FSR

In this episode, Piia Karjalainen, Secretary General of the Mobility-as-a-Service (MaaS) Alliance joins us for a discussion on the role of MaaS in supporting the advancement of the European Green Deal agenda. We discuss issues critical to enabling the development of MaaS, including data sharing, multimodal ticketing and payment systems, as well as the role of the insurance sector in adapting to the needs of multimodality, while also serving the needs of the service providers. Not least, we discuss the implications of the Covid-19 pandemic and the social distancing regulations implemented to curb its spread. Is the pandemic a threat or can it be turned into an opportunity for MaaS?

In this podcast, Leigh Hancher discusses the recent non-binding opinion (http://curia.europa.eu/juris/documents.jsf?num=C-594/18%20) of Gerard Hogan, Advocate General of the European Court of Justice, with regard to a decision on state aid to the nuclear power plant Hinkley Point C in the UK. In Hogan’s opinion, EU judges should dismiss an appeal by Austria aimed at overturning the approval of UK state aid to support the construction of the nuclear plant. Hogan stated, “it is clear that the development of nuclear power is, as reflected in the Euratom Treaty, a clearly defined objective of EU law”.

In 2014, after several agreed changes to the plans, the European Commission approved the UK’s plans to give state aid to support the construction of two EPR reactor units at Hinkley Point C, deeming it compatible with EU state aid guidelines and thus the internal market. At the time, it was considered by the Commission that the aid was justified as there was a “lack of market-based financial instruments and other contracts to hedge against the substantial investment risks in the project”. The project is a joint venture between EDF and China General Nuclear Power Corporation, with the latter holding a 33.5% stake. The planned plant, which would be the first new nuclear power station to be built in the UK in almost twenty years, would account for approximately 7% of the UK’s electricity supply.

Austria first launched an appeal to this decision in 2015 on the basis that approval of the scheme contradicted EU policy to support renewable energy. The then Austrian chancellor Werner Faymann argued that nuclear power “is not an innovative technology and is therefore not worthy of a subsidy”. He added that “[State] aid is there to support new and modern technologies that are in the general interest of all EU countries. This is in no way true of nuclear power.” The case divided Member States. In the course of proceedings, Luxembourg intervened in support of Austria while France, Poland, Czechia, Hungary, Romania, Slovakia and the UK intervened in support of the Commission.

In July 2018, the General Court dismissed the action brought by Austria. However, in September 2018, Austria appealed against the decision before the European Court of Justice. In his opinion of 7 May 2020, Hogan stated that, by accepting the objectives of the Euratom Treaty, all Member States have “clearly signified their unqualified acceptance in principle of the right of other Member States to develop nuclear power plants in their own territories should they wish to do so.” He also notes that EU law (according to Art 194 TFEU) has given each Member State the right to determine its own energy mix.

Hogan comments that, according to its wording and the position of the provision in the TFEU, aid, in order to be compatible with the Treaty, neither has to pursue an ‘objective of common interest’ nor an ‘objective of public interest’. It only has to ‘facilitate the development of certain economic activities’ and it must not ‘adversely affect trading conditions to an extent contrary to the common interest.’

As Hogan noted, “This case can be described as the legal side of a dispute between Member States that are in favour of nuclear power and those that are not. Both sides claim that they pursue their course with a view to protecting the environment”.

While a decision on this appeal is still pending, Hogan’s opinion will be taken into account when the European Court ultimately rules on Austria’s appeal. In the podcast, Leigh Hancher shares her thoughts on the opinion.

