EURELECTRIC calls for market emphasis in EU “green” legislation

04 January 2008

While some aspects of the energy and climate package proposed by the European Commission on 23 January are a step in the right direction, the legislators in the European Parliament and Council of Ministers must ensure that the texts finally adopted into law ensure maximum use of market-compatible mechanisms, especially for incentivising renewable energy. This is the central point of a EURELECTRIC statement issued yesterday as initial reaction to the draft legislation. The internal market, whose integration and development EURELECTRIC is striving to drive forward, should be fostered as a mechanism for cost-effective delivery of secure energy supply and climate-related policy goals, EURELECTRIC members believe.

The European electricity industry has consistently supported the development of an integrated European electricity market. The industry has also clearly stated its intention to move to a low-carbon power-mix by mid-century. Our Role of Electricity project demonstrates that deployment of a broad mix of technologies is the most cost effective way to meet the climate challenge, while maintaining secure supplies of energy.

As regards the Commission's proposals for reviewing the EU Emissions Trading Scheme, EURELECTRIC members welcome the clear visibility to the 2020 horizon and recognise auctioning as the main allocation method.

The purpose of emissions trading is to send a carbon price signal that will encourage take-up of new low-carbon technologies and if the mechanism works correctly it will incentivise the deployment of renewable energy sources (RES). It is vital that current efforts to drive forward the internal energy market are not negated by ring-fencing up to 35% of the EU electricity market via non-market RES-support schemes. EURELECTRIC fully supports the trend towards greater use of RES in power generation and is disappointed to see that the Commission's proposals present a mechanism for cross-border trading in Guarantees of Origin (GOs) only as a limited secondary possibility. We urge policymakers to foster GO trade for RES-production so as to link RES more closely into the electricity market.

EURELECTRIC members see carbon capture & storage (CCS) as a promising technology route with potential to ensure long-term continued use of fossil fuels in power generation. We therefore welcome the Commission's proposals for an enabling legal framework, and urge the Member States to come up with strategies to facilitate the construction of a number of demonstration facilities. In the long term, however, emissions-capping and trading via the Emissions Trading Scheme should serve to provide the incentive for CCS, which will have to become competitive without subsidies.

 

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