Energy, EU – Baltic States, Legislation

This Commission’s idea is to be "bigger and more ambitious on big things". Climate change is one of the biggest threats facing modern society and the EU has been leading the action to reduce emissions. Renewable energy can greatly contribute to that and to reducing EU’s external energy dependency.  

Therefore, the EU is leading world actor in renewables; it is one of the Commission’s top priorities, and it is one of the top priorities in the context of the Energy Union. But good intentions count for nothing if we don’t get the policies right. Renewables take central stage in the Energy Union action plan, which is designed to unlock the investment in the renewable energy sector.

Progress already made: some statistics

Twenty years ago, renewables were generally seen as an expensive gamble. Presently, the Europeans are building solar panels on the roof providing clean electricity; efficient insulation is combined with geothermal heat pumps. In short, renewables can function perfectly. Worldwide, since 2011, more new renewable energy capacity has been installed than fossil and nuclear power combined. And with a sector employing more than 1 million people and a turnover of €130 billion, renewables are now in the mainstream in Europe.

Renewables represented more than 15% of our energy in 2014, and almost 26% of our electricity; in the EU-2020 targets, those jobs and growth figures will keep up. In some states (Finland, Latvia and Austria), renewables already account for around one third of energy demand. In Sweden, more than a half of the energy needs is covered by renewables!

However, in many EU states the picture is not so good and a lot remains to be done to reach their 2020 targets. Let alone to get ready for additional contributions towards the EU target of "at least 27%" by 2030.

Future aims

The EU’s primary task is to make renewables an integral part of each Energy Union’s dimension. The following are the priorities:  

First, decarbonising European economy with renewable. In October 2014, the EU agreed on a binding target of reducing domestic greenhouse gas emissions by at least 40% by 2030. To get there the member states will have to step up their efforts to reach at least 27% of renewables by 2030.

Good intentions in politics are usually supported by good laws, which must be supported by a proper implementation. Therefore, the Commission later in 2015 will report on the implementation of the Renewable Energy Directive in order to collectively deliver on the EU target for 2030. In 2017, the Commission intends to come forward with a new Renewable Energy package to ensure that the states meet the EU-2030 targets cost-effectively. This will also include a new policy for sustainable bio-energy.

As part of this package, the states will need to find a way to promote cooperation on renewables support – notably at regional level – more effectively than in the past. This entails that the states will need to coordinate their renewables policy already at an early stage with their neighbors. This new renewable energy framework will also need to ensure that the significant efficiency, decarbonisation and security of supply gains in the heating and cooling sector are exploited to the fullest extent possible.

Another action area is the decarbonisation of the transport sector and its switch to alternative fuels. The EU’s task by 2020 is to have 10% of transport fuel coming from renewable sources such as biofuels. To make that a reality, the Commission will come forward with a comprehensive road transport package to create the right market conditions for increased use of alternative fuels and the roll-out of intelligent transport solutions.

Second, designing an internal energy market that works for renewables. Energy markets and grids have to be fit for renewables; these markets should be designed, or re-designed, to fully integrate renewables into the wider electricity market and remove any existing barriers. The EU State Aid guidelines of 2013 and the reform of support schemes were the first steps to better integrate renewables in the market.

As the next step on this trajectory, in the middle of 2015, the Commission will present a plan on a new electricity market design to increase security of supply and to help better integrate renewables into European energy system (followed up with a legislative proposal in 2016).

The objective is to make the EU power system more flexible, interconnected and consumer-centered. This requires both an important transformation of the grid and significant changes in the way the market operates thus creating and better functioning (as well as liquid short-term) markets.

Improved interconnections are another key to better integration of renewables into the system. To make it happen, the Commission published in spring 2015 a set of measures to achieve 10 % interconnection target while supporting the Projects of Common Interest (PCIs) with the highest potential.

Recent progress in the Iberian Peninsula to better connect France and Spain is encouraging in this regard. But modern distribution networks are needed too, as well as smart grids! Consumers should be able to react to energy prices, and decide where and when to consume or produce energy.

