[FOCUS] Green energy cross-border trading faces opposition
RENATA GOLDIROVA
19.05.2008 @ 14:55 CET
EUOBSERVER / FOCUS - As a new EU law aimed at having green energy account for 20 percent of the union's overall energy consumption by 2020 goes through the legislative pipelines, some EU member states are questioning one of its core ideas - the cross-border trading of renewable energy.
"We have objections because the [trading] system could threaten the already existing and well-functioning support schemes at national level," said one diplomat from Germany, the driving force behind the opposition.
Wind, solar, geothermal or hydropower should cover a fifth of EU energy consumption in 2020 (Photo: European Commission)
The main concern centres around the European Commission's proposal to set up so-called guarantees of origin (GO), a certificate allowing producers to trade their renewable energy within the 27-nation bloc.
The system is a part of a draft law - the renewables directive - tabled by EU energy commissioner Andris Piebalgs in January this year.
The legislation lays out exactly how to get from the current 8.5 percent to a 20 percent share of renewables in EU energy consumption by 2020, with each member state facing a specific target mirroring its geographic and economic potential.
The European Commission believes that cross-border trading would motivate companies to engage in the renewable energy sector and motivate EU capitals to use the most cost-effective way of meeting their targets.
In practice, this could mean that a Greek solar farm produces electricity for Germany if Germany does not have enough potential to meet its individual target or if it finds it too costly to produce such energy on its own territory.
But Berlin has been up in arms about the proposal from the beginning, claiming the guarantees of origin would endanger its feed-in tariff scheme, an incentive programme set up to boost renewable energy.
Under the tariff scheme, regional or national electricity utilities are obliged to buy renewable electricity at fixed - above market rate - prices set by the government. The idea is to help overcome the cost disadvantages of green energy production, while ensuring consumers pay less than for conventional energy.
According to the German diplomat, there is a risk that local producers would rather export their certificates for higher prices than feed their energy into the national grid at fixed prices.
"It would be difficult for a country to guarantee that it meets its individual [green energy] target," he said, arguing it is impossible to predict companies' behaviour.
The commission has already tabled ideas that should enable the EU-wide guarantees of origin system to function alongside national support programmes, with its spokesperson indicating there would be "limits" to the trade.
But sceptics point out that the GO could result in legal uncertainty and even end up at the European Court of Justice as tradable certificates are de facto a new good and setting limits could be in breach of one of the EU internal market's main principle - the free movement of goods.