Capacity mechanisms: DG Competition and DG Energy clash over future of EU energy market

Margrethe Vestager presents sector inquiry electricity capacity mechanisms (photo Europe by Satellite)

EU member states are setting up capacity mechanisms that may be unnecessary, expensive and badly designed. This is the conclusion of the European Commission's Competition Directorate in the interim report of its first ever “sector enquiry” into capacity mechanisms as a form of state aid for electricity producers. But the report shows that DG Competition has a different view than DG Energy about the future of the EU's energy market design, writes … [Read more...]

EU expects large nuclear new-build programme despite escalating costs

Olkiluoto nuclear power plant, Finland (photo Foro Nuclear)

The European Commission estimates that nearly three quarters of a trillion Euros will need to be spent on nuclear power over the next decades to enable it to maintain a market share of about one-fifth of the EU electricity mix in 2050. At the same time it notes that the cost of building new nuclear plants has risen 50% in the last decade. Critics say the Commission is too optimistic and has not analysed what the advent of renewables and changing … [Read more...]

Europe’s energy investment crisis: “the EU energy market needs a makeover”

photo Europe by Satellite

Europe’s electricity market, which has some of the highest renewable energy shares in the world, is suffering from a profound investment crisis. Sonja van Renssen spoke with top experts from government, business and academia about the causes and possible solutions. Conclusion: “tinkering around the edges” won’t do - “a complete makeover” of Europe’s market design is needed. Courtesy of World Energy Focus. … [Read more...]

Biofuels are back on the EU agenda

Rapeseed (Credit: Phil and Pam Gradwell, via Flickr)

Biofuels are returning to the political agenda in Europe as EU policymakers start to shape a strategy for reducing greenhouse gas emissions from transport after 2020. Biofuels producers continue to argue that they are an essential part of the solution, even as the low oil price puts an end to several cutting-edge projects, the European Commission prepares to publish a new report about indirect land-use change (ILUC) and some stakeholders urge a … [Read more...]

EU insists energy security is about more than gas

Credit: European Union, 2016

“When it comes to energy security in the long term, there is no better antidote than focusing on sustainable energy,” said EU Climate and Energy Commissioner Miguel Arias Cañete at the launch of a new EU energy security master plan in Brussels on 16 February. The Commission defended its proposals – which focus on safeguarding gas supplies – as an aid to moving Europe along to a low-carbon economy as well as preparing it for possible supply … [Read more...]

Behavioural change could deliver half of industry energy saving potential

Photo credit: www.gotcredit.com

Expert studies show that there is still vast untapped energy efficiency potential of up to 25% in European heavy industry. Moreover around half of that, or 10-15%, could be delivered through behavioural change at zero capital cost. So far, the EU has mandated energy audits for large companies, but not application of their results. Energy Post looks at how a new heating and cooling strategy due on 16 February and a review of the EU’s energy … [Read more...]

Cost of capital for renewables varies hugely across EU

wind turbine in Germany photo Christian Dembowski

It is much more expensive to undertake onshore wind projects in some European countries than others, according to the first-ever study of these costs for the entire EU-28. The EU-funded “Diacore” project finds moreover that market actors single out the design and reliability of renewable support schemes as the single biggest risk (after generic country risk) driving up the cost of capital. Best practice policy design could cut support costs for … [Read more...]