The Commission’s Winter Package: world number one in renewable energies, really?

The European Commission is due to unveil its so-called Winter Package tomorrow. The details of the package will be of crucial importance for fulfilling the commitments we made in the Paris Agreement. It consists of a series of legislative proposals including revisions to existing directives and new regulations in the field of energy and, more particularly, energy efficiency, renewables and the internal market. Leaks of the proposals seen last week were deeply worrying. Beneath a small step forward on energy efficiency, a lack of ambition, weaker governance and more market barriers for renewables, together with disguised subsidies for coal and the maintenance of privileges for nuclear energy and fossil fuels are the key ingredients of this Winter Package.  

‘I want the EU to become the world number one in renewable energies’. Those are the words of the President of the European Commission, Jean-Claude Juncker. However, he is not really practicing what he has preached. In the past, the European Union was indeed a leader and innovator on climate policy: in 2004, the EU held 53% of the world’s share in global investments in renewable energies. However, in 2015, it held just 17%. While the costs of clean technologies tumble, China and the US are overtaking the EU, which is clearly proving not to be up to scratch.

The proposal that the European Commission will present tomorrow lacks ambition and risks provoking a lost decade for renewable energy. The target to achieve a 27% share for renewables EU-wide is a step backwards and is equivalent to aiming at halving the new capacity installed annually on renewable energy over the next decade compared to what installed from 2010 to 2020. Also, the approach envisages no binding national targets, which would encourage free-riding attitudes among Member States. We would need at least indicative national benchmarks if we really want them to deliver. Moreover, the European Commission has decided to remove priority access and dispatch of renewable electricity as enshrined in the current directive, while limiting it in both amount and time. This is another important step back, since priority access currently serves as a guarantee of profitability for investors in renewable energy. Scrapping priority access jeopardizes the EU’s position on the renewable energy market and has a negative impact on self-generation. Despite the Commission’s claim to be focusing on energy citizens and self-consumption, the lack of priority access for renewables will de facto prevent these from being realised.

Also importantly, through this legislation the European Commission is massively facilitating new subsidies to coal and gas granted by Member States via capacity mechanisms. Capacity mechanisms allow electricity producers, particularly coal power plants, to earn money from their idle generation capacity; that is, for not being producing electricity. The alleged reason is the need to have additional electricity supplies to prevent potential blackouts, but in reality capacity mechanisms are little more than veiled subsidies for fossil fuels, due to the absence of CO2 criteria. A further developed market interconnection would be enough to guarantee energy security all across the continent. Indeed, the wind does not blow in perpetuity in a particular place, but is always blowing somewhere. What we need is to make sure those places are well connected. This way a progressive, organised coal and nuclear exit strategy would be possible, which would allow for phase out coal in 2017.

The Commission continues to ignore the environmental risks of bioenergy and fails to establish meaningful safeguards. It proposes a 3.8% cap on food and feed based biofuels for 2030, which is an improvement compared to 2020’s cap of 7%, but still largely insufficient: we want no fuels competing with food. Additionally, the European Commission is not proposing any sustainability criteria for advanced biofuels and turns a blind eye to emissions caused by indirect land-use change, e.g. turning forests into agricultural land to produce biofuels. These proposals risk postponing the real decarbonisation measures in the transport sector, such as electro-mobility and efficiency measures that we so urgently need.

Energy efficiency is another crucial element of this legislative package. The energy efficiency target must be not lower than 40% and come with binding national targets, in order to trigger the myriad possible benefits related to job creation, economic development, poverty alleviation, geopolitical shifts and health improvements that energy efficiency could bring in a short and medium term. A coalition of leading businesses, including Philips, Veolia, Knauf and Schneider, was very clear last week: Europe must set a 40% EU binding target for energy efficiency and “increase the scale and rate required to meet its Paris climate commitments. If we want to secure a cost-effective energy transition, both a binding ambition for energy efficiency and clear long-term vision are needed”.

Speaking good words in Marrakech but showing very low ambition in Brussels cannot be an option. The European Union has the responsibility to align its policies to what it committed to in Paris last year, but it has not yet done so. The energy transition can bring enormous benefits for our economies and our health. It is now up to the European Parliament and the Council to improve this proposal and raise ambition. A lot is at stake.