The European Commission’s long anticipated ‘Winter Package’ touching many aspects of the energy markets is expected to have a significant impact on energy activities and developments going forward. [Engerati-Power in Europe 2016 and In Focus: Power in Europe]
So what is contained in these proposals, which are entitled ‘Clean energy for all Europeans’ and run to some 70 documents? A package of measures which, according to the press materials, is aimed at keeping the EU competitive in a time of changing energy markets and the region not only adapting to but leading the clean energy transition.
Furthermore – in other sound bites from the press materials – the measures are designed to show “that the clean energy transition is the growth sector of the future – that’s where the smart money is”, with the EU “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 of public and private investment per year from 2021, this package can generate up to a 1% increase in GDP over the next decade and create 900,000 new jobs,” it is claimed.
Energy efficiency first
The three main goals are “putting energy efficiency first, achieving global leadership in renewable energies and providing a fair deal for consumers”.
On the energy efficiency front, revisions of the Energy Efficiency Directive (EED) and of the European Performance of Buildings Directive (EPBD) are proposed “to bring them up to date with the 2030 energy and climate goals, to check their effectiveness, to simplify and improve the text, and to facilitate implementation at national level.”
• A binding 30% energy efficiency target at EU level by 2030
• Extending beyond 2020 the energy saving obligation requiring energy suppliers and distributors to save 1.5% of energy each year from 2021 to 2030
• Improving metering and billing of energy consumption for heating and cooling consumers
• Encouraging the use of ICT and modern technologies, including building automation and charging infrastructure for electric vehicles
• Strengthening the links between achieving higher building renovation rates, funding and energy performance certificates
• Launching a smart finance for smart buildings initiative to unlock private financing for energy efficiency and renewables in buildings at greater scale.
Some outcomes envisaged include the decarbonisation of Europe’s building stock by mid-century and removal from energy poverty of between 515,000 to 3.2 million households. The 30% energy efficiency target is expected to create up to an additional €70 billion euros and 400,000 jobs compared to a 27% target.
Leadership in renewable energies
With the target of at least 27% renewables share in final energy consumption by 2030 - unchanged from previously - the goal of the measures, including a revised Renewable Energy Directive, are “to set a regulatory framework that leads to investor certainty and allows a level playing field for all technologies.”
• Options for member states to increase their share of renewable energy in heating and cooling supply aiming at a 1 percentage point per year increase until 2030
• An obligation on European transport fuel suppliers to provide an increasing share of renewable and low-carbon fuels for transport
• New rights for consumers including enabling consumers to self-consume renewable electricity without facing undue restrictions, recognition of energy communities and the ability to stop buying heating/cold from a district heating/cooling system if they can achieve better performance themselves
• New requirements on sustainable development of bioenergy including that advanced biofuels emit at least 70% fewer GHG emissions than fossil fuels and that heat and power produced from biomass and biogas have an 80% GHG saving.
Fair deal for consumers
The goal of the new market design is to provide “a fair deal for consumers,” adapting to fast-evolving technologies, specifically the growth of renewables, and the presence of new participants. Furthermore, in most parts of the EU, retail markets suffer from “persistently low levels of competition and consumer engagement.”
• Providing consumers with better information about their energy consumption and their costs through clear electricity bills
• Free of charge access to electricity consumers to at least one certified energy comparison tool
• Easier switching conditions
• Enabling consumers to offer demand response and to receive remuneration, directly or through aggregators
• Removal of retail price regulation
• Incentivising DSOs to use flexibility services and energy efficiency measures to improve the efficiency of their operations
• Creation of a new EU DSO entity, with responsibility for putting in place rules on grid management and use and EU-level cooperation with TSOs. It will also work on the integration of renewables, distributed generation, energy storage, demand response and smart metering systems
• A Risk Preparedness regulation setting out common rules to be respected when preparing for and managing crisis situations.
Energy Union and innovation
Other elements of the Package include new rules on Energy Union governance to ensure that the renewable energy, energy efficiency and carbon reduction targets are met. These include the setting out of requirements for integrated national energy and climate plans and for cooperation between member states.
Actions also are proposed to boost research and innovation in the above areas as well as in integrated energy storage solutions and electro-mobility. Over €2 billion is to be earmarked for support for these priorities during the last three years of the Horizon 2020 programme, while additional financing will be available through the European Innovation Council and the European Structural and Investment Funds.
Further analysis of aspects of the Package, which now enters a lengthy legislative process, will be presented by Engerati in forthcoming features.