Fsr Energy & Climate

At the Energy Infrastructure Forum in Copenhagen, Pradyumna Bhagwat (FSR) spoke to Rosemary Steen (Director External Affairs - Eirgrid) about her thoughts on the topic digitization of the grids. Digitization would be an enabler for consumer participation but some cyber security threats do exist as was discussed at the Forum. Another valuable insight from the forum was the different experiences of member states with smart meters. visit the Florence School of Regulation website: fsr.eui.eu

At the sidelines of the State of the Union 2018, Jean-Michel Glachant (Director FSR) and Catia Bastioli (Chairwoman Terna) discuss the new industrial plan of Terna, the Italian TSO for electricity. The plan foresees a 5.3 billion euro of investment in the 2018-2022 period and is going to focus on sustainability and territories. Ms Bastioli highlights the importance of a global vision while keeping the “roots” in the local communities and territories. Undeniably, the major obstacle to the energy transition is not the lack of technologies but the limited ability so far to involve regions and communities actively in the transition. Industrial players and institutions must be transparent, include people and propose solutions that create trust and lead to the regeneration of territories and communities. This move is indispensable to reconcile the needs of the economy and climate with the needs and aspiration of society. Without it, the acceptability and the speed of the energy transition cannot be given for gr

Nicolò Rossetto (FSR) and Asta Sihvonen-Punkka (Fingrid) exchange views about the digitalisation of the energy sector. The massive deployment of renewables and advancements in the ICT field are making a deeper digitalisation of the energy sector both possible and increasingly necessary. As a result, it is possible to detect a greater parallel with the telecom sector, especially in terms of cybersecurity challenges. European energy companies are beginning to understand the importance of cybersecurity and are catching up quickly. A regulatory framework is being built, but there is still a lot of work to do to ensure that companies receive the right incentives and properly address the issue of cybersecurity. Sharing experiences and best practices among companies and regulators is vital in this respect.

Nicolò Rossetto (FSR) and Thomas Pearce (NARUC) discuss the issue of cybersecurity in the energy sector. Cybersecurity is attracting growing interest from companies and regulators around the world, largely because the associated costs are increasing and becoming more visible. Special attention from the regulators is then necessary. In the US, the 50 state jurisdictions plus the District of Columbia are putting in place different approaches, while sharing the same goal of enhanced cybersecurity protection for the utility systems they regulate. The differences in their approach often stem from each state's varying regulatory framework: some have vertically integrated utilities, while others introduced unbundling and competition. Furthermore, some states have made more progress, while others are still defining their policy and looking for the best practices around the country. Indeed, both Europe and the US could learn from each other by sharing early experiences and reflections on an issue that is becoming incr

In this podcast, Maria Olczak (FSR) interviews Adina Crisan-Revol (Team Leader at DG ENER, UNIT B1) to discuss the Projects of Common Interests (PCI). Mrs Crisan-Revol explains what the PCI is, and the benefits it brings to the EU energy market and EU consumers. Since 2013, the PCI list is updated every 2 years. The third list has been proposed by the European Commission in November 2017 and has been already adopted by the Council and the European Parliament. Mrs Crisan-Revol addresses the key changes recently introduced by the European Commission in order to ensure that the third PCI list better aligned with the EU longer-term targets. Recorded at the Specialised Training on the Regulation of Gas Markets in Florence, 21 March 2018.

At the margins of the World Forum on Energy Regulation (WFER) in Cancun, Jean-Michel Glachant (Florence School of Regulation) interviews Marcelino Madrigal from the Comisión Reguladora de Energía (CRE) about the recent reform of Mexico's energy system. The reform is all-encompassing, covering oil, natural gas and electricity at the same time; it is far-reaching too, because it introduces competition and freedom of choice for consumers. The power sector, for instance, has been unbundled and long-term contracts for the purchase of electricity from renewable sources have been successfully auctioned. Within this major reform, CRE is performing several important tasks, like defining transmission and distribution tariffs and promoting a competitive retail market, where consumers are empowered. In this transition, Europe is seen as a reference case, in both positive and in negative ways, which emerging countries have to take into consideration, while not forgetting the significant differences in their social and eco

During the Smartnet Advisory meeting held in Glasgow in January 2018, we had the chance to interview Steven Atkins from the Scottish & Southern Electricity Networks and exchange ideas on the key aspects and links between our project and the SSEN initiatives in the same field. For more information on the SmartNet Project: http://smartnet-project.eu/

Given its current carbon intensity, the power industry is particularly sensitive to the reform of the EU Emission Trading Scheme (ETS). Eurelectric, the association representing many of the big players in electricity generation, has a broadly positive view on the reform that has been recently approved by the Council and the European Parliament. Nevertheless, it is interesting to hear that for the largest power producers a price on carbon is not the only important factor that will steer the industry towards full decarbonisation by the middle of the century. Many other issues must be addressed, and the uncertainty that investors are currently facing is particularly important. Investment signals based on long-term electricity purchase agreements could become one of the key pillars of a new market design. Indeed, long-term contracts can efficiently complement short-term flexibility markets and ensure security of supply, decarbonisation and competitiveness for the power sector.

