Regulation & Policy

Doubts on the effectiveness of the energy bill have been raised by the industry. The reform "comes too late" and regulations are "unclear", is the verdict of some investors: "We have long been pushing for greater clarity on the detailed design of the EMR proposals, and greater expediency in the process as a whole," Volker Beckers, chief executive of RWE npower said in a statement to Gas to Power Journal.

Facing up what it calls the "Red Tap Challenge", the UK Department of Energy and Climate Change (DECC) has announced it will scrap unnecessary regulation with the aim of stipulating 100 billion pounds of investment in the electricity sector.

The complexity of proposals to establish a Feed-in Tariff with a Contract for Difference (CfD) under the UK's draft energy bill is freezing new investment. "The proposal has now arguably become unworkable," the Common's energy and climate change select committee warned today.

The introduction of a strategic reserve capacity is more effective and better compatible with the current energy-only market model than a capacity payment scheme, according to an Ecofys study published today on behalf to the German federal environmental ministry (UBA).

Subsidies are not the right approach to encourage investment in new gas-fired power plant projects in Germany, environment minister Peter Altmaier told the business daily 'Handelsblatt' late Wednesday.

Improved energy efficiency measures could reduce the anticipated UK power demand for 2030 by up to 40%, an initial Electricity Demand Reduction Assessment by the British government finds.

The British energy regulator Ofgem will continue to develop detailed proposals on a mandatory power auction "ahead of the autumn" with the aim of increasing market liquidity, Ofgem said in a liquidity update letter.

EMRA, Turkey's Energy Market Regulatory Authority, is considering introducing 'paid-in capital' criteria as a precondition for granting licences to power plant developers. By taking this step the regulator intends to limit so-called 'speculative licence applications', Muhammed Demir, Group Head, at EMRA's Electricity Market Department said in Istanbul today.

Plant operators in the UK are requested to apply for funding under the UK's carbon capture and storage (CCS) competition by July 3, the Department of Energy and Climate Change (DECC) confirmed. Designed to develop commercial-scale CCS facilities, the competition will make available £1bn in funding to up to four coal or gas-fired CCS projects.

The Department of Energy and Climate Change (DECC) is fine-tuning last details of an upcoming capacity market in the U.K.  "There is currently a lot of discussion about a penalty regime [for delays and non-delivery] and the eligibility of power plants for capacity payments," Neil Bush, Head Energy Economics at DECC told delegates at PowerGen 2012. "More details will be announced in late October," he said in Cologne today.

To close the nuclear gap in Germany's power generation capacity, "more new gas- and coal-fired power plants need to be built than we had estimated," Rainer Brüderle, head of the German liberal party FDP, said over the weekend. "And this may well cost more than we thought," he told the paper "Welt am Sonntag".

The European electricity industry stands by its commitment to achieve carbon neutrality by 2050, but struggles with investors' lack of confidence and the low carbon price, delegates learned at Eurelectric's Annual Conference. E.ON CEO Johannes Teyssen, however, criticized the preferential treatment of renewable energies, which widely profited from generation subsidy schemes across Europe, causing market distortion.

Horizon 2020, an EU innovation, has earmarked €80billion for research and development (R&D) of low-carbon intensive fossil fuels. Industry observers rate this development a "clear victory" for the gas lobby in its effort to attract investment in new gas-fired power plants.

The subsidy criteria for new power plants without CCS-readiness are "very restrictive", the German energy industry association (BDEW) criticises. New EU rules have "effectively stopped plans of the Germany government to sponsor new efficient plants," BDEW head Hildegard Müller said.

Further hesitation or reluctance to undertake much-needed investment in new power generation capacity could threaten Britain's energy security. "Our priority is to rebuilt the power sector. To put it bluntly, we need twice as much investment every year of this decade, as in the last decade," the UK energy minister Charles Hendry said.