RED III: EU PAVES THE WAY FOR THE EXPANSION OF RENEWABLE ENERGIES

1. RED III: What's new?

On 31 October 2023, the amendment to the Renewable Energy Directive (Renewable Energy Directive III or RED III)[1] was published in the Official Journal; in it, the European Union sets out additional requirements to further promote the expansion of renewable energies in the EU.

RED III plays a key role in reaching the Green Deal targets of climate neutrality by 2050 and - as an interim target - a reduction in net greenhouse gas (GHG) emissions by at least 55% by 2030 (compared to 1990 levels). RED III not only raises the EU targets for the share of renewable energies in the mix of energy used. Authorisation proceedings for the expansion of renewable energy generation plants, grids and energy storage systems are to be shortened, too. This also means that the temporary requirements for speeding up authorisation proceedings adopted under the EU emergency regulation[2] at the end of 2022 will be transposed into regular European law.

RED III enters into force on 20 November 2023. Once it is in force, member states must implement most of the directive's requirements in national legislation on transport, industry, buildings as well as heating and cooling by 21 May 2025. However, the provisions on the organisation of the approval proceedings must generally be implemented by 01 July 2024.

2. New ambitious targets for the expansion of renewable energies

According to the new binding targets of RED III, the share of renewable energies in the EU is to be increased to at least 42.5% of (gross) final energy consumption by 2030 - instead of the previous 32%. Moreover, all member states are required to endeavour achieving a non-binding target of 45%. By way of comparison: in Austria, the share of renewable energy sources in gross final energy consumption changed little between 2014 and 2019 and remained just under 34%. In 2020, the share rose to 36.5%.[3]

As regards buildings, a separate Union target was set to increase the share of renewable energy in heating and cooling to at least 49% across Europe by 2030. Member states are obliged to enshrine national targets in law in line with this European target. In order to promote the use of renewable energy, each member state must increase the share of renewables in the building sector by at least 0.8% (for the period 2021-2025) or 1.1% (for the period 2026-2030) each year. Public buildings should be role models in this respect. The target for district heating and cooling is to increase the share of renewable energy by 2.2 % per year.

Apart from the heating transition, RED III also provides for regulations to increase renewable energy and reduce greenhouse gas intensity in the sectors of transport and industry. In particular, the share of green hydrogen in industry is to be increased, while there are plans to increase the share of non-fossil fuels and expand the charging infrastructure in the transport sector.

3. Acceleration areas for renewable energy

A central component of RED III is the mandatory designation of priority zones (go-to areas) for renewable energy where provisions are in place to significantly speed up the proceedings for renewable energy projects located in these zones. Sustainable protection mechanisms for nature and the environment are to be implemented via regular specialist programmes or plans instead of case-by-case assessments as part of related approval proceedings.

RED III anchors acceleration areas for renewable energies in legislation. These are designed to enable faster approval proceedings for e.g. wind farms or photovoltaic systems.

Member states must designate these priority areas for renewable energy by 21 February 2026. This can be done for one or more types of renewable energy sources. The designation of these priority areas must be carried out with public participation. A Strategic Environmental Assessment (SEA) must be carried out prior to the designation of land and bodies of water as priority areas. The designation of these priority zones is then linked to a number of procedural simplifications which are intended to ensure expeditious approval proceedings.

Renewable energy projects located in such priority areas which fulfil the relevant requirements should be assumed to have no significant impact on the environment. Therefore, no environmental impact assessment should basically be required for these projects. The approval proceedings must then not take longer than 12 months.

Approval proceedings for projects located outside of acceleration areas must not take longer than two years. The simplification of organisational and procedural matters also includes the establishment of a single point of contact for approval proceedings. There are special provisions for repowering.

4. Enshrining the overriding public interest in renewable energies in law

The definition of the overriding public interest in renewable energy plants is of particular importance in this context. It will now apply beyond the period for which the EU emergency regulation was in effect - until climate neutrality has been achieved.

By 21 February 2024 at the latest, member states must ensure, in particular in approval proceedings, that renewable energy plants are a matter of overriding public interest and serve public health and safety; this needs to be done when interests under the Habitats Directive, Water Framework Directive and Birds Directive are weighed. RED III clarifies that under European law, renewable energy installations (also) serve public health and safety.

5. Further measures to shorten approval proceedings for renewable energy plants

a) Approval of solar energy systems

One of the aims of RED III is to limit the duration of approval proceedings for the installation of solar energy systems, especially for self-sufficient energy suppliers. The EU emergency regulation, which is directly applicable, contains similar provisions for solar energy plants; it is in force and will remain in force in parallel to RED III until mid-2024.

The installation of solar energy systems (i.e. systems for converting solar energy into thermal or electrical energy) on artificial structures and associated storage facilities in the same location must generally be approved within three months. This does not apply to installations on artificial water surfaces.

Normally, small installations do not require any capacity expansion at the grid connection point. In view of the direct positive effects of such systems for consumers and given their limited potential impact on the environment, approval proceedings for small systems are to be streamlined by means of short decision-making periods and tacit approvals. For solar energy systems with a capacity of up to 100 kW, which will usually include photovoltaic systems on roof surfaces, approval proceedings must be completed within one month. If the authority does not respond within this period, the project is deemed to have been tacitly approved. However, exceptions are possible in the event of capacity bottlenecks in the connection to the distribution grid.

The scope of application also includes solar energy systems which are "integrated into buildings". For example, these include photovoltaic systems on residential buildings, warehouses, operating facilities, etc. Acceleration provisions do not apply to floating and ground-mounted photovoltaic systems, however.

b) Approval of heat pumps

Space heating and air conditioning in buildings account for roughly 11% of Austria's total emissions. (Imported) fossil fuels still play a major role in Austria's space and water heating systems: around 41% of the total energy used for space and water heating in the building sector comes from fossil fuels, with around 15% of the final energy demand being covered by oil and around 23% by natural gas.[4]

The use of heat pump technology to generate renewable heating and cooling from ambient energy and geothermal energy is therefore essential for energy transition. The rapid expansion of heat pump use should make it possible to replace natural gas boilers and other fossil fuelled boilers with a renewable heat source and increase energy efficiency. Against this background, RED III requires member states to approve the use of heat pumps fast.

However, like the EU emergency regulation, the provisions of RED III only stipulate a shortened decision-making period, but no tacit approval. The approval proceedings for the installation of heat pumps with less than 50 MW must not exceed one month. For geothermal heat pumps, the approval proceedings are restricted to three months. Proceedings for connecting heat pumps to the grid will also be streamlined.

6. Further data disclosure obligations for grid operators

To support the system integration of electricity from renewable sources, distribution system operators and transmission system operators will in the future have to publish the share of renewables and CO₂ emissions in their supply area. Such data must be made available in real time wherever possible.

Where this is technically feasible, distribution system operators should also publish anonymised and aggregated information about their self-sufficient grid customers (using renewable energy). This also includes electricity from renewable sources generated and fed into the grid as part of a renewable energy community.

The KWR team for energy law and sustainability law will be happy to assist you with any questions you may have regarding the implementation of renewable energy projects.