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EU to avoid prolonging revenue cap on renewables – pv magazine International

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The European Fee says it’s pointless and unwise to increase the emergency measures for the vitality market adopted on the finish of 2022. Which means that the €0.18 ($0.19)/kWh worth cap on photo voltaic and different renewable will not be out there in most member states from June 30.

The European Fee is not going to prolong the income cap launched in September 2022 for infra-marginal applied sciences resembling PV and wind.

In a report on emergency interventions to handle excessive vitality costs, the fee concluded that “the extension of those measures doesn’t appear crucial or advisable on the present time” as a result of “the electrical energy provide within the EU and costs at present have modified considerably from final yr’s file excessive ranges.” The report mentioned that measures to scale back electrical energy demand, infra-marginal earnings tax, and retail worth setting guidelines “contributed to the stabilization of European vitality markets, along with different emergency proposal to be adopted in 2022.”

The infra-marginal income cap on renewables, nuclear, and lignite units a €0.18/kWh worth cap and has been in place since December 2022 in most member states. Will probably be in impact till June 30, 2023, aside from Austria, the Czech Republic, Finland, France, Luxembourg, Poland, Portugal, Slovenia, and Spain, the place it can apply till December 31, 2023.

In Cyprus, the termination of the measure shall be primarily based on a call issued by the regulator. In Slovakia, the measure shall be applied till December 31, 2024. And in Germany, the applying interval could also be prolonged till April 30, 2024, in response to the report. The nation is reportedly nonetheless deciding whether or not to go forward with the transfer.

The fee mentioned the implementation of the infra-marginal income cap is heterogeneous. In a public session on a possible extension, most respondents sided with it, arguing that this heterogeneous implementation resulted in uncertainty for traders and discouraged new investments. In addition they say the transfer is troublesome to implement and has excessive administrative prices in comparison with their advantages.

It says that it’s only restricted knowledge to report on the revenues obtained from the implementation of the earnings cap. Bulgaria collected BGN 321 million ($176 million) in December 2022, whereas Lithuania collected roughly €10 million by March 9, 2023. Revenues from the cap have been initially estimated to exceed €50 billion.

“Nonetheless, these assumptions don’t appear to have materialized throughout the reporting interval,” the fee mentioned.

The report highlighted concern that the impression of the emergency measure on current energy buy agreements (PPAs) and the shortage of enthusiasm for brand new ones have been the primary causes behind the choice to not anticipate income. Specifically, it raises issues about conditions the place the cap applies to fictitious earnings primarily based on the wholesale worth of electrical energy, which can end in producers being pressured to promote electrical energy at a loss.

“A possible extension of the measure will hinder one of many aims set out within the proposal for the design of the electrical energy market, which is to encourage the acquisition of PPAs and be certain that the PPA market is as liquid as attainable,” concluded fee.

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