| Quota system with banded TGC in the case of soft harmonisation
Brief characterisation: This policy pathway prescribes the EU-wide adoption of a quota system with banded TGCs feed-in tariffs to support RES-E. Since soft harmonisation is chosen, an EU-wide target and national targets for RES by 2030 are set and an EU-wide harmonised support scheme (i.e. the quota scheme with banding) aims to provide the necessary basic funding which MSs may complement via additional incentives to stimulate and steer investments in new RES-E. |
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Under soft harmonisation MSs have to implement domestically the support scheme that has been decided at EU level. However, countries may in principle use complementary incentives or select upon design elements in their main scheme (i.e. the quotas system). For the modelling exercise the assumption is taken that MSs do only partly make us of their freedom, i.e. they define complementary support (i.e. via investment incentives) according to their needs to contribute best to domestic target fulfilment. An EU-wide socialisation of support expenditures is only necessary for the part referring to the EU-wide harmonised basic support (i.e. the trading regime).
Since national targets for RES by 2030 are in place under this pathway, RES cooperation comes into play that finally affects the overall cost allocation across MSs – i.e. the ultimate height of support expenditures for RES at country level is defined by national RES deployment and the support expenditures related to that, the cross-country exchange of expenditures related to the trading regime for RES-E, and, on top of that, the additional revenues (for exporting countries) or additional expenditures (for importing countries) related to RES cooperation.
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 4c - 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 4c (QUO banding soft))
Figure 4c - 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 4c (QUO banding soft))
Figure 4c - 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 4c (QUO banding soft))
Figure 4c - 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 4c (QUO banding soft)
Figure 4c - 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 4c (QUO banding soft))
Figure 4c - 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 4c (QUO banding soft))
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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