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23 August 2023
The arrival of summer has felt rather different this year. The climate emergency has never felt more pressing with extreme temperatures gripping the south of Europe and record rainfall elsewhere. The summer quiet period is less quiet than usual as preparations are underway for what is likely to be a busy political period in the autumn.
The EU Parliament in turn successfully adopted a position which mainly followed the Commission’s proposal of a targeted market design reform. EU MEPs agreed to retain the merit order system and to avoid the use of inframarginal revenue caps which fragmented the internal market and undermined investor confidence, risking the crucial development and expansion of renewables in line with EU targets.
Spain now takes up the Council of the EU Presidency and has set out its four main priorities: to reindustrialise the EU, advance the green transition, promote greater social and economic justice and strengthen European unity. The failure of Spanish conservatives to win enough votes in the snap July general election and to form a right-wing coalition leaves the main parties struggling to form a new Government. Nevertheless, Spain holds the final full EU Presidency before the June 2024 European parliamentary elections and is expected to finalise a number of key files including market design. The uncertainty at national level could affect the functioning of the Presidency, and its ability to move files forward at EU level will depend on the speed at which any new Government can be formed.
Another key piece of legislation that needs to be expediated in the EU law making process is the Net-Zero Industry Act (NZIA). The EU has ramped up its renewable targets for 2030. And so it follows that Europe’s clean energy supply chains must now be strengthened and expanded to deliver on a Green Deal ‘made in Europe’. But the NZIA proposal currently falls short. Chinese turbine and component manufacturers are waiting at the door to fill any vacuum in supply: they are already beginning to secure orders in Southern and Eastern Europe. Getting the NZIA right, and soon, will be a key priority for EU policymakers in the second half of 2023.
Meanwhile there have been some positive investment developments. Six offshore wind farms have taken Final Investment Decision (FID) in the first half of 2023, raising €15bn for 5 GW of new capacity – there were no FIDs for large-scale offshore wind at all in 2022. And things are looking up for Central and Eastern Europe. Romania and Serbia plan to start CfD auctions for onshore wind this year and Romania also plans to introduce a legal framework for offshore wind. Slovakia and Czechia have legislated for CfD auctions, while Albania and Lithuania have announced the results of their first onshore and offshore auction respectively.
There is a lot going on and a lot more to play for in the autumn. This online resource covers the latest changes in policy and regulation across European countries impacting wind energy and is regularly updated.
I hope you enjoy the findings.
Guy Brindley,
Head of Market Intelligence
