WRITTEN QUESTION E-2447/00

by Fernando Fernández Martín (PPE-DE) to the Commission

(19 July 2000)

Subject: Islands

The 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 submitted by the Commission, has caused a number of questions to be raised.

Paragraph 2.4 of the document, which deals with questions relating to grid connection and grid strengthening, contains the following statement:

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.

Would it be right to conclude on the basis of the above that an operator wishing to deploy an RES installation in a peripheral region, and in particular in an island region would, in future, have to bear the grid connection costs, which in the most remote and isolated areas of the Community are very likely to be prohibitive?

For example, would the laying of an underwater cable between an island region such as the Shetland Islands and the Scottish mainland involve a connection cost for any company wishing to establish an installation in the Shetlands in order to exploit its wind and wave energy resources?

Does the Commission not consider that such a policy, which can only discourage the development of such activities, would be completely at odds with the provisions of Article 154 of the Treaty and the provisions of the Article 158 relating to economic and social cohesion, which also contains a specific reference to islands?

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.