BUILDING A RELIABLE AND TRANSPARENT RENEWABLE ENERGY GOVERNANCE FOR THE POST-2020 PERIOD

BUILDING A RELIABLE AND TRANSPARENT RENEWABLE ENERGY GOVERNANCE FOR THE POST-2020 PERIOD

Key messages New planning, monitoring, reporting and enforcement rules on renewable energy deployment should take effect only as of 2021. Until then, the European Commission should safeguard the integrity of the Renewable Energy Directive and should assiduously monitor and prosecute any infringements of all the provisions of this piece of law. The process leading to the approval of planning, monitoring, reporting and enforcement rules on renewable energy deployment for the post-2020 period should be kicked off by the European Commission by the end of this year and should be concluded with the adoption of a new Renewable Energy Directive by 2019. Before December 2015 the EU executive should issue a template for national plans for competitive, secure and sustainable energy and should publish national renewable energy benchmarks for the year 2030. In their plans Member States should define their renewable energy targets by 2030, should set linear trajectories with biennial milestones, and should outline which technologies will be deployed to reach the defined targets. While some elements of the plans could and should be revised by Member States every two years, the renewable energy targets and trajectories should be treated as fix elements. The Commission should set up a European funding scheme to complement Member States contributions to the achievement of the minimum European 2030 RES target; the EU executive should also independently and timely track national renewable energy shares and promptly launch effective infringement procedures if countries jeopardise the RES investment environment or fail to meet their biennial milestones. Timeline and process By Dec 2015: COMM issues template for plans and benchmarks By mid-2016: MSs partially fill out the plans with 2030 targets, trajectories and technological breakdown H2 2016: MSs and COMM discuss plans 2017: COMM makes recommendations and MSs submit final plans 2019: plans are resubmitted to take account of the agreed RES, EE and GHG 2030 legislation 2016-2017: COMM proposes RES, EE and GHG 2030 legislation 2019: Adoption of legislation containing provisions on planning, monitoring, reporting and enforcement

Introduction In February 2015, the European Commission put forward a Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy. Decarbonisation of the energy system and moderation of the energy demand are two of the five dimensions of the Energy Union. Within these areas, 2030 objectives have been unanimously agreed by European political leaders. In this moment the European Commission is spelling out planning, monitoring, reporting and enforcement procedures for these climate and energy targets in the framework of the wider Energy Union. The EU executive, upon request from Member States, is considering streamlining the reporting obligations already in the period up to 2020 and merging planning, monitoring and reporting streams in the climate and energy sector in the post-2020 period. This position paper details SolarPower Europe suggestions for the actions that the Commission and Member States should take in this respect in the upcoming years. Our proposals contribute to the definition of a reliable and transparent governance, which maximises investors confidence. Safeguarding the integrity and ensuring the full implementation of the RES Directive up to 2020 While overall progress towards the achievement of the 2020 20% RES target is good, the renewable energy sector in some European countries is weathering the storm. Recently introduced sudden and retrospective changes to the national regulatory frameworks have jeopardised investors confidence. As a matter of fact, in contradiction with the rules established by the RES Directive, in some Member States it is now very difficult to connect a renewable-energy based power plant to the grid and the electricity produced by RES plants is often curtailed. Hence, it is essential that in the remaining years up to 2020 the European Commission makes all the necessary efforts to ensure that all the provisions of the RES Directive are fully implemented. Member States reports on the implementation of the RES Directive, which are due every two years, should exhaustively describe the way how the RES Directive requirements are met and the Commission should fully use its right to ask for clarifications, to issue policy warnings and to launch infringement procedures. While understanding the rationale behind the upcoming initiatives of the EU executive to streamline the numerous reporting obligations in the energy and climate sectors, we strongly warn against the modification of the RES Directive articles about planning, monitoring and reporting. Instead, we call for a more vigorous enforcement of all the RES Directive provisions from now to 2020. Steering the process towards the approval of planning, monitoring and reporting rules for the post-2020 period While today s framework must be preserved up to 2020, new rules for the post-2020 period should be proposed already now so that they can be agreed by 2019. This way there will be no time gap between the end of the current governance and the beginning of the new one. SolarPower Europe suggests that as a first step the European Commission come forward with a template for national plans for competitive, secure and sustainable energy. The template should contain some flexible and some fix elements. Member States could and should revise the flexible components every two years; but they should not modify the fix parts. The latter include the renewable

