Eurelectric calls for supplier protection against consumer debt

Sector association Eurelectric, representing the common interests of the electricity industry at a European level, has delivered a list of proposals focused on protecting companies against the pandemic’s financial impact.

The association’s proposals include compensation for suppliers as well as their protection against excessive consumer debt resulting from the crisis.

The association recommends the establishment of state support programs to help consumers cover the costs of outstanding electricity bills.

Eurelectric also calls for a monitoring effort to identify possible energy shortages and lack of personnel at energy companies.

The association wants appropriate measures adopted to counter major financial impact anticipated by energy companies as a result of reduced electricity demand and prices. Government measures supporting energy-transition investment plans of companies have also been requested.

Other Eurelectric recommendations include the establishment of a long-term RES plan offering clarity and security for investors.

The association also points out the need for a mechanism designed to recover excessive debt related to the coronavirus crisis.


Eurelectric: Electric vehicles growth effort lacks local support

Domestic political support for the EU’s ambitious electric vehicle growth objectives over the next decade is clearly lacking, officials at Eurelectric, a sector association representing the electricity industry’s common interests at a European level, have warned, while also doubting Greece’s ability to meet these objectives amid the current climate, seen as unfavorable.

The EU’s auto-related CO2 emission reduction targets will require the introduction of approximately 40 million electric cars, vans and trucks on European roads by 2030, Eurelectric officials explained.

The continent’s fleet of electric vehicles will need to grow 40 times over the next 11 years, compared to figures registered in 2018.

Eurelectric admits this is a difficult target but believes it is achievable through appropriate investments and support.

Put into a local context, the target sets a big challenge for Greece as the country’s fleet of electric vehicles will need to grow from about 600 at present to 23,200.

Sector changes are urgently needed in Greece otherwise the country risks being left behind in the wider effort to electrify transportation, the Eurelectric sources stressed.

Big investments in recharging infrastructure are necessary, while swift action must be taken at governmental and regulatory levels, the sources added.

Eurelectric remains pessimistic about the prospects in Greece given the lack of initiatives taken so far in the electricity vehicles domain.

EU regulations have set a limit of ten cars per recharging unit but the number has reached 15 in Greece, the Eurelectric sources noted.


Protergia decision to develop 650 MW gas-fueled power station explained

A decision by Protergia, a member of the Mytilineos corporate group, to develop a 650 MW natural gas-fueled power station is primarily based on long-term trends projected for the domestic energy market over the next 10 to 15 years, Dinos Benroubi, the energy division head at the Mytilineos group, informed participants at a conference staged by HAEE, the Hellenic Association for Energy Economics.

“We have made certain decisions and will push ahead with a new 650 MW gas-fueled power station,” Benroubi remarked.

Electricity demand is expected to significantly increase beyond 2025, while the European trend is headed towards decarbonization and a turn to renewable energy, according to projections made by IPTO, Greece’s power grid operator, the official explained.

By 2022, when the new Protergia gas-fueled power station is expected to begin operating, thermal units totaling 1,060 MW are expected to be added to the system while between 1,600 and 1,900 MW will be withdrawn by 2025, Benroubi noted.

He explained that, based on IPTO forecasts, a capacity sufficiency issue will emerge as of 2022.

“Acting together, we will all resolve this issue for the years 2020 and 2021 but, from then on, thermal output will be needed, it has become apparent,” Benroubi remarked.

According to Eurelectric, the sector association representing the common interests of the electricity industry at a European level, 1 MW of thermal capacity is needed for every 1 MW of wind energy capacity, the Mytilineos group’s energy head told.

Thermal output currently suffices to cover present RES levels, Benroubi explained, while questioning whether reduced thermal output will be enough to cover increased RES levels in 2025.

The corporation has estimated that, in 2025, a lignite-fired power station would generate electricity at a cost of 105 euros per MWh and a natural gas-fueled unit would produce at a cost of 67 euros per MWh, the official pointed out.

The development of a new natural gas-fueled unit is needed both in terms of grid needs and sustainability.

