Europe's Renewables Targets Challenged by Policy Costs

Key trends in this Market Brief include:

• Europe's energy ministries, still mired in a sovereign debt crisis, face mounting pressure to defend renewable energy incentive schemes.
• The net cost of support for renewables in 2010 equaled less than 0.5% of GDP in most EU member states, or less than 10% of retail prices per kWh.
• A functioning renewables support policy is one that that calibrates incentives to accurately reflect costs, which has been achieved in few countries.
• The ongoing economic crisis and bearish outlook for financial markets is poised to drive governments to make additional cuts to renewables support.
• Governments remain committed to their long-term renewable targets, but acknowledge the need to redefine the roadmap.