Covid-19: Effects on Energy Policies?
Climate and Energy package
In 2007, the EU heads of state and governmental bodies set the core objectives of the 2020 climate and energy package. Two years later, comprehensive legislation was introduced, to implement these targets which were adopted to ensure that the EU meets its climate and energy goals by 2020.
The EU’s 2020 climate and energy package has three main objectives which need to be achieved within this timeframe:
- the reduction of greenhouse gas emissions by 20% compared to 1990;
- the production of 20% of energy within the EU from renewable sources; and
- the improvement of energy efficiency by 20%.
In October 2014, new climate and energy targets were adopted which need to be achieved by 2030. These targets were then subsequently corrected. The aim by 2030 is the reduction of greenhouse gas emissions by at least 40% (compared to 1990), the increase of the share of energy which is gained from renewable sources to approximately 32%, and the improvement of energy efficiency by at least 32.5%.
The climate and energy package which was agreed upon should bring ample improvements by 2020, whilst having positive effects of the EU’s security of energy supply in the long term. Additionally, this energy package forms the basis for the European Energy Union.
Green electricity package
A green electricity package was adopted in Austria in 2019. This package will provide investment subsidies of EUR 36 million for the expansion of photovoltaics and electricity storage facilities. The adoption of the green electricity package will secure an additional photovoltaic capacity of 20% and also ensure the doubling of the storage capacity for 2020.
In the wind power sector, the quota calculation will be changed. By bringing forward the quota from 2021 to 2020, and changing the calculation methodology, additional funds will be mobilised for 2020, which allows for the backlog to be cleared. As of 2021, the introduction of new legislation should facilitate the rapid expansion of wind power in Austria, which means that all projects already approved can be erected in the coming year. According to the industry association IG Windkraft, this will directly influence approximately 200 wind turbines. In the area of biomass, an agreement was reached on the granting of follow-up tariffs for plants that are being phased out. Further innovations in this respect also apply to small hydroelectric power plants, biogas and medium sized hydroelectric power plants. Medium-sized hydroelectric power plants will be provided with a funding increase of 30 million euros to a total of 80 million euros.
Effects of the crisis
On the 11th March 2020, the World Health Organisation (“WHO“) officially classified Covid-19 as a pandemic, with companies in the energy sector also being increasingly affected. The International Energy Agency (“IEA“) has also already reacted to the current situation and stated that the countries which are currently facing the global Covid-19 emergency should not allow the crisis to cause green energy goals to fail.
For the renewable energy sector, the long-term effects of the rapidly spreading Covid-19 crisis are currently still unclear. However, it is certain that in order to achieve the EU’s objectives in the current situation, anticipatory measures are particularly needed now.
As the end of this crisis cannot yet be predicted, companies in the energy sector should invest time in defining new strategies, and the planning and structuring of projects.
Do you have any questions? We will be pleased to help you.