Industry body WindEurope is urging the European Parliament to reject proposals on revenue caps made by MEP Nicolás González Casares.
The EU is debating a revised electricity market design and the European Commission has set out a targeted reform to end the investment uncertainty caused by uncoordinated government interventions in electricity markets.
WindEurope has urged the European Parliament and Member States to stick to this plan after the MEP proposed lowering the bar to apply revenue caps, allowing Member States to design them and making them more permanent. National interventions like this would undermine the EU electricity market and deter investments in home-grown renewables claims the industry body, calling them bad for consumers and energy security.
The EU is about to raise its Renewable Energy target for 2030 from 32% to 42.5%. For wind this means doubling the current installation rate to 30GW/year. Europe invested only €17bn in new wind farms in 2022 however, down from €41bn in 2021 – and orders for wind turbines were down 47% year on year.
WindEurope puts this down to inflation and uncoordinated government interventions in electricity markets which have undermined the fundamentals of the EU’s internal energy market. National taxes, levies and revenue caps have sapped investor confidence it says. The result is only 10GW of new wind farms reached Final Investment Decisions (FID) in 2022 – a third of what Europe needs to build each year. No single large offshore wind farm reached FID in 2022.
The EU electricity market design plays a key role in ensuring the necessary investment certainty to create more renewables and beat the energy crisis and accelerate climate action.
WindEurope backs the European Commission’s balanced proposal for a revision of the EU electricity market design. But in his draft report MEP Nicolás González Casares wants to lower the threshold for Member States to declare regional “electricity price crises” when they’d be allowed to apply revenue caps on inframarginal generation. Member States would also be given more flexibility in designing these caps. His proposal would lead to a further fragmentation of the EU electricity market and deter much-needed investments, claimed WindEurope.
Calling on the European Parliament to reject MEP González Casares’ proposals, the wind industry player set out a new position paper in which it calls on Brussels and national governments to: Avoid uncoordinated power market interventions; Allow different routes to market for wind energy: two-sided CfDs, PPAs and merchant investments; Facilitate corporate renewable PPAs; Support the expansion of Europe’s electricity grids; Facilitate hybrid offshore wind farms.
Find a more detailed overview of what WindEurope wants from the upcoming EU electricity market revision in its new position paper.