406

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Capacity mechanisms for electricity

22-05-2017

Concerns about a lack of investment in electricity generation capacity to meet peak demand have prompted several EU Member States to introduce rewards for making capacity available, in the form of capacity mechanisms. Such mechanisms must conform to the EU guidelines on state aid for environmental protection and energy. However, capacity mechanisms are considered problematic because they risk distorting the internal electricity market. Moreover, purely national mechanisms are not as cost-effective ...

Concerns about a lack of investment in electricity generation capacity to meet peak demand have prompted several EU Member States to introduce rewards for making capacity available, in the form of capacity mechanisms. Such mechanisms must conform to the EU guidelines on state aid for environmental protection and energy. However, capacity mechanisms are considered problematic because they risk distorting the internal electricity market. Moreover, purely national mechanisms are not as cost-effective as mechanisms that allow for cross-border participation. To tackle these issues, the European Commission carried out a sector inquiry, in which it analysed capacity mechanisms in the EU and offered conclusions about the design principles needed to ensure their effectiveness and compatibility with the internal electricity market. It found that many Member States did not adequately assess the need or cost-effectiveness before introducing capacity mechanisms. Consequently, the Commission's 'clean energy for all Europeans' package, adopted in November 2016, includes a proposal for a recast of the Electricity Regulation, which updates the rules for European resource adequacy assessments and sets out design principles for national capacity mechanisms. In several resolutions, the European Parliament has expressed support for market-based cross-border capacity mechanisms, pointing out, however, that they should only be used under certain conditions. The Council of the EU stresses that ensuring the security of electricity supply is the responsibility of the Member States. Stakeholders have expressed various views about what the appropriate design of capacity mechanisms should be.

Intergovernmental agreements in the field of energy

19-05-2017

The Commission has proposed a decision which would require Member States to submit draft intergovernmental agreements with non-EU countries in the field of energy to it before they are signed. The Commission would then check whether they are compliant with EU law, and Member States would have to take full account of the Commission's opinion. At present, Member States are required to submit such agreements to the Commission after signature. The Commission considers the present system as ineffective ...

The Commission has proposed a decision which would require Member States to submit draft intergovernmental agreements with non-EU countries in the field of energy to it before they are signed. The Commission would then check whether they are compliant with EU law, and Member States would have to take full account of the Commission's opinion. At present, Member States are required to submit such agreements to the Commission after signature. The Commission considers the present system as ineffective. A trilogue agreement reached in December 2016 restricts the scope of the ex-ante assessment to gas and oil contracts, while agreements related to electricity would be subject to an ex-post assessment. If a Member State departs from the opinion in the Commission's ex-ante assessment, it would have to justify its decision in writing. The agreed text needs now to be approved by Parliament and Council.

Energy: a shaping factor for regional stability in the Eastern Mediterranean?

16-05-2017

Since 2010 the Eastern Mediterranean region has become a hotspot of international energy discussions due to a series of gas discoveries in the offshore of Israel, Cyprus and Egypt. To exploit this gas potential, a number of export options have progressively been discussed, alongside new regional cooperation scenarios. Hopes have also been expressed about the potential role of new gas discoveries in strengthening not only the regional energy cooperation, but also the overall regional economic and ...

Since 2010 the Eastern Mediterranean region has become a hotspot of international energy discussions due to a series of gas discoveries in the offshore of Israel, Cyprus and Egypt. To exploit this gas potential, a number of export options have progressively been discussed, alongside new regional cooperation scenarios. Hopes have also been expressed about the potential role of new gas discoveries in strengthening not only the regional energy cooperation, but also the overall regional economic and political stability. However, initial expectations largely cooled down over time, particularly due to delays in investment decision in Israel and the downward revision of gas resources in Cyprus. These developments even raised scepticism about the idea of the Eastern Mediterranean becoming a sizeable gas-exporting region. But initial expectations were revived in 2015, after the discovery of the large Zohr gas field in offshore Egypt. Considering its large size, this discovery has reshaped the regional gas outlook, and has also raised new regional cooperation prospects. However, multiple lines of conflict in the region continue to make future Eastern Mediterranean gas activities a major geopolitical issue. This study seeks to provide a comprehensive analysis of all these developments, with the ultimate aim of assessing the realistic implications of regional gas discoveries for both Eastern Mediterranean countries and the EU.

