Final Stretch for Clean Energy Package Files

With the publication of the ‘Clean Energy for All Europeans’ Package more than a year ago (on 30 November 2016), most of the files are on the final stretch before definitive adoption. The International Union of Property Owners (UIPI) has been active since the very beginning, voicing property owners’ concerns regarding the initial Commission proposal and explaining the need for adjustment. While UIPI acknowledges the need for ambitious energy transition objectives in the building stock, the potential impact on housing affordability needs to be highlighted. The most important files of the Clean Energy Package for UIPI were the following:

the Amendment Proposal for the Energy Performance of Buildings Directive (EPBD),
the Amendment Proposal for the Energy Efficiency Directive (EED),
the Recast of the Proposal for a Directive on the promotion of the use of energy from renewable sources (Renewable Energy Directive – RED),
the Proposal for a Regulation on the Governance of the Energy Union (Governance Regulation), and
the Proposal on common rules for the internal market in electricity (Electricity Market Directive).

After intense negotiations, both the European Parliament and the Council have agreed on their respective approaches. Those positions provided the basis for the negotiation in Trialogue (European Commission, European Parliament and Council) to come to an agreement on the final text to be adopted. With each file being discussed separately, some are more advanced than others.

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Emmanuelle Causse, Director of the International Union of Property Owners said:

“We want our homes and our buildings to be healthy and comfortable with minimum energy consumption! Yet, the key to the success to a fair energy transition done for and with the citizens lies in finding the right balance between the carrot and the stick. This is a necessary condition for affordability and wide acceptance of the efforts to be done. We hope that Member States will keep that in mind when transposing the directive and defining their long-term strategy.”

Energy Performance of Buildings Directive (EPBD)

The crucial Energy Performance of Buildings Proposal is the most advanced file in the process since, after intense negotiations, a preliminary interinstitutional agreement between the European Parliament and the Council has been reached on 19 December, clearing the way to trhe final formal adoption at the beginngin of 2018. Even if the detailed outcome of this agreement is yet to be seen, UIPI acknowledges the tremendous work done by all institutions. UIPI welcomes the fact that, by opting for a voluntary smartness indicator, the Parliament and the Council recognise the need to be cautious on the development and roll-out of such a tool. We are also pleased that adequate advice has been accepted as an effective alternative to inspection of heating and cooling systems. In addition, the greater contextualisation and framing of the requirements for electromobility should help to limit the burden on households and SMEs. UIPI also acknowledges the reinforcement of national long-term renovation strategies, through decadal milestones and measurable progress indicators, as well as policies and actions to target the worst performing stock, the split incentive and energy poverty. While reaching those goals will imply extensive efforts from our sector, a long-term vision leaving some room of manoeuvre to Member States on how to reach the goal is preferable to specific and detailed provisions.

Energy Efficiency Directive (EED)

On 28 November, the European Parliament’s agreed on its position on the Energy Efficiency Directive after the Council reached an internal agreement on its negotiation position back in June.

While the Council calls for an overall EU energy efficiency target of 30%, the Parliament is more ambitious asking for 40%. The goal of upcoming negotiations will be to find a compromise on all of the remaining diverging points.

UIPI welcomes the Parliament’s and the Council’s position as most of the property owner concerns initially raised on the Commission’s proposal were heard and the necessary changes were introduced. Taking account of technical feasibility and cost-effectiveness is crucial and this is recognized by inserting a caveat in the provision calling for metering and sub-metering in multi-apartment buildings and the installation of remotely readable meters.

Additionally, by proposing to strengthen the provision on energy savings obligations, a further impetus is provided to develop energy-provider-lead financing schemes for energy efficiency renovations.

Renewable Energy Directive (RED)

On 18 December, the Council agreed on its negotiation position on the Renewable Energy Directive. Talks with the Parliament are expected to begin in early 2018. The EU is committed to reach a target of at least 27% renewable energy of its overall energy consumption by 2030. This directive confirms this binding target and puts in place the framework and tools to achieve that goal. One of the main points of interest covered by this Proposal was the setting of minimum levels of renewable energy in buildings (new or undergoing major renovation). While the Commission’s original Proposal envisioned setting minimum levels in all cases, the Council has acknowledged the need to tie it to technical and financial feasibility, which UIPI advocated for heavily. There are situations where the minimum requirement for usage of renewable energy sources cannot be fulfilled through district heating or cooling but, at the same time, the installation of renewable energy sources at building level (such as solar panels) may not be reasonable due to e.g. climatic conditions and lack of sufficient sun exposure to make it not cost-effective. There may also be instances where, due to technical reasons, the installation of renewables is simply not feasible. The Council appropriately reflects those considerations in its general approach. Another aspect of high interest to property owners is the introduction of the concept of ‘renewable self-consumers’. Consumers are to benefit from simplified notification procedures for small-scale renewable energy installations at building level. The framework rights and obligations of self-consumers as well as renewable energy communities are set out in the Proposal. The Council’s approach adjusting the wording of the provision to allow for a variety of scenarios is welcomed as it increases the potential for higher future uptake of renewable self-consumption by both owner-occupiers, co-owners and landlords, allowing them to profit from the simplified procedures.

Governance Regulation

The Energy Council also agreed on its negotiation position on a Regulation setting out the system for the governance of the Energy Union, which integrates climate and energy planning into a single framework. The Regulation establishes a cooperation and control mechanism – similar to the European Semester – to oversee the implementation of the 2030 EU climate and energy policy objectives and targets, in particular those regarding renewables, energy efficiency, interconnections and greenhouse gas emissions.

Electricity Market Directive

Finally, a general approach from the Council has also been agreed on the Electricity Market Directive, which aims to create a competitive, consumer-centred, flexible and non-discriminatory internal market for electricity. It provides more emphasis for the rights of customers, balanced regulated electricity prices and sets a regulatory framework for energy communities (roles and responsibilities). The beginning of 2018 will be a busy period with Trialogue negotiations outstanding on several files and a final approval on the EPBD revision. UIPI will continue its activities to ensure that property owner’s interests are considered appropriately to ensure future affordability of housing while going through the necessary energy transition.