By Shannon Weigel, Head of Policy, Edison Energy, and Matt Donath, Sr. Policy Analyst, Edison Energy
Stay in the know with our team’s Pulse on Policy series, a biweekly publication covering the latest in global legislation and regulation that impact corporate procurement plans and sustainability goals.
What Does the REPowerEU Plan Mean for Business?
On May 18, the European Commission published its REPowerEU Plan, which modifies the Fit for 55 package to reduce dependence on Russian fossil fuels and accelerate the transition to clean energy. The policy measures highlighted below require additional action at the EU Council and Member States.
Permitting Procedures to Address Multi-year Delays
- Proposes streamlined permitting procedures for Member States to implement at the national level, developed from industry best practices and RES Simplify Projects
- Industry experts from Member States to convene on June 13 to begin implementation of the recommendations
- Creation of “Go-to” areas where environmental assessments are not required for renewable energy projects and expedited permitting processes are no longer than one year
- Limitation of exclusion zones in Member States and qualification of renewable energy systems as an “overriding public interest”
Power Purchase Agreements (PPAs)
- Calls for Member States to remove “unjustified administrative and market barriers” that may hamper corporate PPA development, with an emphasis on small to medium-sized entities
- Encourages Member States to provide support schemes and Guarantees of Origin in a way that complements and encourages corporate PPAs
Funding & Grants
- €210 billion between 2022-2027, with 95% of the funding and financing going towards the clean energy transition
- €10 billion investment to diversify LNG and pipeline gas imports
Boosts industrial decarbonization with approximately €3 billion of frontloaded projects under the Innovation Fund
Rooftop Solar Initiative
- Mandates that public and commercial building owners with useful floor area larger than 250 m² sign a PPA or install rooftop solar on new buildings by 2026 and existing buildings by 2027
- Increases financing for renewable hydrogen projects under Horizon Europe
- Accelerates work on the technical hydrogen standards
- Creation of a Global European Hydrogen Facility & Green Hydrogen Partnership to encourage coordination on
- hydrogen projects and provide investment security
Short-term Measures to Address Increased Energy Prices
- EU Energy Platform to aggregate gas, LNG, and hydrogen demand for all Member States, Ukraine, Moldova, Georgia, and the Balkans to attract and secure supply at fair prices
- An administrative price for gas to be established in parallel, such as a maximum regulated price for natural gas delivered to European consumers and companies (EU price cap) to cover the period of the declared Union emergency
- Establishes new international energy partnerships to accelerate cooperation on renewable deployment and low carbon fuels
- Fills gas storage to 80% capacity before November 1, 2022, and develops EU-coordinated demand reduction plans in case of supply disruptions
Bottom Line for Businesses
While the proposed policy measures are not yet in effect and may be amended before adoption, the message is clear:
- Europe must diversify its energy mix away from Russian fossil fuel imports to stabilize the region and ensure affordable energy in the immediate future.
- Now is the time to prepare for these changes. Companies can mitigate high energy prices by seeking behind-the-meter opportunities, such as onsite solar and energy efficiency measures, and long-term corporate PPAs immediately. Other impactful decarbonization measures, such as renewable hydrogen, will take additional time to reach scale in a cost-effective manner, as regulations need to catch up to technological advancements.
To learn more about procuring energy and renewables in Europe amid geopolitical volatility, check out our Q1 Global Renewables Market Report, and be sure sign up here to receive our Q2 Market Report this month.
Our Global Renewables Market Report is a comprehensive assessment of current power purchase agreement (PPA) pricing developments, policy updates, insights on PPA evaluation, and trends shaping the global renewable energy market.