Europe's Renewable Energy Sector Needs Milestones To Spur Growth, Commission Claims

* Options include new set of green goals

* Another option would be just a carbon goal

* Commission wants subsidies to be consistent, not withdrawn suddenly

By Barbara Lewis

BRUSSELS, June 6 (Reuters) - Europe must agree 2030 milestones as soon as possible to spur investment in renewable energy, or green power growth will fizzle once firm policy runs out in 2020, the European Commission said on Wednesday in its latest strategy statement.

Many in the renewable energy sector agree there is a need for strong guidance, but they want binding targets, rather than vague aims. At the other extreme, some of the 27 member states are strongly opposed to legal goals for renewables.

The European Union currently has a firm target to increase the share of renewable energy in the mix to 20 percent, which analysts and industry say it should meet and could exceed.

"We should continue to develop renewable energy and promote innovative solutions. We have to do it in a cost-efficient way," Energy Commissioner Guenther Oettinger said in a statement.

"This means producing wind and solar power where it makes economic sense and trading it within Europe, as we do for other products and services."

The Commission says meeting the 20 percent goal in a cost-efficient manner requires better coordination across member states, so renewables, such as solar and wind, can be generated wherever they are cheapest.

It also says "support schemes" should be consistent across the bloc and reiterates its backing for an integrated market connecting into northern Africa, where it sees the potential for large-scale solar generation to supply Europe.

Looking beyond 2020, Oettinger has said he wants agreement on a new policy regime before the end of the current Commission, whose mandate expires in 2014.

The renewables communication only lays out scenarios for how to move on from the 20 percent renewables binding goal, which is one of a set of three green energy targets to be achieved by 2020. The others are for a 20 percent cut in carbon emissions and a non-binding 20 percent cut in consumption compared with projected levels.

"Without a suitable framework (after 2020) renewable energy growth will slump," the Commission said in a statement.

Options include new goals for emissions cuts, but no goals for renewable energy, which would leave the Emissions Trading Scheme (ETS) as the main instrument to cut carbon emissions and encourage renewable energy.

Britain, for instance, has said the emphasis should be on the carbon goal and that a renewable target might disadvantage other low carbon generation, such as nuclear, or even natural gas.

Nuclear generation of power is carbon-free, while gas is the least carbon intensive of the fossil fuels.

Many in the renewable industry say the collapse of the ETS to less than 7 euros, far below the 20-50 euros analysts have said is necessary to encourage low carbon investment, also demonstrates the need for a renewable target.

A second option outlined in the Commission document would be to replace the three 2020 targets with three 2030 targets. This could take the form of national, or EU-wide targets.

The European Renewable Energy Council (EREC), the umbrella organisation for the European renewable energy industry, has proposed a binding target to ensure renewables make up 45 percent of the energy mix by 2030.

"This is not something that's really impossible," said Arthouros Zervos, EREC president and chief executive of Greece's biggest electricity producer, PPC.

EREC also backs increasing the ambition on carbon cutting to 30 percent from 20 for 2020.

Zervos called for a stable policy on subsidies for renewables, arguing that fossil fuel subsidies were much higher than those for green energy, and "negative, disruptive changes" and retroactive changes were a particular problem.

The European Wind Energy Association said strong growth in renewables to 2030 could generate more than 3 million jobs. (Editing by Rex Merrifield)