Feature - Regulators count the high cost to consumers of renewable subsidies
The new CEER Status Review of Renewable Energy Support Schemes in Europe shows the coverage and cost of support schemes (or subsidies) for renewable (RES) in Europe.
What’s in the RES report?
Covering 27 countries, the CEER RES report has country data, the type of support instrument and the expenditure (by technology) on RES subsidies.
• RES subsidies are a significant cost to electricity consumers
• The weighted average subsidy paid to renewable generators in Europe, on top of the wholesale price, was €96.29/MWh in 2017. There are wide variations across countries, ranging from €12.87/MWh in Norway to €198.29/MWh in the Czech Republic.
• Although the average RES subsidy cost is high, it is a decrease of 12.6% from €110.22/MWh in 2015. This cost improvement has been facilitated by the increased use of competitively-determined support schemes (tendering procedures), a move strongly advocated by CEER.
• The amount of gross electricity produced receiving RES support in Europe is fairly stable, at 17% in 2016. The mount and cost of RES support differs across countries and technology, from 3% in Norway to 63% in Denmark.
• In terms of RES integration into wholesale markets, the CEER report finds that 18 out of the 27 countries have balancing responsibility for RES producers as a feature in their support schemes.
Who pays the cost of the RES Support? Consumers
• CEER’s RES report shows that the cost of the RES support is mostly financed through non-tax levies paid via electricity consumer bills.
• The ACER-CEER Market Monitoring Report in 2017 shows that RES subsidies are now a significant and rising proportion of average electricity consumer bills in Europe. RES subsidies make up about one-seventh (14%) of the average European household bill, so a decrease in subsidy levels is welcomed.
The move towards more efficient supports for renewables, highlighted by this CEER report, is welcome progress. CEER advocates decarbonisation at least cost using a variety of measures, with a key one being retrofitted wholesale markets which integrate and work better to facilitate renewables. See Press Release.