* EU plan would end priority grid access for new renewables
* Utilities lobby welcomes abolishing priority dispatch
* They also welcome proposed subsidies for back-up power
* Greenpeace says plan to block new investment in renewables
By Geert De Clercq
PARIS, Nov 30 European utilities welcomed
long-awaited power market reform proposals on Wednesday, hoping
a framework to subsidise fossil fuel plants and plans to wind
down a key support for renewable energy could turn the page on
years of crisis.
The European Commission's 1,000-page draft reform "Winter
Package" proposes binding targets to cut energy use by 30
percent by 2030 and wants to put Europe on track for renewables
to power half of the continent by 2030.
But it also plans to remove new wind and solar
installations' priority access to electricity grids and backs
"capacity mechanisms" under which utilities can receive payments
for keeping unprofitable and polluting fossil fuel-fired power
stations on stand-by.
Under existing regulations, renewable energy gets priority
access to electricity networks, which means wind and solar
producers are guaranteed being able to sell their power at
fixed, usually subsidised prices, even when power demand is low.
This depresses wholesale electricity prices and has at times
led to negative prices, when huge quantities of free wind power
saturate EU grids, to the detriment of traditional utilities
such as Engie, RWE, and EDF, whose
gas, coal and nuclear plants struggle to compete.
"The abolition of priority dispatch (access) is an important
step towards a level playing field and full market integration
of renewables," said Gunnar Groebler, head of wind at Swedish
utility Vattenfall, a major player in nuclear and hydro.
Germany's E.ON, a big player in fossil fuels,
also welcomed the EU proposals, saying it agreed with making
renewables bear more responsibility for a stable energy system.
Environmentalists Greenpeace, however, criticised the plans,
saying they threatened the roll-out of renewables, while
prolonging subsidies for coal.
"These draft laws are designed for polluting power
companies, not for European citizens," Greenpeace EU energy
policy adviser Tara Connolly said.
EU wind industry lobby WindEurope said it would have
preferred priority dispatch to remain but scrapping it was
unlikely to have a big bearing on new investment.
"Investment is more likely to be affected by the level of
clarity that governments provide on support schemes," spokesman
Oliver Joy said.
Utilities also welcomed the EU's endorsement of capacity
mechanisms for back-up power, a long-standing industry demand.
Under the plan, new power plants wanting to benefit from
capacity payments could emit at most 550 grams of CO2 per
kilowatt-hour, while existing plants will not have to comply
with the measure before 2026.
Greenpeace said this meant governments would be able to dole
out cash to at least 95 percent of all coal power stations in
Europe for another decade.
(Additional reporting by Christoph Steitz in Frankfurt; Writing
by Geert De Clercq; Editing by Mark Potter)