Regulated electricity prices ‘impeding clean energy package’

Regulating retail prices impedes the successful implementation of the Clean Energy for All Europeans Package, a unique opportunity that would empower European energy consumers, Eurelectric, Europex, WindEurope and EFET (European Federation of Energy Traders) have warned in a joint statement.

The package promises to empower consumers through a combination of measures, such as efficient price signals, certified comparison tools and easy switching, the four associations noted. Should retail prices continue to be regulated in some member states, the benefits brought by the Clean Energy Package would be severely weakened, they stressed.

Retail price regulation is also a serious obstacle to competition among electricity supply companies, the groups noted, as this reduces the incentive of companies to become more efficient and discourages the emergence of new market participants, they explained.

In addition to their negative impact on retail markets, regulated prices also distort the functioning of the wholesale markets, limiting and partly undermining the price formation process, ultimately leading to higher electricity costs for all consumers, the associations noted.

Regulated end-user prices aim to protect household – even non-household – consumers from energy costs increases but the pricing methodology often lacks transparency and can prove counterproductive, the associations stressed.

Also, the phasing-out of regulated prices does not imply the end of fixed-price contracts, the associations specified, adding that electricity suppliers will continue to offer such contracts.

EU carbon discharge limit plan could backfire, Eurelectric warns

A European Commission proposal that would impose a carbon discharge limit of 550 grams per kilowatt on power generators may backfire as a result of high costs, failure to achieve decarbonisation objectives, and its disproportionately large impact on east and southeast European countries, Eurelectric, a group representing power generators across the European Union, has warned.

The European Commission’s 550 grams per kilowatt limit for power generators is intended to allow them to take part in capacity mechanisms.

This law would begin applying five years after its implementation for existing units and take immediate effect for new power generating facilities.




Greece backed by Eurelectric for ETS, modernization fund

Eurelectric, the European electricity industry association, has backed Greece’s positions concerning revisions to the EU ETS, a cornerstone of the EU’s policy to combat climate change and its key tool for reducing greenhouse gas emissions cost-effectively.

Eurelectric favors a proposal made by the European Commission and EU member states for the absence of criteria regarding emissions by electricity generating units in order for them to receive emission rights when upgraded, as foreseen in an article for revisions to the ETS.

Three-way negotiations involving the European Commission, European Council and European Parliament are taking place this year on the future of the ETS.

The European Council supports the institutionalization of specific limits that units will need to meet in order to receive carbon emission rights from now on. These standards promise to limit lignite-fired units and, therefore, impact Greece.

Eurelectric is backing both the European Commission and European Council on the matter. The association has also stressed that a “robust structure ensuring full transparency and investment based on the objectives of the directive, without top-down management and control measures. Investments must not affect the functioning of the market, must respect competition and give priority to the modernization of production as well as to networks and energy efficiency.”

Another detail of interest for Greece concerns the country’s inclusion into a category of low GDP member states. Inclusion in this category promises benefits from the EU’s modernization fund in the form of financial support for new projects.

Though an initial proposal did not include Greece in this category, a European Council proposal called for special handling of Greece so that the country could benefit from the fund. Eurelectric noted that EU member states with small GDPs will need to benefit from compensation. The association also wants an increase in compensation levels offered.

Electricity bill levies triggering greater energy poverty

Energy poverty, an issue affecting a growing number of consumers as a result of greater levies added to electricity bills, depsite often being unrelated to electricity supply, is the focus of an article, for energypress, by Kristian Ruby, Secretary General of Eurelectric, a sector association representing the common interests of the electricity industry throughout Europe.

By Kristian Ruby, Secretary General, Eurelectric

More and more consumers struggle to pay their energy bills and to heat or cool the place they live in. Faced with this reality, national governments should act. Consumers’ electricity bills should stop being a vehicle for financing other – sometimes totally unrelated – policies. Moreover, while energy efficiency is key to alleviate energy poverty, financing tools which leverage private investment should be chosen ahead of regulating prices or indeed imposing obligations on suppliers.

Electricity prices and “energy poverty” have recently been top of the news in several European countries with suppliers occasionally accused of being responsible. However, reality shows that the main driver for households’ electricity prices over the past few years has been policy costs and levies. According to European Commission figures, they have indeed increased by no less than 70% between 2008 and 2015. Today, their weight equates that of the energy and supply component of the bill for a residential consumer.

