European solutions are of the essence when it comes to reconciling the objectives of energy security, competitiveness, and climate change mitigation as the energy transition is progressing. The European climate and energy framework for 2030 and the proposals by the European Commission for an energy union are of key strategic significance for the future direction of European and national climate and energy policies, and thus for the successful implementation of the energy reforms. In its package entitled Clean Energy for all Europeans, the European Commission sets out proposals on how this can be achieved.
Clean Energy for all Europeans: A package designed to help implement the energy union and the climate and energy framework for 2030
On 30 November 2016, the European Commission published a large legislative package (often referred to as the winter package or clean energy package). This package is to be combined with earlier on climate policy and the gas sector, and is to help implement the energy union and the climate and energy framework for 2030. The package itself consists of four Directives and four Regulations:
- Review of the Renewable Energy Directive;
- Review of the Energy efficiency Directive;
- Next-generation Buildings Directive;
- Review of the Internal Electricity Market Directive;
- Electricity Market Regulation to replace the existing Regulation on conditions for access to the network for cross-border exchanges in electricity;
- Review of the Regulation establishing an Agency for the Cooperation of Energy Regulators;
- Draft Regulation on crisis preparedness;
- Draft Regulation for better coordination of national energy policies by means of coordinating national climate and energy plans (Governance Regulation).
The package also serves to implement the decisions of the European Council of October 2014 on the European climate and energy targets for 2030. These are based upon the framework for 2020 that is currently in force and that set out the so-called 20-20-20 targets. Under the 2020 framework, Member States have agreed to cut their greenhouse gas emissions by at least 20% by 2020 compared to the levels of 1990, to boost energy efficiency by 20%, and to have renewables cover 20% of total energy consumption. The main elements of the decision for 2030 are the following:
- a binding target for greenhouse-gas emissions in the EU, which are to be lowered by at least 40% by 2030 compared to 1990 levels;
- a binding EU target for renewable energy, which is to account for at least 27% of energy consumption by 2030;
- an indicative energy efficiency target for energy conservation, which is to attain at least 27% by 2030. In addition, the energy efficiency target is to be reviewed by 2020 to see whether it should be raised to 30%. Under the proposals recently set out by the European Commission, this target is now to be raised to 30% and made binding.
The German government welcomes the package, which it sees as an important step towards reframing European energy policy. The government is convinced that better coordination and greater convergence between national energy policies, combined with action to strengthen the European internal market, set out the right way forward.
The Commission’s proposals are currently in the European legislative procedure. On 18 December 2017, the EU energy ministers reached a political agreement (the so-called general orientation of the Council) on the amendment of the Renewable Energy Sources Directive, the amendment of the Internal Electricity Market Directive, the Electricity Market Regulation and the Governance Regulation. The Council had already reached general orientations on the amendment of the Energy Efficiency Directive and the further development of the Building Directive and the Regulation on crisis prevention in the electricity sector on 26 June and 4 December 2017. In January 2018, the European Parliament held a first reading of a first part of the ‘Clean Energy for all Europeans’ package (Energy Efficiency Directive, Renewable Energy Directive and Governance Regulation). It will continue the negotiations in trilogue with the Council of Ministers and the European Commission. The aim is for the three parties to reach agreement on this part of the package.
The integrated National Energy and Climate Plan (NECP)
The integrated National Energy and Climate Plan (NECP) is a new planning and monitoring tool that is used within the context of the EU’s Energy Union. Member States are called upon to draft an NECP setting out their national energy and climate targets along with strategies and measures they are planning to adopt in order to reach these targets. This will allow to map out for the first time the EU Member States’ national energy and climate policies in an integrated, transparent, and consistent way covering all five dimensions of the Energy Union: decarbonisation, energy efficiency, energy security, internal energy market, and research/innovation/competitiveness. Every EU Member State must submit an NECP to the EU Commission by 2020. As of 2023 and every two years thereafter (current state of play of Council negotiations, October 2017), Member States are expected to send NECP progress reports to the European Commission . For more information on the NECP, please consult this .
Electricity trading with Austria to take account of grid capacity
On 15 May 2017, Germany’s Bundesnetzagentur and Austria’s E-Control agreed on how they want to deal with the bottleneck that exists in the electricity grid at the German-Austrian border. As Germany and Austria have been part of a single bidding zone for electricity, Austrian traders have tended to buy much greater quantities of electricity in Germany than the amount that the cross-border transmission lines can actually deal with. When this has happened, power stations in Germany have had to be shut down and Austrian power stations ramped up to avoid gridlock. This has amounted to costs totalling several hundred million euros per year that have been borne by electricity consumers.
The process agreed by the two countries’ regulatory authorities will take strain off the power grids and strengthen the European internal market. Care has been taken to ensure that the future German-Austrian trade in electricity will be limited to amounts that the grid infrastructure can physically cope with, as is the case with all other European neighbours. The agreement reached between the regulators will now be discussed with the relevant neighbours and the EU Commission.