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AlwaysFree: International Energy Agency (IEA) Renewables 2022 Analysis And Forecast To 2027: Trends To Watch - Is The European Union On Track To Meet Its REPowerEU Goals?

Author: SSESSMENTS

According to International Energy Agency (IEA) website publication on Renewables 2022 Analysis and Forecast to 2027 report, the REPowerEU plan’s aim is to rapidly reduce dependence on Russian fossil fuels by 2027, and the European Commission estimates that this will require significant expansion of renewable energy shares in the electricity, transport and heating sectors. Although the use of renewable energy does increase in all three of these sectors by 2027 in our main-case forecast, in none of them are levels consistent with the REPowerEU plan. 

While the share of renewables in electricity expands to almost 55% by 2027 in our main case, this is well below the 69% share the European Commission estimates is needed to support the REPowerEU plan. To enable further increases, governments across the European Union will need to minimise policy uncertainty, simplify permitting procedures and accelerate transmission and distribution network upgrades. Ramping up renewables-based power generation is also essential to expand renewable energy uptake in the transport and heating sectors, as renewable electricity can power electric vehicles and heat pumps and be used to produce green hydrogen. 

For transport, a renewable energy share of 16% by 2027 in our main case is less than half the estimated REPowerEU requirement. Member states will need to align their domestic policies, accelerate biofuel deployment and reinforce conservation and efficiency programmes to contain or reduce energy demand and enlarge the share of renewables in final energy consumption. 

Meanwhile, renewable energy shares in heating and cooling expand 0.9 percentage points annually up to 2027 – one-third faster than during the last decade, but well below the 2.3-percentage-point annual increases needed to match REPowerEU ambitions. To accelerate deployment, more aggressive policies will be needed to strengthen heat pump supply chains; increase labour availability for installations; integrate renewable energy sources in district heating networks; scale up biomethane production; streamline permitting regulations for large-scale renewable heat projects; and support alternative business models for heating. 

Should government and industry overcome deployment challenges in the electricity, transport and heating and cooling sectors, REPowerEU goals appear to be within reach, at least in terms of renewable energy. 

The REPowerEU plan 

The European Commission’s REPowerEU plan, released in May 2022 in response to energy market disruptions from Russia’s invasion of Ukraine, aims to rapidly reduce dependence on Russian fossil fuels by 2027. It builds upon existing initiatives, including the Recovery and Resilience Facility, and increases the renewable energy target of the proposed Fit for 55 package (launched in 2021) from 40% to 45%. 

This higher aim for renewable energy use, combined with other REPowerEU provisions to reduce energy demand, implies significant increases in renewable capacity shares across the electricity, transport and heating and cooling sectors. The Commission estimates that renewable energy in electricity would need to climb to 69% by 2030, to 32% in transport, and in heating/cooling should expand at least 2.3 percentage points annually. 

Tags: All Markets,AlwaysFree,Bio/Renewables,English

Published on January 30, 2023 5:56 PM (GMT+8)
Last Updated on January 30, 2023 5:56 PM (GMT+8)