Article 1 Purpose The purpose of this Directive is to promote an increase in the contribution of renewable energy sources to electricity production in the internal market for electricity and to create a basis for a future Community framework thereof.

Article 2 Definitions For the purposes of this Directive, the following definitions shall apply: (a)"renewable energy sources" shall mean renewable non-fossil energy sources (wind, solar, geothermal, wave, tidal, hydropower, biomass, landfill gas, sewage treatment plant gas and biogases); (b)"biomass" shall mean the biodegradable fraction of products, waste and residues from agriculture (including vegetal and animal substances), forestry and related industries, as well as the biodegradable fraction of industrial and municipal waste; (c)"electricity produced from renewable energy sources" shall mean electricity produced by plants using only renewable energy sources, as well as the proportion of electricity produced from renewable energy sources in hybrid plants also using conventional energy sources and including renewable electricity used for filling storage systems, and excluding electricity produced as a result of storage systems; (d)"consumption of electricity" shall mean national electricity production, including autoproduction, plus imports, minus exports (gross national electricity consumption). In addition, the definitions in Directive 96/92/EC of the European Parliament and of the Council of 19 December 1996 concerning common rules for the internal market of electricityOJ L 27, 30.1.1997, p. 20. shall apply.

Article 3 National indicative targets 1. Member States shall take appropriate steps to encourage greater consumption of electricity produced from renewable energy sources in conformity with the national indicative targets referred to in paragraph 2. These steps must be in proportion to the objective to be attained. 2. Not later than 27 October 2002 and every five years thereafter, Member States shall adopt and publish a report setting national indicative targets for future consumption of electricity produced from renewable energy sources in terms of a percentage of electricity consumption for the next 10 years. The report shall also outline the measures taken or planned, at national level, to achieve these national indicative targets. To set these targets until the year 2010, the Member States shall: take account of the reference values in the Annex, ensure that the targets are compatible with any national commitments accepted in the context of the climate change commitments accepted by the Community pursuant to the Kyoto Protocol to the United Nations Framework Convention on Climate Change. 3. Member States shall publish, for the first time not later than 27 October 2003 and thereafter every two years, a report which includes an analysis of success in meeting the national indicative targets taking account, in particular, of climatic factors likely to affect the achievement of those targets and which indicates to what extent the measures taken are consistent with the national climate change commitment. 4. On the basis of the Member States' reports referred to in paragraphs 2 and 3, the Commission shall assess to what extent: Member States have made progress towards achieving their national indicative targets, the national indicative targets are consistent with the global indicative target of 12 % of gross national energy consumption by 2010 and in particular with the 22,1 % indicative share of electricity produced from renewable energy sources in total Community electricity consumption by 2010. The Commission shall publish its conclusions in a report, for the first time not later than 27 October 2004 and thereafter every two years. This report shall be accompanied, as appropriate, by proposals to the European Parliament and to the Council. If the report referred to in the second subparagraph concludes that the national indicative targets are likely to be inconsistent, for reasons that are unjustified and/or do not relate to new scientific evidence, with the global indicative target, these proposals shall address national targets, including possible mandatory targets, in the appropriate form.

Article 4 Support schemes 1. Without prejudice to Articles 87 and 88 of the Treaty, the Commission shall evaluate the application of mechanisms used in Member States according to which a producer of electricity, on the basis of regulations issued by the public authorities, receives direct or indirect support, and which could have the effect of restricting trade, on the basis that these contribute to the objectives set out in Articles 6 and 174 of the Treaty. 2. The Commission shall, not later than 27 October 2005, present a well-documented report on experience gained with the application and coexistence of the different mechanisms referred to in paragraph 1. The report shall assess the success, including cost-effectiveness, of the support systems referred to in paragraph 1 in promoting the consumption of electricity produced from renewable energy sources in conformity with the national indicative targets referred to in Article 3(2). This report shall, if necessary, be accompanied by a proposal for a Community framework with regard to support schemes for electricity produced from renewable energy sources. Any proposal for a framework should: (a)contribute to the achievement of the national indicative targets; (b)be compatible with the principles of the internal electricity market; (c)take into account the characteristics of different sources of renewable energy, together with the different technologies, and geographical differences; (d)promote the use of renewable energy sources in an effective way, and be simple and, at the same time, as efficient as possible, particularly in terms of cost; (e)include sufficient transitional periods for national support systems of at least seven years and maintain investor confidence.

