The European Commission announced its ‘Fit for 55’ package, a broad range of legislation that will help the EU reduce greenhouse gas emissions by 55% by 2030 (compared to 1990 levels). The ambitious climate and energy package proposes to revise and strengthen the legislative framework for renewables as originally laid out in the 2017 Clean Energy Package and represents a landmark moment for the European energy transition and the solar industry in particular.
During a press conference at the Brussels headquarters of the Commission, President Ursula von der Leyen, Executive Vice-President Frans Timmermans, and top commissioners revealed the proposal to increase Europe’s 2030 renewable energy target from 32% to 40% of Europe’s final energy demand.
“Today is a bright day for solar in Europe. The Fit for 55 package is a watershed moment for the European solar sector, heralding solar as a key solution for the climate transition. According to our modelling, the European Commission’s proposed 40% renewables target would correspond to 660 GW solar power installed by 2030 amounting to 58GW installed each year, a huge number, driven by the versatility of solar and record-breaking cost reductions. No other energy technology is growing more than solar in Europe today which means that we can go even further even faster. Our 100% Renewable Europe study with LUT University demonstrates the most cost-efficient pathway to climate neutrality is a 45% renewables target by 2030, which would put the continent on track to deliver on the 1.5° Paris Agreement scenario.”
The amendment of the Renewable Energy Directive increases the renewable energy target to 40% by 2030, which will help to accelerate the deployment of solar PV across the continent. The Commission has committed to strengthen private procurement of renewable energy, by improving the Guarantees of Origin framework and bolstering provisions on renewable energy PPAs. New guidelines to facilitate best practices for renewable energy procurement in Member States are in the works, which recognises the increasing role of corporate renewable sourcing in supporting Europe’s climate ambitions.
“It is very good news that the Renewable Energy Directive removes barriers for private procurement of renewables and has announced European guidelines on how to facilitate Corporate Power Purchase Agreements (CPPAs) as part of national frameworks. This is a positive development for corporates that can be a major force in accelerating the energy transition.”
The Commission also presented plans to ensure that only hydrogen produced from renewable sources will contribute to the EU’s 2030 renewable energy targets.
“The revised Renewable Energy Directive secures ambitious rules to ensure that renewable electricity will be at the core of Europe’s clean hydrogen strategy. In line with SolarPower Europe’s recommendations, the Commission established that the Renewable Energy Directive is for renewables only, clarifying that only renewable-based hydrogen can contribute to the achievement of the EU 2030 renewable targets. This is an essential move to boost the EU’s leadership in renewable-based electrolysis. The Commission’s proposal to ensure that 50% of the hydrogen in industry is renewable by 2030 is a true game changer. This target, coupled with appropriate support measures, can create the market pull needed to accelerate the competitiveness of renewable hydrogen versus fossil-based solutions.”
The review of the Renewable Energy Directive introduces a review clause to amend provisions related to permitting procedures in 2024, should Member States’ efforts to streamline administrative procedures prove insufficient.
“We are happy to see the European Commission address permitting which continues to be a critical barrier to solar deployment today. The introduction of EU permitting guidelines are a necessary step to support this dialogue between the European Commission and Member States, we therefore applaud Energy Commissioner Kadri Simson’s confirmation that the European Commission Directorate-General for Energy (DG ENER) will issue guidance on ‘Reconciling permitting with environmental and local communities interests’ as of 2022. If this fails to deliver, the introduction of a review clause for provisions on administrative procedures and permitting constitute a strong safeguard and should be mandated as soon as possible.”
The RED II Amending Directive also establishes new indicative targets to promote the use of renewable energy in industry and buildings. These could provide a framework to promote industrial decarbonisation through the deployment of commercial and industrial self-consumption installations and accelerate on-site solar on all buildings in the EU.
“It is good news that the Commission is taking action to drive the uptake of renewables in buildings and industry, as the 2030 potential for prosumers across the residential, commercial, and industrial sectors is more than 580 GW. More on-site solar will directly contribute to meeting our renewable energy targets, reduce consumer energy bills, and increase the competitiveness of the EU private sector. Indicative targets for industry and buildings are a good first step but must be combined with facilitating measures, such as the new provisions to strengthen the framework for private procurement of renewable energy.”
Herrero added: “With regards to industry, however, stronger action is needed to remove disproportionate administrative barriers on mid-sized self-consumption solar systems. Concrete measures are also needed to accelerate the deployment of solar PV on buildings. Exempting rooftop systems from construction permits and putting in place mandatory requirements to deploy solar and storage can unlock more than 680 TWh of renewable electricity, equal to 25% of EU electricity demand.”
However, in a worrying move, the Commission has proposed a sunset clause which would remove the ability of Member States to exclude renewable energy generated on-site from energy savings calculations from 2024 onwards. This measure would remove a key element to ensure coherence between the renewable energy and efficiency frameworks and is counter-productive to the integrated renovation approach introduced in the Renovation Wave Strategy, the improvement of energy system efficiency, and the promotion of smart building electrification.
“It is very concerning that the Commission intends to remove the ability of Member States to exclude renewable energy generated on-site from energy consumption calculations from 2024 onward. This removes a crucial link between the renewable energy and efficiency frameworks, as renewable-based electrification could deliver up to 17% primary energy savings by 2030, according to our 100% Renewable Europe 2050 study,” concluded Herrero.
The European Council and the European Parliament will now begin formal internal negotiations on their positions. The Energy Working Party in the European Council will hold a first meeting to discuss the Fit for 55 Package proposals, with a focus on the RED II Amending Directive and the EED II. The Council is expected to reach a position on the RED II Amending Directive and the Recast EED by mid-2022. The European Parliament is expected to begin reviewing the proposals from the end of August.