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4 step in the short life of EU “energy
policy”
Medellin– 5th ELAEE Conference
(16 March 2015)
Jean-Michel Glachant
Directo...
4 step in the short life of EU
“energy policy”
I. 1986-2009: an EU Internal market within open grids / ~1 EU
Internal mark...
1986-2009: only an EU Internal market
and nothing elseMarket
First and foremost (Internal Market) ¤ Not because market log...
1986-2009: an EU Internal market…
within open grids…
• Second to Internal Market (EU Grids) ¤ very logical: no power marke...
2005-2009 EU goes to EU energy policy
What was it about?
Previsibility (foreseeability) very low: “EU energy policy” was n...
II. 2007-2009: EU got “energy policy”: a
“RES country pillar” pushed by MS
• Only third and external to Internal Market an...
2012-14 core assumptions derail:
And so what?
(Fukushima 2011); Shale gas; Russia as supplier; Green
revolution & EU RESwo...
III. 2013-14: Countries ask for “RES
cease-fire”; Commission reacts
June 2012: make your choice - November 2013: some guid...
III. 2013-14: Countries ask for “RES
cease-fire” Eurelectric reacts
3 differences from Commission (Eurelectric Manifesto F...
1- 25 February 2015: Commission COM. ‘’Towards an Energy Union’’ NB:
‘Energy Union’ has NO predefined content; is only ‘ca...
www.florence-school.eu
IV. 2015-2020: Commission’s proposals 25 Feb.?
/~1 Internal Market BAU?
1- EU 4th Big Package Inter...
www.florence-school.eu
IV. 2015-2020: Commission’s proposals 25 Feb.?
/~2 Security of Supply?
2- EU actions for Security o...
www.florence-school.eu
IV. 2015-2020: Commission’s proposals 25 Feb.?
/~3 Beyond Internal Market & SoS?
3- Other fields of...
www.florence-school.eu
How to conclude?
Too many EU energy policy future(s): which Energy
Union(s) will EU get? ?? To be s...
www.florence-school.eu
www.florence-school.eu
Comillas & Florence School offers you full-fledged online
• Course directed by Ignacio Pérez-Arriag...
www.florence-school.eu 20
Thank you for your attention
Email contact: jean-michel.glachant@eui.eu
Follow me on Twitter: @J...
4 steps in the short life of EU energy policy | 5th ELAEE Conference
4 steps in the short life of EU energy policy | 5th ELAEE Conference
4 steps in the short life of EU energy policy | 5th ELAEE Conference
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4 steps in the short life of EU energy policy | 5th ELAEE Conference

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5th ELAEE Conference in Medellin, Colombia, 16 march 2015 in

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4 steps in the short life of EU energy policy | 5th ELAEE Conference

  1. 1. 4 step in the short life of EU “energy policy” Medellin– 5th ELAEE Conference (16 March 2015) Jean-Michel Glachant Director “Florence School of Regulation” @ European University Institute – Florence (Italy)
  2. 2. 4 step in the short life of EU “energy policy” I. 1986-2009: an EU Internal market within open grids / ~1 EU Internal market / ~2 open EU grids II. 2007-2009: EU got an “energy policy”: “RES country pillar” / ~3 RES push into EU Internal market @ country level III. 2013-14: Countries ask for “RES cease-fire”: divorce? /~1 EU Commission / ~2 EU power industry IV. 2015-2020: And tomorrow? /~1 Internal Market BAU? / ~2 Or renewed EU energy policy in a brand new “Energy Union”? 5
  3. 3. 1986-2009: only an EU Internal market and nothing elseMarket First and foremost (Internal Market) ¤ Not because market logical or astute to support any EU energy policy – only because EU strong & legitimate there: Internal Market “raison d’etre” (Treaty 1957 + Single Act 1986) <Power only> ¤ 1st Package 1996: *“Free Entry in Generation” ** “B2B Consumer eligibility” *** “Free movement of goods at all internal borders” ¤ 2nd Package 2002 : *transparent & market friendly cross-border operation; **regulators supporting market building; cannot get EU market design (wholesale pricing & sequence of markets(Day-Ahead to real time); ***full retail eligibility; ¤ 3d Package 2009 unable to get EU “market design” & EU “grid operation rules” >SO> sets up process to produce that with new Bodies: *EN.TSO-s to “EU” the TSOs; **ACER to “EU” the N.RAs 6
  4. 4. 1986-2009: an EU Internal market… within open grids… • Second to Internal Market (EU Grids) ¤ very logical: no power market can work if Grids aren’t market friendly (Opening EU market > Open EU grid) ¤ 1st Package 1996: *“Third Party Access to power Grids ** “Including all internal borders ¤ 2nd Package 2002 : Regulated access to grids; regulators duties for markets and grids; transparent & market friendly cross-border grid operation, congestion mechanisms, grid capacity allocation ¤ 3d Package unable to add full EU harmonization of “market design & grid operation rules” >> but did set up a process to produce it with new Bodies: *ENTSO-E(G): EU GridCodes &EU TYNDP GridPlanning; **ACER : “EU” NRAs ¤ NB: 3dPackage didn’t try to EU harmonize TRSM grid tariffs making; grid investment & data methodology; did miss all Distribution grids issue as Market Operators (wholesale exchange: PXs); Plus NO EU regulator 7
