EU headed for new impasse on gas price cap agreement

The EU’s energy ministers appear headed towards another deadlock for a gas price cap agreement at an upcoming council meeting on December 13, which will prove a disappointment for Europeans as prices surge again.

Several EU member states seem to be resisting any sort of compromise for the establishment of a gas price cap level ahead of next week’s meeting of energy ministers, a measure now more urgent than ever before as winter temperatures begin to fall.

Gas prices surged yesterday at the Dutch energy exchange, a European benchmark, reaching 160 euros per MWh before easing to 140 euros per MWh and ending the day at 138 euros per MWh.

Though the prospect of high-priced natural gas is alarming, a price cap agreement does not appear to be a priority for a group of EU member states, led by Germany. Berlin, according to sources, wants the issue deferred until a summit of EU leaders, scheduled for next Thursday, two days after the meeting of EU energy ministers.

This, of course, would be a setback as it was at the previous summit, in October, that EU leaders referred the issue to the Energy Council, asking its members to work on details of an agreement reached by the 27 EU leaders.

Germany, joined by the Netherlands, Austria, Denmark, Estonia and Luxembourg, appears to be insisting on gas price cap at the level initially proposed by the European Commission, 275 euros per MWh, well above the 220-euro proposal forwarded by the Czech Republic, currently holding the EU’s rotating presidency.

Colder weather a first test for European energy system

Falling temperatures in Europe, particularly at central and western regions, have increased electricity and natural gas demand for household heating needs, representing a crash test for the European energy system, interlinked and influencing market conditions from one country to another.

Wholesale electricity price levels have risen to record levels in France and Germany, currently experiencing sub-zero Celsius temperatures.

Besides the sudden drop in temperatures, windless conditions are depriving the Netherlands, Denmark and Germany of wind-based generation, down by at least 15 to 20 GW today, according to market data.

Subsequently, the energy mix of these countries and the EU as a whole has increased in cost as the mix is now dominated by natural gas, on a record-breaking price surge in recent months.

This has prompted wholesale electricity price increases throughout Europe. In Greece, day-ahead market prices for today are at 281.03 euros per MWh, a new record for the country following a rise for a fourth consecutive day.

German wholesale electricity prices have also struck a new record level today, reaching 273.89 euros per MWh, up 13.9 percent in a day. Dutch wholesale electricity prices rose 15.5 percent in a day to reach 254.01 euros per MWh. In France, the average wholesale electricity price for today is 295.82 euros per MWh. The highest price level in Europe was recorded in Serbia, reaching 310.63 euros per MWh.

Meteorologists have forecast a heavy winter. Greek officials are awaiting energy price levels for the rest of November before they decide on whether to increase current electricity subsidy levels.

 

 

 

Three key factors pivotal for offshore wind farm development

Spatial planning-licensing, grid connectivity and the remuneration formula for investors are three key factors pivotal to the development of the country’s offshore wind farm industry, investors and authorities agree.

Speaking at an event staged yesterday by ELETAEN, the Greek Wind Energy Association, the energy ministry’s secretary-general Alexandra Sdoukou stressed that the right formula for the sector’s development needs to be based on these three factors.

This industry’s course abroad, so far, has shown that a variety of options can be adopted for each of these factors. Fellow European countries have followed a range of paths, often contradictory. Greece’s energy ministry will need to seek solutions that best suit local conditions.

The spatial planning-licensing options range from a liberal model adopted by the UK, offering offshore wind farm investors maximum freedom to develop their investment plans, as they deem best, including in choice of appropriate location for maximum commercial potential, and, at the other end, a state-regulated model, as practiced in countries such as Denmark and the Netherlands. In this latter case, state regulatory authorities are responsible for determining installation locations and capacities, through studies of their own, before staging auctions.

ELETAEN’s proposal favors a mixed approach, through which the state would initiate the process by allotting wider areas for offshore wind farm development.

The wind energy association also favors a mixed approach for network connectivity that would require power grid operator IPTO to develop main lines in areas designated by the state for offshore wind farm installations.

Local authorities and players still appear to disagree on whether non-auction fixed tariffs will need to be offered to investors as a catalyst for this industry during its early stage of development.

Sdoukou, the energy ministry’s secretary-general, did not rule out such an approach at yesterday’s ELETAEN event. But, regardless of whether a preliminary stage of non-auction fixed tariffs will be offered, all sides seem to agree that tariffs, later on, will be exclusively made available to offshore wind farm investors through auctions.

 

Danish waste-to-energy model, China offers examined by PPC

Electricity production through virtually zero-emission waste combustion, a method adopted in Denmark, is one of a number of options being examined by the Greek power utility PPC as part of the country’s decarbonized future.

PPC’s existing coal generators, headed for closure, imminently, could be transformed into waste-to-energy plants.

PPC has received proposals from Chinese companies. Cost and environmental matters will be key factors in any decisions made by Greek officials.

Joint ventures could be formed to utilize the output of waste management PPPs (Public Private Partnerships) in Greece. Three such facilities currently exist in the country but more are expected to open in the near future.

The positions of local communities in lignite-dependent regions, such as west Macedonia, in the country’s north, and the price of waste-generated electricity will be pivotal.

Denmark’s Copenhill waste-to-energy plant, possibly the world’s most advanced such facility, was launched last month. It is situated in the heart of Copenhagen.

Designed as a lush downhill slope to host skiing and other recreational activities, the Copenhill facility processes the waste of 550,000 homes and 45,000 businesses, providing electricity and heating for 150,000 homes. The unit is designed to take in approximately 400,000 tons of waste annually for combustion.