Consumers struggling to pay their electricity bills are of concern for companies too – beyond the fact that the cost of arrears borne by companies can amount to millions of euros – and it is in their interest to find effective solutions. Suppliers generally assist consumers who are struggling to manage their electricity usage and bills through energy efficiency advice, payment arrangements and appropriate debt management processes. Many suppliers have also signed agreements with local authorities and social services to support low income consumers and help avoid supply interruptions due to unpaid bills.

So, what are some solutions to this problem? How can Europe face the challenge of energy poverty? First of all, it is crucial to recognise that EU member states are best placed to define criteria and policies to alleviate energy poverty. This is because their situations differ greatly in terms of employment, social security systems, climatic conditions, electricity consumption, home insulation and energy retail prices. Tackling the issue should be done at the level where it is most efficient to do so, in line with the subsidiarity and better regulation principles. Governments should also be aware that increasing taxes and levies on energy is not in line with combatting energy poverty. Consumers’ bills should reflect as far as possible the market-based cost of energy and should not be a vehicle for financing other – sometimes totally unrelated – policies.

The way network charges and levies are charged to consumers is also problematic. These regulated costs are indeed paid according to the consumption, even though they are largely fixed and need to be paid even if consumption decreases. With technological developments like distributed generation, storage, or electro-mobility, some customers are now consuming less electricity from the grid, thereby contributing less to system costs through tariff payments. Those costs then have to be charged across a smaller consumer base – those consumers not willing or not able to invest in such technologies, including many low income consumers – meaning an effective increase to their tariff payments. To reverse this trend, regulated costs should be charged in an efficient way, progressively removing cross-subsidisation.

Similarly, whilst energy efficiency is key to alleviate energy poverty, financing such measures through the bill is not sustainable. Indeed, costs are distributed among consumers regardless of their ability to pay. In addition, they inevitably create winners, those who receive measures, and losers, those who cannot or do not receive measures. We must transition to using financing tools, which leverage private investment such as Energy Performance contracts (EPC), Energy Saving Agreement (ESA) or on-bill repayment.

Last but not least, as customers who have energy debts are likely to struggle paying for other essential services too (e.g. housing, food, etc.), wider social policy is the best mechanism to help consumers tackle the root causes of debt, including energy debts. Considering the progressive nature of taxation, using social policies would also allow for a fair burden-sharing without causing those on lower incomes to bear a disproportionally higher burden.


Greece, Poland refuse to back Eurelectric’s carbon retreat

Eurelectric, the European electricity industry association, intends to stop supporting investments in carbon-based electricity generation from 2020 onwards as part of its commitment to helping achieve carbon-neutral power supply in Europe by 2050, the association noted in a statement released today.

Greece and Poland, still maintaing carbon-heavy energy mixes and planning to develop new carbon-fired power stations, will not back Eurelectric on this objective.

“EURELECTRIC believes that market-based mechanisms such as carbon markets are the most cost-effective and efficient tool for mitigating greenhouse gas emissions and stimulating investments in low carbon technologies and energy efficiency,” Eurelectric noted in a statement.

The association also pointed out: “Only the combination of an effectively reformed EU ETS and improved EU electricity market design can lead to sustainable and credible carbon price signals to drive investments to mature low carbon technologies. The power sector is already widely investing into low-carbon and innovative solutions to achieve carbon-neutral electricity supply by 2050 and does not intend to invest in new-build coal-fired power plants after 2020. In this context, we strongly reiterate our belief in cost-efficiency as an essential to building a resilient and future-proof Energy Union. We therefore urge policy makers to refrain from introducing command and control tools and to support a market-based energy transition.

Antonio Mexia, president of Eurelecric and chief executive of Portugal’s EDP, noted that the electricity sector is “determined to lead the energy transition and support its commitments for a low-carbon economy through specific actions.”

Eurelectric represents 3,500 electricity sector enterprises in Europe with a total capitalization of over 200 billion euros.