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Building owners and developers will need to provide energy performance certificates for buildings.

By Paul A. Davies and Michael D. Green

The European Union has published a directive aimed at improving building energy efficiency and reducing carbon emissions. EU Member States are required to transpose the directive (Directive (EU) 2018/844) by March 10, 2020.

The directive, published on June 19, 2018, replaces the previous directive on the energy performance of buildings, which was first introduced in 2002 and then recast in 2010. The directive, forms part of the Clean Energy for all Europeans legislative package and is designed to promote energy efficiency in both old and new buildings as well as encourage building renovation. The revised directive is one of the EU’s eight proposals to achieve the Energy Union targets.

The EU has agreed that one third of energy use should be from renewable sources and encourages the use of renewable electricity or biofuels sourced from waste rather than crops.

By Paul A. Davies and Michael D. Green

After 18 months of negotiations, the EU has increased its renewable energy target from 27% to 32% for the years 2020 to 2030. The European Parliament and Council will formally approve the agreement in the near future, so it can be set into EU law in the form of the EU Renewable Energy Directive (RED II).

The EU has agreed that by 2030, just under one third of energy use in the EU should be from renewable sources. The trade body for European energy utilities has described the deal as a “well-balanced compromise”. Miguel Arias Cañete, the climate and energy commissioner, noted that “the binding nature of the target will also provide additional certainty to the investors”.

Representatives from 19 countries explore climate responses in several areas, including urban development, transportation, renewable energy, early warning systems, and agriculture.

By Rosa Espín and Leticia Sitges

Nearly 200 participants from 19 different countries recently convened in Colombia for the Green Climate Fund’s (the Fund’s) first Structured Dialogue with Latin America. The meeting, which was held on March 5–8 with the collaboration of the Government of Colombia, underscores the importance of the conclusions reached under such Structured Dialogues. The Fund holds Structured Dialogues in different areas of the world to exchange insights with regional governments on how to use public investment to address climate change concerns and promote private funding.

The United Nations Framework Convention on Climate Change created the Fund in 2010 to support developing countries’ efforts to limit or reduce emissions to fight the effects of climate change. In 2015, the Paris Agreement designated the global Fund an important role in achieving certain targets, for example, keeping global temperature rise well below 2º C above pre-industrial levels and to further limit the temperature increase to 1.5º C.

The split ruling may have broader implications for FERC’s stance toward state-sponsored resources.

By Michael J. Gergen, Tyler Brown, and Peter R. Viola

The Federal Energy Regulatory Commission (FERC) has approved ISO New England Inc.’s (ISO-NE’s) two-stage capacity market proposal, Competitive Auctions with Sponsored Policy Resources (CASPR), by a 3-2 vote, with Chairman Kevin McIntyre and Commissioners Cheryl LaFleur and Neil Chatterjee voting in support, and Commissioners Robert Powelson and Richard Glick voting against. FERC issued an order (CASPR Order) on March 9, 2018, accepting ISO-NE’s proposed tariff revisions largely unchanged. The bulk of the revisions took effect on March 9, 2018 and the remainder will take effect on June 1, 2018.

ISO-NE originally released CASPR as a set of proposed changes to its Transmission, Markets, and Services Tariff in April 2017. (Additional details can be found in this Latham blog post.) Following a series of stakeholder meetings, ISO-NE filed its proposed tariff revisions with FERC in January 2018 pursuant to section 205 of the Federal Power Act (FPA), arguing that the proposed revisions were just and reasonable and not unduly discriminatory. ISO-NE designed CASPR to balance competitive pricing in the organization’s three-year Forward Capacity Market (FCM) with the entry of state-sponsored renewable electric energy resources into the FCM.

The regional transmission organization’s proposal seeks to reconcile the increasing deployment of state-sponsored subsidized clean energy resources with competitive forward auctions.

By Michael Gergen and Tyler Brown

Proposed New Auction Process in New England

energy pylonThe ISO New England Inc. (ISO-NE), the regional transmission organization serving Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont has filed proposed changes to its Transmission, Markets and Services Tariff with the Federal Energy Regulatory Commission (FERC).  The proposal would create a two-stage capacity auction designed to balance competitive pricing in its three-year Forward Capacity Market (FCM) with the entry of state-sponsored renewable electric energy resources into the FCM. ISO-NE’s proposal, known as Competitive Auctions with Sponsored Policy Resources (CASPR), emerged from the New England Power Pool (NEPOOL)’s Integrating Markets and Public Policy (IMAPP) initiative. IMAPP sought to reconcile states’ efforts to deploy new generation with existing generators’ concerns that resources receiving out-of-market revenues will suppress capacity prices. ISO-NE filed the CASPR proposal on January 8, 2018 even though it fell short of the support it needed to win endorsement by a vote of the ISO’s Participants Committee on December 8, 2017. Stakeholders have until January 29, 2018 to submit comments.

