EU Clean energy package: more chance for “energy citizens”?

EU Clean energy package: more chance for “energy citizens”?

Photo credits: Thijs ter Haar

The European Commission stresses the importance of a major “energy democracy” to boost renewables. A process that could also pave the way for alternative finance such as crowdfunding

The next few weeks are going to be crucial for the future of renewable energy in Europe. The EU Parliament and the national governments are currently finalising their respective positions on the “Clean energy for all Europeans” package, which will shape energy policy across Europe for the next decade. On December 18, EU energy ministers are expected to reach an agreement on future laws about renewables and energy union governance.

Two of the draft laws under discussion - on the development of renewable energy and the redesign of the European electricity market - could prove instrumental in boosting Europe’s role in the global fight against climate change and in ensuring the EU meets its commitment to help limit global temperature increase to 1.5°C. The new rules would apply between 2021 and 2030.

On a number of topics the Commission’s proposal is considered weak by environmental organisations that count on the Parliament to back more ambitious targets but fear the member States might go for even less restrictive measures.

For the first time, the EU would recognise a universal right for citizens to produce, store and sell renewable electricity, free of any surcharges such as tariffs for grid connections. However, on energy democracy and the empowerment of citizens and private players, the Commission appears more ambitious than some countries. While Greece, Belgium and Hungary have expressed support for citizen energy, Spain and Germany, backed by France and the UK, seem to be putting on the brakes.

“I think we are seeing a group of States being against any more democratic efforts which have one thing in common: the protection of incumbents, delaying any transformation towards more sustainable forms of generating energy,” says Fabian Pause from the Foundation for Environmental Energy Law, a German think tank. “Of course, they can undermine the Commission´s efforts as any new legislative act needs a majority in the Council.”

Community or citizen energy has an enormous and largely untapped potential. A report by CE Delft, commissioned by Greenpeace, Friends of the Earth, and EREF in 2016, showed that over 112 million energy citizens could meet 19% of Europe’s electricity demand by 2030. Now, the European Commission’s goal is a minimum of 27% in renewable energy compared to gross consumption by 2030.

“Empowerment of new actors is positive and can lead to real changes in most of the member States. The Commission’s ideas are in general well thought out, but it is still unclear if the overall system for achieving the 2030 targets is robust enough,” states Fabian Pause.

One of the means to involve citizens might also be crowdfunding. Even if not specifically named in the “Clean energy package”, “it is attracting the interest of the European Commission and Parliament, as it is regarded as an innovative financial option that shows a vast potential for financing renewable energy projects and can help bridge the existing funding gap,” explains Pablo Alonso from the EU project CrowdFundRES, which has seen platforms, renewable energy developers and other organisations join forces to boost crowdfunding.

The revision of the EU energy regulations, “which is currently being discussed following the publication of the Clean energy for all Europeans package, should ensure a stable regulatory framework that makes the electricity market fit for renewables, and foster citizen participation in financing renewable energy projects through crowdfunding. This will notably impact the further development of renewables and the way citizens and communities will engage in the energy transition over the next years,” he adds.

In this context, recent announcements show that the European Commission intends to put forward, during the first quarter of 2018, a proposal to regulate crowdfunding and P2P lending in Europe.

While the EU waits for its leaders to decide on its future for renewables, on 12 December the second anniversary of the Paris Agreement on climate change will be celebrated in the French capital at the One Planet Summit, a huge event organised by the UN and the World Bank Group. One of the panels intends to “demonstrate how the Paris Agreement framework sets a new mandate for public and private finance and why it is necessary to scale-up climate finance through public engagement and its leveraging effect on private investments.” It might be the chance to talk about the role of crowdfunding in the development of renewables.

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