With the goal of ensuring that the EU meets the commitments it gave under the Paris climate agreement, which include reducing its CO² emissions by 40% by 2030, the European Commission has brought forward a large package of proposals to speed up the European Union’s transition to a decentralised clean energy system by encouraging improvements in energy efficiency and pushing renewable energy, and by redesigning the electricity market with consumers being actively involved.
The package will require revision of eight pieces of legislation on renewables, energy efficiency and the energy performance of buildings, the electricity market and security of electricity supply, rules for the governance of the energy union, a new way forward for eco-design and a strategy for connected and automated mobility.
It has three key objectives: to generate the investment necessary for the sustainable energy transition and for economic recovery through the growth sectors of energy savings and renewables; empowering consumers and giving them a fair deal; and deepening cross-border integration so as to build a genuine EU energy market, Commission Vice-President Maros Sefcovic and Commissioner Miguel Arias Canete told the press.
“These new rules will put Europe at the forefront of the clean energy transition. After the Paris Agreement, the EU is continuing to work hard to identify the right incentives to encourage the investment that is so badly needed in Europe”, said Canete. The package is looking to mobilise up to €177 billion of public and private investment per year from 2021, in order to generate an increase in GDP of up to 1% over the following decade and create 900,000 new jobs, he said.
The package, set out in a communication on “Clean Energy for All Europeans”, is based on four flagship initiatives.
Revised framework for renewables. The Commission proposes, firstly, to revise the 2009 directive on renewable energy to help achieve the 27% target for renewables in the energy mix by 2030 by creating the conditions to allow this sector, which already employs over a million people and is worth €144 billion per year, to develop. The Commission is looking towards a binding 27% target for the EU and is not setting any national objectives, not even indicative.
To ensure that the right price signals are sent to encourage investment, the Commission wants the revised text to establish a clear, stable framework for allocating support to renewables, the aim being to make certain that support is awarded sustainably and without distorting the market. The idea is to end support for the most mature technologies and to give more time to support for the most recent technologies, such as wave and offshore wind power.
Furthermore, as part of the revision of the text and its bio-energy strategy, the Commission proposes gradual but significant reduction from 7% to 3.8% in the share of first generation biofuels (agrifuels) in fuel consumption in the transport sector between 2020 and 2030. It also suggests introducing rising targets for the use of advanced biofuels (from biomass, agricultural and forestry waste and seaweed) (see EUROPE 11676).
Revised framework for energy savings. The Commission’s second flagship proposal is revision of the 2012 directive on energy efficiency to unleash the potential for energy savings in the EU and to boost the economy, setting a binding EU target of 30% improvement in energy efficiency by 2030 (the European Parliament has called several times for 40%), which could generate additional revenue of €70 billion and create 400,000 jobs.
In its aim to tackle energy wastage, the Commission is also proposing to revise the 2013 directive on the energy performance of buildings, which account for 40% of energy consumption in the EU. As two thirds of existing buildings were built before the energy performance standards were introduced and their annual refurbishment rate stands at around just 1% a year, the Commission wants to promote the refurbishment of the entire European stock, which, according to its calculations, represents a market of €80 to €120 billion to SMEs up to 2030. The new text lays down refurbishment targets, minimum requirements for existing and new buildings and adds provisions on energy performance certificates.
In order to mobilise investment in energy efficiency, the Commission is counting on the success of the European Fund for Strategic Investments (EFSI) – with one quarter of the €116 billion deployed so far having gone to the energy sector – as well as the European Regional Development Fund and the Cohesion Fund, under which €17 billion will be invested in energy efficiency over the period 2014-2020. In addition, it is forwarding an initiative for the 'intelligent' financing of 'intelligent' buildings, aiming to remove obstacles in the sector, with the expectation of financing of an additional €10 billion in public and private funds.
Again with the aim of making full use of the energy savings potential, the Commission is proposing a new approach to the eco-design of low products, which will help consumers to benefit from new energy savings requirements for certain categories of products such as kettles, hand dryers and solar panels (see EUROPE 11663).
Reorganisation of electricity market. The third key proposal of the package aims to reorganise the electricity market, in order both to better integrate renewables in the national grids and to increase the participation of consumers on the market. This will be done by revising the 2009 directive and regulation on the electricity market, the regulation on the European Agency for Cooperation of the Energy Regulators (ACER) and a proposed regulation on risk-preparedness in the electricity sector.
The Commission's proposals to shake up the electricity market aim to ensure the active involvement of consumers in the electricity market through self-production, self-consumption, storage or sales to the grid. The aim is to remove the many obstacles preventing consumers from selling their electricity to the grid, or forcing them to do so in a way that gives them a poor deal, by making the system more flexible.
According to the Commission's vision, the reorganisation of the electricity market is based on increased cross-border cooperation and a more in-depth integration of the markets, firstly in order to continue with the development of infrastructures on the basis of the successful work carried out by regional groups for the interconnection of the countries of the Baltic region, the Iberian peninsula or the offshore wind-power network in the North Sea, but also by ensuring a better use of the existing infrastructure, on the basis of the cooperation of the transport network managers, reinforcing links between regulatory bodies and a revised role for ACER.
Lastly, as regards the capacity mechanisms which make it possible to pay electricity producers operating the production capacity needed to cover consumption peaks, but which are not necessarily economically viable, the Commission's proposals ultimately do not encourage public intervention, but require the member states to justify the use of such a mechanism, taking account of the available capacity of their neighbours. The aim is to ensure that any public intervention does not favour the national production capacity over cross-border generation and that all capacity mechanisms are fully aligned on the broader objectives of the EU in terms of green energy. With regard to this, the Commission wishes to impose a limit of 550 g of CO² produced per kilowatt hour, in order to prevent the most polluting coal-fired power stations from being kept alive by this system.
Framework for governance and initiatives against energy poverty. In order to guarantee the coherence and coordination of the entire raft of measures and, in a broader context, the entire raft of measures proposed in the framework of the planned Energy Union, the Commission is proposing a regulatory framework for a system of governance based on integrated national plans for the energy and the climate and aiming to stimulate the required responsibility for promoting the energy transition.
Finally, the package provides measures to fight energy precariousness: it includes a new approach to the protection of vulnerable consumers, particularly by supporting investments in energy efficiency. In its proposals on this, the Commission calls upon the member states to take account of energy precariousness by requiring certain measures to be applied as a priority to households in situations of energy precariousness or living in social housing. The national long-term strategies for the refurbishment of buildings should also help to attenuate energy precariousness.
In the framework of the governance process of the Energy Union, the member states will be required to check and report back on energy precariousness, whilst the Commission will facilitate the exchange of best practice and coordinate these monitoring measures at EU level through the Energy Poverty Observatory.
Lastly, the Commission has proposed to set in place certain procedural guarantees before energy supply to consumers can be cut off. (Original version in French by Emmanuel Hagry)