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EU spending on renewable energy needs improvements to enhance its contribution to policy goals, say EU auditors

EU Reporter Correspondent

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solar-field-cc-Windwärts-Energ2011A report published today by the European Court of Auditors (ECA) reveals that improvements are needed if EU funding is to make the maximum possible contribution to achieving the 2020 renewable energy target. The EU auditors examined whether funds in that period had been allocated to well prioritised, cost-effective and mature renewable energy generation projects with rational objectives and to what extent these funds had achieved good results in contributing to the EU 2020 target for energy from renewable sources

“The EU Member States have set ambitious renewable energy goals that can be supported significantly through EU money only if improvements in the management of the expenditure programmes are made,”stated Mr Ladislav Balko, the ECA Member responsible for the reportThe Commission also needs to make sure the programmes being funded in the Member States are cost-effective.”

The ECA found that the audited projects delivered outputs as planned, and most of them were sufficiently mature and ready for implementation when selected. There were no significant cost overruns or time delays in the projects, and the renewable energy generation capacities were installed as planned and operational. However, the energy production results were not always achieved or not properly measured. The overall value for money of Cohesion policy funds support to renewable energy generation projects has been limited in helping achieve the EU 2020 renewable energy target, because: cost-effectiveness has not been the guiding principle in planning and implementing the renewable energy generation projects; and cohesion policy funds had a limited EU added value.

The Council of the European Union has set a binding EU target of 20 % in renewable energy in gross final energy consumption by 2020, based on the Commission’s Renewable Energy Roadmap which lays down a pathway for mainstreaming renewable energy into EU energy policies and markets.

Approximately € 4.7 billion was allocated for renewable energy by the EU Cohesion policy funds in 2007 - 2013.

European Court of Auditors (ECA) special reports are published throughout the year, presenting the results of selected audits of specific EU budgetary areas or management topics.This special report (No 6/2014) entitled “Cohesion policy funds support to renewable energy generation - has it achieved good results?” assessed whether good results had been achieved by the two most important funding sources among EU spending programmes for promoting renewable energy - the European Regional Development Fund and the Cohesion Fund (Cohesion policy funds).

The ECA found that the audited projects delivered outputs as planned. Most of them were sufficiently mature and ready for implementation when selected. There were no significant cost overruns or time delays in the projects, and the renewable energy generation capacities were installed as planned and operational. However, the energy production results were not always achieved or not properly measured. The overall value for money of Cohesion policy funds support to renewable energy generation projects has been limited in helping achieve the EU 2020 renewable energy target, because: cost-effectiveness has not been the guiding principle in planning and implementing the renewable energy generation projects; and cohesion policy funds had a limited EU added value.

The EU auditors recommend that:

  • The Commission ensure that future Cohesion policy co-funded renewable energy programmes are guided by the principle of cost-effectiveness, including the avoidance of deadweight. Programmes must be based on proper needs assessment, prioritisation of the most cost-effective technologies (while not discriminating between renewable energy sectors) and optimal contribution to the EU renewable energy 2020 target. Adequate renewable energy generation objectives in relation to the budget as well as project selection criteria with a focus on the cost-effectiveness of the energy generation results (avoiding over-compensation of projects) need to be set;

  • The Commission promote the establishment by the Member States of a stable and predictable regulatory frameworks for renewable energy in general, along with smoother procedures for the integration of electricity from renewable energy into the grid networks; and

  • The Member States should establish and apply, based on Commission’s guidance, minimum cost-effectiveness criteria which are adapted to the projects’ circumstances. They should also enhance the added value of cohesion policy funds by improving renewable energy project implementation as well as monitoring and evaluation and by building a stock of measured data about energy generation costs in all relevant renewable energy sectors.

A short video interview with the ECA Member responsible for the report and with the audit team leader is available at: https://www.youtube.com/user/EUAuditorsECA

Environment

EU takes aim at zero pollution for air, water and soil

Catherine Feore

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Today (12 May), the European Commission adopted its EU Action Plan: ‘Towards Zero Pollution for Air, Water and Soil – a key deliverable of the European Green Deal’. 

