EURELECTRIC welcomes state aid inquiry into capacity mechanisms #eureletric #commission #energy #europe


EURELECTRIC welcomes the European Commission inquiry, launched on April 29, into capacity mechanisms implemented, or under implementation within Member States to safeguard security of electricity supplies.

EURELECTRIC Secretary General Hans ten Berge seized the opportunity to call for a harmonised approach to capacity mechanisms across Europe and stronger Commission leadership in the implementation of an efficient, integrated European energy market.


EURELECTRIC welcomes deal on ETS Market Stability Reserve #eurelectric #energy #europe #market #deal


EURELECTRIC strongly welcomes the provisional agreement reached yesterday by the European Parliament and the Council on the proposal to establish a Market Stability Reserve (MSR) under the EU Emissions Trading System (ETS).  EURELECTRIC has consistently advocated the need for an urgent and thorough reform of the ETS.

This includes a robust MSR which enters into operation early and ensures that the 900 million backloaded allowances as well as the unallocated allowances are transferred to the reserve.

The deal reached yesterday will establish an effective reform mechanism in line with all these expectations.



EURELECTRIC publishes a reference model for European capacity markets #energy #europe

The completion of the Internal Energy Market remains a cornerstone of European energy policy. Yet faced with growing concerns about long-term security of supply, several EU countries are in parallel moving forward with national capacity markets. EURELECTRIC believes that capacity markets must evolve from national to regional solutions, to optimise the use of capacity across regions – and ultimately Europe as a whole. A new EURELECTRIC report, published today, sheds light on how capacity markets can be properly designed to keep the door open to such regional solutions.
Titled “A reference model for European capacity markets”, the report outlines crucial elements of capacity markets and shows how cross-border participation in capacity markets could act as a stepping stone to regional markets. It also discusses which elements of capacity markets should be harmonised to reach a regional solution.
EURELECTRIC Secretary General Hans ten Berge said: “European energy markets today are facing one pressing question: how can we ensure that markets deliver continued security of supply in the future? For EURELECTRIC, capacity markets are clearly one piece of the puzzle. However, capacity markets should strengthen rather than undermine ongoing efforts to complete the Internal Energy Market. We therefore urge policymakers to make sure that capacity markets go beyond national borders. In addition, capacity markets should follow a set of basic design features: they should be market-based, technology-neutral, open to new and existing plants, and open to generation, demand response and storage.”
As the European Commission steps up its efforts to provide guidance on what the future electricity market design in Europe should look like, the present report shows EURELECTRIC’s continued engagement in this important discussion. The report builds on previous work published by EURELECTRIC late last year.
The shape of the evolving market design was also at the heart of today’s EURELECTRIC conference “Capacity Markets – delivering security of supply in the Internal Energy Market”. The workshop looked at current national initiatives on capacity markets with the aim of drawing out lessons for future capacity market implementation in Europe.
Source : eurelectric.org



Changes in electricity market design are necessary if Europe wants to achieve its energy and climate ambitions whilst securing energy supply, EURELECTRIC President Johannes Teyssen (CEO of E.ON), will tell a EURELECTRIC conferencetoday. The conference discusses the implications of Europe’s energy transition on the development of Internal Energy Market (IEM) and on electricity market design.

To successfully achieve the energy transition process, policymakers need to see power companies as an ally, not a threat. The European electricity industry remains committed to the EU’s energy policy objectives: sustainability, competitiveness, and security of supply. But these objectives are being compromised: we are witnessing energy policies that increase CO2 emissions, raise customers’ energy bills and cause major asset destruction in our industry. We need to find a path to a sustainable future that allows companies to be active in a market dominated by more intermittent generation – a market that properly remunerates the assets necessary to fulfil customers’ requirements for security of supply,’ Mr Teyssen will say.

Further integrating wholesale electricity markets, enhancing demand-side participation, and developing interconnection capacity is essential for an efficient functioning of the market and valuing flexibility, which – with increasing intermittent generation – will grow in importance and will be needed to ensure short-term system stability.

However, in a growing number of countries even taking all these necessary steps would not be sufficient to guarantee generation adequacy. In these cases, the energy-only market will therefore have to be complemented by a capacity element, which provides signals for investments and operating back-up plants to support a more intermittent electricity system. Such a capacity element will thus be instrumental for long-term system adequacy.

Discussions today will also focus on capacity remuneration mechanisms (CRMs). EURELECTRIC speakers will stress the need to underpin CRMs by a proper regional generation adequacy assessment. Member states should coordinate among themselves and adopt market-based mechanisms (i.e. mechanisms that are non-discriminatory, open to existing and new plants, and open to generation, storage and demand response) that allow cross-border participation. The preferred approach would be to adopt the same model at regional level or at minimum to introduce market-based mechanisms at national level with cross-border participation.

