Does Russian gas weaken energy security in Europe? Lessons from the Baumgarten incident. CEPS Commentary, 19 December 2017

On December 12th, an explosion in the Baumgarten gas hub in Austria, a key distribution knot for the European gas market, led to a disruption in gas transmission that affected a large part of Europe. The incident caused Italy to declare a state of emergency and disrupted supply to the UK from Belgium and the Netherlands. Simultaneously, an outage in Norway caused flow reductions from Europe’s largest gas production site “Troll”, which compounded the supply problems. Amplified by a demand peak in the UK due to unusually cold weather, prices were directly affected, with short-term prices in the UK reaching a four-year high (up 35%).[1] The incident has affected the gas market and may lead to further repercussions throughout the remainder of the winter, when demand stays high due to household consumption for heating

Improving the Market for Flexibility in the Electricity Sector. Report of a CEPS Task Force. CEPS Task Force Report

Electricity will play a greater role in the transport and building sectors and all decarbonisation scenarios point to the increasing electrification of the energy system. To reach EU climate change targets, however, electricity will need to come increasingly from low carbon sources, especially (but not only) from variable renewable energy sources. Both trends − the electrification of sectors and the need to integrate electricity from variable renewables − mean that the electricity sector should become more flexible. This report reflects the discussions held in the CEPS Energy Climate House Task Force on Creating a Market Design for Flexibility in EU Electricity Markets, which met between April and September 2017. The Task Force formulated a number of recommendations in the areas of short-term and balancing markets; grid reinforcement and cross-zonal capacity allocation; aggregation; priority dispatch; DSOs (distribution system operators); and sectoral integration

Why the future of European renewables policy may be decided in Washington and not in Brussels. CEPS Commentary, 13 July 2016 Wednesday, 13 July 2016

In the last few years, several EU member states have reduced support to renewable energy, leading to numerous claims that these policy changes retroactively affected existing investments and that the practice of ‘grandfathering’ should have been observed. Among these, the case of Spain stands out, both due to the material size of the cuts and the large volume of investments affected, although the Czech Republic, Bulgaria, Poland, Romania and Italy have also introduced reforms with deleterious consequences to their renewable energy sectors

Fulfilment of National Objectives under the Renewable Energy Directive: State of play and projections. CEPS Policy Insights No. 2017/04, February 2017

The EU Directive on the promotion of the use of energy from renewable sources contains the main body of the EU's current renewable energy (RE) policy. Adopted in April 2009, the Directive provides a common framework for the promotion of energy from renewable sources in all EU member states. The act specifies binding national targets for the share of renewable energy (as a percent of gross final energy consumption) for each member state, which together amount to an EU-wide target of 20%. This report reviews the progress made to date by each member state towards fulfilling its target and offers projections about possible outcomes in the year 2020

Improving Cooperation among EU Member States in Handling Electricity Crises: Lessons for the Regulation on risk-preparedness. CEPS Policy Insights No. 2017-25, July 2017

As part of the “Clean Energy for All Europeans” package, the European Commission has proposed a Regulation on risk-preparedness in the electricity sector that aims to improve cooperation among member states in preventing, preparing for and managing electricity crises. To reap the benefits of improved cooperation compared with the current diverging national approaches, the proposal foresees, inter alia, national risk-preparedness plans, a number of principles for crisis management and ex post crisis evaluation. This Policy Insight analyses the proposal and confronts it with a case study about a recent crisis in South East Europe (in January 2017). Among other conclusions, the findings suggest that the Regulation’s provisions for clear rules and national/regional procedures for crisis management and for evaluating crisis management ex post (i.e. whether the rules were followed) are appropriate, but they may need strengthening

Do almost mature renewable energy technologies still need dedicated support towards 2030?

[EN] The discussion on whether and how to continue support for almost mature renewable electricity (RES-E) technologies, such as onshore wind and PV, has recently intensified. In this paper we analyze arguments in the literature in favor and against the phase-out of renewables support in the context of increasingly competitive RES-E technologies. We conclude that there are good reasons to continue dedicated RES-E policies beyond 2020 for those technologies. Dedicated RES-E support can provide a predictable, secure investment framework that lowers the risk premiums required by investors and therefore reduces the capital costs of RES-E. In addition, there are still significant cost reduction potentials for these technologies. The increased use of renewables has multiple socio-economic benefits in addition to climate change mitigation. These arguments are still valid when looking at the current market situation characterized by oversupply and low prices on both the CO market and some power markets in Europe. Since renewables are not the main reason for the current oversupply, it would not be effective to take actions towards restoring market equilibrium in the form of radical or overall phase-out of RES-E support