“The lobby of the conventional energy sector is still very influential in Brussels, but it’s increasingly becoming split over renewable energy. Some of the incumbent companies are trying to slow down the development of renewables, others want to encourage them. At the same time, renewable energy lobbyists are becoming increasingly professional, catching up with the lobbyists for the conventional energy sector.” A senior lobbyist for the renewable energy sector in the EU describes how he sees energy lobbying evolve in Brussels. This article is part of the Power Talk blog, a Ph.D. research project in which Hendrik Steringa speaks with energy professionals on an anonymous basis about how they are dealing with the energy transition in their day-to-day work.
“The renewable energy sector is changing and the renewable energy associations are changing with it”, says the renewable energy lobbyist. “Because of the rapid growth of renewables, the sector is increasingly becoming a mature industry. It is becoming serious money and therefore serious business is stepping in. So this industry now asks for a different type of person to promote its interests. The key word here is professionalisation.”
Within the solar energy association, Chinese solar module manufacturers have expanded their influence
“Renewable energy came into the picture some 15 years ago because of the increasing importance of climate policies. In those days their associations were run like NGO’s. The employees had more of an idealistic focus and wanted to save the planet. They were also less results-oriented and took their time to focus on processes. In recent years a new more radical type of advocate has appeared on the scene. They focused on energy self-sufficiency and the local community. They radically want to scale down energy use but also consumption in general. They advocate for local production of energy and goods. But over the past four years both types have lost ground to a new type of employee that has increasingly becomes dominant: the professional.”
Big business
“With professionalisation I mean: away from so-called NGO-practices, which tend to be less results-oriented and more ideologically driven. Nowadays the renewable energy lobby has become more focused on getting results. The speed at which things are done has greatly increased. There are also more assessments being carried out where the focus is on ‘what is in it for us’.”
“This professionalisation you see most clearly in the wind and solar sectors. In the past four years these two sectors have become big business. Their associations have changed from non-profit organisations into business associations. And because wind and solar became big business, big business has stepped into the wind and solar associations (EWEA and Solar Power Europe) and are claiming more influence.”
Energy companies are not against renewable energy as such. They just want to maintain their market position
“Within the solar energy association, Chinese solar module manufacturers have expanded their influence. This explains the firm stance they have only recently taken up against the import tariffs imposed on Chinese solar modules, whereas in the past they used to favour import tariffs.”
“The big European power companies mainly focus on the EWEA. Big centralised wind power projects is a business they understand and prefer. Wind energy is becoming big business and therefore they are demanding professionalisation of the EWEA. Employees that were not deemed professional enough have been pushed out. The story published some months ago in The Guardian, about how big power companies are taking control of EWEA’s policy positions, tallies with my own experience. EWEA’s positions are changing for example on support schemes for renewable energy, access to the grid and decentralised versus centralised power production. Their positions are increasingly in line with the positions held by Eurelectric [the European business association of energy companies, editor].”
Do-gooders
About the lobbying efforts of the conventional electricity sector, the lobbyist notes: “The strength of Eurelectric compared to the renewable energy lobby is that they have more resources. Also they have a lot of experts at their office doing nothing but thinking of ways to make life difficult for renewable energy. These experts are very well paid and therefore Eurelectric can attract highly experienced people.”
“Historically Eurelectric and its members also have easier access to high level officials from the European Commission (see this lobbying assessment tool from Politico) although the renewable sector increasingly has access too. But for example in high level meetings with the Commission’s Director-General of Energy, Dominique Ristori, they often outweigh their counterparts from the renewable sector purely on seniority and experience. In contrast, the renewable sector can pay its employees much less than Eurelectric does. Therefore the renewable energy sector often attracts people who are idealistic, willing to work hard but who are often younger. Therefore they have less experience and lack seniority.”
Eurelectric lobbied to change the network codes. Their goal was to complicate grid access for consumers
“But the Eurelectric lobby also has its weaknesses. A temporary one is that key personnel has left or is leaving Eurelectric. With them a lot of experience is leaving their offices. Equally important, there is a divide between the members of Eurelectric. There are those who favour renewables [the coalition of progressive energy companies, editor] and those of the Magritte group with major conventional assets that try to slow down the development of renewables. This increasingly puts pressure on the people of Eurelectric to come up with positions that are shared by all members.”
“A final weakness is their credibility. They are often perceived as an industry that is in it only for the money. True or not, but the people from the renewable sector are more often perceived as do-gooders that are not just in it for the money but also want to contribute to the common good. This adds to their credibility and brings influence with it.”
