Renewables priority dispatch, balancing exemptions criticised

27 April 2017 15:16 Source:ICIS

Energy market union EURELECTRIC and the European Federation of Energy Traders (EFET) have called for tighter regulations on small renewable producers to ensure they are not exempt from balancing and dispatch rules.

In the winter package, published in November, the European Commission attempted to establish the principles of universal balancing responsibility and the phase-out of priority dispatch for new renewable installations ( see EDEM 30 November 2016 ).

But the commission’s proposals leave open the possibility for installations of less than 500kW being exempt from the new rules.

EFET pointed out in a recent policy document that this threshold would “exclude the vast majority of solar power installations from common market rules”.

“We believe that the legislation should go further and phase out network-related privileges for all renewables installations, or at the very least set a much lower threshold or limit the exemption to pilot projects in new renewable technologies,” EFET said.

A spokeswoman for EURELECTRIC told ICIS on Wednesday that the organisation was also against the 500kW threshold.

“For new capacity … there should be no exemptions based on size of power capacity,” she said.

Retroactive change?

EFET also said that priority dispatch should not just be removed for new projects, but also for existing projects in place before the rules come into force.

“We believe the obligatory grandfathering of nationally created rights through EU legislation is unnecessarily generous and may not be entirely consistent with the current state aid guidelines for energy and environment,” EFET said.

This position is controversial as it would amount to a retroactive change to laws.

The spokeswoman for EURELECTRIC said that the organisation was against such retroactive changes. “As such, we are aligned with the EC proposal of grandfathering the provisions applying to capacity installed,” she said.

The issue of retroactively changing the rules for renewables producers has proven controversial in the EU, most notably in Spain where reforms were introduced between 2010 and 2012 cutting the generous system of feed-in tariffs and imposing a ceiling on investment returns. As a result of this decision, Spain has 27 cases going through the World Bank’s international arbitration court, ICSID ( see EDEM 6 September 2016 ).

By Matthew Jones