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The renewable energy policy of the European Union

Andreas Pilzecker Unit for Renewable Energy and CCS Policy

DG Energy, European Commission

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blue – planned trend in EU renewable energy red dotted – estimated trend in EU renewable policy with current policies

…current RES policies will not be sufficient to reach 2020 targets! Renewable energy outlook to 2020

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20000

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2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

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RES 2012 Progress Report

Biomass is not progressing as projected in many NREAPs

blue – planned trend in EU renewable energy red dotted – estimated trend in EU renewable policy with current policies

Bioenergy outlook to 2020

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2030 climate and energy Framework

20 % GHG

40 % GHG

20% RES

20 % EE

≥ 27 %

RES ..

2014

2020

2030 New Key Indicato

rs

New governance system

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Main challenges…

• Increasing in any event: renew ageing energy system, rising fossil fuel prices, meeting the climate and energy targets already agreed upon

Energy costs

• Shift away from fuel expenditure towards investments, additional € 38 billion investment/year 2011-2030 compared to the reference scenario

Additional investments to achieve 2030 framework

• Future discussion will have to be centred on how to ensure an equitable effort sharing affordable for all

Differences between Member States

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European Council Conclusions March 2014 A coherent European energy and climate policy must ensure affordable energy prices, industrial competitiveness, security of supply and achievement of our climate and environmental objectives. Substantial progress has been made towards the attainment of the EU targets for greenhouse gas emission reduction, renewable energy and energy efficiency, which need to be fully met by 2020. The European Council confirms that the European Union will submit its contribution [for COP 21 in Paris 2015] at the latest by the first quarter of 2015, as should all major economies. The specific EU target for 2030 will be fully in line with the agreed objective for 2050. Such an agreed EU policy framework on greenhouse gas emissions, renewables and energy efficiency, to be elaborated on the basis of the Commission communication, will provide the necessary stability and predictability for its economic operators and confirm the EU's role globally.

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The European Council invites the Council and the Commission to continue work and rapidly develop the following elements: • analyse the implications for individual Member States of the Commission's proposals for EU-wide targets for emission reductions and renewable energy; • elaborate mechanisms which will result in an overall fair effort sharing and foster the modernisation of the energy sector; • develop measures to prevent potential carbon leakage and call for long-term planning security for industrial investment in order to ensure the competitiveness of Europe's energy-intensive industries; • review the Energy Efficiency Directive in a timely manner and develop an energy efficiency framework.

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EU Energy Security Strategy (28 May 2014) It proposes the following key actions: . Immediate actions aimed at increasing the EU's capacity to

overcome a major disruption during the winter 2014/2015 . Strengthening emergency/solidarity mechanisms including coordination of risk assessments and contingency plans; and protecting strategic infrastructure . Moderating energy demand . Building a well-functioning and fully integrated internal market . Increasing energy production in the European Union (incl. renewable energy) . Further developing energy technologies . Diversifying external supplies and related infrastructure . Improving coordination of national energy policies and speaking with one voice in external energy policy

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Medium to long-term challenge (5) Renewable energy

.  20% RES by 2020, but market-based

.  Coordinated RES support

.  Accelerate fuel-switch in heating .  Supporting Finance for renewable projects (EIB, national investment banks, ESI Funds)

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Import dependency has increased

• Since the mid-90s import dependency up by 10 percentage points, but relatively stable in recent years • Significant decline in production of oil, gas and coal due to depletion of EU reserves and closures of uncompetitive sources against demand that was steadily growing until 2006, but flattening out since then

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Natural gas: in the spotlight for disruption risks

.  High import dependency (66%) and import bill (approx. 87 billion Euro in 2013), limited number of suppliers

.  Six Member States depend on Russia as single external supplier for their entire gas imports. Three of them use natural gas for more than a quarter of their total energy needs .  In 2013 energy supplies from Russia accounted for 39% of EU natural gas imports or 27% of EU gas consumption .  Russia exported 71 % of its gas to Europe with the largest volumes to Germany and Italy

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Council Conclusions 26/27 June 2014

. The European Council [..] stressed the importance of swiftly developing the key elements of the framework, and looks forward, in particular, to the Commission presenting by July a review of the Energy Efficiency Directive and how energy efficiency can contribute to the 2030 climate and energy framework. . It reaffirms the importance of the UN Climate Summit in September 2014 and confirms that the specific EU target for 2030 for greenhouse gas emission reductions will be fully in line with the agreed ambitious EU objective for 2050.

