Fsr Energy & Climate

Maria Olczak (FSR) and Peter Fraser (Head of Gas, Coal and Power Markets Division at IEA) discuss the key messages coming from the latest edition of World Energy Outlook published on 14 November 2017. The major observed shifts include: massive deployment and failing costs of clean energy technologies, mainly solar; the significant growth in the electrification of energy; and the changing landscape of natural gas markets. The IEA predicts that natural gas will grow much faster than the other fossil fuel, especially in developing economies. In the second part of the interview, Peter Fraser explains how LNG is changing current global gas order and how rising LNG exports from the US are leading towards a more flexible and liquid global market, with major role of Qatar, Australia, USA. Podcast recorded on the sidelines of the workshop “Promoting a flexible, liquid and transparent global LNG market” organized jointly by the European Commission (DG Energy) and Japanese Ministry of Economy, Trade and Industry. Flo

In this podcast, Dijana Dmitruk, legal advisor of the Danish Energy Agency, discusses the Danish-German cooperation agreement for mutually opened auctions of solar photovoltaics (PVs). This significant agreement allows projects located in Germany to receive support payments from the Danish state and vice versa, and may operate as a blueprint for future cooperation agreements. While cross-border cooperation has been encouraged at European level and promoted through the cooperation mechanisms put in place by Directive 2009/28/EC, there has been little uptake to date. Despite several hurdles, among them issues surrounding taxation rules and the permitting process, from an EU perspective cross-border auctions are considered to support the development of the internal market and investment in renewable energy systems. Dijana Dmitruk outlines the myriad challenges of the pilot test and what can be learned from it for future arrangements.

ENERGY REGULATION TRAINING – INDIAN OCEAN at Mauritius, July 20-21, 2017. In cooperation with Indian Ocean Commission (IOC) This blended training cycle consisted of three blocks specifically designed to meet the learning objectives of the Indian Ocean participants. The first block was a three-day kick-off residential training which provided an introduction to power systems and grid regulation; renewable energy (RE) and how to introduce them into power systems; and how to optimise energy efficiency (EE). The second block was an eight weeks online training focusing on the regulation of power systems which allowed the participants to concentrate on the main challenges within their local setting. The third and final block of the programme was a two-day residential training which allowed the participants to present their country cases and discuss RE and EE energy regulation and energy policy issues pertinent to their nations. Countries Participating: Madagascar, Seychelles, Mauritius, Comoros and Réunion Swe

On the sidelines of the Florence School of Regulation Young Researcher’s Seminar, Pradyumna Bhagwat (FSR) and Joe Perkins (OFGEM) discuss the topics of electrical storage and electric mobility. Batteries can be expected to play a key role in providing balancing services. The trickier question is about “time-shifting”: whether batteries will provide intraday time shifting or even over a longer period. Furthermore, batteries could play a part in providing flexibility in a changing energy system. In the context of Electric Vehicles, it is vital that we have the right networks to support EVs. The question is about getting to the most efficient solution at least possible cost. National regulatory commission in the UK is looking at pathways for supporting Electric Vehicles.

In this podcast, Antonis Metaxas and Maria Charontaki discuss the implications of the Winter Package for the Greek energy market before considering the recent legislative amendment of the Electricity Customer Supply Code. The revision aims to strengthen consumer rights by promoting a greater level of transparency as regards energy consumption, improving consumer protection, and facilitating fair competition and the switching of suppliers.

During a conference in Milan Ilaria Conti, Head of Gas at the Florence School of Regulation, interviewed Daniele Agostini (ENEL), the head of ENEL Low-carbon and EU Energy Policy. Gas and electricity utilities are currently undergoing a deep restructuring – imposed by the changes that occurred at macroeconomic and regulatory level. In particular, the pressure coming from the decarbonisation challenge in Europe is accelerating the need for every company to look for new business models and make bets on future market developments. What’s the starting point? Which are the most important elements to consider in this model shift? And what should, or could, regulators do? According to Agostini, de-carbonisation is one of the major drivers of this change and a challenge that not only Europe, but most countries around the world are or will be facing. Of course, the pressure and the speed of change imposed by decarbonisation vary considerably from country to country. Utilities do not necessarily have to adapt quick

In the context of the first FSR Young Researcher Seminar (http://fsr.eui.eu/event/fsr-researcher-seminar/) held on 4-5 July 2017 in Florence, Luca Lo Schiavo, Infrastructure Regulation Deputy Director and Head of Innovative Regulation Unit at AEEGSI, has been interviewed about the Italian experience with smart meters by Tim Schittekatte (FSR). Italy is an interesting case as it can be considered as one of the frontrunners in the roll-out of smart meters. Already in 2001 the first smart meters were installed in the country. Today, the second generation of smart meters is introduced. To know more about the why and how, listen to the podcast! For more information on the topic: http://www.mdpi.com/1996-1073/10/2/199/htm

