Small steps to big changes | Impact of the "Clean Energy..." package on power sector
We are starting to implement new EU energy regulations. Will the "Clean energy for all Europeans" package heal the Polish energy sector and give it an impulse for development? How can the energy consumer benefit from the changes? In Forum Energii's report "Small steps to big changes", we analyse the provisions of the Package and their consequences for Poland.
"Clean energy for all Europeans" is a set of 8 directives and regulations. They define the parameters of a new energy model in the European Union called the energy union. Negotiations have lasted for several years and were concluded in December 2018. We are now starting to implement them. Activities are concentrated around key areas:
- improving energy efficiency,
- building a single internal energy market,
- increasing energy security, and
- greater innovation and competitiveness of the European energy sector.
Forum Energii is reviewing the most important changes introduced by the energy package. We are focusing on what is important for the Polish power and heating sectors. Poland actively participated in the negotiations and accepted the changes. The direction and objectives have been chosen, now we need a debate. It is necessary to involve companies, administration, science and citizens in the discussion and analysis of how to introduce these changes for the benefit of society, the environment and the economy. Major changes are ahead of us, and the Polish energy sector needs investment. The task of the government is to define the process and build a stable regulatory environment to encourage investors to be active and to make it possible to obtain financing.
The adopted solutions make it possible to develop the energy sector in a coherent way in all EU countries. For Poland, this is an opportunity to reform our market and modernise the sector in line with global trends of reducing emissions, taking greater care of the environment and providing consumers with high quality services thanks to real competition on the market - says Paweł Wróbel, the author of the report.
Dr Joanna Maćkowiak Pandera adds: Trying to define this biggest package of regulations in the history of the European Union in one sentence, you can say that in a few years the energy sector will be getting closer to people. Kowalska and Kowalski will be able to produce energy for their own needs, RES will be a desirable source of energy in the European Union. A large energy system will continue to be the basis for the supply of electricity in the socket, but there will be more and more alternatives and new opportunities. The basis will be energy efficiency, especially in buildings.
The reason for regulatory changes is, among other things, the aspiration to reduce emissions and independence from fuel imports, for which Europeans now pay hundreds of billions of euros every year. The package also tries to keep up with the technological revolution that is taking place in the energy sector. We are facing major developments in the energy market, aimed at increasing competition and reducing the costs of these changes.
What changes are we facing?
The European Union is moving towards 3D energy, i.e. decentralised, digitalised and decarbonised. The most important changes:
A new model of energy governance in the EU
By the end of 2019, the Member States should agree with the European Commission a strategy for achieving the energy and climate targets in 2030, the so-called national plans for energy and climate. The plans will be subject to review. Their assumptions will be reflected in the financing of projects from EU funds.
RES is to become a key source of energy generation - we should reach the level of 32% in the EU. Poland's national target for 2020 should be accelerated. A path for achieving this target in the years 2021-2030 will be agreed. Integration of RES sources in the energy system will be a priority. Barriers to entry of small sources into the market will be reduced.
There will be incentives for the development of prosumers in single- and multi-family houses and prosumers-entrepreneurs.
It is treated as a form of public support for the energy sector. Its application will require a European assessment of resource adequacy and agreeing a market reform plan with the European Commission. Capacity markets will be gradually reduced.
New consumer rights
Consumers will be offered a number of opportunities to increase their awareness and market activity (e.g. smart metering, greater freedom of choice for suppliers - in view of increasing price fluctuations).
Building a single energy market
From 2020 to 2025, the 70% capacity target for electricity interconnectors made available for cross-border exchange must be met.
Unlocking prices for households
The plan is to liberalise prices to individual consumers, which should be achieved from 2021 onwards. It will be possible to temporarily apply regulated tariffs for vulnerable consumers at risk of energy poverty.
Distribution System Operators
The role of the OSD will change radically. Distributors will be responsible for integrating local resources (RES, storage, DSR) into the energy system. They will share responsibility with the TSOs in the balancing of the system. An EU institution will be established to coordinate the work of the DSOs.
The European Union faces a major challenge to rebuild its generation infrastructure, which was intensively shaped in the 1960s and 1970s. With significant investments ahead of us, it is necessary to take into account strategic objectives - to improve energy security, create jobs in Europe, reduce the impact on the environment. It is important for Europeans to be able to afford these changes. The Clean Energy Package increases competition in the market.
Author of the report: Paweł Wróbel, Gate Brussels
Cooperation: Dr. Joanna Maćkowiak-Pandera,
Dr. Aleksandra Gawlikowska-Fyk
Date of publication of the report: 12 September 2019