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The European Clean Energy Package, the State of the Energy Union and the Progress Report on Renewables – the race is on!

The European Commission announced 2017 as “the year of implementation” of the EU Energy Union – a project which should lead to a “fundamental transformation of Europe’s energy system” with “an ambitious climate policy at its core” as well as the European Union to become “the world number one in renewable energies”.

The necessity to proceed with this vision is made more acute with the Paris Agreement on Climate Change, which clearly signals a global transformation away from a fossil fuel based economy and an increased level of political commitment worldwide.

The European Parliament and the EU Member States have started the negotiations on the Clean Energy Package as submitted by the European Commission by the end of 2016. The outcome of these negotiations will be decisive for the future of the European energy policy as well as the well-being and wealth of Europe and its citizens.

Whereas the European Parliament demonstrated its support by its unanimous vote for the ratification of the Paris Agreement by the European Union, the European Council still sticks to its decision of 2014 to pursue the lowest possible ambition pathway including an EU wide binding target for renewables of minimum 27 %, to be reached by 2030. This target is at a lamentably low level and can in no way be considered as a driving force to achieve the climate change objectives.

Consequently, a lot of persuading remains to be done to ensure a strong development of renewables as the critical means for a stable, secure, affordable and democratic energy system for the European Union, a system which generates jobs and wealth and helps expanding and pacifying access to energy around the world.

As it stands, the EC Clean Energy Package does not reflect a courageous step towards an energy system change nor does it prepare for the forecasted massive shift in infrastructure and production and supply realities. The proposed legislation would weaken the position of renewables’ access to the market in times during which many Member States back paddle from renewables and/or protect their national fossil and nuclear champions at all costs.

The package does not take stock of the increasing imbalances on the energy market due to bad heritage and ongoing support for nuclear and fossil. It is embedded in a series of market blocking state aid and capacity market decisions for coal and nuclear.

The blindness towards the ticking time bomb in view of the old nuclear park with increasing financial constraints looming, the eagerness to look away from the coal and gas sector and not organising good exit strategies for all three weakens all efforts for modernisation and system change.

As long as EU decision-makers do not tackle these imbalances openly and seriously, there will be no market development.

Within this unequal European energy market, renewables will still need continued support to provide enough incentives and security for investors and project developers to develop renewables and energy efficiency further.

Crucial points for a cost-effective energy transformation include continued guaranteed priority access and dispatch for renewable electricity; continued financial support (especially as balance to subsidies to conventional and nuclear energy); if auctions, they need to be technical specific; a favourable framework for prosumers, energy cooperatives and small and medium-sized enterprises to enter the energy market as new market players; a clear and reliable governance framework for renewable deployment (particularly in the absence of national binding targets); access to cheap capital for renewable projects throughout the EU; and specific funding schemes for small and medium-sized projects.

We call on European decision-makers to have the vision and courage to show a strong political will and dedicated long-term commitment to the 2050 EU goal and international commitments.

Dr. Dörte Fouquet

Director