EU Energy Ministers Aiming at More Ambitious Renewables Energy Efficiency Targets

EU energy Ministers Aiming at More Ambitious Renewables Energy Efficiency Targets. The Council of the EU adopted higher targets for renewables and energy efficiency within the Fit-for-55 package ahead of the negotiations with the European Parliament on the two relevant directives. The body also endorsed the European Parliament’s decision on the obligatory levels of gas storage for the winter.

Energy ministers from European Union member states gathered in a meeting of the Council of the EU adopted the body’s negotiating positions or general approaches on two legislative proposals that tackle the energy aspects of the climate transition under the Fit-for-55 package. The agreements pave the way for negotiations with the European Parliament.

The agreement of the member states on the proposals for the Renewables Directive and the  renewable energy Directive aimed at decarbonizing the energy system through a massive deployment of green energy and significant efforts in energy savings, according to the statement.

The council also stated that it will assist the EU in reducing its reliance on Russia for energy in light of the Ukraine conflict. The target is to reduce net greenhouse gas emissions by at least 55% from the 1990 level by 2030.

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Two options for transportation sector

EU energy Ministers Aiming at More Ambitious Renewables Energy Efficiency Targets

The organisation has stated that it wishes to establish a binding EU-level objective of 40% renewable energy in the entire energy mix by 2030. The current EU-level aim is 32%, according to the EU Council.

In terms of transportation sub-targets, member states can choose between a binding target of 13% greenhouse gas intensity reduction, with different methods to be decided subsequently, or a binding objective of at least 29% renewable energy within the sector’s ultimate energy consumption.

The indicative target for the annual average increase in renewable energy use in industry is set at 1.1%

The EU Council voted on a gradual increase in renewable heating and cooling objectives, with a binding increase of 0.8% each year at the national level until 2026 and 1.1% from 2026 until the end of the decade.

The industry’s yearly average increase in renewable energy consumption was set at 1.1% as an indicative aim. Energy ministers are now aiming for a 49% renewable energy share in buildings by 2030.

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Environmental issues with acceleration of permitting

EU energy Ministers Aiming at More Ambitious Renewables Energy Efficiency Targets

The EU Council agreed to speed up permission procedures for renewable energy projects in keeping with the aims of the European Commission‘s – REPowerEU initiative, which was unveiled in May. While supporters of solar and wind energy applaud the move, detractors argue that by relaxing environmental regulations, the EU would allow for speedier adoption of such technology.

The ministers stated that they seek to reduce final energy consumption by 36% and primary energy consumption by 39% by 2030.

Separately, the council finalised the regulation on mandatory gas storage levels. Following the European Parliament‘s vote, the regulation requires underground tanks on a member state’s territory to be filled to at least 80% of their capacity by November 1 and to 90% by the start of the winter season in subsequent years. According to the council, the EU would strive to fill 85% of total subterranean gas storage capacity by 2022.

European Parliament votes to raise targets for renewables, energy savings

The European Parliament backed the revisions of the Renewable Energy Directive and Energy Efficiency Directive (EED) with proposals to increase targets. Lawmakers also decided limits should be determined and phased down for woody biomass counted as a renewable energy source and called for subsidies for primary wood to be abolished.

EU energy Ministers Aiming at More Ambitious Renewables Energy Efficiency Targets

The European Parliament seeks a considerable increase in renewable energy use by 2030, as well as a significant reduction in energy consumption. It agreed to increase the percentage of renewables in the European Union‘s final energy consumption from 40% to 45% as part of the 2018 modification of the Renewable Energy Directive (RED). The European Commission suggested a similar aim as part of its REPowerEU package.

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Separately, MPs voted in favour of revising the Energy Efficiency Directive (EED), the regulation that establishes energy-saving objectives for both primary and final energy usage.

EU energy Ministers Aiming at More Ambitious Renewables Energy Efficiency Targets

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EU must more than double renewables share

Notably, member states agreed in June to raise the renewables objective to 40%, in line with prior intentions. The REPowerEU strategy was unveiled in May.

If EU member states agree to the higher target in future negotiations with parliament, the EU would be required to reach a 45% percentage of renewables in its entire energy mix by 2030, up from the current rate of 22%.

The goal for the category of fuels including green hydrogen and green ammonia is 5.7%

The Greens and the Left first asked other parliamentarians to raise the target to between 55% and 56%, to reach 100% by 2040.

The Act establishes objectives for a variety of industries. Renewables are expected to reduce greenhouse gas emissions by 16%, or three percentage points more than the present regulation. The industry should increase its usage of renewables by 1.9 percentage points per year, while district heating networks should increase by 2.3 percentage points.

The goal is to increase the percentage of Renewable Fuels of Non-Biological Origin (RFNBO) such as green hydrogen and green ammonia to 5.7% by the end of the decade, while the marine fuel market aim is 1.2%. RFNBO is expected to account for 50% of the fuel utilised in industrial output by 2030, and 75% by 2035.

