EREF
European Renewable Energies Federation
Newsletter
January 2015
6
Editorial
2
Renewable energy news from Brussels
4
Upcoming events
12
EREF news
12
Contact us:
Avenue Marnix 28
1000 Brussels
BELGIUM
[email protected]
www.eref-europe.org
Tel: +32. 2-204.44.00
EREF
EUROPEAN RENEWABLE E NERGIES FEDERATION
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Newsletter January 2014
2015 – A new year with new challenges
Editorial from Dr. Dörte Fouquet, EREF Director
The year 2015 has started and with it, a new Commission and a new
Council. In the Commission, under the new President Juncker, some serious restructuring has taken place, and everyone first had to get used to it.
Not always easy to find back your old contacts…. In the Council, the Latvian Presidency has taken over some heavy dossiers from the Italian Presidency, such as the Clean
Air Package, which the Commission was actually partly considering to take back, as the Member
States’ opposition was that strong. Not to forget the European Parliament: Now the Commission
has settled and asked for approval to withdraw the proposal on the National Emissions Ceiling
Directive, the Parliament refused to approve and the procedure is deemed to continue. Thus, as
this exemplary anecdote shows, a lot has changed but the back and forth between the European
institutions keeps going on.
Now what can we expect from 2015? According to the Commission, the focus will be on the Energy Union – and a Strategic Framework is supposed to be presented those days. Under the
heading “Energy Union”, apparently five issues are supposed to be covered: First, there is energy supply security – a topic that has gained certain momentum over the last months, not only
due to the gas crisis in Ukraine, but also due to the Commission itself, recently suggesting what
might be understood as cartel-like structures in their European Energy Security Communication. EREF has lately worked closely with the European Parliament on this latter dossier, trying
in particular to strengthen the apparent link between securing energy supply by increasing renewable energy deployment. Other stakeholders have commented on the role of real competition, and free access to infrastructure in this regard. Generally, under their second point, the
Commission wants to address the integration of national energy markets – thus recognizing that
the internal energy market, as it was originally planned to be completed by 2014, is still far from
reality and there are still several distortions to free trade and competition, also affecting the
position of renewable energy and making it still depend on certain support. Third, energy demand shall be reduced, and fourth decarbonisation of the energy mix is aimed at. Here, we
would like to see the Commission proposing a strong framework to reach the targets on which
the Council agreed last year – i.e. the 40% reduction in greenhouse gas emission, the 27% renewables and the 30% energy efficiency. This would be the chance for the Commission to set
incentives for ambitious national commitments under the Governance structure, to develop
meaningful indicators allowing some kind of monitoring and assessment of the progress and to
establish some kinds of targets or benchmarks giving more certainty to the planning processes.
Working with the Commission and the Member States on the development of such a framework,
as this is so crucial to the renewable energy industry, will be highest priority for EREF in 2015,
accordingly. The framework should give as much security to the industry as possible, and
should allow for a firm and enforceable commitment by the Member States. While this is certainly not easy considering the opposition in some Member States, such opposition should not
end up being an obstacle to the willingness of some other Member States to really make progress in the transition to renewable energy. Research and development, the fifth pillar under the
Commissions Strategic Framework for the Energy Union, will certainly have to play its role as
© EREF Europe 2013
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Newsletter January 2014
well, and there are huge potentials in several renewable energy technologies which we should
tap in the years to come.
2015 is also going to be the year of the United Nations Climate Change Conference, COP21, held
in Paris this year. Based on the mandate given in the Council Conclusions from October 2014,
the Commission will negotiate at the meeting, representing the European Union as such. For
that, they are working on a Communication, to explain the Union vision and expectations, as
well as the contributions the Union can and is willing to make. An important document, it appears, even more when considering that the European Commission is working on revising the
Emission Trading System (ETS, that in the sectors not covered by the ETS, progress on greenhouse gas emission reductions is rather slow, ), the trouble one is facing e.g. with proposals on
the Clean Air Package…
And then there are all the ongoing initiatives… such as the famous “Juncker Plan”, the “ILUC”
debate which has now been carried on so long and just goes into another round, or the “Market
Stability Reserve” supposed to rescue the ETS…
Thus with not even a month into 2015, we are already having our plates full. But we look forward to it and we are positive that we can help make a change – through taking it step by step
and transitioning to a 100% renewable energy future.
