Client Earth and RAP Winter Package Symposium 1 March 2017, Brussels - - PowerPoint PPT Presentation

Regulatory Perspective on Security of Supply

Andrew Ebrill, CEER Secretary General Client Earth and RAP Winter Package Symposium

1 March 2017, Brussels

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Agenda

• The Regulators’ Trilemma?
• European Electricity Market Context
• What Can Assist Security of Supply?
• Clean Energy and Next Steps

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Putting consumers at the heart of energy policy: CEER-BEUC 2020 Vision

CEER: Fostering energy markets, empowering consumers

• Independent platform for cooperation

between 35 European NRAs

• Promotes competitive, secure and

sustainable markets in the interests

• f consumers
• Champions sound energy regulation

with stakeholders, incl. policy-makers

• Supports NRAs and encourages best

practices: ►Training Academy ►Workshops, e.g. international events on security of supply ►Papers, reports, benchmarking

Regulators’ Trilemma?

Security of Supply: “The lights must stay on”!

Renewables Competitive / Sustainability / Low Prices

Dispersed and Variable Low marginal cost Often small-scale at DSO level Renewables Growth Smart Meters Smart Grids Smart Heating Electric Vehicles Internet of Things Data Management Cybersecurity Competition Consumer choice Demand-side and prosumer growth at DSO level Liberalised Markets

New Technology

European Electricity Market Context

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• Renewables are now central, often subsidy-driven
• A market, technical and security of supply challenge:

► Lowers conventional generator output and spark-spreads => less revenue ► Intermittent generation from solar / wind

European Electricity Market Context

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• Energy wholesale market

integration progressing

► A single day-ahead spot price- auction (algorithm)

• Currently one single coordinated

Day-Ahead Market for NWE Region + ES/PT and IT

• Covers around 75 % of EU

demand

• With networks + interconnection,

market integration assists security of supply and competitive prices

European Electricity Market Context

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• Retail competition and consumer empowerment still mixed, with

industry benefitting more than households

• ACER/CEER MMR: retail prices falling again, except for elec HH

► Subsidies and levies are an issue!

1 2 3 4 5 6 7 8 10 11 12 13 14 15 16 17 18 19 20 21 2008201020122014 Electricity HH prices Electricity IND prices Gas HH prices Gas IND prices

2 3 4 5 6 7 8 10 12 14 16 18 20 22 24 2008 2009 2010 2011 2012 2013 2014 2015 Gas price (euro cents/kWh) Electricity price (euro cents/kWh)

European Electricity Market Context

• Many retail markets still price

regulated and not v competitive

• More choice for consumers where

prices have been liberalised for longer

• We recommend price de-

regulation once the market is competitive

• We support facilitating new

supplier entry by reducing barriers

• We advocate consumer

protection and empowerment

Non-regulated prices Regulated prices for the household segment Regulated prices for the entire retail market

Malta Cyprus NHH NH H

European Electricity Market Context

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What Can Assist Security of Supply?

• Fully implement the 3rd Package
• Appropriate investment in networks and cross-border interconnection
• Enhanced functioning of EU wholesale electricity markets:
• Fully implement / extend European day-ahead market coupling
• Enhance European intra-day (XBID) and balancing markets
• Implement efficient bidding zones
• Reward generator flexibility: scarcity pricing
• Enable and reward demand-side flexibility
• Integrate RES into the market / have robust carbon pricing
• Assess system adequacy at EU level, with any CRMs compatible with

efficient cross-border trade

• Improve retail competition, innovation and consumer engagement

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Clean Energy Package

• Regulators' Overview Paper of 23 January broadly welcomed the CE

Package, highlighting issues for consideration

• More detailed regulatory papers expected in the coming months

www.ceer.eu