External author

Simone TAGLIAPIETRA

Assessing the state of Energy Union

12-05-2017

The European Commission’s second report on the state of the Energy Union, delivered in February 2017, paints a picture of considerable progress just two years into the Energy Union strategy. The bulk of new legislative proposals have now been adopted by the Commission. Most are still under consideration in Parliament and Council, although in some cases an interinstitutional agreement has already been secured. The focus of 2017 is therefore negotiations towards the adoption of numerous legislative ...

The European Commission’s second report on the state of the Energy Union, delivered in February 2017, paints a picture of considerable progress just two years into the Energy Union strategy. The bulk of new legislative proposals have now been adopted by the Commission. Most are still under consideration in Parliament and Council, although in some cases an interinstitutional agreement has already been secured. The focus of 2017 is therefore negotiations towards the adoption of numerous legislative proposals already on the table, together with a more limited number of new initiatives. The EU and its Member States are well on track to meet the targets of the 2020 climate and energy package in terms of promoting renewables, improving energy efficiency and reducing greenhouse gas emissions. Continued effort is needed to meet the higher targets of the 2030 climate and energy framework. The Energy Union includes a series of concrete actions to implement the 2030 framework, yet the main EU Institutions have shown different levels of ambition in these fields. A new legislative package on low emission mobility is expected in 2017, as well as ongoing actions across a wide range of energy-related areas. This includes measures to improve gas and electricity infrastructure, foster climate and energy diplomacy, and to advance research and innovation on energy technologies.

Energy policy: general principles

01-05-2017

Challenges facing Europe in the field of energy include issues such as increasing import dependency, limited diversification, high and volatile energy prices, growing global energy demand, security risks affecting producing and transit countries, the growing threats of climate change, slow progress in energy efficiency, challenges posed by the increasing share of renewables, and the need for increased transparency, further integration and interconnection on energy markets. A variety of measures aiming ...

Challenges facing Europe in the field of energy include issues such as increasing import dependency, limited diversification, high and volatile energy prices, growing global energy demand, security risks affecting producing and transit countries, the growing threats of climate change, slow progress in energy efficiency, challenges posed by the increasing share of renewables, and the need for increased transparency, further integration and interconnection on energy markets. A variety of measures aiming to achieve an integrated energy market, security of energy supply and sustainability of the energy sector are at the core of the European energy policy.

Nuclear energy

01-05-2017

Nuclear power stations currently produce around one third of the electricity and 14% of the energy consumed in the EU. Nuclear energy is a low-carbon alternative to fossil fuels and represents a critical component in the energy mix of many Member States. However, in the aftermath of the 1986 Chernobyl disaster and the 2011 nuclear catastrophe in Fukushima, Japan, nuclear energy has become highly controversial. Germany’s decision to phase out nuclear energy by 2020, as well as the temporary closure ...

Nuclear power stations currently produce around one third of the electricity and 14% of the energy consumed in the EU. Nuclear energy is a low-carbon alternative to fossil fuels and represents a critical component in the energy mix of many Member States. However, in the aftermath of the 1986 Chernobyl disaster and the 2011 nuclear catastrophe in Fukushima, Japan, nuclear energy has become highly controversial. Germany’s decision to phase out nuclear energy by 2020, as well as the temporary closure of two Belgian reactors after the discovery of cracks in their vessels, has stepped up pressure for the abandonment of nuclear power in Europe. But it is the Member States themselves that have sole responsibility for choosing whether or not to use nuclear power. Nevertheless, at EU level greater efforts are being made to improve the safety standards of nuclear power stations and to ensure that nuclear waste is safely handled and disposed of.

Energy consumers in the EU

27-04-2017

Consumers are considered a key element of EU energy legislation and the efforts to achieve a transition to a carbon-free society. Back in 2009, the third energy package, which sought to establish a liberalised internal energy market, granted energy consumers a number of rights, such as the right to an electricity connection, to switch energy providers and to receive clear offers, contracts and energy bills. However, some of these rights have not yet been put into practice: consumers often do not ...

