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What future for EU utilities (if any)?


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Prague Energy Regulatory Forum, 17 March 2016

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What future for EU utilities (if any)?

  1. 1. What future for EU utilities (if any)? Prague– Energy Regulatory Forum (17 March 2016) Jean-Michel Glachant Director “Florence School of Regulation” @ European University Institute – Florence (Italy)
  2. 2. What future? If any… What?
  3. 3. 1/ Simple: future is just a (?) What was it about? • More RES? • Less fossil fuel? Or less utilities? Half utilities half dead? E.ON -10bn (EDF weights 18bn); Vattenfall & lignite • Less nuclear? Or no nuclear? E.ON, RWE, Vattenfall 19bn; Areva – 10bn; EDF weights 18bn Hinkley alone 24bn • No wealthy “Major” utilities left: who will drive “energy transition” innovation and investment? Smaller utilities? As Iberdrola? New comers & Investment funds? Nobody needed? Nobody knows? 3
  4. 4. 2/ Less Simple: future is not the past What was it about? • More RES? • More grid investment… but not more energy What is a right incentive regulation to “invest more” but not “deliver more”? • At what point more “grid cost past through” becomes “incentive regulation” for consumers to bypass the grid? • Inevitable to define new services, new KPIs? To go to “A la Carte” tariffs & to stop “Universal Postal Stamp”? 4
  5. 5. 3/ Less Simple: future not at all the past What was it about? • More RES: more distributed gen. & local system operation? • TSOs did become “internal market facilitators” via Unbundling + “Target Model” + Grid Codes • Where are DSOs “Unbundling +“Target Model” +Grid Codes? • Inevitable to define “Demand Response” as service, as products, in a market (pocket market? Local? Coupled to internal market?) To go to “A la Carte” tariffs & to stop “Universal Postal Stamp”? • Inevitable to kill “Yearly average commodity contract” as base of “normal contract practice” (see French Winter peak) 5
  6. 6. 4/ More Simple: Airbnb + Uber > interactive plaforms of local operationwas it about?• Two waves of innovation • 1/ Massive “digitalisation” (ITC for each individual > Qualitative / collection of more accurate data + Quantitative / High number of decision making units) Data / Algorithms / Signals • 2/ Tgy lowering costs of assets for local generation, local storage, and internet of things • (1/ + 2/) facilitate local coordination of system investment and of system operation >> more local investment & op. • End of retail utilities EXCEPT for “public service obligation” (Red Cross for unwilling & unequipped + Stranded Assets) 6
  7. 7. To conclude? Nobody should try concluding an introduction…
  8. 8. 8 Thank you for your attention Email contact: on Twitter: @JMGlachant already >15 000 tweets My web site: