Limiting public subsidies to back-up capacities
Today national adequacy assessments are the document used by DG COMP to assess the need for a capacity mechanism. However many fail to acknowledge the contribution of imports/exports to domestic security of supply (source). In an Integrated Energy Market, ENTSOE should be responsible for performing an EU-wide resource adequacy assessment that would become the exclusive basis for introducing a capacity remuneration mechanism (CRMs). The coexistence of national resource adequacy assessments and EU-wide study foreseen by the Council should be limited in time. Otherwise it would maintain the current status quo.
- Support European Parliament’s amendment 97 on Electricity Regulation
EU Member States have spent €32.6 bn in capacity mechanisms since 1998 and 2bn for this year only (source, source). These schemes should be only used as last resort option and temporary. Their design should be reviewed at least every 5 years, and phased out immediately if the latest adequacy assessment demonstrates that the risk for security of supply no longer exists. A maximum contract length of 1 year for existing installations would also avoid the risk of legacy costs to be borne by consumers beyond the mechanism’s lifespan.