RED III: The Impact on PPAs and GOs

What can we expect from the RED III?

The adoption of the Climate Law has set Europe a binding objective of net-zero by 2050. The first major milestone on the road to net-zero will be the 2030 emission targets. Europe has set a target of net GHG emissions reductions of 55 percent by 2030, compared to 1990 levels. To achieve this goal, a number of updates to energy legislation are currently in progress. At the core of these updates is the amendment to the Renewable Energy Directive II (RED II).

Summary of the Renewable Energy Directive III For PPAs & GOs

During the last edition of RE-Source, Amsterdam’s flagship event which gathers renewable energy buyers and suppliers, RED III was discussed. During one of the main stage conferences of the closing day, speakers from the public and private sector examined how the new directive will shape the European energy policy framework.

Article 15 (PPAs)

Taking a closer look into Article 15, the new PPA provisions propose to:

  • Strengthen reporting requirements on PPAs for member states. Member states will be required to assess the regulatory and administrative barriers of PPAs. They will also be tasked with removing unjustified barriers.
  • Ensure that the associated GOs can be transferred to the buyers of the renewable PPAs.
  • Reduce financial risks of PPAs. The use of credit guarantees has been proposed to help SMEs access the market.
  • Introduce requirements to indicate the expected volume of national renewable power generation that will be supported by Corporate PPAs (CPPAs).



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