European Commission Communication on Support Schemes for electricity from renewable energy sources Beatriz Yordi DG Energy and Transport External Costs.

European CommissionCommunication on

Support Schemes for electricity from

renewable energy sources

Beatriz YordiDG Energy and Transport

External Costs of energy and their internalisation

in Europe

External costs and support systems for renewable energy

Best solution: Create a level playing field

Internalise external costs of all energy sources Abolish energy-related subsidies Finish the internal energy market

Use support systems in order to compensate renewables for avoided external costs & external benefits (environment, innovation, employment, growth)

2nd best solution: Compensate renewables

Principles of the Renewables Directive 2001/77/EC

Quantified national targets for consumption of electricity from renewable sources of energy

National support schemes plus, if necessary, a harmonised support system

Simplification of national administrative procedures for authorisation

Guaranteed access to transmission and distribution of electricity from renewable energy sources

Main objective: Promotion of electricity from renewable energy sources

Where are we?

Setting of national targets

All EU25 Member States have adopted national targets, in line with the reference values listed in Annex I of Directive 2001/77/EC. The New EU10 targets are published in the Accession Treaty in April 2003.

Targets have been also agreed with Bulgaria and Romania:

-Bulgaria from current 6% to 11% by 2010.-Romania from current 28% to 33% by 2010

If EU-25 Member States (+BL+RO) meet these national targets, the 2010 target of 21% at 2010 will be achieved.

The 2010 target

0

20

40

60

80

100

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Ele

ctri

city

gen

erat

ion

[TW

h/y

ear]

_ Wind off-shore

Wind on-shore

Photovoltaics

Geothermal electricity

Biowaste

Solid biomass

Biogas

Production of ‘new’ RES-E (without hydropower) in 2003 is equivalent to the combined overall electricity production

in Portugal, Denmark and Slovenia

Share of green electricity in the Member States’ consumption of electricity compared to the national targets for 2010

0

10

20

30

40

50

60

70

80

90

Austri

a

Belgium

Denm

ark

Finlan

d

Franc

e

Germ

any

Greec

e

Irelan

dIta

ly

Luxe

mbo

urg

The N

ethe

rland

s

Portu

gal

Spain

Sweden

United

King

dom

Cypru

s

Czech

Rep

ublic

Estonia

Hunga

ry

Latvi

a

Lithu

ania

Malt

a

Poland

Slovak

ia

Sloven

ia

1997 2002 2010

Price ranges for direct support of wind onshore in EU-15 member states compared to the long term marginal generation costs

0

20

40

60

80

100

120

140

160

AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK

Minimum to average generation costs [€/MWh]

Average to maximum support level [€/MWh]

Price ranges for direct support of wind onshore in EU-10 member states compared to the long term marginal generation costs

0

20

40

60

80

100

120

140

160

CY CZ EE HU LA LT MT PL SK SI



2003 effectiveness indicator – example biogas in UK

Growth and Existing Potential - Biogas UK

0

2

4

6

8

10

12

14

16

18

20

2002 2003 Total potentialfor 2020

[TW

h]

Additional realisable Potential in 2002 until

2020

A B

C

Effectiveness Indicator represents the RES-E produced

compared to the remaining potential

E = (B-A)/C

Effectiveness indicator for wind onshore electricity in the period 1998-2004 EU-15.

Effectiveness indicator for wind onshore electricity in the period 1998-2004 EU-10

0%

2%

4%

6%

8%

10%

12%

CY CZ EE HU LA LT MT PL SK SI EU10

Ave

rag

e e

ffect

ive

ne

ss in

dica

tor

- W

ind

on

-sh

ore

-

Feed-in tariff Quota / TGC Tender Tax incentives / Investment grants

Historically observed efficiency of support for Wind: effectiveness indicator in relation to the annuity of expected profit

Evaluation of support schemes

Feed-in tariffs have been more effective and more efficient than quota systems

High prices for tradable green certificates due to higher risk cost and immature certificate markets?

