- On 9 October the EU Council gave final approval to the renewable energy directive, raising the binding target to 42.5% by 2030.
- The text sets sector goals, such as transport and buildings, and measures to speed up permits for renewable projects.
- It affects the cost of energy and decisions on self-consumption, supply contracts and investment by businesses and households.
On 9 October 2023 the Council of the European Union gave its final approval to the revision of the Renewable Energy Directive, known as RED III, a month after the European Parliament adopted it on 12 September. Only Poland and Hungary voted against. The rule is part of the “Fit for 55” package and the REPowerEU plan, through which the Union seeks to cut its emissions and its dependence on imported fossil fuels.
The central element is the new binding target: at least 42.5% renewables in the Union’s final energy consumption in 2030, with an indicative commitment to reach 45% through an extra 2.5%. The previous target was 32%. For business owners and families it is not an abstract figure: it shapes the price of electricity, the incentives for installing renewables and the requirements that will apply to buildings, industry and transport.
Sector goals
The general target comes with partial goals. In transport, member states must reach a renewables share of 29% or reduce the emissions intensity of fuels, choosing between the two routes. For buildings, an indicative renewables share of 49% in 2030 is set. Industry also has targets, related to the use of renewables and renewable-origin hydrogen in production processes.
Each country will decide how to meet those goals through its own policies, so we will have to wait for transposition in Spain to learn the specific instruments: grants, obligations on suppliers, building rules or tax incentives. Until then, the practical effect on a company or a home is still indirect, although the direction is set.
Faster permits
One of the most relevant measures for anyone wanting to invest is the simplification of permits. The directive aims to shorten the authorisation times of renewable energy projects, which today can stretch over years, and presumes their overriding public interest in certain cases. It also provides for acceleration areas, designated by member states, where procedures will be quicker and more predictable.
Administrative bottlenecks are one of the main causes of delay in installing solar and wind farms, grids and storage. If the simplification is genuinely applied, it can speed up industrial self-consumption projects and energy communities and lower energy costs in the medium term; if it stays on paper, the target will be hard to meet. Hence the way each member state transposes the directive is decisive.
What to review
Companies with high energy consumption can review their long-term electricity supply and purchase contracts, assess self-consumption with renewables and storage, and follow the incentives approved in Spain for this. Those planning works or facility extensions can anticipate the effect of future renewable-energy requirements for buildings.
Families who own their homes can find out about grants for installing solar panels or heat pumps and about the conditions for collective self-consumption, which depend on the state and regional rules in force at any time. Before deciding on an investment, it is advisable to compare quotes and returns with an adviser and check which grants are still open. If the home is part of a homeowners’ association, collective self-consumption requires agreements and technical projects that are worth planning in good time. This note is general information.
The energy transition is decided in Brussels, but it is installed, paid for and charged in every business and every home.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
