Germany's re-elected chancellor Angela Merkel is seeking a coalition partner before the new Government can jointly tackle rampant electricity costs that resulted from the 'Energiewende' policy of phasing-out nuclear energy in replacement of subsidised renewable power. Curbing the EEG levy – an extra charge for renewables imposed on the taxpayer – is one of the most likely options.
SSE sees an "acute need" for Capacity Auctions to stop further plant closures and bring mothballed power plants back into the market to help counter the imminent shortages in Britain's power generation capacity, says policy and research director, Dr. Keith MacLean.
"If the capacity auctions planned for next year were also targeted at immediate delivery, with payments starting straight away, this would help keep existing, but loss-making, plants operational, which is cheaper than building new ones at a later stage," he told Gas to Power Journal.
While both Portugal and Spain are weighted down under a sizeable electricity tariff deficit due to excess renewables capacity, that Portugal hopes to pay off by 2020 while Spain has no definite plan, Portugal has a better chance of ever climbing out of debt than Spain, found ratings agency Fitch Energy in its report Electric Shock: Iberian Tariff Deficit Comparison.
Timing of UK's first capacity auction next year for delivery in 2018 is "not perfect", as it risks a gap in power supply in the face of tightening reserve margins starting from 2016, no new capacity by then and a lack in demand response, says Stephen Woodhouse, director at Pöyry Management Consulting.
Eager to curb China's notorious air pollution, the State Council has announced it will ban the construction of new coal-fired power plants in three key industrial regions surrounding Beijing, Shanghai and Guangdong. In an action plan, the Chinese cabinet aims to slash the share of coal in the country's energy mix from currently 70 percent to below 65 percent by 2017.
In an open letter to UK energy secretary Ed Davey, the chairman of the Committee on Climate Change Lord Deben has called for caution on shrinking subsidies for offshore wind power projects, warning "required investment" would decline. Investors into new renewable as well as gas-fired capacity are sitting on their hands amid a persistent lack of clarity on the Electricity Market Reform Delivery Plan.
Turkey's government is plagued with a new headache over costs of gas imports after Abu Dhabi-based energy group Taqa decided to pull out of a $12 billion coal-fired power project. Domestic coal is seen as a leeway to reduce Turkey's annual $55bn energy import bill, and policy makers in Ankara have introduced tax breaks in favour of coal generation.
Tension is rising between policy makers and utilities amid rising urgency to invest in new power generating capacity in the UK. Policy makers keep urging utilities to fund much-needed new capacity, but cash-constraint utilities need to first reorganise their balance sheet before they can fund new-build projects, says Ben Caldecot, head of government advisory at Bloomberg New Energy Finance (BNEF).