WRITTEN QUESTION E-1632/01

by Piia-Noora Kauppi (PPE-DE) to the Commission

(12 June 2001)

Subject: Financing the development of renewable energy sources

The Green Paper on Security of Energy Supply referred to the need to develop new and renewable energies with the objective that the EU would produce up to 22 per cent of its electricity from such energy sources.

Given that ambitious objective, how does the Commission plan to find the means to finance the development of renewable energies without penalising other environmentally clean energy sources (such as nuclear power) and without creating unacceptable distortions in the electricity market?

Answer given by Mrs de Palacio on behalf of the Commission

(2 August 2001)

The 22 % of electricity produced from renewable energy sources referred to by the Honourable Member is contained in the Commission's proposal for a Parliament and Council Directive on the promotion of electricity from renewable energy sources in the internal electricity market(1). The European Council of Ministers adopted its Common Position on this proposal on 23 March 2001(2).

The basic objective underlying this proposal for a Directive is to create a framework to facilitate a medium-term significant increase in renewable generated electricity within the Community. It is an important part of measures aimed at meeting the obligation to reduce the emission of greenhouse gases accepted by the Community at Kyoto and must be seen in the light of the indicative objective of doubling the share of renewable energy from the present 6 % to 12 % of gross inland energy consumption, as set out in the White Paper(3) on renewable energy sources and endorsed by the Energy Council in May 1998. Under the terms of the proposal for a Directive, Member States would have to set national targets for the consumption of electricity from renewable energy sources. Indications for national targets are given in an annex to the proposal. If all national targets are met, the share of electricity from renewable energy sources in gross electricity consumption in the Community will increase from around 14 % today to 22,1 % in 2010.

The proposal does not prescribe specific measures for the support of renewables and abstains from introducing a harmonised support system, due to lack of sufficient experience. It is thus impossible to put a monetary value to the hypothetical future costs related to the promotion of renewable electricity in Member States. In the absence of internalisation of external costs, it is reasonable to assume that the promotion of renewable electricity will lead to public expenditure in the short term. However, the proposal is intended to facilitate the creation of a market for renewable electricity, which would bring costs down in the medium and long term.

The Commission recognises the need for public support in favour of renewable energy sources. Nevertheless, the rules of the EC Treaty, in particular its rules on State aid (Articles 87 and 88), will continue to apply to such public support. In this respect it should be mentioned that the Commission adopted new Guidelines on State aid for environmental protection on 22 December 2000(4). The new Guidelines provide for transparent criteria on state aid to renewable energy sources. They allow for the necessary public support while at the same time preventing overcompensation of particular undertakings, so as to prevent unacceptable distortions in the electricity market.

(1) OJ C 311 E, 31.10.2000.

(2) OJ C 142, 15.5.2001.

(3) COM(97) 599 final.

(4) OJ C 37, 3.2.2001.