Threatening progress: the EU’s Renewable Energy Directive and the threat to end-user choice

In an effort to strengthen consumer choice as well as clarify post-2020 regulations, on 30th November 2016 the European Commission released its vision for a new Renewable Energy Directive (REDII). In most aspects, the European Commission has succeeded – with one important exception – the proposal to introduce a mandatory auction of Guarantees of Origin (GOs) from supported power generation.

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ECOHZ strongly supports RECS International’s work. Read Jared Braslawsky’s, Secretary General of RECS International, insights on the issue.


Threatening progress: the EU’s Renewable Energy Directive and the threat to end-user choice

By Jared Braslawsky,
Secretary General RECS International

Few would argue about the impact consumers are making in the electricity market. From the start this was one of the goals of market liberalization, which included choice, competition and reduced costs. In recent years, however, these goals have become realities. Market players and large end-consumers, led by major companies, have driven growth in terms of choice of electricity products, long-term agreements and renewable Power Purchase Agreements (PPAs). Now more than ever electricity end-users are playing an active role in the transition to a more renewable energy supply. The European Commission – and nearly all of the stakeholders who are involved – support increased consumer activity in the market as well as an associated push for cost-efficient, locally produced renewable energy.

In an effort to strengthen consumer choice as well as clarify post-2020 regulations, on 30th November 2016 the European Commission released its vision for a new Renewable Energy Directive (REDII). However, there is one critical place where end-users, market players, environmental groups and many national governments all disagree. In article 19:2 of the draft text there is mention of a mandatory auction of Guarantees of Origin (GOs), the ‘currency’ that drives the renewable electricity market. There is considerable concern that this auction, in its current form, would take away consumer choice in the electricity market and restrict the ability to support specific renewable projects.

Auctions would commoditize renewable electricity and make it impossible to choose a specific product. The proposal would severely impact existing long-term agreements as well as new renewable projects in Europe. Generators for corporate PPAs would be obliged to release the GOs for Government-run auctions, rather than issuing them to the PPA offtaker – undermining sustainability goals of the corporate. It would strip end-consumers of the opportunity to have direct contact with electricity producers and would significantly complicate the possibility for community investment in renewables.

Industry stakeholders, generators and consumers alike, view this as a U-turn in the direction previously endorsed by the European Commission. It will constrain consumers in the electricity market precisely at a time when governments and end-users are looking for ways to empower citizens and businesses. RECS International is leading a coalition of stakeholders who intend to address these issues in the European Commission and the European Parliament.