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More control of liberalisation urged -- Greenpeace report

Greenpeace is calling for European Commission (EC) action on six fronts to prevent renewables being squeezed out of markets across Europe as a result of the "negative environmental impacts of electricity liberalisation." In a 50 page report, the lobby group has firmly entered the debate on the proposed EU directive on renewable energy, calling on member states to shut the "environmental holes in the single electricity market."

The directive proposal (Windpower Monthly, June 2000) is now the subject of a working group, having been sent on its way by EU energy ministers last month. The next step is a first reading of the draft at the European Parliament -- possibly from September. Meanwhile, countries will be feeding their input into the council's working group which comprises representatives from all member states, until the council reaches a "common position."

While this process is going on, liberalisation is being allowed to hamper the expansion of renewable energy, says Greenpeace. "The problem is not liberalisation per se, instead it is the absence of environmental-based standards," says energy campaigner Karl Mallon. "We have to incorporate regulations that use the market to drive us towards a sustainable energy Europe, rather than dragging the EU uncontrolled in the opposite direction."

Recommendations

The report lists recommendations for countering six liberalisation trends. Lower electricity prices will push up consumption, says Greenpeace, thus the external costs of electricity generation must be recouped from generators "to create a more universal demand for clean energy." To mitigate the barrier to new market entrants of volatile prices, renewables must be provided with access to "hedging" systems or other buffer mechanisms to ensure they can secure contracts. Third, existing renewables support systems "must be fully endorsed" by the EC until the market distortions caused by subsidies to the conventional sector -- and the lack of internalisation of external costs -- have been removed. Greenpeace also recommends the EC "immediately call for the suspension" of the billions in subsidies to nuclear and fossil fuel.

Energy imports are increasing, putting at risk security of supply, Greenpeace points out. "Legally binding mechanisms for limiting carbon-intensive and nuclear fuels and prioritising clean indigenous production of electricity must be adopted -- the proposed Renewable Energy Directive is a suitable vehicle." The sixth recommendation calls for the establishment of "EU-wide environmental performance standards for electricity generators and retailers," to help counteract the effects of market domination by a few big players, such as Electricité de France.

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