  5. 5. 2005-2009 EU goes to EU energy policy What was it about? Previsibility (foreseeability) very low: “EU energy policy” was not at all foreseen in 2004; and…. already “packaged” in 2009! • Game Changer 1 2005 Hampton Court Council Tony Blair: long life EU internal Security of Supply • Game Changer 2 2007 (Lisbon treaty) Berlin Council Angela Merkel: long life EU energy sustainability 20-20-20 in 2020 • Game Changer 3 2006&2009 Russia-Ukraine: EXT emergency plans + security reg. 2010 & infrastruc. package 2011-13 8
  6. 6. II. 2007-2009: EU got “energy policy”: a “RES country pillar” pushed by MS • Only third and external to Internal Market and EU grids (EU RES) ¤ external because RES are *subsidy pushed (not market pulled –energy market or carbon price) and **country regulated (no EU wide system of RES push rules in 2007 -except size of countries RES quotas) ¤ EU got a split: # RES split into“green part” (out of market price & trade order, “own special circuit”) &”energy flow” (into EU Market & MS Systems) * RES energy flows circulate through grids to directly enter the demand (while being variable and not dispatched) >> very strong interactions between RES, power system and grids operation ** NonRES can serve only “residual demand”; only what variable RES cannot feed at each moment > very strong market interactions between RES & nonRES (capacity “adequacy” given by amount of working RES) ¤ Small RES > small interactions; Massive RES>> massive interactions 9
  7. 7. 2012-14 core assumptions derail: And so what? (Fukushima 2011); Shale gas; Russia as supplier; Green revolution & EU RESworld leadership; +65Eur GreenCharge MWh > Questioning and redefinition re-opened in 2012 >> Popped up in November 2013; and has ben confirmed by EU Councils Oct. 2014&March 2015: MS call for RES “EU cease-fire” • 1- Commission Novelties (Barroso II: Nov. 2013 to Ap. 2014) • 2- EU Power Industry Novelties (EURELECTRIC 2014) 10
  8. 8. III. 2013-14: Countries ask for “RES cease-fire”; Commission reacts June 2012: make your choice - November 2013: some guide lines – January 2014: Berlin 20-20-20 “game over”. Competitiveness & costs back to top • June 2012 - Options RES policy post 2020 / S2: Only “Carbon Price” risky &unfavorable to technology innovation / S3: National RES targets risk EU fragmentation &high unit costs; favors decentralization & distributed Gen. /S4 EU RES target&harmonized frame favor costs reduction, X-border investments, large scale innovation ;+grid&system costs • November 2013 - Guide lines for RES support till 2020 / Only small units & less mature RES (as off-shore & bio-mass) keep FiT / big units and deployed RES only FiP & Tgy neutral auction (ex: On-Shore or PV 1MW) • January 2014 - Framework post 2020 / *“EU bindingGHGtargets +**MS only RES target & “appropriate “ EU governance for MS action plans 11
  9. 9. III. 2013-14: Countries ask for “RES cease-fire” Eurelectric reacts 3 differences from Commission (Eurelectric Manifesto February 2014) • Single target being GHG emission (– 40%) as carbon market (“carbon pricing”) is most cost-effective instrument for whole decarbonisation • All state aid on RD&D + increase spending on technology demonstration (means: no money for technology deployment as FiT or FiP) • Create new market for “Long Term Capacity remuneration mechanism” coordinated at Regional Level (implicit: carbon market won’t make it; LT entry in power generation cannot come from Carbon Pricing) 12
  10. 10. 1- 25 February 2015: Commission COM. ‘’Towards an Energy Union’’ NB: ‘Energy Union’ has NO predefined content; is only ‘catch word’. It is NOT a new institution (like an EU Treaty or pro-Treaty (Schengen-like Agreement) or even an EU body (say ‘ACER’ or ‘ENTSO’). SO many alternative Energy Union(s) are conceivable 2- Energy Union <mini> to boost Internal Market >> Eurelectric, Eurogas (EU) put new tag on (existing institutions + BAU) = let’s call it Ener.Un: BUT to end ‘Internal Market’ extended to RES & Capacity Mechanism being fully ‘market based’. However such EU-BAU ends undefined: ¤ MS have strong power to take initiatives (Germany: Off-shore + Energy Efficiency push) (UK: SoS being Capacity mechanism + LT contrat with UK Nuclear or tidal + off-shore + ISO Grid +?) (France: own Capacity mechanism + Off-shore too? + Will put EDF as shareholder of Areva + to strangle ‘EPR’? and create new ‘small’ nuke reactors 600MW’;etc ¤ At what speeed Commission could follow MS? IV. 2015-2020: And tomorrow? ~1 / Internal Market BAU?