Article 5 Guarantee of origin of electricity produced from renewable energy sources 1. Member States shall, not later than 27 October 2003, ensure that the origin of electricity produced from renewable energy sources can be guaranteed as such within the meaning of this Directive according to objective, transparent and non-discriminatory criteria laid down by each Member State. They shall ensure that a guarantee of origin is issued to this effect in response to a request. 2. Member States may designate one or more competent bodies, independent of generation and distribution activities, to supervise the issue of such guarantees of origin. 3. A guarantee of origin shall: specify the energy source from which the electricity was produced, specifying the dates and places of production, and in the case of hydroelectric installations, indicate the capacity; serve to enable producers of electricity from renewable energy sources to demonstrate that the electricity they sell is produced from renewable energy sources within the meaning of this Directive. 4. Such guarantees of origin, issued according to paragraph 2, should be mutually recognised by the Member States, exclusively as proof of the elements referred to in paragraph 3. Any refusal to recognise a guarantee of origin as such proof, in particular for reasons relating to the prevention of fraud, must be based on objective, transparent and non-discriminatory criteria. In the event of refusal to recognise a guarantee of origin, the Commission may compel the refusing party to recognise it, particularly with regard to objective, transparent and non-discriminatory criteria on which such recognition is based. 5. Member States or the competent bodies shall put in place appropriate mechanisms to ensure that guarantees of origin are both accurate and reliable and they shall outline in the report referred to in Article 3(3) the measures taken to ensure the reliability of the guarantee system. 6. After having consulted the Member States, the Commission shall, in the report referred to in Article 8, consider the form and methods that Member States could follow in order to guarantee the origin of electricity produced from renewable energy sources. If necessary, the Commission shall propose to the European Parliament and the Council the adoption of common rules in this respect.

Article 6 Administrative procedures 1. Member States or the competent bodies appointed by the Member States shall evaluate the existing legislative and regulatory framework with regard to authorisation procedures or the other procedures laid down in Article 4 of Directive 96/92/EC, which are applicable to production plants for electricity produced from renewable energy sources, with a view to: reducing the regulatory and non-regulatory barriers to the increase in electricity production from renewable energy sources, streamlining and expediting procedures at the appropriate administrative level, and ensuring that the rules are objective, transparent and non-discriminatory, and take fully into account the particularities of the various renewable energy source technologies. 2. Member States shall publish, not later than 27 October 2003, a report on the evaluation referred to in paragraph 1, indicating, where appropriate, the actions taken. The purpose of this report is to provide, where this is appropriate in the context of national legislation, an indication of the stage reached specifically in: coordination between the different administrative bodies as regards deadlines, reception and treatment of applications for authorisations, drawing up possible guidelines for the activities referred to in paragraph 1, and the feasibility of a fast-track planning procedure for producers of electricity from renewable energy sources, and the designation of authorities to act as mediators in disputes between authorities responsible for issuing authorisations and applicants for authorisations. 3. The Commission shall, in the report referred to in Article 8 and on the basis of the Member States' reports referred to in paragraph 2 of this Article, assess best practices with a view to achieving the objectives referred to in paragraph 1.

Article 7 Grid system issues 1. Without prejudice to the maintenance of the reliability and safety of the grid, Member States shall take the necessary measures to ensure that transmission system operators and distribution system operators in their territory guarantee the transmission and distribution of electricity produced from renewable energy sources. They may also provide for priority access to the grid system of electricity produced from renewable energy sources. When dispatching generating installations, transmission system operators shall give priority to generating installations using renewable energy sources insofar as the operation of the national electricity system permits. 2. Member States shall put into place a legal framework or require transmission system operators and distribution system operators to set up and publish their standard rules relating to the bearing of costs of technical adaptations, such as grid connections and grid reinforcements, which are necessary in order to integrate new producers feeding electricity produced from renewable energy sources into the interconnected grid. These rules shall be based on objective, transparent and non-discriminatory criteria taking particular account of all the costs and benefits associated with the connection of these producers to the grid. The rules may provide for different types of connection. 3. Where appropriate, Member States may require transmission system operators and distribution system operators to bear, in full or in part, the costs referred to in paragraph 2. 4. Transmission system operators and distribution system operators shall be required to provide any new producer wishing to be connected with a comprehensive and detailed estimate of the costs associated with the connection. Member States may allow producers of electricity from renewable energy sources wishing to be connected to the grid to issue a call for tender for the connection work. 5. Member States shall put into place a legal framework or require transmission system operators and distribution system operators to set up and publish their standard rules relating to the sharing of costs of system installations, such as grid connections and reinforcements, between all producers benefiting from them. The sharing shall be enforced by a mechanism based on objective, transparent and non-discriminatory criteria taking into account the benefits which initially and subsequently connected producers as well as transmission system operators and distribution system operators derive from the connections. 6. Member States shall ensure that the charging of transmission and distribution fees does not discriminate against electricity from renewable energy sources, including in particular electricity from renewable energy sources produced in peripheral regions, such as island regions and regions of low population density. Where appropriate, Member States shall put in place a legal framework or require transmission system operators and distribution system operators to ensure that fees charged for the transmission and distribution of electricity from plants using renewable energy sources reflect realisable cost benefits resulting from the plant's connection to the network. Such cost benefits could arise from the direct use of the low-voltage grid. 7. Member States shall, in the report referred to in Article 6(2), also consider the measures to be taken to facilitate access to the grid system of electricity produced from renewable energy sources. That report shall examine, inter alia, the feasibility of introducing two-way metering.

