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Policy News, BB200704

EU Heads of State pave the way for a sustainable European energy future by adopting a binding 20% target for renewable energy


The European Wind Energy Association (EWEA) has welcomed the decision reached by EU Heads of State to adopt a binding 20% target for renewables by 2020. At the same time, EWEA called on the EU to ensure legal stability for the European renewable electricity market until an improved legal framework is established.

”European leaders have provided a powerful response to the looming climate and energy crisis, and to the call for more renewable energy from European citizens. If the decision taken at the Spring Summit is now followed by effective implementation in the near future, Europe will have a real opportunity to change its energy supply structure towards a much larger share of indigenous, renewable resources, with reduced import dependence and less exposure to unpredictable fuel prices. Such a supply structure would benefit our economy, the environment and the welfare of European citizens for decades to come,“ commented Christian Kjaer, CEO of EWEA, after the Spring Summit.

The final decision to support the 20% binding target was taken at the last moment, after intense negotiations. The European Commission and the German Presidency favoured the adoption of the target for renewables, whereas France and some eastern European countries, including Poland, the Czech Republic, Hungary and Slovakia were opposed to the decision. The outcome is very positive for renewables. However, turning the Council’s ambition into effective legislation is still likely to be a challenge.

The text approved by the Council states that from the overall renewables target, “differentiated national overall targets should be derived with Member States’ full involvement, with due regard to a fair and adequate allocation taking account of different national starting points and potentials, including the existing level of renewable energies and energy mix (paragraphs 10 and 11)”. This agreement differs from that achieved for biofuels, where each Member State has to achieve the stipulated 10% target. In the case of renewables, a decision has yet to be taken as to how the target should be reached and this will be subject to intense discussion.

In practical terms, this may imply that when national plans are negotiated, the European Commission may find that some countries propose very low national targets, using the argument that they possess a low renewable energy potential, or that they have a particular energy mix that does not allow for dramatic changes.

Therefore it is important that a new legislative framework is adopted relatively fast and that the existing Directive on electricity from renewable energy sources continues to be applied until a new framework is in place.

From now until the end of the year, the European Institutions’ agenda is challenging:

In the immediate future, the European Commission will come up with a plan for the distribution of the 20% binding target into national targets for renewable energy, which will then be negotiated with Member States. A debate is currently taking place regarding the legal basis for new legislation, i.e. whether a unanimous decision or a qualified majority in the Council will be required for its adoption, and whether the co-decision procedure will be used, which would allow the European Parliament to be co-legislator. The acceptance of a qualified majority, as well as the participation of the European Parliament are absolutely crucial to the adoption of an efficient and ambitious legal framework for renewables.

Once approved, Member States will have to prepare their respective national plans, which should specify targets for the three sub-sectors (electricity, heat and transport), as well as how they will be achieved. Such national action plans will have to be approved by the European Commission.

At the same time, the European Commission is working on a “framework” directive, which consolidates the existing legislation covering RES-electricity and biofuels, and proposes a new chapter on heating and cooling with RES. The objectives of the directive will be based on the negotiation process with Member States.

Finally, the EC Directive 77/2001/EC on RES-electricity (1) (RES-e) calls for an interim progress report, which will almost certainly address whether it is appropriate to move towards a harmonised support system at some point.

In EWEA’s view, it is crucial that uncertainty about the existing legal framework for renewable electricity is avoided, particularly with regard to the successful 2001 Directive on RES-e. As already mentioned, other key aspects of this process include an equitable distribution of the 20% among countries and among sectors. The European Commission should ensure that the proposed targets for each Member State in the three sub-sectors are ambitious when compared to those set for 2010, notably in the case of the RES-E directive, where indicative targets already exist.

The choice of legal basis and the statistical methodology for calculating the different contributions from renewable energy sources will also determine the effectiveness of the new legal framework.

Finally, EWEA believes that other important factors affecting the functioning of the energy markets should not be forgotten. These include ensuring a level playing field for renewables in the electricity market and fair grid access for new entrants. This can only happen if transmission and production activities are effectively separated in terms of ownership. It is unfortunate that the Heads of State displayed a lack of commitment to real competition in electricity by rejecting the European Commission’s proposal for full ownership unbundling of production and transmission activities in the electricity sector.

(1) Directive 2001/77/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market