Big renewables investors could turn away from Europe, WindEurope says

By Gulsen Cagatay

ANKARA (AA) - Renewable investments will be put at risk if EU energy ministers decide on deviating from the EU-wide renewables price cap by applying additional taxes on electricity producers, according to WindEurope’s statement Friday.

EU energy ministers will decide Friday on new rules for revenue caps for inframarginal power generation.

As part of its emergency plan to tackle high energy prices, the European Commission proposed to temporarily cap at €180 per megawatt-hour (MWh) the price at which low-carbon electricity companies sell power.

This cap would not only apply to wind but solar, biomass, nuclear, lignite and some hydroelectric power.

WindEurope warns that the decision will make it much harder for Europe to emerge from the energy crisis.

"Governments need to act to help families and businesses pay the energy bills. But what is decided today could worsen the energy crisis," WindEurope warned.

WindEurope explained that Europe needs big investments in home-grown renewables.

"Everyone agrees that - and that it’s the route out of the crisis. But as it stands, the emergency regulation will put many renewables investments on hold. The regulation initially aimed at an EU-wide cap on all inframarginal power generation. But as it now stands, the regulation does nothing to stop national governments from adopting additional taxes and taking uncoordinated measures on different types of power generation," the statement read.

Some national governments are already planning new taxes that would come on top of the emergency EU measures. And these additional measures include taxes on electricity producers’ total revenue, rather than their profits.

“This will stop renewables investments,” the association warned.

“Investors will simply go elsewhere. To the US for example, where the Inflation Reduction Act has big tax credits for renewables investments. This can be avoided still, but national governments need to listen to those who are building the renewables,” it concluded.