Fsr Energy & Climate

After attending a conference jointly organised by Eurelectric and the Florence School of Regulation on the electricity market design of the future, Pradyumna Bhagwat (FSR) and Nicolò Rossetto (FSR) summarise their main takeaways. First, thinking out of the box is fundamental. We live in transformative times and electricity markets must be able to manage uncertainty and adapt to new, unpredictable conditions. Second, the European Commission and the electricity industry believe in the strong role free markets can play but have a different view on what those markets should look like. On the one side, scarcity pricing may scare policy-makers and investors, while on the other, capacity mechanisms may distort the internal market and hinder integration. Convergence of opinions between the industry, the Commission and most of the academics is more apparent on the need to engage consumers, foster flexibility and the breakthrough that turning reliability into a private good could represent. Finally, the parallel sessio

Catalyst of the utilities’ transformation: the case of new York | Scott Weiner (New York Public Service Commission) During a conference at Columbia University Jean-Michel Glachant, director of the Florence School of Regulation, met with Scott Weiner, the deputy for market and innovation at the New York Public Service Commission. With the major wave of changes in energy transition (the three Ds: decarbonisation, decentralisation and digitalisation), Jean-Michel wanted to discuss the role of a public service commission in this new world. According to Weiner, a commission has to implement the policy direction set at the political level and act as a catalyst for transformation, enabling society to take advantage of the opportunities the three Ds have to offer. In the case of New York, in 2012 Hurricane Sandy revealed the vulnerabilities of the utilities, the lack of system resilience and the inability to anticipate customers’ needs. In response to it, the State of New York established a “Utility 2.0” target mode

Energy regulation in a federal country: the case of California | Chairman Michael Picker (CPUC) Jean-Michel Glachant, Director of the Florence School of Regulation, and Michael Picker, Chairman of the California Public Utilities Commission (CPUC), discuss the roles the different levels of government play in managing the changes due to the energy transition (decarbonisation, decentralisation and digitalisation). In California, the governor and the legislative branch set the broad policy framework and appoint the heads of the State energy agencies. The latter then implement the policies. As an example, the CPUC is responsible for regulating the development of gas and electricity infrastructure by public utilities. The Federal Government, located in Washington, D.C., played a role in the recent past by promoting investments in renewables. However, in States like California, a worldwide leader in the energy transition, the overall direction of energy and climate policy is decided, for the most part, autonomously

PETER FRASER on the need for greater consumer participation in decision-making regarding the security of supply in the electricity markets of the future. On the sidelines of the EURELECTRIC – FSR conference on the market design of the future, Pradyumna Bhagwat (FSR) interviewed Peter Fraser, Head of the Gas, Coal and Power Markets Division at the International Energy Agency (IEA), on the need for greater participation of individual consumers in decision making regarding the security of supply. Mr Fraser supports the idea of increased participation of consumers, and in his view, such involvement would aid in providing the level of adequacy that the consumers want and demand at a reasonable price. Furthermore, he shared his thoughts on the proposals of the Clean Energy for All Europeans Package (Winter Package), highlighting his appreciation for its attempt at moving from a national to a Europe-wide context for Security of Supply. Mr. Fraser also reiterated the need for more work on enabling greater consumer i

At the end of the EURELECTRIC – FSR conference on the market design of the future, Nicolò Rossetto (FSR) and Professor Graham Weale (Bochum University) discuss the market design for electricity in 2050. Despite the relevance the European Commission attributed to scarcity prices, Professor Weale is sceptical of the idea that energy-only markets will be enough to induce and remunerate adequate investment in generation capacity. According to him, political opposition to excessively high spot prices, an increased cost of capital and the wide-ranging deployment of renewables with low variable costs can undermine a market design based on few, infrequent price spikes. A second revenue stream to remunerate capacity could be necessary for the electricity market of the future. This position is beloved by Eurelectric. At FSR we see it as controversial as it is not widely agreed upon by many scholars and practitioners. However, “retweeting is not supporting”. What is less controversial and we support is the importance to

Description: Nicolò Rossetto (FSR) and Jean-Michel Glachant (FSR) discuss the role of the Florence Forum in the development of an internal market for electricity. Following an intense exchange of views on the European Commission’s proposal on regional cooperation and ROCs, Glachant highlights the need for coordination tools, cost and benefit sharing principles and solidarity at the European level. These three elements are necessary if Europe wants to create a seamless electricity system from Lisbon to Helsinki. Cross-border remedial actions for congestion management and crisis management are two concrete and relevant examples, where coordination, sharing and solidarity are particularly needed.

