EU seeks flexibility on renewable energy trade

Member states will be authorised to meet their national renewable energy targets using green power certificates bought from other EU countries under plans being considered by the European Commission. The scheme could even be extended to countries outside the EU.

A draft directive currently being discussed at the Commission confirms that trading of green energy certificates will be a central element of the upcoming directive on renewable energy.

The proposal, due to be unveiled on 23 January, says member states will be responsible for issuing ‘guarantees of origin’ (GOs) to producers of heat and electricity coming from renewable energy sources. The certificates could be traded between EU member states so as to help meet national renewable energy targets. “The overall approach is for member states to retain discretion as to the mix of these sectors in reaching their national target,” the draft says.

National targets still to be determined

The national targets, however, are still to be decided and are the subject of heated negotiations between the Commission and the member states.

The Commission’s latest thinking is to mandate a 5.75% increase in renewable energy consumption for all countries as a first step towards the overall target. The remainder would be modulated according to each country’s Gross Domestic Product to arrive at a 20% figure for the EU as a whole (EURACTIV 23/11/07).

National targets are to be set out in national action plans and broken down into individual targets for electricity, heating and transport together with “the measures to be taken to achieve” them. “Minimum interim targets” are to be defined as well, taking 2005 as the starting point “because that is the latest year for which reliable data on national renewable energy shares are available.”

However, the 2005 starting date is raising concerns among those member states which already have a high share of renewables in their energy mix. “Certain member states consider that the starting point should be modified,” an EU official said. Those include Austria and Sweden, where renewable energy accounted for 23% and almost 40% of final energy consumption in 2005 respectively, the official told EURACTIV.

Germany wins optional trading system

Another concern, raised by Germany, is to make sure the national support schemes that are already in place are safeguarded by the new EU law. In Germany, power companies are obliged to buy renewable energy produced by private generators at a fixed price or feed-in tariff determined by the government, a scheme which has so far proved successful in increasing the share of green power.

The updated draft directive addresses German concerns by stipulating that EU countries “may, in order to safeguard the viability of national support schemes, impose objective, transparent and non-discriminatory terms or limits on the transfer of guarantees of origin to or from other member states.”

Under the scheme, green power certificates could be cancelled and therefore made unfit for trading if the energy has already received some form of government support. The system would avoid “interference with support schemes granted to existing installations” as well as “overcompensation of renewable energy producers,” according to the draft.

Towards a global trading scheme for green power?

Another option which did not figure in previous leaked documents relates to international trading of renewable energy certificates. According to the draft, “electricity produced from renewable sources in third countries and consumed in the Community” may be taken into account in achieving the national target.

However, this option would be allowed only if the country “has adopted a national overall target of a degree of rigour at least equivalent” to the EU. 

Renewable energy certificates are already in use in the United States. In Europe, thirteen different countries are already using eco-labels for green energy. WWF Spain and the Öko-Institute in Germany offered an overview of existing power labelling schemes across Europe in a report published in September 2006.

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