Utility Week

UTILITY Week 10th October 2014

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

Issue link: https://fhpublishing.uberflip.com/i/394387

Contents of this Issue


Page 5 of 31

6 | 10th - 16th OctOber 2014 | UtILItY WeeK People & Opinion Energy and climate policy needs a rethink An effective European market is vital to meet future targets for cleaner and more reliable energy. Chief executive's view Peter Terium, RWE E urope's energy and climate policy is currently char- acterised by a number of climate and energy targets to be met by 2020: a 20 per cent reduc- tion in greenhouse gas emissions from 1990 levels; raising the share of EU energy consump- tion produced from renewable sources to 20 per cent; and a 20 per cent improvement in the EU's energy efficiency. These targets have been set independently from each other, reciprocal impacts and side effects have not been assessed and, as a result, EU member states started national imple- mentations that oen interfere with the principles of the inter- nal energy market. Proceeding like this will threaten security of supply, deter investments in the sector, contribute to high energy bills for customers and challenge European competitiveness. This worrying diagnostic emphasises the need for reforms. Europe's energy and climate policy must be put on the right track. In particular, it is impor- tant to build a more balanced package for 2030, targeting sustainability, climate, as well as competitiveness and energy security for electricity and gas. Therefore, we need to restore the EU Emissions Trading Sys- tem (EU ETS) as the flagship of European climate policy. It is essential that our climate policy for 2030 is focused on reducing greenhouse gas emis- sions. The market-based EU ETS should be the main instrument here. An effective European mar- ket should also dissuade mem- ber states from creating their own national climate policies, which would plunge the indus- try into the complexities of dis- parate national regulations and additional taxes. In addition, energy efficiency and renewable energies policies should be more market-based. Renewable energies should no longer solely rely on subsidies passed on to electricity custom- ers' bills. All taxes and levies should be suppressed as much as possible to reflect the true cost of supply (fuel, generation, network). Renewable energies should instead have the same obligations as any other market player, but also benefit from the opportunities related to the ser- vices they can offer to the system. Finally, we must remuner- ate firm capacities as a service provided to ensure security of supply. Taking into account the existing distortions to the internal energy market, a new market design must be devel- oped, based on a combination of energy and capacity market. Otherwise, electricity security of supply might be put at risk, eventually justifying an increas- ing number of national regula- tory interventions. Capacity markets guarantee security of supply. They should be based on the following principles: • Technology neutrality: incor- porating all kinds of firm capacity – thermal genera- tion, renewable energies, storage, demand response; • Non-discrimination: treat- ing new and existing capaci- ties and all market players equally; • Being European: allowing cross-border participation and offering the chance for a harmonised capacity market design, at least in central and western Europe. These factors could help to develop a constituent new energy and climate policy in Europe, enabling the energy industry to accomplish its mis- sion of supplying customers with clean, efficient and reliable energy. "We need TP Ocean * to provide an agreed research agenda for the marine sector – a common roadmap and a basis for collaboration which will share cost, de-risk and accelerate the development of the sector" Andrew MacDonald, senior innovation manager, Offshore Renewable Energy Catapult at Ocean Energy Europe's annual conference in Paris. * Technology & Innovation Platform for Ocean Energy, launched in 2013 to foster consensus on the key technical innovation priorities for marine energy generation. CORRECTION Utility Week would like to apologise for an incorrect refer- ence to consulting company WRc in the issue of 26 September as the Water Research Council. The company, now branded WRc, was formerly known as the Water Research Centre.

Articles in this issue

Archives of this issue

view archives of Utility Week - UTILITY Week 10th October 2014