FSR

Jean-Michel Glachant ponders local markets as potential for "incredible breaking of the whole European project"

Recorded at the European University Institute, June 17 2016

Jean-Michel Glachant has provided our podcast listeners with an insight into the frank discussions between leading regulators, stakeholders and executives at the FSR Executive Seminar: “Integrating the Operation of EU Power Systems?" . This involved views on market coupling, because “solar and wind do not produce energy in the same way so they do not ask for same pricing mechanism in the market.” Glachant also remarked that the idea of dividing the European market into smaller local markets could lead to an “incredible breaking of the whole European project.”

The seminar also dealt with capacity adequacy and capacity mechanisms. Glachant points out that Germany, with its formidable investment in renewable energy, should have been the driver of capacity mechanisms but that in reality the nation remains skeptical about the accuracy of this new tool.

Eventually the discussion on interconnections made Glachant wonder whether the increase in generation at the distribution level warranted less transmission interconnections in favour of a more localised approach.“We do not know where Europe is going.”

Professor David Newbery is the founder and director of the Energy Policy Research Group at Cambridge Univeristy. Here, he talks to Jean-Michel Glachant about the rapid transition in between centralised planning and the new world of non-stop investment in renewables.

Recorded in Cambridge, England May 13 2016.

"It's a revolution in the sense that the system of regulation is based on trying to create stability and predictability in the charger regime. That's fine if you've got plenty of time. So the thing that has revolutionised the electricity system is the speed with which things can change."

"It's not so much a revolution of technology, these technologies have been around."

"We have to think very carefully about what the principles are for connecting and charging for connecting to the system. And we have to get around the problem of regulatory stability by giving people longer term contracts when they connect which allow them to predict what their charges are."

Steven Weissman from the University of Berkeley California discusses the Obama administration's Clean Power Plan in relation to the Paris Agreement on climate change. The Clean Power Plan aims to reduce the high level of green house gas emissions from coal-fired power plants, requiring each state to develop a plan to directly or indirectly tackle the level of emissions. It would be major element of the US's efforts to comply with the terms of the Paris Agreement. But, what are the legal implications of such a plan and will it be enforced?

At the International Energy Agency in Paris, 28 April 2016, Jean-Michel Glachant - Director of the Florence School of Regulation, interviews Fulvio Fontini, an expert on European capacity mechanisms, he works for both the Italian regulator (Autorita per l'Energia Elettrica il Gas) and CEER.

“Administrative borders don’t have any effect on electrons, so we need to deal with the typology of the system”

“There is an issue of security of supply, which is still a national issues, this is what the European legislation prescribes… this is the way that we set up our rules, whatever can be done at national level should be done at national level providing that it is homogenised”

“One dimension of capacity is the dimension of assessing security of supply, whether it is effectively needed or not that you have a capacity mechanism, and what are the consequences of introducing capacity mechanisms for security of supply”

Jean-Michel Glachant - Director of the Florence School of Regulation, interviews Claude Turmes, MEP on European energy security of supply.

Recorded at the International Energy Agency in Paris, 28 April 2016

Claude Turmes has been a leading influence in European energy policy for more than 15 years, he is a Green MEP for Luxembourg and a member of the European Parliament’s Committee on Industry, Research and Energy.

“I think our biggest [security of supply] problem in this moment is over capacity, we have so much coal and nuclear running despite the fact that we have deliberately decided to bring a lot of renewables to the system”

“(On gas security of supply) In Europe we optimised already our grid system and our methodology and our ability to deal with a crisis after the 2004-6 crisis with Russia and Ukraine, and now the issue is more to get pressure on member states… it is good that we work on the Gas security supply legislation which the European Commission proposed, but the bigger picture is how do we avoid too much political damage”

http://fsr.eui.eu/event/real-value-paris-agreement/

Video version available from the link above

The Paris Agreement undoubtedly forms a milestone in the fight against climate change. It sets the framework for the first long-term global common action against greenhouse gas emissions, by both developed and developing countries. The coming period up to 2020 will tell whether the structure and rules of the new treaty form a workable framework to tackle climate change and keep the global temperature rise well below 2C above pre-industrial levels. One of the first challenges in this respect will be to strenghten the commitments of the parties, as the combined effect of their current contributions would bring up the temperature far more than 2°C.

