Indeed this info was first shared by Commissioner Sefcovic during last Windeurope summit in September... details are still to be known as the new renewable energy directive is in preparation and this concrete measure should come with a profound reform of spot markets otherwise the harm for renewable energy business cases could be too high. On the long run, it is necesarry and will help keeping Europe's leadership in power system management.
Can you ellaborate a bit more on your last sentence?
I was reading it as well! In my opinion, it's a non-sense move that could hinder the 2020 and 2030 targets dramatically. As said, "The energy source with the lowest marginal cost - almost always renewables - is usually the first in line to be shut down by power grid operators". On top of the sustainability problems, that would result in higher energy prices - and here in Europe, we already have the highest prices in the world, which encourages industries to de-localize.
Moreover, retroactivity is always a bad move, as it withdraws trust from the investors. There were retroactive measure in Italy and Spain for PV - and we all know how bad the market is now.
Sure Mikel! Let me add some thoughts:
I say in the first part of my last sentence that it is necessary on the long run because, as renewable energy penetration will dramatically increase in the future… keeping such priority will be basically useless. Some people already talked today (provocation?) about “renewables as the new baseload”. Today, I can’t see how such system would be manageable without massive deployment of storage technology and/or appropriate curtailments (by the way, there no reason to talk about retroactivity here... possiblity of curtailments has always been part of the game).
It is clear (and my first point is one of the consequence) that renewables are winning the cost battle today (LCOE talking)… but LCOE above a certain market penetration is pointless, especially for solar or wind, see the quote that Enrico extracted from the article.
I think that those are signals that renewables now have to develop their capacity to match power system needs, for instance through improved disptachability (storage coupling, prediction improvements, etc.) or participation in ancillary services... those developments will increase the LCOE of wind or solar plants but will also boost the value of the power they generate.
On the other side, power systems regulation and markets have to evolve to make this possible: real-time energy markets, active demand response, participation of renewable in ancillary services, role of aggregators, new business models based on storage, etc… Having an adapted, consistent and predictable regulation is probably the biggest challenge.
In summary, and with a good dose of optimism, that brings us to the last part of my last sentence, that the EU panorama seems an interesting base to actively work those innovations. I actually cannot think of another place on earth with such problematics. It is about transforming the challenge into an opportunity… best solutions come from real needs. So at stake is not only low electricity prices (and low emissions) in the EU but also keeping our capability to sell EU technology and knowledge worldwide.
I only partially agree with you. If bringing down the cost of a technology was the only issue, I would completely agree with the statement, as renewables clearly have an advantageous position in the market, creating inequalities between the plants that have to struggle to follow the demand (losing a lot of money in the process) and the renewables, which always get paid if there is sun or wind.
In the long-term, this measure actually make sense, as it would make renewable more competitive in 10-20 years.
However, we have to consider that we might not have a long term and are really talking about the future of the planet - not only about the Q3 earnings of Endesa or RWE (just as an example). Not consuming all the renewable energy that we have might be the difference between 1.5° and 2° - between a future where Andalusia and Sicily will be deserts or still habitable places.
Therefore, I strongly hope that this measure will not take place, as it would drastically reduce renewable energy consumption
Unfortunately, it is official: renewables have lost dispatch priority with the EU's winter package.
Personally, I am very disappointed: only one year ago, those people were at the Paris conference, and now they have approved a law that could hinder the diffusion of renewable energy.
On the positive side, the close-to-zero marginal cost of wind and solar should still ensure that most of the energy will be sold to the grid, at least on a local level.
Biomass CHP will probably suffer much more instead.
I am now curious to see if the EU's members will comply with this law: as the UK, Sweden and the Netherlands did not comply with the previous directory, will Germany (or other countries) do the same for this one?
About the topic, I support more the idea of Emilien Simonot. The prices of renewables like solar and wind are low enough today to permit them to be sold in the market in any case. I was reading yesterday an italian report of a consultancy firm, which says that this reform for example does not make any difference. I'm sorry I cannot report the source.On the other hand, I believe that the support of the law must support more expensive but rightful technologies, but at the same time it must be balanced in order to not give an unfair advantage as it happened in Italy and Spain for solar incentives. Morever, the new settings should not influence national policies, which are the main driver for technology diffusion and development.
What is your point of view?
Hi guys! I am very interested in this particular topic. With the support of other people, I have decided to write an entirely separate post about it, considering more in details the consequences.
Would love to hear your thoughts on the points I have raised! Case study: Renewable energy will lose dispatch priority.
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