It is time to turn to real solutions.
Europe risks becoming lost in the treatment of the symptoms of the energy crisis, and not the cause. We cannot lose sight of the key structural solution to the crisis – renewable energy.
Renewables are not just a solution in the long-term. Solar is available and provides energy price relief from the moment it is connected.
Europeans know this and are rushing to install solar PV on their rooftops. What holds them back are administrative and regulatory obstacles that can readily be removed with political will.
The solar panels are there. Bloomberg NEF reports that Europe imported the equivalent of 54 GW of solar modules in the first half of 2022. Other estimates have the import numbers up to 60 GW in the first 8 months of the year. The solar stock at our fingertips could power the equivalent of 18 million European households.
Understandably, policymakers have exerted considerable effort to address the symptoms of the crisis – now they ought to turn to the root cause. Solutions are there for the taking.
The European Commission should present an emergency plan for boosting renewables now, and land that with the Council before end of the year, applying the same Art 122 emergency procedure.
What should be in that package? There are plenty of elements that can make a real and immediate difference.
FIVE KEY ACTIONS EU LEADERS CAN TAKE RIGHT NOW
Accelerate the development of the solar workforce through the EU large-scale skills partnership for onshore energy, ensuring the mapping of skills shortages and EU funding for training programmes.
Maximise the efficiency of the existing workforce through local authority facilitation of the ‘neighbourhood approach’ of rooftop PV installation.
Require member states to identify areas and complete permits for accelerated renewables deployment by June 2023 (“priority areas”). These should be areas where there are obviously no social or environmental conflicts like old industrial sites, along highways and railways, carparks, etc.
Expand the State aid Temporary Crisis Framework amendment adopted in July 2022. Exempt all solar PV up to 3MW from tendering requirements, and allow aid to benefit from the assumption that is clearly necessary in this crisis. This would cut red tape and open the door to substantial new quantities of rooftop solar aid packages.
Exempt on-site solar from construction permits, except for historical buildings. This is already the case in Italy, Germany, Sweden, and the Netherlands.
Launch a series of extraordinary tenders for flexible or hybrid renewable projects (solar + wind + storage). These directly compete with gas peakers and avoid gas prices to contaminate electricity prices. The EU could also consider EU-level tendering schemes mobilising CEF-E and RRF funding.
These efforts need to go hand-in-hand with proper design and application of the revenue cap on inframarginal generators , as we wrote to Energy Ministers last week.
The draft Regulation still allows Member States to maintain or set alternative caps, even on specific technologies. The proposed cap is designed in ways that could result in taxing revenue that is not earned by renewable companies. It is therefore critical that the text specifies that only net market revenues are taxed, and no earlier than on a monthly basis.
We also call for a price cap on gas imports to Europe. This tackles the root cause of the crisis: the high prices of gas in European markets, twice the prices in Asian markets.
Fossil-fuel crises are the crises that never really go away. In the face of climate catastrophe, and worsening price shocks over the last 50 years, we need to be serious in directing solutions toward the root cause.
Europe cannot find itself in the same situation next winter, exposed and vulnerable to fossil fuel volatility and geo-politics. That would be tragic. We must act now.