JD Ross: EU Ministers confirm details of the new clean energy package

In a process that took over two years, the clean energy for all Europeans plan has now passed all legal requirements and is ready to be implemented into national law by EU members. Back in May 2019, people participated in the European Parliament elections and climate policy was proven to be a top priority for a substantial number of voters.

Reforms to the European Energy Market

At the end of March, EU members passed a new rule for the ‘Electricity Market Regulation and Electricity Market Directive’, including plans for ‘Regulations on Risk Preparedness’ and for the ‘Agency for the Cooperation of Energy Regulators’. All reforms have now been signed off by the council.

Updates to the electricity market include changes that would support enhanced integration of intermittent clean energy. New designs focus on improvements for storage conditions and an increase in customer participation. The new package focuses on access to electrical markets for energy communities on the same level as conventional utilities. Within the new proposals, the EU has also confirmed plans to manage the re-dispatch and curtailment of energy and to support flexibility options. The plans have been welcomed by operators of virtual power plants as a clear sign of progress for the regional energy market.

Within the plan, a new subsidy cap has been announced for power plants with carbon emissions exceeding 550g of CO2/Kwh. The clean energy package will also focus on energy performance within the building industry which currently makes up 40% of energy consumption in Europe and over 35% of total carbon emissions. Based on the new plans, all new buildings will need to be constructed to a ‘zero energy’ standard from December 31st 2020. EU members will also be required to follow a ten-year plan to improve all buildings to meet energy efficiency and carbon emission standards. This is a welcome move for solar and storage developers, with improvement plans likely resulting in a rise in solar plus storage facilities at residential, commercial and industrial facilities.

Renewable Energy Goals in Europe

Within the package, the overall goals of the renewables industry have been updated, with a revision to the original target of 32% within energy generation by 2030. Possible changes could include a revision to 2023, which will mean EU nations need to ensure they are committed to national renewable energy targets, which do vary greatly from nation to nation. EU member states will also be required to source in excess of 10% of transport fuels directly from renewable energy by the end of next year.

Miguel Arias Canete, the European Commissioner for Climate Action and Energy highlights that the new plans include some of the most ambitious proposals ever delivered by the European Commission. Canete highlights that the package has been implemented and adopted in record time and has strong backing from both European Parliament and council members. Canete believes clean energy is a top political priority and the new changes will support the acceleration of clean energy transition in Europe.

The Clean Energy for All Europeans legislative package will make it simpler to integrate intermittent renewable energy onto the grid and support cross-border energy and power trading. In coordination with the new plans, an increase in green party presence in the EU Parliament will further facilitate the opportunities for renewable energy development within Europe.

Energy analysts at Wood Mackenzie believe the resulting changes will only result in the EU strengthening its commitment to carbon reduction and renewable energy development for years to come. If this is the case, then it is a promising development for the regional wind and solar markets.

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