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Leaked: draft EU Renewable Energy Directive

On Wednesday 30 November the European Commission will present the next Energy Union Package. (On Twitter a.k.a. #EnergyUnionPackage.) The package will consist of nine (possibly ten) elements:

  • Governance of the Energy Union Regulation
  • Energy Efficiency Directive (leaked draft here)
  • Energy Performance of Buildings Directive (leaked draft here)
  • Renewable Energy Directive
  • Electricity Market Regulation (leaked draft here)
  • Risk Preparedness Regulation
  • Outcome Sector Inquiry into National Capacity Mechanisms (interim report here)
  • Accelerating clean energy innovation (research, innovation and competitiveness)
  • ACER Regulation
  • (Energy Prices?)

A first assessment of the overall Energy Union Package (by leading energy MEP Claude Turmes) is rather negative. The European Commission can and should do much better!

A draft of the Renewable Energy Directive was leaked to me on Monday 14 November 2016. Full title: ‘Proposal for a directive of the European Parliament and of the Council on the promotion of the use of energy from renewable sources (recast)’. The draft document has 111 pages (plus cover page). Its structure:

  1. CONTEXT OF THE PROPOSAL (p1)
  2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY (p5)
  3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS (p8)
  4. BUDGETARY IMPLICATIONS (p19)
  5. DETAILED EXPLANATION OF THE SPECIFIC PROVISIONS OF THE PROPOSAL (p20)

