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EC wants national push on long-term renewable PPAs – draft

25 Jun 2021 13:16

Brussels

25 Jun 2021 13:16

(Montel) The European Commission wants national governments to promote long-term renewable power purchase agreements (PPAs) as part of EU efforts to use more renewables and cut emissions, according to an unofficial draft of upcoming legislative proposals.

“The market for renewable PPAs is rapidly growing [but] still limited to a small number of member states and large companies,” the EC said in a draft proposal to update the EU renewable energy directive seen by Montel on Friday. 

The draft proposals would require national governments to remove any unjustified barriers to renewable PPAs and to explore how to reduce their financial risks, such as by using credit guarantees. 

The formal proposals, expected on 14 July as part of the EC’s Fit for 55 package, are to help the EU meet its new target to cut its CO2 emissions by at least 55% from 1990 levels by 2030. 

The EC has estimated that would require raising the share of renewable energy in the EU to 38-40% by 2030, up from the current minimum 32% target. 

The goal is to have enough extra renewable power available to meet expected new demand in transport, industry and buildings and to produce renewable gases and fuels, like green hydrogen and ammonia. 

GOs key
Guarantees of origin (GOs) were a key tool to help promote renewable PPAs, as well as for informing consumers, said the draft. 

It proposed that national governments must grant all requests for GOs from renewable producers, including those receiving financial support. 

Any GOs associated with the renewable power bought via a PPA would be able to be transferred to the buyer. 

The EC would also have to publish guidance on promoting PPAs by 2024. 

National governments would have to set out how they are promoting renewable PPAs in their national energy and climate plans and include the share of renewables supported by PPAs in their progress reports. 

The EC’s formal proposals have to be debated and agreed by both the European Parliament and the EU Council of ministers before they can become binding. This process usually takes at least 18 months to two years, and the final text adopted is usually different from the EC’s proposal.

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