Are EU NECPs missing the mark on REPowerEU targets?

In the latter part of 2023, activity throughout the corridors of power in the European Union (EU) was focused on redrafting National Energy and Climate Plans (NECPs) as its Member States readied to submit their updated versions. The reason behind the revisions? A concerted effort to bring country-level policies into closer alignment with the increasingly ambitious goals of Europe's energy transition agenda. 

If we look back to 2020 when the original NECPs were drafted, at that time, the primary aim was clear: to boost the proportion of renewable energy of overall energy consumption. Starting from a baseline of around 21% in 2020, the target was increased to 27% by the decade's end, and then again to an ambitious 32% when all national plans had been finalised.

Following the introduction of REPowerEU – an EU-wide plan to reduce dependence on Russian fossil fuels and accelerate the energy transition further – the bar at 2030 was raised again, to 42.5%. This goal has been formally adopted as part of the third iteration of the EU’s Renewable Energy Directive.

In response to these heightened ambitions, national governments were asked to return to their drafting tables with the mission of revising their NECPs again to bring them in line with the new target. With the clock ticking, these new plans are set for ratification by the Commission in June 2024. 

In our latest analysis, we review the energy strategies of the 26 countries that submitted updates (Austria has yet to publish) and examine their targets and growth forecasts. We zero-in on the power market dynamics and renewable energy specifics embedded within the revised NECPs, including capacity targets, load growth assumptions, technology strategies, the intricacies of power flows and the drivers of electrification.

The updated targets signify a collective effort to bolster the commitment to a sustainable energy future, but the goal of achieving a renewable energy share of 42.5% falls as electrification fails to keep pace. 

Read on for a summary of our analysis – or, for more detail, download an extract from the full report by completing the form at the top of this page.  

Targets are revised upwards but fall short at the EU level 

It is evident that the projected targets, while indicating significant progress, do not align with the objectives set by the EU. Our calculations indicate that targets outlined in the draft NECPs will see the renewables share of total EU energy achieve 39% by 2030, which falls below the EU’s formal target of 42.5% and aspirational goal of 45%.  

The national objectives set by some of the EU's major markets, notably Germany, Italy, the Netherlands, and Belgium are not ambitious enough to achieve the overall target. France, in particular, has opted for a conservative approach, favouring nuclear power over renewable sources as a decarbonization strategy, and was the only market to revise down its renewables target from 40% to 35%. With these underwhelming targets set by key markets, the likelihood of reaching 42.5% renewable energy is increasingly doubtful. 

Energy forecasts down and electrification too slow 

The failure to meet the 42.5% energy target is a cause of growing concern, particularly in light of the downward adjustments in regional energy demand forecasts. Where previous NECPs outlined a 9% reduction in energy consumption, the updated drafts paint a bleaker picture, with forecasts now indicating a 17% decrease compared to 2020 levels. However, it is possible to attribute the economic repercussions of the Covid-19 pandemic and the ongoing war in Ukraine as  material factors in this change.  

Electricity consumption is forecast to rise, however, the electrification of  transportation as well as heating and cooling sectors doesn’t happen quickly enough to boost power consumption to levels necessary to reach EU targets. More robust and accelerated measures are needed urgently to increase the pace of electrification and so enable the wider transition 

Proposed renewable power supply shares are realistic  

Targets for renewables in power average 72%, up from 63% in previous plans. Our forecasts for 2030 broadly aligned with these submissions, except for Italy, which we forecast to miss its target by a significant margin.

Our expectations for solar capacity at 2030 are slightly below those of the member states, at 584 GW compared to 625 GW. Onshore wind is forecasted at 308 GW, 12% lower than targeted. Offshore wind faces challenges, with supply chain issues affecting project execution – NECPs target 87 GW by 2030, compared to our 70 GW outlook. 

More consistency and coordination needed 

The submitted NECPs vary widely in scope, metrics, technologies, and timelines, reflecting the complexities of the region's energy transition. Several key nations, including Germany, France, Belgium, Bulgaria, and Poland, missed the June 2023 deadline for NECP submission, with Austria yet to release its draft. Ambiguities in defining targets and forecasts were present in many submissions which complicates market-to-market comparisons.  

Forecasts for electricity demand, the growth of EVs and heat pumps, and expansion of energy storage vary widely, and discrepancies in the timing and scale of cross-border power interconnections reveal a lack of coordination among member states.

We are also concerned about potential oversupply in certain energy markets which, in the case of electricity, would amount to an annual generation surplus of over 180 terawatt-hours (TWh) by 2030. It is vital that Europe’s decarbonised power markets functions as a connected system, to accommodate the characteristics of a supply mix that will be increasingly dominated by variable resources. Cross-border interconnection, along with other sources of flexibility (such as battery storage), will be essential to the effective integration of renewables. 

Future analysis 

The updated NECPs are due to be finalized by 30 June 2024 and we will release a follow-up analysis that examines confirmed targets. 

Learn more 

To download an extract from our full report, complete the form at the top of this page. Plus, click here to learn more about our Europe Power Service.  

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