13 October 2021
European Commission doubles down on renewables to remedy high energy prices
The European Commission has presented a toolbox to guide EU Member States on how to deal with the current high gas and electricity prices. The toolbox aims to protect vulnerable consumers and reduce Europe’s future exposure to the sort of prices we see today. To that end the Commission are clear that Europe needs to accelerate the expansion of renewables – because renewables are the key to affordable energy. The Commission are also clear that Europe needs to simplify the permitting rules and procedures for renewables. The Commission will issue guidance next year to help Member States deliver that.
Electricity prices have been on the rise in recent weeks, reaching record levels in many EU countries. The main reason is high gas prices, resulting from the uptake of economic activity post-Covid and supply side constraints. Experts warn that a cold winter could further spur the surge in gas and electricity prices.
To help Governments tackle the high prices, the European Commission today presented a toolbox of immediate policy measures Member States can take to protect vulnerable consumers and businesses. The toolbox also includes measures to ensure the medium and long-term resilience of the EU electricity system.
The short-term measures in the toolbox include tax reductions on electricity, temporary support mechanisms against energy poverty and power cuts and the creation of a European “energy poverty coordination group”.
In the medium term the toolbox aims to step up investments in renewables and energy efficiency. Crucially for the expansion of wind energy, the Commission commits to issue guidance to Member States in 2022 on how they can simplify and accelerate permitting processes for renewable energy projects. Slow and complex permitting is the main bottleneck for the expansion of renewables today. The Commission also encourages Member States to accelerate renewable energy auctions, develop additional electricity storage capacity and invest in cross-border electricity grids.
“With its new toolbox the Commission is doubling down on renewables as the key to stable electricity prices. Spot on – Europe needs to reduce its dependence on imported fossil fuels and exposure to volatile gas prices. And it’s good the Commission recognise that slow and complex permitting is the main barrier to the rapid expansion of renewables. And excellent that they’ve announced they’re going to issue guidance on how to simplify permitting processes”, says WindEurope CEO Giles Dickson.
A well-functioning and integrated EU energy market is key to the successful transition to a renewables-based energy system. In today’s Communication the Commission defended the functioning of the current EU energy market design. The Commission stressed that Europe’s transition to renewables will reduce its dependence on volatile prices for oil, gas and coal and fossil fuel imports. This will have a position impact on Europe’s industrial competitiveness, the Commission argues.
“It’s good the Commission have stepped in to protect businesses and low-income households from high energy prices. And that they’ve stressed the important role of wind energy in ensuring low electricity bills. Wind is one of the cheapest forms of electricity production in Europe”, says Giles Dickson.