An assessment is made as to whether renewable energy use for electricity generation in the EU was beneficial throughout the cycle of high and low oil prices. Costs and benefits are calculated with the EU statistics for the period of low oil prices 1998–2002 and high oil prices 2003–2009. The share of renewable energy in electricity production was 21% of all energy resources in 2008, growing on average 5% a year during 2003–2008 compared to nil growth of the fossil fuels mix. Correlations show significant impacts of growing renewable energy use on changes in consumers' electricity prices during the high and rapidly increasing fossil fuel prices in the period 2005–2008. The growing use has contributed to price decrease in most countries that use more renewable energy and price increase in many countries that use little renewable energy. Costs and benefits are assessed through comparison between the observed consumers' electricity prices and simulated prices had they followed the costs of fossil fuel mix. A net benefit of 47 billion euro throughout the oil price cycle is attributable to the growing use of renewable energy, which is on average 8 billion euro a year. This net benefit is larger than the total public support for renewable energy. The net benefit would be larger had the EU anticipated high oil prices through more public support during low oil prices, as this would create productive capacity, but countries' interests increasingly differed. An anti-cyclic EU policy is recommended.
Proportion of renewable energy in Europe as percentage of total energy consumption, 2010
► Renewable energy use can reduce consumers’ electricity prices during high oil prices.
► Throughout the oil price cycle EU gained 47 billion euro due to renewable energy.
► Average annual gain during the oil price cycle 1998–2008 was 8 billion euro.
► The EU renewable energy production lags behind its use.
► The EU countries’ production capabilities increasingly differ.
by Yoram Krozer, University Twente – CSTM/Sustainable Innovations Academy, p/a Iepenplein 44, 1091 JR Amsterdam, Amsterdam 6-6-2012, NetherlandsVolume 50; February, 2013; Pages 68–73
Keywords: Renewable energy use; cost-benefit; Prices; EU; Production capabilities