European Union: European Commission Releases "Clean Energy Package"

On 30 November 2016 the European Commission published its "Winter Package" containing proposals for new rules for a consumer-centered clean energy transition. The 500 page Winter Package had been eagerly awaited by the energy industry since it was to contain the major energy regulations for 2020 onwards. As expected, the most substantial measures and amendments proposed concern renewables and energy efficiency in the European Union. In addition, the electricity market design is proposed to be amended.

The proposal for a revised Renewable Energy Directive

The proposal for a revised Renewable Energy Directive (RED) aims to increase investor certainty while at the same time working towards efficient climate and energy targets. For that purpose, the proposal identifies six key areas for action:

1. Further deployment of renewables in the electricity sector

The revised RED extends its scope referring to new elements such as the Union binding overall target, self-consumption of renewable energy, greenhouse gas (GHG) emissions saving criteria for biofuels, bioliquids and biomass fuels. On a procedural level it establishes a permit granting process for renewable energy (RES) projects with one designated authority ("one-stop-shop") and a maximum time limit for the permit granting process. Similarly, it introduces a simple notification to distribution system operators (DSOs) for small scale projects, and a specific provision on accelerating permit granting process for repowering existing renewable plants. However, it remains to be seen whether these new procedures will result in acceleration of RES permitting in reality. Evidently, the new rules are very similar to the procedural rules of the TEN-E Regulation which provides for an accelerated permitting process in favour of Energy Infrastructure Projects of Common Interest (PCIs), however, in practice, the expected acceleration effects regularly failed to materialise. The idea of a simple notification process for repowering projects sounds exciting. However, public consultation requirements under the Aarhus Convention will still need to be observed and, therefore, recognised environmental NGOs and neighbours will need to have the right to request a review of the fulfilment of the notification requirements (such as the absence of significant environmental impact).

As expected, the Winter Package also provides for new regulations applicable to national RES support schemes. RES support schemes need to be market-orientated and cost-effective. Moreover, access to RES support schemes should be granted in a competitive manner, for instance by auctioning. In any case, the guidelines on state aid for environmental protection and energy will need to be properly observed when establishing new RES support schemes.

2. Increasing renewables in the heating and cooling sector

One of the major innovations of the revised RED is the proposed mainstreaming of renewable energy in heating and cooling (H&C) installations. This proposal aims to exploit the renewables potential in the heating and cooling sector, ensuring a cost-efficient contribution by the sector to target achievement, and to create a larger market for RES-H&C across the EU. Accordingly, designated energy suppliers for heating and cooling are required to achieve an annual increase of 1 % in the share of renewable energy in their total annual sales volume until 2030. Most importantly, Member States may use established structures under the national energy efficiency obligation schemes set out in Article 7a of Directive 2010/27/EU to implement and monitor the measures set by the suppliers.

3. Decarbonising and diversifying the transport sector

In the transport sector, the revised RED establishes an EU-level obligation for fuel suppliers to progressively increase the share of renewable and low-carbon fuels from 1.5 % in 2021 to 6.8 % in 2030, including at least 3.6 % of advanced biofuels. Indirect Land-Use Change (ILUC) issues are addressed by introducing a cap on the share of biofuels and bioliquids produced from food or feed crops, starting at 7 % in 2021 and decreasing to 3.8 % in 2030.

4. Renewable self-consumers

Consumers are being empowered by being entitled to carry out self-consumption while maintaining their rights as consumers, and not being considered as energy suppliers, although they are entitled to sell their excess production to other consumers. Notably, this also applies to self-consumers living in the same multi-apartment block, or located in the same commercial site or "closed distribution" system. As a consequence, self-consumers would be exempted from various supplier obligations, eg from paying certain energy levies (such as the "Ökostrompauschale" or "EEG-Umlage" or "KWK-Umlage"), which will most probably encourage private investments into small-scale RES installations. The aforesaid privileges may raise legal concerns in light of the principle of equal treatment.

5. Sustainability criteria for bioenergy

The revised RED requires that sustainability criteria for biofuels are improved, including that (new) advanced biofuels emit at least 70 % fewer GHG emissions than fossil fuels. Further, it introduced a new sustainability criterion on forest biomass in order to ensure that the production of woodfuel continues to be sustainable. Additionally, it is foreseen that solid biomass and biogas used in large heat and power plants (above 20MW fuel capacity) is extended. Finally, large heat and power plants are required to reach efficiencies above 80 % by using highly efficient combined heat and power technology. Existing plants regularly fail to achieve this high level of efficiency.

6. Timely and cost effective achievement of binding EU targets

The Union binding overall target is to ensure a renewable energy share amounting to at least 27 % in 2030. However, it needs to be noted that this target is an EU-level binding target only, and is not to be translated into national targets. In order to achieve that target, the revised RED establishes the 2020 national targets as a baseline, which means that Member States cannot go below their 2020 national targets from 2021 onwards. It further lays down financial support schemes for electricity from renewable sources. Moreover, a gradual and partial opening of support schemes to cross-border participation in the electricity sector is established which includes, inter alia, opened tenders, joint tenders, opened certificate schemes or joint support schemes.

