Europe needs to embrace technology neutrality in its energy policy

The European Union has a long-term commitment to become carbon-neutral by 2050. Several policy proposals and strategies have been brought on their way to achieve this goal. ...

The European Union has a long-term commitment to become carbon-neutral by 2050. Several policy proposals and strategies have been brought on their way to achieve this goal. Following the recast of the Renewable Energy Directive (RED) the EU requires a minimum of 32% of all energy that should be created from renewable energy sources by 2030.

The European Green Deal goes even further and sets out to make Europe the first carbon-neutral continent in the middle of the century. While this is a noble goal to tackle climate change, the EU needs to ensure that policies aiming to achieve these goals are technology-neutral and not ex-ante favor certain technologies over others. All fields of energy production experience tremendous innovation these days and by just focusing on select renewable energies, we might miss out on allowing private actors to find the actual silver bullet against carbon emissions.

According to the European Commission renewable energy is defined as energy that is produced by using natural resources. It limits this definition to water, sunlight, wind, heat, and biomass and distinguishes it as clean energy compared to fossil fuels such as gas or oil, different forms of coal, or nuclear energy derived from uranium. 

Large-scale subsidies, punitive taxes, and massive market intervention was necessary to jumpstart the European ambitions to make Europe greener by increasing the share of so-called clean energy.

Currently, about one-fifth of energy produced in the EU comes from renewable sources. The leading EU member states in this area also tend to be some of the wealthiest nations in the block. German economist Justus Haucap estimates that the German energy transition (Energiewende) will cost a family of four around 25,000 Euros, which nearly equals the net savings of German households. A cost hard to bear for one of the richest economies in the world could be even more detrimental for consumers in less wealthy parts of Europe.

A more consumer-friendly and at the same time climate-friendly approach towards the EU’s energy future should bet on as many technologies as possible and enforce technology neutrality across the block. Nuclear power has become a rock-solid and reliable source for many economies - and also de facto carbon neutral. With nearly three-quarters of its energy produced by nuclear power plants, France is one of the leading nations when it comes to clean energy. Belgium, Hungary, Slovakia, and Bulgaria follow France in offering end-consumers affordable and clean energy. A study shows that producing one Megawatt Hour of offshore wind energy costs nearly three times as much as the same energy from nuclear in France. In the UK, which is a leader in offshore wind parks, it still costs twice as much as a Megawatt Hour produced by nuclear,

Critics of nuclear energy would say that it is not a clean form of energy generation due to the high emissions of uranium mining and the construction and decommissioning of power plants set free. But research published by Nature Energy suggests that the life-cycle carbon debt of nuclear and solar power merely differs by one percentage point.

Besides nuclear, there are other technologies Europe should not shy away from taking a closer look at. Liquified Natural Gas, for instance, would enable a global gas market and reduce dependence on gas imports from authoritarian countries such as Russia.

A previous focus on biofuels has led to the negative unintended consequences of increased food prices and more land converted into farmland. This is another example of the dangers of regulators focusing too much on one technology instead of creating regulatory pathways for technology-neutral innovation. If Europe wants to be a true forerunner of beating climate change, we need to become an energy innovation powerhouse. And innovation can only happen if we let innovators and entrepreneurs try out different ways of achieving the same goal.