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Renewable Energy Policies in Europe

Europe’s electricity market is made up of rigid structures that do not take the environmental advantages of wind energy into account. New entrants face a number of barriers: they have to compete with conventional plants that were built decades ago and which are operated and maintained by government funds through former state-owned utilities in a monopoly market. In addition, incumbent electricity players tend to be powerful vertically integrated companies. New technologies experience obstacles when entering the market and often struggle to gain grid access and obtain fair and transparent connection costs. 

The EU has acknowledged these problems, and set up a specific legal framework for renewable energies, including wind, which seeks to overcome such barriers. 

The first step in this direction was the European Commission’s (EC) 1997 white paper on renewable sources of energy, which set a target for 40,000 MW of wind power to be installed in the EU by 2010. In the event, this target was reached in 2005, five years ahead of schedule. Part of the white paper target was to increase electricity production from renewable energy sources by 338 TWh between 1995 and 2010. 

In 2001, the EU passed what was until recently the world’s most significant piece of legislation for electricity produced by renewable energies, including wind: EC Directive 2001/77/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. 

This directive has been tremendously successful in promoting renewables, particularly wind energy, and it is the key factor explaining the success of renewables worldwide. Its purpose was ‘to promote an increase in the contribution of renewable energy sources to electricity production in the internal market for electricity and to create a basis for a future Community framework thereof’. 

Thanks to this directive, Europe has become the world leader in renewable energy technology.
The strong development of wind power can continue in the coming years, as long as the clear commitment of the European Union and its Member States to wind power development continues to strengthen, backed up by effective policies. 

Therefore, the adoption of the Renewable Energy Directive in December 2008 represents an historical moment for the further development of wind power in Europe. The Directive is a breakthrough piece of legislation that will enable wind power and other renewables to push past barriers and confirms Europe as the leader of the energy revolution the world needs. Under the terms of the directive, for the first time each Member State has a legally binding renewable target for 2020 and by June 2010 each Member State will have drawn up a National Action Plan (NAP) detailing plans to meet their 2020 targets.

Key aspects of the Directive are:

1. Legally binding national targets and indicative trajectory: The 20 per cent overall EU renewables target is broken down into differentiated legally binding national targets. The Member States are given an ‘indicative trajectory’ to follow in the run-up to 2020. By 2011-12, they should be 20 per cent of the way towards the target by 2013 - 14, 30 per cent, by 2015-2016, 45 per cent and by 2017-18, 65 per cent, all compared to 2005. In terms of electricity consumption, renewables should provide about 35 per cent of the EU’s power by 2020. By 2020, wind energy is set to contribute the most - nearly 35 per cent of all the power coming from renewables.

2. National Action Plans (NAPs): the directive legally obliges each EU Member State to ensure that its 2020 target is met and to outline the ‘appropriate measures’ it will take do so, by drafting a National Renewable Energy Action Plan (NAP) to be submitted by 30 June 2010 to the European Commission. The NAPs will set out how each EU country is to meet its overall national target, including elements such as sectoral targets for shares of renewable energy for transport, electricity and heating/cooling and how they will tackle administrative and grid barriers. The NAPs will have to follow a binding template to be provided by the European Commission in June 2009; if the Commission considers an NAP to be inadequate it will consider initiating infringement proceedings against that particular Member State. If they fall significantly short of their interim trajectory over any two-year period, Member States will have to submit an amended NAP stating how they will make up for the shortfall.

3. Priority Access to the electricity grid: The Directive requires that EU countries take “the appropriate steps to develop transmission and distribution grid infrastructure, intelligent networks, storage facilities and the electricity system … to accommodate the further development” of renewable electricity, as well as “appropriate steps” to accelerate authorisation procedures for grid infrastructure and to coordinate approval of grid infrastructure with administrative and planning procedures.

Assuming that the reliability and safety of the grid is maintained, EU countries must ensure that transmission system operators and distribution system operators guarantee the transmission and distribution of renewable electricity and provide for either priority access or guaranteed access to the grid system. According to the agreement, “priority access” to the grid provides an assurance given to connected generators of renewable electricity that they will be able to sell and transmit their electricity in accordance with connection rules at all times, whenever the source is available.

When the renewable electricity is integrated into the spot market, “guaranteed access” ensures that all electricity sold and supported gets access to the grid, allowing the use of a maximum of renewable electricity from installations connected to the grid.

Furthermore, priority during dispatch (which was also the case in the 2001 Directive) is a requirement for renewables, and EU countries must now also ensure that appropriate grid and market related operational measures are taken in order to minimise the curtailment of renewable electricity.

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