RES Directive: EURELECTRIC Again Calls For Market Approach

19 December 2007

As the European Commission prepares to publish early in the new year a set of legislative proposals in a "climate package", EURELECTRIC has addressed a letter to several Commissioners, underlining once again the importance of ensuring that the framework in which renewable energies are developed converges with the development of both the internal energy market and the EU emissions trading scheme. The Commission has been gathering input towards finalising the draft RES Directive.
EURELECTRIC sent the letter to European Commission President José Manuel Barroso, Energy Commissioner Andris Piebalgs, Environment Commissioner Stavros Dimas, Competition Commissioner Neelie Kroes, and Enterprise Commissioner Günter Verheugen. It reiterates EURELECTRIC's strong belief that renewable energies must be brought into the internal energy market. While stressing that in the long run the EU emissions trading system should be able to give the necessary boost to the development of renewable energies, the letter argues that the medium-term approach should include a European framework for incentivising renewables.
In order to take a vital step towards integrating RES into the market, EURELECTRIC strongly supports the immediate setting up of a system of tradeable guarantees of origin (GOs) alongside existing support systems, thus enabling all the various market actors to take advantage of optimal site selection and a Europe-wide market. As the binding EU targets are extremely challenging, argues the paper, it is the duty of the EU legislative bodies to strive for cost-effective solutions, including a thorough impact assessment to accompany the forthcoming Commission proposals.
Earlier, on 6 December, EURELECTRIC delegates joined a meeting of the main stakeholders in RES-trading - gathering industry and traders' associations, electricity and RES-technology supplier companies, along with NGOs and consultants - hosted by the Commission following an initiative by RES-certificates association RECS International. Commission officials asked for input on various aspects of trading in RES guarantees of origin, on such issues as what and how should be traded, who should be allowed to trade, how trading would affect existing support schemes, and how a trading system would work in practice. Sharp differences in delegates' views surfaced during the meeting, further highlighting the uncertainty surrounding the text of the planned new RES Directive.
A recent draft of the Directive indicates that it will set a linear path towards the 20% share for RES in energy by 2020 via intermediate targets at 2014, 2016 and 2018. Member States would be able to aggregate their RES-targets from domestic production (excluding production in pumped storage hydropower plants) plus the net balances from physical and separate virtual RES trading. Member States could obtain GOs through surrender (e.g. from RES-production receiving financial support) or purchase. Guarantees of origin could only be traded from new RES-installations, and could be held by any legal person.
In November, EURELECTRIC joined forces with renewable energy certificates body RECS and traders' association EFET in sending a press release arguing that the RES Directive must be properly integrated into the framework of the internal electricity market. Policies must be put in place to make sure the RES targets can be met without damaging the operation of international wholesale markets in electricity, insisted the three associations.

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