Will RED II delay Europe’s energy transition?
What happened with RED II illustrates the problem of market-based thinking on energy planning, argues Paloma López Bermejo.
Paloma López Bermejo | Photo credit: European Parliament audiovisual
As I write these lines, we do not yet know what the Parliament vote on the new renewable energy directive (RED II) will deliver. However, there are reasons to be mildly pessimistic for the future of renewables in the EU, unless the plenary makes substantial changes to the report as it was adopted in committee.
The fault lies, unfortunately, with the Commission itself. First, it has undermined the current RED by strengthening the role of competition policy over energy policy. The most egregious example of this is the legal cover that it has provided to the retroactive elimination of renewable support schemes in several countries.
This casts a cloud of ambiguity as to how we should interpret those provisions within RED II that are seeking to provide a stable and predictable environment for renewables investment. It is not clear whether we can trust Brussels to stick to its commitments.
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Second, it has reduced the coherence of the original directive, by moving issues such as the governance and market integration of renewable energy to separate pieces of legislation, thus creating a potential dissonance between the different parts.
Last, it has caved in to the Council by eliminating binding targets at the national level, while setting a pitiful 27 per cent as the overall goal for 2030.
Essentially, we could say that RED II has shifted the focus from supporting renewables development to creating an EU market for renewables, misplacing its emphasis on issues such as guarantees of origin or the increase in energy interconnections, while remaining vague on ensuring the continuity to those policies that have made the original RED a success.
Parliament’s industry, research and energy committee has provided only partial redress to these shortcomings.
We may commend the rapporteur, José Blanco López, on delivering substantial clarification on protecting investment in renewables and on curbing the primacy of the market to support the development of different technologies and the activity of energy communities and self-consumers. These are crucial in obtaining a wider consensus and participation in the current energy transition. However, there has been no reintroduction of binding targets for member states.
Moreover, even if we have achieved a more ambitious goal of 35 per cent for renewables consumption, this does not greatly differ from the EU baseline. Indeed, considering the continued e¬ orts at improved energy efficiency and the falling costs of renewable technologies, these would likely come within reach of that level even without RED II.
As such, the EU’s energy policy would no longer lead the transition it accepted in the Paris agreement. Instead, it is forced to hope that the markets will do this themselves, although there is no plausible path towards a 100 per cent renewables-based economy in 2050 without a substantial strengthening of every country’s renewables base.
This would have required establishing binding national targets. Faced with a post-2030 scenario of increased energy dependency or climate adaptation, those member states lagging behind in renewables development are likely to block any further commitment, something that looms closer than we dare think.
Unfortunately, the committee vote did add a binding target to the EU’s target, albeit a sector-specific one: a 12 per cent target for transport. This is a target we will continue to oppose for its distorting effects. As long as overall renewables goals are achieved, there seems to be no rationale for providing an a priori orientation on how these gains are to be distributed between transport and other activities.
In addition, achieving this goal would likely exacerbate the problems we have already encountered in the development of biofuels, namely, the global increase in land-grabbing practices and deforestation, including an increase in carbon emissions.
Overall, what has happened with RED II illustrates the problem of market-based thinking on energy planning. This is not to mention the lack of reference to issues of energy poverty or quality job creation in the renewables sector. Let us hope this shortcoming can still be reversed.
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