EC targets faster wind/solar permitting, heat pumps, consumer protection

Europe must amend its permitting rules to clear the way for a massive acceleration in wind and solar development in response to the war in Ukraine, European Commissioner for Energy Kadri Simson said March 8.

Simson and Executive Vice-President for the European Green Deal, Frans Timmermans, were presenting a strengthened plan for secure, sustainable energy in the light of Russia's invasion of Ukraine.

"Let's dash into renewable energy at lightning speed. Renewables are a cheap, clean, and potentially endless source of energy and instead of funding the fossil fuel industry elsewhere, they create jobs here," Timmermans said.

The plan, REPowerEU, comprised two pillars -- one diversifying Europe's gas supply; the second accelerating the energy transition.

"We need millions more PV panels on the roofs of our homes, businesses and farms, and we need to double the installation rate of heat pumps over the next five years," Timmermans said.

Frontloading wind and solar development could replace 3 Bcm of gas burn by end of this year, EC data showed.

Turning down thermostats in buildings by 1 degree C could replace a further 10 Bcm.

Simson said the EC would publish a Recommendation on accelerating permitting of wind and solar facilities, urging EU member states to define "go-to" areas suitable for development.

"We can't talk about a renewables revolution if permitting a wind farm takes seven years. It is time to treat these projects as being in the overriding public interest," the commissioner said.

Protecting consumers

Simson also outlined price regulation, state aid and tax measures to protect European households and businesses "against the impact of exceptionally high prices."

EC plans encompassed guidance on temporary windfall taxes and use of emissions trading revenues to ease pressure on household bills.

Windfall taxes on generators "should not be retroactive, but should be technologically neutral and allow electricity producers to cover their costs and protect long-term market and carbon price signals," the EC said.

The taxes could make up to Eur200 billion available in 2022 to help offset higher energy bills, it said.

For companies, the EC would consult with Member States on a temporary framework to grant state aid to those facing high energy costs.

Finally, the EC would assess options to improve electricity market design, including alternative pricing mechanisms.

Industry anxiety

"The power sector remains very concerned about the outlook on market interventions," said Kristian Ruby, secretary general of association Eurelectric.

"The combination of regulated retail prices and clawback measures could seriously threaten the financial health of the industry and make it less attractive to investors," he said.

European forward power prices further extended their recent gains March 8 as gas prices continued to surge on the back of the conflict.

The German April baseload power contract settled at Eur482.06/MWh on EEX at market close March 7, a record for a front-month contract. As of March 8, the contract had last traded at Eur457/MWh.

The equivalent French contract last traded at Eur500/MWh March 8, down from a settlement of Eur534.99/MWh March 7, again on EEX.