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CLEAN ENERGY FOR ALL EUROPEANS
CLEAN ENERGY
FOR ALL
EUROPEANS
Ivo Schmidt, 15. Dezember 2016
Stiftung Umweltenergierecht
CLEAN ENERGY FOR ALL EUROPEANS
INDEX
1. STRUCTURE OF THE PACKAGE
2. ENERGY UNION GOVERNANCE
3. RENEWABLES
4. ENERGY EFFICIENCY
5. NEW ELECITRICITY MARKET DESIGN
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CLEAN ENERGY FOR ALL EUROPEANS
AN ENERGY UNION BASED ON 5 MUTUALLY SUPPORTIVE AND INTERLINKED DIMENSIONS
SMART AND CLEAN ENERGY FOR ALL EUROPEANS – IMPLEMENTING THE ENERGY UNION STRATEGY
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CLEAN ENERGY FOR ALL EUROPEANS
Unique opportunity to modernise our economy and to
WHY DO WE NEED A NEW LEGAL FRAMEWORK?
THE ENERGY SYSTEM OF TOMORROW WILL HAVE TO LOOK DIFFERENTLY
2030 50 % of electricity to come from renewables
2050 Electricity completely carbon free
We have the most ambitious climate commitments in the world, thanks to the EU
With leadership comes responsibility
create the growth and jobs we need boost competitiveness
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CLEAN ENERGY FOR ALL EUROPEANS
We want to give a clear signal to investors that the clean energy transition is the
growth sector of the future, both through:
WHY DO WE NEED A NEW LEGAL FRAMEWORK?
THE SMART AND CLEAN ENERGY FOR ALL Package
adapting our regulations
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and putting on the table an enabling environment.
CLEAN ENERGY FOR ALL EUROPEANS
WHAT ARE OUR GOALS?
CREATING JOBS & GROWTH, BRINGING DOWN GREENHOUSE GAS EMISSIONS, SECURING ENERGY SUPPLY
Demonstrating global leadership
in renewables
Delivering a fair deal for consumers
Putting energy efficiency first
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CLEAN ENERGY FOR ALL EUROPEANS
New Electricity Market Design
HOW DO WE GET THERE?
THE RIGHT REGULATORY FRAMEWORK FOR POST – 2020
Energy Union Governance
" In essence the new package is about tapping our green growth potential across the board" Commissioner Miguel Arias Cañete (2016)
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CLEAN ENERGY FOR ALL EUROPEANS
The package presents a dual opportunity to
speed up decarbonisation and to speed up growth and job
creation.
WHAT CAN WE EXPECT IN TERMS OF RESULTS?
Economic growth*: • 1% increase in GDP • 190bn EUR into the economy • 900,000 new jobs
*Upper end of estimates
2016 2030
Investment: • extra 177bn EUR euros per year
of investment from 2021 to meet 2030 climate & energy targets
• Crucial role for EFSI
Decarbonisation: • Carbon intensity of the economy
57% lower in 2030 than in 2015 • 72% share of non-fossil fuels in
electricity generation in 2030
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CLEAN ENERGY FOR ALL EUROPEANS
INDEX
1. STRUCTURE OF THE PACKAGE
2. ENERGY UNION GOVERNANCE
3. RENEWABLES
4. ENERGY EFFICIENCY
5. NEW ELECITRICITY MARKET DESIGN
CLEAN ENERGY FOR ALL EUROPEANS
A ROBUST GOVERNANCE TO MEET 3 OBJECTIVES
WHAT NEEDS TO BE DONE?
Meet Energy Union objectives (notably the 2030
targets)
Allow for investor's certainty and predictability
Ensure Better Regulation and reduce
administrative burden
CLEAN ENERGY FOR ALL EUROPEANS
2018 2021 2020 2019 2030 2029 2022 2024 2023 2026 2025 2027 2028
Draft Plans (2021-2030)
Final Plans (2021-2030)
Progress report
Progress report
Progress report
Progress report
Progress report
Draft update (of 2030 Plan)
Final update (of 2030 Plan)
Draft Plans (2031-2040)
Final Plans (2031-2040)
Commission assessment and recommendations; "What If" measures; Regional cooperation
HOW DO WE GET THERE?
