EU Parliament Tweaks Renewable Energy Market Rules

The European Parliament’s Committee on Industry, Research & Energy (ITRE) has voted to modernize Europe’s electricity markets by approving the recast Electricity Directive & Regulation, two of the main files in the Clean Energy Package.

According to WindEurope, priority dispatch, which guarantees renewables are injected first into the grid, will continue to apply to existing wind farms.

For new assets, priority dispatch will be phased out from 2020 onwards and replaced by better rules on curtailment, WindEurope said, adding that in the case of grid congestion, renewables will be curtailed last and properly compensated for it.

The Parliament voted to retroactively phase out balancing requirements, both for new and existing installations, which means that renewables assets will no longer be exempted from compensating Transmission System Operators (TSOs) for any deviations in their projected generation.

“It’s good the Parliament is keeping priority dispatch for existing wind installations. And to see clear rules on curtailment. This helps wind energy projects to reduce risk, lower their costs of capital, and thus minimise the cost of renewables support for consumers. But we are a bit worried about the new rules on balancing. It’s unclear what compensation will need to be paid to TSOs. And wind farms will need to delegate this to third parties with no guarantees it will be done at a fair price,” WindEurope CEO, Giles Dickson, said.

ITRE also voted to introduce an Emission Performance Standard (EPS) from 2020 of 550 gr CO2/kWh for capacity payments, which is expected to phase out capacity payments for Europe’s most inefficient and polluting power plants, leaving more room in the market for renewables, and applying immediately for new installations instead of after five years as the European Council proposed.

Finally, the committee gave its support to a European-level monitoring of the security of electricity supply. This is significant as any country seeking to apply a national capacity mechanism would need to justify this based on European, and not national, resource adequacy assessments, WindEurope said.