Download IEEE Bulletin ~ June-July-August

IEEE Bulletin
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June-July-August-September 2015
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Renewables: Paving the way to more renewable energy - New EU code approved!
Renewables: Denmark: state aid for ‘experimental’ wind turbines
Renewables: MEPs want to tie climate finance to green measures
Renewables: Toothless targets in EU’s renewables project
Energy Agenda: Luxembourgish Presidency-Energy priorities
Climate Change: Juncker links immigration with climate change
Energy Security: EPP tension on energy security
ETS: Plugging the carbon leak
ETS: Dutch double down on emissions ruling
ETS: EU countries clash over climate target review
Events
1. Paving the way to more renewable energy - New EU code approved!
More than 7.7 million people worldwide are now employed by the renewable energy industry, according to a new
report released by the International Renewable Energy Agency (IRENA). This is an 18 per cent increase from last
year’s figure of 6.5 million. The report, Renewable Energy and Jobs – Annual Review 2015, also provides a firstever global estimate of the number of jobs supported by large hydropower, with a conservative estimate of an
additional 1.5 million direct jobs worldwide. As in previous years, renewable energy employment is shaped by
regional shifts, industry realignments, growing competition and advances in technologies and manufacturing
processes. Jobs in the renewable energy sector are increasingly being created in Asia, with five of the 10
countries with the most renewable energy jobs now located in the region (China, India, Indonesia, Japan, and
Bangladesh). As a result, even with continued jobs growth, the European Union and the United States now
represent 25 per cent of global renewable energy jobs, compared to 31 per cent in 2012.
The 10 countries with the largest renewable energy employment figures globally are China, Brazil, the United
States, India, Germany, Indonesia, Japan, France, Bangladesh and Colombia. The solar PV industry is the largest
renewable energy employer worldwide with 2.5 million jobs, followed by liquid biofuels with 1.8 million jobs, and
wind power, which surpassed one million jobs for the first time this year. The employment increase spreads
across the renewable energy spectrum with solar, wind, biofuels, biomass, biogas and small hydropower all
seeing increases in employment. “If we continue to invest in renewable energy and its multiple economic,
environmental and social benefits, employment in renewables will continue to climb,” said Mr. Amin. “IRENA’s
research estimates that doubling the share of renewable energy in the global energy mix by 2030, would result in
more than 16 million jobs worldwide.”
2. Denmark: state aid for ‘experimental’ wind turbines
The European Commission has approved DKK70m (€9.4m) state aid in Denmark for the development of offshore
wind turbines with an “experimental aspect”. The subsidy will be available on request for projects that are
individually assessed as incorporating “one or more significant experimental aspects” which bring electricity
production costs down. This is seen important to Denmark’s aim to have all the country’s electricity and heat
supplied by renewable sources by 2035. The decision was made on 17 December 2014 and published on 21
August 2015. Some of the subsidy will also go toward household wind turbines, though this will only cover
electricity that is fed into the national grid.
3. MEPs want to tie climate finance to green measures
Climate finance should be tied to energy efficiency measures and the use of renewable energy, according to the
European Parliament's development committee. To cut emissions in developing countries, “it is necessary to put
in place mechanisms that would increase the use of alternative and energy efficient energy sources [and]
encourage developing countries to invest in small-scale, off-grid and decentralised renewable energy
production,” the MEPs said. The development committee agreed recommendations for the Parliament's position
on the upcoming UN climate talks in Paris. Its recommendations go forward to the environment committee for a
vote on 22 or 23 September, with a vote by the full Parliament expected next month.
The Parliament has no formal say on the EU's stance in the negotiations, but its position can influence the
Commission and Member States. The use of innovative climate finance mechanisms should be a central element
of the new climate agreement, the development committee said. The EU should increase support to developing
countries through new measures, such as using auctioning revenue from the emissions trading system, levies on
fossil fuel emissions from international aviation and maritime transport, and a financial transaction tax, the MEPs
said.
Environment committee MEP Gilles Pargneaux (S&D), who is leading work on drafting the Parliament's position
on Paris, has called on the EU to agree a climate finance roadmap setting out how it will scale up to its fair share
of the global $100bn commitment by 2020. The development committee called for a timetabled phase-out of
fossil fuel subsidies and action to reduce use of F-gases. Public funding for crop-based biofuels should end
because this may incentivise land-use change and deforestation. Agricultural practices that increase greenhouse
gas emissions should also be tackled, such as land-use change for feed or pasture, the MEPs said.
