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Proposal criticised and supported

Reaction to the European Commission's proposal for a renewables directive before it was amended (story above) ranged from bitter condemnation to quiet expressions of admiration for a job well done. Organisations and politicians closely involved in renewables policy were more positive than groups representing the interests of independent renewables producers, such as Germany's thousands of wind turbine owners, who risk being stranded in the tide of liberalisation without a government subsidy package.

The one clear message to emerge was that the lack of a requirement for binding targets for renewables production was a serious flaw in the Commission's proposal. This was the main thrust of the criticism of the European Wind Energy Association. "EWEA still believes that binding renewables quotas are the only way to ensure a consistent promotion of renewables in the electricity supply across member states," said the association in a statement submitted to the Commission. While welcoming the idea of a directive, EWEA said that without binding quotas it became a "completely voluntary approach," and as such the competitiveness of countries taking the lead on renewables will be penalised.

Carlos Westendrop, who heads the energy committee in the European Parliament, which is also pushing for a renewables directive, agreed. "The parliament's aspired directive must require member states to determine binding minimum shares for the use of renewable energies with a defined timeframe," he said. From the Netherlands, Annemarie Goedmakers, director of renewables at the NUON-ENW utility, views the market from a different angle, but with the same view. "In the Netherlands we need continuation of the portfolio standard and an obligatory legally binding target," she said. In the directive, "Europe shows no real commitment to renewables," she added.

Denmark's environment minister, Svend Auken, had the same concerns. "What seems to be lacking in the Commission's current thinking is a much more pro-active approach. There seems to be no really efficient driving mechanism for any expansion of renewables." He stressed that the purpose of a directive should be to establish a level playing field for competition between renewables producers within and between member states. This will require a "harmonised set of rules" and a proposal that "incorporates a strong promotional effort."

Five per cent fears

Auken's main criticism, however, was reserved for the Commission's proposal that EU member states throw open the doors of their national support systems on a reciprocal basis. It is this clause which has gone from the amended proposal for promoting renewables. While accepting that the aim was to create a level playing field for competition, Auken said that without harmonised rules the 5% threshold would have become "become a disincentive for any expansion" of renewables. "For budgetary reasons mainly, no country would run the risk of financing an increase in other member states," said Auken. His comments were picked up by the Danish press and media, which ran front page stories and lead TV news items claiming that Brussels was bent on destroying the Danish wind industry.

Director of the Danish Wind Turbine Manufacturer's Association, Søren Krohn, shared these fears. "I simply see all national support of renewables doomed under the Commission's proposal," he said. "I am disappointed with the Commission as I do not think this is the way to go about it. It is economically unworkable." He argued that if a country financed renewables development in another country, for example because the size of the resource gave better prospects of profit, the country could not claim to be bettering its own environment. "Why should any country invest in developing renewables if that investment cannot contribute to their C02 reduction commitments?"

Similar claims of unworkability were also voiced by Greenpeace, which together with the World Wildlife Fund and Climate Network Europe said a 5% threshold would become a cap on all further renewables development. The German renewables association agreed. The scheme was "completely unrealistic," said president Johannes Lackmann. "It will only lead to an immediate end of all national support mechanisms."

Lackmann went further in his complaints than other critics. He also attacked the concept of harmonised rules for renewables, saying they make no sense until the entire electricity playing field is levelled, presumably by achieving the holy grail of internalising external costs. Lackmann's view was shared by the European Renewable Energies Federation, a new organisation which claims to represent the views of producers. To the frustration of EWEA and the Commission, it, too, was doing its best to block the directive.

Praise from experts

At least two policy analysts, however, did not share the broad indictment of the Commission's efforts to fulfil the task set by energy ministers in May. At that meeting ministers rejected Commission plans for a harmonised system of support based on binding targets and renewable energy credit trading.

"I do not know what all the fuss is about," said Catherine Mitchell of the Science and Technology Policy Research Unit at England's Sussex University. Fears of the effect of the 5% threshold were greatly overstated, she said. The effect of it would have been to oblige countries to harmonise their support systems and lower the costs of renewables, thus greatly boosting their ability to compete with fossil and nuclear.

Gaynor Hartnell from Britain's Confederation of Renewable Energy Associations was also supportive of the directive. She took issue with the assumption made by its critics that all EU states currently exclude foreign generators from their own support schemes; this is not true in the case of Britain where there is nothing to prevent overseas generators from bidding into the Non-Fossil Fuel Obligation. Only transmission costs and the limited size of the England-France interconnector prevent them from doing so in practice. "However, it is only if or when a fully functional green certificate trading scheme becomes a reality that cross-border trading is likely to take off," she pointed out. "The Commission's proposal is very short of detail on this point."

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