Great news: The Council of the European Union yesterday adopted its position on the Net-Zero Industry Act (NZIA), an important instrument for improving the sustainability and resilience of European renewables supply chains!
With the planned NZIA regulation, the EU aims for introducing non-price criteria (NPC) for renewable energy auctions. Future auctions would then value additional important factors such as environmental sustainability, instead of competing on prices only.
For making the NZIA a success, NPC related to sustainability and resilience need to be carefully selected and well-designed. In addition, the following points need to be considered:
(1) Take into account technology-specific differences when selecting, designing and implementing NPC in auctions. This is needed for adequately addressing the technology-specific characteristics and challenges of the respective technologies, e.g. related to supply chains, cost structures, impacts on land use and other societal objectives.
(2) Follow a harmonized approach which still allows for flexibility at national level for addressing market-specific differences. This can be done by having a catalogue of concrete and technology-specific NPC at EU level, with the differentiation between NPC suitable for competitive bidding processes and NPC suitable as prequalification requirements in auctions. Member states should then be allowed to choose which of the NPC they apply to their auctions, based on market-specific needs.
(3) For ensuring the effectiveness of non-price criteria in RES auctions and avoiding an indirect price competition only, the European Commission should provide clear guidance on how to allocate points in the financial and non-price categories of the bids. By that, higher non-price contributions cannot be easily compensated by higher financial offers and adequate incentives for contributing to wider societal targets (e.g. environmental sustainability) can be established.
However, poorly designed and wrongly weighted criteria risk slowing down the expansion of renewables by decreasing supply availability and substantially increasing costs for renewables projects This could also result in increased cost for electricity for consumers and reduced competitiveness of EU industries. Therefore, it is also crucial to diligently apply the new rules with a sufficient implementation period at national level!
We at RWE strongly support a fast ramp-up of European wind and solar energy supply chains, which is urgently needed for increasing the resilience and sustainability of Europe’s energy transition.
#EUGreenDeal #REPowerEU
For more information: https://lnkd.in/eC-gBffB
