New proposals would kill solar and wind in the European Union

In mid-May, European grid regulators spoke out against priority grid dispatch for renewables. If the European Commission adopts their suggestions into law, it will be hard to add more wind or solar capacity. Craig Morris explains what this means for Europe.

overlay of the EU flag on windmills along a coastline

If the EU wants to keep its renewables growing, it can’t scrap priority dispatch (Photo by Obra19, edited, CC BY-SA 3.0)


Before we get started today, we will need to understand two terms (feel free to skip this paragraph if you already know them). Priority dispatch for renewables simply means that the grid must take up power from wind, solar, and biomass (along with hydro, geothermal, and anything else you give priority to) even if sources with no priority (such as coal, gas, and nuclear) have to be curtailed. Curtailment is when power has been generated already or can be generated, but the grid cannot take it up, so it is thrown away. For more terms, see our Glossary.

In late May, the Environmental and Energy Law Foundation of Würzburg – simply called the “Würzburger” in German – produced a review (PDF in German, but with an English abstract on pp. 7-9) of the Commission’s Winter Package for “clean energy,” which had the following main items in this context:

  • Renewable systems larger than 500 kW (and 250 kW or smaller, depending on how much is built, after 2025) would be curtailed first; conventional systems, later.
  • The renewable generators would be compensation for 90% of loss revenue nonetheless.

The Würzburger say that “priority grid access” (a term I have often used as synonymous with “priority dispatch”) for renewables could remain unchanged, meaning that a grid connection would need to be provided. The loss of priority “dispatch” means that the power would no longer have to be paid for, however – and since that’s where the money is made, the economic incentive for wind and solar would be gone. That’s where the 90% payment is crucial; foregone revenue would be limited to 10% when power is curtailed.

Furthermore, the Commission would still curtail conventional power first, cogeneration second, and renewables last, as the Würzburger point out: “one can hardly argue that the priority dispatch is abolished by the Commission’s suggestion as {is} often worried.”

In contrast, recent proposals from the CEER and ACER are worrisome. In its White Paper on Clean Energy from January, the Council of European Energy Regulators (CEER) “welcomed the European Commission’s proposals to remove priority dispatch.” But the CEER would expose all generators to the “real-time value of energy.” In mid-May, the Agency for the Cooperation of Energy Regulators (ACER) issued a joint press release with the CEER arguing the same – and adding that compensation for curtailed renewable power should be done away with as well.

You might as well say you don’t want wind or solar

The problem, as the experts certainly know, is twofold. First, wind and solar react to the weather, not to prices. From the grid operator’s perspective, this situation is undesirable: they want generators that produce more power when needed and less when not. Solar and wind cannot be switched on.

Second, solar and wind cannibalize themselves. When the wind blows and the sun shines, more power is generated, so power prices on spot markets go down. If no payment is ensured for curtailment, it doesn’t matter how cheap solar and wind get; they price themselves out of the market. In other words, if you want wind and solar, you want guaranteed payments for them. Calls for them to make do with spot prices (and, eventually, forgo curtailment payments) are tantamount to saying, let’s just not have wind and solar, shall we?

The Commission’s use of the term “clean energy” is dangerous. That could be anything: renewables, nuclear, coal with CCS, gas. If the climate is the only issue, nothing speaks against all these sources. Surprisingly, in this complex world, our best minds often reduce everything to one issue, if not one number (GDP, ppm of CO2, etc.). The only complication that CEER and ACER allow for other than cost is that wind and solar are not dispatchable, so let’s do nuclear, gas, and coal with CCS. Nothing else matters.

According to the Würzburger, the regulation proposed in the Winter Package – unlike a directive – would become law immediately; it would not need to be ratified by members states first. The Commission will take account of comments, including those from ACER and CEER, in moving from its Winter Package to the upcoming Clean Energy Package 2020-2030, expected in 2018.

Craig Morris (@PPchef) is the lead author of Global Energy Transition. He is co-author of Energy Democracy, the first history of Germany’s Energiewende, and is currently Senior Fellow at the IASS.

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Craig Morris

Craig Morris (@PPchef) is the lead author of Global Energy Transition. He is co-author of Energy Democracy, the first history of Germany’s Energiewende, and is currently Senior Fellow at the IASS.

