In a joint paper published on Monday 11 April, the Agency for the Cooperation of Energy Regulators (ACER) and the Council of European Energy Regulators (CEER) advised the European Union to exercise caution and carry out a more thorough analysis before drafting any legislative proposals on offshore renewable energy.
While they support the strategy on this issue published by the European Commission on 19 November 2020 (see EUROPE 12605/12), the regulators believe that not all the challenges are known and fully understood.
In particular, they are concerned about the implementation of offshore bidding zones (OBZs) aimed at integrating offshore renewable energy from hybrid systems (combining offshore renewable energy generation and transmission in a cross-border context) into the EU electricity market.
In their view, the current market rules governing real-time trading “favour the home market approach more than OBZs”.
They therefore recommend addressing this aspect “in a way that does not discriminate between internal and cross-zonal trade close to real-time”.
ACER and CEER have also identified several “serious concerns” about the disruptive effects that could result from a change in EU legislation on allowing congestion revenues (a situation in which transmission system operators receive proportionately higher revenues due to congestion on the grid) to be allocated to offshore renewables.
This amendment, foreseen in the European Commission’s strategy, is intended to allow Member States to provide for a more flexible allocation of these revenues in relation to offshore hybrid projects.
Regulators are also concerned about the European Commission’s intention to exempt hybrid interconnectors from the obligation to make 70% of capacity available for inter-zonal trade.
In their view, this would unduly favour offshore generation over onshore generation, distort competition, and potentially prevent the cheapest electricity from reaching consumers.
They thus advocate refraining from any derogation from the general EU energy market rules.
Regulators also believe that the objective of supporting offshore investments can be achieved through traditional renewable energy support systems, more targeted to their specific needs, with less disruptive effects.
See the recommendations of the regulators: https://aeur.eu/f/17z (Original version in French by Damien Genicot)