EU Climate and Energy policy

Report
EREF
European Renewable Energies Federation
EU Climate and Energy policy
Dalarna’s regional energy seminar
May 2014
Dörte Fouquet
EREF Director
EREF
European Renewable Energies Federation
Transport policy:
Clean Power for Transport
package
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EREF
Clean Power for Transport package
European Renewable Energies Federation
Clean Power for Transport: A European alternative fuels strategy
In January 2013, the Commission adopted a Clean Power for Transport
package.
Aims to facilitate the development of a single market for alternative fuels for
transport in Europe
Includes:
• A Communication on a comprehensive European alternative fuel strategy:
for the long-term substitution of oil as energy source in all modes of
transport.
• A Directive’s proposal on the deployment of alternative fuels infrastructure
• An accompanying Impact Assessment and a Staff Working Document
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Clean Power for Transport package
EREF
European Renewable Energies Federation
The European context
Oil dependence major issue for economy - but transport first

Oil supplies 94% of energy to transport; 84% imported

Cost for oil high and rising; price hikes hit economy

Oil is cause for high CO2 and pollutant emissions from transport
Comprehensive long-term European fuel strategy

Aims to substitute oil for all transport modes

Fuel mix: LPG, biofuels, natural gas, electricity, hydrogen

European action required to ensure integrity of internal market
Alternative fuel infrastructure

EU-wide coverage important for citizens and industry

Public intervention required through action on EU level
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EREF
European Renewable Energies Federation
Directive on the deployment of
alternative fuels infrastructure
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Directive proposal on the deployment of
alternative fuels infrastructure
European Renewable Energies Federation
EREF
What is in the Commission’s proposal?
 Member States should adopt national policy frameworks for the
market development of alternative fuels and their
infrastructure,
 It sets binding targets for the build-up of alternative fuel
infrastructure, including common technical specifications
 It defines the way of fuel labelling at refuelling points and on
vehicles to ensure clarity in the consumer information on
vehicle/fuel compatibility.
 Minimum infrastructure shall be provided, differentiated
according to needs and technological maturity, for electricity,
hydrogen, and natural gas CNG and LNG.
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Directive proposal on the deployment of
alternative fuels infrastructure
European Renewable Energies Federation
EREF
European Parliament and Council reached an agreement on the text on April
2014
They amended the Commission proposal as follows:
Each Member State should adopt a national policy framework with:
• assessment of current and future development of the market of alternative
fuels
• national targets and objectives
• measures to ensure that the national targets and the objectives are reached
• measures promoting alternative fuels infrastructure in public transport
• designation of the urban/suburban agglomerations which will be equipped
with CNG refuelling points.
Electricity supply for transport: an appropriate number of recharging points
accessible to the public must put in place by 31 December 2020 (based on
number of electric vehicles estimated to be registered in 2020)
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EREF
European Renewable Energies Federation
The discussion on energy taxation
Commission Proposal from 2011
Commission submitted a proposal in 2011
Core features:
CO2 Element - single minimum rate for CO2 emissions (20 €/t CO2) for all
sectors not covered by the EU ETS
= introduction of a carbon price e.g. for households, transport, smaller
businesses and agriculture
AND: Renewable energy sources would not be subject to this CO2 element!
Energy Content Element - minimum tax rates for energy based on the energy
content of a fuel (€/GJ) rather than the volume
= a fuel will be taxed on the basis of the amount of energy that it
generates, and greater energy efficiency will automatically be
rewarded
THUS: One GJ would be taxed in the same way, regardless of the product
producing it.
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EREF
European Renewable Energies Federation
The discussion on energy taxation
Commission Proposal from 2011
But…
- … already in Parliament no support:
- Luxembourgian MEP and Rapporteur Astrid Lulling (EPP), and Swedish
MEP and shadow Rapporteur, Olle Ludvigson (S&D):
- system based on energy content and on CO2 would automatically
redistribute the relative advantages of various fuels in terms of CO2
emissions
- no CO2 tax on biomethane and a lower CO2 tax on NG
- BUT: too early!
- Up to 50% tax reduction on the energy content (9,6€/GJ for all
fuels) should be granted until 2030
And…
- Taxation requires unanimity vote in the Council
- Member States do not like the Commission’s proposal
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EREF
European Renewable Energies Federation
The EU 2030 climate and
energy framework
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EREF
European Renewable Energies Federation
2030 Climate and Energy Package
European Commission White Paper on 2030 framework
Published on 22 January 2014

Binding target of 40% GhG reduction by 2030 with national binding
targets.

