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Policy, Press2005

European Commission publishes communication on “The support for electricity from renewable energy sources”: EWEA welcomes the analysis but finds a proposed 2007 review pointless

07.12.2005

In a statement, the European Wind Energy Association (EWEA) supported the analysis and conclusions of a European Commission Communication released today on support for electricity from renewable energy. However, EWEA finds it pointless that the Commission proposes to have another review of the European renewables framework already in 2007.

“The Commission’s analysis of the efficiency and effectiveness of the different payment mechanisms for renewables very well reflects the current situation in the Member States. Its recommendations on grid access and administrative barriers in the Member States are spot on and we also strongly agree on the Commission’s main conclusion that it is too early for European harmonisation at this stage. But the Commission’s intention to have another review of the policy framework in 2007 is pointless: it contradicts its own stated objectives to ensure short and medium term regulatory stability in the Member States and allow countries time to fine tune the frameworks they have developed in the last few years,” says Christian Kjaer, Policy Director of EWEA.

The Commission’s main conclusions are:
[extracts from the Communication]

  • “It is impossible to isolate the discussions of support schemes from the issue of administrative barriers”;
  • ”While gaining significant experience in the EU with renewable support schemes, competing national schemes could be seen as healthy at least over a transitional period. Competition among schemes should lead to a greater variety of solutions and also to benefits”;
  • “It is too early to compare the advantages and disadvantages of well-established support mechanisms with systems with a rather short history. Therefore, and considering all the analyses in this Communication, the Commission does not regard it appropriate to present at this stage a harmonised European system”;
  • “The Commission will closely monitor the state of play in EU renewable energy policy and, not later than December 2007, make a report of the level of Member States systems for promoting renewables electricity in the context of the on-going assessment related to 2020 targets and a policy framework for renewable energy beyond 2010”.

“The Commission’s report clearly spells out that it is too early to compare the advantages and disadvantages of the full range of systems. That situation will not have changed two years from now. Most Member States are still in the preparatory phase of developing well-functioning frameworks for renewables. These must be given time to result in actual development, before we start another debate on European harmonisation. Furthermore, effective competition in the conventional power market is a precondition for creating an undistorted European market for renewable electricity. Nobody seriously believe that we will have real competition in the European market for conventional electricity this decade”, says Christian Kjaer.
In relation to support schemes for renewables, “the Commission considers a co-ordinated approach to support schemes for renewable energy sources to be appropriate, based on two pillars: cooperation between countries and optimisation of the impact of national schemes.”

EWEA supports the Commission’s intention to create competition between national systems to gain more experience about the full range of mechanisms before proposing a harmonised system.
That will encourage Member States with similar systems to converge their currently incompatible mechanisms over time and provide much needed insight into bilateral cross-border trade in renewable electricity.

Considering that real competition in the European market for conventional power is likely to be distorted well into the next decade, and in order to maintain regulatory stability in the Member States, EWEA proposes that the issue of harmonisation is addressed in the Commission’s 2010 summary report, already established by the Renewables Directive. EWEA also proposes that the Commission addresses the issue of targets in its 2006 report as required under the same directive. A 2007 review is unnecessary.

“The existing directive already instructs the Commission to issue a number of reports on renewables. It is a waste of everybody’s time to have yet another report, especially when it is clear to most stakeholders that the situation will not have changed two years from now. We should allow Member States adequate time to fine tune and converge their payment mechanisms and address the real obstacles for renewables in the form of administrative and grid access barriers. Addressing these barriers is the main driver for achieving cost reductions through economies of scale. In 2010 we will also have a better idea about the state of competition in the currently highly distorted European market for conventional electricity. That is the appropriate time to have a look at the issue of harmonisation for renewables again,” says Christian Kjaer.

EWEA supports the intention to eventually adopt support mechanisms that are compatible with an undistorted internal market, but things must be done in the right order. Effective competition in the European electricity and gas markets must precede a European-wide system for renewables. Judging from the preliminary results of the Competition Commissioner’s inquiry into the state of competition in the energy sector as well as the Commission’s last four benchmarking reports, Europe is a far cry from real electricity market competition.

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