In October 24th European Council reached an agreement on 2030 Climate and Energy Policy Framework. A binding renewable energy target of at least 27% was set at European level, a binding EU target to reduce domestic greenhouse gas emissions by 40% compared to 1990 levels and a non-binding energy efficiency target of 27% (to be re-visited by 2020). The framework does not mention individual targets for state implementation so it is still not clear how efforts will be conducted at the national level. European Institutions have now to work in the governance system to set the framework to reach this 2030 targets.
In October 2015, the European Environment Agency published its “Trends and projections” report, according to which the EU would be on tract to meets its climate and energy targets set for 2020. The report states that GHG emissions were already in 2013 19.8% below 1990 levels (and therefore, very close to the 20% target). Regarding renewables share, the 2020 target could be meet, provided that Member States sustain the speed of renewables’ development.
On January 14th 2016 the first auction of RES capacity under the RD 413/2014 framework was held. The auction was designed to provide a similar remuneration scheme that the one that applies to current installations (RD 413/2014). Developers were bidding to build 500 MW of wind energy and 200 MW of biomass plants. The auction was very competitive, around 5 times oversubscribed for onshore wind, and awarded contracts without any incentive, this is, at 100% discount to the opening price. EDPR was awarded 93 MW of wind energy composed by projects of the company’s pipeline located in very high wind resource areas, with some capex already invested and environmental permits near to expire. Given those very particular conditions, and anticipating an oversubscribed auction following years of no new capacity added in the country by the whole sector, the company decided to bid competitively, even if only benefiting from the floor protection over operation and maintenance cost provided by the auction. The Government has announced that more auctions will be organised, possibly in 2016, to contract the capacity that Spain needs to comply with its 2020 targets. In connection with 2020 targets, the ministry of Industry, Energy and Tourism published in December its “National Energy Infrastructure Plan 2015-2020” which includes government’s view on capacity additions by technology throughout the period. According to this document, and in order to comply with the 2020 targets, around 4.5-6.5 GW of wind capacity would be needed.
In France, the “Energy Transition bill”, whose aim is to build a long-term and comprehensive energy strategy, was finally passed in July 2015. In 66 articles, the text targets to cut France’s GHG emissions by 40% between 1990 and 2030 (and divide them by four by 2050), to halve the country’s energy usage by 2050, to reduce the share of fossil fuels in energy production, to cap the total output from nuclear power at 63.2 GW and bring the share of renewables up to 32% of the energy mix. Following the provisions of the “Energy Transition Law”, the French government disclosed a draft decree with the details of a new remuneration scheme for renewables. According to this text, renewables will be remunerated by contract-for-difference scheme. However, the implementation for wind energy will probably be delayed to 2018 and up until then, new wind farms will be remunerated according to the current feed-in tariff scheme.
In Poland, a new Renewables’ Act was approved in February 2015, introducing a different support system for new renewables plants. According to the law, the current Green Certificate (GC) system will be replaced by a tender scheme. However, the current GC scheme will be maintained (with some adjustments) for operating plants. These plants will have the choice to remain under the GC scheme or shift to the new scheme through specific tenders for operating assets.
In Italy a new draft decree envisaging new wind tenders for at least the two next years. According to the draft, 800 MW of onshore wind could be tendered, with a reference tariff of 110€/MWh. The publication of the final decree is expected for the first quarter of 2016.
On February 26, DECC (Department of Energy and Climate Change) and National Grid, published the results of the first “Contract for Difference” (CfD) auction. Over 2.1 GW of capacity across 27 projects was awarded a CfD contract. Successful projects include 15 onshore wind projects, 2 offshore wind and 5 solar PV, among others. UK energy secretary Amber Rudd announced a “new direction for UK energy policy” in a speech on 18 November. According to it, the strategy is likely to be focused on gas, nuclear, and provided it cuts its costs, offshore wind. With regards to offshore, she announced that the government would fund three auctions before the end of the decade, with the first probably to be held by end 2016. However, this funding will depend on offshore wind capacity to lower its costs.
The European Commission (DG Competition) disclosed in May 2015, its clearance to the Romanian Renewables support scheme amendments notified in 2013 and 2014. Therefore, the amendments have been declared compatible with European regulation, specifically, the European Energy and Environmental State aid Guidelines (EEAG). On December 2015 the Government finally set the value of the GC quota for 2016 at 12.15%, the same value that was proposed by ANRE by the end of July (well below the original 17% set in the original RES Law).
There are two types of renewable reverse auctions in Brazil: energy auctions and capacity auctions. Energy auctions result in long-term power purchase agreements (PPAs) being signed between generators and distributors in order to satisfy distribution companies’ demand. Capacity auctions result in long-term PPAs signed between generators and Brazil’s wholesale market operator, being the main purpose to guarantee the country’s reserve margin and grid safety. In 2015, renewables’ projects participated in four auctions. EDPR was awarded 140 MW of wind in an auction held on November 13th.