© EREF Europe 2013
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Newsletter January 2014
Renewable energy news from Brussels
New Commission Work Programme 2015:
For the energy sector, the priority initiative
of the European Energy Union is most relevant. As the Commission stated, “The first
steps towards a European Energy Union: to
ensure energy supply security, further integrate national energy markets, reduce European energy demand and decarbonize the
energy mix.”
On 16 December 2014 the European Commission adopted its Work Programme for
2015, in which it outlines 23 new proposals
and lists 80 items of pending legislation for
withdrawal or amendment, concentrates on
a set of concrete initiatives, including
Juncker’s €315 billion investment offensive,
an ambitious Digital Single Market package,
creating a European Energy Union, a new
policy on migration, a fair taxation environment and cutting red tape.
The Commission Work Program 2015
A new boost for jobs, growth and investment
A connected digital single market
The Work Programme presents focused
actions on where the Commission will deliver in 2015. In addition, as guaranteed, in
many areas, the Commission will continue
to work hard to ensure that existing policies
and rules are fit for purpose, deliver concrete results on the ground and are properly implemented.
A resilient energy union with a forward-looking climate change policy
A deeper and fairer internal market
with a strengthened industrial base
A deeper and fairer economic and
monetary union
A reasonable and balanced free trade
agreement with the United States
The Commission notably committed to deliver the six priority initiatives mentioned
above, which by themselves should then
contribute to ten objectives: a new boost for
jobs, growth and investment; a connected
digital single market; a resilient energy union with a forward-looking climate change
policy; a deeper and fairer internal market
with a strengthened industrial base; a deeper and fairer economic and monetary union;
a reasonable and balanced free trade
agreement with the United States; an area
of justice and fundamental rights based on
mutual trust; working towards a new policy
on migration; a stronger global actor and a
union of democratic change.
© EREF Europe 2013
An area of justice and fundamental
rights based on mutual trust
Working towards a new policy on
migration
A stronger global actor
A union of democratic change
The Commission expects to publish a strategy framework for an Energy Union that
will focus on increasing security of supply
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through a stronger and more integrated
internal market, less dependence on imports from third countries, and more research and innovation. It will aim at reducing the EU’s environmental impact by decarbonizing the energy mix and promoting
energy efficiency at the same time. At the
same time, the Commission will start tabling proposals for the implementation of
the 2030 Climate and Energy Package, recently agreed by the European Council.
Those shall lead to the achievement of the
targets of at 40% greenhouse gas emission
reduction, 27% renewable energy and 30%
energy efficiency. Concrete action will include a revision of the EU Emissions Trading System (ETS) and a non-binding Communication outlining the EU position ahead
of the United Nations Framework Convention on Climate Change (UNFCCC) Conference in Paris at the end of 2015.
tive procedure will continue as planned.
The proposal for an amendment to the Energy Taxation Directive which had caused
so much discussion will however really be
withdrawn, as it appears Member States are
still “not ready for that”.
The Commission also intended to withdraw
two proposals in the environmental field
due to controversial discussions in the European Parliament and in particular in the
Council: the so called Circular Economy
Package (on waste, packaging waste, etc.)
