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Quota system with banded TGC in the case of medium harmonisation

Brief characterisation: This policy pathway prescribes the EU-wide adoption of a quota system with banded TGCs to support RES-E. Since medium harmonisation is chosen, only an EU-wide target for RES deployment by 2030 is set and an EU-wide harmonised support scheme (i.e. the quota system with banded TGC scheme) aims to provide the necessary basic support which MSs may complement via additional limited incentives to stimulate investments in new RES-E installations.

Thus, there is a very limited role to be played by the MSs since medium harmonisation involves harmonisation of: the detailed design of the support scheme selected, including the level of basic support by technology, and the legal framework as a whole, including regulatory issues. Medium harmonisation gives MSs however the freedom to apply limited additional support (i.e. via investment incentives) to complement the revenues gained through the EU-wide harmonised trading regime. An EU-wide socialisation of the costs related to the EU-wide trading regime takes place whereby the assumption is taken that consumer pay an EU-wide equalised fee per MWh electricity consumed.

General notes on the design of the quota system with technology banding:

  • A quota system with technology banding is applied, providing a different weighting to different technologies in terms of the number of green certificates (GC) granted per MWh generation, e.g. wind offshore obtains twice the weighting as wind on-shore. More precisely, these banding factors are adapted over time, i.e. from year to year, in order to reflect technological progress in terms of future cost reductions.
  • Quota targets, i.e. the shares of consumed/sold electricity that need to stem from RES-E plants, are defined on a yearly basis for obliged actors.
  • Penalties for the case of non-fulfilment of quota obligations are defined.
  • Duration of support is limited to 15 years, i.e. a new installation can only receive financial support through certificates during the first 15 years of operation.

Figure 4b - 1.   Technology-specific breakdown of RES-E generation from new installations (2021 to 2030) at EU-27 level in the year 2030, indicating deployment in absolute terms (left) and the change compared to reference (right) (for the assessed policy pathway 4b (QUO banding medium))

Figure 4b - 2.   Country-specific breakdown of RES and RES-E generation from new installations (2021 to 2030) in the year 2030, indicating RES(-E) deployment as share in corresponding demand (i.e. gross final energy demand for RES total, and gross electricity demand for RES-E) (for the assessed policy pathway 4b (QUO banding medium))

Figure 4b - 3.   Indicators on cost/expenditures and benefits of new RES(-E) installations (2021 to 2030), expressing yearly average (2021 to 2030) monetary values at EU-27 level in absolute terms (left) and the change compared to reference (for the assessed policy pathway 4b (QUO banding medium))

Figure 4b - 4.   Country-specific breakdown of yearly average (2021 to 2030) capital expenditures in new RES and RES-E installations (2021 to 2030), expressing investments as share of (country-specific) GDP (for the assessed policy pathway 4b (QUO banding medium)

Figure 4b - 5.   Country-specific breakdown of yearly average (2021 to 2030) support expenditures for RES total and RES-E, expressing expenditures as share of (country-specific) GDP (for the assessed policy pathway 4b (QUO banding medium))

Figure 4b - 6.   Yearly average (2021 to 2030) monetary transfers between Member States related to the support for RES, expressing additional expenditures (+) or income (-) as share of (country-specific) GDP (for the assessed policy pathway 4b (QUO banding medium))

Note: Additional expenditure or income stems from the underlying cost allocation under a full or medium harmonisation of RES support, or they refer to RES cooperation in the case of soft, minimum or no harmonisation, respectively.

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General contact for more infomation: resch@eeg.tuwien.ac.at
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