WRITTEN QUESTION E-1710/97 by Hiltrud Breyer (V) to the Commission (23 May 1997)

Subject: Electricity Grid Feed Act

The letter of 26 October 1996 from Commissioner Van Miert to Germany's Federal Minister for Economic Affairs, Rexrodt, refers to adverse effects of the Electricity Grid Feed Act on intra-Community trade in electricity. In connection with the letter, Directorate-General XVII was also asked to deliver an opinion. An internal note to DG IV from DG XVII dating from summer 1996 mentions alleged 'disproportionately high windfall profits' associated with new or prospective wind power facilities in Germany. In the meantime (at the beginning of 1997), studies by German research institutes concerning trends in the cost of wind power have been published showing that the Electricity Grid Feed Act clearly does not result in excessive subsidies being paid. These studies demonstrate that only at favourable coastal sites do the rates of subsidy currently granted permit the facilities to operate economically. This calculation does not even take account of the impact of possible future damage to facilities and repair work.

1. Is the Directorate-General for Energy aware of these studies, and will it qualify its statements of summer 1996 in the light of this new information?

2. How does Directorate-General XVII explain the call in the above-mentioned internal note for renewable energy to be promoted purely by means of public budget funding rather than by maintaining and further developing the most successful instruments for the promotion of renewable energy supplies, which do not require any public funding at all (such as the Electricity Grid Feed Act)? Is not such a call for public funding contrary to the Maastricht criteria, which require restrictive budgetary policies?

3. According to the information available to the Energy Commissioner, what methods of promoting renewable energy have been most successful in recent years? Is not a system of guaranteed minimum prices the most efficient way of ensuring that renewable energy penetrates markets as rapidly as possible?

Joint answer to Written Questions E-1708/97, E-1710/97, E-1712/97 and E-1717/97 given by Mr Papoutsis on behalf of the Commission (31 July 1997)

The Commission is not able to comment at this stage on different figures for costs and capacities of the German electricity industry. The Commission, however, wishes to confirm its commitment to promoting renewable energy sources. Given the favourable reactions to its green paper on renewable energy sources ((COM(96) 576 final. )), the Commission intends to propose further measures to promote penetration of renewables in the Union in order to achieve the proposed indicative objective of a 12% share by 2010.

Directive 96/92/EC of the Parliament and of the Council of 19 December 1996 concerning common rules for the internal electricity market ((OJ L 27, 30.1.1997. )) came into force on 19 February 1997. Articles 8(3) and 11(3) explicitly offer the possibility to Member States, to give preference to electricity produced from renewables, waste or combined heat and power (CHP), at the stage of load dispatch. However, the Directive does not address the problem of financing such actions, which, following the principle of subsidiarity, will have to be solved at national level during the implementation of the Directive. The Commission will examine all proposed measures as to their compatibility with the Directive, without prejudice to relevant provisions of the EC Treaty, in particular the provisions concerning competition.

In its Resolution of 27 May 1997 on a strategy for renewable energy sources, adopted on the basis of the Commission's green paper on the same subject, the Council noted that in the framework of the liberalisation of the energy markets, a policy at the level of Member States and, within the limits of subsidiarity, at Community level, is required to improve the competitive position of renewables. The Commission intends to give further consideration to this issue, including the question of electricity feed-in laws, in the framework of the preparatory work for the establishment of a Community strategy on renewables. The Commission intends to publish its strategy in the form of a white paper and a proposal for an action plan, later in 1997, as announced in the green paper.