On 20 June 2018. Agreement was reached on the wording of the provisions of the Regulation on Governance of the Energy Union ("EU Governance"), which will set out how to prepare the Integrated National Energy and Climate System. Plans for 2021-2030 as well as monitoring and reporting by Member States on the implementation of the European Union's energy and climate objectives until 2030. The compromise reached also concerns the Energy Efficiency Directive ("EED"), which sets targets for improving energy efficiency and achieving energy savings for end consumers. The compromises reached on the EU Governance Regulation and the new wording of the RES Directive and the Energy Efficiency Directive mean that the legislative package presented in November 2016. Is at the final stage of agreement. Thus, the Austrian Presidency starting on 1 July 2018. It will conduct negotiations to agree on the final wording of the Internal Electricity Market Directive and Regulation, the ACER Regulation and the Electricity Risk Preparedness Regulation. The compromise reached on the EU Governance Regulation, the EED and the RES Directive significantly facilitates this task, most likely meaning that the negotiations of the entire package will be completed before the end of 2018. In view of the above, the Polish Electricity Association ("PKEE") would like to present its position on the key solutions adopted in the EU Governance Regulation and the Energy Efficiency Directive. The Austrian Presidency starting on 1 July 2018 will conduct negotiations to agree on the final wording of the Directive and the Regulation on the Internal Electricity Market, the Regulation on ACER and the Regulation on Risk Preparedness in the Electricity Sector. The compromise reached on the EU Governance Regulation, the EED and the RES Directive significantly facilitates this task, most likely meaning that the negotiations of the entire package will be completed before the end of 2018. In view of the above, the Polish Electricity Association ("PKEE") would like to present its position on the key solutions adopted in the EU Governance Regulation and the Energy Efficiency Directive. The Austrian Presidency starting on 1 July 2018 will conduct negotiations to agree on the final wording of the Directive and the Regulation on the Internal Electricity Market, the Regulation on ACER and the Regulation on Risk Preparedness in the Electricity Sector. The compromise reached on the EU Governance Regulation, the EED and the RES Directive significantly facilitates this task, most likely meaning that the negotiations of the entire package will be completed before the end of 2018. In view of the above, the Polish Electricity Association ("PKEE") would like to present its position on the key solutions adopted in the EU Governance Regulation and the EED. ACER Regulation and the Regulation on Risk Preparedness in the Electricity Sector. The compromise reached on the EU Governance Regulation, the EED and the RES Directive significantly facilitates this task, most likely meaning that the negotiations of the entire package will be completed before the end of 2018. In view of the above, the Polish Electricity Association ("PKEE") would like to present its position on the key solutions adopted in the EU Governance Regulation and the EED. ACER Regulation and the Regulation on Risk Preparedness in the Electricity Sector. The compromise reached on the EU Governance Regulation, the EED and the RES Directive significantly facilitates this task, most likely meaning that the negotiations of the entire package will be completed before the end of 2018. In view of the above, the Polish Electricity Association ("PKEE") would like to present its position on the key solutions adopted in the EU Governance Regulation and the EED.
Energy Efficiency Directive
The Energy Efficiency Directive introduces a non-binding Europe-wide target to improve energy efficiency by 32.5% compared to 2007 consumption projections. Importantly, to the best of PKEE's knowledge, Member States will retain the flexibility to choose whether to meet the primary or final energy consumption target. In addition, Member States will autonomously declare achievable reductions in energy consumption and present their national contributions to the EU-wide target, in accordance with the provisions of the negotiated EU governance regulation.
Furthermore, during the negotiations, it was agreed that the level of annual energy savings sold to final customers set out in Article 7 of the Energy Efficiency Directive would be 0.80%. This is lower than what was indicated in the initial positions of Council and Parliament; however, the final agreements reached include a limit on flexibility, allowing Member States to reduce this target in practice. Without this flexibility, the negotiated target became more tangible.
The EU Governance Regulation introduces tools to enable the coordination of individual actions by individual Member States in order to achieve the goals set at EU level by 2030, namely:
- 32% share of energy from renewable sources in gross final consumption of energy as a result of negotiations in the trilogue on the Directive on the promotion of the use of energy from renewable sources, and
- 32.5% of the energy efficiency target, in line with the outcome of the Trilogue negotiations on the Energy Efficiency Directive.
In the absence of national targets in the new RES Directive, the EU Governance Regulation requires each Member State to submit by the end of 2018. Draft of the first Integrated National Energy and Climate Plan ("NERP") containing, inter alia, the declared national share of RES in final energy consumption in 2030 as a contribution to the EU target. The European Commission will assess the drafts and then finally approve the final text of the submitted plans and will monitor their implementation.
According to PKEE, the above solutions, i.e. no national targets and the possibility to individually declare the level of contribution, will allow Member States to maintain an appropriate level of flexibility. PKEE fully supports the decision, according to which Member States will individually determine their possible RES contribution, taking into account their economic situation, the need to ensure stability of their power systems, the available potential, including the cost of the technology and the level of consumer burden.
However, we would like to point out that, in accordance with the provisions of the regulation, Member States' flexibility is subject to certain limitations in the form of defining the trajectory of RES development, the minimum RES share, the formula for calculating the target. based on objective criteria and the possibility for the European Commission to issue recommendations. Member States will be obliged to ensure that the increase of RES share will be evenly distributed over a 10-year period. For this purpose, a RES development trajectory has been provided for, assuming that it will be important not only to achieve the finally declared share for 2030, but also to achieve earlier stages - milestones. The adopted trajectory assumes that at the EU level in the first milestone, i.e. 2022
Moreover, the adopted solutions include a formula for calculating a percentage of the fair value of the national contribution. The formula will only be applied if, as a result of the assessment of the draft plans submitted by the Member States, the European Commission concludes that the voluntarily declared national contributions will not ensure the achievement of the EU-wide target. In this case, it is likely that Member States will receive optional recommendations from the Commission to increase their contribution to the EU-wide RES target based on the calculation of the formula.
To the best of our knowledge, the European Commission has not been given further hard means under the regulation to enforce targets in Member States, which justifies non-compliance. According to available sources, the role of the European Commission was limited to pointing out and criticising countries declaring insufficient ambition - but final confirmation of the nature of the Commission's powers will be possible once the agreed text of the regulation is published.
Summary
In our view, the compromise reached on the EED allows the specific features of the Member States to be taken into account to a large extent; however, the overall target has been set at a very ambitious level. At the same time we draw attention to the fact that the mechanism provided for in Article 7, which makes an important contribution to achieving a reduction in energy consumption, places a considerable burden on energy suppliers for end consumers and represents a major challenge for national energy companies facing capital-intensive modernisation investments.
The EU governance regulation introduces tools to increase the European Commission's ability to intervene in Member States' energy policies. The ability to reflect, when determining the national contribution to the achievement of the EU-wide target, the specificities of individual EU Member States, while not limiting the ambitions of those Member States that intend to develop RES to a greater extent, should be positively assessed. This approach, in our view, strikes the right balance between respecting the specificities of the Member States and the necessary flexibility, while striving to achieve the targets collectively at EU level. In addition, it will be important for the European Commission to respect the flexibility outlined above in agreeing the national energy and climate plans, thereby allowing Member States to set their contribution to achieving the targets at levels that do not overburden their economies.
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