A primary tool for the growth of the European energy transition was the Renewable Energy Directive 2009/28/EC, which set individual binding targets for all European Union member states, the sum of which should lead to a 20% share of renewable energy in gross final consumption of energy by 2020. How each member state achieves its target – such as the choice of funding mechanisms or technology – is a matter to be entirely decided by each member-state separately.
The EU’s Clean Energy Package, published in December 2018, goes even further. The Renewable Energy Directive 2018/2001, which is part of the Clean Energy Package, has set a target at the EU level, by allowing member states to meet their greenhouse gas targets and implement an energy mix at their own discretion. Member states are only required to bring forward national contributions to the union’s overall target, which mandates that at least 32% of the bloc’s final energy consumption is to be met via green energy, with a clause for a possible increase revision by 2023.
Regarding the remuneration policy for renewable energy more specifically, the Energy and Environmental State Aid Guidelines (EEAG) adopted by the European Commission in 2014 asks that all member states shift toward market-based remuneration mechanisms. This resulted in most countries ending their feed-in tariffs (FIT) schemes for new solar installations, which are now remunerated through premium tariffs for large-scale systems. For systems smaller than 500 kW, the EEAG allows any form of aid, including FITs, but most states have instead opted for net-metering and self-consumption policy schemes. Of great interest now though is that low technology costs and new business models have allowed a new wave of PV installations, which are subsidy-free.
We currently see three major remuneration policy trends in Europe. Firstly, solar PV capacity is allocated via tenders and is remunerated via premium tariffs. Secondly, there will be corporate PPAs unsupported by subsidies. And lastly, self-consumption remuneration systems will be aimed primarily at domestic and commercial electricity users.
Hariram Subramanian, CTO of Huawei’s FusionSolar Smart PV division in Europe, told pv magazine that the company is offering solutions to target all different scenarios, from utility-scale plants to residential arrays and commercial and industrial systems.
“The sunnier regions of Europe will definitely experience more PV installations in the immediate future, however we also expect to see a significant shift to solar PV in northern states where wind was active before,” says Subramanian. And what is the driving force behind this shift? He says it is “the impressive drop in the cost of electricity generation through PV, so that photovoltaics can now be deployed on market terms. Utility-scale PV, in terms of the levelized cost of electricity, is lower than compared to offshore wind.”
The intensive energy-consuming data centers that are coming online are another driving force changing the energy dynamics in Northern Europe specifically. Subramanian says that such data centers call for more renewable energy projects, and it’s important to maintain a good energy mix to satisfy demand around the clock. Solar PV and wind technologies can complement each other well in this regard, allowing for uninterrupted power during seasonal changes. Finally, Subramanian says that sector coupling will call for the convergence of renewable energy sources with heating and transportation.
A lot of these new installations, especially those commissioned by corporations and other businesses, will be developed subsidy-free. This is because “subsidy-free business models are being proven more and more as profitable,” said Subramanian.
Huawei is located in every region of Europe where customers can harvest energy from the sun’s rays. The company says its goal is to innovate and optimize PV throughout its entire life cycle of energy generation. To do this, Huawei integrates cutting-edge digitalized inverter technology offering smart solutions for customers to achieve faster solar payback periods with higher yields and lower maintenance costs, according to Subramanian.
Challenge or opportunity?
In light of the Covid-19 crisis, there are fears that Europe’s subsidy-free PV market might come to a halt. This links to uncertainty over demand and financing availability. The rate of new solar installations might slow down due to precautionary measures to tackle the spread of the new coronavirus problem.
SolarPower Europe, the continent’s leading solar PV association, has called on EU leaders to build out a European Green Deal in order to develop an economic stimulus package to alleviate European economies of the burden of the novel coronavirus. SolarPower Europe’s proposals indicate that investments should be channeled into cost-competitive technologies that have significant job-creation potential. In the aftermath of the Covid-19 outbreak, European solar PV markets could perhaps experience new leverage for growth. Solar PV technology – with its many forms of applications – can always offer solutions.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: email@example.com.