European Energy and Climate Policy
The EU Framework for Climate and Energy sets ambitious policy objectives to decarbonise the energy system in the coming decades, introducing additional environmental EU legislation that also influences the design of gas & steam turbines. To be more concrete, the Energy Union strategy outlines the path to ensure secure, affordable and climate-friendly energy in the EU, covering five policy areas: (1) security of supply, (2) internal energy market, (3) energy efficiency, (4) climate action and (5) research and innovation. As part of the “Clean Energy Package”, the EU Commission proposed the revision of both the regulation and directive for the European electricity market design. EUTurbines has focused its activities on the regulation.
The changes in the composition of the energy system in the past years, with a growing share of variable renewable energy sources poses several challenges. Read more about the EUTurbines position on the need of an adaption of the current rules of electricity trading and changes the existing market rules as well as a full integration of all market players.
Electricity market design
For EUTurbines, providing sufficient flexibility to the system to ensure its stability and security is key. Flexible dispatchable gas-fired power plants can provide a considerable share of this flexibility, but need a market framework which ensures that, with a limited number of operating hours, investment as well as operating costs can be recovered.
Tools like capacity mechanisms may be needed in some specific cases but must reward flexibility and not simply capacity. In addition, their design principles – related to the CO2 limit proposed – need further clarification about definitions and calculations to avoid an unintentional exclusion of smaller flexible gas-fired power plants, highly efficient cogeneration and/or biofuel. Alternative options – such as referring to “solid fossil fuels” – should be considered.
European Emission Trading System
The EU ETS is EU`s main tool for reducing greenhouse gas emissions cost-effectively. Currently being revised, it is of great importance that the carbon price as adequately set up, giving the right signal for investment.
EUTurbines supports an integrated approach considering environmental objectives, local conditions and economic aspects. The development of a well-functioning ETS that steers incentives in low-carbon solutions is imperative to reach the agreed goals. Ambitious and realistic targets for air pollutants need to be considered.
Related EUTurbines Publications for further reading:
- Joint Position Paper: Electricity Market Design: Any threshold requires an appropriate calculation methodology
- Position: EUTurbines Position on the proposals for a new electricity market design for Europe
- Press Release: European Electricity Market Design: Flexibility of the energy system
- Press Release: Energy Union Package: What it needs to achieve a fully integrated electricity market