Third, investing in renewable research and innovation. More research and innovation will be needed to keep us competitive on the global stage: already at present, about 40% of all patents for renewable technologies are owned by European companies. Staying world number one in this field will create the jobs and growth Europe needs in emerging areas, like offshore wind, ocean energy or advanced biofuels.

One of the best innovators of all, Thomas Edison used to say: “There’s a better way to do it. Let’s find it”. Hence, the EU will need to fund the research that will help deliver breakthrough solutions and get them to the market quicker.

Innovations in smart grids are needed, as well demand-responsive energy storage. Users should be able to charge their electric vehicle when prices are low and reduce their consumption when prices are high. This is one of the fields in which the member states have to embrace the technology transition.

Therefore, the EU has doubled the funding for energy research under the new Horizon 2020 program. And to support that, the Commission will shortly propose an upgraded Strategic Energy Technology Plan focusing on the areas with the highest potential.

Finally, through the EU’s trade policy, the Commission will aim at improving access to foreign markets for European renewable technologies. For example, the "Green Goods Initiative" aiming at liberalizing trade in green goods and services, will help promote products that reduce CO2 emissions and create jobs and growth.

Fourth, making Energy efficiency and renewables work together. About 75% of the European housing stock is energy inefficient. However, to make existing buildings more efficient and reach the "nearly zero-energy" standards for new buildings, renewables and energy efficiency will have to work hand in hand.

The new “Smart Financing for Smart Buildings” initiative is aimed at making the funding available for that to happen. The European Fund for Strategic Investments (EFSI) should also multiply funding for efficiency projects while reviewing regulatory framework. Although the Renewable Energy Directive and the Energy Performance of Building Directive already contain important provisions to make use of renewables and energy savings measures in buildings, the Commission is going to revise both pieces of legislation to make these provisions even stronger.

Fifth: secure renewable energy supply. Presently, the EU member states import over €400 billion worth of energy every year; without renewables, this figure would have been at least €30 billion higher!

Renewable energy, and in particular heating based on renewables instead of fossil fuels, is important to reduce import dependence. That’s why renewables will be prominent in the new heating and cooling strategy that the Commission will propose later this year as part of the Energy Union Strategy.

Energy Union needs to be powered by consumers and citizens, as active participants will make it work. Decentralised energy production as well as energy cooperatives will contribute to meeting the EU's climate and energy targets and are essential for public acceptance of renewable energy and energy infrastructure. Therefore, the Commission is currently reviewing best practices for promoting cost-effective self-generation and consumption of energy, with a view to developing guidance in this field.

Ambitious objectives

The focus of the present Commission’s Investment Plan on energy, and in particular on renewable energy and energy efficiency, illustrates the EU’s commitment to support these ambitious objectives.

There are hundreds of cities and millions of citizens at the local level who want to go beyond the 2020 targets. The Commission will assist them, e.g. through initiatives like the Covenant of Mayors and the European Innovation Partnership on Smart Cities and Communities.

The European Council agreement on the 2030 Climate and Energy Framework has opened the door for an ambitious agreement in Paris.

In March 2015, the EU submitted its contribution to this new agreement; the EU states are the first to do so in the world. The EU will show the way to other countries to follow on the road to a climate conference in Paris. The EU is calling for a deal with legally binding emission targets, where renewables have a central role to play for all countries, developed and developing alike. Without them, Europe will not get to the 40% reduction in greenhouse gas emissions by 2030. Without them, providing sustainable energy for all, as advocated by UN Secretary-General Ban-Ki-Moon and embedded in the Sustainable Development Goals, would not be possible either. 

The momentum created by renewables for competitiveness, growth and jobs in Europe must continue. The success on the issue is in a resilient energy union and climate targets powered by renewable energy.  

Reference: European Commission, Speech by Commissioner Arias Cañete “A renewable energy union”. Brussels, 17 March 2015. In:

http://europa.eu/rapid/press-release_SPEECH-15-4615_en.htm?locale=en