EU’s Renewable Energy Directive (REDII) moves into final and decisive phase

REDII: Almost 14 months after the European Commission first presented its Clean Energy package on 28 November 2016, both the Council and the Parliament have completed their respective deliberations, including tough discussions and a high number of amendments.

The Council (i.e. member states) reached an agreement on 18 December 2017, while the European Parliament voted on its stance this week, on 17 January. This means that the inter-institutional negotiations (“trialogues”) can begin. These will be led by the Bulgarian Presidency of the Council. Beside the Council and the Parliament, the trialogues also include the Commission (Directorate General for Energy), and will likely start in February or in March.

Each of the three negotiating parties come to the table with a different set of priorities. In some areas, consensus will likely be reached fast, while in others there will be tough discussions. For example, how ambitious will the EU member states be when it comes to overall 2030 renewable targets? The Council has backed the Commission’s proposal of 27%, while there is a political consensus in the Parliament to raise the bar to at least 35% of Europe’s energy demand coming from renewable energy sources. The final outcome will have a profound impact not only on the EU, but probably also for the future pace of the global energy transition.

ECOHZ has been heavily engaged in the REDII process during the last year, and has actively contributed to policy makers in Brussels with comprehensive facts, figures, case studies and position papers. We have also cooperated with a wide range of stakeholder organizations.

Our efforts have primarily been focused on the topic of how to best define, develop and use the system of Guarantees of Origin (GOs).

The Guarantee of Origin (GO) is an instrument created to track and document renewable electricity, and to allow households and businesses a real choice of power source. Businesses of different sizes and across all industries purchase GOs to demonstrate their renewable claims, as a basis for their sustainability reporting and CO2 emission calculation. GOs are used for documenting electricity purchased from the grid and for power purchased directly from new renewable projects through Power Purchase Agreements (PPAs).

Guarantees of Origin are mentioned throughout the REDII directive text, but the key provisions are included in Article 19.

ECOHZ has made an overview of “final” draft text of REDII comparing proposals from the EU Commission, Council and Parliament as of January 17th, 2018. The overview includes text elements which comprises Guarantees of Origin and Power Purchase Agreements (PPAs) directly.

Moving forward into the trialogues, ECOHZ will emphasize its support for six (6) key issues, reflected in the Parliament’s position:

 

  1. Confirming that only Guarantees of Origin can be used as basis for renewable claims and disclosure and making the GO mandatory for making renewable claims. This would be ensured by the use of the word shall, and not may (Art 19.8).
  2. Harmonizing validity rules of the GO – using a full (12 month) calendar year, as well as a common 6-month deadline for providing national fuel disclosures (Art. 19.3-4).
  3. Expanding the use of GOs to new energy sources like gas, heating and cooling (Art. 19.7).
  4. The removal of the proposed mandatory “auctioning concept” of GOs originating from power plants having received support, and the inclusion of a clearer definition of “no double compensation” (Art. 19.2).
  5. Explicitly removing administrative barriers to corporate power purchase agreements (PPAs) and setting up an enabling regulatory framework for enhancing PPAs (Art. 15.9).
  6. Ensuring the use of GOs to track and document corporate power purchase agreements (PPAs) – without unnecessary limitations (Art. 19.2 and Art 15.9).

Since 2008, the GO volumes have grown year on year by 17.5%, with more countries joining the pan-European marketplace and more customers opting for documented renewable electricity. In 2017 more than 50% of all renewable electricity in Europe was available and documented with GOs. The GO system benefits from a broad stakeholder endorsement and is a sterling example of European global leadership in energy market innovation.

We will continue to follow the process closely, and are currently optimistic that the European policy makers will find agreement as described above. We hope that a finalized Renewable Energy Directive that strengthens the GO system will be ready by summer 2018.

 

ECOHZ’ position papers regarding REDII