4. Toothless targets in EU’s renewables project
The EU has pledged that 27 percent of its energy will come from renewables by 2030 — but now the fight is over
how individual countries are supposed to pitch in to reach that goal. At issue is how much flexibility Member
States should have when drawing up their national climate and energy plans, which will be key in reaching the
collective target, and how strong the European Commission’s role should be in monitoring progress. Some
countries, especially the U.K. and central and eastern Europeans, want a soft, non-legislative approach which
would not interfere with their right to decide their energy mix. In other words, it would allow the U.K. to
continue building nuclear power plants and exploring for shale gas, while coal would continue to play an
important part in Poland’s power generation.
But other countries keener on slashing emissions and switching to solar and wind, like Germany, Denmark and
Sweden, want a tougher system to ensure that everyone is doing their fair share. The worry is that while the EU
may reach its promised target by 2030, it could do so thanks to expensive and painful steps by some countries,
while others free-ride and do much less.
The dispute — known as “governance” — goes to the heart of the division of powers between Brussels and
Member States. Luxembourg, which holds the presidency of the EU’s Council of Ministers, has spelled out its
ideas for how to finesse the issue in a first draft of conclusions submitted September 1. The goal of the
Luxembourg presidency was to present a methodology for drafting national plans. Officials say the idea was to
move away from political discussions and towards more technical ones. National climate and energy plans
should outline a country’s goals and “set out a realistic indicative trajectory for the achievement of these targets
and objectives,” says the draft.
Light touch
The seven-page document emphasizes the need for regional cooperation and calls on states to submit progress
reports every two years. National representatives have until September 10 to send in their feedback. The first
working group meeting was scheduled for September 15. Officials are gearing up for a brutal debate as they try
to hammer out a final text over the next months. “What we are looking for is enough flexibility to shape our
energy policy to take into account our specificities,” one official from a CEE country said on condition of
anonymity.
Several EU countries have already circulated informal papers on the topic, either warning against a monitoring
mechanism that is too strict or advocating for robust and binding legal frameworks. The U.K. and the Czech
Republic argued that the governance system should be “light touch and non-legislative so as to respect Member
States flexibility over its choice of measures and technologies.” The same line of argument also comes from
countries such as Poland and its neighbors who worry that tough rules could harm their industries. However,
Germany argues there should be “consequences” if countries cannot meet renewables targets. While potential
penalties are not spelled out, the uncertainty “constitutes a significant incentive” for Member States to pledge a
low level of renewables so that they aren’t punished later, according to the paper.
Two camps
Enforcing compliance is still missing from the draft Council conclusions put out by Luxembourg, said Arno
Behrens, head of energy and research fellow at the Centre for European Policy Studies a think tank. The text
mentions a system allowing for “timely corrective action to be taken,” if countries are falling short. But it isn’t
clear what would happen if the collective 27 percent renewables target isn’t reached, he added. “It shows that
those Member States that want the least binding approach are very well represented in this document,” said
Behrens. “It is granting maximum flexibility to Member States at the moment to avoid the difficult issues.”The
problem is that the draft is trying to find a balance between the two camps. “They try to cater to both sides and
are trying to build bridges where they can,” said Katharina Umpfenbach, senior fellow at the Berlinbased Ecologic Institute.
5. Luxembourgish Presidency-Energy priorities
The European energy policy has reached a turning point in its history. Progress has been made, for instance, on
opening markets, securing supplies, deploying renewable energies and implementing measures revitalising the
single market by focusing on its digital dimension. But this has not been enough to make the EU more resilient
vis-à-vis its suppliers or to allow the required energy transition to take place at an affordable, competitive cost,
whilst inducing the deployment of new technologies and the creation of employment in these emerging sectors.
In the field of energy policy, the Luxembourg Presidency will fully take into account the ambitious objective the
EU has set for itself, namely to become a low-carbon economy by 2050. The Energy Union as proposed by the
Commission promotes the emergence of a horizontal energy strategy based on an ambitious action plan and
targets the implementation of a new form of governance. The Luxembourg Presidency will strive to implement
robust governance based on dialogue between the Commission and the Member States with the added value of
the regional and Community dimension.
The Luxembourg Presidency will focus on innovation, research and the new technologies used in energy
transition (essentially in the field of renewable energy, energy efficiency and integrated resource management)
as key catalysts for sustainable, green growth that will create wealth and boost employment throughout the EU.
The Presidency will address the issue of financing the transition to sustainable energy in view of the
establishment of the European Fund for Strategic Investments (EFSI) and will ensure better coordination
between all the existing European financial instruments.
The essential question of the future design of the single electricity market, its implementation and the role played by
end-consumers will also be tabled at the Council. The Luxembourg Presidency will undertake all the legislative work
required in the field of gas supply, which is both economically and strategically important, as well as in labelling
appliances, which is key to the EU’s ambitions in terms of reducing energy consumption.
