| European Commission initiatives We need a regulatory environment that allows us to scale up the clean
energy transition quickly. The Net-Zero Industry Act will do just that. It will create the best conditions for those sectors that are crucial for us to reach net- zero by 2050: technologies like wind turbines, heat pumps, solar panels, renewable hydrogen as well as CO2
storage. Demand is growing in Europe and
globally,and we are acting now to make sure we can meet more of this demand with European supply.
Ursula von der Leyen, president of the European Commission (photo: Christophe Licoppe)
and consumers to protect themselves against excessively volatile prices over longer periods. There will also be new obligations to facilitate renewables integration into the system and enhance predictability for generation. These include transparency obligations for system operators as regards grid congestion, and trading deadlines closer to real time. To ensure competitive markets and transparent price-setting, the Agency for the Cooperation of Energy Regulators (ACER) and national regulators will have enhanced ability to monitor energy market integrity and transparency. In particular, the updated Regulation on Wholesale Energy Market Integrity and Transparency (REMIT) will ensure better data quality as well as strengthen ACER’s role in investigations of potential market abuse cases of cross border nature. Overall, this will step up the protection of EU consumers and industry against any market abuse, says the Commission.
Net-Zero Industry Act
The purpose of the Net-Zero Industry Act is to strengthen the “resilience and competitiveness” of industries in the EU involved in the supply of technologies for achieving net-zero. The Commission says the Act will “create better conditions to set up net-zero projects in Europe and attract investment”, with the aim that the European Union’s overall strategic net-zero technologies manufacturing capacity will approach or reach at least 40% of the European Union’s deployment needs by 2030. This will accelerate “progress towards the EU’s 2030 climate and energy targets and the transition to climate neutrality, while boosting the competitiveness of EU industry, creating quality jobs, and supporting the EU’s efforts to become energy independent”, the Commission believes. Together with the proposal for a European Critical Raw Materials Act and the reform of the electricity market design (outlined above), the Net-Zero Industry Act sets out a clear European framework to reduce the EU’s reliance on imports. By drawing on the lessons learnt from the Covid-19 pandemic and the energy crisis sparked by Russia’s invasion of Ukraine, it will help “increase the resilience of Europe’s clean energy supply chains.”
The proposed legislation addresses technologies that are expected to make a significant contribution to decarbonisation. These include: solar photovoltaic and solar thermal; onshore wind and offshore renewable energy; batteries and storage; heat pumps; geothermal energy; electrolysers and fuel cells; biogas/biomethane; carbon capture, utilisation and storage; grid technologies; sustainable alternative fuels
technologies; advanced technologies to produce energy from “nuclear processes with minimal waste from the fuel cycle”; and small modular nuclear reactors. The “strategic net zero” technologies identified in the annex to the new regulation will receive particular support and are subject to the 40% domestic production benchmark. According to the Europoean Commission, the Net- Zero Industry Act is built on the following pillars: Setting enabling conditions: the Act will improve conditions for investment in net-zero technologies by enhancing information, reducing the administrative burden of setting up projects and simplifying permit-granting processes. In addition, the Act proposes to give priority to “net-zero strategic projects”, which are deemed essential for reinforcing the resilience and competitiveness of EU industry, including sites to safely store captured carbon dioxide emissions. They will be able to benefit from shorter permitting timelines and streamlined procedures. Accelerating CO2
capture: the Act sets an EU
objective of reaching an annual 50 Mt injection capacity in strategic CO2
by 2030, with proportional contributions from EU oil and gas producers. This will remove a major barrier to developing CO2
capture and
storage as an economically viable climate solution, in particular for hard to abate energy- intensive sectors, the Commission says. Facilitating access to markets: to boost diversification of supply for net-zero technologies, the Act requires public authorities to consider sustainability and resilience criteria for net-zero technologies in public procurement or auctions. Enhancing skills: the Act introduces new measures to ensure there is a skilled workforce supporting the production of net-zero technologies in the EU, including setting up Net-Zero Industry Academies, with support and oversight by the Net-Zero Europe Platform. Fostering innovation: the Act makes it possible for Member States to set up regulatory sandboxes to test innovative net-zero technologies and stimulate innovation, under flexible regulatory conditions.
The Net-Zero Europe Platform will assist the Commission and Member States to co- ordinate action and exchange information, including around Net-Zero Industrial Partnerships. The Commission and Member States will also work together to ensure availability of data to monitor progress towards the objectives of the Net-Zero Industry Act. The Net-Zero Europe Platform will support investment by identifying financial needs, bottlenecks and best practices for projects
storage sites in the EU
across the EU. It will also foster contacts across Europe’s net-zero sectors, making particular use of existing industrial alliances. To further support the uptake of renewable hydrogen within the EU, as well as imports from international partners, the Commission, alongside its proposals for the NZIA, also presented its ideas on the design and functions of the European Hydrogen Bank. “This sends a clear signal that Europe is the place for hydrogen production”, according to the Commission. As previously announced in the Green Deal Industrial Plan, the first renewable hydrogen production pilot auctions will be launched, under the Innovation Fund, in Autumn 2023. Selected projects will be awarded a subsidy in the form of a fixed premium per kg of hydrogen produced for a maximum of ten years of operation. This will increase the bankability of projects and bring overall capital costs down.
The EU auction platform can also offer “auctions-as-a-service” for Member States, which will also facilitate the production of hydrogen in Europe. The Commission is further exploring how to design the international dimension of the European Hydrogen Bank to incentivise renewable hydrogen imports. Before the end of 2023, “all elements of the Hydrogen Bank should be operational”, says the Commission.
As part of the Net-Zero Industry Act, the
Commission…adopted a plan to set up the European Hydrogen Bank. The European Union is a powerhouse for research and innovation, and we want to keep it that way! Renewable hydrogen will also play an important role in the EU’s transition to climate neutrality by 2050. The European Hydrogen Bank will establish a full hydrogen value chain in the EU, alongside the Net-Zero Industry Act. Those industries that make early decisions to redirect or focus on cleantech deployment will benefit.
Kadri Simson, European Commissioner for Energy (photo: Christophe Licoppe)
www.modernpowersystems.com | April 2023 | 9
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