In this episode, Auke Lont, CEO of Statnett, talks to Joana Freitas, Ambassador for the Lights on Women initiative of the Florence School of Regulation, about the key challenges around carbon pricing. The European Union currently has a mixed system to price emissions – 41% of greenhouse gas emissions fall under the Emissions Trading System (ETS), 7% are covered by carbon taxes and 4% fall under both instruments. Auke Lont considers that the EU ETS system “functions pretty well” and points out two improvements going forward – introducing a floor price and getting rid of free allowances. On top of that, Auke Lont also recognises the importance of specific measures outside the ETS scheme, particularly to accelerate innovation in getting CO2 out of the system. One of the key issues when pricing carbon is whether prices in different countries should be allowed to vary – a single price approach might have significant impacts on specific regions. The other issue is how to address emissions from different sectors of the economy – there are still a number of sectors not subject to emissions restrictions in EU, like Agriculture and Transport. At the same time, the transition to a low-carbon economy needs to be fair and just. “We should indeed try to link the fairness of the transition to the incomes which might be generated through the carbon tax system”, Auke Lont said. One of the most powerful measures presented by the new European Commissioner is the creation of a Carbon Border Tax. Auke Lont notes that it will force other countries to join EU in the climate change fight; however, the use of trade policy instruments might lead to retaliation. Consumers’ behaviour also play a very significant role in the transition – “it might be a catalyst for both industries to move faster in the green direction and for politicians to actually put more regulations or higher prices on carbon”.

In this episode, Net Zero host Joana Freitas invites Andris Piebalgs, Professor at Florence School of Regulation and former EU Commissioner for Energy, to discuss how renewable energy is changing global geopolitics. While over the last 200 years, control of oil, natural gas and coal, as well as of bottlenecks in global sea routes (like the Strait of Hormuz) have shaped the world geopolitics, renewables are now expected to challenge this landscape. Andris Piebalgs sees an opportunity for those nations that have been investing in new technologies related to renewables, like China, to reinforce their global influence in the energy area. On the other hand, Russia and Saudi Arabia are pointed out as the countries where the energy transformation might be more difficult as “it will be very difficult domestically to change the pricing for fossil fuels”. In the specific case of Middle East countries, there are already some investments in renewables but mostly in the Emirates. In Andris Piebalgs’s perspective a change in consumers’ patterns might be a key trigger for these countries’ transformation - “If Europe will go massively for electric vehicles, then definitely, these countries also will be encouraged to make reforms”. Although China is the world’s largest producer, exporter and installer of solar panels, wind turbines, batteries and electric vehicles, Andris Piebalgs sees no reason to believe that Europe is changing from one type of dependency to another. Europe can always develop technologies on its own, while fossil fuels are clearly geographically located. “So my point is that definitely more renewable energy means more energy security, particularly for Europe”, Andris Piebalgs said. In a world where climate change is perhaps the biggest challenge, Andris Peibalgs also believes that the energy transition “definitely brings more peace”.

In this episode, Elena Bou, Board Member and Innovation Director at Innoenergy, joins host Joana Freitas to discuss how startups are challenging the traditional world of utilities. The energy sector is going through a period of unprecedented opportunities for innovation and growth in lots of different areas, opening doors for start-ups and entrepreneurs. Elena Bou points out that, over the last years, batteries have become one of the most intense areas of activity for these newcomers. At the same time, start-ups have also been working on a wide range of topics, such as alternative ways of mobility and control of heat and cold using low-carbon solutions, which will directly impact citizens. However, as it was noted by Professor Henry Chesbrough, the father of the open innovation concept, “the future of the energy will require ecosystems of collaboration between start-ups and big energy corporates”. While in some cases, start-ups are helping utilities and energy companies to accelerate innovation and to solve specific problems, Elena Bou also notes that “many start-ups are working with utilities to explore new business models”. Utilities seem to be more open to innovation than in the past, but there are still some barriers to overcome. In Elena Bou’s perspective, the lack of new skills is one of those barriers as “these profiles, they don't want to go to work to these type of companies because they prefer to work with the start-ups”. So far, we have not seen attackers from the tech world posing a real challenge to the energy incumbents (perhaps with the exception of electricity retail), but Elena Bou already sees companies like Google and Cisco as potential competitors and feels “a huge pressure on incumbents, particularly in Europe”.

In this podcast, Professor Leigh Hancher discusses the Baltic Cable case, a case centred on a power line which interconnects the electric power grids of Germany and Sweden, and weighs the implications of this case for cross-border interconnectors in the EU as well as its wider significance for EU energy law.

