The REPowerEU communication comes at a time when it is more important than ever that we decrease our dependency on fossil energy, increase our energy security and, at the same time, accelerate measures for climate change mitigation.
Climate Leadership Coalition (CLC), the largest climate business network in Europe, would like to bring to the EU Commission’s attention some comments from a Northern European perspective. First, we would emphasise that the implementation of the ‘Fit for 55’ package, without weakening its environmental ambition or allowing any delays of its legislative files, is a necessary starting point for a transition to both European climate neutrality and a more secure energy system.
The key now is to accelerate investments for renewable and clean energy and emphasise energy efficiency across all sectors and policies. In this respect, we welcome the newly proposed targets for renewable energy and energy efficiency, which are more ambitious in terms of both scope and timescale, presented in the communication. To enable these investments, remember that the overall policy framework should provide a foreseeable and predictable outlook for investors. At the same time, the system should provide incentives to invest in the electrification of industrial processes as well as the transport and heating sectors through access to moderate electricity pricing.
There is and will continue to be a need to support consumers and vulnerable businesses, but the measures should be planned and selected to ensure that they do not slow down decarbonisation or increase the risk of misguided investments.
Regarding predictability, it is important that well-functioning market-based ETS is maintained as the main instrument of the European climate policy framework. Its functionality should not be threatened with additional exemptions. To accelerate the deployment of new low-carbon technologies, like hydrogen-based ones, it is necessary to implement additional policies, like Carbon Contracts for Difference, on the demand side. Demand-based policies, such as combining obligations for biofuels and biogas, should be used to accelerate transition where appropriate.
Concerning energy efficiency, the 9-step plan presented by the European Commission together with IEA in April 2022 provides a good starting point. However, regulatory incentives to improve energy efficiency and increase energy savings should be strengthened to reap the full potential of these measures. Businesses should be encouraged to deploy new models based on more efficient energy use (e.g. heating, cooling and lighting as a service model) as well as taking a more energy efficient and circular approach to buildings (e.g.) renovation, insulation, using renewable/recycled materials). Energy efficiency and energy saving measures are also important for alleviating the burden of high energy prices.
In addition, it is the view of the CLC that when considering accelerating the deployment of renewables, the following issues be taken into account.
The competitiveness of existing low-carbon energy technologies should be maintained. In the Nordic countries, existing hydropower and nuclear power form the backbone of the power system. In addition to emission-free electricity, Nordic hydropower provides balancing capacity for both the Nordic and the Central European power systems and enables an increasing share of intermittent wind and solar power.
On the demand side, preference should be given to projects with electricity, and sustainable renewable and clean energy.Electrification and the use of sustainable renewable fuels and hydrogen-based energy in the transport and industrial as well as the heating and cooling sectors should be accelerated. The right and sufficiently strong financial incentives and required infrastructure should be provided as well as taking a more energy efficient and circular approach to buildings (e.g. renovation, insulation, using renewable and recycled materials). With regard to permitting processes, projects using emission-free energy should be prioritised.
Permitting processes should be streamlined and sufficient professional resources in the fields of key technologies, like solar and wind power, biogas, hydrogen and heat pumps, guaranteed. In addition to resource permitting processes, there should be a dedicated complaints processing lane in court proceedings to significantly fast track renewables. Increased technical flexibility of permitting licences allowing degrees of freedom of technology choice, as technology develops in the years ahead – including new projects, repowering and life-time extensions – would both speed up the process and reduce uncertainty from an investor’s point of view.
The lack of skilled workers is an important barrier to effective implementation of renewable energy projects and energy-efficiency improvements. Increasing training programmes and education in the field of solar and wind power, and heat pumps is a necessity to accelerate the transition in the years to come. Implementing fast-track international hiring and immigration proceedings for professionals, increasing resources for immigrant services, updating work permit document requirements and digitalising application processes could help provide additional professional resources in the short term.
The transmission grids for electricity and hydrogen should be strengthened and adequate resources provided for national transmission system operators accompanied by the right regulation to strengthen electricity networks for renewables. National grid companies should be provided with good leadership and understanding of the importance of nimble processes and customer service. As distribution connection points to networks are becoming saturated with projects in certain European market areas, possibilities for connections directly to transmission networks in addition to distribution network connection points should be opened up.
Finally, there needs to be recognition that a major bottleneck for the energy transition may be a sufficient supply of critical raw materials like lithium, cobalt, graphite and nickel. The transition to a clean energy system will multiply the demand for these minerals. Due to the long lead times of mining projects, plans to secure the supply of these metals should be started in time. The necessary infrastructure and frameworks for circularity should also be created in time. IEA has published recommendations for a comprehensive approach to mineral security.
More information: Tuuli Kaskinen, CEO, Climate Leadership Coalition, tuuli.kaskinen@clc.fi, +358 50 5149752 and Juha Turkki, Development Director, Climate Leadership Coalition, juha.turkki@clc.fi, +358 45 3461925
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