Cross-border participation and a seamless cooperation of transmission system operators (TSOs) will be the cornerstone of any new market design adjustments, EURELECTRIC speakers will highlight. The European Commission should play a prominent role in guiding these changes so that national market design reforms are carried out in a way that is fully compliant with the objective of an Internal Energy Market. In particular, the Commission should help member states coordinate existing and up-coming national CRM, thereby facilitating the emergence of a regional approach.



The European electricity industry has called on the European and national policymakers to take measures that would ‘re-orient energy policy towards cost-efficiency and competitiveness’.

In a ‘Manifesto’ presented to EU Energy Commissioner Günther Oettinger today, the electricity industry calls on national and European policymakers to adopt a more coherent and European approach to energy and climate policies, so as to reduce those policies’ costs while increasing their impact.

In particular, policymakers should pursue decarbonisation in a more cost-efficient way, restrict market interventions and distortions, and empower electricity customers while keeping bills in check.

The document was adopted by the EURELECTRIC Board of Directors on behalf of the electricity industry in 31 European countries.

Energy is a major EU economic policy. It fuels growth in living standards and is the backbone of a healthy economy. Policymakers must take greater care to avoid policy-induced inefficiencies and market distortions that are unnecessarily pushing up the costs of providing electricity and raising the bills for Europe’s customers. National regulatory initiatives without consideration for their impact on other member states cannot remain the rule. Only a true European approach can ensure renewed investment in the future – to the benefit of European businesses and households alike,’commented EURELECTRIC Secretary General Hans ten Berge.

Titled ‘Manifesto for a balanced, more efficient European energy policy’, the document lists a series of actions that policymakers should take to ensure ‘power for a competitive Europe’. They are grouped under three themes:

  • Delivering cost-efficient, competitive energy for Europe’s businesses and customers;
  • Securing supply through competitiveness and innovation;
  • Reducing environmental and climate impact.

The Manifesto was handed over to Commissioner Oettinger by EURELECTRIC Board Members Wolfgang Anzengruber (CEO, Verbund AG, Austria) and Oluf Ulseth (CEO, Energi Norge, Norway).

The Manifesto initiative provides a compass for the major political issues in which the electricity industry would like to see progress within the next 12 months. As such it adds further strength to voices speaking out in favour of a new approach to European energy policy, a debate launched last year by the ‘Magritte Group’ of energy CEOS, among them several EURELECTRIC members.


José Manuel Durão Barroso


EURELECTRIC, together with 51 European companies and business and investor associations, has called on the European Commission to bring forward by the end of the year draft legislation for a structural reform of the EU Emissions Trading Scheme (ETS). A clear carbon price signal and long-term visibility are essential to drive investments and growth, they said in an open letter to European Commission President Barroso, published today.


“Dear Commission President Barroso,

We are 53 companies and business and investor associations, together representing more than 1.5
million jobs in a wide spectrum of sectors including energy, finance, transport, construction,
machinery, telecoms, and commerce.

A clear carbon price signal and long-term visibility are essential to drive investments and growth. We
therefore call on the Commission to bring forward draft legislation for ETS structural reform by the
end of the year, in order that the EU-ETS can deliver in line with the EU’s long-term decarbonisation
goal and remains a central climate policy instrument.

We also call on the Commission and the Ministers to work together for early agreement on an EU
2030 Climate and Energy Framework.

Yours sincerely,
3M, Acciona, Aldersgate Group, Alstom, Ansaldo Caldaie, Areva, Aviva Investors, Carbon Capture and Storage
Association, CEZ, Climate Change Capital, Climate Markets and Investment Association, Danish Energy
Association, Deutsche Telekom, Die Bahn, Doosan, DONG Energy, DRF, Électricité de France (EDF), EnBW,
Eneco, Enel SpA, EnergieNederland, EnergiNorge, Energy UK, E.ON, EU Corporate Leaders Group (EUCLG),
EURELECTRIC, EUTurbines, EWE, Fortum, Gasterra, GDF SUEZ, KDF Energy, Iberdrola, IETA, Institutional
Investors Group on Climate Change (IIGCC), Kamstrup, M+W Group, Novozymes, Otto Group, PUMA,
Schneider Electric, Schüco, Scottish Widows Investment Partnership, Shell, SSE, Statkraft, Stiftung 2°, Stiftung
Schwäbisch Hall, The Climate Group, Velux, Verbund, Xella, Zero Emissions Platform”





eurelectricEURELECTRIC President and E.ON CEO Johannes Teyssen has called on the German and French governments to set up a high-level group to explore the feasibility and benefits of an aligned French and German energy market design, in particular on inter-operability of capacity remuneration mechanisms which could then be extended to other neighbouring countries. The call was made at a conference in Paris today, organised by EURELECTRIC’s French member UFE.