Slowing down renewables
About how the incumbent energy companies use their influence in relation to renewable energy policies he says: “Most incumbent power companies have lobbied against a renewable energy target for 2030. This time, compared to the negotiations for the 2020 climate and energy package, they seem to have been more successful [the renewable energy target for 2020 is binding on the level of member states, whereas the 2030 target is binding on an EU level. This makes it more difficult to enforce, potentially slowing down the growth of renewables, editor]. During the negotiations between 2007 and 2009 for the 2020 targets they also opposed a binding target for renewable energy.”
“But they were up against some strong EU member states like Germany, a European parliament and an ambitious energy commissioner Andris Piebalgs who all favoured such a target. At the same time the lobbyists of the power companies did not bother too much because they were convinced that a 20% renewable energy target by 2020 would be impossible to meet.”
Their biggest success was their lobby targeting feed-in tariff schemes
“But energy companies are not against renewable energy as such. They just want to maintain their market position. This is the reason why they started a strong opposition against renewables two years after the 2020 negotiations had been completed because, to their surprise, the share of renewables was rapidly increasing at their expense. They tried to torpedo the efforts that caused renewables to expand too rapidly because it severely started to endanger their market position.”
“They focused their efforts on feed-in tariff schemes because these are extremely effective in increasing the share of renewables. The major advantage of feed-in tariffs is that they are not financed from the government budget but paid by consumers via a surcharge on their energy bills. Moreover payments are guaranteed over a period of 15 to 20 years. This makes them less susceptible to government changes and therefore contributes to security of investment.”
“But feed-in tariffs are also favourable to consumers who want to produce their own energy because they are simple to understand and easy to use. This bothered the power companies most, because the people that started producing their own electricity used to be their paying customers. Not only did they lose paying customers, they also lost market share on the electricity production side.”
“Therefore their biggest success was their lobby targeting feed-in tariff schemes, especially in Germany, through the European Commision’s State Aid guidelines. According to these guidelines, feed-in tariffs will have to be phased out from 2017 onwards [small installations can be exempted, editor], to be replaced by competitive bidding processes like auctions. Auctions slow down the growth of renewables. This can already be observed in Germany where they have started switching from feed-in tariffs to auctions.”
“But there are also more indirect ways to slow down renewables, for example through regulations. Thus, Eurelectric lobbied to change the network codes. Their goal was to complicate grid access for consumers. Network codes are very complicated and few people really understand them. Therefore policymakers are easily persuaded to do what the experts say without knowing how it really works. Eurelectric does have enough professionals who understand this matter. That is a major advantage over renewable associations who have to do with less staff and resources.”
Buying time
“Over the years I worked with and talked to many people from Eurelectric and power companies. And as I said before, they are not against renewables as such. When politicians want renewables, the companies will install renewables. But in the process they want to keep their market position and also want to protect their conventional assets. Still they have been losing ground during the last couple of years. Therefore they want to slow down the process, not stop it, because they realise it can’t be stopped anymore. This way they are buying time to develop new business models and reduce competition by taking over small innovative competitors, so they will come out of the game as winners. At least, that is the plan.”
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Earlier blog posts
“Vested interests frustrate spread of demand response in Europe, Germany most of all”
Big energy companies take control of Dutch wind energy association NWEA
“Nuon has no vision of the future of the energy system”
one.second says
There are a lot of studies about auctions vs. feed-in-tarifs. Whenever auctions were imposed, they were way worse in terms of cost efficiency and competition as well as the resulting installment of renewables. Still they were able to screw up the feed-in-tarif-system in Germany. It is so frustrating. These people endanger the earth’s ecosystem and civilisation itself. They belong in jail.
Mike Parr says
Much of the commentary rings true. If you look at Spain, the large incumbents such as Iberdrola continue to offer to households PV systems – & are happy to do so – provided it is they who are doing the offering. This is a comprehensive fauilure of competition in the energy market & DG Compo’ seems to have little inclination to correct. The Spanish “non” market and its manipulation by the incumbents is a disgrace, ditto Italy – & as Wittgenstein said “of that we cannot talk we must pass over in silence” – i.e. France & EdF, ERDF and the cosy little monopoloy that exists from top to bottom in France.
In Germany the number of energy co-ops being formed has declined mainly due to the change of RES rules which aim to keep EON and RWE in business.
As the article correctly observes for the most part, the large players have, until very recently resisted RES, tooth & nail, i.e. they have been de facto climate change deniers. Thus quite why they have not been cast into the outer darkness with respect to EU lobbying beats me i.e. if I was Commissioner I would, point blank refuse to meet with this bunch (rabble?) of dinosaurs. If you think I’m over stating – well a year or three ago I was tallking to SSE’s head of R&D – we were discussing local energy markets – he called his colleagues “dinosaurs” – & SSE is supposed to “enlightened”? – not a chance – they are all as bad as each other & it is time they were all comprehensively broken up.