Live blog of the conference on the future of renewables support schemes in Europe
In this post we will present a live blog of the different speeches of the Conference that we organized at Martin’s Hotel in Brussels about the future of renewables support schemes in the European Union.
You can find the conference program here.
9.45: Introduction by Piet Holtrop and Javier García Breva, Plataforma por un Nuevo Modelo Energetico (Platform for a New Energy Model).
Javier remarks that in February the lowest pool price in the daily market it was registered, 17 EUR/MWh, due to a major production of renewables during this month. Also, he explains how the tariff deficit is a consequence of the political mismanagement, and the permanent lowering of electricity demand, therefore, a large part of the gas infrastructures are now unnecessary. We already have a reserve of 1.7, when the standard in Europe is 1.1. This implies a surplus of more than the 60% of the installed capacity.
Spanish companies sold, during the past year, the equivalent of 30.000 MW of gas that has been imported and not used in domestic gas plants.
In addition, Javier has mentioned that the electricity reform mistakes the idea of a guaranteed sustainability of the electricity system with the guaranteed income of the system. Naturally, what the electricity reform looks up is to ensure an efficient collection and not the end of the tariff deficit.
Another problem of this new reform is the high reduction of the competition in the electricity market caused by the vertical integration of the companies that constitute the Spanish oligopoly Finally, he reminds two crucial elements that were forgotten in the electricity reform: the c02 emission reduction and the promotion of the decentralization of power generation (due to penalization of self-consumption). To reverse this trend, it is necessary to comply with the renewable energies Directive and the Directive on Energy Efficiency in Buildings.
FIRST PANEL
10:10. Marcel Bial, Secretary General of ESTELA. He starts his speech wondering about the aim of renewable energies policies. Is their goal to obtain cheaper energy, to protect the environment or to create a path to a more decentralized system? Perhaps it could be a combination of each and every of them. However, there is a need of a clear policy considering a macroeconomic impact analysis. Following this, renewables contribution to the economy has been much higher than their costs.
Regarding Spain, Marcel has highlighted that the regulatory framework is a disaster and there is no interest for investors at the moment. Investors do not even know the total amount of the remuneration they will perceive to produce renewable energy. Also, we cannot forget that cutbacks to renewables are still a hard blow to employment and a burden on one of the few technology sectors where Spain had established himself as a leader
10.25. Frauke Thies, policy director of the European Photovoltaic Industry Association (EPIA).
Frauke starts with an optimistic comment: “the objectives of photovoltaic energy in Europe have been fulfilled”. The past has not been bad. However, the future looks very bad. Frauke reminds that while the costs of photovoltaic technology are higher than the pool price, it will be absolutely necessary to maintain support schemes for new installations. Looking ahead to a new framework of support schemes, it is necessary to take into account the differences in between technologies and as well as the size of the installations, in order to avoid windfall profits and to be more flexible. Support schemes need to be dynamic, but also predictable to guarantee investor confidence. Frauke has mentioned the Commission draft on state aid and renewables, and has proposed a higher ceiling to be eligible to incentives from 1MW to 5MW.
10.40 Petros Tsikouras, Secretary General of Greek PV association P.O.S.P.I.E.F.
Petros explained the situation of renewables in Greece. He showed a graph about the energy demand in Greece which demonstrates that this demand follows the same curve of the photovoltaic production, reaching its peak during summer. Greece is spending 640 million Euros in capacity payments for carbon and oil power plants regardless the fact they are used or not.. In the case of Greece, renewables have lowered considerably the price of the pool. . As in the case of Spain, also remarks that many Greek photovoltaic producers used their family house as collateral in order to guarantee their loans and now they face the risk of losing their houses. Also, he informs us that Greece has approved a “Solidarity contribution”, which can be up to a 42% of photovoltaic producers’ total revenue.
10.55. Dirk Vansintjan, President of REScoop.
Even though he believes that the change towards an energy model based on renewables has to be based on environmental reasons, he says that we cannot forget the economic motivation, which is something that everybody understands and which is easier to promote through every political actor implied. Renewables are now cheaper and more efficient than many other energy sources like nuclear and also for this reason should be promoted.
11.05. Enrique Guerrero, Member of the European Parliament from the S&D Group.
He reminds us that the European Parliament is the institution that has shown a wider support to renewable energies. In fact, in relation to the RES objectives for 2030, the Parliament has noticed that a 27% it is not enough and that this objective needs to be more ambitious. It is necessary at least to reach the 30% and also to impose specific objectives for energy efficiency. Furthermore, he assures that the Socialist Group would have preferred to increase the renewables and energy efficiency objective until 40% as a binding target for 2030. Guerrero also points out that they would have been more ambitious in the interconnection of energy grids
With regard to Spain, Enrique highlighted that the actual Government has made a step back in its support to renewables and has put at risk the credibility of the Spanish energy policy. It is necessary a mid-term planning process in Spain about the strategic elements, which is not taking place at the moment. Competition needs to be increased, nuclear power plants should be closed and the entire sector should be involved in a new reform effort.