Consumers are considered a key element of EU energy legislation and the efforts to achieve a transition to a carbon-free society. Back in 2009, the third energy package, which sought to establish a liberalised internal energy market, granted energy consumers a number of rights, such as the right to an electricity connection, to switch energy providers and to receive clear offers, contracts and energy bills. However, some of these rights have not yet been put into practice: consumers often do not understand their bills, are unable to compare different offers, are charged for switching, or a switch takes too long. Besides, they do not always seem to be aware of their rights. The ongoing revision of EU energy legislation aims to improve some of the rules concerning consumers and to introduce new rights, such as the right to self-generate and self-consume electricity, to ask for a smart meter, or to engage an aggregator. The European Parliament has repeatedly voiced concern that the truly competitive, transparent and consumer-friendly internal energy market envisaged by the third energy package has yet to materialise and that consumers are still having trouble understanding their bills, offers and contracts. It has called, among other things, for providing consumers with increased protection and clearer information, and for requiring suppliers to automatically put customers on the best possible tariff for their individual circumstances.

Competition Policy and an Internal Energy Market - Study concept and preliminary results

14-04-2017

The study will describe the challenges for competition policy in relation to the internal energy market. It explores the specific topics related to the internal energy market and analyses the competition policy issues arising from the topics. The study will mainly focus on competition policy and its instruments such as anti-trust laws, merger regulation, sector regulation and State aid. Other policy fields fall outside the scope. This presentation of the approach and preliminary results was prepared ...

The study will describe the challenges for competition policy in relation to the internal energy market. It explores the specific topics related to the internal energy market and analyses the competition policy issues arising from the topics. The study will mainly focus on competition policy and its instruments such as anti-trust laws, merger regulation, sector regulation and State aid. Other policy fields fall outside the scope. This presentation of the approach and preliminary results was prepared by Policy Department A at the request of the Committee on Economic and Monetary Affairs.

(Re-)Designing the internal market for electricity

11-04-2017

The IA appears to present a good and comprehensive analysis to identify the problems in the status quo, define the objectives of EU action, delineate policy options that can fulfil those objectives, assess the impacts of those options, and choose the best options to address the identified problems. This process seems to be based on sound data and research. In the explanation of the objectives, however, the distinction between what the IA refers to as the sub-objectives and the operational objectives ...

The IA appears to present a good and comprehensive analysis to identify the problems in the status quo, define the objectives of EU action, delineate policy options that can fulfil those objectives, assess the impacts of those options, and choose the best options to address the identified problems. This process seems to be based on sound data and research. In the explanation of the objectives, however, the distinction between what the IA refers to as the sub-objectives and the operational objectives does not appear to be very clear, raising doubts as to whether the sequential process required in the better regulation guidelines has been followed. Finally, the IA’s length and complexity somewhat limit its accessibility, although the sixteen page abstract added in response to the Regulatory Scrutiny Board’s recommendation goes some way towards addressing this issue.

Charging infrastructure for electric vehicles

05-04-2017

As most of the energy used for transport in the EU is dependent on oil, facilitating the transition to low-emission mobility is key to reducing greenhouse gas emissions to 40 % below 1990 levels by 2030. Although electric vehicles (EVs) are making inroads into the European automotive fleet, the market for EVs cannot grow unless users can charge them. Accelerating infrastructure development across the EU is therefore crucial to support the transition to a decarbonised transport sector.

As most of the energy used for transport in the EU is dependent on oil, facilitating the transition to low-emission mobility is key to reducing greenhouse gas emissions to 40 % below 1990 levels by 2030. Although electric vehicles (EVs) are making inroads into the European automotive fleet, the market for EVs cannot grow unless users can charge them. Accelerating infrastructure development across the EU is therefore crucial to support the transition to a decarbonised transport sector.

Upcoming events

29-05-2017
The future of OLAF
Workshop -
CONT
30-05-2017
The potential of electricity demand response
Workshop -
ITRE
30-05-2017
The current challenges of fighting terrorism and serious crime
Hearing -
LIBE

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