The road not taken?

By Alexandre Roesch, Policy Director

Ocotber 2016

When Robert Frost wrote his famous poem ‘The Road Not Taken’ in 1916, observers interpreted it as a criticism of people unable to make clear decisions. A century later, his words remain topical for those of us engaged in the development of the European energy policy.

Major legislative proposals – the so-called Winter Package – will be presented in the coming months and will determine to a large extent the path that Europe will follow in forging the energy system of the next 40 years. While this will be one of the first major political initiative post-Brexit, the question remains: how visionary will the European Commission be? Will it avoid not taking the road of the energy transition?

As part of the expected legislative proposals, the reform of the market design is certainly a strategic one. SolarPower Europe has worked hard to ensure that while solar is becoming cost-competitive – markets will be designed in a way that can generate enough revenues for solar investors. This is not achievable via a single measure but requires several policy levers, from liquidity of intraday and balancing markets to proper frameworks for aggregation, from a closer cooperation of transmission and distribution system operators to enabling rules for storage. And while we are preparing for the next investment cycle in the European power sector, the emergence of capacity mechanisms bears the risk of locking our system into a carbon-intensive pathway. The extent to which the European Commission will resist to this national, backward-looking trend is certainly something we will have to follow carefully.

The other major expected initiative is the revised Renewable Energy Directive. While we have just celebrated the symbolic milestone of 100 GW of solar together with the Commission Vice-President Maros Sefcovic, we need to go further and enable an ambitious market development in Europe. One important aspect will be to make sure that Member States remain able to freely design their supporting frameworks, while at the same time ensuring a progressive convergence. In order to do that, we have proposed that the revised Directive include minimum design parameters for tenders, which we developed together with our members in a dedicated Task Force. We also strongly advocated in favor of a dedicated framework for self-consumption and pushed for specific measures to reduce soft costs (via simplified administrative and grid connection processes). But one key element for ensuring a rapid change of our energy system is to set ambitious binding targets for renewables. The current EU-wide binding target of at least 27% proposed for 2030 is not ambitious enough, but more importantly, it currently lacks a proper enforcement mechanism. Here again, SolarPower Europe made very concrete proposals. We will pursue our advocacy in the coming weeks with the Commission and are already prepared for the negotiation with the European Parliament and the Member States. The path to the energy transition will indeed require strong decisions, and we very clearly know which road we want to take.

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