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'More good than bad' as EU unveils energy reform plans

The European Commission today unveiled its long-awaited Energy Union package that it claimed will speed the EU’s transition to a cleaner energy system – earning a qualified welcome from key renewables industry bodies.

As expected, the package of measures includes plans to end priority dispatch status for renewables on Europe’s grids, although only for new installations. Existing capacity, plus small-scale deployments and those demonstrating “innovative technologies” are exempted in a compromise that will still prove highly controversial.

The commission admits that in consultations it became clear that stake holders are divided on the issue of priority dispatch, and included a compensation for the end priority grid access with a rule that curtailment of renewables should be done last.

At least in theory that means that renewable energy production can't be squeezed out of energy grids by an abundance of fossil electricity output.

Wind industry body WindEurope would like to see more clarity on that point, though.

"We need clarity and transparency on the must-run obligations for conventional power plants and clear rules on for compensation when renewables get curtailed," WindEurope CEO Giles Dickson said.

It was still unclear whether the German government will accept the end of priority dispatch it had so far opposed.  An energy ministry official told Recharge that the government is pleased with the preferential treatment for RE in the case of curtailment, but is still checking the package more closely.

Germany's powerful wind energy association BWE said it supports what had hitherto been the demand by Berlin to maintain priority dispatch.

"The physical feed-in of wind turbines and other renewable energies into the grid must be secured - at least as long as fossil and nuclear over capacities exist. Everything else is contrary to the Paris climate agreement that was also ratified by the EU," BWE president Hermann Albers tells Recharge.

The package of proposals – which need to be approved by the EU’s member states and parliament, a process that commission vice president Maros Sefcovic hopes to be completed by the end of the current commission that is still in charge until 2019 – are designed to underpin the Commission’s goal of a 27% EU-wide renewable energy share by 2030.

The plans include:

  • Guidelines for renewable support programmes in member states. “These principles include cross border opening of support schemes, non-retroactivity and long term visibility for the support.”
  • “Regular surveillance“ of national renewable energy plans to monitor progress towards 2030 goals, with the Commission ready to “propose the necessary measures to avoid and fill any such emerging gap”.
  • Market reforms designed to ensure wholesale markets “further develop and in particular provide adequate rules allowing shorter term trading to reflect the necessities of variable generation”. The Commission also pledged new rules “ to allow renewable electricity generators to earn increasing shares of their revenues from the market”.
  • New rules for cross-border participation and the integration of capacity markets, which means a substantial restriction in the use of national capacity mechanisms, according to Sefcovic.

  • A binding EU-wide target of 30% for energy efficiency by 2030.

Wind industry body WindEurope said the overall plan “is more good than bad”.

It particularly welcomed measures to streamline repowering, protect existing assets from regulatory changes and “crucially”, offer three years of visibility for renewable energy support.

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WindEurope also highlighted positive  market reforms: “Renewable energy will be traded as close to real time as possible in intraday and balancing markets. This means a fairer and more efficient market for all: wind farm operators get more from their assets; balancing costs will fall and consumers benefit.”

CEO Giles Dickson said: “The Commission has laid the ground for the Parliament and the Council to make this the ambitious legislation Europe needs. Notably, we want a higher target of 30%.  And we need clarity and ambition from member states in their national plans.”

In the PV sector, SolarPower Europe said the market redesign measures proposed are “going in the right direction”  but do not go far enough in squeezing coal and nuclear out of the system.

SPE president Oliver Schaefer said: “We also need a firm push now to make sure that coal and nuclear are not given public money through capacity mechanisms. These are the technologies of the past and the market built on renewables must be brought to life.”

SPE said it was encouraged by the establishing of principles for national-level renewables support, and especially welcomed the “right to self-consume” established under the package.

Policy director Alexandre Roesch said: “An important revolution has also started today, giving the basis for consumers to have the right to prosume.

“Solar is a means to democratise energy and we are delighted that for the first time renewable self-consumers will now be recognised at EU level and have a legally binding framework giving them the right to generate, consume, store and sell their own power.”

A first reaction to the energy package by Germany - important due to its economic weight within the EU and its pioneering role in renewables - was lukewarm at best.

Energy minister Sigmar Gabriel welcomed the energy efficiency target and efforts for an increased cross-border coordination of energy policies. But he said the commission with its proposal for a new renewable energy directive is missing the chance to set concrete guidelines for national support systems.

"We won't become Number 1 in the global race for the jobs of tomorrow with a patchwork of individual case permits," Gabriel said, adding that improvements are needed during the approval process of the energy package.

The package needs a "qualified majority" in the European Council, meaning that a majority of countries needs to OK them as well as the equivalent of 65% of the EU's population.

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