Hot air as a catalyst

It is true that ministers did not agree to commit Europe to a 12% target aimed at doubling the use of renewables. It should be noted, however, that Europe's energy ministers, barring none, did agree on where they were headed with renewables and why they need to get there. Such broad based political will can be as important for the stability of the fragile wind market as any amount of regulation. That ministers agree on where we should go and why is an excellent start. The next step is the "how" and the "when."

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Deciphering Euro-speak is no easy task. Documents stuffed with tortured acronyms and perplexing footnotes give everyday words entirely new meanings, the nuances of which are hard to grasp. Frequently the English translation leaves a lot to be desired. These documents are discussed and amended by our political leaders before becoming a basis for further action or new regulation. It falls to journalists to make sense of it all and to report the facts coherently to the outside world. Press reports of the meeting of the European Union's Council of Energy Ministers last month (page 20) ranged from stinging condemnations of the lack of agreement on a binding target for renewables, to songs of praise for the dedicated approach taken to pushing renewables. The real story is more likely to be found in the nuances.

It is true that ministers did not agree to commit Europe to a 12% target aimed at doubling the use of renewables. So on the face of it Greenpeace is justified in its accusations of "warm words and no action." The process towards a European regulatory framework for renewables, set in motion by the Green Paper more than a year ago, pushed along by the White Paper, and taken forward by the report on harmonisation requirements (Windpower Monthly, April 1999), has indeed been drained of inertia. It should be noted, however, that Europe's energy ministers, barring none, did agree on where they were headed with renewables and why they need to get there. Such broad based political will, as this magazine has consistently argued, can be as important for the stability of the fragile wind market as any amount of regulation; regulation not backed by the threatening fist of government is often easy to circumvent.

Good start but what next?

That ministers agree on where we should go and why is an excellent start. The next step is the "how" and the "when." Neither the White Paper, nor the harmonisation report drawn up by European Commission (EC) officials make it easy for governments to take that step. Strong on the why and the where, they are decidedly lacking in how and when. Ministers, it seems, are understandably wary of making commitments not backed by detailed plans for achieving them, especially when faced with the monumental task of tailoring a series of widely differing regulatory approaches into some kind of Europe-wide framework.

National support programs come in many guises. In the Netherlands utilities are obliged to trade green credits in order to meet their fixed quotas for renewables -- a system so new it is still untried; in Britain power plant operators bid for contracts within a protected -- and bureaucratic -- market; and in Germany the politically vulnerable system of mandated premium prices continues, despite its conflict with the spirit of a free market. As the harmonisation report states, the absence of common rules does not create distortions in a market of captive customers; trade is strictly regulated. In a liberalised market, however, the opposite is true. As the penetration of renewables increases in a country paying a subsidised price for green power, the overall price of electricity is pushed up, causing customers to flee and buy their electricity in a country where competitive bidding keeps prices low. Or it could be that the wily German wind turbine owner, selling his electricity at a premium price, decides to also trade his green credit on the Dutch Green Label Exchange. The examples of potential distortions are many, varied, and not hard to find.

Far harder will be the job of devising a framework acceptable to all countries, from those with the free market sympathies of Britain and the Netherlands, to the more command-and-control inclined Germans. Before lambasting the Commission for not having devised such a framework, heed needs to be taken of what is going on right now. EC officials are working on a study of the various support mechanisms in use in Europe -- and their costs to consumers, producers and the state as well as their effectiveness in reducing C02 emissions. Based on these findings the Commission will propose a Directive.

That job could be about to get easier. First there are signs of a slight thaw in the German wind lobby, which until now has been frozen fast in the belief that subsidies are good and competition bad. The chairman of the national wind association, Peter Ahmels, recently argued for a system of accreditation for green power so that consumers opting to buy renewable electricity could be furnished with a product guaranteed to come from a sustainable source. If Ahmels sees a future where his members sell power through the grid to a new era of green consumer, he is presumably warming to the idea of a competitive trading exchange in which such sales can take place. Second, the European Parliament is grappling with a draft for a Directive (page 21) for securing renewables priority access to the grid. The draft talks about both competitive and subsidised systems of support existing in harmony, though specifics on the how this can work are again missing.

Nonetheless, in the light of the Commission's ongoing study -- and in view of progress being made on national targets for greenhouse gas reductions to fulfil Europe's 8% Kyoto commitment -- there are grounds for optimism. What we are witnessing is perhaps a pause in momentum while energy is gathered for the next thrust, rather than a general slowing down of Europe's concerted effort to go renewable. Granted, the energy of ministers went into generating a deal of hot air last month, but hot air condensed into a catalyst for action is a mean force.

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