European Commission proposes 2030 policy framework for climate and energy

On January 22, 2014, the European Commission presented a new policy framework for climate and energy for the period up to 2030. It builds further on the 2020 climate and energy framework, better known as the ‘20-20-20’ initiative. Under the earlier Directive 2009/28/EC, binding goals were set for 2020, which will have to result in a share of 20% renewable energy share in the final European energy demand, a saving of 20% of the Union’s primary energy consumption (compared to 2020 business-as-usual projections) and greenhouse gas emissions (compared to 1990 levels). Current projects expect to meet two of the three targets: a 24% greenhouse gas emission reduction and a 21% RES share in the energy demand are currently projected for the year 2020. In contrast, the projections indicate that the efficiency target will not be met. The target is subject to a separate Directive 2012/27/EU demanding the implementation of measures to boost energy efficiency efforts, although that the 20% savings target is not binding in itself.

In the next step on the EU’s energy roadmap towards 2050, striving for 80 – 95% reduction of greenhouse gas emissions compared to 1990 levels, the 2030 framework puts forward new targets concerning greenhouse gas emissions and renewable energy. This new framework is now to be enacted by the European Council and European Parliament.

The new framework imposes a binding target of 40% reduction of greenhouse gas emissions compared to 1990 levels. This reduction is to be achieved within the EU, in contrast to the 2020 target, which allowed for emission trading outside of the EU. It will be assisted by a reformed Emission Trading Schemes to avoid excess supply and ensure price stability. Again, this target is to be achieved with help of a separate energy efficiency and renewable energy target: the former will be subject to a review of the separate efficiency Directive 2012/27/EU to be concluded later in 2014, while the latter is dealt with by means of a new binding renewable energy target of at least 27% of the EU’s energy consumption by 2030.

In contrast to the previous framework, the renewable target will not be translated into national targets through EU legislation. A specific governance process has to ensure that the energy system is transformed in a flexible way, allowing the Member States to adapt their energy system to national circumstances. This allows taking into account their existing energy mix and ability  to generate renewable energy. The governance process imposes the Member States to compose their national ambitions in a National Plan, resulting from an iterative process between the European Commission and the Member States. How this procedure will ensure achieving the overall binding target is not really clear at this moment.

Similar to the 2020 renewable target, projections show that the electricity sector will bear the largest share of the burden. The share of renewable electricity generation is expected to increase from 21% today, to at least 45% in 2030. Current observations show that the rapid integration of renewable electricity generation sources already challenges the operation of power systems to a serious extent. These issues, strongly driven by decentralized and variable generation such as wind and solar power, manifest in technical challenges as transmission and distribution network congestions, and increased risk towards frequency and voltage stability. Market challenges include ensuring the profitability of back-up generation capacity to keep the system in balance.

In order to ensure a cost-efficient and reliable integration of these renewable energy sources, the adoption of new technologies such as demand-response and storage, facilitated in a smart grid, are crucial. Therefore, European deployment targets have to go hand in hand with Research, Development and Demonstration (RD&D). This is recognized by the European Commission by means of research programs up to 2020 such as the Strategic Energy Technology Plan and Horizon 2020. However, now is the time to determine the instrument to support these technology developments in the period after 2020.