12 May 2021
Fit-for-55 Package: Higher targets alone will not make for more wind energy
With its ‘Fit-for-55 Package’ the European Union wants to create the right framework for an emission reduction of 55% by 2030 and set the course for carbon neutrality by 2050. The package will include a higher renewable energy target, but targets alone won’t deliver the wind volume Europe needs. WindEurope outlines the wind industry’s key policy priorities for the ‘Fit-for-55 Package’.
EU Member States have agreed to raise the EU 2030 emission reduction target from 40% to ‘at least 55%’. This requires a new 2030 renewable energy target. Today the EU renewable energy target is 32%. It needs to be 38%-40% according to the latest European Commission’s Impact Assessment.
This means the EU needs 433-452 GW of wind energy capacity by 2030, a threefold increase on the 179 GW installed today. And by 2050 the EU wants a 20-fold increase in offshore wind capacity. And an even bigger increase in the absolute number of new onshore wind capacity.
Currently Europe is not installing enough new wind. WindEurope expects annual wind installations to be 15 GW per year in the period 2021-2025. But the EU needs 27 GW annually if it wants to meet the new 55% emission reduction target.
“The barrier to the expansion of wind energy needed for the Green Deal is not technology. Nor cost. Nor financing. It’s permitting. Europe is simply not permitting enough new wind farms to reach its renewable energy targets. The rules and procedures are too complex. There aren’t enough staff to process the permit applications. It’ll be nice to have a higher renewables target, but it’ll be academic if we don’t tackle permitting”, says Giles Dickson, WindEurope CEO.
Europe needs to improve permitting procedures for new, repowered and hybrid renewable energy projects. The EU should not only mandate Member States to speed up permitting but also show them how to do it. WindEurope proposes that the EU spells out good permitting practices that empower national Governments to address the critical bottlenecks in permitting.
Urgent action is also needed on PPAs (Power Purchase Agreements). The European Commission should further facilitate the uptake of corporate renewable PPAs to support future wind energy deployment. The ‘Fit for 55 Package’ should ensure Member States issue Guarantees of Origin to renewable electricity producers, irrespective of whether the renewable energy projects receive Government support. Guarantees of Origin make electricity from wind “traceable” and are indispensable to the development of corporate PPAs.
The ‘Fit for 55 Package’ should further ensure that the Renewable Energy Directive reflects the need to prioritise direct renewable-based electrification, the fastest and more efficient way to decarbonise Europe’s economies. It should include a clear definition of renewable hydrogen and a robust traceability mechanism to underpin its market uptake towards competitiveness within this decade.
“Wind is central to the EU’s climate ambitions. For decarbonising electricity. And decarbonising industry. More and more companies are looking to decarbonise their manufacturing and data processes with cheap wind power. The Fit-for-55 package needs to ensure they can source renewables with their own power purchase agreements (PPAs) – which means having a workable system of guarantees of origin in the Renewables Directive”.
A revised EU Emission Trading System (ETS) can incentivise direct electrification and accelerate the expansion of renewable energies. The ETS must align with the new 55% climate target through a mix of rebasing and adjustment in the linear reduction factor.
The package also needs to ensure Europe’s climate commitment do not undermine the competitiveness of our industrial base. Here a well-designed Carbon Border Adjustment Mechanism (CBAM) plays an important role. The CBAM should reflect that Europe’s world-leading wind industry relies on global supply chains. It mustn’t undermine our competitiveness and allow for European exports that will deliver the global energy transition.
Read WindEurope’s positions paper on the Fit-for-55 package
For WindEurope Members: View the recording of our latest WindEurope Sofa Talk on the Fit-for-55 package