Director of the Energy Law and Policy Area, Professor Leigh Hancher (EUI, Tilburg University) opens the podcast series by discussing recent case law and developments concerning national price regulation, especially the regulation of retail price markets. While wholesale price regulation has been explicitly forbidden since the Directives from the Second Package of 2003, retail price regulation remains rather unclear. This podcast examines the recent ruling following the infringement procedure issued by the Commission against the Polish government on their system of regulating gas prices, which restricted the free setting of gas prices by the market, and the interpretation of the Public Service Obligation Provision, in Article 3 Paragraph 2 of the current gas directive under the Third Energy Package of 2009. This case is considered alongside the Federutility case of 2010, an important precedent, which concerned an Italian regulation, introduced in July 2007. The regulation imposed a price reference system on the very same day that national authorities were supposed to implement complete liberalisation of the gas market under the directives of the second package to allow all consumers to choose their supplier. In its ruling, the Court of Justice of the European Union introduced four conditions of state intervention which subsequently had implications for the Polish case. Finally, Professor Hancher looks to a pending case, in which the Courts of Justice of the European Union are facing the complex task of determining retail tariff regulation, following the request for guidance from the Conseil d’État on a french measure which provides for a system of regulated gas tariffs, the ruling on which may prove to be very significant for retail price regulation.

Helmut Schmitt von Sydow, Professor in Parma & Lausanne, and former Director & Chief Legal Advisor at DG Energy, European Commission.

At the EU Energy Law & Policy Conference, 9 February 2016, Jean-Michel Glachant, Director of the Florence School of Regulation, talks with Helmut Schmitt von Sydow, about the formation of the European Energy Union.

“At first sight it seems like old wine in new bottles”

“For some items, it’s just revigorating the policy and giving it new drive… the main new thing in the energy union is the security item, and that’s in reality foreign policy”

“[The European Commission] have already come up with a lot of progress on the external front, in the past the European Union did not dare to deal with external relations with member states… The first step was they had to take account of the existing agreements, instead of going right away to the Court of Justice and speaking of external competences and so on, trade commercial policy, they did it in a slowly normal community method, to take stock, and then by taking stock of the different agreements see that we need a common approach because competing to get a better deal than my community neighbour is not the right approach”

Georg Zachmann is a Research Fellow at the European think tank Bruegel

At the EU Energy Law & Policy Conference, 9 February 2016, Jean-Michel Glachant, Director of the Florence School of Regulation, talks with Georg Zachmann about the problems facing the European energy mix.

“Member states very directly or indirectly, as much as Brussels allows, influence their fuel mix”

“One of the big questions now is, it is essentially a zero sum game, all the member states are building up over capacities, and we have to get rid of some of those capacities, but those who move first that do not have any support schemes… are essentially losing money in the long term”

“We need a certain too for coordinating our investment and divestment schemes again, the market doesn’t seem to play this role anymore… either we leave it to the market, or we coordinate between member states their policies, but currently there is none of the two and this situation is not sustainable”

Damien Meadows is Adviser to Climate Action, European Commission

At the EU Energy Law & Policy Conference, 9 February 2016, Jean-Michel Glachant, Director of the Florence School of Regulation, talks with Damien Meadows to get the perspective of the younger generation at the European Commission.

“COP21 is as bigger success as is possible in the United Nations Systems”

“The direction the EU is going in has been indorsed; European heads of state have committed us to a 40% domestic reduction in greenhouse emissions”

“China is developing an economy wide [carbon] trading system… the Chinese system will be twice the size of Europe’s”

“The carbon price here is neutral on the energy mix, while trying to bring innovation and lower emissions across all sectors”