Nordenergi´s initial reactions on the 18.5.2022 EU Commissions RePowerEU Plan

On the 18th of May 2022, the European Commission published its much-anticipated RePowerEU plan. The Plan consists of several communications, legislative proposals, and recommendations. Furthermore, the plan will be completed in many respects. Below we present some initial view on the RePowerEU plan together with a summary of its main content.

The aim of the plan is to concretize how the EU will move away from Russian fossil energy and towards clean energy as soon as possible. Simultaneously the EU want to unite in creating a more secure energy system. Furthermore, the Commission has stressed the need for solidarity in this move forward together.

Positive aspects of the plan:

  • The ambition of climate policy will be maintained.
  • Renewable energy projects will be licensed more quickly. Of course, there is a need for careful consideration of what the proposed legislation means in practice. At the same time, it is a pity that not all the projects that will make the transition are being fast-tracked.
  • The distribution of financial support will mainly be based on existing instruments.
  • Aid will be directed towards infrastructure that will contribute to the creation of a common market.
  • The Commission will not intervene hastily in the electricity market and will therefore respect the recommendations of the ACER study. At the same time, work will be launched to improve the functioning of the electricity market. This work will need to be done carefully and will require further analysis.

The following points remain to be improved:

  • The Commission tries to design the European energy system at a very detailed level and fails to be big on big issues and small on small issues. It is desirable that the multiple numerical technology-specific targets set should not be taken as a single truth for further work, but more as an illustration of the investment scale challenge we face.
  • Not all emission reduction technologies are recognized nor treated equally – hence the end result is still highly politicized, despite the seriousness of the crisis.
  • In the gas and electricity markets, Member States are given more freedom to apply temporary price caps.
  • The proposed plan does not specifically address the long-term objective of getting rid of Russian energy.

The following are essential for reaching the goals set in the plan:

  • Focus on reducing emissions and allowing technologies to compete with each other. Higher targets can only be achieved cost-effectively if the means are widely deployed.
  • The internal market for energy and electricity must be well looked after. All market interventions by Member States (e.g. price caps) should be time-limited. In order to improve the conditions for investment in the sector, a market price signal is essential.
  • The energy and climate legislation on the table must be completed quickly. Businesses and investors need clear, and predictable legislative framework on which investment will be base.

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