What’s EUp? A busy end of 2023 for the EU institutions

The end of 2023 was an incredibly busy period for the European institutions…and for Energy Cities policy team! Discover the most recent legislative developments of interest for local governments. 

Energy Performance of Building Directive: all new buildings should be zero-emission as of 2030 

On Dec 7^th, the EU Parliament and Council reached an agreement on the new rules to achieve a zero-emission building stock by 2050. Buildings account for 40 % of final energy consumption in the Union and 36% of its energy-related greenhouse gas emissions while 75% of Union buildings are still energy inefficient. The Energy Performance of Buildings Directive (EPBD) calls for national building renovation plans with a target of renovating one in four buildings by 2033. There is an obligation for Member States to consult cities in developing the renovation plans and information campaigns.  

From 2028 all new public buildings will have to be Zero Energy Buildings (no fossil fuels on-site) and by 2030 all existing public buildings with roofs larger than 250m2 will have to have solar panels. One-stop shops will need to be rolled out for every 80,000 inhabitants or at least one per region and provide advice on energy renovations as well as dedicate services to tackle energy poverty and vulnerable households. 

Helpfully, there is also an obligation for Member States to ensure cities have access to building energy consumption data to help with their local heating and cooling planning as foreseen in the Energy Efficiency Directive. 

National Energy and Climate Plans: not all ambitious enough (nor all submitted) 

24 Member States have submitted the first version of their NECP update (due in June 2023), which details the measures taken to achieve the target of reducing GHG emissions by 55% by 2030. In December 2023, the Commission published its analysis, which each Member State must consider for the final version to be submitted in 2024.  

Taken together, the Member States are still somewhat lacking in ambition, since they have only achieved a 51% reduction in GHG emissions by 2030.  

The Commission recognises that “very few Member States demonstrate concrete evidence of how they involve them in the process of preparing the draft updated NECP, and even fewer are building on an established multilevel dialogue for this process”. The NECPlatform project, implementing multilevel dialogues in 6 countries, analysed the draft updated NECPs and remind that there is still time to do set up these dialogues before June 2024, and to discuss implementation on a long-term basis. 

The new Electricity Market Design Directive provides clarity on energy sharing but public support to nuclear and coal power plants will delay EU’s energy transition 

The revision of the EU Electricity Market Design Directive aimed at protecting European customers from future energy price spikes and energy crisis. An agreement was reached on December 14th.  

One of the most controversial aspects of the discussion revolved around how national governments would be able to support the construction of new renewable or nuclear energy facilities. The directive now establishes instruments such as Power Purchase Agreements (PPAs) and contracts for difference (CfDs) to do so. Such contracts would encourage forward markets and the development of renewable energies, offering security to investors, but limiting profits, by redistributing them to final consumers. Unfortunately, the directive foresees the possibility of State support to new nuclear facilities via CfDs and to already existing coal power plants as part of “already authorised capacity mechanisms” and if “duly justified”. 

If you want to learn more about renewable PPAs, don’t miss our new publication on the topic. 

The directive clarifies the rules on energy sharing, via a definition of the concept and the rights and obligations for anyone who want to engage in this activity, including energy communities, households, SMEs, and public authorities, but with the possibility for Member States to include also other actors – larger companies as well (with some geographical and capacity limits). This might pose a risk for smaller projects who would have to compete for grid access. It also includes measures to ensure access to energy sharing schemes for vulnerable households and further protect them from disconnections. For example, Member States will need to do their best ensure that, for projects owned by public authorities, at least 10% of the energy produced goes to vulnerable households.

The newly set transparency obligations for system operators regarding grid availability should facilitate renewables integration into the system and increase predictability for generation. 

Commission’s communication on a Grid Action Plan  

At the end of November, the EU Commission shared their Grid Action Plan, 14 points for a faster deployment of electricity grids to facilitate the integration of renewable energy. Currently, as pointed out by many of our members, local distribution grids are more of a bottleneck than an enabler for the energy transition. For the grid to be able to support the progress towards the EU 2030 targets, the Commission plan should ensure improved long-term planning of grids, faster permitting rules, and improved access to finance for grid projects at transmission and distribution level. We hope that local governments will be involved in the discussion around the planning of local grids, together with the network developers. The “Pact for Engagement” launched by the Commission on the same day seems to go in the right direction. 

CoP 28: RES & energy efficiency global pledge but no deal on fossil fuels phase out 

At the latest CoP of the United Nation Framework Convention on Climate Change (UNFCCC COP28) UN Secretary General Antonio Guterres opened the first ever Local Climate Action Summit and called on National Governments to give a seat to cities and regions when designing their climate policies. 

The EU Commission presented a global initiative to triple renewable energy capacity and double energy efficiency measures by 2030. In this declaration of intent, the Heads of States also committed to work with cities and subnational governments to achieve those objectives, “focusing on the key tools and enablers most relevant to national and local circumstances”. 

The agreement reached on Dec 13th does not mention a global phase out of fossil fuels, but more loosely refers to “transitioning away” from oil, gas and coal. It is the first time in 28 years that such a commitment, even if diluted, appears in a UNFCCC deal.