Detailed explanation of the specific provisions of the proposal

‘The main provisions which substantially change Directive 2009/28/EC or add new elements are the following:
Article [1] indicates the scope of this Proposal mentioning new elements for the period after 2020 such as the overall EU binding target, renewable self-consumption, improved biofuels, bioliquids and biomass fuels sustainability and greenhouse gas emissions saving criteria.
Article [2] introduces new specific definitions, in the light of the amendments carried out to the Renewable Energy Directive.
Article [3] sets out the 2030 EU target. It establishes the 2020 national targets as baseline (i.e. Member States cannot go below the 2020 national targets from 2021 onwards). It also includes a reference to the mechanism to avoid the emergence of a gap in target achievement, as set out under the Governance Regulation. Furthermore, it deletes the 10% RES-T target after 2020.
Article [4] lays down an EU toolkit for Member States in designing support schemes to facilitate a cost-effective, market-oriented and Europeanized approach complementary to the State aid guidelines, including on (i) market-based support schemes for renewable electricity in order to foster RES-E deployment (ii) open, transparent and non-discriminatory tenders (iii) technology-neutral vs technology-specific tenders.
Article [5] establishes a gradual and partial opening of support schemes to cross-border participation in the electricity sector.
Article [6] ensures that the level of, and the conditions attached to, the support granted to renewable energy projects, when Member States opt to do so, are not revised in a way that negatively impact supported projects.
Article [7], which regulates how to calculate the share of energy from renewable sources, includes a decreasing maximum share of biofuels and bioliquids produced from food or feed crops starting from 2021, with the aim to address ILUC emissions. Member States may set a lower limit and may distinguish between different types of biofuels and bioliquids produced from food and feed crops, for instance by setting a lower limit for the contribution from biofuels produced from oil crops, taking into account indirect land use change.
Article [15] includes a new calculation methodology (anchored on the Energy Performance of Buildings Directive) of minimum levels of energy from renewable sources in new and existing buildings that are subject to renovation.
Article [16] establishes a permit granting process for renewable energy projects with one designated authority (“one-stop-shop”) and a maximum time limit for the permit granting process.
Article [17] introduces a simple notification to Distribution System Operators for small scale projects and a specific provision on accelerating permit granting process for repowering existing renewable plants;
Article [19] includes some modifications to the guarantees of origin system (i) to extend the guarantees of origin (GOs) system to renewable gas; (ii) to make the issuance of GOs for heating and cooling mandatory upon a producer’s request; (iii) to make the use of GOs mandatory for RES-E and renewable gas disclosure; (iv) to enable the issuance of GOs to supported RES-E, allocated directly to energy suppliers where thay pay the cost support, or allocated through auctioning, with revenues raised to be used to offset the costs of renewable support; and (v) to improve the administrative procedures through the application of the CEN standard.
Article [21] empowers consumers by enabling them to self-consume without undue restrictions, being remunerated for the electricity they feed into the grid.
Article [22] sets forth new provisions on energy communities to empower them to participate in the market.
Article [23] aims to exploit the renewables potential in the heating and cooling sector, ensuring a cost-efficient contribution of the sector to target achievement, and to create a larger market for RES-H&C across the EU. Accordingly, designated energy suppliers for heating and cooling are required to achieve an annual increase of 1% in the share of renewable energy in their total annual sales volume until 2030. It leaves Member States the freedom to designate the obligated parties, amongst energy and energy fuel suppliers for heating and cooling (amongst wholesale or retail energy and energy fuel suppliers for heating and cooling). An exception for suppliers with small annual heating and cooling sales for heating and cooling at national level, subject to a minimum overall quota being covered, is included. The obligation will be fulfilled via (i) physical incorporation, (ii) direct mitigation measures or (iii) indirect mitigation measures proved by tradable certificates.
Article [24] opens local heating and cooling systems for producers of renewables heating and cooling and waste heat or cold and third parties acting on their behalf. It also empowers energy consumers by enabling them to stop buying heat/cold from a district heating/cooling system at building level if the consumers, or a party on their behalf, can achieve a significantly better energy performance by measures taken at building level.
Article [25] establishes a EU-level obligation for fuel suppliers to provide a certain share ([…%] in 2030) of low-emission and renewable fuels (including renewable electricity and advanced biofuels), in order to stimulate decarbonisation and energy diversification and to ensure a cost-efficient contribution of the sector to the overall target achievement. ILUC issues are addressed through Article 7 which introduces a decreasing maximum share of biofuels and bioliquids produced from food or feed crops starting from 2021. The switch to advanced biofuels is promoted by a specific sub-mandate, increasing yearly their contribution to reach at least […%] by 2030. Finally, the article includes a provision providing for the introduction of national databases that ensures traceability of the fuels and mitigate the risk of fraud.
Article [26] […].
Article [27] brings a clarification on the mass balance system and adapt it to cover biogas codigestion and injection of biomethane in the natural gas grid. The amended article includes the obligatory recognition of evidence from national schemes of other Member States that have been verified by the Commission. To streamline the EU sustainability criteria, it deletes a number of non-operational provisions, including the possibility to establish bilateral agreements with third countries, and the possibility for the Commission to recognise areas for the protection of rare, threatened or endangered ecosystems or species recognised by international agreements or included in lists drawn up by intergovernmental organisations or the International Union for the Conservation of Nature. Furthermore it clarifies the legal basis allowing the Commission to specify the auditing approaches to be applied by the voluntary schemes, with stronger focus on limiting administrative burden. Finally, it enhances the involvement of Member States in the governance of voluntary schemes by allowing checks of certification bodies.
Article [28] includes a legal basis allowing the Commission to update the GHG calculation methodology. It also clarifies the future use of Member States reports on average cultivation emissions.
Articles 3, 4, 16 (1-8), 22 and 23, 24 and 26 of the Directive 2009/28/EC will be repealed by this proposal. Articles 6, 7, 8, 9, 10, 11, 12, 14, 25, 25a, 27, 28, 29 of Directive 2009/28/EC (Articles 8, 9, 10, 11, 12, 13, 14, 18, 31, 32, 33, 35 and 36 of this proposal) are slightly revised (e.g. technicalities or adaptions to new amendments and provisions) or just renumbered.’ (p19-21)

Comment by MEP Claude Turmes (source; p4-5)

‘Are Šefčovič and Arias Canete organising a lost decade for renewables in Europe? The relevance of the “Winter Package” has to be measured against the signal sent to investors and project developers to continue prioritising renewable energy investments in Europe, the ability to create markets for new actors (cities, aggregators, SMEs…) & new technology (smart grids, electro-mobility) and the progress towards removing existing market arrangements protecting the old energy world based on coal and nuclear. But under the influence of energy oligopolies gathered in the Magritte Group and of its own in-house ETS-only gang, the Commission is now proposing a totally empty directive organising a lost decade for renewables. Have you ever seen a world leader with a shrinking home market?

