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Europe stalls again on single market

Detailed proposals for an EU directive ensuring access for clean energy technologies to the electricity markets of Europe were aborted just hours before Europe's energy ministers gathered in Brussels for their council meeting. The aborted proposal was the Commission's second attempt at legislation for a single protected market for renewable energy. At the meeting, the energy commissioner took the unusual step of throwing the issue back into the hands of national governments.

Renewable energy will not be benefiting any time soon from an EU directive ensuring access for clean energy technologies to the electricity markets of Europe. Detailed proposals for such a directive were aborted just hours before Europe's energy ministers gathered in Brussels on December 2 for their last council meeting of the millennium. The decision by the EU executive to pull the draft directive from the agenda angered several energy ministers from the 15 member states (next story). The aborted proposal (Windpower Monthly, December 1999) was the Commission's second attempt at legislation for a single protected market for renewable energy.

At the meeting, energy commissioner Loyola de Palacio took the unusual step of throwing the issue back into the hands of national governments. She outlined orally the Commission's ideas for a framework for boosting the use of renewables and progressively ensuring their access to the internal electricity market. But instead of presenting energy ministers with the draft directive, she asked them to consider a series of eight measures for establishing a community framework for promoting renewables. A response from the ministers was requested already by this month.

Far from dead

Meantime the draft directive, prepared by the cabinets of the EU's energy, environment and competition directorates, is far from dead. Discussions of it are to continue at cabinet level. So far no agreement on the controversial document has apparently been reached within the EU's executive, neither at cabinet level nor among the commissioners.

The draft directive had been prepared at the urging of the energy council, which had requested the Commission to produce such a proposal at its last meeting in May 1999. De Palacio's spokesman, Gilles Gantelet, blames the lack of progress on producing the document on the divergent views of the different member states on support mechanisms for renewables. "It would have been useless to go to the council with a draft regulation that ministers of each country are going to criticise," he explains. The commission is finding the balance difficult to achieve between introducing more competition in renewable energy-as demanded by the energy council and the European parliament-and member states' demands for subsidiarity in their choice of support mechanisms.


Indeed, it has been the concerns of member states to protect their national systems of supporting renewable energy that has made progress towards pan-European harmonisation of support mechanisms particularly fraught. The commission's first attempt at a directive was ditched at the end of 1998 after intensive lobbying by some sectors of the European renewables industry.

De Palacio's latest example of cold feet follows the hostile reaction-particularly from Denmark and Germany-to a leaked draft of the intended directive in October. Despite a redrafting of the document following this criticism, the commission's action was apparently too little and too late to save the day. It decided not to take the risk of incurring the wrath of ministers who had been bombarded by indignant renewable energy lobbies during November. In addition, the competition directorate was reportedly unhappy with the amended draft, which allows national subsidy systems to continue for a decade.


The furore over the original draft centred on perceptions that the directive would impose an effective limit on support for renewables by requiring countries that meet 5% of their consumption from renewables to open their support schemes on a reciprocal basis to producers from other countries. Although the EC withdrew this particular measure in its re-worked draft and changed the proposed market framework, the document was not officially presented to governments.

Starting again

The one-and-a-half page presentation to ministers on December 2 shows signs of hasty drafting. Even the title contains an error in the last word and tellingly reveals the extent of dither at the commission: "Possible orientations for a community framework concerning the promotion of electricity from renewable sources of electricity." De Palacio asks ministers to consider whether member states should adopt targets at national level for electricity from renewables or accept a target set at community level via a directive. She also suggests priority access for electricity from renewables to the transmission network and common rules for grid connection.

Other measures on which she invites comments are concerned with renewable energy's move towards the internal electricity market. A key measure, which appeared in the reworked version of the latest draft, remains: member states are urged to immediately open up domestic electricity markets (but not their support systems) to renewable generators from other countries. This could be accompanied by an "additional incentive" to introduce policies favouring renewables.

Moreover countries which meet 5% of electricity consumption from price supported renewables, could be allowed to deny access to their domestic markets to producers from other member states which have not reached the same threshold. De Palacio also asks ministers to consider a certification system to allow cross border trade, an end to discrimination in favour of domestic renewables producers within ten years of the directive taking effect, ceilings on renewables subsidies, national regulatory and legislative measures to expedite permitting, and verification of subsidy levels from support mechanisms as well as from other energy sources.

Hasty operation

But the list of suggested measures was seen by some as a hastily contrived holding operation by the commission to cover its failure to come up with its expected proposed directive. Many of the issues raised by de Palacio had already been covered over one year ago in preparation for the first aborted directive.

The next step will apparently be behind closed door. No significant changes are planned to the draft directive as it now stands, says Hans-Josef Fell, energy spokesman for the German Green party. He explains that the period before passage of the Directive is to be used to canvass for the proposal and improve the level of its acceptance among the industries and citizens affected. Fell comments that at cabinet level in the commission there is a growing feeling that sections of the European wind lobby opposed to the directive are taking their campaign too far and registering their opposition in a manner that is both too aggressive and destructive.

It is not clear when the proposal will be discussed again or put to the vote, says Fell. He reports, however, that the majority of countries represented at the EU energy minister council meeting were in favour of a swift passage of the commission document.

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