In May 2022, the EU launched the REPowerEUPlan to counteract the socio-economic hardship and disruption to the energy markets caused by the Ukraine issue. The initiative is designed to help provide greater energy security within the EU by focusing on: energy savings, clean energy production and diversification of energy supplies.
The aim is to cut the EU’s reliance on fossil fuels and to accelerate the conversion to green energy. This strategy will also reduce the EU’s need for Russian gas. European Commission President, Ursula von der Leyen, launched the initiative and outlined its goals, “We must become more independent from Russian oil, coal and gas…we need to act now to mitigate the impact of rising energy prices……The quicker we switch to renewable and hydrogen, combined with more energy efficiency, the quicker we will be truly independent and master our energy system”.
When the REPowerEUPlan was launched, the EU was already moving in the right direction. Between May and August 2022, the EU generated a record-breaking 12% of total electricity via solar power and 13% from wind farms.
REPowerEUplan Funding
With such an ambitious schedule of investment and reforms, substantial funding is required. The majority of which is being provided by the Recovery and Resilience Facility (RRF), a temporary instrument through which the EU raises and borrows funds on the capital markets. Approximately 72 billion Euros will be in the form of grants and a further 225 billion Euros will be raised from loans.
EIB increase investment in 2023
In October 2022, the European Investment Bank (EIB) pledged an additional 30 billion Euros in funding to benefit public organisations and businesses over the next five years. Then again in July 2023, the EIB increased their financial commitment, bringing the amount up to 45 billion Euros by 2027. This additional investment will be used to help the EU cut its carbon emissions to net zero by 2050.
REPowerPlan proposed measures
The European Commission website lists five key achievements of the REPowerEUplan which will be accomplished by diversifying the EU energy supply and securing affordable alternatives, reducing energy usage by 20%, cap on gas and oil and 100% increase in renewable energy investment.
The European Commission proposes the following measures:
- Increase the EU’s 2030 target from 40% to 45% renewables in the EU mix, (an extra 169GW to the Fitfor55 2030 target of 1067 GW)
- Speed up rollout of PV energy and EU Solar Energy Strategy, with the view of deploying more than 320 GW of new solar photovoltaic by 2025 and 600 GW by 2030.
- Introduce the European Solar Rooftop Initiative, binding EU solar rooftop obligation for specified categories of buildings.
- Work towards doubling the rate of individual heat pumps to reach 10 million cumulative units over 2023-2027
- Decarbonisation by accelerating the switch to electrification and renewable hydrogen and enhancing low-carbon manufacturing capabilities.
- Accelerate renewables’ permit to speed up the rollout of renewable projects and grid infrastructure improvements, via a Renewable Energy Directive which will identify renewable energy as crucial.
- Increase the EU’s 2030 energy savings target from 9% to 13%.
David Viera, Managing Director of RA-ESG, explains, “The EU’s proposed shift away from Russian gas and the transition towards renewable energy sources such as solar power and other renewable alternatives like wind farms and heat pumps, could create significant growth and new opportunities for renewable energy investment. For example, electrical companies and heat pump and photovoltaic panel manufacturers are expected to play a large role and to benefit considerably from the REPowerEUPlan”.
If you would like to know more about RA-ESG.com’s ESG renewable energy investment opportunities (such as solar energy and ev charging stations) visit www.ra-esg.com or email info@raesg.x-co.dev.