Article 8 Summary report On the basis of the reports by Member States pursuant to Article 3(3) and Article 6(2), the Commission shall present to the European Parliament and the Council, no later than 31 December 2005 and thereafter every five years, a summary report on the implementation of this Directive. This report shall: consider the progress made in reflecting the external costs of electricity produced from non-renewable energy sources and the impact of public support granted to electricity production, take into account the possibility for Member States to meet the national indicative targets established in Article 3(2), the global indicative target referred to in Article 3(4) and the existence of discrimination between different energy sources. If appropriate, the Commission shall submit with the report further proposals to the European Parliament and the Council.

Article 9 Transposition Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive not later than 27 October 2003. They shall forthwith inform the Commission thereof. When Member States adopt these measures, they shall contain a reference to this Directive or shall be accompanied by such a reference on the occasion of their official publication. The methods of making such reference shall be laid down by the Member States.

Article 10 Entry into force This Directive shall enter into force on the day of its publication in the Official Journal of the European Communities.

Article 11 Addressees This Directive is addressed to the Member States.

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Reference values for Member States' national indicative targets for the contribution of electricity produced from renewable energy sources to gross electricity consumption by 201 This Annex gives reference values for the fixing of national indicative targets for electricity produced from renewable energy sources ("RES-E"), as referred to in Article 3(2): In taking into account the reference values set out in this Annex, Member States make the necessary assumption that the State aid guidelines for environmental protection allow for the existence of national support schemes for the promotion of electricity produced from renewable energy sources. Data refer to the national production of RES-E in 1997, except for the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia where data refer to 1999, and for Bulgaria and Romania where data refers to 2001. The percentage contributions of RES-E in 1997 (in 1999-2000 for the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia, in 2001 for Bulgaria and Romania) and 2010 are based on the national production of RES-E divided by the gross national electricity consumption. For the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia, gross national electricity consumption is based on 2000 data. For Bulgaria and Romania gross national electricity consumption is based on 2001 data. In the case of internal trade of RES-E (with recognised certification or origin registered) the calculation of these percentages will influence 2010 figures by Member State but not the Community total. Rounded figure resulting from the reference values above. Italy states that 22 % would be a realistic figure, on the assumption that in 2010 gross national electricity consumption will be 340 TWh. When taking into account the reference values set out in this Annex, Italy has assumed that gross national electricity production from renewable energy sources will attain up to 76 TWh in 2010. This figure includes the contribution of the non-biodegradable fraction of municipal and industrial waste used in compliance with Community legislation on waste management.In this respect, the capability to reach the indicative target as referred to in this Annex, is contingent, inter alia, upon the effective level of the national demand for electric energy in 2010. Taking into account the indicative reference values set out in this Annex, Luxembourg takes the view that the objective set for 2010 can be achieved only if: total electricity consumption in 2010 does not exceed that of 1997, wind-generated electricity can be multiplied by a factor of 15, biogas-generated electricity can be multiplied by a factor of 208, electricity produced from the only municipal waste incinerator in Luxembourg, which in 1997 accounted for half the electricity produced from renewable energy sources, can be taken into account in its entirety, photovoltaically generated electricity can be raised to 80 GWh, and in so far as the above points can be achieved from the technical standpoint in the time allowed.In the absence of natural resources, an additional increase in electricity generated by hydroelectric power stations is ruled out. Austria states that 78,1 % would be a realistic figure, on the assumption that in 2010 gross national electricity consumption will be 56,1 TWh. Due to the fact that the production of electricity from renewable sources is highly dependent on hydropower and therefore on the annual rainfall, the figures for 1997 and 2010 should be calculated on a long-range model based on hydrologic