Markets & Policies

EU 2030 targets for climate and energy: aiming higher

On January 17th the European Parliament in plenary sitting endorsed the proposal of the Industry, Research and Energy (ITRE) Parliamentary Committee to raise the EU 2030 targets on renewable energies and energy efficiency above the objectives originally set with the 2030 Framework for climate and energy agreed by member states in 2014.

Few days ago a large majority of the Members of the European Parliament (MEPs) finally voted in favour of increased energy efficiency and renewable EU 2030 targets: a 35% binding EU target on energy efficiency and a 35% share of renewable energy on the total energy consumptions, showing an increasing commitment to decarbonisation and to the Paris Agreement. In line with the current practice, the energy efficiency target will keep on being based on the projected energy consumption in 2030 according to the PRIMES model simulation results (used by the European Commission to simulate the energy consumption and the energy supply system in the EU). For the renewable energies EU target, specific national targets should be set, but member states will be grated the possibility to deviate by a maximum of 10% under certain conditions.

Background and legislative procedure

The MEPs votes follow the positions adopted by the European Council on increased energy efficiency (June 2017) and promoting renewable energy use (December 2017), which, according to the European ordinary legislative procedure,  are based on the legislative initiative taken by the European Commission on 30 November 2016 with the clean energy package (also known and winter package). The package, which is the implementing tool of the Energy Union strategy, had eight legislative proposals, including the energy efficiency directive (EED) and renewable energy directive (RED). In the 17 January plenary setting the MEPs adopted two texts for the EED and RED with a number of amendments to the original Commission proposal reflecting the Parliament views.  The negotiations between the Parliament and the Council can now start immediately, and hopefully they will soon reach an agreement and the new final legislative acts will be adopted.

The ITRE Commission agreement in November 2017 was for a binding target to reduce energy consumption by 40% by 2030 at EU level, while, as reported above, the Parliament plenary setting passed a 35%, which is anyway a more ambitious target than the EU Commission proposal for a 30% in the context of the clean energy package.

The current targets for 2030, endorsed by the EU with the European Council conclusions of 23 and 24 October 2014, are shown in Table 1.

EU current 2030 climate and energy targets

Cost-effectiveness of higher renewables target: IRENA’s analysis

According to REmap[1] IRENA study for the EU, the EU could double the renewable share in its energy mix, cost effectively, and from 17% in 2015 to 34% in 2030, and all EU countries have cost-effective potential to use more renewables. The study portrays the expected penetration of renewables in the EU by 2030 under a Reference Case scenario, where only existing and planned policies are considered, and through “REmap Options”, which are “realisable renewable-based technology potentials at a country level”. Those are characterised in terms of their levelised cost of energy and compared with a conventional technology alternative to determine the costs of substitution, with the final idea of showing what is technically possible and cost-effective based on today’s best knowledge.  Picture 1 shows a summary of IRENA’s findings for the EU overall renewables sector in terms of cost-effective RES deployment; for the solutions that entail additional costs compared to conventional technologies such costs result to be by far outweighed by the benefits when health and environmental externalities are considered.

Renewable energy cost-effective options in the EU for 2030 in IRENA’s analysis

Other relevant elements of the MEPs votes

For transport the renewables quota on total sector energy consumption will have to be at least equal to 12% in 2030 for each member state, and the “first generation” biofuels (made from food and feed crops) contribution should be capped to 2017 levels, while the renewable transport fuels of non-biological origin, waste-based fossil fuels and renewable electricity will have to be at least 1.5% in 2021 and at least 10% in 2030. Furthermore MEPs voted for a total ban of pail oil from 2021, immediately raising critiques in the south-east Asian producing countries, and, if the decision will finally pass as EU legislation, there will probably be intense protests, also involving more proactively the Roundtable on Sustainable Palm Oil. According to the above mentioned IRENA study for the EU, all the renewable transport options are needed to realise the long-term objectives.

Another tricky and often contested element of EU decarbonisation policy is the use of biomass, and the Parliament wants support schemes for renewable energy from biomass to be designed in order to avoid an unsustainable use of the biomass resources. Industrial or other use of the biomass as a material should be prioritized over the use a mere fuel for the generation of electricity and heat, since burning wood leads to the release of the CO2 captured and stored in its fibres.  IRENA’s view on biomass is that it will remain a key renewable energy source in 2030 and beyond.

A final element of interest is about the role of “prosumers”, and energy communities, versus the traditional consumers. The Parliament view is that consumers should be allowed to 1) install technologies to produce electricity at their own premises, 2) (self)consume the electricity they can produce and 3) install storage systems, all without being charged of any fee or tax. This provision is meant to promote local self-consumptions and the deployment of renewable distributed generation technologies, and the creation and participation to local renewable energy communities. The main question that usually rises is then… who is going to pay the transmission/distribution network costs and developments and the essential services it provides? With fewer and fewer consumers entitled to pay some of those (tariff) costs, the burden will remain on who, for economical or technical reasons, will keep on being heavily dependant on the national grid for electricity supply.

What’s next?

Member states should now be working on the “Integrated National Energy and Climate Plan”, based on the proposed regulation on Governance of the Energy Union, setting own national targets to meet the 2030 overall targets. But the EU final decision about eventually more ambitious 2030 targets is the first element that should be finally set, in order to drive countries decision and policies and to give the final signal to all the stakeholders, from big corporations to citizens, about the level of commitment of the Union.

 

[1] IRENA’s methodology to assess the potential for scaling up renewables in countries, across regions and around the world. An EU-wide model (a dispatch model based on Plexos software and developed in co-operation with University College Cork) was developed to simulate the operation of the EU power sector in 2030, assuming full deployment of the generation mix resulting from the REmap case.

LEAVE A COMMENT