European Commission

1
European Commission
The situation of the Directive on electricity
from renewable energies The recent
Communication on support schemes

Beatriz Yordi DG Energy and Transport

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Principles of the renewable electricity directive
2001/77/EC
Promotion of electricity from renewable energy
sources through
Quantified national targets for consumption of
electricity from renewable sources of energy
National support schemes plus, if necessary, a
harmonised support system
Simplification of national administrative
procedures for authorisation
Guaranteed access to transmission and
distribution for electricity from renewable
energy sources
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Where are we?
Setting of national targets

• All EU15 Member States have adopted national
  targets, in line with the reference values listed
  in Annex I of Directive 2001/77/EC.
• The New EU10 have set up national targets
  published in the Accession Treaty in April 2003.
• 2010 Targets have been agreed with Bulgaria and
  Romania.

The 2010 target

• If EU-25 Member States meet these national
  targets, the 2010 target of 21 will be achieved.

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Where we are?
The Commission assessment reports

• Commission has approved COM(2004) 366 final The
  share of renewable energy in the EU.
• Commission Staff Working Document SEC(2004) 547
  EU-25 country reports
• Commission has approved COM (2005) 627 final The
  support of electricity from renewable energy
  sources.

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European context
On the 7th of December 2005
The Commission has adopted a new Communication on
support schemes of electricity from renewable
energy sources COM(2005)627. Meets the reporting
requirements set out in Articles 4 8 in
Directive 2001/77/EC.
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Status for support mechanisms for RES-E in EU15
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Status for support mechanisms for RES-E in EU10
(2)
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Where are we? Production of new RES-E (without
hydropower) in 2003 is equivalent to the
combined overall electricity production
in Portugal, Denmark and Slovenia
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Price ranges for direct support of wind onshore
in EU-15 member states compared to the long term
marginal generation costs
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Price ranges for direct support of wind onshore
in EU-10 member states compared to the long term
marginal generation costs
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Definition of 2003 effectiveness indicator
example biogas in UK
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Effectiveness indicator for wind onshore
electricity in the period 1998-2004 EU-15.
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Effectiveness indicator for wind onshore
electricity in the period 1998-2004 EU-10
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COM (2005) 627 Evaluation of support schemes
Conclusions for the wind energy sector I

• TGC present currently a significantly higher
  support level than feed-in tariffs. This could be
  explained by
• higher risk premium demanded by investors,
• administrative barriers,
• immature green certificate markets.
• The most effective systems for wind energy are
  currently the feed-in tariff systems in Germany,
  Spain and Denmark.

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COM (2005) 627 Evaluation of support schemes
Conclusions for the wind energy sector II

• Support level
• in 1/4 of Member States too low for any takeoff
• in another quarter sufficient but still mediocre
  results - this can be due to the existence of
  grid and administrative barriers.
• Producer profits/annuity
• higher for TGC - as TGCs are rather new
  instruments, this could be influenced by
  significant transient effects.

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Price ranges for direct support of agricultural
biogas in EU-15 member states compared to the
long-term marginal generation costs.
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Price ranges for supported agricultural biogas
in EU-10 member states compared to the long-term
marginal generation costs.
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Effectiveness indicator for biogas electricity
in the period 1998-2003.
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Effectiveness indicator for biogas electricity
in the period 1998-2003.
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COM (2005) 627 Evaluation of support schemes
Internal Market and trade aspects I

• Unbundling, transparency and dominant players
• truly independent TSOs and DSOs are an essential
  factor for fair grid access and grid development
• Intermittency and Balancing power
• Appropriated prediction and forecasting
  contribute to a better integration of RES-E in
  the internal market and increase its value
• Shorter gate-closure and fair regulation of
  balancing cost can ease these tasks

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COM (2005) 627 Evaluation of support schemes
Internal Market and trade aspects II

• Trade of power
• Increase of available interconnection capacity
  facilitates integration of RES-E and can reduce
  the need for balancing power
• Full implementation of the disclosure (Article
  3(6) of 2003/54/EC, consumers have to be
  informed of each energy source of the overall
  fuel mix) would increase the green value of
  RES-E.
• ? The design of the electricity market is
  essential for the development and take-up of
  RES-E.
• ? Internal electricity market and support of
  RES-E are intimately linked together and
  profit from each other!

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COM (2005) 627 Evaluation of support schemes
Main conclusions
Feed-in tariffs have been more effective and more
efficient than quota systems in wind energy.
Other sectors have a more complex analyses.
High prices for tradable green certificates due
to higher risk cost and immature certificate
markets?
Harmonisation would be premature, more experience
needs to be gained, especially with quota
systems.
Administrative and grid barriers need to be
addressed.
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Time for coordination
1. Optimise the support system

• Adapt the support level to the generation costs
• Half of the Member States give not enough
  support to ensure deployment of RES-E
• Increase stability
• Instability increases risk cost
• Avoid stop-and-go nature of the support
• Reduce investment risk
• Especially green certificate markets need a
  high liquidity

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Time for coordination
1. Optimise the support system

• Encourage technology diversity.
• Ensure compatibility with the internal
  electricity market.
• Encourage employment and local and regional
  benefits.
• Twinning with actions on energy efficiency and
  demand management.

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Time for coordination
Optimisation Reduce administrative barriers

• Establish one-stop authorisation agencies.
• Establish clear guidelines for authorisation
  procedures with a clear attribution of
  responsibilities.
• Establish pre-planning mechanisms that require
  regions and municipalities to assign locations
  for RES.
• Lighter procedures for small projects.
• Guidance on relationship with EU environmental
  legislation.

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Time for coordination
Optimisation Ensure fair grid access

• Grid connection, grid use conditions as well as
  cost bearing and sharing must be transparent and
  non-discriminatory.
• Grid infrastructure enforcement and development
  needs to be planned and developed in advance.
• Associated costs should normally be covered by
  grid operators.
• Pricing of electricity throughout the network
  should be fair and transparent and take into
  account the benefits of embedded generation.

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Time for coordination
2. Cooperation

• Intensify cooperation and co-ordination between
  Member States.
• Examples
• feed-in cooperation established by Spain and
  Germany, other Member States are invited to join.

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Directive on RES-E 2001/77/EC
Legal aspects

• Several Member States seem to be in conflict
  with
• Article 6 (administrative barriers) and
• Article 7 (grid barriers)
• The Commission is currently preparing legal
  actions.

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Directive on RES-E 2001/77/EC
New reporting
March 2006 Updated Country profiles available
http//europa.eu.int/comm/energy/res/legislation/
share_res_eu_en.htm October 2006 New report from
the Commission on the degree of success in
achieving the targets End of 2007 New report on
support schemes
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Thank you very much for your attention.
The Communication on  The support of electricity
from renewable energy sources, COM(2005) 627
can be found at http//europa.eu.int/comm/energ
y/res/legislation/index_en.htm