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    The success or failure of the EU Industry Act hinges on the effective design of the auction

    WindEurope emphasizes that the success or failure of the Net Zero Industry Act (NZIA) is contingent upon the appropriate design of wind energy auctions. The industry association expressed its stance as EU Member States reached an agreement on their position for forthcoming negotiations with the European Parliament on the NZIA.

     

    Diverging on crucial aspects, the Council and Parliament are currently engaged in final negotiations, expected to conclude by the end of the first quarter of 2024. WindEurope asserts that it is crucial for the NZIA to establish clear, EU-harmonized, technology-specific, and immediately applicable modifications to wind energy auction design.

     

    According to WindEurope, only through such adjustments can the expansion of the wind energy supply chain effectively contribute to meeting Europe’s energy security and climate objectives.

     

    Highlighting the need for the EU to install approximately 30 GW of new wind turbines annually from now until 2030, WindEurope emphasizes that the EU’s top-notch wind supply chain must remain resilient and expand to fulfill these targets. The European Commission introduced the NZIA earlier this year as the EU’s initiative to enhance and upscale European clean tech manufacturing.

     

    In her State of the Union Speech, President von der Leyen of the EU Commission conveyed the following message “the future of our clean tech industry has to be made in Europe.”

     

    WindEurope said “The Council’s position adopted today endorses the principle of pre-qualification criteria in renewable energy auctions which is a step in the right direction. Pre-qualification criteria are essential to raise the bar and ensure the technology installed in Europe meets minimum requirements, for example on cybersecurity.”

     

    “But the Council’s position leaves the possibility open of having 27 different sets of pre-qualification criteria which would be an administrative nightmare for market players and would lead to unnecessary costs.”

     

    “Crucially, the Council’s position includes a very long phase-in period for pre-qualification and non-price award criteria. They would only apply to 20% of the auction volume until 2029, thereby cementing a two-tier market.”

     

    WindEurope argues that having one market where projects must adhere to minimum requirements that reflect the European wind supply chain’s added value, and another market where the least expensive project prevails, would extend the competition to the lowest cost, a trend that has negatively impacted the European wind industry.

     

    Pierre Tardieu, WindEurope chief policy officer, commented “Getting auction design right will make or break the Net Zero Industry Act. It’s the only thing that matters, really.”

     

    “When it comes to wind, Europe needs to agree a limited set of pre-qualification and non-price award criteria that apply from the start. That must include a clear criterion on supply chain resilience reflecting the value of ‘made in Europe’.”

     

    “Failing to do that would only prolong the status quo: race to the bottom auctions which hurt the wind supply chain. And our ability to meet our climate and energy security objectives.”

     

    Johan Hanssens, Secretary general for economy, science and innovation at the Flemish Ministry of Economy, Innovation, Work, Social Economy and Agriculture said “Transformative Innovation towards sustainability relies on close cooperation between policy makers, academia and industry.”

     

    “The proposed ETIPWind’s R&I Agenda will help to align the visions between the actors and to design better policies.”

     

    WindEurope stated that trialogues on the Net Zero Industry Act (NZIA) will commence this month and extend into the first quarter of 2024. The organization emphasized that the qualitative criteria in the final agreement must align with five key principles:

     

    1.Simplicity and Applicability: The criteria should be straightforward and easily applicable. WindEurope particularly advocates for robust mandatory prequalification criteria in both onshore and offshore wind auctions. This includes the implementation of readily deployable rules for cybersecurity and data residency to ensure the resilience of Europe’s critical energy and grid infrastructure against cyber threats.

     

    2.Technology-Specific: Acknowledging that nearly all installed wind turbines in Europe are produced domestically, WindEurope stresses the importance of technology-specific criteria. While the EU boasts a robust domestic wind supply chain, this may not be the case for all renewable technologies. Therefore, prequalification and non-price award criteria should be tailored to the specific technology.

     

    3.Uniform Application at EU Level: WindEurope calls for a harmonized approach to pre-qualification and non-price award criteria, discouraging the development of a fragmented set of national auction rules within the EU.

     

    4.Immediate Application: WindEurope advocates for the immediate application of prequalification criteria and, where relevant, non-price criteria to all wind energy auctions. The organization opposes a phased-in approach where only a portion of auction volumes would adhere to these criteria, emphasizing that such an approach may be suitable for other technologies but is inappropriate for wind energy.

     

    5.Supply Chain Resilience: The criterion for supply chain resilience must be effective. WindEurope asserts that having the right approach to supply chain resilience in renewable energy auctions is central to the NZIA. The criteria should be applicable to all wind auctions from the outset and should recognize the contributions of the entire European supply chain, including the UK, Norway, and Turkey.

     

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