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04/12/2016

EU champions ‘people power’ but devil lies in the detail

Energy

EU champions ‘people power’ but devil lies in the detail

Commissioners Maroš Šefčovič and Miguel Arias Cañete talk clean energy at a press conference in Brussels yesterday.

[European Commission]

The European Commission’s Winter Package of energy proposals, unveiled yesterday (30 November), is set to boost household and local power generation, but obstacles remain.

Initial reactions to a raft of draft legislation presented on Wednesday include widespread support for plans to give citizens the right to generate and sell their own green electricity.

The EU executive promised to put consumers in the driving seat of a revolution in the way electricity is produced, traded and consumed across Europe.

“Consumers and communities will be empowered to actively participate in the electricity market and generate their own electricity, consume it or sell it back to the market,” the Commission said in a briefing note accompanying its Winter Package of energy laws, part of EU plans for an Energy Union.

Commission defends new energy rules and climate ambition

The European Commission today (30 November) defended its 30% energy efficiency target, as opposed to the higher goal called for by MEPs and campaigners, as it unveiled “clean energy“ plans to boost renewable use, cut waste and reduce subsidies for coal power.

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Citizen power

However, the devil in the detail suggests hopes of a rapid decommissioning of large coal-fired and nuclear power plants in favour of millions of self-generating, green “energy citizens” may be premature.

“One of the most productive areas of the package is the opening it offers to demand side response and the right of consumers to self-generate and consume,” said Manon Dufour, who heads the Brussels office of climate and energy think-tank E3G.

The potential for households and local cooperatives to supply a major part of Europe’s power from solar and wind installations could be huge. A recent study estimated that “energy citizens” could meet 19% of overall electricity demand by 2030, and 45% by 2050.

Study maps potential of ‘energy citizens’ in push for renewable power

Half of EU citizens – including local communities, schools and hospitals – could be producing their own renewable electricity by 2050, meeting 45% of the EU’s energy demand, according to new research published on Monday (26 September).

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SolarPower Europe, the trade association lobbying for the technology most widely deployed for self-generation, declared itself “delighted” that renewable self-consumers would be recognised at EU level.

A legally binding framework would give households the right to generate, consume, store and sell their own power, policy director Alexandre Roesch said.

“Spain is the worst example we have currently,” Roesch said of a law preventing remuneration for electricity fed into the grid by those who generate their own. Questions over national issues such as grid and distribution tariffs could also be dealt with under rules to be drafted by a proposed EU body made up of distribution firms, he added.

Nevertheless, with the Commission pushing to phase out direct support for renewables and increase the exposure of consumers to wholesale prices, it looks likely that even the smallest producers will have to compete on the open market in order to sell their surplus electricity.

Support schemes are one of the main reasons that householders bother to invest in solar energy in the first place, according to the Brussels-based European consumer organisation BEUC. Rolling back renewable support schemes won’t help in that regard, BEUC said.

“A family running a solar panel is not an energy trader, and cannot compete with large energy companies,” BEUC spokesman Sébastien Pant said.

Cooperatives squeezed

Moreover, the Commission’s plans would also limit the scope for larger-scale local production via renewable energy cooperatives. According to environmental group Greenpeace, such schemes would be limited to installing 18 MW or less per year of generation capacity.

The organisation representing green energy cooperatives in Europe, REScoop.eu, cautiously welcomed the recognition the proposals give to such initiatives – with a call for member states to limit “disproportionate procedure and charges” – but voiced concern over the proposed cap.

“The illustration behind Commissioners Cañete and Šefčovič at the press conference showed the cooperative wind farm at Middelgrunden…and that’s very nice,” the group’s president Dirk Vansintjan said, referring to a 40 MW project in Denmark.

“But we want to have a framework of EU directive and implementation in member states that allows citizens of all 28 to do the same as the citizens of Copenhagen,” Vansintjan said.

