EnergyEnergy

Tom HowesDG EnergyEuropean Commission

EU energy policy update

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The European energy strategy: what's already on the table?

Renewables Directive: mandatory targets, national plans grid rules…

ETS, reflecting a carbon price to achieve the cap.

National (non ETS) emissions reductions strategies and measures

3rd package: unbundling, harmonised grid operation rules, network codes etc.

TEN-E priorities and project support

Infrastructure package: CEF proposal, planning reforms

Smart grids

Energy Efficiency Measures (including ESCOs)

SET plan/R&D/CCS

Institutionally: ENTSOs, ACER, CEER…

Development of the longer term framework: 2050, 2030…

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The share of RES achieves at least 55% in gross final energy consumption in 2050, up 45 percentage points from today's level at around 10%.

2050 Energy Roadmap: Renewable Energy as "no regrets option"

%

80

70

60

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40

30

20

10

0

4

SE LV FI AT PT EE RO DK LT SI ES FR EU BG SK DE PL IT CZ EL HU IE BE CY NL UK LU MT0

5

10

15

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25

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35

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45

50

• Share of renewable energy (% of total energy use)

2020 national target2009 performance

%

Source: European Commission

EU MT LU UK NL BE CY IE HU IT GR CZ PO DE SK FR BG ES LT RO SI DK EE PT AT FI LV SW

0%

10%

20%

30%

40%

50%

12.40%

0.30%

2.60%3.30% 3.80%

5.40% 5.50% 5.90%

8.50% 8.50% 9.10% 9.70% 9.90%10.70%

11.40%12.40% 12.90%

14.10%

21.10% 21.40% 21.70%23.00% 24.10%

24.70%

30.70%

33.60%34.30%

46.90%

The 2020 framework: EU renewable energy shares

2010 2020 target

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http://ec.europa.eu/energy/renewables/consultations/20120207_renewable_energy_strategy_en.htm

Topics:policy approach

Financial supportAdministrative procedures

Grid integration of electricity from renewable energy sources

Market integrationRenewables in Heating and Cooling

Renewables in transportSustainability

Regional and international dimensionsTechnology development

Shorter term developments; learning from others

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Creating the single market:

Regional markets are slowly coming together…The bigger the balancing areas, the easier it is to integrate wind and solar power

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With a fully functioning single market, we can better integrate renwables – reducing the patchwork, reducing/phasing out support, ensuring fair equal treatment.

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Grid development

Grid operation

Grid connectionGrid connection,

Grid operationGrid development:Barriers are still significant(Final report: http://www.eclareon.eu/sites/default/files/res_integration_final_report.pdf)

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Group 6

Group 5

Group 4

Group 2

Group 1

Group 3

Final report: http://ec.europa.eu/energy/renewables/studies/renewables_en.htm

Overall: non-cost barriers to developing renewable energy (2010)

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Empowering Consumers

• Full opening of retail markets to ensure full consumer choice

• More widespread use of micro-generation

• "smartening" of energy system to enable demand response

• reduced dependence on grid electricity/suppliers

Þ Enhanced public acceptance for renewable energy projects

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Significant efforts and financial means have gone into energy funding

SET plan sets priorities, seven European Industrial Initiatives

Need to add new priorities: ocean technologies, renewable energy integration (incl. storage), advanced materials and manufacturing for RES technologies

Next Multi-Annual Financial Framework (2014-2020) proposals prioritise "green" energy funding:

- Cohesion funding to allocate some €17 billion to energy efficiency and renewable energy (doubling current allocations)

- Horizon 2020: €6.5 billion is to be allocated to research and innovation in "Secure, clean and efficient energy"

Driving technology innovation

13Source: European Commission |

Impact Assessment explores effectiveness of different options at addressing key policy objectives

Renewable energy policy post-2020: business as usual is not an option

Three policy options analysed to fill the gap:

• Decarbonisation without renewable energy targets post-2020

• Binding national renewable energy targets post-2020 and coordinated support

• EU renewable energy target and harmonised measures

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Next steps

. Guidance on support scheme reform

. Guidance on the use of the cooperation mechanisms

. Measures to facilitate trade in renewable energy in the Mediterranean

. Forthcoming communication on Internal Energy Market to discuss electricity market arrangements

. 2013 Communication on energy technology

. Reports/proposals to further develop the EU's sustainability framework

. Progress towards preparing proposals for a post-2020 renewable policy energy regime

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http://ec.europa.eu/energy/renewables/index_en.htm

Thank you for your attention

Tom HowesDG ENERGY

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Extra slides

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Readiness for market integration: are the regulatory & competition conditions right for exposing renewable energy producers to market risk? (premiums, quotas)

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Placehoder for missing data points (=10 points as default)E: Gate closure timeD: Share of electricity traded at exchange (spot)C: Number of companies with more than 5% share in the national retail marketB: Number of companies with more than 5% share in generation capacity / wholesale marketA: Share of TSOs that are ownership unbundled

Elec

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Operation

Identified issue Possible solutions

Curtailment

Ensure more legal certainty by introducing a general (or basic) legal framework on:- Curtailment procedure- Responsible bodies- Priorities for RES-E technologies- Rights and duties of affected stakeholders- Compensation system

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Development

Identified issues Possible solutions

RES-E not sufficiently considered in grid development

Conclusion of unbundling process;Installation of independent body to support RES-E; Involvement of stakeholders

No obligation to reinforce the grid Introduction of clear legal obligation in national law

Lack of incentives or regulatory instruments

Introduction of measures to create more comparability and transparency;

Introduction of regulatory measures that incentivise efficient investment, e.g.:- Introduction of priority premiums;- Counting of investments in same regulatory period;- Abolishment of minimum levels;- Nation-wide cost allocation system for DSO

- Harmonisation of regulatory regimes;

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Identified issues Possible solutions

Long lead times & complex procedures

Identification of existing inefficiencies;Introduction of qualitative deadlines (e.g. “promptly”);Reduction of workload for public administration and/or grid operators;Harmonisation and simplification of grid connection requirements.

Lack of grid capacity / different pace of grid and RES-E development

Better coordination between grid & RES-E development;Collection of data on RES-E development from national registries and collection of data on development targets;Consideration of RES-E data in TYNDP[1] and in all national plans.

Virtual saturation & SpeculationDefinition of milestones in grid connection procedure;Introduction of grid reservation fees.

Lack of communication, and weak position of RES-E plant operator

Initialisation of exchange programs and communication platforms through projects at EU level;

Encouraging stakeholders at MS level to participate in exchange programs and communication platforms, as well as to appoint contact persons.

Non-shallow costs

Process to define adequate distribution of costs at MS level to ensure investment security;Funding through EU budgets in case of interconnectors with European significance.

Connection