11.20 Cote Romero Plataforma por un Nuevo Modelo Energetico (Platform for a New Energy Model).
She informs the audience about the 4 complaints filed against Spain, which were prepared by Holtrop and submitted to the European Commission. Furthermore, Cote identifies Spain as the bad-manners vanguard of the energy sector in Europe. She also explains the problems of the market price Spain, which does not take into account the different technologies, especially with respect to their variable costs.
She informs as well about the new electricity sector reform and the Solar Disobedience campaign against the backup toll for self-consumption. She believes that up to 2030, the objectives to look upon should be about 45% of renewable energies, 55% reduction of emissions and 40% of improvement in energy efficiency. A mere reduction of emissions without energy efficiency and RES targets could imply an increment of nuclear energy.
SECOND PANEL
12.00. Piet Holtrop, Holtrop S.L.P.
Piet introduces the second Panel of the day dedicated to the regulatory risk and retroactive changes affecting RES in EU Member States. Piet explains the actions undertaken by Holtrop S.L.P. on behalf of the Platform for a New Energy Model and how it has been created a link between lawyers from different countries specialized in renewables, most of them members of this second panel.
12.10. Sandis Bertaitis, attorney from FORT Law Office in Latvia.
Sandis explains the situation in his country. Although the renewable sector represents more than a 30%energy production in Latvia, Sandis warns that most of it consists of hydraulic energy. Also, Latvia is not close to comply with the objective of a 40% of renewables share in 2020 established by the RES Directive for this country. In 2011, Latvia approved a moratorium for renewables until 2016 while in 2012 the tariff have been reduced between 10 and 15 years, in 2013, it was introduced a new energy tax and during 2014 further cut-backs are expected.
12.25. Antonis Metaxas, Metaxas & Associates Law Firm.
Antonis focused his speech on European law and renewable energies. He remarks the huge distance between the words and acts of the Commission. The decision to not interfere against the retroactive cutbacks to renewables implies a total consent with these policies and an acceptance of a serious infringement of the basic principles of European Law. Therefore, the credibility of the European Commission is at stake.
12.35. Jana Nysten, BBH Brusels office.
At first, she does a review of the European regulation regarding renewable energies, mentioning the limited specification of the RES s Directive. She remarks that we need to use a much precise language, and that the changes in renewables are not a retroactive issue but a retrospective one. Therefore, legitimate expectation is the key, and it’s occurrence must be tested in three steps: 1) Is there a legitimate expectation? 2) Any damage occurred? 3) Is there a balance between reasons of the change and legitimate expectations?
Another legislative useful test is State-aid guidelines to renewables, which require a feed-in tariff and also through public tender systems. In relation to the German situation, the European Commission is investigating the support of renewable energies under the new German system. If the actual system guidelines were applied, legal problems could happen in order to maintain it. The European Commission investigations of the German system are still ongoing.
12.50. Andrius Mamontovas, Fort Law Office Vilnius.
Andrius explains the situation in Lithuania ad how in his country cut-backs have taken place. However they have not been as serious as in the aforementioned cases me of Greece and Spain. He adds that in the Lithuanian case the regulatory changes have mostly affected small PV producers.
13.00. Josh Roberts, Clientearth London Office.
He warns against the infringement of European Union principles, where its breach in the internal market is not comparable to the same situation in the RES market. In the internal market, the Commission interferes, not in Renewables market. Josh reminds the importance of the “polluter-pays” principle, which is not taken into account many times as much as it should. Surprisingly many countries are complying with the objectives imposed by the RES Directive, but not with the ones of their own national energy plans.
13.15. Raul Romeva, Member of the European Parliament from the Greens party.
Raul closes the event, summarizing the different speeches and linking political and legal elements. Raul reminds that sovereignty is every day more related to energy and that renewables are a crucial element in order to reach this energetic sovereignty. We are in a determinant moment and there is a need to determine which future to choose. The result of European elections will be decisive for the path to choose for renewable energy. He also reminds the importance of legal certainty and stability. Spain complaints that Bolivia and Argentina are not respecting the legal certainty of energy investments but is doing the same and this attitude is , damaging invertors confidence. This legal certainty is not just a legal issue, but an issue of democracy. Citizens not only must be costumers but also electricity and energy producers.
UPDATE 08-03-14: Here you can find the presentations from some of the speakers:
- BBH Legal Framework of existing RES Retroactive measures and regulatory risk
- Cost Return balance Spain 2012 ESTELA
- Presentation - FORT Riga 2014-03-04 1432 SB
- Presentation FORT VILNIUS 20140304
- The Future of Renewables Support Schemes in Europe EPIA
- REScoop Brussels meeting on support mechanisms05032014