Capacity problems can best be tackled by letting prices fluctuate and making energy providers responsible for intermittent supply. To the extent that support schemes are used, they should be technology-neutral and driven by market forces to ensure efficiency, argues Diego Zuluaga, Deputy Director of the Epicenter (European Policy Information Center), a coalition of six free-market think tanks in Europe. For this reason, writes Zuluaga, the sector … [Read more...]
Investigation into capacity mechanisms: a test case for the Energy Union
The sector inquiry into the use of capacity mechanisms announced by the EU’s Competition Commissioner Magrethe Vestager on 29 April has important implications for the creation of a single market for energy, writes Matthew Duhan, Adviser at the UK-based consultancy Global Counsel. According to Duhan, the willingness of DG Competition to take on Member States in this key area of energy policy will be a crucial test case for the success of the … [Read more...]
Historic deal in Brussels: EU decides the future of its carbon market
The European Parliament and Member States have reached a historic deal on the first half of a two-part reform of the EU Emission Trading Scheme (ETS). This is the introduction of a “market stability reserve” (MSR) that will mandate EU officials to add or remove allowances from the market according to pre-set rules. The MSR is supposed to wick away the enormous 2.1 billion "surplus" of carbon allowances that has accumulated in the market over the … [Read more...]
UBS: closures coal and gas fired power plants in Europe accelerating
The influx of renewable energy sources such as wind and solar into energy markets is forcing coal and gas fired generation out of the market even quicker than most analysts expected, according to a new market report from investment bank UBS. According to UBS, policymakers may have to take measures to prevent widespread bankruptcies in the European electricity market, writes Giles Parkinson of Reneweconomy.com.au. … [Read more...]
Quo Vadis RWE? A power giant’s struggle with the Energiewende
The German government has proposed new regulations for penalising the country’s most inefficient coal and lignite power plants. This would particularly hit the troubled power giant RWE. What future is there for RWE in a low-carbon economy? Can it engineer its own energy transition? A lot will depend on whether the German government is willing – and even more so: able – to push through its climate legislation at the expense of the existing power … [Read more...]
The Great Grid Special: where is Europe going with its grids?
The EU has adopted a 10% electricity interconnection target that all member states have to meet by 2020. However, experts question this one-size-fits-all approach. They do agree that new investment in power grids is crucial - but not which type should get priority: interconnection, transmission, distribution, "smart" or even microgrid. A new French report shows that most investment is actually going to gas grids where it may be less … [Read more...]
French government study: 95% renewable power mix cheaper than nuclear and gas
A new French government study shows that the cost to the French consumer of a 100% renewable scenario is more or less equal to a scenario close to today’s, with only 40% renewables. It is yet another instance of leading energy experts asserting that a 100% renewable future is possible, writes Terje Osmundsen, Senior Vice-President of Norwegian independent solar power producer Scatec Solar. … [Read more...]
Interview André Merlin: “Europe needs regional System Operators like in the US”
Developing electricity interconnectors should be a shared competence of the EU and individual Member States, with costs shared out at least across regions, says AndrĂ© Merlin, President of Medgrid, a consortium looking to facilitate the exchange of electricity across the Mediterranean, in an interview with Energy Post. Merlin, former Chairman of both RTE, the French transmission system operator (TSO) and ERDF, the main French distribution system … [Read more...]
A vision of a Gas Union in Central and South East Europe
We will never have a unified European energy policy as long as Central and East European gas markets remain fragmented and divided, writes Peter Poptchev. Now, however, under the impetus of the Energy Union, the EU has a unique opportunity to put its Eastern gas house in order. Poptchev sets out the main steps that need to be taken to achieve this goal. … [Read more...]
Catch 2030 the webinar: a debate on the European energy system of the future
How can we transform the European energy system while improving security of supply and competitiveness? In a webinar hosted by Energy Post and sponsored by EDF, four energy experts discuss the future of the European energy system and answer questions from listeners. … [Read more...]
A new framework for climate policy: why carbon pricing is not enough
It is often argued, especially by representatives from the energy sector, that climate change policy should be based exclusively on carbon pricing. In the EU this means: on the EU Emission Trading Scheme. However, a new book by Professor Michael Grubb convincingly shows why such a policy approach is misguided. We also need policies on energy efficiency and renewables as well as policies that drive system change. … [Read more...]
Ex-Polish Prime Minister Tusk reclaims Energy Union agenda
Energy security through new fossil fuel supplies and transport infrastructure, not energy efficiency and renewables, dominates the conclusions issued by EU heads of state and government after their first debate on an Energy Union for Europe in Brussels on Thursday. Former Polish Prime Minister Donald Tusk – now President of the European Council of Ministers – appears to have reclaimed in large part the Energy Union he helped set in motion, … [Read more...]
Europe’s Energy Union: a big deal – but is it a good deal?
The Energy Union, writes Jonathan Gaventa, Associate Director of E3G, offers Europe a unique opportunity to move to a more modern, efficient and technologically advanced energy system, to bring down Europe’s outrageously high energy import bill and to lead global clean energy markets. Unless we allow it to be hijacked by incumbent utilities and oil and gas players who will use it to advance their own interests. … [Read more...]
Statoil’s big dilemma: should it continue to go for oil and gas – or transform itself into an energy service provider?
Norwegian oil giant Statoil, owned 67% by the Norwegian State, readily acknowledges the need to take drastic measures against climate change. But it nevertheless persists in a strategy aimed at expanding its oil and gas production globally. According to Anders Bjartnes, editor of the website Energi og Klima, the company cannot forever embrace these opposing views, “where verbal concerns go in one direction while strategy and cash go in the … [Read more...]
EU energy policy: still ambiguous after all these years
The Energy Union package recently announced by the European Commission is a step forward in that it puts market liberalization and integration at the centre of European energy policy, writes Carlo Stagnaro, senior fellow at the Italian free market think tank Istituto Bruno Leoni. At the same time, it is still strongly influenced by the idea that government intervention is required to ensure both security of supply and sustainability. As a result, … [Read more...]