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Green energy firms clash with big utilities on EU policy

Source: Reuters - Wed, 12 Feb 2014 17:59 GMT
Author: Reuters
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* Utilities want just one carbon-cutting goal

* Say gas needed to offset intermittent wind, solar

* Renewables firms say upgraded grid can handle them

By Barbara Lewis

BRUSSELS, Feb 12 (Reuters) - Leaders of six green energy firms challenged big utilities on Wednesday by advocating a tougher EU renewable goal to save billions in fossil fuel imports and create hundreds of thousands of jobs.

The European Commission, the EU's executive, in January put forward a carbon-cutting goal of 40 percent by 2030 compared with 1990 levels, plus an EU-wide renewables goal of 27 percent

The six firms - Acciona Energia, Alstom, ERG, Enercon, RES and Vestas - told a Brussels audience the EU should instead make a 30 percent green energy goal binding on all 28 member states.

The companies are among 91 firms and organisations taking on the big utilities, whose business model has been shaken by the uptake in renewable power, spurred by a mandatory 2020 goal to get 20 percent of energy from green sources.

The green energy firms say the Commission's own figures show their 30 percent green energy goal would create 570,000 extra jobs and save 260 billion euros ($356 billion) in fossil fuel imports, compared with a single carbon-cutting target.

"Renewables came into the market in a disruptive manner and there is fight between the two sectors," said Rafael Mateo, CEO of Spain's Acciona Energia, which describes itself as the only utility 100 percent reliant on renewable energy.

Other utilities have renewable units, but have invested heavily in natural gas generation, which in some cases they have been forced to mothball because cheap coal, a weak carbon market and subsidised renewables have made it unprofitable.

"The fight is because different kinds of assets are not in the same hands. The fight between the two sides has confused the regulators," Mateo said.

Hans-Dieter Kettwig, managing director of German wind turbine maker Enercon, said utilities needed to be "more proactive" and "accept a new industry is coming".

Executives from utilities including Germany's E.ON , RWE and GDF Suez, formed what became known as the Magritte Group last year to lobby for an end to subsidies for wind and solar.

They also wanted help to maintain gas generation, which emits only around half as much carbon dioxide as coal, and which they say is needed to balance intermittent renewable generation.

With success so far, they lobbied for a single goal on greenhouse gas emissions, plus a strengthened EU Emissions Trading System to help shift generators away from coal.

The renewable sector says investment in the grid, necessary in any case, can equip it to transmit more green energy and that the cost of green subsidies will be offset by savings. ($1 = 0.7312 euros) (Additional reporting by Geert De Clercq in Paris; Editing by Ruth Pitchford)

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