EU-wide binding target of 27% for RES by 2030
 Without national binding targets.
 Binding on the EU only, not on Member States.
 Revision of the RESD for the period after 2020.

New European Governance
 National plans on plans to achieve 203 reductions, amount of
RES, new nuclear capacities, CCS infrastructure plans.
 Commission assessment of the plans
 Still a lot of unclarity …

End of subsidies for mature technologies in 2020-2030 timeframe
EREF
2030 Climate and Energy Package
European Renewable Energies Federation
Member States
European Council conclusion (20-21 March):

Head of States and Governments to take a clear decision by October 2014

No agreement on the targets and ambition level

Call for a supporting framework for advancing RES
Next European Council (27 June 2014):

The framework will be discussed at the next Council

Discussion focused on CO2 emissions and effort sharing
EREF
2030 Climate and Energy Package
European Renewable Energies Federation
European Parliament

Parliament in favor of three mutually reinforcing binding targets for 2030

Ambition level of at least 30% for RES (40% CO2 and 40%EE)

However, very slim majority

New Parliament to come with expected a lot of Eurosceptic:
 Hard to assess the impact of the elections on Parliament position
EREF
2030 Climate and Energy Package
European Renewable Energies Federation
Next steps:
High possibility of a two step approach:
- Agreement on the climate target:
pressure from international level
-
stronger consensus than on RES,
-
Ban Ki Moon meeting in September
-
already discussions on effort sharing
- Discussion on the RES and Energy Efficiency:
review of the energy efficiency directive this summer
-
Commission currently analysis which article of the RES Directive
do not expire by 2020
-
Considering a new RES Directive but not confirmed
-
Work on how the new Governance will look like: but will certainly
not be binding
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EREF
2030 Climate and Energy Package
European Renewable Energies Federation
Discussion on Energy Efficiency:
-
So far there is nothing in the White paper related to it
-
Review of the energy efficiency directive was expected this
summer
-
However likely to be delayed to Autumn
-
Commission will use the outcome of a public consultation to
prepare the review
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EREF
2030 Climate and Energy Package
European Renewable Energies Federation
Additional Commission work:
Report on Energy dependency
March European Council ask the Commission for a 25 years plan on EU energy
dependency (context of the crisis in Ukraine):
 Priority for the Commission
 Led directly by the Director General Mr Ristori
 Report to be presented at the European Council of June
Study of energy subsidies
Aim is to bring more transparency to subsidies given to the conventional energy
sector

