Photo: The four rapporteurs of the clean energy files address the press in Strasbourg after the vote on 17 January. [European Parliament]

The Clean Energy Package for all Europeans goes forward

By: Aurelie Beauvais, Policy Director

Following lengthy negotiations, on the 18th of December the European Energy council adopted its general approach on key pieces of the Clean Energy Package including: the Renewable Energy Directive, Energy Union Governance, as well as the Electricity market regulation and directive. On 17th of January, the European Parliament followed suite by adopting its final position on the Energy Efficiency directive, Renewable Energy Directive, and Energy Union Governance Regulation.

The Bulgarian Presidency which has taken the lead of the Council of the European Union on 1st January will therefore start negotiations with the European Parliament and European Commission on these legislative dossiers. The Bulgarian Presidency program has set ambitious timelines, aiming at finding a final compromise on the Renewable, Governance, and Energy Efficiency files in the first half of 2018.

As crucial inter-institutional negotiations are now about to start, how does the future look for solar?

On the Renewable Energy target, the Parliament has taken an ambitious stance, calling for a 35% EU binding target by 2030. Even though the Council decided to stick to a 27% target, there is still hope for a more ambitious agreement to be reached. Several Members States such as France, Luxembourg and Sweden, as well as the European Commission, called for higher targets, and the European Parliament put forward extremely ambitious provisions on national long-term strategies, which would turn Europe into a net-zero GHG emitter, and make it run almost entirely on renewable energy.

To boost the development of renewables in Europe, both the Parliament and Council acknowledged the need to develop tailor-made approaches reflecting the specificities of small-scale solar installations through support schemes. They also recognized the need to ensure policy stability and predictability for solar investors, with arbitrary retroactive support scheme cuts now outlawed. The Council should, however, be more ambitious when it comes to the simplification of administrative procedures for smaller projects, which is still a significant barrier to project development today.

Regarding self-consumption, another major priority, good provisions have been adopted by both the Parliament and Council, recognising the rights of prosumers to sell, store, and generate their own electricity. However, a compromise on taxation and charges has still not been found. This aspect will be crucial, as disproportionate and unfair taxation practices for self-consumers can put a dramatic stop on the uptake of such models which are at the core of a consumer-powered energy transition. Trialogue negotiations should also focus on developing innovative business models - collective self-consumption, PPA's, peer to peer exchanges - as the Parliament has taken a far more ambitious stance than the Council on these issues.

Governance remains very uncertain, as both the Parliament and Council have dropped the introduction of linear trajectories, which would have put a stronger requirement on Member States to deliver their national targets. Member States' progress will be monitored through in-depth evaluations of national frameworks and RES developments, carried out in 2023, 2025 and 2027. In the institutional negotiations, it will be crucial to empower the European Commission with the means to take 'additional action' if the collective EU effort is deemed insufficient to reach the targets. This is key to avoid any free-riding, and revive the trust of solar investors in European commitments.

Last but not least, the Energy Efficiency file will also take a lot of attention of the European policy makers. The positions adopted by the European Parliament and Council are different on key provisions such as the 2030 Energy efficiency target, and the introduction of flexibility levers which could improve the consistency of the Clean Energy Package, and deliver the objectives set by the Paris Agreement at a lower cost. For example, allowing Member States who are over-achieving on their RES targets to alleviate the burden of energy efficiency actions, if deemed unprofitable or too costly, will contribute equally to the fight against climate change, and reduce the consumers bill.

The ambitious package adopted by the Parliament sends a clear signal that Europe is ready for more renewables - now we await the negotiations which will start in mid-February to see if this ambition can enthuse the other EU institutions to power the energy transition.