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 the €0.18 ($0.19)/kWh value cap on photo voltaic and different renewable will not be obtainable in most member states from June 30.
The European Fee won’t lengthen the income cap launched in September 2022 for infra-marginal applied sciences equivalent to PV and wind.
In a report on emergency interventions to deal with excessive vitality costs, the fee concluded that “the extension of those measures doesn’t appear needed or advisable on the present time” as a result of “the electrical energy provide within the EU and costs as we speak have modified considerably from final yr’s file excessive ranges.” The report stated that measures to scale back electrical energy demand, infra-marginal revenue tax, and retail value setting guidelines “contributed to the stabilization of European vitality markets, along with different emergency proposal adopted in 2022.”
The infra-marginal income cap on renewables, nuclear, and lignite units a €0.18/kWh value cap and has been in place since December 2022 in most member states. Will probably be in impact till June 30, 2023, apart 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 will likely be primarily based on a call issued by the regulator. In Slovakia, the measure will likely be applied till December 31, 2024. And in Germany, the applying interval could also be prolonged till April 30, 2024, based on the report. The nation is reportedly nonetheless deciding whether or not to go forward with the transfer.
The fee stated 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 buyers 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 is just restricted information to report on the revenues obtained from the implementation of the revenue 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.
“Nevertheless, these assumptions don’t appear to have materialized through the reporting interval,” the fee stated.
The report highlighted concern that the influence of the emergency measure on present energy buy agreements (PPAs) and the shortage of enthusiasm for brand spanking new ones have been the principle causes behind the choice to not lengthen the income cap. Particularly, it raises issues about conditions the place the cap applies to fictitious revenue primarily based on the wholesale value of electrical energy, which can end in producers being compelled to promote electrical energy at a loss.
“A possible extension of the measure will hinder one of many targets set out within the proposal for the design of the electrical energy market, which is to encourage the acquisition of PPAs and make sure that the PPA market is as liquid as doable,” concluded fee.
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