Facing facts

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There is an inevitability about some things that defies discussion. The sun will rise, the wind will blow, and the electricity markets of Europe will be liberalised. To believe otherwise is to live in another world. With this in mind, it was perhaps no coincidence that this very accusation was levelled at the wind community last month, meeting in Nice for the 1999 European Wind Energy Conference (pages 38-48). "Anyone walking in here from off the street would think you lot came from another planet," said an astounded Corin Millais of Greenpeace. He had gone to Nice to lend Greenpeace's weight to what he had presumed would be a rallying call for action from politicians to make wind power a central part of the solution to man-made climate change. What he witnessed almost defies belief: hours of clique-ridden infighting over the obscure details and intricate merits of "quotas" versus "REFITs;" and a wind lobby so torn apart over the issue that it had lost sight of its global mission.

By the time of Millais' outburst, the air in Nice was thick with the terminology of a shadow-world. "Percentage obligations," "portfolio standards," "feed-in tariffs," "liberalisation," "deregulation," "fixed prices," "competitive mechanisms." The language of confusion had so fogged the debate that even those fully initiated in the intricacies of European wind politics had by that time lost the thread. No wonder Millais sounded despairing when he told the audience that the language it should have been talking was one of environmental benefits and job creation. These are the arguments that will advance wind up the political agenda. The rest is mere detail, he admonished.

The most frustrating aspect of the European wind lobby's split over giving up price-subsidies in return for a guaranteed market is that prior to the deadlock, renewables had arrived at the top of the EU's agenda. The EU's executive arm, the European Commission, had put forward a proposal which used broad brush strokes to outline a single market for renewables which, being competitive in nature, could be dovetailed with the liberalised new Internal Energy Market. (Subsidy systems designed for old-style markets cannot be.) Details were deliberately in short supply. What was important was getting the proposal adopted by the EU's member states as European law. The details could be saved for later discussion at national level.

Had Europe's wind lobby fully backed the Commission's effort, there is a good chance that renewables would have got their single market. But the European Wind Energy Association (EWEA) found itself hamstrung by dissension in the barracks. The German bulk of its membership, apparently believing that liberalisation was not going to happen in Germany, broke ranks and campaigned against the Commission's proposal, with the result that the document was sucked back into the bureaucratic machinery of Brussels.

Second chance

All is not lost, however. There is time to make amends. The Commission is holding out another branch to renewables (page 18), in the form of a "working paper," again advocating a single competitive market for renewables, but more strongly than before. Details, such as the proportion of electricity to come from the various renewables, are left well alone. The document, if all goes according to plan, will be put before Europe's energy ministers on May 11. If, prior to that meeting, each minister has been firmly told by its renewables industry that the document is vital for future growth, it stands a good chance of being adopted and progressing further. That is a big "if." It would require the German membership of EWEA to accept the inevitable and agree to discuss details at another time.

The working paper has laid the groundwork for such an approach, even to the extent of lifting an environmental stick to the ministers. "If the Kyoto targets are to be reached by 2010, it is not possible to await completion of the identification of the exact measures that will need to be adopted before laying the foundations for their achievement," it states. In short: never mind the details, we've got to move now. Indeed, the time for delicately stepping around sensitive issues is gone. It is no accident that for the first time the term "stranded costs" was heard explicitly applied to wind energy in more than one forum at Nice. It is also used several times in the working paper to refer to unrecoverable capital costs as a result of introducing competition. Until now, the term stranded costs has mainly been reserved for the follies of investment in nuclear, rather than in reference to the investment of pioneers in wind power. But in principal we're talking of the same fault, an in-built flaw in any planned economy.

For inspiration on how to cope with wind's stranded costs -- and of how to break the current deadlock -- take a look at Denmark's blueprint for its electricity reform (page 20). When it comes to wind energy, the Danes seem to have learned the lesson of being first off the mark. Not waiting for a directive from Brussels, they have gone ahead with an electricity reform agreement which already includes a single market for renewables, backed by trade in green credits. Far from fighting the inevitable, the Danish wind turbine owners have used their time to get the details right. It is a strategy well worth taking note of. Pull together now, back the EU policy of a protected guaranteed market for renewables, and secure a stable and unlimited market for a cleaner Europe.

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