EU maps out low-carbon energy path

Posted: 24 January 2008

The European Commission has released its proposals for a Directive on the promotion of energy from renewable sources. This report is from Renewable Energy World, the leading UK publication on renewable energy of all kinds.

The Directive aims to establish an overall binding target of a 20 per cent share of renewable energy sources in energy consumption and a 10 per cent binding minimum target for biofuels in transport to be achieved by each Member State, as well as binding national targets by 2020. The move follows last January's Strategic European Energy Review which proposed the targets, including an overall EU target of 2 per cent of total energy to come from renewables by 2020.

The proposals will, in particular, form part of a legislative package that will establish greenhouse gas and renewable energy commitments for all 27 EU Member States.

The proposed Directive lays down the principles according to which Member States need to ensure that the share of renewable energy in the EU final energy consumption reaches at least 20 per cent by 2020.

Country targets

The Commission acknowledges that Member States' starting points, renewable energy potentials and energy mixes vary and has therefore translated the overall 20 per cent target into individual targets for each country. This is calculated on the basis of an equal increase in each Member State's share weighted by their Gross Domestic Product, modulated to reflect national starting points, and by accounting in terms of final energy consumption.

On this basis the UK, for instance, has been set a 15 per cent target for total energy, France 23 per cent and Germany 18 per cent. Meanwhile, Romania has been set a 24 per cent target, with Hungary and Poland at 15 per cent each.

By contrast, the Commission says it is appropriate for the 10 per cent target for renewable energy in transport to be set at the same level for each Member State in order to ensure consistency in transport fuel specifications and availability. According to the proposal this is because transport is showing the most rapid increase in greenhouse gas emissions, and also biofuels promote oil independence.

Biofuel rules

Specifically for biofuels and other bioliquids, the Directive sets up a system to guarantee the environmental sustainability of the policy, ensuring inter alia that the biofuels counting towards the targets achieve a minimum level of greenhouse gas savings.

The development of a market for renewable energy sources and technologies also has a clear positive impact on security of energy supply, regional and local development opportunities, rural development, and employment opportunities, says the Commission proposal.

In addition to the Directive establishing renewable energy targets for 2020, the package by the Commission includes a regulation updating national greenhouse gas emissions targets and a Directive to improve and expand the EU emissions trading system (EU ETS). Under the new system over 40 per cent of total emissions will be covered by the ETS, although industrial plants emitting less than 10,000 tonnes of CO2 annually will not have to participate.

Power auctions

The emission allowances put on the market will be reduced year-on-year to allow for emissions covered by the ETS to be reduced by 21 per cent from 2005 levels in 2020. Furthermore, the power sector, which creates the majority of EU emissions, will face full auctioning from the start of the new regime in 2013. The auctions will be open, with any EU operator able to buy allowances in any Member State. For each Member State the Commission is proposing a specific target by which it must reduce or, in the case of new Member States, may increase its carbon dioxide emissions up to 2020, ranging from -20 to +20 per cent.

The proposals add that third party countries should be able to benefit from the promotion of renewables in the EU through the supply of biofuels and other bioliquids which meet sustainability requirements, or the supply of renewable electricity from neighbouring countries. However, while no trade restrictions should apply to renewable energy imports or exports, the Community has said that it will ensure that a level playing field is afforded to all renewable energy producers, both in and outside the Union.

Warm welcome

The renewable energy industry unanimously applauded the proposal document, although the European Photovoltaic Industry Association (EPIA) warned that, a 'number of clarifications and improvements are necessary to ensure its concrete implementation.'

EPIA says particular concerns are the provisions on transfer of Guarantees of Origin by which Member States can help to meet their targets and that 'no penalties are foreseen for Member states if they do not reach their own target.'

Noting the recognition by the Commission that 'well-adapted feed-in tariff regimes are generally the most efficient and effective support schemes for promoting renewable electricity,' EPIA says that the introduction of binding priority access to the grid for renewables should accelerate development. Christian Kjaer, EWEA Chief Executive adds: 'The target implies that renewable energy's share of electricity will increase from 15% today to more than a third of Europe's demand in 2020.'

The European Wind Energy Association, notes that the proposals only allow Member States and companies to sell their guarantees of origin if that country is meeting its interim targets and also welcomed the Commission's decision to establish full auctioning for the power sector from 2013.

The European Solar Thermal Industry Federation's President, Gerhard Rabensteiner, observed: 'For the first time, an EU legislative proposal has the explicit purpose of supporting all renewables, including solar heating and cooling.'

The European Renewable Energy Council, which also released a statement, said that the main elements to improve are the 'integration of an enforcement mechanism for Member States not complying with their intermediate targets, the calculation of imports from outside the EU, certain technical specifications for technologies, clearer wording in the section of guarantees of origin and a clarification of sustainability criteria.'

Source: Renewable Enegry World (REW) January 24, 2008.

The full directive proposal may be viewed: here