EU energy ministers ready to reflect on EU post-2020 RES framework ... "in appropriate time and after thorough analysis"

The "Conclusions on Renewable Energy" adopted by the energy formation of the Council on 3 December 2012 leaves a mixed impression. It is a mix of endorsement for some of the European Commission's proposals, notably on internal market, need for improvement of national support schemes, infrastructure and consumer protection, coherence with carbon market, and at the same time a puzzle of careful formula as to what will be, should be, can be and may be done after detailed assessment. The most notable is probably the reference to a post-2020 framework for EU renewable energy policy, the assessment of which will first be the task of the European Commission.

The European Commission have already expressed its views on the future role that renewable energy sources (RES) in its communication "Renewable Energy: a major player in the European energy market" adopted on 6 June 2012. As an answer to this communication, the EU energy ministers set a series of priorities in terms of renewable energy policy in their Conclusions.

The energy ministers agree on the need to complete the internal energy market (both electricity and gas) by 2014 and the further liberalisation of the sector. These remain the funding pillars of EU energy policy. They will ensure a level playing field across the sector which "facilitate market participation of new and more players, including a growing number of small and medium-sized enterprises producing renewable energy." This credo is also summarised as follows : "The more open, transparent, interconnected and integrated markets are, the easier the access for renewables and their establishment in the market will be."

In the same time, there will remain a need for support to RES-technologies through "market arrangements". Participation of RES producers in balancing markets should be supported. The Council calls upon a collaboration between the Commission and the Member States in the assessment of "energy market distortions causing inadequate incentives for new instruments." The first manner to deal with these distortions would be to "improve market rules and functioning", while resisting against "premature action".

Until that point, nothing is really changed in the stance taken by the Council, beside the reference to collaboration on resolving energy market distortions and one noticeable paragraph on guarantees of origin, which relates in practice to internal market, RES policy and consumer protection. Council requires a more coherent approach as to the use of guarantees of origin (GOs) in relation to consumer protection and fuel mix disclosure. While this direct reference to GOs is a recognition of their role, it remains to be seen what the Council intends to say by requiring "consistent application of fuel mix disclosure at EU level" while this should contribute to more accurate and complete information on consumption "within each Member State". Should we expect more reform on that topic soon?

A first new political statement is the endorsement of the Commission's position on national support schemes. According to the Council, most of the efforts must concentrate in the coming months on the (re-)design of national support schemes in order to ensure "better market integration of RES". And a lot of expectations are put in those schemes. They must "be able to accommodate changes in the respective markets", and must be adapted in order to "pass on cost-efficiency gains to final consumers", and "control the cost of the schemes". They must be "continuously improved through simpler administrative regimes, reliability, and easier access to capital". But should they not do that already? Or is this a sort of confession that some national support schemes failed compared to others, and created distortions? National schemes should also "gradually be phased out" according to the level of competitiveness of the market. Here, it is unclear which "market" the Council is referring to, i.e. national or European. This can be an interesting question for competition cases and definition of relevant geographic market, although it tends to be the national one in energy cases. Similarly, the Council points a possible ("may") need for "post-2020 support". The concept of "post-2020 support" seems to refer directly to a reform of support schemes at national level, but assisted (more than supervised) by the Commission since the Council agrees on the idea of guidance "showing ways for the most cost-efficient and effective deployment". Such guidance must remain "non-binding".

There is a difference between sharing best practices and establishing a joint support scheme. Neither the Council nor the European Parliament are in favour of the latter. Therefore, the Council makes a clear distinction between the drafting of "guidance on the further improvement of national support schemes in order to achieve further cost reduction and market mechanisms" and "separate guidance on the implementation of the cooperation mechanisms" defined in the Renewable Energy Directive 2009/28/EC. The European Commission is already working on guidance documents for an extended use of cooperation mechanisms, and the Member States are now endorsing this strategy. The keyword is here "voluntary". Even if the Commission drafts such guidance, the participation of the Member States must remain "voluntary". Since most Member States currently foresee to achieve their 2020 target alone, the Commission has to find enough incentives to make the states voluntary use the cooperation mechanisms, either through detailed guidance or increased post-2020 targets. The strengthening of cooperation with third countries is also backed by the Council. A huge potential lies in regional approach to renewable energy projects, within the EU or with neighbouring countries. The Council rightly put that "this will require an evaluation of the interconnection reinforcement where needed within the EU while maintaining the secure and efficient operation of Member States' electricity systems, and of the related costs to transit countries." There is an obvious link with the proposal for a regulation on energy infrastructure which has been endorsed by the Council on 30 November 2012 (see previous post). Infrastructures between EU and one or more third countries are encompassed. 

There is also consensus on the need better energy infrastructures for delivering the EU renewable energy potential. This covers issues of: "more effective permit granting procedures and cost sharing rules", "more intelligent metering systems", wide use of heating and cooling based on renewables. The challenge will be to get a coherent approach between the different provisions enshrined in the Electricity Directive, the Renewables Directive and the soon-to-be regulation on Guidelines for trans-European energy infrastructure.

Finally, and after the long discussions on the 2050 Energy Roadmap, the Council opens for discussion on a EU post-2020 "framework" (i.e., not yet a "policy"). This careful move is summarised in the last paragraph of the Conclusions: 

"The Council invites the Commission to present in appropriate time and after thorough analysis, discussion and the review by 2014 of certain aspects of the current Renewable Energy Directive as foreseen therein, a solid and effective EU post-2020 RES framework embedded in the broader context of and contributing to the long-term overall EU policy framework."

The full text of the Conclusions is available here.