Recorded 18 May 2017, Brussels Description: Nicolò Rossetto (FSR) and Juan Alba Rios (chairman of the EURELECTRIC Markets Committee) discuss the 2016 legislative proposals of the European Commission on a new market design for the electricity sector. Alba Rios expresses a positive view on the proposal, which strengthens the role of markets in providing signals to economic actors and acknowledges the possibility of establishing capacity remuneration mechanisms to complement the existing energy-only markets. Indeed, short-term scarcity prices are not enough to foster adequate investment decisions in generation capacity and must be supported by additional, market-based, incentives. According to EURELECTRIC, although the Commission's proposal is not perfect, it goes in the right direction and provides a good starting point for building the market design of the future.

Recorded 11 May 2017 at CEER, Brussels Description: Nicolò Rossetto (FSR)and Ben Voorhorst (COO at TenneT, ENTSO-E)discuss the report prepared by the Florence School of Regulation on the integration and the decarbonisation of the European electricity sector. Mr Voorhorst acknowledges the relevance of the missing pillars and the roadblocks identified in the report and underlines the necessity for European policy-makers to take clear decisions regarding coordination of actions and decisions, sharing of costs and benefits, and of solidarity beyond costs and benefits. Without such basic and intrinsically political choices, technical entities like TSOs cannot provide, by their own, efficient and effective solutions enabling the full integration of the European electricity system and a smooth and speedy transition to a low-carbon economy.

In this podcast, Christopher Bremme and Thomas Schulz of Linklaters Berlin discuss the Commission’s proposed revision of the Renewable Energy Directive of 30 November 2016.

In this podcast, Rosaria Arancio of Macchi di Cellere Gangemi discusses the implementation of REMIT in Italy. REMIT is the EU Regulation on Wholesale Energy Market Integrity and Transparency (REMIT) (Regulation No. 1227/2011), overseen by ACER and National Regulatory Authorities, which aims to establish common rules, at European level, to prevent abusive practices in wholesale energy markets. It defines abusive practices in terms of market manipulation and insider trading, prohibits abusive practices in the wholesale electricity and gas markets, applies a monitoring system of the European energy markets, and gives National Regulatory Authorities powers to enforce rules, investigate and sanction misconducts. This podcast considers how the Italian regulatory authority AEEGSI has applied REMIT to Italy, including looking at recent cases where the criteria of REMIT was put into effect.

Nicolò Rossetto from the Florence School of Regulation asks Annabelle Lee from the Electric Power Research Institute a couple key questions regarding cybersecurity in the Energy Sector from a U.S. perspective. "The issue of cybersecurity in the electric sector and gas both is of high importance and high visibility in the United States." "Dealing with cybersecurity in the electric sector the primary importance is the reliability of the grid." "How do you implement cybersecurity where you have a lot of very old equipment that you cannot put cyber security in? "

Ilaria Conti, Head of the Gas Area at the Florence School of Regulation talks to Jean Arnold Vinois, former director of DG Energy at the European Commission. She asks, "what is energy governance"? Recorded in Bruges, Belgium, April 2017 "The concept of an Energy Union is already a kind of revolution where the idea is to approach energy in a holistic way" "the first change which the Commission has brought into the Energy Union is to put the consumer first" "the member states are going backwards because they don't want binding targets on renewals"

The Market Abuse Regulation (MAR): Technology for Meeting Market Abuse Regulation Challenges In this podcast Yasmine Li and Shane Henley, from Baringa Partners, discuss the EU Market Abuse Regulation (MAR), which came into force in July 2016. The new EU-wide regime, replacing the previous Market Abuse Directive (MAD), is intended to harmonise measures addressing market distortion arising from regulatory arbitrage. The regulation extends its scope to new markets and redefines the terms of market abuse, introducing some significant changes including a transaction surveillance capability. This podcast outlines the key aspects of the regulation and its compliance obligations for energy players in the wholesale markets. Link: Accompanying slides are available here https://drive.google.com/open?id=0B0TGd4_CLZXNNGdiZkhGVVpYUWc