Firstly, the revision of the directive on renewables is lacking ambition. The EU target set in article 3 of the renewable energy directive should be increased to 30% to 35% by 2030. A cap of 27% is a step backwards when we consider the volume of additional capacity: in terms of volume, it would be equivalent to halving new capacity installed annually compared to the 2010-2020 decade! It represents a level even lower than the capacity foreseen by the Commission in their business as usual reference scenario. The Commission should propose a credible scenario to increase the volumes of new renewable capacity in the next decade within the range of 30 to 35%.
Secondly, the governance system proposed by the Commission is weak and loose. The Commission should propose a credible and solid governance architecture within the directive on renewables. The current system based on national binding targets allowed Europe to become world leader on renewables. However this situation is threatened by a non-prescriptive pledge-and-review approach envisaged at this stage. Without national binding targets, Member States will adopt a wait-and-see approach. The Commission risks to encourage free riding attitudes and should at least propose indicative national benchmarks allowing a measurement of Member States’ efforts and the establishment of a gap-filler mechanism ensuring all Member States’ fair participation to the EU effort. The gap-filler as proposed in the new regulation on governance is extremely weak as it postpones to 2025 any corrective intervention in case the EU is not on track. This proposal implies uncertainty for investors during the period 2020-2025, notably in the case of off-shore wind where manufacturers and developers need a long-term vision. Thousands of jobs are at stake.
Thirdly, the revision of the renewables directive should include the possibility for Member States to continue with renewables support schemes for the period 2020-2030, based on common principles (e.g. a common rulebook) on how to best design such mechanisms. These common principles should also include de minimis exemptions for small projects run by individual citizens, cooperatives and SMEs.
Finally, the biggest step back foreseen by the Commission is the removal of priority access and dispatch of renewable electricity as enshrined in article 16 of the current renewables directive. The Commission is proposing to abolish those provisions and to replace them with new articles 11 and 12 of the electricity regulation that are allowing Member States (such as conservative governments in Spain and Poland) not to grant any priority access and dispatch at all. In addition, even pro-renewables governments would be left with tied hands as, if they decide to continue with priority access and dispatch, they could do so only for a limited period of time and within the limit of 15% of the electricity production! This would also totally hinder the development of biomass via cogeneration, including highly-efficient CHP and cogeneration at industrial level. The Commission’s own impact assessment considers priority access and dispatch as a precondition to avoid “must-run” coal and nuclear continuing to produce when renewables are curtailed. In the middle of COP22, at a time where climate change should be at the heart of EU policy-making, the removal of priority access and dispatch for renewables is unacceptable.

The Commission has now two weeks to seriously reconsider its intentions and come with an ambitious renewables directive on the table on 30 November, making progress on priority access and dispatch, on the level of ambition and on the governance.’

Stakeholders reactions*

BirdLife Europe: ‘The package seems to be falling miserably short in addressing the well known and indisputable problems with bioenergy, the EU’s biggest renewable energy source.’

“The Commission’s proposal fails to ensure that bioenergy will help us to radically reduce emissions without destructive impacts on nature as well as lacking clear directions about the future of bioenergy. We need to limit the use of biomass for energy and we need a clear trajectory to phase out the use of crops altogether by 2030 as well as measures to stop the use of whole trees. While scaling down support for inefficient electricity-only bioenergy would be a step to the right direction, proposed targets to increase the volume of renewables in transport and in heating are likely to just repeat the earlier mistakes with targets that drove the use of harmful biofuels.” 

 “Existing sustainability criteria for biofuels have been completely inadequate to ensure the genuine sustainability of biofuels and to stop indirect land use change, so it’s hard to understand why the Commission even considers that the same criteria on other kinds of bioenergy would make a difference.” 

Document

You can find the draft document hereIf this blog is the first place you saw it, then please use its original source when sharing it, that is: please share this blog, not just the Google doc. Many thanks!

* This blog will be updated with more comments from stakeholders.

bioenergyclimateconsumersenergyenvironmentEU Energy Uniongovernancepriority accessrenewables

@StollmeyerEU • 15th November 2016


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