24 Comments

  1. Very worrying. In the idealised neoliberal model or fantasy, there are no negative prices and grid operators face a marginal cost despatch stack with an asymptote at zero. In the real world, inflexible must-run plants drive prices into negative territory. The solution is to get rid of must-run. capacity, which hurts all other producers. The other strange (and non-textbook) feature of practical neoliberalism is the obsession with spot markets. A 25-year PPA is as good a market product as a spot sale with a half-hour duration. Only renewables can offer such contracts. Many consumers, including large ones like steelworks as well as households, may well prefer long-term certainty to short-run arbitrage opportunities. which in any case are not open to the small guy.

    I do disagree with the proposition that wind and solar need guaranteed prices, unless they can find their own PPA customers. It’s reasonable that new wind ans solar plants should face the possibility of occasional curtailment, and this risk will rise over over time – compensated by the steady fall in installation costs. What is unfair with keeping priority despatch but with no compensation for curtailment, assuming no must-run capacity?

    • Your assumption that PPAs for energy over time are a correct overlay to wholesale markets is flawed. Furthermore your idea that “inflexibility” should be disallowed is flawed. The correct paradigm recognizes the two to three major stratified roles of generation beneath annual load shape. Adherence to operating consistency within the roles is the value metric. Wind from MW one and solar after a few percent market share fail to operate within a functional role. This ex-role behavior imposes costs (Lion Hirth DE, Stacy, Taylor – US. Energy PPAs overlaid on markets are distortive and do not reflect time of supply within the strata and load shape of the purchaser.

      • Vivi says

        “Flawed” how and why? If you don’t give any actual arguments and explanations to back up your claim, you’re just arrogantly stating your beliefs as if they were fact. You’re neither trying to educate nor enganging in honest dispute this way.

        And the rest of your post after that claim is barely comprehensible – I suspect intentionally. You sound like one of those early 20th century academics who used a lot of fancy technical terms and so much polysylabic bluster in the hopes that their lay audience wouldn’t notice that they weren’t actually making a coherent argument, instead banking on the audience just giving up in confusion and believing them because what they said sounded “learned”. The appeal to authority without any link given to check what you’re refering to (which I assume is what you were meaning to do in your penultimate sentence – the one that doesn’t even make grammatical sense because you seem to have lost the thread yourself) is also typical for that style of empty rhetorics used by people who can’t back up their position with actual facts.

        • Love it when someone who won’t put their full name to their postings goes full ad-hominem to accuse someone else (who will) of exactly what they are doing. If you don’t know what “strata” means, maybe you could look it up?

  2. Thank you for the post.I’m working in a company where projects are conducted on renewable energy.This article gave me some valuable information/knowledge to my career.

  3. Attended the Sustainable Energy Week (yawn) – EU still farting around (it’s a technical term) with “demand response” – which would go some way to helping RES – by making load more flexible – lots of talk from the EC – little action – with the usual suspects (ACER & CEER) making all the right noises but in reality doing little (arguably wanting to impede DR).

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  5. Scottar says

    Renewables are green in name only. It’s why too much bureaucratic power fails on best of intentions.

  6. Nathanael says

    The fossil fuel interests will really do anything they can to attack wind and solar, won’t they?

    Time for everyone to go OFF THE GRID and escape these tyrranical monsters.

    At least some countries (France) are doing the right thing. If I were in Germany I’d get off the grid ASAP.

    • Kevon M Martis says

      When you say fossil fuel interests, do you mean E.ON? Iberdrola? They have massive portfolios of wind and solar even though they are massive “fossil fuel” utilities.

      That feeling you are now feeling is called “cognitive dissonance”.

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  8. Shawn Grannell says

    But there isn’t any coal with CCS. I understand that the construction of our one pilot plant is not going well.

  9. Van Snyder says

    Below the fold: 50,000 people formed a 90km human chain to protest nuclear power. Why protest the safest-ever lowest-cost way to make electricity? Probably because they’ve been systematically lied to, and believe it’s the least safe and most expensive way to make electricity.

  10. This is a very valuable article for almost all the people who are associated with Engineering projects related to energy.I will recommend this article to all the trainees and engineering students.Appreciate this great work as a mentor in an Engineering Company.

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  12. Doesn’t this mean that the “subsidy” for bursty renewables has been passed to less-bursty renewables, with future projects’ full revenue being contingent on some short-term storage being included, to cover the time period over which base load generation can be ramped up/down.

    This means renewables have moved from a pampered experiment to a real player, with the rules of the game altered to note the effect they have on the wider energy economy.

    It means the investment focus has widened to include short term storage – a real need, which can be met by thermal or gravitational storage for example.
    Best place to position this is co-located with renewables, eliminating the grid-level choreography, but anywhere on the grid will work to a lesser extent.

    I may have this wrong, I’m not in the industry, and have no skin in the game except a rooftop solar array, and a planet.

