Optimism in face of German barrier -- EU renewables Directive

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Head of renewables at the European Commission, Luc Werring, says he is "quite confident" that the EU's long awaited renewable energy directive will make it through the legislative obstacle course by the end of the year. Several points of contention have been resolved and by not calling immediately for harmonised regulations for trade of green power he believes the directive is more palatable to countries not wishing to change their support frameworks for renewables, notably Germany.

If Europe's council of energy ministers can accept probable amendments by the European Parliament to the draft agreed to by the council in December (Windpower Monthly, January 2001), Werring says the directive can be in force by summer. Failing that it will be the end of the year after a period of conciliation between the council and parliament.

German insistence

But only days before Werring's optimistic statements at a London conference on March 12, Mechtild Rothe, a European parliamentarian with a track record for forcefully representing German interests on renewables legislation, warned she would not let up on her insistence that the directive impose binding targets for the use of renewables on each EU country. Rothe was speaking in Brussels at a meeting called by Eurelectric, the European electricity industry's association.

Yet in London Werring said: "I am sure we will never get an agreement on compulsory targets." Instead he feels that an acceptance of the concept of burden sharing, whereby countries with greater sources of renewable energy share more responsibility for achieving the overall target of 22% of EU electricity from renewables, is possible, and important. "Even with indicative targets, politicians are bound to deliver," he commented.

Five mechanisms

The directive specifies five support mechanisms for support of renewables for a five year period, after which the Commission will propose one harmonised system compatible with the rules of Europe's internal energy market. The five options are: investment support up to 40% of a project's cost; support which covers the difference between production cost and market price until the investment is paid off; market mechanisms such as green certificates and competitive bidding for premium priced contracts, up to a period of ten years; aid based on calculations of external costs, up to a limit of EUR 0.05/kWh; and aid allowed under general EU rules, which is limited to five years. "With five cents a kilowatt hour there is a tremendous possibility for renewable energy," comments Werring.

Germany is against the ultimate aim of the directive to support renewables through the use of market instruments to allow cross-border trade and competition. Germany wishes to retain its system of minimum price support. Critics of price control argue that it makes renewable energy expensive by reducing the incentive to bring down its cost

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