CEER Review of the renewable energy support schemes in Europe

25. February 2013. / SEE Energy News

The latest Status Review of Renewable and Energy Efficiency Support Schemes in Europe published by the Council of European Energy Regulators (CEER) shows that in most member states, the support schemes are financed by passing on suppliers’ costs to end-users.

The unit support level on final electricity consumed varies from EUR 0.25/MWh to EUR 25.52/MWh, while the average support is roughly EUR 7/MWh. The electricity from renewable sources that used the support schemes on average represented 8% of the gross electricity generation, and 9% of the final consumption in 2010. The Czech Republic leads the CEE region for TWh generated from renewable sources that received support schemes. At the EU level, Germany had the highest level of renewable electricity receiving support schemes. As concerns access to the grid and balancing costs, the report shows that in most of the reporting countries, access to the grid and dispatching are granted with priority, and the generators are responsible for the balancing costs of their renewable generation facilities. For the investors in the renewable energy sector, the report could serve as an indicator of the pressure put on the end-consumers in a particular market, and could potentially raise a red flag as to the likelihood that a support scheme might be revisited.

The Council of European Energy Regulators (CEER) holds its Annual Meeting this year on the January 29. One of the topics on the agenda is CEER’s latest report, “Status Review of Renewable and Energy Efficiency Support Schemes in Europe”.

The report assesses the impact of the costs of the support schemes for renewable energy in the EU and EEA. The report focuses only on those EU member states and EEA countries that provided a complete set of information as requested by CEER1. The report is relevant in the context of increasing energy costs for the end-consumer, as most of the costs brought about by the support schemes are either passed on through higher electricity prices or added directly to the electricity bill. The purpose of the Report is to assist decision makers both by providing comparative information for future support scheme designs, and in helping them to shape a harmonised approach with the aim of applying targeted and cost-effective support schemes.

For the investors in the renewable energy sector, the report could serve as an indicator of the pressure put on the end-consumers in a particular market, and could potentially raise a red flag as to the likelihood that a support scheme might be revisited.

According to the Renewable Energy Directive (Directive 2009/28/EC), a support scheme is any instrument or mechanism used by a one or several member states that promotes the use of energy from renewable sources either by reducing the cost of that energy, increasing the price at which it can be sold, or increasing the volume of energy from renewable sources in the final consumption. The Directive further gives examples of the options available to member states in building a support scheme: investment aid; tax exemptions or reductions; tax refunds; renewable energy obligation, including green certificates; and direct price support schemes, such as feed-in tariffs and premium payments. Nevertheless, the Directive allows each member state to choose and implement the support scheme that best fits its own energy market.

The consequence of this approach is that there is currently no harmonised system of support schemes across Europe, with the mechanisms available to stakeholders ranging from investment grants, to feed-in tariffs to green certificates.

Based on the CEER report, the preferred support mechanism so far has been feed-in tariffs.

For the 19 countries analysed, the unit support level on final electricity consumed varies from EUR 0.25/MWh to EUR 25.52/MWh, while the average support is roughly EUR 7/MWh. The electricity from renewable sources that used the support schemes on average represented 8% of the gross electricity generation, and 9% of the final consumption in 2010.

Based on the data reported, the Czech Republic leads the CEE region for TWh generated from renewable sources that received support schemes (6.169 TWh). seconded by Austria (5,989 TWh), followed by Hungary (1.84 TWh), Romania (1.5 TWh) and Slovenia (0.6 TWh). At the EU level, Germany had the highest level of renewable electricity receiving support schemes both in 2010 and 2011 (82 TWh, respectively 103 TWh).

The report shows that in most member states, the support schemes are financed by passing on suppliers’ costs to end-users.

Surprisingly, out of the countries analysed, Romania in 2010 and 2011 had the lowest share of total electricity that received support compared to the total gross electricity production and consumption.

Another piece of relevant information is the weighted average of the support level by technology in 2011. The highest level of support provided in the EU and EEA was in the Czech Republic (EUR 214.16/MWh). In the CEE region, the highest level of support after the Czech Republic was recorded in Hungary (EUR 107.33/MWh), followed by Slovenia (EUR 81.05/MWh) and Romania (EUR 64.99/MWh).

As concerns access to the grid and balancing costs, the report shows that in most of the reporting countries access to the grid and dispatching are granted with priority, and the generators are responsible for the balancing costs of their renewable generation facilities.

Source schoenherr

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