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Vague limits for woody biomass

EU energy Ministers Aiming at More Ambitious Renewables Energy Efficiency Targets

Members of the European Parliament passed amendments calling for a reduction in the proportion of so-called primary wood – largely healthy and fallen trees – considered as renewable energy. They advocated for the elimination of subsidies for the categorization and use of biomass in power plants, as well as the exclusion of palm oil and soya products from transportation biofuels.

Legislators did not suggest a timetable for reducing the use of primary wood as biomass.

The latest legislative changes opened the way for negotiations with member states

Parliamentarians voted that the EU must jointly lower final energy consumption by at least 40% by 2030 and primary energy consumption by 42.5% by 2030 compared to 2007 predictions. Member nations should establish legally binding national contributions.

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Last year, the European Commission established the Fit-for-55 package, to reduce emissions by at least 55% over the next decade. The present version of the Renewable Energy Directive requires the EU to reach a 32% proportion of energy consumption from renewables. The Energy Efficiency Directive, which must also be amended, specifies a level of improvement of 32.5%.

EU governments preparing market reforms to decouple power prices from gas

EU energy Ministers Aiming at More Ambitious Renewables Energy Efficiency Targets

Record-breaking power prices, and the threat they pose to households and businesses throughout Europe, have prompted some EU governments to call for a market intervention. Austria, Belgium, and Germany believe market reforms are inevitable in order to weaken the prevailing influence of natural gas costs on electricity prices.

The Czech Republic, which now holds the rotating presidency of the EU, may organise an emergency conference of EU energy ministers on September 9 to agree on the first concrete steps.

Even though both gas and electricity costs have been reaching record highs daily, power prices are now the most pressing issue. In Germany, year-ahead rates have already risen to EUR 1,000 per MWh.

Sikela: the best solution is an EU-wide solution

According to Euronews, the Czech Republic will propose restricting the price of gas used in power generation, but other solutions should be explored during the conference as well.

Czech Industry Minister Jozef Sikela stated that the price of electricity should be decoupled from the price of gas. He stated that this is a pan-European issue that affects all nations to varying degrees, and that the greatest answer would be a European-wide approach.

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Germany is preparing power market reform

EU energy Ministers Aiming at More Ambitious Renewables Energy Efficiency Targets

Almost concurrently with the announcement of the EU energy ministers’ emergency meeting, Germany declared that it was contemplating separating the gas and electricity markets to control growing power costs.

The German Economy and Climate Action Ministry revealed to Euractiv that it is working on a change to avoid growing gas costs from hurting end-consumer power pricing.

The aim is for consumers to benefit from cheap renewable energy

According to the ministry, the goal is for customers to gain from the power that can be produced inexpensively from renewable energy sources, with the costs of the measures covered by windfall taxes put on energy corporations that profit from increased prices.

Several months ago, France, Italy, Portugal, and Spain all indicated their support for market changes in the EU. Greece has even devised a proposal to create two different markets: one for pricey fossil-fuel electricity and another for inexpensive renewable-energy electricity.

Portugal and Spain have already limited the impact of gas-fired power plants on electricity prices

Although no EU-wide agreement was obtained, Portugal and Spain were granted the go-ahead to implement a system to subsidise the price of gas for gas-fired power plants, lowering wholesale energy rates. Prices in these two nations have certainly fallen since the mechanism was implemented, but there have been some unintended consequences, such as the doubling of gas use in gas-fired power plants.

The Iberian mechanism and the German government’s declaration are centred on gas power plants because they have the greatest cost of production – and the market is organised in such a manner that the price is set by power plants with the highest generation costs that are required to satisfy demand.

Austria and Belgium are also calling for action

EU Energy Ministers Aiming at More Ambitious Renewables Energy Efficiency Targets

Germany appears to have Belgium’s support, with Belgian Energy Minister Tinne Van der Straeten remarking that power generating costs are now substantially cheaper than gas and electricity prices. She stated that there is no longer a link between production costs and selling prices, and she suggested that the EU’s power pricing structure be altered. Belgian Prime Minister Alexander De Croo has defended her position.

The Austrian government, which has also indicated that the power price increases are attributable to record gas costs, shares a similar opinion.

Prices must get closer to actual costs of electricity generation

Austrian Chancellor Karl Nehammer has stated that “this craziness” on the electrical markets must end, and he has also advocated for an EU-wide solution.

The Austrian government wants to decouple electricity prices from gas prices to ensure that electricity prices are closer to the actual costs of generation, he said, noting that nuclear power plants and renewable energy installations produce a large portion of the electricity consumed in the EU at low cost.

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The European Commission was initially opposed to market reform, but Ursula von der Leyen, the EU executive’s head, subsequently stated that the bloc’s power market was no longer fit for purpose. On the other side, several specialists, including Eurelectric, the European business organisation for the power sector, are opposed to modifying market regulations.

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