6. Juncker links immigration with climate change
European Commission president Jean-Claude Juncker has called for ambitious climate action to “tackle the root
causes of the next migration wave”. In his inaugural ‘state of the European Union’ speech in the European
Parliament on Wednesday, Mr Juncker said there would soon be climate refugees. The EU should “not sign just
any deal” on climate change in Paris in December, Mr Juncker said. “The EU’s priority has to be to adopt and
ambitious, robust and binding deal – we have to fight for that and raise a voice against those in our Member
States who are not sharing that view,” he said.
Elsewhere, Mr Juncker said the UK was right to criticise the EU for being too bureaucratic and for “overdoses of
regulation”. “It is the programme of my Commission to wind down this regulation and under the leadership of
the first vice-president Frans Timmermans we are doing everything we can do in order to make sure that the
regulation in the EU is better,” Mr Juncker said. “But better regulation does not mean destruction, does not mean
no rules, does not mean that the EU should stand away from everything that has to be organised in a proper
way,” he added, instancing the ‘energy union’ strategy and efforts to complete the internal market as examples
of sound EU policies. The refugee crisis dominated Mr Juncker’s and MEPs’ speeches. Mr Juncker ran out of time
to read out all his comments on climate change, which came at the end of his address. A written version of the
speech published online laid out plans for the Parliament to host a meeting with 5,000 European mayors on
climate change next month. Cities use around 80% of all energy produced in Europe, the written version of the
speech said. Mr Juncker did not address other environmental issues.
7. EPP tension on energy security
The European Parliament’s largest grouping is divided on how to better coordinate energy policy. The European
People’s Party’s effort to push EU institutions to cooperate more closely on energy diplomacy is creating
friction between MEPs from western and central and eastern Europe, who are divided over how to reduce
dependency on Russian gas. A draft policy paper, spells out three options for getting Brussels to speak with a
unified voice on external energy security matters.
 The first option calls for the creation of a new office within the European External Action Service, the
EU’s diplomacy branch, which could better coordinate the work of the EU’s foreign policy chief and
relevant commissioners.
 The second takes a milder tone, calling on the Commission to set up “a permanent cluster” to better
integrate policy.
 The third one calls only for “regular coordination” between Federica Mogherini, the EU’s foreign policy
chief, and the commissioners.
MEPs from CEE countries, where gas dependency on Russia is higher, support the text calling for the creation of
the special office, which they see as a tangible step towards a policy that would allow the bloc to speak with a
single voice in talks with Russia and Gazprom. However, members from western and northern Europe are wary
of spawning more red tape.
The draft EPP paper also calls for setting up a collective purchasing system at the regional level, “where Member
States could voluntarily introduce a common negotiating mechanism and create regional hubs for further
expansion of the gas supply infrastructure.” This is similar to a proposal from the Commission, which waters
down an idea originally suggested by Tusk when he was still prime minister of Poland that called on EU countries
to set up a joint purchasing body to negotiate gas deals with Russia. MEPs also have diverging views on this topic
and will try to agree on a compromise at the meeting in Poland.
Christian Egenhofer, head of the energy and climate program at the Brussels-based Centre for European Policy
Studies, said the difference of opinion among EPP members reflects long-standing divisions between EU
countries on how to tackle energy issues. “The split is along the same lines,” he said. “Member States don’t agree
on most energy policy matters. They have very different views on Russia and even if you create a new office that
discusses it, you don’t get around the issue of consensus.”
8. Plugging the carbon leak
The European Commission wants to slash the number of free emissions allowances given to industry, part of its
project to revamp the bloc’s ailing Emissions Trading System (ETS). The Commission plans to limit the free
allowances to 50 sectors, down from 177 today. The goal is to continue encouraging industries which would
otherwise be in danger of moving to less costly jurisdictions, while cutting out those which don’t need support.
That means bad news for wine producers and tomato growers, who will be struck from the list, while heavy
industry like aluminum and cement remain. The prospect of deep reforms prompted a furious lobbying battle
with businesses arguing the scheme could wipe out European industry and advocates insisting the fears are
overblown.
The worry is over “carbon leakage,” referring to industries reacting to tough and costly emissions limits by
shifting investment or even whole factories to cheaper and less restrictive regions. If that happens, the end result
could actually be more pollution, undercutting the whole point of the EU’s emissions policy. The ETS is the
world’s largest emissions trading scheme, covering factories and power plants across the EU who have to buy
permits in order to pollute. The idea was to use market forces to reach the EU’s target of reducing greenhouse
gases by 40 percent compared to 1990 levels by 2030. But the economic crisis produced a glut of permits. Prices
are around €6-8 per ton of CO2 equivalent, well below the original aim of €30 per ton. That means the ETS isn’t
using prices to force utilities and industries to cut back on CO2 emissions.
