The European Union has published new guidelines for renewable energy support that will determine how member states can support solar PV deployment.
The new state aid guidelines call for the introduction of ‘feed-in premiums’ which represent a premium paid on top of the market price, designed to “expose renewable energy producers to market prices”. Feed-in premiums will be granted through a lowest-cost-wins auction to encourage competition.
Although member states can not explicitly pre-define which renewable technologies will receive support under feed-in premiums, they will be able to require a minimum number of different renewable technologies to help ensure targets are met.
For small-scale generators, however, the EU will allow member states to side-step the introduction of feed-in premiums and certificates after it approved aid in the form of feed-in tariff for installations with a generation capacity below 1MW.
The current feed-in tariff and renewable obligation mechanisms in the UK will not be affected by the new guidelines. The EU has confirmed that when a member state has already received confirmation for state aid for a predetermined period, “such aid can be granted under the entire period under the conditions laid down in the scheme at the time of the confirmation”.
In response to the draft guidelines, the European Photovoltaics Industry Association (EPIA) questioned the proposed competitive bidding process for feed-in premiums. In a statement EPIA said: “This approach, de facto technology neutral, would only allow the currently cheapest technologies to get qualified for support. This would exclude other technologies that could – if they were developed – become the most cost - effective options in the future. Alternatively, the support level would have to be quite high to allow these less mature technologies to come in, while generating high windfall profits for the more mature ones.
“The very purpose of state aid is to remove different barriers and to help less competitive technologies develop: a technology neutral approach would simply undermine this objective. In order to avoid over-compensation, support should on the contrary be technology specific and tailor-made to segments and markets.”
The full draft regulations published by the EU can be viewed here. A consultation will run on the proposed guidelines until 14 February 2014.