Collective power: towards an EU-wide support scheme for renewable energy

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

EU support for renewable energy currently “suffers from fragmented, uncoordinated national policies”, writes Sheldon Welton for the think tank Notre Europe.

European countries that already have experience of domestic Tradable Green Certificate (TGC) markets would “benefit considerably from merging these markets into a single scheme”, argues the August 2007 report. 

Moreover, a common TGC market could “significantly” help the EU to achieve its renewable energy objectives, adds Welton – advocating enhanced cooperation as a first step towards “a fully harmonised EU renewable energy policy”. 

The legal basis for enhanced cooperation is contained in the Treaty of Nice, and Welton does not anticipate any major legal obstacles to the creation of a common TGC market, though she does warn that the subject “has not been subjected to legal scrutiny”. 

Although technically feasible, she says that the political feasibility of such a scheme is difficult to assess, because enhanced cooperation and international quota-based TGC schemes are “untested” and will require “political compromise”. 

Promoting renewable energy is a “widely recognised” and “critical” policy objective, she states, as it reduces energy dependency on fossil fuels and politically unstable regions, stimulates local economies, reduces air pollution and enhances Europe’s competitiveness in the renewable energy market. 

An EU TGC market would require the support of both the Commission and the Council in order to be established, she states – with Council support likely to be influenced by industry opinion. 

Welton believes that the most difficult aspect of designing a common TGC market will be setting national quotas, with “political battles likely” over the methodology used to determine targets. She suggests establishing “an interval of reasonable ambition levels” for setting mandatory national targets as it offers “more domestic sovereignty”. 

Moreover, a well-designed governance and administration system must be established, she adds – suggesting that this be done either by governmental bodies, or governmental bodies overseeing market players that implement and operate it. 

Welton concludes that “the benefits of participation in such an innovative policy and market mechanism will far outweigh the costs”. 

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