ISO-NE’s existing FCM rules subject new capacity resources to a Minimum Offer Price Rule (MOPR), which requires that subsidized generation resources bid into the FCM’s Forward Capacity Auction (FCA) at their unsubsidized cost. The FCM contains a Renewable Technology Resource (RTR) exemption to the MOPR, which allows for up to 200 MW per year of certain renewable resources to bid into the FCA at their subsidized (i.e., below market) cost. New England state regulators have argued that the MOPR can cause electricity consumers to “pay twice”: once for the cost of capacity that clears in the FCA, and a second time for additional capacity from subsidized resources that did not clear in the FCA (because those subsidized resources were required to bid at their unsubsidized cost).

By Tommy Beaudreau, Janice Schneider, and David Amerikaner

New York Governor Andrew Cuomo released the 2018 Clean Energy Jobs and Climate Agenda last week as the 20th proposal of his 2018 State of the State address. The far-reaching proposal charts a path forward for further progress in advancing clean energy in New York this year, and beyond.

In particular, the agenda intends to promote clean energy development, combat climate change, and reduce greenhouse gas emissions through reductions in greenhouse gas caps, additional goals for offshore wind development, and investments in energy infrastructure and storage, as well as other initiatives. This agenda supplements New York’s previously adopted commitment to generate 50% of the state’s electricity needs from renewable sources by 2030.

By Paul Davies and Rosa Espin

Spain is leading the fight against climate change with a proposed new Climate Change and Energy Transition Law.

The Spanish government regards climate change as one of the greatest challenges facing the country. Since 22 April 2016, the Paris Agreement (which sets out a global action plan to avoid climate change by limiting global warning to well below 2ºC), has been open for signature. Spain formally ratified the Paris Agreement in early 2017 and must now seek to implement measures to achieve the ambitious targets that it faces.

As an important consequence of these targets, in December last year the Spanish Climate Change Commission passed a proposal which urged the Government to develop a draft law on Climate Change and Energy Transition. This draft law will enable Spain to achieve its climate change and energy goals and promote competitiveness in the country. This proposed law is expected to regulate existing and future climate related measures, taking into account the climate change targets for the years 2030 and 2050.

By Paul Davies

The launch of the Ecodesign Working Plan 2016-2019, covering the eco-design and energy labelling framework last month is another key milestone in the Commission’s plan to transition the EU to a more circular economy.

Key points to note from the Working Plan include:

  • The current state of play is that the Commission have adopted 28 Ecodesign Regulations, 16 Energy Labelling Delegated Regulations and three recognised Voluntary Agreements. A number of these regulations will be subject to review in 2019.
  • Going forward, the Commission shall publish a working plan outlining an indicative list of energy related product groups which will be considered priorities for the next three years.
  • Further measures to be adopted include: (i) an eco-design measure for heating and cooling products; (ii) an eco-design and energy-labelling measure on verification tolerances to improve product testing and reduce the scope for cheating; and (iii) a Recommendation for self-regulation to support industry in the pursuit of voluntary agreements as an alternative to regulation.

By Antonio Morales and Leticia Sitges

Last month, the European Commission presented a package of measures, known as “the Winter Package”, to strengthen the EU’s competitiveness in adopting and leading the clean energy transition. In addition to promoting energy efficiency, the clean energy transition will continue to offer a wide range of investment opportunities. During 2015, the clean energy field attracted a record global investment of over €300 billion, six times the investment secured in 2004.

By Daniel Scripps

A new report (pdf) from the Brookings Institution discusses the nearly two dozen  state-level clean energy funds (CEFs) that have invested in clean energy projects and concludes that CEFs hold out great promise for the continued design and implementation of “bottom up,” decentralized clean energy finance solutions and economic development.  The report also anticipates that CEFs will need to play a critical role given the decline in federal financing support for clean energy.

The report…