SETREC

SETREC stands for Side Effects of Renewable Energy Certificates. This project seeks to remove the barriers for European tradable renewable energy certificates (TRECs) by making an assessment of the magnitude of side effects of TREC trade. More importantly, the project will formulate recommendations for harmonised trade regulations on an EU and national level. In that sense, it seeks to prepare the ground for a Community framework of TRECs.

Context

Although an explicit EU framework for trade in green electricity and its related certificates does not yet exist, a number of Member States are opening their borders for this electricity. Due to differences in national support schemes unwanted side effects can occur. Schemes unintentionally subsidise existing renewable energy (RE) instead of additional generation. Consumer confidence will be undermined if tax payers money is spent in this way. This poses a major threat for locally emerging RE markets. Countries may close their borders again, preventing a cost-effective Community approach to unlock potentials. The EU, as well as individual Member States will encounter severe difficulties in meeting the targets for green electricity as set in the 2001/77/EC Directive. This project seeks to remove these barriers.

Project Objectives

• Description of market drivers for RE trade in 15 EU countries and the description of the actual and potential cross border trade of renewable energy and of tradable renewable energy certificates.

• Analyse and quantify actual and potential side effects of TREC-trade under the current RE-policy-regimes in (some) EU countries.

• Assess the magnitude of the side effects of TRECs related to the RE-target and its projected growth and make an estimate of them in financial terms.

• Develop scenarios to prevent unwanted negative side effects of TRECs and give EU and member state policy makers recommendations on policy measures for RE production and RE and TREC trade.

• Prepare the ground for EU legislation following the 2001/77/EC directive on support mechanisms and for a harmonised European policy on Renewable Energy regulation.

The project is funded by the European Commission Altener Programme.