Which policies can facilitate the realisation of the required investments in the electricity sector?

This study was prepared at the request of the European Parliament Committee on Industry, Research and Energy (ITRE), executed in July 2016 by Trinomics, in cooperation with Oeko Institute and Aether. The paper provides an overall assessment of European investments in the electricity sector, eventually concluding with policy recommendations which can facilitate the investments in the electricity sector required to enable the transition to a low-carbon energy supply by 2050. At the same time, the proposed policies should contribute to realising a fully integrated and interconnected electricity system (internal market), enhancing the competitiveness and ensuring security of electricity supply.

This study also provided useful input for the members of the European Parliament in view of the upcoming reviews of legislative proposals regarding areas such as: energy market design (interconnection target), energy efficiency (EED and EPBD) and renewable energy (RES Directive) as well as the review of the ESFI, the EIAH, and the EIPP. This study supports the European Parliament in its role of doing a regular stock-taking to ensure the necessary political ownership to make sure that these initiatives continue to produce results. Our research study was also published on the European Parliament’s website here.

power lines

The study concluded with 11 recommendations for the EU to focus on which can foster investments in the power sector:

  • Investors’ certainty should be enhanced by more consistent, stable and balanced policies based on long term strategy and objectives.
  • Targeted and coordinated support schemes are necessary to foster investments in renewable energy.
  • Research, development & innovation (RDI) should focus on promising technologies as well as on new services, market models and data management.
  • Coordinated and harmonised policies should be in place to stimulate investments necessary for security of supply.
  • Policy initiatives are needed to facilitate investments in energy storage. Investments to increase electricity interconnection capacity should be boosted.
  • Adequate regulation and supporting initiatives are required to incentivize grid investments.
  • Access to co-financing instruments and partners, including European funds, should be facilitated.
  • Authorities should allow carbon and electricity markets and grid operators to offer appropriate price signals to investors.
  • An adequate legal and regulatory framework is important to facilitate investments in energy efficiency and demand response (DR).
  • Further streamlining and simplification of permitting procedures, as well as enhancing public acceptance of energy infrastructure.