EU: Commission considers legislation on single market for renewable energy

The European Commission has adopted a Working Paper containing a detailed analysis and options regarding possible future European Union (EU) action with respect to the progressive creation of a competitive EU-wide internal market for electricity generated from renewable energy sources.


The Working Paper suggests that there are two possible options for the creation of such a market. First in the medium term through the operation of the EU Treaty rules on the internal market and state aid rules, or second, pro-actively, in the short-term, through EU legislation, probably via a Directive.
The Working Paper, proposed by Commissioner Christos Papoutsis responsible for Energy, notes that no conclusion has been reached on the question of which of these two avenues to pursue, but indicates that this will be further examined notably following comments received following publication of the Report. The Working Paper will be sent to the Council and European Parliament, and published for widespread consultation.
Commenting on the Working Paper, Commissioner Papoutsis stated that he views this paper “as the next step in the goal to creating a large, important and competitive European Union renewable electricity market, which will produce major benefits for our citizens in environmental, employment and regional terms”.
Renewable-generated electricity, notably produced via hydro, wind, solar, biomass and photovoltaic sources, has been rapidly increasing in the EU in recent years; 15-30% per year excluding large hydro since 1990. This trend is strongly expected to continue.
The Commission views the development and continued growth of renewable sourced electricity as vital for a number of reasons, the most important of which is environmental protection. The Commission says “it is clear in this respect that the increased use of renewable generated electricity will play an important part in the overall package of measures that each Member State and the EU as a whole will have to take in order to meet the climate change commitments accepted by the EU at Kyoto”.
In order for renewable generated electricity to continue to develop, financial support schemes will play a vital role in the coming years. It appears likely that such electricity will continue, at least in the medium term, to cost more to produce than “traditional” electricity, says the Commission. All Member States have such support schemes in place. However, the nature of the schemes differs considerably between countries.
In the light of this situation, the Working Paper analyses (i) the nature and advantages/disadvantages of the differing support schemes operating in the EU; (ii) the factors that need to exist to ensure the long-term growth of renewables-generated electricity under optimum conditions; and (iii) the options available to the EU in seeking to ensure the creation of such factors.
Finally, the Paper examines the possible contents of any proposal, in the event that it is concluded that a pro-active approach, through EU legislation, is necessary.
The issues identified include a possible definition of renewable-generated electricity in this context, the types of options available in order to develop rules which will lead to the rapid creation of a single market for renewable generated electricity, and possible common rules regarding grid connection and planning / administrative issues.

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