These are exciting times in the role of energy, the way people produce and consume is changing in front of our eyes…” and that’s where Lynne Mc Donald (UK Power Networks), who joined the Advisory Board of the SmartNet Project in Glasgow, sees the benefit of the SmartNet project. The SmartNet project arises from the need to find answers and propose new practical solutions to the increasing integration of Renewable Energy Sources in the existing electricity transmission network. The subsequent technological (r)evolution is not only affecting the structure of the electricity markets, but also the interactions between TSOs and DSOs. Learn more on the project here: http://smartnet-project.eu

What lessons from the SmartNet Project? Interviews with the stakeholders #1: Andrew Burgess (CEER, OFGEM) ‘What is interesting of the SmartNet project is that it’s looking at difficult issues in detail and it’s trialling them to see what works’ Highlights from the SmartNet Project Advisory Board (Glasgow - February 2018) The EU Horizon2020 funded SmartNet project arises from the need to find answers and propose new practical solutions to the increasing integration of Renewable Energy Sources in the existing electricity transmission network. http://smartnet-project.eu/

The Euratom Treaty, signed in Rome on 25 March 1957, established the European Atomic Energy Community, alongside the European Economic Community (EEC). Its function is to provide a regulatory and cooperative framework which governs the development of nuclear energy and its trade across Europe, a kind of ‘nuclear common market’, which also funds cross-border research and development projects, upholds safety standards and procedures, notifies the potential impact of activities on other Member States, and ensures that nuclear materials are not deployed for military use. Euratom has established nuclear cooperation agreements with third countries, including Canada, Japan, and the USA, and sets out provisions for international compliance with nuclear safeguards. Euratom also reports to the International Atomic Energy Agency (IAEA). While a separate legal entity from the EU, it is tied to its laws and institutions, and subject to the jurisdiction of the European Court of Justice (ECJ). No country is a full member of

Competitiveness of wholesale energy markets is a fundamental goal of the EU since more than 20 years. Recently, specific pieces of legislation like REMIT have been introduced to foster market transparency and integrity. According to Clara Poletti – Head of the Energy Division at the Italian energy regulator ARERA (formerly known as AEEGSI) – national energy regulators are used to cooperate with national competition authorities and the European Commission to promote competition both ex-ante and ex-post. They are now obliged to adapt their procedures and praxis to the new rules. Beside traditional issues like abuse of market power and market foreclosure, they need to consider further cases of market abuse, not necessarily implemented by dominant players. Harmonised implementation across Europe is vital. A relevant example is represented by excessive pricing. Unfortunately, due to the current deployment of more capital intensive electricity generation technologies, it is more and more difficult to assess whethe

At the margins of the residential part of the Annual Training on the Regulation of Energy Utilities, Maria Olczak (FSR) talks with Aad Correljé (Clingendael, TU Delft) about LNG markets. In February 2016, the European Commission has published an EU strategy for liquefied natural gas and gas storage as a part of its sustainable energy security package. The LNG is perceived as an important element for ensuring energy security, especially in regions currently dependent on a single gas supplier, and hence vulnerable to any supply disruptions. Nevertheless, European countries need to compete with other markets, especially the Asiatic ones for the delivery of LNG. So far Europe has been perceived as a “market of last resort”, since LNG exporters have been targeting the premium consumers in Asia. Given that domestic gas production in Europe is declining faster than expected, competition for access to energy supplies will likely increase in the future.. Aad addresses two main questions - what will be the role for Eur

At the margins of the residential part of the Annual Training on the Regulation of Energy Utilities, Maria Olczak (FSR) discusses with Sergio Ascari (FSR; REF, Ricerche per l’Economia e la Finanza) current developments in Ukrainian gas market. In June 2017, at the latest meeting of the Eastern Partnership Platform 3 on Energy Security, the FSR has presented its recent study on Ukrainian gas market reforms. Sergio Ascari, who is one of the authors of the report, explains the main findings of the study. In the second part of the interview, Sergio Ascari explains the situation in Central and Eastern European countries, which was one of the regions that suffered the most during the 2009 gas crisis, but also invested heavily in the development of new infrastructure. However, security is not just a matter of hardware: infrastructures need to be complemented by the adoption of efficient market arrangements, i.e. a proper software.

