The UK Government's Energy Bill which includes contracts to develop low carbon generation and market-wide capacity contracts is expected to pass through the House of Commons "within the next month or two", Tim Lord, Security of Supply Team at the Department of Energy and Climate Change (DECC) told a conference organised by Gas to Power Journal in London today.
"We expect the first capacity auction to be held in 2014 for a delivery year of 2018/19," he said.
Scottish Powers' Director of Regulation, Rupert Steele has called on the UK Department of Energy and Climate Change (DECC) policy to "maintain momentum" to deliver a workable scheme for a Capacity Mechanism and Contracts for Differences (CfDs) in 2014, though he strongly opposed a Carbon Floor Price.
The European Commission has warned Ireland that it must fully transpose the Electricity Directive of the third energy package into law or face referral to the European Court of Justice (ECJ). The directive contains provisions for the proper functioning of European Union electricity markets such as rules on the unbundling of networks, rules strengthening the independence and powers of national regulators and rules on the improvement and functioning of retail markets.
Germany's 'green' energy policies are failing to provide their intended emissions reductions , says John Rhys, Senior Research Fellow at the Oxford Institute for Energy Studies (OIES), arguing that phasing out nuclear will continue to increase coal use significantly. "Germany does not promote CCS (...) and it is also foregoing gas," he said in an opinion piece published by the Institute, claiming "Germany's simultaneous capitulation to anti-nuclear prejudice and willingness to compromise on cheap high CO2 emissions coal is therefore a disappointment to British supporters of EU ambitions to lead on climate change".
A coalition of 10 US states and 5 cities lead by New York Attorney General Eric T. Schneiderman has filed a court brief urging the US Supreme Court at the request of the Environmental Protection Agency (EPA) to review and reverse a lower court decision that invalidated an EPA rule requiring substantial cuts in the interstate transport of air pollution.
Gas-fired distributed power projects in the UK will benefit from specific support schemes, including capacity mechanisms, which are forthcoming as part of a new regulatory package stipulated under the Electricity Market Reform, says Dr. Jim Fitzgerald, Associate Partner at The Advisory House.
"Contracts for Difference (CfD) will differentiate on technology, with different auction prices for each low carbon technology. We expect a specific capacity mechanism to be put in place to enhance support available for distributed gas fired power generation projects," he told Gas to Power Journal in an interview.
Unless new efficient policy measures are implemented, about 40 percent of Spain's installed Combined Heat and Power (CHP) capacity is at risk of being shut-down in 2015, Javier Rodríguez Morales, Director General of Spain's Cogeneration Association (Acogen) told Gas to Power Journal. "At the moment, there is a moratorium in place to install new cogeneration capacity since 2012, as well as uncertainty about the actual regulatory framework reform and new energy taxes applied since 2003 which are deeply impacting CHP," he said.
Selling heat in addition to electricity has made new combined-cycle power plants (CCPPs) economically feasible in Germany, Norbert Wenn, Director of Sales Support and Product Line Management at Siemens told Gas to Power Journal at this year's COGEN Europe annual conference in Brussels. "The renewed German CHP law and incentive scheme has made a business case of the Lausward plant currently being built in Düsseldorf, which would have never happened had it been planned as a pure condensing plant," he said.
Long-term regulatory stability is key for helping make new cogeneration developments more attractive for European industry, Dave Brownell, Refinery Manager at ExxonMobil told Gas to Power Journal at this year's COGEN Europe annual conference in Brussels. "In Europe, we're looking for stability in the rules of the game; stability in terms of regulations. A large cogen plant is an investment of hundreds of millions of euros, typically takes four to six years of project development and the operational life of the unit exceeds 30 years," he said.
The EU's 2004 CHP Directive has played an important part in the encouragement and recent introduction of CHP incentives across several member states, according to an International Energy Agency (IEA) report on Cogeneration and District Energy. The Directive establishes general principles for CHP policy but leaves detailed implementation to member states.
The introduction of Capacity Payment Mechanisms (CPMs) as suggested under the UK Electricity Market Reform may solve immediate problems of renewable output increasing revenue volatility for operators of coal- and gas-fired power plants, but could introduce many more, says James Marshall, Senior Consultant, Pöyry Management Consulting. "Conventional generation must expect to rely on a smaller number of hours to cover fixed and capital costs, with the timing largely determined by weather patterns with only short-term predictability," he told Gas to Power Journal.