Energy trends are positive but the current provisions may be insufficient for reaching EU goals

In the last quarter of 2020, several reports, announcements and studies were published, which not only evaluate the development of various different branches of the energy sector but also present their vision for the upcoming years. EU, as well as the Czech Republic, share a positive perspective of the sector’s future and are trying to start several initiatives, such as the Modernisation Fund – a new grant project, which has just been launched in the Czech Republic. The significant topics also include the progress in the competitiveness of clean energy, strategies to launch the Renovation Wave for Europe or trends in the fulfilment of climate and energy targets.

Take a look at other topics that we address in our EnviLaw newsletter #4:

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Development of renewable resources until 2030: Updates in relation to the Modernisation Fund

The latest analysis follows from the study entitled Development of Renewable Sources until 2030, which was prepared for the Modern Energy Union by Deloitte as of September 2019 and updated with regard to the Modernisation Fund. The aim of this update is to place the development of large photovoltaics into the context of the fulfilment of defined targets and conditions as the best available resource for their fulfilment. The updated analysis thus reacts to the discussion in which certain facts related to photovoltaics are ignored and rooftop installations are overemphasised. According to this analysis, rooftop photovoltaic power stations will most probably not suffice to fulfill the anticipated changes in the Czech energy sector.

Nevertheless, large photovoltaics brings significant environmental benefits. Professionals from Deloitte’s energy team state that it should play a much greater role in the Czech energy sector since it can help economic recovery after the current crisis. It has been predicted that an additional 1 GW of renewable resources should create 173 permanent job positions, 800 positions in construction and 0.24 percentage points for GDP growth.

First calls from the Modernisation Fund

In the winter dReport, Deloitte’s energy professionals have dealt with the Modernisation Fund. It is a new grant with which the Czech Republic is trying to support (with regard to the Green Deal strategy aiming at a CO2-neutral Europe) investments related to environmental and climate protection, low-emission energy system and other areas. The Modernisation Fund is the first programme of such kind, which started accepting preliminary applications.

Within this fund, approximately CZK 150 billion can be allocated; these will be distributed among businesses as part of individual programmes. Currently, preliminary applications can be submitted in three programmes: the Modernisation of Heat Energy Supply Systems (HEAT), New Renewable Resources in the Energy Sector (RES+), and the Improvement of the Energy Efficiency and the Reduction of Greenhouse Gas Emissions in the Industry within the EU ETS (ENERG ETS).

Despite the fact that the projects for funding will not be selected within these preliminary calls (this will be the subject of the actual calls for the submission of grant applications), it is an obligatory step for applicants who are planning to use financial support from the fund. You can find more details on the individual programmes in the dReport.

Renovation Wave for Europe: environmentally friendly buildings, new job positions and a better standard of living

On 14 October 2020, the European Commission published a report entitled the Renovation Wave for Europe. The report includes a strategy for launching renovations in Europe, which will help overcome long-term obstacles of a highly efficient renovation (concerning energy and resources), support new investments in public buildings and buildings with lower efficiency in the long term, boost digitalisation, create job opportunities and enable growth within the renovation-related supply chain.

This transformation aims at achieving climate neutrality, apply the principles of circularity, contribute to the objectives of sustainable development and Europe’s competitiveness and protect everyone’s right to accessible, comfortable and healthy living while maintaining cultural heritage.

The Commission is prepared to provide member states with advisory and support in the planning and realisation of ambitious renovation measures in connection with their recovery plans. At the same time, it aims at eliminating the current barriers preventing renovations, namely by reviewing the current regulations and strengthening the EU emission trading system in relation to a follow-up package until 2030.

Progress report on clean energy competitiveness

The aim of the first Annual Report of 14 October 2020 prepared by the European Commission is to assess the state of clean energy technologies and the competitiveness of the relevant sectors within the EU. The report answers the question of whether the current state leads to securing environmental transformation and EU’s long-term climate goals. Competitiveness assessment is also extremely important for the economic recovery after the COVID-19 pandemic.

The report mainly confirms the economic potential of the clean energy sector and proves that technology in this sector will surpass conventional resources and create a greater added value, more jobs and a more productive workforce compared to them. At the same time, it proves that the importance of the clean energy sector within the EU economy is rising in line with the increased demand for clean technologies.

Following the report, in cooperation with the member states and stakeholders, the European Commission is planning to further develop the methodology for competitiveness assessment. Its annual assessment in the clean energy sector is supposed to complement the framework of integrated national energy and climate plans, the strategic energy technology plan and the clean energy industrial forum.

State of the Energy Union report: On energy union administration and climate sector measures

On 14 October 2020, the European Commission released a State of the Energy Union Report. This report presents several initiatives, which were adopted by the EU and its member states during the past months. In addition to the assessment of 27 national plans, the report also includes the related guidelines to their realisation in relation to the recovery of the EU economy (in relation to the crisis caused by COVID-19). The report stated that energy, climate and environmental policies will have a major impact on the recovery and resistance of the EU economy leading to sustainable growth.

This is the first report to be issued as part of the Energy Union administration and climate measures. The report is accompanied by several thematic reports and recommendations of the Commission on energy poverty and also provides an overview of the Energy Union’s progress in a broader context of EU provisions concerning the climate and sustainability goals.

Monitoring the progress in fulfilling European climate and energy goals

The European Environmental Agency (EEA) issued an annual report entitled Trends and projections in Europe 2020, which assesses the progress of the EU and European countries in fulfilling their goals in climate change mitigation and in the energy sector. It is based on national data concerning greenhouse gas emissions, renewable energy and energy consumption. The report states that in order to maintain control over global climate change, it is crucial to reduce greenhouse gas emissions, introduce renewable energy and enhance energy efficiency.

The EEA report states that the last years’ trends suggest a stable trend in the reduction of greenhouse gas emissions until 2020. However, the likely achievement of goals in energy and renewable resources also brings about troubles related to sufficiently efficient energy reduction in order to achieve the levels anticipated for 2020.

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