On European Energy Policy and the State of Renewable Energy

Energy, although we don't often think about it, significantly determines our daily lives. Overconsumption leads to global environmental damage, while shortages severely affect human life. We need energy for our bodies to function, to work, for communication, entertainment, and even doing nothing involves some level of consumption.

Therefore, it matters a great deal where our used energy comes from, how secure the energy supply is, and how much we burden our environment with it. Answering these questions is the task of the European Union and its member states, which typically create complex energy policy strategies and various directives. We attempt to clarify these concepts in the following lines.

The Basics: Energy Consumption in the European Union

First, it is essential to determine how to measure the energy consumption of a country or other region. When measuring total energy consumption, two metrics are usually used: PEC (Primary Energy Consumption) and FEC (Final Energy Consumption). PEC measures the total domestic energy demand, while FEC shows how much end users finally consume. The difference represents the losses resulting from energy conversion and distribution.

To make the amounts of energy from different sources comparable, the oil equivalent metric is commonly used. One ton of oil has a calorific value of 42 GJ, and this value is applied to various technologies. For example, 1 toe of oil equals the calorific value of 1,200 m3 of natural gas or 100 g of uranium.

The indicator values for the year 2022:

PEC: 1,257 million tons of oil equivalent
FEC: 940 million tons of oil equivalent

Energy consumption distribution in the EU by source (2022):

Another crucial metric is whether the energy is produced locally or imported, primarily from an energy security perspective. The following, particularly illustrative chart shows this distribution:

As can be seen from the graphs, the situation is less-than-stellar. On the one hand, the EU consumes a massive amount of energy, a significant portion of which comes from non-renewable, fossil sources (the energy sector is responsible for 75 percent of the EU's greenhouse gas emissions). On the other hand, most of the energy comes from imports, which also pose supply security risks.

What is the EU's Energy Strategy?

Recognizing the above-mentioned problems, the European Commission adopted the Energy Union Strategy (COM/2015/080) in 2015, in which the general energy policy of the EU is formulated as a framework. Its most important objectives are as follows:

Energy Security: Diversifying supply sources to minimize dependence on external providers and enhance the flexibility of energy supply.
Internal Energy Market: Creating an integrated, cross-border energy market that enables competitive pricing and secure supply.
Energy Efficiency: Improving efficiency to reduce consumption and emissions.
Decarbonization: Accelerating the transition to renewable and low-carbon energy sources to achieve climate goals.
Research and Innovation: Investing in new technologies and infrastructure.

These priorities are embodied in a mixture of laws, action plans, and frameworks, such as the "Clean Energy for All Europeans" package. One of the most important regulatory documents among these is the European Parliament and Council (EU) Regulation 2018/1999 (December 11, 2018) on the governance of the energy union and climate action, which sets the EU's 2030 energy and climate goals and outlines how member states and the Council should cooperate to achieve these goals. The regulatory mechanism is based on national energy and climate plans (NECPs), covering a ten-year review period from 2021 to 2030.

Further regulatory documents, various directives, and packages have also been issued over the past years to outline specific goals or respond to the changing global environment. These include:

2009 - RED I: Renewable Energy Directive: Directive Legal framework for the development of clean energy sources across all sectors of the EU economy, supporting cooperation between EU countries to achieve this goal. The original target was to achieve a 20% share of renewables in the energy mix by 2020.

2012 - EED: Energy Efficiency: Directive Legal framework for energy efficiency, aiming for a 20% reduction in energy consumption by 2020.

2018 - Clean Energy for All Europeans Package: Comprehensive legislative package aimed at facilitating the transition to clean energy across the EU. This involved amending both the RED and EED directives.

2018 - EED Revision: As part of the "Clean Energy for All Europeans" package, the EED was revised to set new targets for 2030, prescribing a 32.5% improvement in energy efficiency.

2018 - RED II: Compared to the previous directive, conditions were tightened, raising the renewables' share to 32% to be achieved by 2030.

2019 - European Green Deal: A broad policy package aiming for complete climate neutrality in the EU by 2050.

2019 - Clean Energy for All Europeans Package: Regulatory framework underpinning the European Green Deal, specifying goals for successful implementation of the EU's energy policy. This legislative package includes, among others, the target of a 32% share of renewables, a 32.5% improvement in energy efficiency, and the integration of the electricity market.

2021 - Fit for 55 Package: A proposal package ensuring the EU's climate, energy, transport, and taxation policies are fit for reducing net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels.

2021 - RED III: Under the Fit for 55 package, the previous target for the share of renewables in the energy mix was raised to 40%.

2022 - RePowerEU: A program introduced in response to the energy crisis exacerbated by geopolitical tensions, focusing on reducing dependency on Russian fossil fuels, enhancing energy savings, and accelerating the use of renewable energy sources.

How do these directives work in practice?

European Green Deal:

The Green Deal's content includes:

Emission reduction targets for various sectors
Increasing and utilizing natural carbon sinks
An upgraded emissions trading system to limit emissions, price pollution, and generate investments in the green transition.
Social support for individuals and small businesses

Sector-specific targets:

Sustainable Transportation:

55% emission reduction in cars by 2030
50% emission reduction in trucks
Zero emissions for new cars from 2035
Carbon pricing in air and water transport
SAF (Sustainable Aviation Fuel) requirements

Clean Energy System:

42.5% share of renewables by 2030
11.7% improvement in energy efficiency by 2030
RED directive

Green Industrial Revolution:

Green Deal Industrial Plan
100 billion EUR investment in the net-zero startup system
400 GW of installed solar and wind capacity

Building Renovation:

Doubling the renovation rate over the next 10 years
Higher energy and resource efficiency
Energy Performance of Buildings Directive

Nature Protection:

EU biodiversity strategy
Expansion of existing Natura 2000 areas
EU nature restoration plan

RePowerEU:

RePowerEU's goals are similar to those of the European Green Deal, but the trigger is the Russia-Ukraine conflict, thus placing particular emphasis on energy security and independence. RePowerEU is an accelerated action plan with a shorter timeframe compared to the Green Deal.

Specific measures include:

Increasing imports of LNG and non-Russian natural gas
Enhancing energy efficiency with intensified measures and consumption reduction
Accelerating the deployment of renewable energy sources

These are the general measures that currently define the EU's energy policy. In the next article, we will analyse the role of renewables in more detail and the related RED III directive.

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