TIMELINE OF THE PROCESS
CLEAN ENERGY FOR ALL EUROPEANS
INDEX
1. STRUCTURE OF THE PACKAGE
2. ENERGY UNION GOVERNANCE
3. RENEWABLES
4. ENERGY EFFICIENCY
5. NEW ELECTRICITY MARKET DESIGN
CLEAN ENERGY FOR ALL EUROPEANS
Investment
certainty
Cost-effective deployment
Collective target achievement
Promoting innovation incl.
in transport
Tapping heating and cooling
potential
Contributing to the EU political priority of becoming world
number 1 in renewables
&
Achieving the at least 27 % EU-level binding
renewables target cost-effectively
THE REVISED RENEWABLES DIRECTIVE – MAIN OBJECTIVES
CLEAN ENERGY FOR ALL EUROPEANS
No additional action would lead only to 24.3 % RES, non-cost efficiently and unevenly spread
across the EU
The modelling shows that for a cost-effective target achievement both Heating & Cooling and electricity will have to cover a major part of
the effort
PRIMES EUCO27, GFEC of RES
EU LEVEL ACTION ACROSS THE 3 SECTORS IS REQUIRED
CLEAN ENERGY FOR ALL EUROPEANS
Various measures can ensure a more even and more cost-
effective deployment of RES across the EU
e.g. Financial instruments tackling cost of capital, no retroactive changes, open up
support schemes…
A MORE EVEN DEPLOYMENT WOULD BE MORE COST-EFFECTIVE
Investments are increasingly concentrated in a few Member States with low cost of capital and policy frameworks perceived as more stable
UK and Germany alone represented over 2/3 of all investments over 2013-2015
Baseline EUCO27
RES share in 2030 27% 27%
Assumptions National support; diverging cost of
capital
EU-wide support; same cost of capital
RES investments required (2021-2030)
€ 404 bn € 240 bn
Share of top 3 MS in total investments
67% 47%
CLEAN ENERGY FOR ALL EUROPEANS
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DELIVERING A SET OF WELL-BALANCED MEASURES ACROSS SECTORS
CLEAN ENERGY FOR ALL EUROPEANS
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A STABLE FRAMEWORK FOR RES-E DEVELOPMENT
STATE AID RULES
1. Guidelines
2. Case by case notifications to and assessment by DG
COMP
Support to be market-
responsive
Streamlined administrative
procedures
Gradual and partial open-up to cross-
border participation
Stability of financial support
CLEAN ENERGY FOR ALL EUROPEANS
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2030 2025 2021 2019
Governance (reporting & monitoring)
RED II sector specific measures (blending mandate, HC obligation, toolkit, self-consumers…)
Flexible Gap filler If gap, MS decide on measures Incl. voluntary contribution to
fund (governance)
Enabling framework incl. enhanced use of funds
Governance (planning, reporting and monitoring)
2020 targets as the baseline If MS fall below, MS mandatory contribution to fund
Governance
RED II
ACHIEVING AT LEAST 27 % RENEWABLES AT EU LEVEL
CLEAN ENERGY FOR ALL EUROPEANS
INDEX
1. STRUCTURE OF THE PACKAGE
2. ENERGY UNION GOVERNANCE
3. RENEWABLES
4. ENERGY EFFICIENCY
5. NEW ELECITRICITY MARKET DESIGN
CLEAN ENERGY FOR ALL EUROPEANS
WHY?
Boost wholesale market flexibility and provide clear
price signals to facilitate the continuing penetration
of renewable energies and ensure investments
Enable active consumer participation and ensure
that consumers are protected and benefit from
progress in energy technologies
Promote regional cooperation and provide a true
European dimension to security of supply
CLEAN ENERGY FOR ALL EUROPEANS
CONTEXT
MORE POWER COMING FROM RENEWABLES
INVESTMENT NEEDS FOR POWER: €75 bn PER YEAR FOR 2021-2030
2014 2030
-20%
Power
generation
28%
Tertiary
11%
Residential
28%
Industry
10%
29% 50%
Today up to 90% of variable renewable electricity is connected to distribution grids
power grids 47%
renewables 33%
conventional 20%
CLEAN ENERGY FOR ALL EUROPEANS
HOW?
Stenghthened role
Regulatory oversight
Better
information
Protection
Empowerment
Information
sharing &
transparency
Common
principles
Level-playing
field
Liquid,
integrated
markets
Sharing
generation
adequacy
Regional
Operation
Centres
Flexibility
CLEAN ENERGY FOR ALL EUROPEANS
23 #EnergyUnion