In this podcast, Szymon Zaręba from the Polish Institute of International Affairs discusses the legislative developments surrounding the controversial Opal gas pipeline. The Opal pipeline was established in 2011 to export natural gas from the Nord Stream 1 pipeline across Germany to the Czech border, with it currently connecting with the JAGAL and STEGAL pipelines in Germany. Given the EU’s long-standing efforts to curtail the export monopoly of the Russian state-owned Gazprom, and with Russian gas still accounting for a third of Europe’s energy supplies, the pipeline remains one of the EU’s central energy disputes with Russia and has become a playing field for the exercise of EU law. Zaręba outlines the history of the pipeline project and details the complex legal developments surrounding its usage. Did you miss our webinar with Professor Kim Talus on the Baltic Sea Pipelines and EU law? You can catch the recording here: http://fsr.eui.eu/event/webinar-baltic-sea-pipelines-eu-law/

In 2016, Ukraine proposed for the re-establishment of an independent national energy and utilities regulatory body. The Draft Law No 2966-d, “On the National Commission for State Regulation of Energy and Public Utilities Sector”, was signed into law by the President of Ukraine on 22 November 2016 following a decade-long campaign. This marks a significant step toward creating a competitive energy market in Ukraine, a reliable regulatory environment, and a meaningful reform of the country’s energy sector. The new law was developed in line with the Energy Community Treaty and Ukraine’s obligations to implement the EU’s Third Energy Package. Up until this point, the activities of the National Energy and Utilities Regulatory Commission of Ukraine (NEURC) had been governed by a series of legislative acts and could be dissolved on the basis of a presidential decision. Under the new law, the regulator’s functions shall include the issuing of resolutions, orders and regulatory acts, licensing conditions and the grant

There is no single way to organize the electricity industry at the world level. In the EU the industry is liberalized and the competitive segments are unbundled from those related to the management and planning of the grid. On the contrary, in countries such as Thailand one or few vertically integrated companies are responsible for the whole supply chain, i.e. from the generation to the transmission and distribution of electricity. Nicolò Rossetto (FSR) had the possibility to discuss it with Thanawadee Jaem On and Nicha Saiped, two engineers employed by the Electricity Generating Authority of Thailand (EGAT). During the exchange of view, it came out that EGAT is facing challenges similar to those that utilities and regulators in Europe are trying to cope with (decentralization of power production, development of prosumers, digitalization). Interestingly enough, also in Thailand a change in gender balance is taking place with more and more women working in a sector traditionally populated by men.

Maria Olczak (FSR) and Dr. Niko Bosnjak (Energy Policy Manager at ONTRAS) discuss the integration of Electricity and Gas Networks. The rapid deployment of energy from renewable sources helps to tackle climate change, but at the same time poses new challenges to existing networks and the entire energy industry. One of them is the intermittency of renewables, since their output depends on the available sunlight, wind speeds and wave activity. How can we manage the intermittency? One of the answers is an integration of electricity and gas networks. Dr. Bosnjak explains how the use of gas grids contributes not only to the reliability and safety of the system, but also helps to save costs, e.g. those related to power grid expansion. This is one of the findings of the study on the German energy market commissioned by the Association of German Gas Transmission System Operators (FNB Gas e.V.). In the final part of the podcast, Dr. Bosnjak discusses the key obstacles preventing the integration of electricity and gas

Nicolò Rossetto (FSR Energy) and Josh Roberts (REScoop.eu) talk about the role of energy cooperatives in Europe and the role that local energy communities could play in the near future. According to Dr Roberts, citizens are getting more and more active in the energy markets, and they can play, via cooperatives and local communities, an important role in the energy transition. However, an adequate policy and regulatory framework are needed to ensure that both citizens and the whole energy system can benefit from the opportunities that new technological developments bring. The EU is important in this respect since it can promote a change in legislation that allows every European citizen to become a member of these communities, foster the energy transition and benefit from it. The proposal in the Clean Energy Package represents a potential breakthrough. However, energy communities are not a merely technical issue but should be based on the traditional principles of cooperatives, e.g. voluntary and democratic par

Nicolò Rossetto (FSR Energy) and Andrea Villa (Enel) discuss the proposal on local energy communities by the European Commission. Engaging more citizens and energy customers is an important move to achieve an efficient internal market for energy and foster the transition to a decarbonised economy. At the same time, the multiplication of entities in the electricity system, each of them with specific rights and duties, can create unnecessary hurdles. Citizens should be allowed to invest in renewables and easily access the market, but no artificial and expensive segmentation of the electricity system at the local level should be introduced. Keywords: local energy communities, Clean Energy Package, electricity markets, energy cooperatives, energy transition.