“Without a decisive change of course the emissions trading system will fail permanently”
Only the rapid introduction of a market stability reserve to increase the price of CO2 emissions can salvage the European system of emissions trading, a new study by energy policy think-tank Agora Energiewende argues. “Without reform that quickly takes effect, the emissions trading system as an instrument of European climate policy is dead,” the analysis concludes. The trading system was intended to cut emissions but without drastic changes, the massive oversupply of certificates will remain permanent, the study warns. “Given such a surplus, the prices for emissions allowances will remain permanently below five euros per tonne. That is much too low to trigger investments in low-emission technologies,” explains Patrick Graichen, head of the think-tank. The German government has suggested introducing the market stability reserve from 2017. In this scenario, prices might recover from 2022, according to the study. “That is too late to contribute to the German climate goal of reducing carbon emissions by 40 percent by 2020. The 40 percent climate goal can only be achieved if EU emissions trading is supplemented by national climate instruments at least until 2020,” says Graichen.
Like the Clean Energy Wire, Agora Energiewende is a project funded by Stiftung Mercator and the European Climate Foundation.
See the study in German here.
European Energy Exchange (EEX)
“EEX designs the Energy Market 2.0”
In response to the rapid rise of wind and solar power in Germany, the European Energy Exchange (EEX) in Leipzig plans to introduce new “energy turnaround products” which it says will create additional investment incentives for flexible power plants to supplement volatile renewables. Investors can use so-called Cap Futures to be introduced later this year as an insurance against high prices in short-term trading. “By using their own flexible generation capacity on the intraday market, the seller, in turn, can cover this risk. Therefore, Cap Futures lead to additional revenue for flexible generation capacity”, explains the Exchange. Additionally, EEX plans to offer further “energy turnaround products” such as weather derivatives.
See the press release in German and English here.
“Bury with Care”
The heated discussions over grid extensions have shown that new power lines shoud be as inconspicuous as possible, writes Lex Hartmann, member of the management board of grid operator TenneT, in an opinion piece for the Handelsblatt. “No acceptance without invisibility” appears to be the rule. But Hartmann warns underground cables with alternating current (AC) as opposed to direct current (DC) have barely been tested. “How reliable are they in comparison to overland lines? How long will repairs take? These and other questions will need to be thoroughly investigated in pilot projects."
See CLEW’s dossier on grid development here.
Dow Jones Newswires
Energy Consultancy BET – “Gas turbines will only become profitable from 2030”
If the government decides not to introduce a capacity market, which would pay utilities to keep conventional power plants on standby to cover shortfalls in renewable generation, highly efficient gas-fired power plants will remain unprofitable for a long time, according to energy expert Ralf Schemm from consultancy BET. “Germany needs additional gas-fired plants from 2022,” said Schemm, according to a report from Dow Jones. Otherwise, such power stations will only become profitable from 2030 on, as electrcity becomes increasingly scarce on the German electricity market, argued Schemm. The BET is based in Aachen and specialises on advising the energy and water industries.
“Companies stay in the Ruhr because of sinking oil price”
According to local chambers of commerce, the falling oil price has halted a trend that saw companies considering leaving the west German Ruhr, writes Frank Meßing in the regional newspaper WAZ. A survey found that the number of companies ready to invest abroad had dropped to the lowest level since 2008. At the beginning of last year, the chambers warned that energy-intensive businesses – particularly in the steel and chemicals sectors – could move abroad to locations such as the US, which has seen falling energy prices as a result of the boom in fracking, the article says.
See the article in German here.
Energie & Management / Powernews.org
“BDEW sees grid blockade as a threat to the Energiewende”
The BDEW industry association which represents businesses in the power sector has called for Energy Minister Sigmar Gabriel and north Germany’s state premiers to put pressure on Bavaria over its resistance to grid extensions, writes Timm Krägenow. BDEW head Hildegard Müller warned against a “Bavarian island” and criticised the southern German state’s premier Horst Seehofer, saying that blocking the new power lines would put the Energiewende at risk.
German chemicals manufacturer BASF has launched an open competition for sustainable and economical technology to store power from renewable sources and feed it back onto the grid.
See the press release in English here.
The Energy Collective
“Europe loses billions in badly sited renewable power plants”
The World Economic Forum's (WEF) Future of Electricity Report says European countries could have saved around 100 billion dollars each by investing in renewable power generation better suited to their own weather, says Jospeh Nyangon reporting for The Energy Collective. The reports says Germany is installing solar PV capacity faster than Spain, while Spain has wind power capacity of 23 gigawatts, despite being less windy than northern European countries. The report says harmonisation of renewable energy incentives across Europe would improve the situation, Nyangon writes.
See the article in English here.
See the full report in English here.