  13. Joris van Dorp, MSc says

    “That could be anything: renewables, nuclear, coal with CCS, gas. If the climate is the only issue, nothing speaks against all these sources. ”

    Actually, neither coal with CCS or natural gas are anything near zero-carbon. They’re technologies that can help reduce emissions in the short term (namely by replacing coal-without-CCS), but ultimately they can play no role in finally eliminating co2 emissions.

    Only nuclear and renewables are zero-carbon, and only nuclear is dispatchable.

    • Joe Public says

      Nuclear is NOT dispatchable – its power cannot be adjusted frequently and rapidly in periods of less than several hours.

      • You make it sound like dispatchability is a black and white issue. It’s certainly not that at all. There are degrees to dispatchability in terms of slew rate and availability probabilities. Intermittent renewables score very low on the dispatchabiltiy score. Dare I suggest 0%? Certainly without buffering it’s got to be close to that and even with “adequate” transmission and storage such as it is, dispatchability remains extremely low.

        Current nuclear on the other hand scores very high, limited mainly by economics (high fixed costs thus becoming uneconomical to turn down the output dial). Generation IV nuclear, coming to an area near you perhaps within a decade, promising much lower cap costs will also come with improved slew rates and will not have the same economic constraints as current nuclear. So reasonable dispatchability today and much improved in a decade.

        These EU grid regulator announcements sound the death knell for wind and solar. Long live nuclear.

  14. Bryan Elliott says

    First, I’m all for market distortions when they make sense. Carbon tax, clean energy subsidies, etc – anything that addresses a problem, whose cost is lower than the cost of inaction, and whose predictable side-effects are negligible, is, in my opinion, probably a good idea.

    That said, the market distortion caused by subsidizing wind and solar in this way can _cause_ greater pollution – by forcing carbon-emitting generators to be run more like significantly less efficient spinning reserve.

    In short, what you do to increase renewables outlay can have the opposite result from what you’re looking for.

    The better answer is to deploy more baseload generators that don’t emit carbon – that is, conventional nuclear for now, and advanced nuclear as it becomes available – and to invest in advanced nuclear RD&D so that “as it becomes available” is a reasonably short timeline. Once the market is _all_ nuclear and renewables, it would make sense to revisit this – as the side effect wouldn’t cascade into greater pollution.

    Also, I’m fine with the term “clean energy” catching nuclear. It has carbon emissions on par with that of renewables. It has zero NOx, SOx, and particulate matter. With Areva’s reprocessing work, it has the potential to have close to zero mining footprint, and to be mostly renewable – and certainly sustainable (a uranium mining tax may be in order to distort the market appropriately to encourage the use of reprocessed fuel over mined – after all, it significantly mitigates the waste problem and nearly eliminates pollution from mining).

  15. Lorne Cooper says

    Everyone promoting wind and solar knows they are sporadic, uneven and can’t be curtailed. They also know that they carry dirty secrets about how much energy it takes to build them, how long they really last before being consigned to the junk pile, and the toxic waste they become at that time. That’s why, at the very least, unless and until they include practical storage for energy so it can be used as needed, neither should have been promoted as real alternatives to any other generation, as they require 100% backup generation, which is a ridiculous waste of money and energy! ANY other form of energy is better. Yet were conned and Joe citizen was lied to, and CO2 was demonized even though all animal-kind has a symbiotic relationship with plants, CO2 and O2 that actually ALLOW life to exist on earth. So let wind and solar power generation go extinct. Whatever the cost it will be less than continuing to feed the $ sucking, parasitic, in dependable monstrosities.

  16. “The Commission’s use of the term “clean energy” is dangerous. That could be anything: renewables, nuclear, coal with CCS, gas. If the climate is the only issue, nothing speaks against all these sources.”

    Well duh! Morris remains fixated on intermittent renewables but he does recognize what this means.

    “In contrast, recent proposals from the CEER and ACER are worrisome. In its White Paper on Clean Energy from January, the Council of European Energy Regulators (CEER) “welcomed the European Commission’s proposals to remove priority dispatch.” But the CEER would expose all generators to the “real-time value of energy.” In mid-May, the Agency for the Cooperation of Energy Regulators (ACER) issued a joint press release with the CEER arguing the same – and adding that compensation for curtailed renewable power should be done away with as well.

    You might as well say you don’t want wind or solar”

    Exactly Craig. Exactly!!

  17. As usual Europe will be left behind because of outdate legislation ,unaccountable politicians and vested interests.many countries outside Europe will have a much more flexible and resiliant power system .

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