Message from the President - March 2023

Coming into the month of March, I highlight three issues that mark the current agenda in the renewable electricity sector. They add to the several ones that APREN follows and that I have been referring to, not only in the messages to our members, but also in the Association's platforms and in our media communication.

 

I start with the design of the European electric market. The European Commission's proposal was recently presented at a short press conference by the European Commissioner for Energy, Kadri Simson.

 

The reform aims to boost the installation of more renewable power, better protect consumers (individuals and businesses) and increase industrial competitiveness, interested in these three plans. The reform aims to strengthen consumers protection by giving them more choice when it comes to their electricity contracts. They will have access to contracts with a dynamic tariff, allowing them to direct consumption to when the price is lower; access to fixed-rate contracts for at least one year; and the possibility of having several electricity contracts at the same time.

 

Consumers will also be able to sell the excess solar electricity produced to neighbors, not just suppliers. Already they are called upon to manage their risk of failure of supply, and must guarantee at least what has been established in fixed contracts. Member states will have to have suppliers of last resort so that no consumer is left without electricity.

 

To increase the predictability and stability of energy costs and thus increase industrial competitiveness, business/industrial consumers will have easier access to more stable long-term contracts such as PPAs (Power Purchase Agreements). Electricity producers will have to make their investments in inframarginal and mandatory renewable and non-fossil electricity generation in the form of bidirectional Contracts for Difference (CfDs), and will find new obligations to facilitate the integration of renewables into the system and increase the predictability of generation.

 

As we know, these measures will only be possible by resorting to the massive incorporation of renewables in electricity production, accompanied by regulation to remunerate the storage and the offer of flexibility to the National Electric System (NES) by the different typologies of consumers. In addition, we also know that regulatory stability is essential to ensure that the investment needed to meet the targets set by Europe itself actually happens on time and in the required amount.

 

In addition to the Communication of the reform of the European electricity market, the European Commission published on  February 13 a long-awaited Delegated Act on the production of renewable fuels of non-organic origin (RFNBOs) category that includes green hydrogen, with the definition of the principle of additionality, temporal and geographical correlation, and criteria for considering electricity used in its production as renewable.

According to the released documents, the electricity from the grid used in the production of RFNBOs is considered renewable if one of the following options is fulfilled:

• The production of RFNBOs occurs in a bidding zone in which renewable production has exceeded 90% in the previous year, and the production period of RFNBOs does not exceed the number of hours in which at least 90% of renewable electricity generation was incorporated into the grid in the same year. If the renewable incorporation is above 90% in a given year, it is considered that the same is fulfilled for the following 5 years;
• The production of RFNBOs takes place in a bidding zone where the specific emissions of electricity are less than 18 g CO₂eq/MJ, and producers have secured a PPA with one or more renewable electricity producers for the amount of electricity that is considered to be renewable. If the specific emissions of a given year are lower than the stipulated value, it is considered that the same is fulfilled for the following 5 years;
• the electricity used in the production of RFNBOs is consumed during a period of settlement of deviations, during which the producer can demonstrate that the renewable production facilities have redispatched the electricity, in accordance with Article 13 of the European Regulation 2019/943; and the electricity used for the production of RFNBOs has contributed to the reduction of the need for redispatching.
• The conditions of additionality, temporal and geographical correlation are met.

As regards the production of renewable electricity at the RFNBOs production site, electricity will be considered to be renewable when the plant producing it has started operations up to 36 months before the start of production of RFNBOs.

In addition, the principle of additionality is considered to be fulfilled if the producers of RFNBOs produce renewable electricity on-site, at least equivalent to what they indicate as fully renewable; or have completed a PPA with renewable electricity producers for at least the amount of electricity they indicate as renewable, and the following criteria are met: the renewable plant has been operational up to 36 months before the RFNBOs production facility; if the installed power is increased, it shall be considered if it has been added up to 36 months after the plant has entered into operation; the plant has not received financial support for the investment or operation, with some exclusions.

I end by going through one of the issues that has occupied the sector the most: ocean renewables. As we know, the five geographical exploration zones have been launched for public hearing, and the government has publicly presented its intention to hold a first auction later this year, demonstrating that it wants to move quickly with the development of this technology. As we also know, the challenges that await our sector on the way up to 10 GW of renewable maritime power are enough, but we must work constructively, so that the goal is feasible.

 

Precisely for this, on May 24, APREN will hold a conference entirely dedicated to Ocean Renewables. The event, the Ocean Renewables Summit, will take place in the auditorium of the Museu do Oriente in Lisbon, and will feature a full day of panel discussions with the aim of understanding the state of the art of this sector in our country, with the help of national and international experts. APREN is still working on the program, but all the information about this event is already available in the site of APREN.

 

Because Portugal needs our energy!