WRITTEN QUESTION E-2467/00

by Paulo Casaca (PSE), Isidoro Sánchez García (ELDR), Margie Sudre (PPE-DE), Roy Perry (PPE-DE), Mariotto Segni (UEN) and Jean-Claude Fruteau (PSE) to the Commission

(24 July 2000)

Subject: Islands

Proposal for a directive of the European Parliament and of the Council on the promotion of electricity from renewable energy sources in the internal electricity market, (COM(2000) 279 final) recently published by the Commission, raises certain questions.

Point 2.4, which deals with grid connection and reinforcement issues, contains the following paragraph:

It has been suggested, as a general rule, that connection costs of renewable generators should be borne by the grid operator, to facilitate deployment of RES installations. It is doubtful whether this approach can be considered appropriate. In fact, it would lead to a situation where the distance to the grid would be irrelevant to potential investors. Such an approach would thus encourage non-economic installations. On the contrary, to ensure the correct development of the RES sector in the EU, it is important that all relevant investments are fully taken into account, including grid connection costs.

Does this mean that an entrepreneur who wants to install an RES production unit in an outlying region, especially an island region, will in future be liable for grid connection costs, which in the Community's most outlying and isolated regions are likely to be prohibitive?

By way of example, would construction of a submarine cable between a region such as the Shetland Islands and the Scottish mainland entail payment of connection costs by any undertaking that wished to set up business in Shetland, taking advantage of its wind and wave energy resources?

Does it not seem that such a policy, which would most certainly discourage development of this kind of enterprise, would be in total contradiction with Article 154 of the Treaty and with Article 158 on economic and social cohesion, which also makes specific reference to the islands' situation?

Joint answer to Written Questions E-2447/00 and E-2467/00 given by Mrs de Palacio on behalf of the Commission

(10 October 2000)

The promotion of electricity from renewable energy sources (RES electricity) is a high priority for the Community. The 1997 White Paper on renewable energy sources(1) stressed the fundamental role of such sources in terms of security of supply and environmental protection and suggested an indicative objective of doubling the share of Community energy consumption accounted for by renewable energy sources by 2010.

Point 2.4 of the explanatory memorandum of the proposal referred to by the Honourable Members explains why the Commission did not feel it appropriate to propose that the connection costs of RES-E generators should be borne by the grid operator. According to the Commission, such an approach would lead to a situation where the distance to the grid would be irrelevant to potential investors and, consequently, would encourage non-economic installations.

However, it does not follow that an operator wishing to set up a new RES installation in a remote or isolated area should in future be forced to bear all the costs of connection to the grid. The Commission considers that while it does not seem appropriate

to set mandatory rules on cost sharing with regard to connection and other grid system costs at the European level, it should be ensured that the rules at Member State level comply with certain general principles.

Article 7 of the proposal therefore lays down that all the costs and benefits associated with the connection of a new RES installation must be defined on the basis of standard rules and in accordance with objective, transparent and non-discriminatory criteria; the costs of the system installations, such as grid reinforcements, are shared between all generators benefiting from them (the arrangements for sharing must be made on the basis of standard rules and in accordance with objective, transparent and non-discriminatory criteria); Member States adopt rules providing for compensation where generators connected subsequently to the grid derive benefits (connection or reinforcement) associated with a party connected earlier which bore the cost of the operation.

The question of establishing the connection costs for RES-E generators associated with the laying of an underwater cable between an isolated region such as the Shetland Islands and the Scottish mainland, as mentioned by way of example by the Honourable Members, must be considered in the light of the provisions on security of supply. Moreover, without prejudice to the rules of the Treaty, and in particular Articles 87 and 88 (formerly Articles 92 and 93), the public authorities concerned could subsidise such a project.

The Commission is therefore of the opinion that its proposal for a Directive establishes a regulatory framework for RES-E generators which is consistent with Community policy in favour of remote and isolated areas.

(1) COM(97) 599 final.