energy targets set by Member States themselves, the trajectories towards the achievement of the targets, and the technological breakdown of the targets. At this stage the template can of course not be complete as the pieces of legislation underpinning the achievement of the 2030 greenhouse gas emissions reduction, renewable energy and energy efficiency targets are still missing. Hence, for the moment Member States should not be required to provide exhaustive information about their policies in all the Energy Union dimensions. They should be asked to do so in 2019, when the post-2020 RES Directive and the other regulations are adopted. In addition to the template, the European Commission should provide Member States with benchmarks of how the binding, minimum European 27% renewable energy objective could be declined into individual contributions. As noted by the Towards 2030 project, like so, it will encourage sufficiently ambitious pledges and will facilitate the assessment of the contribution needed by each Member State to achieve the EU-wide target. Next year, Member States should submit their plans to the European Commission, and discussions should take place in order to fine-tune the documents with special regard to the targets, trajectories and technological breakdown of the targets. Member States not willing to deploy renewable energies to the levels of the proposed benchmarks should clearly substantiate the obstacles that stand in the way of higher ambition. Discussions should take place not only between the Commission and each single Member State but also among countries, in order to enhance the synergies between and to optimise the regional impacts of national policies. Following this dialogue phase and in line with Commission recommendations, Member States should resubmit their plans and start implementing the parts that are not related to the 2030 climate and energy targets, such as the research and innovation and the internal market policies. In 2016 or 2017, the European Commission will propose a revision of the 2020 climate and energy package legislation, including the RES Directive. The new planning, monitoring and reporting rules for the post-2020 period should be enshrined into these new pieces of law. This way, they will acquire a solid legal basis and will become non-disputable. In line with the rules included in these regulations, by 2019 Member States should complete their plans, showing for example how they will continue to ensure that renewable energies are granted priority access and dispatch and how new RES plants benefit from one-stop-shop permitting and grid connection procedures 1. Ensuring the achievement of the minimum 27% European target As mentioned above, by publishing its calculations of the cost-optimal national contributions to the agreed European objective, the Commission would support a swift decision on the effort sharing. However, the EU executive needs to be equipped with the appropriate tools to face two negative scenarios: first, that Member States fail to agree on their contributions to the attainment of the European goal; second, that Member States succeed in agreeing on sufficiently ambitious contributions, but that at some point in time between 2021 and 2030 one or some of them start lagging behind. These scenarios are very unlikely as, according to Commission estimates, without any specific policy support, renewable energies would already be able to cover 24% of Europe s energy needs in 2030. Hence, the investment required to bring the RES share to 27% will be very limited. In addition, the European target that Member States will contribute to attain has been unanimously declared binding 1 Our position on the provisions that should be contained in the post-2020 RES Directive is contained in the paper Ensuring a cost-effective growth of solar power in Europe

by the 28 national leaders during their October 2014 summit. This indicates that there is strong political commitment to pursue the deployment of renewable energies in the next decade. Nevertheless, the availability of European instruments to guarantee the achievement of the minimum 27% European target will be key to strengthening investors confidence and decreasing the cost of capital of new RES projects. This is why SolarPower Europe encourages the EU executive to investigate the possibility to set up a European financing scheme for the deployment of renewable energy capacities in the context of the Multiannual Financial Framework 2021-2028. The scheme could be inspired by the existing and the announced funds for energy efficiency and by the programme for renewable energy demonstration projects. These are: the European Energy Efficiency Fund, the Smart Finance for Smart Buildings Initiative and the NER 300, which will become the Innovation Fund. The scheme should also reinforce the contribution that the Modernisation fund will make to the renewable energy deployment in the least wealthy EU countries. Of course, for the new European scheme to trigger significant renewable energy capacities, it is important that it be equipped with a substantial budget. We also call on the European Commission to set up instruments for the effective and timely monitoring and removal of delays in the progressive attainment of the 2030 targets. Such instruments should clearly be defined in the proposal for a post-2020 RES Directive. Today, Eurostat numbers about the renewable energy shares in the 28 Member States involve the aggregation of somewhat inconsistent numbers provided by Member States authorities and provide a 2-year old picture of the situation. By the next decade, the European Commission should be provided with independent and reliable instruments to verify the almost real-time national renewable energy shares. Moreover, as opposed to today, in the period 2021-2030, the EU executive should be able to promptly warn Member States if the latter take measures that jeopardise the renewable energy investment environment or if they fail to meet their biennial milestones. Clear procedures for policy warnings and for infringement procedures should be laid down in the proposal for the revision of the RES Directive. Conclusions The energy sector in Europe must be reassured that the rules in place under the Renewable Energy Directive will be fully applied until the end of the year 2020. At the same time, the investor community needs visibility on Member States ambition to deploy renewable energies after the year 2020. This is why SolarPower Europe proposes that the European Commission takes up a more active watchdog role with respect to the RES Directive implementation in the period up to 2020. This is also why, on the other hand, we suggest that the Commission kicks off already this year the process that defines planning, monitoring reporting and enforcement rules in the renewable energy sector for the post-2020 period. We call for robust national plans that provide real visibility to investors: concretely, we suggest the definition not only of individual renewable energy targets by 2030, but also of trajectories with biennial milestones, and of the technological breakdown of the targets. Investors need to be able to rely upon Member States plans. Hence, targets, trajectories and the technological breakdown of the targets should be considered as fix elements of the national plans and should be provided with a solid legal basis, namely the revised RES Directive and the other energy and climate pieces of EU law. Finally, investors must be certain that the minimum 27% European target will be met. On the one hand, a European fund should be available to complement national contributions. On the other hand, the Commission should timely track and redress Member States weak progress towards the achievement of their national 2030 objectives.

Paper developed by the SolarPower Europe Strategy Committee: Chair: Simone Diodato Antonelli Vice-Chairs: Andreas Wade, Wolfgang Storm Contact in the SolarPower Europe team: Giorgia Concas, Policy Advisor: g.concas@solarpowereurope.org SolarPower Europe Rue d Arlon 69-71 B-1040 Brussels Belgium Tel.: +32 2 709 55 10 Fax: + 32 2 725 32 50 solarpowereurope.org