The debate is intensifying over how to decouple power prices from the extraordinarily high natural gas prices in Europe. Simona Benedettini and Carlo Stagnaro warn that the current problem of high prices is not caused by the mis-functioning of electricity markets, but by the exceptional trend in gas prices. So should the markets be re-designed at all? Will we lose the benefits of the current design, one being the reliable profits that renewables … [Read more...]
EU Solar has avoided 20bcm of gas imports and saved âŹ29bn
Solar generation in the EU has avoided the import of 20bcm of gas that would have cost âŹ29bn, explains PaweĆ CzyĆŒak at Ember, writing for Carbon Brief. The new solar power added since 2021 alone avoided âŹ6bn of gas imports. Record EU solar generation increased by 28% in the summer of 2022, compared with the same period a year earlier. And itâs growing very quickly, with a consistent 15% year-on-year increases in installed solar capacity â from … [Read more...]
As spot market electricity prices break all records, what is the prediction for winter?
Spot market prices for electricity have been breaking all records, as European leaders and their ministers intensify their discussions on how to deal with the crisis. Simon Göss at cr.hub, writing for Energy Brainpool, starts by explaining how the markets work, noting that price rises are indeed being driven by fossil prices and not CO2 certificates. Göss looks at how prices have climbed in Germany, France, the Baltics and Spain, and how the … [Read more...]
Electricity market re-design should focus on the root cause of the crisis, Europeâs dependence on fossil fuels
Amidst the perfect storm of the pandemic, war in Ukraine, and extreme weather events, Bruce Douglas at Eurelectric urges us all not to lose focus on our decarbonisation targets. Energy savings, electrification and renewables are more important than ever to help reduce dependence on fossil fuels. Douglas explains that Europeâs electricity sector remains totally committed to the drive towards clean energy, citing examples. He summarises the … [Read more...]
Donât cap gas prices for consumers. It wonât reduce demand. Instead, subsidies must reward cuts in gas use
European nations are considering capping the price of gas that consumers pay, a subsidy that governments will pay for, to ensure households donât freeze this winter. Daniel Gros at CEPS warns that this strategy will remove the incentive for consumers to cut their gas use, keeping international market prices high. Instead, governments should incentivise a reduction in gas use. Gros has modelled two strategies. The first is to pay households for … [Read more...]
How to ramp up Hydrogen under the new REPowerEU targets
What needs to be done to develop hydrogen as a major fuel in Europe as the continent looks to diversify away from Russian oil and gas supplies? The war in Ukraine has led to the EU substantially raising its hydrogen ambitions. While the earlier âFit for 55â target for 2030 was set at 5.6 Mt, the new REPowerEU strategy has increased the target to 20 Mt, to replace 50 bcm of Russian gas. That means, for example, the use of hydrogen in industrial … [Read more...]
Will price caps on Russian oil work? Three experts debate
Whatever the G7 does, the objective is to cut revenues flowing into Russia, not oil flowing out. And whatever the sanctions, getting compliance from neutral and pro-Russian countries will need a strong positive incentive. Hence the idea of a price cap which would keep prices low. Here, three experts â Edward Fishman and Brian OâToole at the Atlantic Council, and Mark Mozur at S&P Global Commodity Insights (with background by Atlantic … [Read more...]
Imposing a $50/barrel tariff on Russian oil is the best sanction
Is there a way to impose sanctions on Russia that cuts its revenues without causing fossil fuel prices to balloon? The current strategy has seen oil prices rise to $120/barrel by mid-June, so although volumes are down Russia has seen no reduction in revenues. In other words, it has not achieved its objective, says Edward Chow at the Center for Strategic and International Studies. Instead, he argues for imposing a big import tariff â like … [Read more...]
If Russia cuts its gas supplies to Germany, what happens next?
Replacing Russian pipeline gas to Europe in the short term is much more difficult than finding alternative sources for coal and oil. Itâs why the EU hasnât banned Russian gas. But what if Russia cuts off the supply? Benjamin Wehrmann at Clean Energy Wire looks at what the consequences and options are for Germany. Though Germany aims to wean itself off Russian supplies almost entirely by 2024, a sudden cut would have serious consequences. Storage … [Read more...]
Russia-Ukraine: modelling the consequences for the European electricity market to 2050
Alex Schmitt, Christoph Kellermann, Calvin Triems and Huangluolun Zhou at Energy Brainpool have used their modelling tools to update their predictions of how the European electricity market will develop over the next 30 years, given a target of 99% emission-free generation in 2050. Projections are made on generation (mix and volumes) and price. The big change from their last predictions is the Russia-Ukraine war and Europeâs determination to ramp … [Read more...]
EUâs latest sanctions on Russian Oil: what are they and will it work?
On June 3, the EU agreed an embargo on Russian crude oil and petroleum products. Ben Cahill at the Center for Strategic and International Studies looks at the details of the latest sanctions imposed in response to Russia's ongoing invasion of Ukraine, and assesses the possible consequences. The aim is to cut oil imports from Russia by 90 percent by February 2023. A critical part of the sanctions is a ban on providing shipping insurance to Russian … [Read more...]
Critical minerals: price spikes are affecting Wind, Solar, Batteries, EVs
A wide range of critical minerals are needed for the energy transition. Tae-Yoon Kim at the IEA summarises the reasons why we should expect this to be a year of price spikes due in the main to the Russia-Ukraine war and post-lockdown supply chain bottlenecks. So severe is the problem that the long record of declining costs in clean energy technologies like solar, wind, batteries and electric vehicles is being reversed. Although these crises will … [Read more...]
Russia-Ukraine stalls EU Biofuels, but accelerates its medium/long-term targets
Rising food and fuel costs are pushing several EU countries to freeze or lower 2022-2023 low-carbon blending mandates for transportation fuels. That will likely mean a rise in emissions, but only in the short term, says Cornelius Claeys at Stratas Advisors. However, the same policymakers understand that ending imports of fossil fuels from a belligerent Russia is an opportunity to raise low-carbon targets for the medium and long term. So, right … [Read more...]
Europe must simultaneously replace Russiaâs fossil exports and accelerate its clean energy deployment
The Ukraine crisis has had an immediate impact on Europeâs strategy for energy supply security. And this weekâs sudden halting of gas supplies by Russia to Poland and Bulgaria only emphasises the urgency. Dolf Gielen, Ricardo Gorini, Luis Janeiro and SeĂĄn Collins at IRENA look at the best options, basing their findings on their latest âWorld Energy Transitions Outlookâ, published in March, that lays out a routemap for the next eight years for … [Read more...]
How could Germany wind down Russian oil imports by the end of 2022
Berlin has said that, though difficult, it could become independent of Russian oil imports by the end of 2022, with a target of halving them by the middle of the year. Kerstine Appunn at Clean Energy Wire compiles information on the practical challenges for Germanyâs oil infrastructure, refineries and security of supply. Germany is serviced by three pipeline systems for the west, the east and the south of the country. But they are not connected … [Read more...]
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