European solar industry predicts planned auctions could derail efforts to hit 2020 renewable energy goals
European Union plans to force mature renewable energy technologies, such as solar and onshore wind, to compete for subsidies could derail efforts to drive down costs and meet the bloc's binding green energy targets, the solar industry has warned.
The European Commission proposed new draft guidelines late last year determining how member states can offer state aid to solar photovoltaic deployment.
The plans suggest introducing reverse auctions for more mature technologies in an effort to drive competition in the market and recognise the falling costs of certain technologies by increasingly exposing them to real market competition.
However, the solar industry has raised concerns that the competitive bidding process could derail the market rather than help it. Now it has written to competition commissioner Joaquín Almunia, urging him to revisit the plans.
The letter, signed by 28 solar industry groups, was sent on Friday and criticises the document for distinguishing between "deployed" and "less deployed" technologies across the bloc, arguing that in fact member states are at different stages of development with regards to renewables deployment and as such a one-size-fits-all policy could damage less mature markets.
It also warns that the technology neutral competitive bidding process could undermine member states' efforts to hit their 2020 national binding renewable energy targets.
"Such an approach would also significantly slow down the development of promising renewable energy technologies which have not yet fully achieved their cost-decline potential," the letter warns. "Solar PV still has a long way to go down its learning curve and could therefore increase competition in the electricity sector for the benefits of European consumers."
The letter also laments the expected lack of flexibility for member states to adapt their existing support schemes would create uncertainty for investors.
The move echoes similar warnings from the UK's renewables industry that the government's plans to force wind and solar projects to compete for financial support at auction as part of its electricity market reforms could damage investment.
However, supporters of auctions argue that they help to reduce the cost of renewable energy, curbing pressure on energy bills and forcing renewable energy firms to further accelerate cost reductions.
