It wants the EU to adopt a leading position in this transition, not merely adapting to it. For this reason, the EU has now committed to cutting CO2 emissions by at least 40 percent by 2030 while modernising the EU's economy and delivering jobs and growth for all European citizens.
The proposals have three main goals: putting energy efficiency first, achieving global leadership in renewable energy technologies and providing a fair deal for energy consumers.
This in turn means that consumers become active and central players in energy markets, having a better choice of supply, access to reliable energy price comparison tools and the possibility of producing and selling their own electricity.
Meanwhile, increased transparency and better regulation will enable more opportunities for society to become more involved in the energy system and better able to respond to price signals.
The package also includes a number of measures aimed at protecting the most vulnerable consumers.
“Today's package will boost the clean energy transition by modernising our economy” said Vice-President for Energy Union Maroš Šefčovič. “Having led the global climate action in recent years, Europe is now showing an example by creating the conditions for sustainable jobs, growth and investment. Today's proposals touch upon all clean energy related sectors: research and innovation, skills, buildings, industry, transport, digital, finance to name but a few. These measures will equip all European citizens and businesses with the means to make the most of the clean energy transition.”
Commissioner for Climate Action and Energy Miguel Arias Cañete added that the proposals provide a strong market pull for new technologies, setting the right conditions for investors, empowering consumers, making energy markets work better and help EU countries to meet its climate targets. The binding 30 percent energy efficiency target will reduce EU member states dependency on energy imports, creating jobs and cutting more emissions. Europe is on the brink of a clean energy revolution and, following the example of the Paris Agreement on Climate Change, the EU can only get this right if EU member states work together. The proposals clear the way to a more competitive, modern and cleaner energy system. It is now up to the European Parliament and EU Member States to make it a reality.
The Commission's “Clean Energy for All Europeans” proposals are designed to show that the clean energy transition is the growth sector of the future - that's where the smart money is.
Clean energies in 2015 attracted global investment of over 300 billion euros and the EU is well placed to use its research, development and innovation policies to turn this transition into a concrete industrial opportunity. By mobilising up to 177 billion euros of public and private investment per year from 2021, this package can generate up to 1 percent increase in GDP over the next decade, creating 900,000 new jobs.
The Clean Energy for All Europeans legislative proposals cover energy efficiency, renewable energy, the design of the electricity market, security of electricity supply and governance rules for the Energy Union. In addition the Commission proposes a new way forward for Ecodesign as well as a strategy for connected and automated mobility.
The package also includes actions to accelerate clean energy innovation and to renovate Europe's buildings. It provides measures to encourage public and private investment, promote EU industrial competitiveness and mitigate the societal impact of the clean energy transition. We are also exploring ways in which the EU can show further leadership in clean energy technology and services to help third countries achieve their policy goals.
In October 2014 the European Council agreed on the 2030 climate and energy policy framework for the EU setting an ambitious economy-wide domestic target of at least 40% greenhouse gas emission reduction for 2030. The Paris Agreement vindicates the EU's approach. Implementing the 2030 energy and climate framework as agreed by the European Council is a priority in follow up to the Paris Agreement.
The EU is consolidating the enabling environment for the transition to a low carbon economy through a wide range of interacting policies and instruments reflected under the Energy Union Strategy, one of the 10 priorities of the Juncker Commission.
The Commission has already brought forward key proposals to implement the EU's target to reduce greenhouse gas emissions by 2030. In 2015, it presented a proposal to reform the EU Emission Trading System (ETS) to ensure the energy sector and energy intensive industries deliver the emissions reductions needed. In summer 2016, the Commission brought forward proposals for accelerating the low-carbon transition in the other key sectors of the European economy. Today's proposals present the key remaining pieces to fully implement the EU's 2030 climate and energy framework notably on renewables and energy efficiency.
The EC believes that all the Energy Union related legislative proposals presented by the Commission in 2015 and 2016 need to be addressed as a priority by the European Parliament and Council.
Commenting on the proposals, WindEurope called on the European Parliament and the Council to use the package as a base to build greater ambition on renewables and market design toward 2030.
“We welcome the Commission’s package on renewables and market design” said Giles Dickson, CEO of WindEurope. “But there is still a lot of work to do in the Parliament and the Council to ensure renewables investors stick with Europe after 2020. If Europe is going to deliver on its goal to be number one in renewables, the Commission’s proposals have to be further developed. Crucially, Member States have to produce meaningful national plans that map out how they are going to deliver their energy transition. And that means all Member States. Today only 7 out of 28 have clear plans and policies in place for renewables beyond 2020.”
The Commission’s renewable energy and market design proposals lay out a number of positives for the industry.
The Renewable Energy Directive includes measures to secure the investments – 254 billion in the power sector alone - required to meet the renewable energy target. These include the streamlining of administrative procedures including for repowering, a grandfathering clause to protect existing investment from regulatory changes and 3-years of visibility for renewable energy support (indicative timeline, volumes and budgets). In addition, Member States will be required to remove regulatory barriers to long-term provider/purchaser contracts for renewables (so called corporate PPAs).
The package will also make electricity markets more flexible and fit for an increasing share of renewables. Renewables will have access to balancing markets and be paid for the services they provide. Renewable energy will be traded as close to real time as possible in intraday and balancing markets. This means a fairer and more efficient market for all: wind farm operators get more from their assets; balancing costs will fall and consumers benefit.
Mr Dickson added that there are some very positive elements in the proposals. The requirement for governments to clarify at least 3 years up front what renewables investments they want and how they’ll be supporting them is crucial for enabling investors and developers to plan ahead. It will reduce costs of capital, drive further innovation and help keep people in jobs. The language on simpler permitting is also good - there is still too much red tape around Europe on renewables that delays projects unnecessarily. And it’s good the Commission has recognised the importance of making it easier to repower existing wind farms. Over half of our existing wind farms will reach the end of their normal operational life between now and 2030. Priority dispatch will stay in place for existing assets but will be phased out for new projects. We need clarity and transparency on the must-run obligations for conventional power plants and clear rules on for compensation when renewables get curtailed.
On balance, the proposal is more good than bad. The Commission has laid the ground for the Parliament and the Council to make this the ambitious legislation Europe needs. Notably, the industry wants a higher target – 30 percent. It also needs clarity and ambition from Member States in their national plans.
For additional information:
