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DG Energy for the European Commision Ditte Juul Jørgensen outlines unprecedented energy challenges
EU facing ‘unprecedented challenges’ in energy
According to Ditte Juul Jørgensen, Director General for Energy of the European Commission, the EU is at a turning point with its energy policy which has its origins in the supply chain crisis which arose from the Covid-19 pandemic.
The energy crisis was exacerbated by Russian aggression and invasion into Ukraine and the arising uncertainty particularly with gas supplies.
Jørgensen states: “The EU has made bold decisions cutting dependence on Russia; we need to diversify with other resources, accelerate the development and use of renewables, and invest more in energy efficiency. We need to invest in our infrastructure to be able to diversify and we need to accelerate that transition.
“This is all set out in the REPowerEU plan, which aligns with our European Green Deal, and aligns with our climate neutrality targets by 2050, together objectives on security of supply.”
On the European Green Deal, energy ministers agreed on a general approach in energy efficiency and on renewable energy in June 2022 which
aligns with REPowerEU, and underlines the need to replace Russian fuels with green energy and lowering consumptions.
Reducing reliance on Russian fossil fuels
Jørgensen emphasises the importance of creating the investments and building the necessary skills for energy efficiency, both for industry buildings and for transport, which are the biggest energy consumers across the European Union.
On the regulatory side, she references the Energy Efficiency Directive, and the agreement reached in the Council of Ministers in June 2022. “Last year we had a proposal which aimed to scale up our package on energy efficiency, setting a higher target for energy efficiency across the European Union both at final energy consumption and primary energy consumption.
“We have seen that Ireland is giving significant investment to this and really giving it prominence, giving priority to building renovation, in both its energy strategy and its recovery and resilience plan so as to make significant gains here. The idea would be that we all arrive at a carbon neutral, decarbonised cooling and heating before 2050 as a necessary means of achieving our objective of climate neutrality by 2050.”
Jørgensen furthermore expresses her concern for those living in energy poverty. “They may not be able to make the investments and make the changes in housing. It is important to ensure that consumers are empowered, and that we protect vulnerable households and consumers.
“Energy efficiency, our structural investments, and changes to our building mass, to our industry, to our transport, and to how we organise ourselves are the long-term objectives.”
Developing renewable energy
Reiterating the importance of the development of renewable energy, Jørgensen states that the development of renewable energy has a crucial role to play in job creation, increasing European energy independence, and meeting the climate change ambitions.
She acknowledges the Irish Government’s pledge to generate 80 per cent of Ireland’s electricity from renewable sources by 2030 and emphasises the importance of ensuring that there is an EU-wide regulatory framework to accelerate the use of renewables.
She adds: “Last year we proposed a strengthening of the Renewable Energy Directive, and the Council agreed to set clear targets in transport, heating, cooling, and industry, which are the sectors of our economy where that action is most needed.”
Jørgensen believes that the permitting process presents the top challenges for the EU in meeting its renewable energy targets and calls for a significant simplification of planning procedures which could be achieved through a European framework.
“In many EU member states, permitting simply takes too long; it delays these investments and it means that we do not get the renewable energy into our system as quickly as we would like to.
“We have suggested, again as part of REPowerEU, some specific measures and regulatory simplifications. Go-to areas, which are a recognition of the overriding public interest of renewable energy, and we hope that that will be taken up by the two co-legislatures, so that the of the regulatory framework can be streamlined.”
An important part of the strategy is the solar rooftop initiative. This will create a legal obligation to install solar panels on new buildings commercial buildings and new residential buildings.
Renewable gases
A European level, the aim is to significantly increase the share of renewable gases in the overall energy mix. To the greatest extent possible, the priority is to replace fossil molecules with renewable molecules, for example, green hydrogen produced via the offshore wind or via photovoltaics across the European Union or imported green hydrogen.
“To accelerate this hydrogen market, the Commission made specific proposals in relation to renewable energy. What we also have is a specific proposal on the decarbonisation of gas and on hydrogen which is currently being drafted as legislation so that we make sure we have a clear regulatory framework so that there is no uncertainty standing in the way of investments and the development of this sector.
“We need to develop both on the demand side and the supply side, and we need industry to come in and to accelerate the hydrogen projects.”
Jørgensen additionally emphasises the importance of biomethane which she states offers important economic incentives, particularly to the farming sector.
“We already have one member state that has more than 20 per cent of biomethane in its domestic gas mix and is aiming to replace fossil fuels completely with biogas and with renewable sources,” she concludes.
Consumer driven integration of renewables
The traditional flow of energy was unidirectional, from large generators to customers with suppliers acting as intermediaries. This relationship is beginning to be transformed however, as more consumers are installing small-scale generation and consumers are being empowered to become active in the transition to a low-carbon economy, through demand response.
The Clean Energy for all Europeans Package (CEP) is a set of EU Regulations and Directives aimed at setting requirements that will enable the EU to meet its renewable goals and targets set out at the Paris Agreement in 2015. Two of the main documents in this package include the Electricity Directive (EU) 2019/944 (IMED) and the Renewables Directive (EU) 2018/2001 (REDII).
A key element of these Directives is the inclusion of small-scale market actors in the energy sector, such as individuals and energy communities who will be integral in developing and participating in new energy activities and opportunities, previously only available to large suppliers and network operators.
As smart meters continue to be rolled out in Ireland, consumers will have more opportunity to become aware of their energy usage and realise how it affects the wider electricity grid. Their active consumption can lead to an understanding of the source of the energy they use, and the opportunity to use greener and cheaper electricity at different times of day, or in different weather conditions. This understanding can then be translated into action if an individual or a group of individuals forming an energy community want to become more involved in maximising their local area’s decarbonisation efforts.
The CRU is in the process of developing an enabling regulatory framework that will facilitate the participation of active consumers and energy communities in the Irish electricity sector. An active consumer is an individual who generates renewable energy for their own consumption, sells or stores excess generated electricity, participates in energy efficiency schemes, or provides flexibility services to the distribution system operator, provided none of these activities are their primary profession.
An energy community is considered a group of active consumers who voluntarily commit to providing environmental, social, or economic welfare by engaging in renewable energy generation, energy sharing or trading, storage, or supply, provided these activities are not for commercial purposes and do not constitute the primary profession of any of the members of the community.
Ireland has a well-developed network of existing Sustainable Energy Communities (SECs) who actively participate through the Sustainable Energy Authority of Ireland’s SEC Programme. The concepts of energy communities detailed in the Directives, however, depict a different model than the existing SECs. Energy communities under the CEP would be encouraged to partake in specific energy activities that would help integrate more renewable energy into Ireland’s energy system.
The activities that active consumers and energy communities may partake in to play their part in the transition towards cleaner energy and higher renewable energy integration include the following:
• Generation: consumers should be able to produce renewable electricity for self-consumption. For example, this could include installing solar PV panels on rooftops, or installing a small wind turbine that provides energy to community members;
• Supply: consumers should be able to sell electricity from individually owned or community owned generation assets. Additionally, in selling this electricity, consumers should be renumerated for excess electricity supplied to the grid;
• Storage: consumers should be able to own an energy storage unit and not be faced with barriers while connecting to the grid;
• Sharing: members of a community or jointly acting active consumers located in the same apartment building or complex should be able to share self-produced electricity among themselves;
• Trading: consumers should be able to participate in peer-to-peer trading arrangements; and • Flexibility and Demand response: consumers should be able to provide services to the distribution system operators to provide flexibility to the grid. This could involve avoiding using large appliances at times of peak demand or turning off appliances when notifications are received that there is congestion on the grid.
Energy communities and active consumers are entitled to engage in these activities on their own, or by using an aggregator, who would be an entity that pools consumer loads and operates in the electricity markets on their behalf. Additionally, energy communities can hire a third-party to install, operate, or maintain their renewable energy project. The use of aggregators and third parties should enable more community participation from non-industry experts that want to play their part in integrating more renewables into the system.
Another key entity in the facilitation of active consumers and energy communities will be the distribution system operator. ESB Networks will have a role to play in facilitating community development and enabling participation in activities such as energy sharing and demand response. They have begun assessing the changes needed to enable these forms of participation, and the CRU will continue to engage with ESB Networks as these concepts develop further. with prospective energy communities to identify regulatory barriers which could cause challenges in the progression of their projects. Two Calls for Evidence and one Consultation have already been published as the CRU started exploring these topics. sector. The papers mainly presented subjects, such as regulatory oversight, at a high-level to highlight the challenges of incorporating new market actors and small-scale individuals and energy communities into the energy. This work culminated in the publication in November 2021 of a conclusions paper – CRU21126.
The framework set out in the conclusions paper will take time to develop fully, but once completed, it should be flexible enough to allow participation in all forms of energy activities by active consumers and energy communities. This would then enable a higher integration of renewable energy being used by small scale market actors in ways that were unavailable to these individuals and communities in the past and will empower consumers to play a larger role in the transition towards using cleaner energy.
The CRU will be issuing consultations and further work on this topic beginning later in 2022.
W: www.cru.ie