and the National Emission Ceilings Directive
(on the reduction of emissions of certain
atmospheric pollutants). However, the European Parliament rejected the Commission’s request to withdraw the Circular
Economy Package, and after a hearing of the
Commission’s Director General for the Environment in the Parliament on 22 January
2014, one is now thinking about how to
revise and make agreeable the proposal. On
the withdrawal of the National Emission
Ceiling Directive, the Parliament did not
agree either and after a debate in the Committee for Industry, Technology, Research
and Economy (ITRE) in the Parliament on
21 January 2015, it seems that the legisla-
3. Strengthening the EU role as a global actor.
© EREF Europe 2013
New Council Presidency Work Programme
and Priorities
Latvia will hold the Presidency of the Council of the European Union in the first half of
2015. The priorities of the Latvian Presidency are defined in the Presidency’s work
programme, the following priority courses
of action:
1. EU competitiveness and growth,
2. Use of European digital potential in
the EU development,
During the Latvian Presidency, around 200
events will be held in Latvia including highlevel political meetings. One of the main
events will be the Eastern Partnership
Summit and its related meetings (Business
Forum, Civil Society Forum, Media Freedom
Conference and Youth Forum, etc.). There
will also be 10 informal meetings of EU Ministers and the Asia-Europe Meeting (ASEM)
of Ministers for Education.
Among its first priority: Competitive Europe, Europe needs to enhance its entrepreneurial capacity by promoting investment in new and competitive products and
services. Only by developing competitive
industry and service sectors can Europe
facilitate job creation, and thus also promote social cohesion. Based on its own experience, Latvia knows that this is possible
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Newsletter January 2014
through efficient structural reforms and
growth-stimulating investment measures.
biofuels will be a good means to achieve
these goals.
In line with the Work Programme of the
European Commission, the main tasks of
the Latvian Presidency is to work on the
Investment Plan for Europe; continue to
work on strengthening the Single Market;
launch discussions and start working on the
European Energy Union; promote industrial
competitiveness.
The main amendment in the Directives regarding biofuels deals with the problem of
indirect land use change (ILUC).Under Article 7(d)(6) of the Renewable Energy Directive, the Commission is required to review the impact of ILUC, which might occur
during the production of biofuels. In order
to decrease ILUC and the downsides that
come with it, the European Commission
proposed to limit the amount of food-based
biofuels to 5% of the final consumption target of 10% for energy in transport in 2020,
which is the amount that is currently used.
Therefore, the amount of conventional biofuels should not increase. Consequently,
there would be an increase in advanced
biofuels. Furthermore, the Commission
proposed the introduction of a reporting
obligation of estimated emission from carbon stock changes caused by ILUC, based on
the best available scientific evidence, for the
purpose of reporting the life cycle greenhouse gas emission savings from biofuels.
The Latvian agenda accordingly includes
the Investment Plan aimed at unlocking
public and private investments in the real
economy as proposed by Commission President Juncker; strengthening the Single
Market to make progress on remaining Single Market Act II proposals, launch discussions on the expected Internal Market
Strategy for goods and services; enhancing
the competitiveness of industry and related
service sectors- better regulation will be a
guiding principle; establishing an Energy
Union- energy policy built on solidarity,
trust and security, focus on infrastructure,
better governance, energy security and energy diplomacy.
Another change the Commission proposed
is concerning the calculation towards the
10% target. The Commission proposes to
count certain biofuels double and others
four times towards the 10% target. Those
double and quadruple counting rules had
been proposed to address the problem that
second and third generation biofuels to date
are at very early stages – further, there are
also concerns that renewable e-mobility
may not suffice to reach the 10% target
either.
European Legislation on Biofuels – the discussion on ILUC
In 2012 the Commission proposed a new
Directive amending the Renewable Energy
Directive and the Fuel Quality Directive,
wherein the targets two targets are laid
down: First, as greenhouse gas emission
neutral energy sources, renewable energy
in the transport sector should amount to
10% by 2020 and secondly, overall the
transport sector should reduce greenhouse
gas emissions by 6%. It is expected that
© EREF Europe 2013
The European Parliament and the Council,
which recently published its opinion on the
proposal, are concerned that the 5% cap
might be too low and could harm Member
States already having a higher conventional
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Newsletter January 2014
biofuel production. Therefore, it is being
proposed to increase the cap to 6% by the
Parliament and to 7% by the Council. However, in order to further incentivize the production of advanced biofuels, the Parliament and the Council propose a minimum
target of 0,5% of the final energy consumption in transport for advanced biofuels. The
calculation procedure proposed by the
Commission is welcomed and even taken a
step further by the Council by proposing to
count double towards the overall renewable
energy target as well and by introducing a
multiplication factor of 5 for electricity from
renewable sources in electric road vehicles
and of 2.5 for electrified rail transport.
more demanding emission reduction targets in the future.