The regional approach to the internal energy market: by what means? | Alberto Pototschnig (ACER) At the end of the Annual Conference of ACER near Ljubljana, Nicolò Rossetto (FSR) and Alberto Pototschnig, the Director of the Agency for the Cooperation of the Energy Regulators (ACER), discuss the regional dimension of the internal energy market. Currently, there is a consensus that the EU has to move forward with regional cooperation in the field of electricity and gas. However, it is not yet clear how to implement such regionalisation. Thus far, the experience was mainly based on voluntary initiatives like the Pentalateral Energy Forum. Discussions on the matter are ongoing, with several questions hotly debated: what aspects should be part of the regional dimension? What geographical scope should the regions have? What are the most appropriate governance and regulatory frameworks for the regions? The discussion is particularly lively in the area of electricity, where ENTSO-E and the European Commission have p

At the margins of the RTE executive seminar, Nicolò Rossetto (FSR) talks with Jean-Francois Gahungu (Coreso) about the cooperation of electricity transmission system operators at the regional level. Initiatives like the creation of Coreso in 2008 was undertaken by TSOs to ensure security of supply through better coordination and avoid disruptions to the supply of electricity like the one that happened in November 2006. Over the years, new services have been added and today Regional Security Coordinators (RSCs) like Coreso play an official role in the operation of the European transmission grid. Growing cross-border electricity trade and the integration of variable renewables make the role of such regional coordination centres more and more important. Cooperation among different RSCs is the next obvious step that Coreso and TSCnet have recently embarked on. Extreme events like the extraordinary safety control of the French nuclear fleet over the winter and the cold spell of January 2017 successfully tested the

On the sidelines of the FSR Executive Seminar on EU Power system operation and solidarity: the issues and practices, Pradyumna Bhagwat (FSR) and Jens Møller Birkebækt (Energinet.dk) discuss the regional operation of EU power systems. It can be expected that with growing interdependencies of markets and renewable implementation, there would be greater dependence on regional coordination of all activities related to power systems. The availability of a common grid model would not only be beneficial for the operations of the TSOs but also for all customers in the future. In the context emergency events, the risk of such events occuring will always exist. Therefore, it is important to be prepared for the restoration of the system if such low probability events do occur. Understanding how the system reacts, the adequacy of generation and the system state at a regional perspective would enable TSOs to restore the system more efficiently and may also aid in preventing crises.

After attending a conference jointly organised by Eurelectric and the Florence School of Regulation on the electricity market design of the future, Pradyumna Bhagwat (FSR) and Nicolò Rossetto (FSR) summarise their main takeaways. First, thinking out of the box is fundamental. We live in transformative times and electricity markets must be able to manage uncertainty and adapt to new, unpredictable conditions. Second, the European Commission and the electricity industry believe in the strong role free markets can play but have a different view on what those markets should look like. On the one side, scarcity pricing may scare policy-makers and investors, while on the other, capacity mechanisms may distort the internal market and hinder integration. Convergence of opinions between the industry, the Commission and most of the academics is more apparent on the need to engage consumers, foster flexibility and the breakthrough that turning reliability into a private good could represent. Finally, the parallel sessio

Catalyst of the utilities’ transformation: the case of new York | Scott Weiner (New York Public Service Commission) During a conference at Columbia University Jean-Michel Glachant, director of the Florence School of Regulation, met with Scott Weiner, the deputy for market and innovation at the New York Public Service Commission. With the major wave of changes in energy transition (the three Ds: decarbonisation, decentralisation and digitalisation), Jean-Michel wanted to discuss the role of a public service commission in this new world. According to Weiner, a commission has to implement the policy direction set at the political level and act as a catalyst for transformation, enabling society to take advantage of the opportunities the three Ds have to offer. In the case of New York, in 2012 Hurricane Sandy revealed the vulnerabilities of the utilities, the lack of system resilience and the inability to anticipate customers’ needs. In response to it, the State of New York established a “Utility 2.0” target mode

Energy regulation in a federal country: the case of California | Chairman Michael Picker (CPUC) Jean-Michel Glachant, Director of the Florence School of Regulation, and Michael Picker, Chairman of the California Public Utilities Commission (CPUC), discuss the roles the different levels of government play in managing the changes due to the energy transition (decarbonisation, decentralisation and digitalisation). In California, the governor and the legislative branch set the broad policy framework and appoint the heads of the State energy agencies. The latter then implement the policies. As an example, the CPUC is responsible for regulating the development of gas and electricity infrastructure by public utilities. The Federal Government, located in Washington, D.C., played a role in the recent past by promoting investments in renewables. However, in States like California, a worldwide leader in the energy transition, the overall direction of energy and climate policy is decided, for the most part, autonomously

