FSR

Interested in this topic? Check out our specialised training on REMIT, designed to provide a critical understanding of how REMIT is currently being implemented and enforced, and equip participants with the necessary tools to anticipate practical issues and ensure compliance. http://bit.ly/2SbvuHt

In this podcast, Sohra Askaryar from Baker Botts (Brussels) addresses the recent case before the European Court of Justice, C-15/16 Bundesanstalt für Finanzdienstleistungsaufsicht V Ewald Baumeister, which clarifies the definition of confidential information in the context of the Markets in Financial Instruments Directive (MiFID) first introduced in 2004 followed by MiFID II and the regulation MiFIR in 2014, effective from January 2018. The case sets out the criteria which national financial regulators must consider to determine if the information they hold on entities under their supervision may be disclosed to third parties. National financial regulators have extensive powers to request information from companies and are thereby privy to a range of commercially or otherwise sensitive information. This case has important practical implications for these companies with regard to the type of information they can expect to remain confidential and what may be disclosed. Do national financial regulators have an absolute duty of confidentiality? Can access to certain documents be granted and, if so, what determines this disclosure? What powers do financial regulators have over information? What protections are there for entities? What does it mean for energy market trading and transparency?

Digital technologies enable accurate monitoring and controlling of all devices connected to the electricity grid and the relative flows of energy. By doing so, they can harness the untapped potential for flexibility hidden in the system, both on the demand and the supply side, offering a solution to the challenges raised by decentralisation and decarbonisation. This is what aggregators and virtual power plants (VPPs) like Next Kraftwerke do. However, technology is only half of the story: favourable market conditions and an adequate regulatory framework are equally essential to get a sustainable business model.

How can you ensure that a monopoly company behaves in the best interest of consumers when the technological, economic and political landscape is always moving?

In this podcast, Nicolò Rossetto (FSR) and Joe Perkins (Ofgem) discuss the British experience with inventive regulation for energy grids.

In 2010, Ofgem launched a major reassessment of the regulatory framework for energy grids. The analysis showed how the incentive regulation introduced in the 1990s had both merits and drawbacks. Among the latter, a difficulty to promote investments in innovation was apparent.

Building on such analysis, Ofgem decided to change the regulatory framework for grids and adopt RIIO. Far from being a revolution, that move represented a natural evolution of the framework previously in place.

Achievements so far have been good, but the oversight effort required from the regulator has been significant and the regulated companies may have benefited more than expected in terms of financial returns. It is for this reason that Ofgem is once again assessing the situation and is ready to learn from its own mistakes to improve continually grid regulation in the interest of British consumers.

Do you want to know more? Please take a look at the recently published book ‘’Electricity Network Regulation in the EU: The Challenges Ahead‎ for Transmission and Distribution’’ edited by Leonardo Meeus and Jean-Michel Glachant:

http://fsr.eui.eu/publications/electricity-network-regulation-in-the-eu-the-challenges-ahead%E2%80%8E-for-transmission-and-distribution/

In the first chapter of the book, Vincent Rious and Nicolò Rossetto cover the British model of incentive regulation for electric grids, from the introduction of the RPI-X formula in the 1990s to the current revision of RIIO.

Today, in Europe electricity prices are determined per (bidding) zone which equals in most cases a country. Under zonal pricing, only transmission capacity limitations between the zones are considered in the market-clearing process. The transmission lines within a zone are assumed to have unlimited capacity. This assumption is more and more challenged; one factor is the changing pattern of network flows due to the integration of renewables. As a result, Europe’s less-than-optimal zonal configuration is becoming a limiting factor for the efficiency of the market integration process.

One remedy could be to build more transmission lines. This option is however costly and takes a lot of time. Another remedy could be to redraw the boundaries of the different bidding zones, a so-called bidding zone review. In the extreme, the zones could be determined so small up to the point that each node of the transmission network is priced; this is nodal pricing. With nodal pricing, limitations on all transmission lines are considered in the market clearing process. Nodal pricing is advocated by many academics as being the theoretical optimal solution. However, many stakeholders in Europe are resisting against a push in the nodal direction.

On the 25th of January, the Florence School of Regulation held a workshop about zonal versus nodal pricing for the electricity markets. In the slipstream of the workshop, Tim Schittekatte interviewed Vincent P. Duane, Senior Vice-President at PJM. PJM stands for Pennsylvania-New Jersey-Maryland and is the largest independent power system operator (ISO) in the US. It operates competitive wholesale electricity markets and the power system serving an area encompassing 14 different states. Since about 20 years ago, nodal pricing is implemented in PJM.