Announced by Oettinger in November last year

Prepared by a consortium of external consultants

Interim report before the summer and final report in September

Report to take a historical perspective
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EREF
European Renewable Energies Federation
Attack on the Directive
2009/28/EC
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EREF
Attack on the Directive 2009/28/EC
European Renewable Energies Federation
Questions from Swedish Court to the ECJ:
Are Article (2(k)) and Article 3(3) of Directive 2009/28/EC to be
interpreted as meaning that they permit a Member State to apply a
national support scheme as above, in which only producers situated in
the territory of that country can participate and which has the result
that those producers have an economic advantage over producers who
cannot be issued with an electricity certificate?
Can a system such as that described in question 1 — in the light of Article
34 (TFEU) — be regarded as constituting a quantitative restriction on
imports or a measure having equivalent effect?
If the answer to question 2 is affirmative, can such a system be
compatible with Article 34 (TFEU) as regards the objective of promoting
the production of electricity from renewable energy sources?
How is the consideration of the above questions affected by the fact that
the restriction of the support scheme to include only national producers
is not expressly governed in national law?
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EREF
Attack on the Directive 2009/28/EC
European Renewable Energies Federation
Background:
Ålands Vindkraft power plant on the Ålands islands
- fed electricity into the Swedish grid
- not connected to the Finnish grid
- sought for financial support (certificates) from Sweden
Swedish authorities refused
- not located in Sweden
- Swedish support scheme only for electricity Sweden can use to
reach its mandatory national target under Directive 2009/28/EC?
-…
Sounds like a repetition from the past…
- EFET had tried a similar thing in 2008…
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EREF
Attack on the Directive 2009/28/EC
European Renewable Energies Federation
Response by the Advocate General Yves Bot:
Directive 2009/28/EC allows Member States “national support schemes”
BUT: Swedish support scheme = “measure having equivalent effect”
Prohibited under Art. 34 TFEU, unless justified.
Justifications not possible:
- electricity markets nowadays more liberalized
- i.e. changed circumstances since ECJ PreussenElektra
- Guarantees of origin allow tracking of renewable energy quality
- no reliable proof that national support schemes would blast if
also support to renewable energy projects elsewhere
- environmental protection requires support of renewables
everywhere rather than financing conventional energy within own
territory
Conclusion: Art. 3(3) Directive 2009/28/EC needs to be changed!
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EREF
Attack on the Directive 2009/28/EC
European Renewable Energies Federation
What now?
European Parliament petitioned to be allowed to join proceedings
Court has not ruled on this petition so far
Court to deliver judgment normally some months after conclusions be
the Advocate General
Free whether or not to follow his line of argument
About 75% of the cases, the ECJ follows
BUT: significant delay as highly political???
Conclusions came in January 2014
In “topically related” case already in May 2013 (C-204/12 – C208/12 Essent)
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EREF
European Renewable Energies Federation
Guidelines on environmental and
energy State aid for 2014-2020
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EREF
European Renewable Energies Federation


Guidelines on environmental and energy
State aid for 2014-2020
Adopted by the Commission on 9 April 2014
Enter into force on 1 July 2014
The guidelines are soft law.
However, actually “self-binding” the European Commission:
when assessing a national renewable energy support scheme which
is designed as State aid, Commission will (almost) have to approve
it if it complies with the Guidelines.
State aid not in accordance with the Guidelines may still be
approved!
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EREF
European Renewable Energies Federation
Guidelines on environmental and energy
State aid for 2014-2020
Type of support:
Type of support allowed based on installation size:
- Installations under 500kW (3MW wind): Feed-in tariff still possible
- Installations under 1MW (6MW wind): Feed-in premium
- Installations above 1MW (6MW wind): Feed-in premium and technology
neutral tendering
Member State have several derogations where they can decide:
 not to use a bidding process
 And/or to use exclude certain technologies from the bidding process
EREF
European Renewable Energies Federation
Guidelines on environmental and energy
State aid for 2014-2020
Gradual implementation
 In 2015 and 2016: 5% of new RES electricity capacities should be
granted by technology neutral tendering.
 In 2016, installations above 500kW (3MW wind) should receive a
Feed-in premium
 From 2017, all installations above 1MW (6 MW for wind), should
apply for support through a technology neutral bidding process and
will receive a Feed-in premium
EREF
European Renewable Energies Federation
Guidelines on environmental and energy
State aid for 2014-2020
Analysis of the guidelines

Overall, it is not positive for the RES industry

Globally in favor of large-scale centralized project and mature technologies

However, a lot of exemptions have been introduced that give more
flexibility to member States

Final version clearly improved from the 1st drafts
However

Still an excess of power by the European Commission

Lack of reflection of the current EU energy system situation

No proven record of use and success over a longer period of the
methodologies used such as the introduction of a very restricted choice of
state aid mechanisms
EREF
European Renewable Energies Federation
Thank you for your attention!

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