The European Commission has already introduced “back loading”, which postpones
the auctioning of 900 million allowances
until 2019-2020 to allow demand to pick
up. Nonetheless, this is only a short term
measure.
DG CLIMATE ACTION Consultation on the
revision of the ETS
Between 19 December 2014 and 15 March
2015, DG. CLIMATE ACTION is running a
consultation on the future revision of the ETS
post-202
The consultation questionnaire consists of
the following six sections, each with mainly
open questions:
The Council officially passed its position to
the Parliament on 10 December 2014, the
Parliament gave it into second reading in
January, accompanied by the draft report of
Rapporteur Nils Torvalds, which was published on 18 December 2014 already. It will
be seen which direction the Parliament will
then be taking, but it seems that an agreement can be reached as the Council seems
to be not very insisting on the counting
rules. No date for a debate has been scheduled yet.
Free allocation and addressing the
risk of carbon leakage
Innovation Fund
Modernisation Fund
Free allocation to promote investments for modernising the energy
sector
Market Stability Reserve
SMEs / regulatory fees / other
The Emission Trading System (ETS) set a
cap on greenhouse gas emissions companies are allowed to produce within one
year. However, due to the economic crisis
which has depressed emissions more than
anticipated there is now a growing surplus
of around 2 billion allowances. As a result of
the economic crisis the demand for allowances decreased, however du to the rigid
ETS the supply was not interconnected with
the demand causing an imbalance between
supply and demand of allowances. This
could affect the ability of the EU ETS to meet
General evaluation
© EREF Europe 2013
However, it is possible to respond only to
some questions.
In order to solve this problem on a more
long-term basis the Commission proposed
to introduce a market stability reserve. Allowances would be placed and released
from the market stability reserve in relation
to the total number of allowances in circulation. To ensure predictability and more
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Newsletter January 2014
gradual changes to the market stability reserve, a predefined volume of 100 million
allowances per year would be released from
the reserve where the conditions are met.
Specifically, the Commission believes that it
could create up to 1.3 million jobs with investment in broadband, energy networks
and transport infrastructure, as well as education and research.
Even though it is not a question whether
this market stability reserve would come,
the real question is when. The Commission
proposes to start the market stability reserve at the start of the fourth trading period beginning in 2021. This way there would
be enough time for market participant to
adapt to the introduction of the reserve and
sufficient regulatory certainty. The Commission however also states that the introduction of the market stability reserve before 2021 would deliver benefits for the
strengthening and the efficiency of the carbon market, but these could also be provided by back-loading on a short-term basis.
The European Parliament has not yet given
an official opinion on the timeframe of the
market stability reserve, though there are
discussions on an earlier starting date..
Juncker said the European Investment Bank
will be the "prime mover'' in delivering seed
money for those investments that would not
occur if only private resources were available. As he mentioned earlier, the problem is
not the money but the lack of risk-bearing
capacity to finance projects, “our energy
sector needs to upgrade its networks with
the latest technologies, integrate renewable
sources of energy and diversify its sources
of supply.” He further addressed a message
which needs to go out to the people of Europe and the rest of the world that "Europe
needs a kick-start and today the Commission is providing the jump leads," Juncker
said as he detailed his ambitious five-year
plan at the European Parliament in Strasbourg.
Presentation of the “Juncker plan”:
In terms of how to find the right projects,
there is a taskforce made up of the member
states, the Commission and the EIB to examine barriers to investment and screen the
potential projects. Projects must meet three
criteria: they must support EU objectives;
be economically viable; and start within the
next three years. Ideally, the plan would
take the burden off national governments,
which are already facing big debts after the
financial crisis but could still contribute to
the fund if they wished with "high socioeconomic returns".
