May 2020 View this newsletter in your browser here.

CEER Newsletter

Editorial  

First, CEER welcomes Mr Jean-Laurent Lastelle, a Commissioner at the French regulator CRE as a new member of the CEER Board. He already chairs the CEER international work and has been coordinating much of our work related to the COVID-19 situation.                                                  

Mr Lastelle will serve a 2.5-year term, along with three other Vice Presidents/Board members whose terms were equally extended this month: Mr Rolands Irklis (PUC, Latvia), Mr Koen Locquet (CREG, Belgium) and Mr Wolfgang Urbantschitsch (E-Control, Austria).

Although people are physically apart, COVID-19 has in many ways brought the world closer together. CEER has teamed up with organisations from across the globe (including IRENA and regional regulatory associations like ERRA and NARUC) to deliver an exciting series of webinars (see events below) on topical issues including on the impact of COVID-19. CEER/ECRB/MEDREG collaboration also doesn’t stop during the COVID-19 pandemic (see the International section below).

CEER has also recently provided input to two European Commission public consultations; one on the priority list of EU-wide network codes; and the other on the Commission’s upcoming strategy for smart sector integration.

With renewable subsidies in many instances coming to an end, what will happen to unsupported renewable energy sources (RES)? Check out CEER’s paper on unsupported renewables (featured below) to see if renewables are ready to stand on their own feet.

Publications

- CEER Paper on Unsupported RES
- CEER input to the European Commission’s strategy for smart sector integration

Feature: With renewables subsidies coming to an end, are renewables ready to stand on their own feet?

Renewable energy sources (RES) bring various benefits. But subsidies to support RES are also a significant cost to consumers. For years, CEER has called for EU legislators to bring RES fully into the market (with proper accounting for externalities) and in many ways Europe’s (2019) Clean Energy Package of legislation seeks to do that.

In this short CEER Paper on Unsupported RES, energy regulators examine the challenges for RES when the supports stops and the business strategies for RES running without any support or subsidy.

Background – what is the share of Renewables in Europe?

To reach Europe’s 20% RES target (measured in terms of the RES share of energy consumption) by the year 2020, as well as in the past to build-up to scale what was once a small industry, many countries have supported RES (e.g. through subsidies) to boost their renewables penetration. From 2004 to 2018, RES increased continuously (from 9.6 % to 18.9 %) and 14 EU Member States even doubled their RES share (source: Eurostat data). Europe is on track to meet the 20% target 2020, and the RES target now is 32% by 2030.

The adoption of EU-wide RES targets coupled with binding national targets set under the Renewable Energy Directive and supporting policy measures has resulted in strong growth in renewables across Europe. RES has reached a level of maturity. Renewable energy accounted for 30.7 % of gross final electricity consumption, 19.5 % of energy consumption for heating and cooling, and 7.6 % of transport fuel consumption in the whole EU (source: European Environment Agency).

RES support schemes are a significant cost to electricity consumers

Every two years, CEER reports on the level and cost of support schemes for RES across Europe (with country data on the amount of RES support, the type of support instrument and the support expenditure by technology).

The last CEER Status Review of Renewables Support Schemes (“CEER RES Status Review”), published in December 2018, shows that the weighted average subsidy paid to renewable generators, on top of the wholesale price, was circa €96.29/MWh across 25 countries for 2017. RES subsidies are a significant and rising part of electricity consumer bills in Europe, having risen from about 6% of average bills in 2012 to 14% in 2017.

Hence, it is in the interest of consumers to achieve RES deployment in the most cost-effective manner. Understanding the different approaches to RES support can help to inform and improve future support scheme designs, thereby reducing costs for consumers.

How are Europe’s renewables subsidised/supported?

Four types of support schemes were mainly in place in Europe, namely:

- Feed-in tariffs (FiTs);
- Feed-in premiums (FiPs);
- Green Certificates (GCs); and
- Investment grants.

CEER has also advocated that RES support schemes, where needed, should be market-based and market responsive. CEER has called for Member States to move away from guaranteed FiTs to more market-based schemes.

Key objectives of the new Paper on Unsupported RES

- To assess the magnitude of RES installations which will be running without support, notably after their support time has ended, in the coming years;
- To identify the upcoming regulatory challenges and, if needed, the changes to the legal framework; and
- To show the alternative business strategies for RES installations running without support.

Findings of the new CEER report on unsupported RES

Key findings of the newly published CEER Paper on Unsupported RES are:

- Only a small share of RES installations is not being supported;
- An increasing number of supported RES installations are reaching the end of their support time
- The largest share of unsupported RES installations has never been supported (much of which is hydro);
- There is a shift towards market-oriented support schemes (FiP or green certificates) for newly installed RES capacities.
- For onshore wind and solar, new (larger) capacities are already being planned and installed without any direct financial support;
- The legal framework governing RES installations has so far not been adapted in Member States; and
- There are many different strategies for unsupported RES (detailed in the paper).

Events
Register for our (free) webinars:

•    COVID 19 and renewables - impact on the energy system (EUSEW)
Thurs, 04 June from 16.00-17.00 (CET). Co-hosted by CEER-IRENA.

•    Regulatory tariff considerations due to the pandemic
Wed, 10 June 2020 from 15:00-16.30 (CET). Co-hosted by CEER-ERRA-NARUC.

•    The Regulatory role in supporting cybersecurity investments
Wed, 17 June 2020 from 15:00-16.30 (CET). Co-hosted by CEER-ERRA-NARUC.

•   Transition plans and cost recovery following the COVID-19 Pandemic
Wed,  24 June 2020 from 15:00-16:30 (CET) Co-hosted by CEER-ERRA-NARUC.

•  Understanding renewable gases, hydrogen and power-to-gas: empowering consumers to make informed choices (EUSEW)

Mon, 29 June from 10.00-11.30 (CET). Co-hosted by CEER-AIB-FSR.

•  Dynamic regulation and innovations in enabling technologies for a renewable-powered future.
Mon, 20 July 2020 from 16.00-17.000 (CET). Co-hosted by CEER-IRENA.

The European Commission has confirmed that EU Sustainable Energy Week 2020 (EUSEW) goes ahead (22-26 June) but it is scaled down and digital. CEER is pleased to co-host two official EUSEW side events.

                  

International

Although their annual workshop had to be rescheduled to 2021, collaboration among the chairs of the customer working groups of the Council of European Energy Regulators (CEER), the Energy Community Regulatory Board (ECRB) and the Association of Mediterranean Energy Regulators (MEDREG) continues. Topics for discussion at their 28th May video conference include retail markets and the impact of the COVID-19 pandemic on energy customers and national energy regulators’ work.

Contact

Una.Shortall@ceer.eu

Tel Logo +32 278 873 30 or +32 484 668 599

 

www.ceer.eu

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