PETER FRASER on the need for greater consumer participation in decision-making regarding the security of supply in the electricity markets of the future. On the sidelines of the EURELECTRIC – FSR conference on the market design of the future, Pradyumna Bhagwat (FSR) interviewed Peter Fraser, Head of the Gas, Coal and Power Markets Division at the International Energy Agency (IEA), on the need for greater participation of individual consumers in decision making regarding the security of supply. Mr Fraser supports the idea of increased participation of consumers, and in his view, such involvement would aid in providing the level of adequacy that the consumers want and demand at a reasonable price. Furthermore, he shared his thoughts on the proposals of the Clean Energy for All Europeans Package (Winter Package), highlighting his appreciation for its attempt at moving from a national to a Europe-wide context for Security of Supply. Mr. Fraser also reiterated the need for more work on enabling greater consumer i

At the end of the EURELECTRIC – FSR conference on the market design of the future, Nicolò Rossetto (FSR) and Professor Graham Weale (Bochum University) discuss the market design for electricity in 2050. Despite the relevance the European Commission attributed to scarcity prices, Professor Weale is sceptical of the idea that energy-only markets will be enough to induce and remunerate adequate investment in generation capacity. According to him, political opposition to excessively high spot prices, an increased cost of capital and the wide-ranging deployment of renewables with low variable costs can undermine a market design based on few, infrequent price spikes. A second revenue stream to remunerate capacity could be necessary for the electricity market of the future. This position is beloved by Eurelectric. At FSR we see it as controversial as it is not widely agreed upon by many scholars and practitioners. However, “retweeting is not supporting”. What is less controversial and we support is the importance to

Description: Nicolò Rossetto (FSR) and Jean-Michel Glachant (FSR) discuss the role of the Florence Forum in the development of an internal market for electricity. Following an intense exchange of views on the European Commission’s proposal on regional cooperation and ROCs, Glachant highlights the need for coordination tools, cost and benefit sharing principles and solidarity at the European level. These three elements are necessary if Europe wants to create a seamless electricity system from Lisbon to Helsinki. Cross-border remedial actions for congestion management and crisis management are two concrete and relevant examples, where coordination, sharing and solidarity are particularly needed.

Recorded 18 May 2017, Brussels Description: Nicolò Rossetto (FSR) and Juan Alba Rios (chairman of the EURELECTRIC Markets Committee) discuss the 2016 legislative proposals of the European Commission on a new market design for the electricity sector. Alba Rios expresses a positive view on the proposal, which strengthens the role of markets in providing signals to economic actors and acknowledges the possibility of establishing capacity remuneration mechanisms to complement the existing energy-only markets. Indeed, short-term scarcity prices are not enough to foster adequate investment decisions in generation capacity and must be supported by additional, market-based, incentives. According to EURELECTRIC, although the Commission's proposal is not perfect, it goes in the right direction and provides a good starting point for building the market design of the future.

Recorded 11 May 2017 at CEER, Brussels Description: Nicolò Rossetto (FSR)and Ben Voorhorst (COO at TenneT, ENTSO-E)discuss the report prepared by the Florence School of Regulation on the integration and the decarbonisation of the European electricity sector. Mr Voorhorst acknowledges the relevance of the missing pillars and the roadblocks identified in the report and underlines the necessity for European policy-makers to take clear decisions regarding coordination of actions and decisions, sharing of costs and benefits, and of solidarity beyond costs and benefits. Without such basic and intrinsically political choices, technical entities like TSOs cannot provide, by their own, efficient and effective solutions enabling the full integration of the European electricity system and a smooth and speedy transition to a low-carbon economy.

In this podcast, Christopher Bremme and Thomas Schulz of Linklaters Berlin discuss the Commission’s proposed revision of the Renewable Energy Directive of 30 November 2016.

In this podcast, Rosaria Arancio of Macchi di Cellere Gangemi discusses the implementation of REMIT in Italy. REMIT is the EU Regulation on Wholesale Energy Market Integrity and Transparency (REMIT) (Regulation No. 1227/2011), overseen by ACER and National Regulatory Authorities, which aims to establish common rules, at European level, to prevent abusive practices in wholesale energy markets. It defines abusive practices in terms of market manipulation and insider trading, prohibits abusive practices in the wholesale electricity and gas markets, applies a monitoring system of the European energy markets, and gives National Regulatory Authorities powers to enforce rules, investigate and sanction misconducts. This podcast considers how the Italian regulatory authority AEEGSI has applied REMIT to Italy, including looking at recent cases where the criteria of REMIT was put into effect.