G20 voluntary cooperation in energy policy

Written by Nikolina Šajn

G20 energy ministers held their first ever meeting on 2 October 2015. Their discussion focused on renewable energy, energy efficiency, universal access to energy and investments in energy. The ministers adopted the ‘Toolkit of Voluntary Options for Renewable Energy Deployment’, aimed at increasing the use of renewable energy around the world, as well as the ‘G20 Energy Access Action Plan: Voluntary Collaboration on Energy Access’, part of the overall G20 goal of ensuring universal access to affordable and reliable energy.

G20 and energy

The first ever meeting of G20 energy ministers took place in Istanbul on 2 October 2015. This followed on from the G20 Principles on Energy Collaboration adopted at the 2014 G20 summit in Brisbane, with energy ministers asked to lay out options for their implementation. The EU was represented by the Commissioner for Climate Action and Energy, Miguel Arias Cañete. The G20 is an informal forum for international cooperation and its members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, UK and the USA. Combined, these countries represent 85% of global GDP, over 75% of global trade and about two thirds of the world’s population, as well as 80% of global renewable electricity capacity.

Renewable energy

The G20 ministers emphasised the importance of renewable energies, and adopted the G20 Toolkit of Voluntary Options for Renewable Energy Deployment, prepared by the International Renewable Energy Agency (IRENA), with options for coordinating their work in five areas:

• reducing the cost of renewable technology by exchanging good practices, analysing why renewable energy has different prices across countries and transferring technologies to developing countries,
• exchanging good practices on national policies in support of renewable energy,
• developing financial risk mitigation instruments to secure access to affordable financing for renewable energies,
• assessing individual countries’ renewable-energy potential and developing roadmaps for them, and
• deployment of modern biotechnology.

Energy efficiency

The ministers also welcomed the Report on the G20 Energy Efficiency Action Plan, prepared by the International Partnership for Energy Efficiency Cooperation (IPEEC). The Action Plan covers six areas in which the G20 countries cooperate and share knowledge. The EU takes part in the following four areas: energy efficiency of vehicles, aimed at reducing the energy and environmental impact of motor vehicles; energy efficiency of products, with an emphasis on networked devices which could help manage energy consumption in the future, but could by 2030 use more than 6% of global energy consumption; finance for investments in energy efficiency; and energy efficiency of buildings, which includes cooperation in the field of building codes and building energy data.

Universal energy access

The G20 Energy Access Action Plan: Voluntary Collaboration on Energy Access, also adopted by the ministers, aims to strengthen cooperation among G20 countries in ensuring universal access to affordable and reliable energy. It mainly takes into consideration projects these countries are already working on, while adding the components of exchange of knowledge, experience and good practices.
More than 1.1 billion people today have no access to electricity, including around 620 million in Sub-Saharan Africa, which is the focus of the first phase of the G20 Action Plan. According to World Bank data, only around 24% of the population in this region has access to electricity, a situation which leads to poverty, lower economic growth and lower quality of public services. The Action Plan includes cooperation in the field of policy and the regulatory environment, technology development and dissemination, investment and financing, and capacity building.

Energy investments

The ministers supported further investments, both public and private, in research and development of innovative technologies for all types of energy, including clean ones. The head of the International Energy Agency (IEA), Fatih Birol, who also took part in the meeting, said that a record decline of 20% in global oil investments was expected for 2015. However, the Saudi Energy Minister announced that Saudi Arabia would continue investment in the oil and gas industry, as well as solar energy, while Russia announced that by 2035 it plans to invest more than US$2 trillion in gas and oil, and an additional US$240 billion in greater energy efficiency. The ministers once again called on the G20 countries to ‘rationalise and phase out inefficient fossil fuel subsidies that encourage wasteful consumption’, which has been a goal for G20 countries since 2009.

Position of the EU institutions

The EU has set a binding target of 20% renewable energy in its energy mix by 2020, and of 27% by 2030, as part of its efforts to curb greenhouse gas emissions and create a more sustainable economy. According to Eurostat, renewable energies made up 15% of EU energy use in 2013. The share of renewable energy in EU electricity production is already at 23.5%, said Commissioner Arias Cañete at the G20 meeting, and this is expected to rise to 50% by 2030. Miguel Arias Cañete warned that the EU is lagging behind in its goal of energy efficiency gains of 20% by 2020. Current policies are expected to improve energy efficiency by 21% only in 2030, whereas the EU target for 2030 is a 27% improvement in energy efficiency. The European Parliament’s resolution of 5 February 2014 on a 2030 framework for climate and energy policies called on the European Commission to set a target of 30% of renewable energy and 40% of energy efficiency gains by 2030.
When it comes to securing access to electricity in Africa, the EU has been working on this goal in the framework of the Joint Africa-EU Strategy (JAES) adopted in 2007. That same year, the European Union-Africa Infrastructure Trust Fund (EU-AITF) was established, and has since committed €528 million to infrastructure, including energy projects. The EU commitment to electrification in Africa was also affirmed in the 2011 Agenda for Change, which lists energy as a key target area of EU assistance. More than €2.5 billion will be allocated from the EU budget. The European Commission in July 2015 partnered with the Power Africa initiative, headed by the United States, to bring electricity to more than 100 million people in Sub-Saharan Africa by 2020. The European Parliament is involved in the oversight of the JAES, mainly through the ACP-EU Joint Parliamentary Assembly, which meets twice a year.

Positions of other G20 countries

The US has not set an overall target for renewable energy, but it has stated that by 2030 it plans to produce 20% of electricity from renewable resources, and that by 2025 30% of electricity consumed by the federal government, the largest electricity user in the country, should come from renewable energy. Among the G20 countries which have set an overall target there is wide variation in deadlines and percentages, e.g. Russia plans to have 4.5% and Japan 10% by 2020, while India’s objective is 6% by 2022 and South Korea’s 11% by 2030. The same is true for targets for electricity production from renewable energy: China plans 20% of electricity from renewables by 2015, Indonesia 15% by 2025, Mexico 35% by 2024, Saudi Arabia 20% by 2032. Great variations also exist when it comes to energy efficiency targets.

Follow-up

The energy ministers’ conclusions were presented to G20 leaders at their summit in Antalya on 15-16 November 2015 for consideration and were endorsed in the G20 Leaders’ Communiqué. Although the measures are only indicative and not binding, G20 countries tend to have relatively high compliance in the field of energy. G20 pledges also influence future EU legislation, making it easier to pass measures that have already been agreed at G20 level.