'EU nations must build on energy package momentum'
The Commission's plan contains more positives than negatives but there's plenty left to do, says WindEurope CEO Giles Dickson
The European Commission put its cards on the table last week with the release of its "Clean Energy Package" — eight legislative proposals that will shape renewables deployment and electricity markets to 2030.
Overall, the package is not bad. There are a lot of good things in it. And a lot of things that we'll need to try to improve when the proposals are negotiated in the European Parliament and by the 28 member states. But it's more good than bad overall.
So what's good? The best thing is the clause that requires EU member states to give at least three years’ visibility on their support schemes. So national governments will have to announce their auction volumes, tender schedules and (where relevant) available budgets three years in advance.
This will give industry and investors a level of certainty we've not had before — apart from in a few model countries such as the Netherlands and Germany. And this certainty will reduce the costs of capital and give industry the confidence to keep people in jobs and invest in innovation.
The next best thing is the "grandfathering" (or "Spanish"!) clause that'll make it much harder for governments to change policies and support schemes retroactively. This will give investors much more protection than they've had before.
Also good are the provisions on permitting. Governments will now have to award them via a one-stop shop. And award them more quickly than before: three years max for all projects; and 18 months only if it's a repowering project.
Repowering has done well in the package. Member states will also have to detail in their national energy plans not only what new renewables they plan to deploy each year to 2030 but also what they're going to do with their renewables capacity that reaches the end of its normal operational life before 2030. This matters a lot: more than half of our existing wind farms will reach the end of their normal operational life between now and 2030.
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Now, these national energy plans are arguably the most important part of the package. Because it's via the national plans and how they're implemented that the Commission plans to square the circle of how to get the necessary effort out of the 28 member states (or 27 if the UK leaves the EU) to meet the binding EU target without imposing binding national targets.
What's good is that the template for the national plans is detailed and binding — governments will have to tell us exactly what renewables they plan to deploy and when. They've never had to give this level of detail before. The problem is the Commission won't be able to hold them to their plans. This is one of many things we're going to have to try to beef up in European Parliament/Council of ministers negotiations.
We'd also like more detail on the so-called EU "gap-filler" measures that the Commission will apply from 2023 if the collective efforts of the member states are not on track for 27% renewables.
And of course we'd like a higher target than 27%. The European Parliament supports 30% (the WindEurope position). We will urge them to continue plugging for this.
What about electricity markets? Again, there are some good things in the package. Intraday markets get a big push — so renewables will be able sell more of our power closer to real time. And we get equal access to ancillary service markets, so we'll be able to sell more power to balance the electricity system and make it more reliable.
Priority dispatch and access for renewables were big issues in the market design bit of the package. What the Commission has proposed on them could have been a lot worse. Both will still apply fully to all existing renewables installations. Priority dispatch will be phased out for new projects from 2020. And when curtailment occurs, renewables will be one of the last to be curtailed — and we'll be compensated for it.
The Commission's proposals are just the first step in the legislative process. There is still a huge amount of work to be done with the Parliament and the member states in the Council. We will need to step up our engagement in national capitals to ensure a qualified majority of member states support the package.
And there are many other points of detail that we'll want to strengthen in the proposals — eg, greater clarity that support schemes can be technology-specific; and a robust approach to capacity remuneration mechanisms.
At the same time we'll need to work with national governments as they define their national energy plans. They have two years now to submit them to Brussels. We need to ensure they are ambitious and give maximum details and clarity to our industry.
The Commission has fired the starting pistol on Europe’s renewable energy legislation in the post-2020 world. It’s now up to member states to drive forward with the baton if Europe wants to remain relevant in the global renewables race.
Giles Dickson is chief executive of WindEurope