European wind power generation companies have harshly attacked the electricity market reform project proposed by Spain. The proposal prepared by the Ministry headed by the Vice President of Ecological Transition, Teresa Ribera, and ‘defended’ by the Spanish MEP Nicholas Gonzalez Casares “has proposed useless things,” according to Wind Europe. The wind energy association asks the governments of the Union and the European Parliament itself to adhere to the project prepared by the Commission. Against the proposal of Ribera, European employers are opposed to lowering the bar to limit the income of the operators (the so-called ‘profits from heaven’) and allowing Member States to define said bar. “National interventions like this,” says the employers, “would undermine the EU electricity market and discourage investment in local renewable energy. They would be detrimental to consumers and to energy security.”
The business organization ensures that: «The European Parliament and the Member States should stick to the proposal prepared by the European Commission. But the main MEP, Nicholas Gonzalez Casareshas proposed useless things about income limits, business representatives add.
Wind Europe does not hesitate to specifically support the European Commission’s plan, which it describes as “the balanced proposal” for the redesign of the EU electricity market. On the contrary, he considers that, in his draft report, the MEP defending the proposal before the European Parliament, Nicolás González Casares, “has made extremely useless proposals.” European businessmen are harshly critical of lowering the threshold for different governments to raise ‘regional electricity price crises’ when allowed to apply extra revenue limits on marginal generation.
For the wind sector, the proposal of the European socialist group to make the participation of the different governments more flexible when setting these income limits, “would lead to a greater fragmentation of the EU electricity market and discourage much-needed investment.”
Investor mistrust
For Wind Europe, taxes, levies and income caps have undermined investor confidence. As a consequence, the final investment decisions have remained in the last year in 10 gigawatts Gw of new wind farms; that is, one third of what Europe needs to build each year. “And not a single large offshore wind farm reached the final investment decision in 2022,” he adds.
One of the problems that most affects the development of this technology is inflation, highlights the employers’ association. The other, he stresses, is “uncoordinated government interventions in electricity markets that have undermined the fundamentals of the EU’s internal energy market.” And he adds that, to overcome the energy crisis and accelerate climate action, Europe needs more renewable energy as quickly as possible. The design of the EU electricity market plays a key role in ensuring the necessary investment security.
The European Union is about to raise its 2030 renewable energy target from the 32% initially set to 42.5%. For the wind industry, this means doubling the current installation rate to 30 gigawatts/year (Gw). However, last year the Union invested 17,000 million euros in new wind farms; barely 41% of what was invested in 2021 (41,000 million). A drop in the investment rate that has caused, for example, orders for wind turbines to have fallen by 47% over the past year.