Description: In this podcast, Deni Mantzari from the University of Reading addresses the looming effects of Brexit on the EU's internal energy market. While the terms of the UK's planned exit remain to be seen, unravelling their ties with the EU undoubtedly poses considerable challenges to an EU which is pushing toward an increasingly harmonised Energy Union. Up to this point, the UK has played a pivotal role in shaping the energy policies and regulations of the EU, particularly with respect to the liberalisation of the market. How will the UK's departure impact upon market integration initiatives, such as market coupling, cross-border balancing and cross-border capacity remuneration mechanisms, and the development of network codes? In addition, at the level of governance, while the UK will have to interact with the EU's energy networks, they will not be allowed to have representation in certain governing bodies such as ACER. In turn, without the UK's influence, how might the EU's energy priorities change? A

Video version here: https://youtu.be/eI3DSKYb-I4 Capacity remuneration mechanisms are currently at the forefront of the EU energy debate with the electricity sector, in particular, undergoing a considerable shake-up. One element of this discussion, is cross-border participation in capacity remuneration mechanisms, which is becoming increasingly important to a Europe-wide approach of ensuring a sustainable security of supply and the efficiency of the internal energy market. In this podcast, Dan Roberts from Frontier Economics outlines the key issues surrounding cross-border participation. He considers it from several aspects: how much capacity should be allowed to cross over; if participation is permitted in more than one national scheme; who should participate - generators or interconnectors; what consumers are paying for; and lastly, the challenge of cross-border co-operation across Europe. To view accompanying slides for the podcast, please see http://www.slideshare.net/secret/E4pabGafFQGdXT

http://fsr.eui.eu/training/energy/regulation-integration-renewable-energy/ FSR’s new training on the Regulation and Integration of Renewable Energy will provide a comprehensive and detailed view of the European regulatory framework for the integration and development of renewable energy from top European experts.

Scientific Organisers: Jean-Michel Glachant | Florence School of Regulation/RSCAS/EUI Alberto Pototschnig | Florence School of Regulation/RSCAS/EUI and ACER Interview by Pradyumna Bhagwat | Research Associate at Florence School of Regulation Florence, 28 October 2016 FSR REGULATORY POLICY WORKSHOP SERIES 2016-2017 http://fsr.eui.eu/event/congestion-management-in-the-internal-energy-market/ The establishment of a fully integrated European energy market is one of the five mutually-reinforcing and closely interrelated dimensions of the EU Energy Union strategy aimed at bringing greater energy security, sustainability and competitiveness to the EU’s economy. In this regard, the integration of national markets has been one of the primary objectives of EU energy policy since the 1990s and has been pursued throughout three legislative packages and detailed provisions defined in Network Codes and Guidelines. The achievement of a fully integrated and well-functioning EU energy market requires both an optimal leve

Nadia Horstmann from Bundesnetzagentur outlines the FSR & BNetzA Forum on the Legal Issues of Energy Regulation and gives an insight into the important topics discussed this year. Florence, 28 October 2016 http://fsr.eui.eu/event/8th-fsr-bnetza-forum-legal-issues-energy-regulation/ Jointly organised by the FSR Energy Law and Policy Area and Bundesnetzagentur, the German regulatory office, the forum will focus on the emerging energy market design. The workshop will open with a keynote address from Professor Michael Pollitt on the future of the European single market for gas and electricity.

In this podcast, Gianni De Stefano of Hogan Lovells International LLP (Brussels) and Pierre Loaec from the European Commission discuss the Commission’s investigation into the acquisition by US-based General Electric (GE) of the energy businesses of French multinational Alstom. Valued at more than €12 billion, the deal generated considerable interest and triggered multiple merger control and foreign investment filings worldwide. In 2015, the Commission launched an in-depth investigation to assess whether the acquisition was in line with the EU Merger Regulation particularly due to concerns regarding competition in the market for heavy-duty gas turbines. Gianni de Stefano and Pierre Loaec detail the history of the case, review the conclusions of the investigation and consider the effect it had on the energy sector.

Jean-Michel is joined by Annegret Groebel, vice-President CEER & Vice-chair of ACER's Board of Regulators, to discuss regional cooperation in the internal energy market and the coupling of regions. How can we converge towards a common regime? And who is in charge of the process? Recorded 23 September at the conference "Completing the European Power Market Integration" organised by ENTSO-E in Bratislava with the support of FSR. http://fsr.eui.eu/event/completing-european-power-market-integration/ “I think we should not talk of regionalisation because this indeed has the negative impact of splitting the market, and we all work towards the internal energy market.” “All stake holders must work together, and would not say it is bottom up or top down, maybe we can say it’s kind of a diagonal”