Outline of EU renewables directive emerges

Commission to abandon national targets, push for competitive funding schemes

Details have emerged of European Commission plans for an EU law on renewable energy just weeks before the draft directive is likely to be endorsed by commissioners. To the chagrin of environmental groups, leaked drafts of the proposal fail to maintain an earlier plan for binding national targets for renewable energy (ENDS Daily 22 October). The directive will also give member states more flexibility over the design of renewable energy support schemes.

The Commission first announced that it would draft a renewable energy directive in early 1998, making clear that renewables needed state support, but that schemes should avoid causing trade barriers in the EU's liberalised electricity market (ENDS Daily 18 March 1998). In the face of political pressure from countries fearing that successful renewables support schemes based on guaranteed fixed tariffs for producers were about to be outlawed, the Commission abandoned the plan earlier this year (ENDS Daily 9 February).

The new directive will sidestep the competition issue. Instead of encouraging a transition away from fixed price systems to those designed to encourage competition between renewables producers, it defines fixed feed-in prices, fixed premium schemes, green certificates and tendering schemes equally as "direct price support schemes".

A second key innovation is that the draft places a 5% ceiling on member states' freedom to provide financial support to domestic renewable energy producers only, followed by a ban on schemes limited to domestic producers only from 2010.

The Commission is set to propose that, where the amount of renewables production receiving state support in any country passes 5% of domestic electricity consumption, the government must open its support scheme to renewable generators in any other EU country that has also passed the 5% threshold. The clause has been incorrectly interpreted by some observers and at least one news agency as being a proposal to prevent EU countries from supporting renewable energy once it contributed over 5% of electricity.

Other key elements of the directive include the abandonment of specific national targets for renewable energy, which are replaced with a requirement for each EU country to set its own national target. These should be compatible with the EU's overall aim of doubling the share of renewable energy by 2012.

The directive will also propose that member states should create legally backed systems for certifying the origin of electricity as renewably generated. Certification must be mutually recognised by all EU countries, its says, for which the Commission could in the future propose rules.

Follow Up:
European Commission, tel: +32 2 299 1111.

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