Low-carbon energy markets needs 'massive investment'

However, the event - organised by Eurelectric, the EU body which represents Europe's electricity industry - was told that Europe's energy needs should still come from a diversified range of sources.

The meeting came on the same day that MEPs debated the proposed energy efficiency directive.

David Porter, chairman of Eurelectric's energy policy and generation committee, said that, in the past, there had been a general perception that the electricity industry was not "connected" to the renewable sector.

However, he said his industry had "continued" to invest "significantly" in renewables in recent years.

"Renewable energy technology has really taken off and we fully expect this to continue to grow up to 2020. We will need to think a lot about how we are going to accommodate renewables into our system."

He pointed to a new report by Eurelectric which showed that total CO2 emissions produced by the electricity industry in Europe had fallen in the past 12 months.

Porter said - "This is clearly encouraging, but I think we need to stress that we need all technologies in order to meet Europe's energy needs. If you believed stories in the press it is an 'either/or' situation in terms of fossil fuels and renewables. But we will need all cost-effective technologies we can lay our hands on. The message I want to get across today is - 'Use them all.'"

Porter told the meeting he was "confident" that by 2050 the electricity industry in Europe will be "carbon-free". However, he warned - "a great many things are going to have to happen between now and then for this to become a reality".

Doubling the generation of electricity from renewables by the middle of the century will require a "massive" investment, he argued.

He added - "The continued growth of renewable energy at prices the public can afford will depend on a well-integrated and fully-functioning market."

Herbert Reul, chairman of the industry, research and energy committee, told the meeting that renewables are expected to have a "huge" impact on the energy market. He said the electricity industry was investing "significantly" in order to satisfy demand.

The Eurelectric report on trends in the industry showed that demand for electricity rocketed by 70 per cent between 1980 and 2008.

However, it said that, in 2009, at the peak of the economic crisis, demand dropped by an average of four per cent, but that by 2010, demand had reached "pre-crisis" levels.

Meanwhile, a new report says that stepping up to a next phase in policy support for renewable energy could save €4bn a year.

Corinna Klessmann, of Ecofys in Germany, also said that if EU member states would "increasingly" cooperate, another €2 - €3bn could be saved in annual policy costs for achieving the 2020 energy renewable targets.

She said that support of renewables in the EU is a patchwork of 27 different policy portfolios, guided by the EU directive targeting a 20 per cent share of renewables by 2020.

The analysis shows that the effectiveness and efficiency of policies is still low in many European member states, but top runner countries have gained significant experience in tailored policy design.

"The first thing in improving policies is - reducing the risks for investors," Klessmann said. "This is in parallel with ensuring long-term commitment and increasing the stability of the regulatory framework. These two aspects will considerably reduce policy costs. In the present circumstances of the financial crisis, this has become even more important than before."