EU target power reserve for emission limits

The EU Commissioner for Climate Action and Energy says the Commission plans to attach emissions limits to subsidies paid to utilities that set aside capacity to avert blackouts.

The capacity mechanism is a favoured strategy used by countries such as the UK and France to ensure back-up power guaranteeing supply during peak demand.

However the European Commission is set to introduce a draft law on Wednesday impacting on the system.
Miguel Arias Canete
"Capacity mechanisms will not be used as a backdoor subsidy of high-polluting fossil fuels; that would go against our climate objectives," Miguel Arias Canete told Reuters. "It is necessary to include strict environmental criteria in such mechanisms to avoid giving wrong incentives that might lead to stranded assets as our emissions target gets more strict."

The draft law will set a limited of 550 grams of carbon dioxide per kilowatt-hour for new plants, the source said, and give EU nations time to adapt existing capacity mechanisms already cleared by regulators.

This would limit their use of coal-fired and less efficient gas-fired power plants as back-up for when renewable plants are not running.

The Commission's proposal will also require members of the 28-nation bloc to open such schemes across borders where sufficient infrastructure is in place.

Under the draft rules, capacity mechanisms would only be allowed if justified by an EU-wide adequacy assessment and if other market distortions that might have triggered their need are first removed, the EU source said.

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