and climatic conditions. Portugal, when taking into account the reference values, set out in this Annex, states that to maintain the 1997 share of electricity produced from renewable sources as an indicative target for 2010 it was assumed that: it will be possible to continue the national electricity plan building new hydro capacity higher than 10 MW, other renewable capacity, only possible with financial state aid, will increase at an annual rate eight times higher than has occurred recently. These assumptions imply that new capacity for producing electricity from renewable sources, excluding large hydro, will increase at a rate twice as high as the rate of increase of gross national electricity consumption. In the Finnish action plan for renewable energy sources, objectives are set for the volume of renewable energy sources used in 2010. These objectives have been set on the basis of extensive background studies. The action plan was approved within the Government in October 1999.According to the Finnish action plan, the share of electricity produced from renewable energy sources by 2010 would be 31 %. This indicative target is very ambitious and its realisation would require extensive promotion measures in Finland. When taking into account the reference values set out in this Annex, Sweden notes that the possibility of reaching the target is highly dependent upon climatic factors heavily affecting the level of hydropower production, in particular variations in pluviometry, timing of rainfall during the year and inflow. The electricity produced from hydropower can vary substantially. During extremely dry years production may amount to 51 TWh, whereas in wet years it could amount to 78 TWh. The figure for 1997 should thus be calculated with a long-range model based on scientific facts on hydrology and climatic change.It is a generally applied method in countries with important shares of hydropower production to use water inflow statistics covering a time span of 30 to 60 years. Thus, according to the Swedish methodology and based on conditions during the period 1950-1999, correcting for differences in total hydropower production capacity and inflow over the years, average hydropower production amounts to 64 TWh which corresponds to a figure for 1997 of 46 %, and in this context Sweden considers 52 % to be a more realistic figure for 2010.Furthermore, the ability of Sweden to achieve the target is limited by the fact that the remaining unexploited rivers are protected by law. Moreover, the ability of Sweden to reach the target is heavily contingent upon: the expansion of combined heat and power (CHP) depending on population density, demand for heat and technology development, in particular for black liquor gasification, and authorisation for wind power plants in accordance with national laws, public acceptance, technology development and expansion of grids. When taking into account the indicative reference values set out in the Annex, the Czech Republic notes that the possibility of reaching this indicative target is highly dependent upon climatic factors heavily affecting the level of hydropower production and utilisation of solar and wind energy.The National Programme for Economical Energy Management and Use of Renewable Energy Sources was approved by the Government in October 2001 and indicates a target of the electricity share from RES in gross electricity consumption of 3,0 % (excluding big water power stations above 10 MW) and 5,1 % (including big water power stations above 10 MW) by 2005.In the absence of natural resources, the additional substantial output extension of large as well as small water power stations is ruled out. On the basis of the preliminary analysis and the updated information, the 11 % target is based on a positive development of renewable energies and on favourable climate conditions. The possibility of reaching this indicative target is highly dependent upon the total annual rainfall, timing of rainfall during the year and inflow as well as other climatic factors heavily affecting the level of hydropower production and utilization of solar and wind energy. Furthermore, the RES utilization is limited by the relevant environmental and related national legislation corresponding to the respective EU legislation.

	RES-E TWh 1997	RES-E % 1997	RES-E % 2010
Belgium	0,86	1,1	6,0
Bulgaria	1,7	6	11(7)
Czech Republic	2,36	3,8	8
Denmark	3,21	8,7	29,0
Germany	24,91	4,5	12,5
Estonia	0,02	0,2	5,1
Greece	3,94	8,6	20,1
Spain	37,15	19,9	29,4
France	66,00	15,0	21,0
Ireland	0,84	3,6	13,2
Italy	46,46	16,0	25,0
Cyprus	0,002	0,05	6
Latvia	2,76	42,4	49,3
Lithuania	0,33	3,3	7
Luxembourg	0,14	2,1	5,7
Hungary	0,22	0,7	3,6
Malta	0	0	5
Netherlands	3,45	3,5	9,0
Austria	39,05	70,0	78,1
Poland	2,35	1,6	7,5
Portugal	14,30	38,5	39,0
Romania	14,9	28	33
Slovenia	3,66	29,9	33,6
Slovakia	5,09	17,9	31
Finland	19,03	24,7	31,5
Sweden	72,03	49,1	60,0
United Kingdom	7,04	1,7	10,0
Community	372	13,2	21

Directive 2001/77/EC of the European Parliament and of the Council of 27 September 2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market