In this podcast, Clemens Ziegler (Ziegler State Aid AntiTrust SRL) discusses the EU Commission’s emergency state aid rules, which were announced on 19 March 2020 in response to the COVID-19 crisis. What do these temporary rules allow? And what may be the implications of relaxing some of the EU state aid controls, especially for the energy sector?

In this episode, António Mexia, CEO of EDP Group, joins us to discuss the challenges that utilities are facing in adapting their organization, skills and culture to the energy transition environment.

António Mexia starts by noting that we are living in the middle of a revolution: digitalisation is totally transforming most sectors, including the energy sector, which was for decades a very traditional one. An open innovation approach is crucial in facing this new context, as “most opportunities will probably come from outside our walls, from outside the company”. In the specific case of EDP, of which António Mexia is CEO since 2006, the growth of the renewables business segment was one of drivers of the company’s cultural change – “People understood that everything would be different”. The need for a cultural change is now an issue for all the players along the value chain. Regarding grid operators, they have been mainly focused on the security of supply, but now they are also being challenged to change very fast to adapt to a much more decentralised and decarbonised system. In António Mexia’s view, the ability to become agile and flexible is key to address the technological and market disruptions that are coming. Moreover, he considers that attracting the best talent and committing to diversity are critical elements for energy companies to succeed. While it seems that not everyone is on-board on this upcoming disruptive change, António Mexia notes that this is a movement “clearly demanded by the society in the streets” with which companies will have to cope.

What role will Carbon Capture, Utilisation and Storage (CCUS) technologies play in the energy transition context? In this episode, Mechthild Wörsdörfer, Director for Sustainability, Technology and Outlooks at International Energy Agency (IEA), shares her views on the opportunities and challenges arising from CCUS technologies with Net Zero host Joana Freitas.

According to IEA, industry currently accounts for almost 25% of CO2 emissions and 40% of global energy demand. Continued economic growth and urbanization, particularly in developing countries, is expected to drive up the demand for cement, steel and chemicals. In Wörsdörfer’s perspective CCUS is “the only known technology to be able to put these sectors on a pathway to this net zero emissions”. She also sees a role for CCUS in the power generation segment, especially in Asian countries, like China and India, where most of coal power plants are still very young and able to operate for decades: “One of the options here is to retrofit them and put also CCUS on the existing ones to cut the emissions”.

The discussion around CCUS is not new; however, the achievement of the Paris agreement goals and the new net zero ambition for 2050 have been driving a renewed interest in CCUS, particularly in Europe. On the other hand, CCUS deployment is still facing public acceptance issues in some European countries. According to Mechthild Wörsdörfer the use of CCUS does not mean “business as usual for fossil fuels” as, even considering the use of this type of technologies, it is necessary to decrease the use of coal in power generation by 75% in 2040 to achieve the climate goals. CCUS technology “provides a bridge between the reality we are still having right now and certainly the need for urgent emission reduction”.

In this episode, EU Energy Commissioner Kadri Simson discusses the energy taxation policy in EU and the challenges behind a just transition with Joana Freitas, Ambassador for the FSR Lights on Women initiative. To achieve the level of ambition that is proposed in the Green Deal, the EU needs to set an effective carbon pricing policy. However, as Commissioner Simson notes, in some European countries, there are still some inconsistencies in the energy taxation system – there are cases in which taxation is more favorable to fossil fuels than to renewables. One of the most disruptive measures proposed in the EU Green Deal is the creation of a Carbon Border Tax.

As some segments of the population and some regions are particularly affected by this green transition, political initiatives, as the Just Transition Mechanism, play an important role in funding the transition and bringing the entire society on-board. Despite different starting points, the Just Transition Mechanism will be available to support all the Member States. “All around Europe we have factories that are losing their market share because of the technological solutions they are using”. Given the amount of investment required, national governments and the private sector will also have to contribute. In the Commissioner's view, national governments should develop their own financing mechanisms as the “Green Deal is not only about protecting our environment, but is also a growth strategy”.