Renewables policy hampered by cost misconceptions

EUROPE: The development of EU policy to increase the share of renewable sources in the energy mix is being hampered by the mistaken perception that solar and wind energy are more costly than conventional power.

WindEurope CEO Giles Dickson speaks at the policy forum
WindEurope CEO Giles Dickson speaks at the policy forum

"There is a political perception out there that renewables are expensive," Giles Dickson, head of trade association WindEurope, said at a Brussels policy forum this week.

"The problem is Europe's consumers are paying for feed-in tariffs for projects installed up to 15 years ago," he added.

European Commission proposals to reform EU policy on renewable power and electricity market rules envisage a phase-out of direct subsidies for mature technologies such as onshore wind and solar photovoltaic (PV).

Lawmakers are reluctant to accept that renewables are now often the cheapest option, the Green MEP Claude Turmes told reporters on the sidelines, singling out the centre-right EPP and eurosceptic ECR group for criticism.

The European Parliament's lead negotiator on reforms to the Renewable Energy Directive (RED), José Blanco López, is pushing for a target of 35% by 2030, compared with a Commission proposal of 27%, and recently urged the EU executive to hurry up with revised data on the cost of renewables.

Speaking at the annual conference of the European Parliament's cross-party forum on renewable energy (EUFORES), Blanco López repeated his criticism of the Commission's decision to abandon binding national renewable energy target after 2020.

"I believe this is the wrong choice — it will have a negative impact and remove safety for investors," Blanco López said.

The theme of investor certainty was also raised by the head of the International Energy Agency's renewable energy division, Paolo Frankl.

"The fact that renewables are cheapest does not automatically mean investment will flow," Frankl said.

Angus McCrone, chief editor at Bloomberg New Energy Finance, argued there was no shortage of investors and bank financing for green power projects, but questioned how willing they would be in the no-subsidy environment envisaged by the European Commission.

"Will investors be happy to provide equity for projects backed by very low subsidies... and will banks lend to projects relying on merchant power prices and short-term purchase agreements?" McCrone asked.

First published on Ends Europe

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