The New Energy Efficiency Measures

The European Commission adopts proposals for a revision of the Energy Efficiency Directive (EED) and of the European Performance of Buildings Directive (EPBD), to bring them up to date with the 2030 energy and climate goals. Notably, the building stock is the largest single energy consumer, with the use of buildings representing 40 % of energy consumption in the EU.1 Therefore, it is reasonable that in particular, measures tackling the energy efficiency of buildings have been proposed.

1. The Energy Efficiency Directive (EDD)

The EDD prescribes an additional Union binding energy efficiency target for 2030, namely increasing efficiency to 30 %. As the new target is an additional one, the increase of 20 % still has to be achieved by 2020 at the latest. Meeting the 30 % energy efficiency target in 2030 will be ensured, especially by improving and extending policy areas. To meet the target the EDD makes provision for the European Commission to assess progress towards that target and to allow the European Commission to propose additional measures if the Union is not on track to reach the goal. One of the main changes introduced is the extension of the energy savings requirement to 2030. The savings should have a cumulative effect with 1.5 % saved by 2021 and reaching 15 % in the year 2030 (1.5 % times 10 years). As under the existing EDD, the savings requirement can be achieved either by way of Energy Efficiency Obligation Schemes or alternative policy measures. However, Member States who decide to fulfil their energy saving obligations by way of "alternative policy measures" are urged to achieve the energy savings among final customers and, as under the Energy Efficiency Obligation Scheme, they need to put measurement, control and verification systems in place, under which documented audits are carried out on a statistically significant proportion and representative sample of the energy efficiency improvement measures put in place.

With this, alternative measures are put on an equal footing with Energy Efficiency Obligation Schemes. Moreover, improving the financing conditions of energy efficiency and strengthening of minimum requirements for products, vehicles and buildings will ensure the achievement of the energy goal by 2030. Evidently, the latter measures stand in close connection with the proposed adaptions of the EPBD.

Unfortunately, the Package does not contain any eligibility criteria for energy efficiency measures. This might lead to substantial distortions of competition.

2. The Energy Performance of Buildings Directive (EPBD)

EPBD is aimed at energy performance of buildings and supporting the implementation of the "Smart Finance for Smart Buildings Initiative", mobilising private investments for energy efficiency and small scale renewables in buildings at a greater scale.

One main focus of the proposed EPBD therefore is rooted in financial and long-term renovation measures and strategies. Member States must link their financial measures for energy efficiency improvements in the renovation of buildings to the energy savings achieved due to such renovation. These savings will be determined by comparing energy performance certificates issued before and after renovations.

Furthermore, the EPBD proposal streamlines provisions regarding regular inspections. As the provision regarding the obligation on performing inspections of heating systems and air-conditioning systems has not delivered the expected results, the European Commission proposed to replace and concretise the inspection obligations. In this context, the most significant amendment is the distinction between residential and non-residential buildings and the stricter thresholds. In exchange for this streamlining, building automation and control systems are introduced as an alternative to physical inspections to ensure continuous buildings' performance. To sum it up, the bulk of the EPBD proposal intends to adapt the directive to technical progress and to derive advantage therefrom.

New Electricity Market Design

The new market design aims to improve price signals to drive investment in areas where it is needed most, reflecting grid constraints and demand centres, rather than national borders. Therefore, wholesale price caps will be removed, making prices reflect the real value of electricity in time and location (scarcity pricing) and new capacity mechanisms will be implemented in order to ensure security of supply. Capacity mechanisms are support schemes that remunerate generation availability, in addition to any revenue already gained from selling generated electricity on the market. However, generation capacity for which a final investment decision has been made, will only be eligible to participate in a capacity mechanism if its emissions are below 550 grams of CO2 per kWh. Generation capacity emitting 550 grams of CO2 per kWh or more shall not be committed in capacity mechanisms 5 years after the entry into force of the Regulation on the internal electricity market (RIE). As coal-fired power plants release almost more than twice as much as prescribed by the RIE, it appears that at this point the package intends to effectively rule out coal.

It is also proposed to remove priority grid dispatch for new renewables under RED. However, according to the RIE, priority dispatch will remain in place for existing installations, small-scale renewables (electricity capacity of less than 500 kW) and demonstration projects. Notably, this priority dispatch is only to be facilitated where the total capacity of generating installations is less than 15 % of the total installed generating capacity in a Member State.

The most important aspects at a glance

  • No binding national RES 2030 targets; however, national 2020 targets have been set as a baseline.
  • New criteria for the establishment of RES support schemes.
  • Implementation of procedural rules to accelerate RES permitting and repowering.
  • Cancellation of priority grid access for new RES installations.
  • Binding RES targets for the heating and cooling sector.
  • Renewable self-consumers are entitled to sell their excess production to other consumers without being treated as energy supplier (even when using the public network!).
  • New sustainability criteria for bioenergy.
  • Extension of the energy savings requirement to 2030.
  • Member States who decide to fulfil their energy saving obligations by way of "alternative policy measures" (rather than by implementing an Energy Efficiency Obligation Scheme) need to put appropriate measurement, control and verification systems in place.


1. European Commission, Review of the Energy Performance of Buildings Directive, including the 'Smart Financing for Smart Buildings' initiative, A legislative proposal and a communication (November 2015).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions