Response to consultation on Art 29(2) NZIA main specific components

Summary

As the EU-level industry association for the electricity sector, we appreciate the opportunity to contribute to the consultation on the implementing act of the NZIA defining the main specific components (Art. 29(2)). This list lays the foundation of the resilience criterion in public procurement procedures (Art 25(7)) and RES Auctions (Art 26(2)). In the context of this consultation, Eurelectric members can be both the contracting entities procuring net zero technologies, and/or bidders in public procurement tenders or RES Auctions.

Eurelectric welcomes the efforts of the European Commission with the long-term aim of increasing manufacturing capacity in Europe. This necessary end-goal is a means of reaching 2030, 2040 and 2050 decarbonisation targets, while fostering sovereignty and technological development in the Union. Nevertheless, it remains key that the measures are balanced and align with the two leading principles of the EU to strive for simplification and affordable energy.

While the resilience criteria could support the contracting entities choosing local products in a longterm perspective, it risks being counter-productive in the short term. The industry’s opportunity for efficient procurements and auctions has consequences for the pace at which the sector can enable the energy transition. We see a risk that applying the resilience criterion overly stringent could risk further straining supply chain issues in the coming years, potentially increasing the price and delivery times, in a time where a nearly doubling of grid investments is needed and customer affordability is key.

Our five recommendations for the Implementing act and its application:

1. We recommend the European Commission create an implementing act as per Art 29(2) with a list
   of Tier 1 level products, rather than the resilience criteria applying to Tier 2-level products. This
   would alleviate the sector from the highest administrative costs. In Annex 2, suggested amendments
   to the list can be found.
   
2. The resilience criterion should be applied after at least 12 months after the EU Commission’s trade
   assessment has been published. As the Implementing Act is currently written, actors on the market
   will receive a maximum of 5 months from the trade assessment publication to analyse their supply
   chains and adjust procurement and auction procedures.
   
3. The trade assessment should be formed transparently and evidence-based, providing opportunities
   for stakeholders to contribute.
   
4. Where possible, the provisions in Article 25 should align with the provisions in Article 26 provisions. As many actors are subject to non-price criteria (NPCs) in both RES auctions and public procurement, an alignment will facilitate compliance.
   
5. The EU Commission should notify the National Regulatory Authority to consider the possible
   impact of the increased costs of equipment in each country’s tariff plans for Distribution System
   Operators. Any cost increase arising from the resilience criterion should be considered in the
   Regulatory Asset Base (RAB) of DSOs.