The plan sets an objective of reducing pollution to levels that are no longer harmful to human health and natural ecosystems, and lays out the steps to get there. The plan ties together all relevant EU policies to tackle and prevent pollution. The Commission will review existing legislation and identify remaining gaps that need to be closed.

European Green Deal Executive Vice President Frans Timmermans said: “The Green Deal aims to build a healthy planet for all. To provide a toxic-free environment for people and planet, we have to act now. This plan will guide our work to get there.”

“Environmental pollution negatively affects our health, especially the most vulnerable and socially deprived groups, and is also one of the main drivers of biodiversity loss,” said Environment Commissioner Virginijus Sinkevičius. “The case for the EU to lead the global fight against pollution is today stronger than ever. With the Zero Pollution Action Plan, we will create a healthy living environment for Europeans, contribute to a resilient recovery and boost transition to a clean, circular and climate-neutral economy.”

To steer the EU towards the 2050 goal of a healthy planet for healthy people, the Action Plan sets key 2030 targets to reduce pollution at source, in comparison with the current situation.

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Climate change

Executive Vice President Frans Timmermans attends Petersberg Climate Dialogue

EU Reporter Correspondent

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Today (7 May), Executive Vice President Frans Timmermans participates in the 12th Petersberg Climate Dialogue, an annual high-level political meeting of over 30 ministers from around the world, co-hosted by the German government and the COP26 Presidency. The meeting will start at 14h CEST  today with remarks by UN Secretary-General António Guterres, Federal Chancellor of Germany Angela Merkel and UK Prime Minister Boris Johnson. Their speeches will be live-streamed here. This year's Petersberg Dialogue will focus on the preparations for the upcoming COP26 climate conference in Glasgow. It will address pressing issues such as enhancing countries' climate-resilience and adaptation capacity, scaling up international climate finance, and promoting transparent international carbon market rules. The meeting will be held virtually for the second year in a row due to the ongoing COVID-19 pandemic. The Commission will publish Executive Vice-President Timmermans' remarks climate finance on Friday here. For more information see here.

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Environment

EU sets plan to promote rapid green transition of key industries

Reuters

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The European Union aims to help industries slash greenhouse gas emissions by promoting a rapid expansion of investment in low-carbon technologies, partly through schemes with easier state aid rules, according to a draft policy plan seen by Reuters, writes Kate Abnett.

The EU's target to become climate neutral by 2050, helping curb dangerous global warming, will require a green transition in industrial sectors through a take-up of technologies like renewable hydrogen fuel and energy storage.

A draft of the European Commission's industrial strategy, to be published on Wednesday, outlines how Brussels will help speed investments in those strategic areas, plus others such as raw materials and semiconductors.

The EU is considering ways to support and speed up the rollout of Important Projects of Common European Interest (IPCEI), where member states can pool resources for strategic technologies, the draft said.

IPCEIs allow EU governments to fund projects under easier rules pertaining to state subsidies and for companies to team up on projects that would be too large or risky for one firm alone.

"These projects could accelerate needed investments in the fields of hydrogen, 5G corridors, common data infrastructure and services, sustainable transport, blockchain or European Digital Innovation Hubs," the draft said.

It said some EU states plan to use money from a 672-billion-euro EU COVID-19 recovery fund towards these multi-country projects. Member states must spend 37% of their respective share of recovery funds to support climate objectives.

The Commission is also considering a support scheme, called "contracts for difference", that would guarantee a CO2 price to a project developer regardless of EU carbon market prices.

This could encourage investments in technologies like hydrogen produced from renewable energy. EU carbon prices soared to record highs on Tuesday, but remain far below the price at which analysts say renewable hydrogen could compete with the fossil fuel-based alternative. Read more.

The industry plan slots together with other EU measures to steer cash into green technologies, including its recently-agreed system to classify sustainable investments, and planned environmental standards for electric car batteries sold in Europe.

Brussels will also announce details this summer of a plan to impose carbon border costs on imports of polluting goods. That aims to level the playing field for EU industry and overseas firms by exposing them both to the same carbon price.

The draft industrial plan, reported by Reuters last week, updates a strategy the EU conceived before the COVID-19 pandemic heightened scrutiny of Europe's dependence on foreign suppliers in strategic areas. Read more.

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