A reform already approved during summer will set up a Market Stability Reserve by 2019 to soak up some surplus
allowances and drive up prices. Under the Commission’s proposals, 43 percent of all allowances will be given out
for free and 57 percent auctioned off. From 2021, changes would include reducing the cap on total emissions in
the market by 2.2 percent per year, (versus 1.74 percent today), which would amount to emissions reduction in
the ETS sectors of some 556 million tonnes over the decade. Proposals also foresee an innovation fund worth
some 400 million allowances to invest in renewables, carbon capture storage and low-carbon innovation in
energy-intensive industry. A modernization fund dedicated to support Bulgaria, Croatia, Czech Republic,
Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia upgrade their energy systems and shift to a
low carbon model will also be set up.
Climate policy vs. competitiveness?
Energy-intensive industries have argued carbon leakage is already cutting into their European growth, despite
the low price of allowances. Their core argument is that a more ambitious European climate policy will undercut
competitiveness and push them to invest in friendlier places. Marcin Korolec, Poland’s deputy environment
minister, argues the burden will fall particularly hard on countries with high levels of traditional industry, like
Poland. Warsaw pushed to postpone ETS reforms, but was defeated.
No one’s happy
The Commission’s proposal has done little to satisfy either side. Industries say the Commission is ignoring their
needs, while NGOs say it is pandering to business. “There would’ve been carbon leakage if the carbon price was
where the Commission expected it to be, at €30 per ton of CO2 equivalent,” said Mark Cryans, head of
communications for Fertilizers Europe. “We know if the carbon price goes to €10 or possibly €15, there will be
carbon and investment leakage.” Anja Kollmuss, EU climate policy coordinator at Climate Action Network
Europe, counters that there is little sign of any carbon leakage so far, and sees the draft proposal as overly
industry-friendly. The Commission says decisions by some industries to shift away from Europe have not been
caused by carbon pricing. However, it does not discount the risk. The Commission is aware of the danger of
driving European costs so high that some industries flee to countries with looser environmental standards.
The big lobby push
ETS reform has drawn concerted lobbying efforts from all sides in recent months. “Everybody is already knocking
on our door,” Arias Cañete said.On the industry side, fear of carbon leakage brought 16 trade associations
together under one banner, called the Alliance of Energy Intensive Industries. It sent a letter to Commission
President Jean-Claude Juncker last, asking among other things not to penalize industries that were doing a good
job of cutting emissions by cutting their carbon leakage protection. The Commissioner for Internal Market and
Industry, Elżbieta Bieńkowska, from Poland’s industry-heavy Silesia region, recently established a high-level
working group for energy-intensive sectors to discuss industrial policy issues, including the ETS. With national
and industrial interests at stake, the ETS reform is likely to face a long and heated battle in the European
Parliament.
9. Dutch double down on emissions ruling
The Dutch government said Tuesday it plans to appeal against a court decision which ordered it to slash
emissions, arguing the verdict could set a precedent for courts to interfere with government policy. In a June 24
ruling, a court in The Hague ordered the government to cut greenhouse gas emissions by 25 percent by 2020,
saying that the more modest 17 percent cuts that it was expected to achieve by that year were not enough to
combat global warming. Wilma Mansveld, the Dutch environment minister, sent a letter to the Dutch parliament
announcing the cabinet would appeal against the ruling, arguing that the verdict constrains the state’s ability to
make decisions by balancing competing interests.
“For the very first time in Holland, a judge has given a ruling on a policy implemented by the government, passed
by a parliamentary majority,” said Annelou van Egmond, spokeswoman for the environment ministry. “What is
very important to us, is get the verdict of a higher court of law to see if this was a one-off or if this is going to be
the approach.” The danger for the government is that if the verdict stands then courts could end up tying its
hands on a host of other issues. “There are a great many treaties that countries partake in, that say there’s an
ambition to do something,” said van Egmond, pointing to agreements under the Internal Labor Organization or
the North Atlantic Treaty Organization. “If these treaties aren’t just considered a goal but a legal limit that’s quite
a change.” Despite the decision to appeal, the government will still go ahead and begin carrying out the court’s
emissions mandate.
