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6. EU Developments

EU-ETS ‘a failure’

A study by UK think tank Open Europe has claimed that the EU Emission Trading Scheme will cost British firms around $2.8 bn over the first three years, while businesses in Germany will make almost $1.8 bn selling off unused permits, basically because the initial carbon cap targets were set too high e.g. in Germany. The glut of free permits also lowered the price of carbon credits, reducing the incentive for businesses to cut emissions. When the ETS was introduced, the price of the credits was $10, rising to a peak of $38 but then falling to less than $12.60, although they did recover later. Hopes are that these problems will be resolved in phase two of the scheme- with tighter caps. That’s certainly what the UK is pushing for- in order to support its proposed new nuclear programme and renewables. But Open Europe says that, so far, the scheme is ‘an environmental and economic failure’ and ‘an administrative nightmare’.

The National Allocation Plans from each EU county for round 2 of the ETS (2008-12) have now been lodged with the EC, specifying proposed national ‘carbon cap’ levels. The UK aimed high, with an 8m tonne cut, but Estonia, Poland & Latvia wanted higher quotas.

Euros for Bulgaria

Refocus Weekly reported that, with Bulgaria now a member of the EU, the European Bank for Reconstruction & Development (EBRD) will lend Euro 20m to Bulgaria’s Raiffeisenbank to promote renewable energy projects in private companies. Eligible projects include biomass, biogas, wind, run-of-river hydro, geothermal and PV, as well as energy efficiency systems. EBRD has committed Euro 1.4 bn to 64 projects and is the largest investor in Bulgaria. Companies that invest in renewables will be eligible for a rebate of 20% on the loan.

In parallel, the Energy Conservation Agency in the other new EU country, Romania, has drafted a law to provide incentives and subsidies for the use of green heat which could fund 30% of the cost for biomass and geothermal heat pump systems, and 50% for solar thermal. The government would also cut VAT to 9.5% for renewable energy equipment, and exempt payment of environmental taxes for companies using such equipment for ten years.

Offshore Belge

Belgium is seeking consent to install a windfarm off the coast on Bligh Bank, a shoal 46 km from the port of Oostende, in depths of 20 to 35 m. It would have 66 turbines each of 5MW capacity and would involve an investment of Euro 800m. The proposal by Belwind, part of the Econcern group, is for a site further offshore than applications from C-Power & Eldepasco, whose concessions have already been granted. The Econcern group comprises Ecofys, Ecostream, Evelop & Ecoventures. Evelops’ portfolio already includes the 120 MW Q7 offshore project in the Netherlands & the 315 MW Sheringham Shoal project in the UK.

France goes greener

As part of a regular review process, the French Minister for Industry, Finance and Economics has issued new tariffs for solar, wind, biogas and geothermal energy. The new programme of Advanced Renewable Tariffs differentiates the price paid per kilowatt-hour by technology, by location or size of the installation, and the number of years the generator has been in service. The new tariffs pay Euro 0.55/kWh for building-integrated solar photovoltaics, and doubles payments for electricity from rooftop solar panels to Euro 0.30/kWh. They also provide a 50% capital subsidy for the cost of the solar panels and other equipment. In addition, tariffs for biogas were more than doubled to Euro 10.3/kWh for plants under 150 kW.

Paul Gipe told Renewable Energy Access that this put France on a par with Germany: ‘France has lagged behind other European countries, notably Germany, in developing renewable energy. Previous French tariffs for solar energy were especially noncompetitive with those in Germany and Spain.’ He noted that the regional government of Rhone-Alps in SE France also provides an additional payment of Euro 0.30/kWh, bringing the total for rooftop solar to Euro 0.60/kWh, more than that paid in Germany.

While the new tariffs did not increase the base rate for onshore wind, they increased the time that wind projects receive the premium payment from 5 to 10 years. This, said Gipe, significantly improves the profitability of wind turbines at moderately windy and windy sites. The new tariffs also substantially raised the tariffs for offshore wind turbines to Euro 0.13/kWh and also extended their premium payment period from five to ten years.

France has a very ambitious target of 12,500 MW of wind energy capacity installed on land by 2010. This year France will pass its first 1,000MW of wind projects (supplying 0.25% of consumption). There are nearly 3,000MW of wind projects in the queue for installation under the previous French wind tariffs. The government wants 13,500 MW by 2013, according to reports by Reuters, and 17,000 MW by the end of 2015, which Windpower Monthly (August) noted was ‘a lot more than its plans for nuclear in the same period’. And in theory wind turbines could supply 30% of the country’s electricity by 2030 if the government removed barriers, according to the French wind energy association.

* France’s socialist presidential hopeful, Segolene Royal, who was environment minister in 1992-1993, has called for the share of nuclear power to be gradually lowered to allow a place for more renewable energy- she wants 20% by 2020. Reuters

German Green power only costs consumers Euro 1.60

The additional costs of using power from green sources for an average home with electricity consumption of 3,500 kWh per year currently is Euro 1.60 a month, according to the German federal environment ministry.

It commented that ‘While the costs of conventional electricity generation are clearly on the increase, most of the feed-in fees laid down in the Renewable Energy Sources Act are decreasing every year. Despite continuously and clearly rising volumes of electricity covered by the Renewable Energy Source Act, the monthly costs for a household resulting from the Act will only increase to a maximum of Euro 2.80 a month by the middle of the next decade and will then decrease.’

It added that this public subsidy helped to establish ‘the foundations and prerequisites for a sustainable technologically future-oriented energy supply that is cost-effective in the long term. The prospects for the future are good’.

* The renewables share in Germany’s total electricity supply could rise to 25% by 2020. ReFocus Weekly reported the German renewables industry estimate that 170,000 people already work in the sector and it claimed that, compared with quota/trading systems like the UK’s Renewables Obligation, the Renewable Energy Sources Act with its fixed long-term calculable feed-in fees was ‘a significantly more efficient and cost-effective instrument for promoting renewable energies and leading them to profitability’. Germany was the largest exporter of wind power in 2005, accounting for 38% of the global revenue of Euro 10.6 billion. The German Wind Energy Association says exports of turbines increased 55% in 2005 over 2004, to Euro 2.9 billion. Domestic sales rose 11% to Euro 1.16 bn. There are now 18,000 turbines in Germany.