European promotion of the use of energy from renewable sources

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the promotion of the use of energy from renewable sources 23.1.2008

Energy from renewable sourcesIn 2005, in accordance with directive 2001/77/EC on the promotion of renewable electricity, the European Commission reported on the application and coexistence of the different support mechanisms for electricity from renewable energy sources (COM(2005)627). The report found that in general the effectiveness and efficiency of support schemes differ widely across the Member States. It also found that the different support schemes are characterised by different levels of maturity and that policy schemes in some countries – in particular quota obligation systems – are fairly young systems and still in a transitional phase. The report also found that there is scope for greater cooperation between member States and optimisation of individual support schemes. Whilst harmonisation of support schemes was considered a long term objective, persisting barriers to the development of renewable electricity and the low level of competition in the electricity market implied that such harmonisation would be premature. The report concluded that the Commission should closely monitor support schemes and report again in 2007. This report fulfils that commitment.

This report presents an updated review of the performance of support schemes using the same indicators presented in the 2005 report. It finds that, as in 2005, well-adapted feed in tariff regimes are generally the most efficient and effective support schemes for promoting renewable electricity.

This report also examines the relationship between support schemes and the internal electricity market, including current policy proposals to increase competition, the application of rules on the free movement of goods. The report underlines the need to improve the competitive situation on the internal electricity market, and recalls the need for implementing the Commission proposals regarding unbundling, improved regulatory oversight and cooperation, network cooperation and transparency. These proposals are vital in order to improve the market access for renewable electricity. It also concludes that it is important that the design of support systems is compatible with a competitive internal electricity market. If the renewable electricity is traded on the electricity market, it can contribute to the development of a more competitive market through for example a more diversified supply structure. Member States' efforts to coordinate and optimise their support regimes are then examined. Several Member States have adapted their support schemes to optimise or improve their effectiveness and there have been some efforts to coordinate between Member States.

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