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Energy Efficiency Communication, 23 July 2014 . The Commission proposes a new energy

efficiency target of 30% for 2030. . Energy efficiency can drive competitiveness and strengthen security of supply. . Current measures will achieve energy savings of 18-19% by 2020. . If already agreed legislation is properly implemented, the 20% target can be reached without additional measures.

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. The EU's new 30% target for 2030 can make energy cheaper, ensure security of supply, and improve the lives. . For every additional 1% in energy savings, EU gas imports are expected to fall by 2.6%. . More energy efficient buildings offer 'ancillary benefits' in addition to reducing their energy bills. . Ambitious energy efficiency policies create new opportunities for European businesses. . The new energy efficiency target is estimated to create new jobs by 2030.

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Commission President-elect Junker’s priorities on energy: . Strengthen the share of renewable energies on our continent. This is not only a matter of responsible climate policy. It is, at the same time, an industrial policy imperative if we still want to have affordable energy at our disposal in the medium term. I strongly believe in the potential of “Green Growth” and I want the EU to become the world number one in renewable energies. . Enhance energy efficiency beyond the 2020 objective, notably when it comes to buildings. A binding 30% objective for energy efficiency by 2030 is to me the minimum if we want to be credible.

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Mission letter to Commissioner for Climate Action and Energy .  Contribute to establishing a European Energy Union with a forward-looking climate

change policy. .  Contributing to the completion of the internal market for energy. .  Identify and select infrastructure projects on which to focus, assess the need to add to the current legal framework and monitor very closely the implementation of existing legislation. .  Contributing to the jobs, growth and investment package. Ensure that the EU can be a catalyst for public and private investment. A particular focus should be in infrastructure such as energy networks, as well as in renewable energy and energy efficiency. .  Increasing Europe’s energy security by diversifying sources and routes of energy imports and combining our negotiating power. .  Steering the preparation and negotiations of the legislative instruments that will follow political agreement on the 2030 energy and climate framework. .  Continuing to develop EU policy for renewables. The EU should be a world leader in this sector. .  Guide work on energy efficiency. .  Strengthening and promoting the Emissions Trading System to ensure we reach our climate goals in a cost-effective way.

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European Council Agenda (23/24 October 2014) “The European Council will take a final decision on the new climate and energy policy framework, including on further measures aimed at enhancing Europe's energy security and on specific 2030 interconnection objectives.”

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EU policy on biomass

§  Biomass: only renewable energy source that requires ongoing use of fuel with a cost to supply

§  Key role for biomass: expected to deliver over half the

renewables target in 2020, key role for 2030-2050 energy scenario

§  EU policy objectives:

ü  competitive feedstock mobilization ü  sustainable lifecycle production ü  efficient biomass end-use

§  Many opportunities and benefits but also significant

risks

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EU approach to biomass and biogas sustainability

•  RES directive: mandate to assess the issue

•  EU February 2010 report on biomass sustainability: recommendation that national criteria follow in almost all respects those for biofuels for consistency and to avoid unwarranted discrimination in the use of raw materials

•  Ongoing review of approach effectiveness, focusing on three aims

ü  Market impacts of national sustainability regulations

ü  Sustainability issues: production of biomass, lifecycle greenhouse emissions, end-use efficiency, resource efficiency

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What stakeholders told us

ü  Overall stakeholders split on the need for additional EU action beyond national regulations, clear divide between biomass exporters and importers

ü  Non-government organisations and some academia want robust action to prevent deforestation and ensure real GHG benefits

ü  Large generators worried about conflicting national approaches, want to end the uncertainty on what standards would be needed to receive public support

ü  But smaller players in the supply chains – small woodland owners and some farmers - are concerned at cost and complexity

ü  Traditional feedstock users (i.e. wood panel industry) concerned about potentially increasing competition for biomass raw material

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Biomass policy post-2020

An improved biomass policy will also be necessary to maximise the resource efficient use of biomass in order to deliver robust and verifiable greenhouse gas savings and to allow for fair competition between the various uses of biomass resources in the construction sector, paper and pulp industries and biochemical and energy production. This should also encompass the sustainable use of land, the sustainable management of forests in line with the EU's forest strategy and address indirect effects as with biofuels.

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EU Roadmap Energy 2050

% 80 70 60 50

40 30 20 10 0

Biomass  will  con,nue  to  play  a  key  role,  need  to  promote  most  efficient  uses  

RES share up to 55% of EU energy demand (64-97% of total power demand) by 2050

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Thank you for your attention! More information:

http://ec.europa.eu/energy/renewables/