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

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.

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.

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.

‘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.

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