BackgroundThe European Commission has recently published a proposal for a new Renewable Energy Directive, the objective of which is to further promote the use and consumption of renewable energy. By way of background, the 2009 Renewable Energy Directive (2009/28/EC) implemented a mandatory overall target for Member States of the EU to source 20% of all energy consumption from renewable sources by 2020. This varies at national level; Ireland’s target is 16%. The 2030 climate and energy framework, which built on the 2020 target and the 2015 Paris Agreement, imposed a legally binding target of 27% of final energy consumption from renewable sources by 2030. However, based on the policies currently in place at both EU and national level, EU projections show that renewable energy consumption in 2030 is estimated to fall short of the 27% target, and will be around 24.3%.
Objectives of the new directiveIn order to prevent such a shortfall from occurring, the proposed new directive sets out a number of principles intended to ensure that the 2030 target is reached. A number of the proposed changes are outlined as follows:
- The attraction of investment by means of a strong and stable investment policy, as substantial investment will be required in the sector in order to reach the 2030 target.
- The 2020 target of 20% as the minimum threshold for renewable energy consumption for all member states from 2021 onwards, with no member state being allowed to fall below the threshold.
- The establishment and development of cost-effective national support schemes to aid in cross-border participation in the sector. The level of conditions attached to such schemes will be subject to specific rules preventing them from having a negative effect on supported projects. Participation in such schemes is at the discretion of member states, and subject to the normal restrictions on state aid. The rationale for encouraging cross-border schemes is based on the idea that environmental issues such as climate change and biodiversity loss are more efficiently addressed at EU level.
- The creation of a permit for renewable energy projects, with one designated authority with the power to grant such a permit established in each Member State by 2021, and a specific time limit for granting such a permit put in place. Where a permit is sought for the repowering of existing renewable energy plants, the process for granting a permit will not exceed one year.
- The guarantee of origin (GO) system is intended to be consolidated. The system, which currently applies to renewable energy sources such as wind, solar, geothermal, wave, tidal, hydropower, biomass, landfill gas, sewage treatment plant gas and biogases, will be extended to include renewable gaseous fuels. The use of GOs will be mandatory for electricity from renewable energy resources and renewable gas disclosures, and the issue of GOs will be mandatory for heating and cooling on the request of a producer.
- The remuneration of consumers who self-consume for their contribution to the grid, and allowing them to self-consume without undue restrictions.
- The imposition of an obligation on fuel suppliers to provide a fixed amount of renewable fuels.
ConclusionThe changes proposed are intended to be cost-effective, and it is envisaged that the Directive will have various benefits including encouraging the deployment and market integration of renewable energy; reducing investor uncertainty; minimising the loss of citizen buy-in; and developing renewable energy potential in the heating and cooling sector. It is further intended that the implementation of the Directive would have limited consequences for the public authorities of Member States in budgetary and administrative terms. The proposal, if implemented, will enable the EU to continue towards its stated long-term objectives for 2030, of a 27% share of renewable energy consumption, in addition to a reduction of greenhouse gas emissions by 40%. The revised Renewable Energy directive can be accessed here.
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