Tag:European Commission

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EUROPEAN COMMISSION PRESENTS REPOWEREU PLAN
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New Turns in Germany’s Energy Turnaround
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Conclusions or Delusions? EU Aims To Set 2030 Renewable Energy Targets

EUROPEAN COMMISSION PRESENTS REPOWEREU PLAN

Policy and Regulatory and Energy, Infrastructure, and Resources Alert

By: Tariq A. FeddaMiguel A. Caramello AlvarezGiovanni CampiInês S. Mendes, Paula Esteban Gomez

The European Commission (the Commission) presented on 18 May 2022 details of its plan to repower Europe and to reduce, and ultimately end, Europe’s reliance on Russian fossil fuels (the REPowerEU Plan or the Plan)1 that was announced on 8 March 2022. 

It aims to do this with three pillars: energy conservation; diversifying supplies; and quickly substituting fossil fuels by accelerating Europe’s clean energy transition, all while smartly combining investments and reforms.

The Plan acknowledges that the shift away from Russian fossil fuels will also require targeted investments for security of supply in gas infrastructure and very limited changes to current oil infrastructure, alongside large-scale investments in the electricity grid and an EU-wide hydrogen backbone. As such, the different elements of the Plan, which comprise a series of proposals, communications and guidance documents, will be of interest to anyone participating in the energy markets in Europe, including developers of renewable and conventional energy projects, buyers and sellers of commodities, and even households. 

New Turns in Germany’s Energy Turnaround

In March 2014, the German government presented the details of its plans for changes in the country’s renewable energy support scheme. The planned legislation (the “Draft”), which passed the cabinet on 8 April 2014, seeks to curb the increase of energy costs and to promote a stronger market integration of renewable energy production.

Under the Renewable Energies Act (“EEG”), renewable energy producers are entitled to fixed feed-in tariffs and to priority feed-in into the grids. The spread between the market price and the feed-in tariff is levied to electricity consumers by a renewable energy surcharge (“EEG Surcharge”) whereby energy-intensive industries benefit from a reduction.

Under the EEG support scheme, renewable energy sources have experienced a boom in Germany, now serving as a source for about 25 % of the country’s electricity consumption – four times as much as a decade ago. In turn, the system has increasingly been put under political pressure as energy costs (especially for households) continue to increase. In addition, the support scheme is held to produce a paradox effect: whereas consumer prices increase due to the EEG Surcharge that levies the feed-in tariffs, wholesale electricity prices plunge because the rapidly growing renewables are flooding the market. The effect of this price development is tangible: Germany’s second largest utility, RWE AG from Essen, whose core business is electricity delivery, has announced a net loss for the year 2013 of 2.8 billion Euros. It was RWE’s first loss-making year since the end of the Second World War. Read More

Conclusions or Delusions? EU Aims To Set 2030 Renewable Energy Targets

In an announcement awaited by industry, the European Commission has proposed the non-binding objective of increasing the share of renewable energy to 27% of the EU’s energy consumption in 2030. However, at the same time, an ambitious and binding target emerged: for the EU to reduce by 2030 domestic greenhouse gas emissions by 40% below the 1990 level. An extraordinary target or a disappointment?

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