BAKGRUNN (fra kommisjonsrekommandasjonen)

(1) Renewable energy is pivotal in meeting the Union’s decarbonisation objectives and delivering clean, affordable and secure electricity to households, businesses and industry and increasingly transport sector.

(2) Energy production and consumption is responsible for over 75 % of the total greenhouse gas emissions in the Union. Speeding up the deployment of renewable energy installations is therefore vital to reach the Union’ renewable energy target of at least 42,5 % by 2030 and to contribute to reaching the 2030 Union target of at least 55 % greenhouse gas emission reductions in accordance with Regulation (EU) 2021/1119 of the European Parliament and of the Council (1).

(3) Renewable energy is rapidly expanding. In 2022, the Union had 16 GW of offshore wind power capacity, 187 GW of onshore wind power and 203 GW of solar photovoltaic generation capacity (2). Furthermore, electricity generated from wind and solar represented 16 % and 7 % of the electricity mix, respectively, leading to a total of 23 % (3).

(4) That expansion in the share of energy from renewable energy sources has been significantly facilitated by auctions organised by Member States. These auctions may involve State Aid. They can allocate public support for the construction of renewable projects or the rights to develop a project to a developer in a specific location, or both. Those auctions have allowed Member States to determine the level of financial support for renewable energy technologies in a competitive manner. Auctions have been instrumental in optimising the level of public support. Even though market-based deployment of renewable energy is on the rise, it continues to be mostly based on support schemes.

(5) Pursuant to Article 4(2) of Directive (EU) 2018/2001 of the European Parliament and of the Council (4), support schemes for electricity from renewable sources are to provide incentives for the integration of electricity from renewable sources in the electricity market in a market-based and market-responsive way, while avoiding unnecessary distortions of electricity markets as well as taking into account possible system integration costs and grid stability. Pursuant to Article 4(6) of Directive (EU) 2018/2001 whenever support for electricity from renewable sources is granted by means of a tendering procedure, Member States, in order to ensure a high project realisation rate, are to establish and publish non-discriminatory and transparent criteria to qualify for the tendering procedure. It is therefore particularly important that such auctions are properly designed.

(6) Pursuant to Article 6(3) of Directive (EU) 2018/2001 Member States are to publish a long-term schedule anticipating the expected allocation of support, covering, as a reference, at least the following five years, or, in the case of budgetary planning constraints, the following three years, including the indicative timing, the frequency of tendering procedures where appropriate, the expected capacity and budget or maximum unitary support expected to be allocated, and the expected eligible technologies, if applicable. That schedule is to be updated on an annual basis or, where necessary, to reflect recent market developments or expected allocation of support. That is particularly relevant to provide transparency and certainty in the market and facilitate the necessary investments to meet the deployment needs. Publication of this information in a dedicated Union interactive platform on auctions would serve these objectives as well as increase harmonisation.

(7) National auctions for the development of renewable energy often do not appropriately reward the high environmental and social standards of Union products or consider the need for supply chain resilience or for energy system integration, as many auctions are based solely or mostly on price, though some Member States have started to introduce non-price criteria. Auction design options differ strongly across Member States, which increases transactions costs for economic operators. Some of those design options may also make project delays or the non-realisation of the projects more likely. Further harmonisation of Member States’ auction design principles could reduce transaction costs and help ensure that auctions are fit for purpose thanks to building on experience and good practice, while enabling sufficient scope for flexibility and innovation. With the support of the Commission, the existing structured dialogue fora (5) related to renewable energy can be used to exchange best practices and harmonise auction design when appropriate. The Union legislation on the electricity market design aims to harmonise the design of direct price support schemes in the form of two-way contracts for difference (6).

(8) The Commission adopted a Communication on the European Wind Power Action Plan (the ‘WPAP’) on 24 October 2023 (7). Its Action 4 calls on Member States to include in their auctions objective, transparent and non-discriminatory qualitative criteria and measures in order to maximise the execution rate of the projects with a view to bringing quick and tangible improvements and more harmonisation to the design of renewable energy auctions. This Recommendation aims to support Member States regarding the design of their auction design principles, in full complementarity with Union legislation on establishing a framework of measures for strengthening Europe’s net-zero technology manufacturing ecosystem (8). This Recommendation is without prejudice to Union law, in particular in the area of energy, environment and cybersecurity, and to the obligations arising out of it. It is also without prejudice to the Union rules on competition, in particular Articles 107 and 108 of the Treaty on the Functioning of the European Union, and the Commission’s decisional practice in the enforcement of the Union State aid rules.

(9) Auction design should guarantee a competitive bidding process, and it is to be based on objective, transparent and non-discriminatory criteria, ensuring legal certainty in line with Union law and the Union’s international commitments.

(10) Non-price criteria in auctions are a tool to pursue additional objectives next to the sourcing of electricity at the lowest costs. Non-price criteria can be implemented as pre-qualification criteria or as award criteria, or both. They should be designed and evaluated in a non-discriminatory, objective and transparent manner.

(11) Auction rules need to be designed to ensure full completion of the projects in a timely manner. Addressing the risk of project delays or non-execution increases predictability and certainty for investors. This can be done through measures such as penalty clauses for bidders in case of delays or lack of completion of the project or price indexation to help industry to better cope with cost increases due to inflation after the award of the auction.

(12) Whenever auctions for renewable energy allow for negative bidding, a properly designed competitive process should reflect the willingness to pay of each bidder for the project, therefore reflecting its market value.

(13) Bid ceilings are a budgetary insurance for the Member State to limit deployment costs, but if they are not properly set, they may lead to auctions being undersubscribed and may hamper the renewable deployment or lead to overcompensation.

(14) Pursuant to Article 22(7) of Directive (EU) 2018/2001 Member States are to consider specificities of renewable energy communities when designing support schemes in order to allow them to compete for support on an equal footing with other market participants. Moreover, the Guidelines on State aid for climate, environmental protection and energy (9), as well as the General Block Exemption Regulation (10) and the Temporary Crisis and Transition Framework (11), allow Member States to apply certain flexibilities for 100 % small and medium enterprises (‘SMEs’) owned projects or renewable energy community projects below certain capacity thresholds.