5 April 2018
WindEurope Bulletin Foreword April 2018
Dear WindEurope Member,
Last month the European Parliament voted on reforms to Europe’s electricity markets – to make them fit for renewables. This is part of the EU’s Clean Energy Package. The Parliament’s vote is not the final deal. They still have to agree the detail with the EU Member States. The Parliament and Member States agree on some things already but disagree still on others. The video above summarises where things stand. The main points are:
- the rules on electricity trading will be harmonised in such a way that will allow renewable energy to be sold closer to the time it is produced. This will help to reduce forecast errors and costs for balancing the grid. There’ll be more cross-border trading too, allowing electricity to flow from where it is abundant to large consumption centres;
- priority dispatch will remain in place for all existing wind farms. For new wind farms from 2020, priority dispatch will be phased out and replaced by new rules on how energy is curtailed when the grid is congested. Renewables will be last curtailed and compensated for the lost revenue;
- balancing responsibility will be mandatory both for new and existing installations. Renewables will no longer be exempted from compensating Transmission System Operators for any deviations from their projected generation. It’s a universal obligation for anyone producing or buying electricity. But it may imply more costs for smaller wind farms that would need to delegate this to third parties. We don’t yet have a guarantee that the price for this will be fair. It’s a priority for us to correct this in the negotiations to come; and
- on capacity mechanisms there is still disagreement between the Parliament and the Member States. The Parliament wants to them to be a last resort only. And only used if a Europe-wide review has identified a security of supply risk in the country. The Council say let’s have national assessments of security of supply, which take account of energy trade between Member States. The Parliament and Council also disagree on when to apply CO2 limits for capacity payments. The Parliament want to end capacity payments for new coal plants immediately and end them for existing ones from 2025. The Council want to do it later: 2025 for new plants and 2030 for existing ones.
So what happens now? Tough negotiations on these four points are now expected between the Parliament and the Member States. But these will not start until the summer. We’ll continue to tell policy makers these rules should ensure fairer competition with conventional sources of energy. And that we need to move towards an electricity system that is more flexible and more interdependent.
- you will have seen that WindEurope member Vattenfall won the recent zero-subsidy tender to develop the Hollandse Kust Zuid offshore wind farms in the Netherlands. These will be the world’s first offshore wind farms to be built without subsidy. It shows that zero-subsidy bids are possible for some developers in some markets not least where Governments take on and manage a share of the project risk and financing costs are low. In this instance the Dutch Government taking care of the grid connection is a significant factor. WindEurope continues to plug the importance of revenue stabilisation mechanisms for the industry as we navigate these unchartered waters;
- WindEurope published a new infographic on the integration of wind energy in the energy system. It shows that integrating increasing shares of renewables into electricity grids is getting easier and cheaper. It explains in simple presentable terms how smart grids, demand response, storage and more flexible wind turbines and storage are all helping to achieve do this; and
- on the events side, our Summer Reception is taking place after our Annual General Assembly on 21 June in Brussels. You can register for it here. We’ve also had confirmation that European Commissioner for Climate Action & Energy Miguel Arias Cañete and IEA Executive Director Fatih Birol will join us at the Global Wind Summit in Hamburg this September. Preparations for the event are in full swing and registrations will open soon.
– Giles Dickson
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