Can Europe get over its renewable energy midlife crisis?

Barak Obama did not come back from his Indian state visit with an ambitious climate policy deal similar to the one he brought back from China in November last year. Many might be disappointed, writes Julian Popov.

Julian Popov is a former Minister of Environment of Bulgaria.

A carbon emissions agreement between the two biggest democracies in the world – one in terms of economy and the other of population – would have been welcomed ahead of the United Nations Climate Change Conference in Paris at the end of 2015.

But with 25% of the Indian population (or 300 million people) not connected to the power grid it is not unnatural that the government is hesitant to make ambitious carbon reduction commitments.

India however is offering something else to the carbon emissions struggle – a plan to install a massive 100GW of solar energy generation capacity by 2022. This comes on top of a plan for 100GW wind generation. And President Obama made a commitment to support the ambitious Indian clean energy drive.

His pledge signals progress for US international energy policy. In 2013 he announced the $7bn Power Africa initiative, which was much more focused on conventional energy development. The offer was then criticised for addressing the problem in a wrong way.

Providing renewable power for those with no grid access in India and Africa is not just a humanitarian objective. It is a huge task that could turn around what we tend to call business as usual scenario – the expectation that in order to get out of poverty countries need to increase their carbon emissions.

For most of the off-grid populations around the world the carbon intensive path will simply not work. Their income level and, in the case of Africa, the pattern of geographical spread can not support expensive centralised generation and transmission infrastructure. And no matter how generous the richer countries are, they will not be able to provide sufficient financial aid to fill the centralised energy investment gap.

And they don’t have to. The cases of India and Africa might be very different but their vast off grid population offers a great opportunity to the more developed countries. This is the reason why Obama’s promise to support India’s renewable ambition is significant.

US technology, technical assistance and investment could give a strong boost to India’s clean energy plan. The thriving Indian technology sector could provide high quality and low cost research and production capacity for the mutual benefit of the two countries.

The Indian plan could also have a wider systemic effect – it could contribute to the further reduction of the cost of renewables, improve installation knowhow and trigger technological breakthroughs on the back of its huge scale.

We could see an accelerated decoupling of poverty reduction and CO2 emissions growth. That could signal an end of the global climate mitigation divide between developed and developing countries. The predominantly aid based climate mitigation policy for poorer countries will move to a sustainable business model for expanding renewables.

Such transformation is already underway in Bangladesh where home solar systems are being installed at a rate of 100,000 per month. Organisations like SolarAid and initiatives like Lighting Africa are bringing solar lights to millions in Sub Saharan Africa. The natural next stage will be organic growth of local micro-grids and connecting appliances other then lights.

Obama’s visit to India highlights also another question – where is Europe in the global clean energy race and cooperation? Europeans like to see themselves as global leaders in clean energy and climate policies. We are so much absorbed by this belief that we started criticising ourselves for doing too much.

Many European governments are convinced that they have gone too far with the renewables drive and that it would be wiser to slow down. And Europe has slowed down. It did it just when the steep climb was over and the cost of renewables has levelled with the cost of conventional energy.

Last year, according to Bloomberg New Energy Finance, investment in renewables in India went up 14% and in the US – 8% while for Europe the figure is just 1%. Europe’s renewable energy ambitions have entered an erratic midlife crisis. European renewables depend now more on insecurity over assumed cost and on targets that have been watered down by political compromises than on a vision for future opportunities.

Research is also lagging behind. The European Union is registering fewer clean energy patents than the US, Japan or even China. Current and future clean energy competitiveness is slipping out of the hands of Europe. And part of the reason is that Europe is inward looking.

Absorbed by internal energy policy disputes, the European Union is failing to capitalise on the global growth potential of the renewables industry which attracted $310bn investment in 2014.

A key component that is missing in European energy policy is ambitious clean energy diplomacy. Clean energy needs proactive global cooperation in trade, research and manufacturing. India with its strong technology sector and ambitious renewable energy targets is the perfect partner in the global low carbon industry competition. Europe should race to support and join the Indian ambition. Such move would bring significant political and economic benefits to Europe and will revitalise its aging renewables ambitions.

There is a murky light at the end of the tunnel. The current debate around the Energy Union, the flagship policy of the European Commission President Juncker, might bring some focus to the global potential of the European clean energy sector. A visit by Mr. Juncker before the Paris Climate Conference to India, Bangladesh and Africa to promote clean energy cooperation with Europe might be a good first step.