In the interview, Tim questions Mr Duane about how PJM deals with some of the common ‘’European concerns’’ regarding a nodal electricity market: low liquidity, market power, and computational complexity. Looking at the PJM experience, the challenge in switching from zonal to nodal pricing is not really in the economics or technicalities but rather in governance. The interview ends with an outlook to the future. It is argued that if we really want a vision of local energy generation and smart consumption to materialize, we need local prices reflecting the correct value of the different attributes of electricity.

There is little debate about a charging point in your garage. It is yours. But what about charging points in the street?

In this short podcast, Tim Schittekatte interviews Luca Lo Schiavo, Vice-Director Energy Infrastructure and Unbundling at the Italian regulator ARERA. The Italian experience is an interesting case in this regard. Namely, a call for pilot projects was launched to build and operate public EV charging stations between 2011 and 2015. Three possible business models were proposed, which were distinct in terms of the operator (the DSO or a third-party), the number of competing retailers at the recharging infrastructure and the allowed degree of competition between charging stations in a determined area.

Want to know more? Please take a look at the recently published book ‘’Electricity Network Regulation in the EU: The Challenges Ahead‎ for Transmission and Distribution’’ edited by Leonardo Meeus and Jean-Michel Glachant:

http://fsr.eui.eu/publications/electricity-network-regulation-in-the-eu-the-challenges-ahead%E2%80%8E-for-transmission-and-distribution/

In the last chapter of the book, we cover new grey areas at the frontiers of European power grids. The regulation of public EV charging infrastructure is identified as such a grey area.

Is EU gas markets standardization a shortcut to energy transition or an obstacle?

Listen to Ilaria Conti (FSR) and Nicolas Peugniez (GRTgaz) reflect on the status of implementation of #gasNetworkCodes and the way ahead towards #decarbonisation

In the context of a FSR workshop on zonal vs. nodal pricing in electricity markets on 25 January 2019, Valerie Reif (FSR) interviews a panellist from the Austrian regulatory authority. Christine Materazzi-Wagner, Director Electricity at E-Control, talks about her personal take-aways from the workshop, the EU target model for electricity and the possibilities of moving towards a nodal approach in Europe. She also shares her views on recent market developments in Austria In the context of the German-Austrian bidding zone split in October 2018.

At the IRENA General Assembly, Swetha Bhagwat (FSR Global) interviews Andris Piebalgs, FSR Part-time Professor and one of the authors of the Global Commission’s Report launched on 11 January in Abu Dhabi. The Report presents the first-ever comprehensive analysis of the far-reaching geopolitical consequences driven by the rapid development of renewable energy and it suggests several areas where international cooperation would help countries to mitigate the emerging risks emerging like cybersecurity, trade in electricity and clean energy technologies, critical materials.

More info here: http://fsr.eui.eu/fsr-in-abu-dhabi-for-the-launch-of-new-world-the-geopolitics-of-the-energy-transformation/

Find the report here: http://www.geopoliticsofrenewables.org/

At the IRENA Assembly held in January 2019 in Abu Dhabi, the FSR Director, Jean-Michel Glachant and the Head of FSR Global, Swetha Bhagwat interview Paul Van Son, CEO of DII.

What are the real cost levels of renewables (Solar and Wind) today? What should be the next measures to take and what are the roadblocks in policy and regulation?

Learn more about the IRENA Assembly here:

https://www.irena.org/events/2019/Jan/Ninth-Session-of-the-IRENA-Assembly

FutureGas project looks into the ways the gas sector could be integrated in the Danish energy system and contribute to clean energy transition e.g. through the injection of green gas. The researchers from Technical University of Denmark (DTU) and key stakeholders of the Danish gas industry have been working with 18 international partners (including Florence School of Regulation) to pursue the research on the potential opportunities across the gas value chain. Moreover, the project looks into different national experiences with renewable gas injection and the support systems. This four-year project (2016-2020) is funded by Innovation Fund Denmark.

In this podcast, Maria Olczak (FSR) interviews Tara Sabbagh Amirkhizi (DTU) to give you some insights from the project. In the first part, the key information regarding the scope, objectives and the work packages of the project are provided. Then, we discuss how this project fits into the changing policy landscape in Denmark with the adoption of a new 55% renewables target. Tara will also shed some light on the preliminary results of the project. You can find more information, reports and presentations on the project webpage:

https://futuregas.dk/

zhttps://twitter.com/futuregasdk