Renewables leaders call for carbon price floor

EUROPE: A group of 16 renewable energy companies and bodies have signed a joint declaration calling for the creation of a carbon price floor (CPF) in the power sector.

The group said a carbon price floor would stabilise power prices, reducing volatility and make renewables cheaper
The group said a carbon price floor would stabilise power prices, reducing volatility and make renewables cheaper

The introduction of a CPF would increase power price certainty in the sector, thereby reducing the cost of investment, as well as aid the transition to a cleaner economy, the group argued.

They cited an FTI Consulting report, which said "a more robust path towards decarbonsation of the power sector is possible if more countries join forces".

"Several renewable energy technologies are cost-efficient on market terms when carbon costs are internalised in wholesale electricity prices," the group said in the joint statement.

"A multi-member CPF can secure a credible short and long-term carbon pricing signal to decarbonise the European power sector in a cost-efficient manner. It will do so by eliminating a significant layer of regulatory risk, which in turn will reduce the cost of renewables," the members added.

The report also found that a CPF could reduce CO2 emissions by an additional 29% by 2030, and power sector emissions would fall by 17%. FTI’s report is due to be presented to the EU in mid-December.

Many of the major wind power players have backed the statement.

Turbine manufacturers Siemens Gamesa Renewable Energy (SGRE), Vestas, Enercon and Nordex were among the signatories. Developers EDF, EnBW, E.on, Engie, Ørsted, Eneco and SSE also signed the declaration.

The group also backed a stronger EU emissions trading system, which "should be a strong driver of emission reductions". 

SGRE chief executive Markus Tacke said a CPF would "make an important contribution" to decarbonisation of the European economy.

Meanwhile, Frank Mastiaux, CEO of German utility-developer EnBW, said: "A carbon price floor supports and accelerates decarbonisation by reducing coal-based production more rapidly…"

E.on chief Johannes Teyssen added that carbon pricing "will only have the required impact on climate protection if its coverage does not remain constrained". 

Finally, Martin Neubert, CEO of Ørsted’s offshore wind business said: "A carbon price floor would reduce volatility and uncertainty for any investor, which makes offshore wind projects without revenue stabilising mechanisms more viable."

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