On 26 November 2014 the President of the
European Commission, Jean-Claude Juncker
proposed a 315-billion euro investment
plan to boost the EU economy with about 21
billion coming from EU institutions. He
hopes that it will stimulate jobs and growth
in Europe. The plan consists of a fund – the
European Fund for Strategic Investments
(EFSI) backed up with a number policy
measures. The money will come from existing EU funds (€16 billion) and European
Investment Bank (EIB) capital (€5 billion)
and will be used to invest in strategic infrastructure (energy, digital, transport); projects boosting employment, particularly
youth employment and employment in the
SME sector; environmentally sustainable
projects; and innovation and R&D projects.
© EREF Europe 2013
Although the “Juncker Plan” specifies “there
should be no thematic or geographic preallocations” it does mention infrastructure,
notably broadband, energy networks and
transport infrastructure, education, re-
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search and innovation, and renewable energy and energy efficiency.
Commission legislative proposal to implement the Juncker Plan
So far what kind of projects have be selected? On 9th December gave a first glimpse of
what kind of projects could be financed by
the new €315bn investment fund scheduled
to become operational mid-2015.
On 13 January 2015, the Commission (DG
Economic and Financial Affairs) presented a
legislative proposal to implement the plan,
which in addition to establishing the European Fund for Strategic Investments, in close
partnership with the European Investment
Bank (EIB), sets up a .European Investment
Advisory Hub to help with project identification, preparation and development across
the Union and a so-called European Investment Project Pipeline, supposed to increase
investor knowledge about suitable projects.
Among about 2,000 projects worth €1.3
trillion in investments which could be eligible for the new funding scheme, it seems
that particularly high risky projects that are
most likely to have been left on the shelf
during the crisis and can be activated without risk of crowding out. The projects range
from a breakwater for the Valletta port in
Malta, an airport expansion in Germany's
Frankfurt, to an underwater fibre-optic link
between the Canary Islands and Brazil. It is
the first selection from exhaustive wish-lists
submitted by Member States. The EU Task
Force mentioned in a report that many of
these projects are currently not being realised due to financial, regulatory or other
barriers. The central idea is to provide a
pipeline of what can be considered trustworthy projects which will restore investor
confidence and unlock private sector investment to complement finance from
Member States and the EU. It appears rather
self-evident that the projects need to have a
certain maturity and have to be low in risk,
considering the extreme leverage of 1 to 15
the plan is aiming for.
In Parliament, the dossier sits within the
Committee Economic and Financial Affairs
and vote in the committee is scheduled for 24
March 2015.
In terms of its difference with the Connecting Europe Facility and the "Marguerite
Fund", which also fund infrastructure projects, the 2020 European Fund for Energy,
Climate Change and Infrastructure (“Marguerite”) is very different in nature, since it
targets equity financing in infrastructure
investments, and is much more modest in
size. Current commitments stand at € 710
million. The scope of Marguerite is limited
to transportation, energy and matures renewable sources.
ECJ: Exclusive EU external competence in
the promotion of electricity from renewable
energy sources
Project selection will also focus on projects
that meet both the additional criteria and
which have the highest social rates of return. After all, what matters is not just how
much private investment can be leveraged,
but how much growth and employment can
be created from these investments.
© EREF Europe 2013
In the Green Network case from 26 November 2014 (case C-66/13), the ECJ ruled that
the EU enjoys exclusive external competence, in the field of promotion of electricity
from renewable energy sources in the Internal Market. The consequence of this
competence is the precluding of an Italian
law provision, relative to the granting of
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Newsletter January 2014
exemptions from the obligation to purchase
green certificates due to the import, in Italy,
of electricity produced in Switzerland, i.e. a
third State. The Italian legislation at issue in
the main proceedings was enacted on the
grounds of an agreement concluded between Italy and Switzerland, under which
the electricity imported from the latter had
a guarantee of being produced from renewable energy sources.
from Switzerland. Green Network argued
that they had supplied guarantees of origin
proving the renewable energy characteristics of such electricity and thus considered
their obligation under Italian law to have a
certain amount of renewable energy in their
energy supply mix. Italian law included a
provision according to which guarantees of
origin from third countries, i.e. outside the
European Union, would be eligible for meeting this obligation provided that there was
an international agreement to that end, and
in fact Italy had at some point entered into
such an agreement with Switzerland. However, in case, Green Network had tried to
use Swiss guarantees of origin already predating the agreement, and in the course of
the proceedings the Consiglio di Stato became doubtful as to whether Italy could
conclude a valid agreement on a topic –
guarantees of origin for renewable electricity – regulated by the European Community.
