European Commission To Member States: Follow Our Lead for Renewable Energy Policy

New Hampshire, USA -- The European Commission has offered up some new guidelines about managing electricity markets among its Member States, offering direction for design and support schemes for renewable energy, managing capacity, and addressing demand at the consumer level to mitigate new generation investments -- which, while technically not binding, likely will inform future regional environmental and aid policies.

Renewable power generation is fast approaching parity with non-renewables, though in general any new generation type is more costly than market prices for electricity, according to recent analysis from the International Energy Agency. But those IEA studies are "not comparable [nor] fully applicable" to future energy policy directions, says the EC, so it is undertaking its own analysis of cost comparisons and subsidies of various technologies, pledging to issue its report next June.

While supportive of Member States' efforts to establish an internal electricity market for Europe by 2014, the EC underscores the needs to adhere to European Union policies about secure and competitively priced supplies, renewable energy and climate change objectives, and energy efficiency improvements. Thus, it is stepping forward to "define the role, level and nature of public intervention, in line with the principle of subsidiarity, at Union, regional, national or local level." (Here's the PDF of the EC's proposals and explanations.)

Specifically for renewable energy (admittedly focused on solar and wind), the EC suggests adapting policies and rules for state intervention to recognize future market needs. That means letting the market dictate investment and production decisions, and thus gradually phasing out feed-in tariffs (FIT) and moving towards other "supportive instruments" more tied to market pricing, such as auctions and tenders, feed-in premiums, and quota obligations. (Other types of support such as domestic content requirements, the EC advises, "might not be in line with the EU acquis.") Cooperation mechanisms also should be pursued, seeking to leverage renewable energy opportunities across Member State borders, including joint projects and support schemes. Unannounced or retroactive scheme changes should be avoided to preserve investor confidence, says the EC -- quite likely a memo to Spain about its recent legislative about-face. Renewable energy support and goals ought to align more closely with Europe's carbon emissions trading schemes, says the EC, and these principles and directions it is laying out for public intervention in electricity markets could also be applied in other sectors, such as heating and transportation. All the EC's recommendations and discussions, including examples of standardized forms, are listed here within individual working documents.

While the EC acknowledges all these guidelines and recommendations are not legally binding to Member States, it urges that they will be applied when the EC assesses state interventions into renewable energy support schemes or capacity mechanisms, and will "guide the future enforcement of EU state aid rules and future proposals for EU energy legislation." The EC is currently prepping a draft for guidelines due next year on environmental and energy aid for 2014-2020.

Broadly speaking the EC's proposals are well-timed, encouraging Member States to take the lead on deployment of renewable energy while raising broader issues of generation, availability to the EC's level, notes the European Photovoltaic Industry Association (EPIA). However, many of the EC's recommendations such as "competitive allocation mechanisms" and auction processes emphasize factors relevant to large-scale renewable energy efforts, and would tend to ignore or lock out smaller distributed-generation efforts and self-consumption, the EPIA notes. And adjusting renewable energy support schemes to be more market-based wrongly assumes that there's a level playing field in the market to begin with; "requesting market responsiveness from renewables would be putting the cart before the horse," says EPIA policy director Frauke Thies.

The EC also calls for Member States to assess and address "generation inadequacy" and whether and how to incorporate ancillary services into the equation particularly to balance renewable energy. This is especially important and needs to be "harmonized" across Europe as a whole, notes the EPIA, adding that the EC should emphasize it even more, particularly development of aggregation strategies. The group also thinks the EC must offer more direction in flexibility requirements such as demand response and energy storage, and rewarding more flexible generation assets.

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Report from the Commission provides recommendations, to double US energy efficiency financing

The Commission's action plan would use funding programs and policies, capital to support billions of dollars in savings to unleash hundreds of billions of dollars.
According to the Commission, energy savings contracts for services and utility energy service contracts, focusing on government buildings, are the most important energy efficiency of financing methods on the market involved. Although these models work well, its scope is not wide enough, to nationwide have far-reaching effects on energy efficiency.

To open the door to new energy efficiency funding, the Commission recommends:
Create a secondary market for efficiency Loanssetting State and local programs to resell loans to investors in secondary Marketsinitiating on Bill-repayment and on-Bill financing Programsimproving federal regulations financing efficiency through property taxes and Trustsattaching energy efficiency incentives for Mortgagessetting, control strategies for the promotion of investment of in Efficiencyincreasing the industry real estate buyers to assist customers with their energy use data awareness through ratings and Informationproviding

Creating a secondary

Since there is no uniform system for the evaluation of these loans, there are no robust secondary market for energy-efficiency loans. On the secondary market, investors purchase loans have already been issued. When institutional investors could buy large amounts of energy-efficiency loans, would create a market for energy efficiency loans.

To remove this barrier and investors, access to the market, recommends that the Commission produced consistent underwriting guidelines, contract, language and data requirements for energy efficiency investments.

The report also recommends that State and local governments set up programs, sell to groups of loans to investors on the secondary market. These programs would be similar to the new camp for energy-efficiency loans (wheel)-program.

Revision of guidelines and to initiate programs

New State and local programs can on invoice refund or taxes to finance energy efficiency. On-Bill-repayment programs offer customers the option to pay improvements in energy efficiency in the course of time through their utility bills. Third lending figures for the investment costs. On invoice financing programs programs are similar to the repayment account, but by the utility or taxpayer capital financed.

Revision of federal regulations could develop energy efficiency financing easier. In real terms, for example, a possible tool for efficiency are estate investment trusts.

Improvement of federal regulations, that of residential property assessed clean energy the current roadblocks would remove (PACE), which interfere with these programs. There are no federal restrictions to commercial speed.

Federal regulations can build energy efficiency incentives in mortgage programs. If programs of incentives for energy efficiency include mortgage, would the housing market towards more efficient decisions draw. It would also people their homes upgrade before selling them stimulating.

Federal tax rules change could encourage industries to make investments that could support energy efficiency. This policy could also target specific energy efficiency improvement measures.

Efficiency to visualize information

The Commission recommends that awareness of the energy efficiency at national level. A step towards improving public understanding of energy use is to make energy data transparent, available and easy to understand. It is also important for the financial markets, which require high-quality data on the actual energy savings, associated with different types of energy-efficiency projects.

Energy efficiency rating systems for building real estate buyers and sellers to a Visual stimulus energy can give attention. Manufacturers can also reviews for appliances and other products.

Utility customers and third can track access to standardised energy data customers authorize their energy savings. For this approach, to succeed State agencies would have to set up rules to ensure the privacy of our customers.

This story was originally published by the Energy Finance Center (CEFC) clean. You can subscribe future stories from the clean energy source for financial services by visiting the CEFC-news page.

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