Pushback on EU ‘Green New Deal’ leads to alternative proposals.

From GreenTech media

The EU is currently working through the details of a €1.85 trillion ($2.08 trillion) recovery package. Before the stimulus was signed, a leaked document by the European Commission’s Directorate-General for Energy (DG Energy) ran through a serious of policy plans to marry the European Green Deal and the COVID-19 recovery effort.

Those plans included a possible 15-gigawatt EU-wide renewable tender designed to help make up for a shortfall in national tenders. Support for green hydrogen was also advanced as a potential item for inclusion.

But the plans have not survived a barrage of lobbying by vested interests and pushback from member states still married to a more traditional energy mix, according to multiple sources following the green recovery’s development.

As things stand, Europe’s stimulus package “has no green strings attached — none,” said Patrick Graichen, executive director of the Agora Energiewende think tank, speaking last week about the green recovery. 

At the same time, an alternative plan is emerging for renewables — more complex and harder to quantify in scale or duration, but with the potential to be up and running much sooner. It could be a tradeoff worth making.

The new renewable energy financing mechanism (REFM) would use existing funding mechanisms to sidestep the need for new EU legislation. That means it could “kick in as soon as July,” said Aurelie Beauvais, policy director at SolarPower Europe, who added that she is hopeful for its prospects.

Under the REFM proposals, countries could pay into a central tender fund, but the winning projects could be built elsewhere. That means that European countries with grid restraints, land shortages or scant renewable resources could instead fund Mediterranean solar farms or Irish wind projects. The contribution to EU climate targets would pass to the financial backers. The economic benefits and clean power would flow to the host country.

The plans are still being finalized, but GTM understands that the intention is for auctions to take place every year starting in 2021.

“The Commission is currently working on how to use the recovery package to support renewables, which are clearly a priority for recovery investment — but we cannot comment on this idea of an EU-wide tender,” a European Commission spokesperson told GTM by email. “In parallel, the preparation of the financing mechanism is progressing well, with ongoing discussions in the Energy Union Committee with member states,” the spokesperson said.

The scale of the program would be dependent on the appetite of sponsor nations to fund it and hosts to take advantage. SolarPower Europe’s Beauvais thinks the expected favorable financing conditions of an EU-sponsored, national-government-backed tender could ramp up interest.

The REFM could prove to be a masterful piece of political maneuvering from the European Commission, given that prospects for a discrete, standalone tender program were facing opposition.