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CT1 - 3rd Plenary Meeting in Warsaw

|   CT 1

Highlights Core Theme 1: RES Electricity

Headline 1: Challenges of Technology-Neutral Auctions. Design Options and Experiences

The first session of CT1 discussed the challenges of technology-neutral auctions. The State Aid Guidelines for environmental protection and energy 2014-2020 have introduced the principle of technology-neutral auctions. Since then, many Member States have either already implemented or are planning to implement technology-neutral auctions in the near future. However, implementation of such auctions proves to be challenging for many Member States, among others, due to grid/system/market integration, geographical distribution, and uncertainty regarding the long-term potential of technologies. During the session, CT1 participants discussed recent experiences, while exploring the various auction design options Member States have chosen for technology-neutral tenders. Participants discussed whether specific auction designs can address concerns related to technology diversification, grid stability and system integration. The participants concluded that integrating objectives other than cost-efficiency in the auction design of technology-neutral auctions is challenging. Finally, CT1 participants found that comparing results of technology-neutral auctions across Member States remains complex, since each Member States uses different types of auction designs.

Headline 2: National Planning for the 2020 RES Targets in the Electricity Sector. Lessons Learned for the Next Decade

Under the current RES Directive, National Renewable Energy Action Plans (NREAPs) have been a critical tool for integrated planning of renewables deployment towards the 2020 RES targets in each Member State. With the proposal for a new regulation on the Governance of the Energy Union, the central element of National Energy and Climate Plans (NECP) has been introduced. In the second CT1 parallel session, participants discussed the experiences made and lessons learned with national planning for the 2020 RES targets in the electricity sector with the NREAPs with the hope of identifying good practices for the future. No formal regional consultation of NREAPs took place in the 2020 context, but a multitude of well-functioning regional cooperation formats are available and can be used for NECP consultations. During the discussions, CT1 participants discussed the importance of regional consultation for better coordination of national energy policies and identification of cooperation opportunities.
Additionally, the CT1 Taskforce on factors that influence renewable energy initiatives presented its first results to the CT1 participants. Renewable energy cooperation and cross-country electricity trade is expected to play an increasing important role in the future EU energy market. The CT1 Taskforce has the aim of understanding those factors that have affected renewable energy cooperation in Europe.

Core Theme 1 & 2: RES Electricity & RES Heat

Headline for the Joint Session: Self-Consumption Combined with Heat Pumps and Storage. Options for Flexibility and System Integration of Renewables

This joint session was led by Core Themes 1 and 2, bringing together their separate initial explorations of the topic of self-consumption during the 2nd Plenary Meeting in Zagreb. The CT2 Taskforce on the topic of self-consumption of renewable heat was extended to include aspects (and members) from CT1 in order to include the overall perspective for the electricity system, in particular effects on the grid and the flexibility potential of self-consumption combined with heat pumps and storage.

The joint session explored different aspects how power-to-heat both at the centralized level and at the prosumer level can contribute to the energy system. To achieve a contribution to decarbonisation through power-to-heat, high efficiency technologies (e.g. heat pumps) and a relatively high share of RES in electricity are necessary. The participants of the joint session found that the aspect of flexibility provision through power-to-heat is of mixed importance for participating Member States, depending on their share of variable RES and on their local distribution. Although flexible power to heat options at a large scale level are considered a relevant option in some MS for balancing purposes, currently numerous barriers to using power-to-heat exist, including high regulatory price components for electricity, relatively stable prices (ie low differential between peak and off peak prices), which do not make flexibility provision economically viable and need to be addressed.

At a household level a further barrier is the missing rollout of smart meters in some MS. The participants concluded that the potential of using power-to-heat to increase self-consumption strongly depends on the region and does not necessarily provide benefits for the overall system.  Furthermore, for it to be successful in the future – MS raised the point that it would require greater public awareness for householders to “buy-in” to the concept. The use of power-to-heat technologies varies strongly between member states, where use on the prosumer level to increase residual self-consumption is not very relevant at the time being, but might become more relevant in the future.