Harmonisation would be premature, more experience needs to be gained, especially with quota systems

Administrative and grid barriers need to be addressed

Main conclusions

Optimise the support system

• Adapt the support level to the generation costs• Half of the Member States give not enough support to ensure deployment of RES-E

• Increase stability • instability increases risk cost

• avoid stop-and-go nature of the support

• Reduce investment risk• especially green certificate markets need a high liquidity

Recommendations to Member States

Optimise the framework conditions

• Reduce administrative barriers• reduce administrative requirements

• use clear guidelines, one-stop-authorisation agencies and pre-planning mechanisms

• Ensure fair grid access• grid access conditions must be transparent and non-discriminatory• grid infrastructure should be improved to accommodate RES-E, associated costs should be covered by grid operator

Recommendations to Member States

What’s next?

• 2020 targets (overall and/or by sectors)• Communication on the share of RES-E by 2006• Directive proposal on Heating & Cooling• Review of the biofuels Directive

Support for renewables

Thank you for your attention!

What’s next?

• 2020 targets (overall and sectoral)• Communication on the share of RES-E• Directive proposal on Heating & Cooling• Review of the biofuels Directive

Support for renewables

Thank you for your attention!

Price ranges for direct support of agricultural biogas in EU-15 member states compared to the long-term marginal generation costs.

0

20

40

60

80

100

120

140

160




Price ranges for supported agricultural biogas in EU-10 member states compared to the long-term marginal generation costs.

0

20

40

60

80

100

120

140

160




Effectiveness indicator for biogas electricity in the period 1998-2003.

-1%

0%

1%

2%

3%

4%

AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK EU15

Ave

rage

eff

ect

iven

ess

ind

ica

tor

- B

iog

as -


Effectiveness indicator for biogas electricity in the period 1998-2003.

-1%

0%

1%

2%

3%

4%


Ave

rag

e e

ffect

ive

ne

ss in

dica

tor

- B

ioga

s -


Price ranges for supported biomass electricity production from forestry residues in EU-15 member states compared to the long-term marginal

generation costs.

0

20

40

60

80

100

120

140

160

180

200




*

* system gives the option for co-firing

*** *

Price ranges for supported biomass electricity production from forestry residues in EU-10 Member States compared to the long-term marginal

generation costs

0

20

40

60

80

100

120

140

160




* * ** *

* system gives the option for co-firing

*

Effectiveness indicator for biomass electricity in the period 1998-2003.

-1%

0%

1%

2%

3%

4%

5%


Ave

rage

eff

ect

iven

ess

ind

ica

tor

- S

olid

Bio

mas

s -


Effectiveness indicator for biomass electricity in the period 1998-2003.

-1%

0%

1%

2%

3%

4%

5%


Ave

rage

effe

ctiv

enes

s in

dica

tor

- S

olid

Bio

mas

s -


Historically observed efficiency of support: effectiveness indicator in relation to the expected annuity. BIOMASS

BE-Flanders

BE-Wallonia

FR

DE

IT

SE

UKAT

FI

HU

DK

-2%

0%

2%

4%

6%

8%

10%

-1 0 1 2 3 4 5 6

Expected Annuity [€ Cent/KWh]

Eff

ectiv

enes

s in

dic

ato

r

Feed-in tariff Quota / TGC Tax incentives / Investment grants

Price ranges for direct support of small-scale hydro in EU-15 Member States compared to the long-term marginal generation costs.

0

20

40

60

80

100

120

140

160




Price ranges for direct support of small-scale hydro in EU-10 Member States compared to the long-term marginal generation costs.

0

20

40

60

80

100

120

140

160




Effectiveness indicator for small hydro electricity in the period 1998-2003.

0%

5%

10%

15%

20%

25%

AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK EU

Ave

rage

eff

ectiv

enes

s in

dica

tor

1998

-20

03

- S

mal

l Hyd

ro -


Effectiveness indicator for small hydro electricity in the period 1998-2003.

0%

5%

10%

15%

20%

25%


Ave

rag

e e

ffect

ive

ne

ss in

dica

tor

- S

ma

ll H

ydro

-


Price ranges (average to maximum support) for direct support of photovoltaic electricity in EU-15 Member States compared to the long-

term marginal generation costs.

0

200

400

600

800

1000

1200




Effectiveness indicator for photovoltaic electricity in the period 1998-2004.

0%

1%

2%

3%


Ave

rag

e e

ffect

ive

ne

ss in

dic

ato

r-

Ph

oto

volta

ics

-


European Commission Communication on Support Schemes for electricity from renewable energy sources Beatriz Yordi DG Energy and Transport External Costs.

Documents

biomass slide

target slide

slovenia slide

europe slide

support level

efficiency of support

direct support of wind

biofuels directive support