A long-standing proponent of energy market integration, EURELECTRIC is pushing for greater coordination between EU member states as they strive to address concerns regarding generation adequacy and soaring costs for renewables.

‘We cannot declare failure on Europe’s energy system, the backbone of our society. We, the people of Europe, our politicians in Brussels and in the 28 capitals, need to confront the situation and fix it now!’Mr Teyssen said.

Regional initiatives had proven successful in the past to integrate European electricity markets, he noted. For instance, market coupling between France, Germany and the Benelux has optimised the use of interconnection capacity and reduced prices for consumers.

The conference was attended by several high-level representatives of the French government, notably Philippe Martin, Minister of Energy, and Arnaud Montebourg, Minister of Industrial Renewal.



SupergridToday, the Commission adopted the EU-wide list of energy infrastructure priority projects till 2020. These so-called “projects of common interest” (PCI) have a strong cross-border component and benefit from accelerated planning and permit granting of maximum 3 ½ years by a single national competent authority.

EURELECTRIC welcomes the publication of the PCI list as a step towards extending and reinforcing the European electricity network. Grid infrastructure is the backbone of the EU energy system. Without stronger networks it will be difficult for Europe to reap the full benefits of the internal energy market, successfully integrate renewables into the system and enhance security of supply.

However, while reinforcing the European grid infrastructure is critical, policymakers should not lose sight of the bigger picture: the aim to achieve an EU-wide internal energy market. Yet according to the Commission’s latest quarterly power market report, the spread between day ahead, base-load German and Dutch power prices is increasing, peaking at €24.9 on 20 May 2013. This worrying development shows that existing cross-border grid infrastructure is not being used to improve market integration, but to ‘export’ unwanted side-effects of national policies, e.g. policies to expand wind and solar generation, to other European countries.

In addition, several recent market design proposals emanating from EU member states do not sufficiently address interconnector capacity, giving rise to concerns that Europe is moving towards a renationalisation of energy policy.

As such, Europe is not facing a ‘simple’ problem of technical capacity, but a larger one of energy policy and market integration. Grid reinforcement via PCIs should therefore go hand in hand with broader efforts to integrate wholesale markets, remove regulated end-user prices, integrate renewables into the market, and develop flexible gas markets.



On 11 October, 10 European electricity CEOs, representing half of European power generation capacity, came together in Brussels to urge for a reform of European energy policy.[1]


Wind Energy

Wind Energy (Photo credit: janie.hernandez55)


Warning that the current EU energy policy was not delivering, they spoke out in favour of a new approach that would reverse today’s trends of higher bills, less security of supply and rising CO2 emissions.


Key steps for policymakers should include integrating mature renewables into the market and abandoning subsidies, using existing competitive capacity as a matter of priority instead of subsidising new constructions, and fundamentally strengthening the EU carbon market to have the EU Emissions Trading Scheme (ETS) as the key driver of Europe’s climate policy.


EURELECTRIC shares the concerns raised and welcomes actions taken to make sure that the valid concerns of the European electricity industry are heard by policymakers in Brussels and national capitals alike. We also strongly believe in the value of going one step further and providing constructive suggestions for the way forward. We therefore welcome this initiative, which – while not a EURELECTRIC initiative – is closely aligned with most of our own positions.



Network tariffs should be made more cost-reflective and ensure that customers only pay for the electricity they use. These are among some of the recommendations EURELECTRIC makes in a new report on network tariff structures in Europe.


The report finds that recovering network costs today heavily depends on how much electricity is sold – in spite of the fact that direct network costs are largely independent of the actual energy delivered. About 50-70% of distribution system operators’ (DSO) allowed revenue is usually recovered using such volumetric network tariffs.

In last week’s European Council conclusions, EU leaders called for a boost in energy efficiency and a completed single energy market with more domestically-produced renewables and new and intelligent energy infrastructure. Implementing this vision will require DSOs to undertake heavy new investments. To this end, network regulation must change to induce cost-effective investments, including in smart grids, and ensure adequate DSO remuneration.

To ensure that DSOs can recover such investment costs, the EURELECTRIC report recommends that:

  • Cost-reflective network tariff structures should be developed that incentivise demand response and energy-efficient behaviour while providing a stable framework for both customers’ bills and DSO revenues. Such tariff structures would be in line with the Energy Efficiency Directive (2012/27/EU), which requires the removal of network tariffs that would impede energy efficiency and/or demand response.

Customers only pay for what they use: cross-subsidies between different categories of users should be minimised.

More capacity-based network tariffs (decoupling from the volumes of sold energy) such as two-part network tariffs with a capacity and an energy component, or volumetric time-of-use network tariffs with different prices for peak and off-peak energy.

Smart meters will open the door to more cost-reflective tariff structures and demand response. Nevertheless, different customers’ potential and the outcome of the national cost-benefit analysis for the roll-out of smart meters should be taken into consideration when designing new tariff structures.