Europe needs €30 billion by 2027 to rebuild PV, says Agora Energiewende
Europe depends heavily on imports of clean technologies such as solar photovoltaics or batteries.
“Recent events demonstrate that it would be naive to take the security of supply of critical raw materials, refined materials, components or clean-tech end products for granted,” German think tank Agora Energiewende said in the new “Ensuring resilience in Europe’s energy transition” report.
Europe's transition to climate neutrality requires a rapid increase in solar, onshore wind, offshore wind, batteries, heat pumps, and electrolyzers, said Agora Energiewende. Based on an analysis by Roland Berger, it recommends a package of measures to grow the EU's clean-tech manufacturing industry.
“Greater resilience will come from diversifying supplies through domestic extraction and international strategic partnerships, improving the circularity of materials, and increasing the production of clean technologies in Europe,” the report reads.
The analysis proposes minimum clean technology production quotas in the EU “as insurance against supply chain risks.”
“The technology-specific targets set in the Net Zero Industry Act for batteries, wind and electrolyzers are high and would require more public funding,” said Agora Energiewende.
Europe now needs a credible approach to close the production cost gap, reach acritical scale, and develop local supply networks.
“To ensure long-term competitiveness without support, dedicated public funding should be part of a broader policy package including access to finance, competition on quality (including sustainability), a robust pipeline for clean technologies and investments in innovation,” said Agora Energiewende.
It said EU countries should try to attract major clean technology suppliers to establish production in Europe.
“To achieve a gradual derisking of current value chain dependencies, offers of support should however be accompanied by guarantees that ensure a lasting commitment from companies deciding to establish production in Europe,” it said.
Agora Energiewende adds that the European Commission's reform proposal would lead to less aggressive fiscal consolidation in high-debt countries compared to the old rules.
“Unfortunately, the Commission's reform proposal does not sufficiently protect public investments, especially when it comes to a structural and permanent increase in public spending, as in the cases of industrial policy and climate change mitigation,” said Agora Energiewende. “For example, the proposed reform would require Italy to achieve a primary surplus of 2.8% to 3.2% of GDP by 2027, equivalent to a fiscal adjustment of €18 billion to €27 billion.”
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