Public Policy

July 17, 2017

Clean Energy Package – what has the EU seen in the past few months?

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Written by Almos Molnar, Consultant, Brussels

The last two months brought significant developments in regards to the legislative files of the clean energy package both within the Parliament and the Council. While in the first four months of 2017 both institutions were occupied with first phase of their institutional procedure, namely ‘exchange of views’, and with ‘article-by-article examinations’ in the case of some of the dossiers in the Council, May and June pushed things along to the next milestones of the institutional timelines. In the Parliament, the draft reports on all 8 legislative files were published in that time, and in the Council, the general approach on the Energy Efficiency Directive (EED) and the Energy Performance of Buildings Directive (EPBD) were agreed on at the Energy Council meeting of 26 June.

Developments in the Council

Developments in the Council

When they took over the Council Presidency in 1 January 2017, the Maltese set the goal to attain a general approach in the Council on the EED and EPBD dossiers before their mandate was over. They managed to successfully pull off the feat without too much of a hassle (as we forecasted) – at the 26 June Energy Council meeting the Energy ministers of the Member States gave their political approval to the Presidency’s compromise texts.

While there were fears that the Council would go back to their preferred 27% target, the watering down of ambition happened via another way: they kept the 30% annual energy efficiency target of the Commission, but settled to make it non-binding. Similarly, worries ahead of the meeting was that the 1.5% annual energy saving target was going to be reduced by the Energy ministers to 1.4%, instead they ended up keeping the figure but have it only apply until 2025 as opposed to 2030.

It comes no surprise that the adopted texts read in their prefaces “the Commission expressed its general reservation on the text” – Commissioner Canete expressed his disappointment to the media after the Energy Council meeting, stating that the deal was “below the ambition of the Commission”. However, he did acknowledge that it would have been a worse political scenario if a general approach could not have been agreed on.

Among the Member States, reportedly UK, Poland, Hungary, Latvia, Slovakia and Romania proved to be the party-poopers, vetoing a stronger deal, while Slovenia and Bulgaria also demonstrated their general lack of ambition, ending up abstaining on the final vote. The Commission’s dissatisfaction with the outcome suggest that it could end up teaming up with the European Parliament on the dossiers when the trilogues commence (which will probably only be around the end of the year, or if the rapporteur’s final reports will end up having to be approved by the plenary as well, next year, under the Bulgarian Presidency).

Looking back on the Maltese Presidency’s 6 months, we can observe a few interesting figures on how the Council spent its time in regards to the clean energy files: both the EED and EPBD were tabled for discussion 9 times in the Working Party in Energy (WPoE), and in both cases, the Maltese put forward the first version of their compromise texts at the 5th time the WPoE considered the files. The Council also significantly cut down on the provisions around the charging points for electric vehicles in the EPBD.

Comparing that with the other legislative dossiers, the Renewables Energy Directive was tabled 8 times, the Governance of the Energy Union Regulation 7 times, the Risk-Preparedness of the Electricity Sector Regulation 6 times, the Electricity Regulation & Directive 5 times, and the Regulation on ACER 4 times respectively, with no compromise proposal put forward on any of them. Even for RED, will still stay on the examination of individual provisions when for the 9th time the WPoE will convene on the file in early July under the leadership of the new Presidency. So far this reinforces our previous intuition that the RED will prove more difficult to handle for the Council than the EED and EPBD were.

The Estonians, taking over the Presidency on 1 July, didn’t even prioritise the file. We have recently learned that their interest lies elsewhere, in the electricity market design dossiers. In its programme, the Baltic nation noted that “retail markets and distribution networks should be adapted to the needs of all customers, including those generating electricity”, stressing the need for more electricity grid integration. The Estonians would most likely wish to have the general approaches worked out on the electricity regulation & directive and on the RPES file around October in the WPoE in time for the Energy Council to adopt the final positions before their mandate is over in the end of the year.

Developments in Parliament

We have now the draft reports of the rapporteurs published for each of the 8 legislative files. The table below shows when they were published, and for how long the tabling of amendmentsphase will take in each case.

Legislative Proposal Draft report in EP Amendments until:
Proposal for a Revised Electricity Regulation Karins report – 16.06.2017 06-Sep-17
Proposal for a Revised Electricity Directive Karins report (2) – 15.06.2017 06-Sep-17
Proposal for a Revised Regulation on ACER Petersen report – 14.06.2017 06-Sep-17
Proposal for New Regulation on RPES Zanonato report – 14.06.2017 29-Jun-17
Proposal for a Revised EED Gierek report – 31.05.2017 27-Jun-17
Proposal for a Revised EPBD Bendtsen report – 24.04.2017 19-Jun-17
Proposal for a Revised RED Blanco Lopez report – 18.05.2017 05-Jun-17
Proposal for a Regulation on GE Turmes report – 18.05.2017 27-Jun-17

 

Due to the relevant parallel developments taking place in the Council, we will only consider the EED in more details here. Rapporteur Adam Gierek ended up calling for a 35% target in his draft report, predictably backing down from his previous calls for 40%. It should not make us feel anyhow since it is very hard to see how the figure can end up going any higher than 30% at the end of the trilogues. But Gierek knows that the perception that he is willing to compromise in this area can help him in securing his wishes in regards to other provisions in the dossier: that this energy efficiency target should be expressed in primary energy consumption as opposed to final energy consumption for example; something he has been very vocal about (the Commission proposed a mix system of indicators in this regard).

Another important area for him seems to be Article 7 of EED, namely that the transport sector should be included in the calculations of energy savings. This will also be very hard to spear through the trilogues, and not something where the Commission was originally likely to come to his rescue. But Gierek might gamble on the fact that the Commission now needs the ambition of the Parliament more than before the policy outcome of the 26 June Energy Council meeting, and that he will be ready to entertain more of the Parliament’s ideas to force the Council in the right direction. The double-team scenario will most likely be the strongest with regards to the 1.5% annual energy savings provision where the Commission and the Parliament were in perfect sync before the Council came along and spoiled the broth.

The Gierek report is expected to be adopted around October in the ITRE committee. Depending on whether there will be enough political scrutiny to force the report to plenary before it can go to trilogues (it is likely), the trilogues will be either started before the winter holiday season kicks in, or only in the new year (our vote is on this one).

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