  11. 11. www.florence-school.eu IV. 2015-2020: Commission’s proposals 25 Feb.? /~1 Internal Market BAU? 1- EU 4th Big Package Internal Market *Legislation 2016; retail & wholesale; integrating RES; phasing out non market based support; coordinating Capacity Mechanisms . **Legislation 2018 Electricity security of supply ***Review framework from 3d Package notably for ACER (to ++power of Europeanizing regulation) & ENTSOs (to ++ as regional operational entities to create) ****Propose guidance for ‘regional cooperation for market integration’ and to act at regional level wih regu. Bodies, MS and stakeholders *****Create ‘Energy Infrastructure Forum’ with MS, Regional coop. Groups, and EU institutions (ACER? Banks?) by late 2015 14
  12. 12. www.florence-school.eu IV. 2015-2020: Commission’s proposals 25 Feb.? /~2 Security of Supply? 2- EU actions for Security of Supply *Legislation: Revision Gas Regulation by 2015-2016 **Legislation: Revision Decision International Agreement for Commission to intervene ex ante before signature of agreements with 1/3 countries ***Coordination Commission / HR-VP / MS to create international diplomacy for energy & climate issues; for international treaties (as TTIP) or within WTO, and launch new initiatives (as agreement with India, with China ;etc) in field RES, Ener.eff, etc. ** **implementation of existing PCIs with adequate financing ** ***Strategy for LNG an its storage ** ** ** Council 19-20 March : explore feasibility of gas joint-buying mechanism 15
  13. 13. www.florence-school.eu IV. 2015-2020: Commission’s proposals 25 Feb.? /~3 Beyond Internal Market & SoS? 3- Other fields of EU actions beyond Internal market & SoS : *Legislation to revise EnerEff directive &make proposals to meet 2030target **RES package by 2016-17 incl.sustainable &cost-effective biomass, biofuels *** Legislation to achieve Oct2014GHG target in ETS & non-ETS sectors ** **Legislation ‘Full Road Transport Package’ covering efficient pricing of infrastructures; rool-out of intelligent transport; enhancing ener.eff ------------------------------------------------------------------------------------------------------- ** ***Strategy to facilitate Investment in efficient ‘Heating & Cooling’ ** ** **Create Smart financing for smart buildings fund ** ** ***To push MS & regions to use more the funds to renovate housings ------------------------------------------------------------------------------------------------------- **** **** Strategy for transport research & innovation agenda **** **** *Revision ‘Strategic Energy Technology Plan’ 16
  14. 14. www.florence-school.eu How to conclude? Too many EU energy policy future(s): which Energy Union(s) will EU get? ?? To be seen in 2015-17…
  15. 15. www.florence-school.eu
  16. 16. www.florence-school.eu Comillas & Florence School offers you full-fledged online • Course directed by Ignacio Pérez-Arriaga (MIT, Comillas Madrid & Florence) • 20 weeks of flexible online training • Internet access Pérez-Arriaga’s guidebook “Regulation of the Power Sector” • Direct interaction with a Faculty of leading experts (led by Ignacio) • Support from the FSR Online Community • A Certificate of attendance (both Comillas & Florence) 1st edition 2 February –5 July 2015 (sold-out: 200 candidates registered) 2nd edition November 2015 – March 2016 > watch registration window @ http://florenceonlineschool.eui.eu/
  17. 17. www.florence-school.eu 20 Thank you for your attention Email contact: jean-michel.glachant@eui.eu Follow me on Twitter: @JMGlachant already 6 389 tweets My web site: http://www.florence-school.eu

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