The Court of Justice of the European union
(CJEU) answered some questions by the
Italian Consiglio di Stato concerning the
interpretation of Unionthe external competences of the European Union (prior to the
adoption of the Lisbon Treaty, thus as established in the case-law, in conjunction
with the then applicable rules on guarantees of origin for renewable electricity
found in Article 5 of the “old” Renewable
Electricity
Directive,
Directive
2001/77/EC(now replaced by the current
Renewable Energy Directive, Directive
2009/28/EC), and the Free Trade Agreement with Switzerland.
The CJEU now ruled that the EU enjoys exclusive external competence in the field of
promotion of electricity from renewable
energy sources through guarantees of origin
in the Internal Market, such competence
precludes a provision of the Italian law,
which allows the extension of the use of
guarantees of origin and the promotion of
electricity from renewable sources to third
countries such as Switzerland.
The questions had arisen in proceedings
between Green Network SpA and the Autorità per l'energia elettrica e il gas concerning an administrative fine imposed by the
latter on Green Network for its refusal to
purchase green certificates in an amount
corresponding to the quantity of electricity
which that company had imported into Italy
© EREF Europe 2013
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Newsletter January 2014
Poland faces heavy fines for breaking EU laws on renewable energy use
On December 11th 2014, European Court of Justice Advocate General Melchior Wathelet concluded that Poland
has not fulfilled its legal obligations to adopt the 2009 Renewable Energy Directive in time and/or inform the
European Commission of its legislative deliberations.
In his Opinion, Wathelet said that the Polish government had an obligation to provide regulators with clear
and precise information on how it planned to implement EU law, while it is for the Commission to prove the
allegation that an obligation has not been fulfilled. Poland's failure of replying the Commission’s request on
adopting all the measures necessary to transpose the Renewable Energy Directive or notifying the relevant
instruments justified the opening of infringement proceedings.
Contrary to what Poland argued, who implicitly conceded that the pre-existing national legislation did not
constitute full transposition of the directive, Wathelet emphasises that such law was only adopted in July
2013, which is much later than the deadline set by the Directive.
In fact, even today and at the time the case is in front of the Court, Poland still has not fully implemented the
Renewable Energy Directive yet. The Advocate General thus suggests to ordering Poland to pay a €61
380daily fine until its laws are amended to comply with the Directive, such means in the view of Wathelet
being an appropriate financial means of encouraging a Member State to take the measures necessary to put
an end to an established infringement and to ensure full transposition of a directive.
© EREF Europe 2013
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Newsletter January 2014
Upcoming events
28 January 2015: EREF New Year's Reception
Organized by: EREF; Location: Brussels; Venue: European Parliament / Member's Salon
13/14 March 2015 EUFORES 15th Inter-Parliamentary Meeting on Renewable Energy and
Energy Efficiency
In the Austrian Parliament, Vienna
17 March 2015 European Commission High Level Conference on EU leading n Renewable
Energy
Organized by the European Commission
EREF News
1 February 2014
New Senior Policy Advisor Dirk Hendricks starts to work for EREF.
Mr. Hendricks has more than a decade of “Brussels experience” and has lately been working as
Senior Policy Advisor at ESHA. …
© EREF Europe 2013
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Newsletter January 2014
Contact us:
Avenue Marnix 28
1000 Brussels
BELGIUM
© EREF Europe 2013
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[email protected]
www.eref-europe.org
Tel: +32. 2-204.44.00