The verdict followed a lawsuit brought by Urgenda, a Dutch foundation, along with 900 co-plaintiffs, who
argued the government was shirking its duty to protect its citizens. In its ruling, the court found that “the severity
and magnitude of climate change make it necessary to take measures to reduce greenhouse gas emissions.” The
court found the government’s emissions pledge was below “the 25 percent to 40 percent for developed countries
deemed necessary in climate science and international climate policy.”
The ruling was celebrated by environmental groups, which had worried that Holland was falling behind more
ambitious European countries like Germany in reducing emissions. Despite the appeal, Urgenda was optimistic it
would eventually prevail. “We have full confidence in the outcome of the appeal,” said Marjan Minnesma,
director of Urgenda. “The government knows 25 percent is not nearly enough if you consider the enormity of the
dangers that climate change poses to us.”
10. EU countries clash over climate target review
Member States continue to disagree on whether the EU should show willingness to increase its 2030 emissions
reduction target at the Paris climate summit, a draft document has indicated. Some countries “would like to
signal that the EU and its Member States retain the possibility to increase the level of mitigation ambition” if a
global agreement is reached. But others are “opposed to such as signal”. The EU has been pushing for a fiveyearly review mechanism under a new climate agreement to be signed in Paris in December. The last round of
UN talks in Bonn last month ended with some consensus on the matter.
However, EU ambassadors cannot agree on whether this should imply that the ambition level must be raised or
at least maintained. Most countries would accept the current text on the table, which states that countries
should be required to revisit and submit “new, existing, or updated commitments”, according to the document.
But some countries want to stress that new commitments must not water down previous ambition levels. The EU
has agreed to reduce its greenhouse gas emissions by at least 40% by 2030 domestically, leaving open the option
of using international market mechanisms to boost the target.
Environment ministers are scheduled to agree the EU's negotiating position in the next days. The EU's position
on climate finance will be left for finance ministers to adopt in November. Green group CAN Europe called on
ministers to clarify how and when the EU will upgrade its emissions pledge. A paper by the NGO calculated on
Tuesday that the current target would still allow the EU to emit 37-43 billion tonnes of greenhouse gases in the
next decade.
The difference of 6 billion tonnes between the upper and lower estimates is due to Member States delaying
important policy decisions until after the Paris summit, said CAN. These include issues such as the possibility to
carry over surplus emissions under the EU Emissions Trading Scheme to the period after 2020 and accounting
of emissions from forestry.
11. Events
ENERGY EVENTS
September 21
September 23
The European Commission organises an Information Day to present the 2016 work
programme of Horizon 2020’s Societal Challenge “Climate Action, Environment,
Resource Efficiency and Raw Materials”, as well as “Blue Growth – Demonstrating an
ocean of opportunities”, “Industry 2020 in the Circular Economy” and “Smart and
Sustainable Cities”.
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The Parliament Magazine and Fertilizers Europe hold a roundtable looking at
the Upcoming revision of the EU's emissions trading scheme.
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ENTSO-E holds a workshop on Implementing the European Connection Network
Codes – challenges and solutions.
September 24
Forum Europe organises the Energy Regulation Forum 2015 on the Role and impact of
auctions and competitive allocation across EU energy policy and the European energy
market.
September 28
Bruegel organises a conference entitled “Challenges for growth in Europe” on stable
growth and energy transition in Berlin.
October 7
The 2nd edition of Smarty City + Smart Grid Congresses on Smart grids, smart cities, smart
transportation, smart metering, smart water, smart services, MtoM, Internet of Things,
Big Data, smart technologies is held during two days in Paris.
October 14
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The Executive Agency for Small and Medium-sized Enterprises (EASME) organises a
workshop on Financing energy efficiency in buildings, heating and cooling.
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CERRE will hold an Expert Workshop on Reforming the EU's Emissions Trading
System.
October 15
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Friends of Europe organises an event entitled “Climate and energy outlook: Policy
challenges and choices that will shape our common future”, with the participation
of MEP Jerzy Buzek (EPP, PL).
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The CERRE executive seminar on Making the energy union work for consumers is
held.
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EURELECTRIC organises a workshop on Cybersecurity in electricity distribution
grids.
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The Centre for European Policy Studies (CEPS) hosts a conference on “Accelerating
the Transition to a Green Economy in Europe: National-regional strategies and
the new Sustainable Development Goals” with the participation of MEP Sirpa
Pietikäinen (EPP, FI) and Anna Kárníková, Head of Sustainable Development Unit,
Office of the Government of the Czech Republic.
The European Policy Centre (EPC) organises a Policy Dialogue on “A reformed ETS: a real
driver for a low-carbon economy?” with Mary Veronica Tovsak Pleterski, Director internal
carbon market, DG CLIMA, European Commission as speaker.