SPE: 'EU energy package a new dawn for European solar'
Proposed measures on small-scale PV and national support schemes are welcome, but there is still plenty of room for improvement, writes SolarPower Europe boss James Watson
On 30 November, the European Commission brought forward its plans for the future of energy in Europe. The grandly entitled ‘Clean Energy for all Europeans’ package, due to enter into force in 2020, is more than 4,000 pages of legislative proposals comprising eight different initiatives, covering key areas such as a renewables directive and two proposals on electricity market design. It has received a mixed welcome to the world, with some commentators calling it unambitious, while others applaud the efforts to decarbonise the European power sector.
For solar, it is a curate’s egg — good in part. SolarPower Europe is delighted with the commitment shown to small-scale solar, especially as we in Europe are in an age of about 70% of installed capacity being rooftop — the Commission has brought forward a right to self-consume and self-generate. This means that it will become very difficult for member states to force consumers to sell to the grid or try to prohibit self-consumption. This is a dramatic new right for all European citizens, a true silent revolution if ever there was one.
This new right for consumers to enjoy their solar systems is backed in the market design initiatives, with a guarantee of priority dispatch for all solar systems under 125kW, forever. This means that you can now be sure that a household with solar will be able to self-consume and pass power to the grid at liberty. This is truly worth applauding. A small-scale solar revolution has been cooked up and promises to deliver a feast for solar companies, as the prices of systems continue to fall (especially if the Commission finally gives up on applying huge trade taxes on solar panels from China). Expect more action in the solar sphere from major retailers across Europe.
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At the large scale, there is also good news. There is an obligation for all EU countries to provide at least three years of visibility on national support schemes for solar — including tender and auction programmes. This is exactly the sort of visibility needed to attract investors and create stability. There is also a “retroactivity” clause that will support the transparency element by ensuring that there are stable financial support systems for solar in Europe. Importantly, the package guarantees that all projects built up to 2020 will benefit from priority dispatch and access, and will continue to do so after 2020. This is hugely important for a stable investment regime.
When you read these elements, it is hard to imagine why some commentators have lambasted the package. Here we come back to the curate’s egg to see which parts are perhaps only half-cooked and will require some serious action from the European Parliament and the Council of the European Union (aka the council of ministers) to really deliver a solar treat.
Firstly, there is the overall target for renewables in energy — 27% of energy should come from renewables by 2030. This translates to about 45% of electricity from renewables. This target could easily have been 35% with the power market picking up the lion’s share of the work, delivering closer to 60% of power from renewables by 2030.
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Secondly, priority dispatch will be phased out for larger projects over the period 2020-30, which is a loss. The use of priority access will remain but the procedures around curtailment and the compensation for it are not as strong as they could be — so we have some work to do.
Finally, and most damagingly, the Commission has not outlawed capacity remuneration mechanisms that give public money to inflexible and grid-blocking — mainly coal and nuclear — power plants. They are subject to adequacy assessments and must also emit less than 550g of CO2/kWh, but the fact that they are not banished completely is a missed opportunity.
Overall, we can assess the package as more positive than negative, but we still have areas to improve and of course we must protect the wins we have to date. This will be decided over the next two years in the European legislative process. Can we nevertheless, say that a new solar dawn is breaking? Yes we can! Now just watch this space…
James Watson is chief executive of SolarPower Europe