The REPowerEU Plan (the Plan) was issued by the European Commission on 18 May 2022. The Plan responds to the disruption in the global energy market caused by Russia's invasion of Ukraine, by seeking to rapidly reduce the EU's dependence on Russian fossil fuels and speeding up the oncoming green transition. The Plan frames this issue as particularly pressing given the contribution of Russian fuels to Europe's energy supply: 40% Gas, 27% Oil and 46% Coal.
What is the goal of REPower EU?
The Plan contains strategies to phase out the EU's dependency on Russian fossil fuels by the end of the decade by building on the implementation of the European Green Deal and the EU's "Fit for 55" proposals (seeking to cut emissions by at least 55% by 2030), with a focus on:
1. Diversifying energy sources
The Commission and Member States have set up an EU Energy Platform to support the common purchase of gas. This will be done by engaging in international outreach, demand aggregation and structuring, and the transparent use of the import, storage and transmission of gas. The Commission will also consider developing a 'joint purchasing mechanism' for negotiating and contracting on behalf of participating Member States, leveraging the power of the European market. This mechanism will be subject to a review of its impact on competition.
2. Accelerating a transition from fossil fuels to clean energy
The Plan aims to speed-up and scale-up the role that renewable energy plays in power generation, industry, buildings and transport which will help phase out the EU reliance on Russian fossil fuels and ultimately lower electricity prices. The Plan sets the following key targets:
• Increasing the target in the Renewable Energy Directive to 45% by 2030 (up from 40% in the original Fit for 55 proposal); and
• Increasing total renewable generation capacity to 1236 GW by 2030, up from 1067 GW.
The boost in renewable energy will be delivered by combining solar, onshore and offshore wind, with renewable hydrogen being key to replacing gas, coal and oil in certain industries and in transport. The Plan emphasises offshore wind as a significant future opportunity, although notes the need to strengthen supply chains and accelerate permitting processes.
In particular, the Plan notes that "slow and complex permitting processes are a key obstacle" to realising the potential of renewable energy. The Commission has therefore issued a Recommendation on Permitting, which proposes measures to streamline procedures at national level.
The Plan further calls on Member States to implement "country specific" permitting recommendations issued in May 2022. The recommendation for Ireland highlights the long duration of planning permission procedures and lengthy and costly appeal procedures. It also notes the need to ensure appropriate resourcing at all stages of the planning and permitting system. The Government may incorporate this recommendation as part of the wholesale review of Ireland's planning legislation due in Q3 2022.
As part of the Commission's revised proposal on the Renewable Energy Directive, the Commission is framing renewable energy as an "overriding public interest". It is calling for "go to areas" to be earmarked for renewables development (while minimising risks and negative environmental impacts). The Commission is also proposing "regulatory sandboxes" for experimental and innovative development, which involves testing of innovative technologies, products and services that are not fully compliant with existing legal and regulatory frameworks.
If these proposals are implemented, we can expect to see more prescriptive areas and zones designated for offshore development. The "sandbox" concept also raises the potential for various regulatory exemptions and streamlined processes for emerging technologies. Any such mechanisms will still be subject to parameters in terms of environmental protection and public participation.
3. Saving energy
Reducing energy consumption through higher efficiency is vital to the clean energy transition and has the added benefit of decreasing imports of Russian fossil fuels in the short term. The EU Save Energy Communication accompanying the Plan provides for a two-pronged approach which includes both behavioural as well as structural change. Further, the Commission is proposing to strengthen the existing "Fit for 55" target from an additional 9% reduction in energy consumption to a 13% reduction.
4. Smart investment
The Commission's analysis indicates that the Plan entails an additional investment of €210 billion between now and 2027, over and above what is needed to meet the "Fit for 55" proposals. Key investment areas include: (i) European interconnection and infrastructure needs, including emphasis on completing the current raft of "projects of common interest" related to the Trans-European energy networks framework; (ii) Providing appropriate investment support for storage projects and new infrastructure to import LNG and pipeline gas from other suppliers; (iii) Limited and target investment to ensure security of oil supply; (iv) Additional investment into the power grid; and (v) Associated policy support, including recognition of the Plan in Member States' Recovery and Resilience Plans.
5. Reinforcing preparedness
The Plan emphasises the need for Europe to be prepared for a severe supply disruption, particularly in anticipation of winter 2022. The Commission is therefore calling on Member States to implement the "Save Energy" communication, which can be used to build up reservoirs of gas ahead of winter. The Commission is also seeking that Member States update their contingency plans, request that transmission operators undertake technical measures to allow for "reverse flow" of gas from West to East, and conclude outstanding bilateral solidarity arrangements between member states.
The Plan envisages sweeping policy amendments to improve the diversity and resilience of Europe's energy supplies. Many of these changes build on existing policy measures. In practice, the Plan may result in changes to key strategies in Ireland, including the targets and actions in instruments such as the Climate Action Plan 2021. The Commission's emphasis on streamlining permitting processes is of particular interest, particularly in light of the Government's intended reforms of Ireland's planning system to speed up the permission process.