Co-op chief: People can produce most of their energy themselves

Half of Europeans could have solar panels on their roofs by 2050. And the trend won’t stop as small-scale energy cooperatives bring in eight times more revenue to local authorities than big utilities, argues Dirk Vansintjan.

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‘Puzzling contradiction’ on renewables

Beyond the technicalities of grid access and subsidies for small producers of green power lies what some see as the main inconsistency within the electricity market reforms contained in the Winter Package of proposals, part of the EU’s Energy Union strategy.

Despite its championing the new role of citizens as active players in the electricity market and commitment to increasing the deployment of renewable power, some perceive a reluctance on the part of the EU executive to press for the closure of large conventional power plants.

E3G’s Dufour spoke of a “puzzling contradiction” in the Commission’s approach to coal subsidies and its treatment of renewables.

“It is difficult to grasp how the EU will become ‘number one in renewables’ when the same package strikes the rule giving priority to renewable energy and prolongs capacity payments to ailing coal plants,” she said.

Greenpeace was quick to dismiss the package as a “lifeline to coal” thanks to its enabling of “capacity mechanisms” – schemes that allow generators to keep otherwise unprofitable coal, gas or nuclear power plants on line in the interests of energy security.

But Friends of the Earth Europe, another environmental NGO, saw the Commission’s plans in a more positive light.

“Seeing citizens placed at the heart of the energy transition is a beacon of hope amongst an otherwise gloomy, fossil-fuel-heavy package,” said Molly Walsh, community power campaigner at the environmental organisation.

“The European Commission has recognised the benefits of community-owned renewables and cooperatives,” she said, adding she sees the move as insufficient in light of efforts needed to keep global warming below 2°C.

Oversupply

Europe as a whole currently has more generation capacity than it needs, one often cited reason that wholesale prices have hit rock bottom and investment has stalled.

Greenpeace EU energy policy adviser Tara Connolly described the proposals as a “technocratic fudge” resulting from pressure by national governments urged on by large energy firms.

“A lot of progress could be blocked by the failure to address the issue of overcapacity, and extending the life of plants beyond the point were they should have been shut down,” Connolly said.

SolarPower Europe’s Roesch spoke of a “battle between the current incumbent fleet and new entrants” in the power generation sector. “The more solar power penetrates the market, the more we risk hitting a glass ceiling,” he said, warning that renewables output could have to be curtailed.

The battle is set to continue next week as EU member states hold their first talks on the new proposals at an Energy Council meeting on 5 December. The European Parliament is expected to start divvying its work up between committees and appointing rapporteurs straight after the Christmas break.

Background

Households and neighbourhoods feeding small-scale electricity and heat into a decentralised European energy grid: this is the vision developed by proponents of microgeneration. Yet at present, the EU's energy system remains centralised and dominated by large power plants.

The term 'microgeneration' refers to an array of small and medium-sized generators of electricity, including solar, wind, hydro, biomass and waste. Also included in the scope of microgeneration are combined heat and power (CHP) or cogeneration facilities, which feed the heat produced during electricity generation either directly into homes or into a local district heat and power network.

Proponents of microgeneration – also known as distributed or decentralised generation – argue that a decentralised energy market is a prerequisite for achieving the EU's renewable energy and energy efficiency goals. But they lament that significant obstacles block their ability to compete with larger power producers.

In addition, EU member states have different rules in place governing grid access for smaller producers, which the microgeneration industry says acts as a barrier to the development of an EU-wide market for small-scale power generation. At the moment, the EU's microgeneration market remains rather small.

Microgeneration: Power to the people?

Households and neighbourhoods feeding small-scale electricity and heat into a decentralised European energy grid: this is the vision developed by proponents of microgeneration. Yet at present, the EU's energy system remains centralised and dominated by large power plants. 

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Timeline

  • 5 December: EU energy ministers hold first exchange of views on Winter Package at Energy Council meeting in Brussels

Further Reading