Regulation & Policy

Uncertainty abounds after Britain voted for Brexit amid concerns over implications on foreign direct investment, not least in the UK energy sector. The very future of the Hinkley Point nuclear power project is up in the air, as observers warn that the departure of UK prime minister David Cameron might give EDF a pretext to pull the plug on financing.

Cross-border electricity flows need better TSO coordination, as do capacity measures set by national policymakers, if Europe wants to achieve its energy security policy objectives. As Fabien Roque, senior vice president for Compass Lexecon Energy put it: “We will only be able to address issues of coordination in capacity markets if we can deal with simultaneous scarcity situations.”

Unsubsidized renewable spot prices in many markets are now equal to or below gas power prices, prompting substantial changes in generation requirements. “We are in the midst of transition to a new energy paradigm and this implies consequences for traditional generation. The first need is a much higher efficiency for all plants along with greater flexibility,” Enrico Viale, Enel Group’s head of global thermal generation said at the opening of Power-Gen Europe in Milan today.

Implementation of the EPA’s Clean Power Plan will accelerate the growth of renewable generation and the phase out of coal power plants throughout the United States. Wind and solar power is set to will overtake coal-fired generation by 2029, while gas power capacity will exceed coal-fired plants by 2022, according to EIA projections.

Pennsylvania’s environmental watchdog will host a public hearing on June 21 to discuss the proposed CPV Fairview Energy Center (1,050 MW) in Jackson Township, Cambria County. Approval for the plant’s air quality plan is still pending, though the operator aims to start construction in early 2017.

‘Continuity in energy policy’ is the top concern of UK energy professionals, surveyed in the EI’s Energy Barometer 2016, with a ‘lack of investment’ a close second. An overwhelming majority of respondents foresee negative effects on the UK energy system – notably on supply security, renewable deployment and energy efficiency - should Britain leave the EU.

German energy minister Sigmar Gabriel has rejected the idea of establishing a commission to analyse ways of a coal power phase-out. He called the nuclear exit a “brave decision,” but cautioned one should “not attempt to repeat such experiments too often.” E.ON and RWE are radically restructuring their operations to stay afloat as Berlin keeps embracing renewables.

Stepping up the use of local energy sources and lowering electricity prices is the main objective of Turkey’s new electricity law, approved by parliament this week. Complicated regulation on energy investment will also be scrapped in a bid to incentivise new-build capacity.

Consultations are underway at Whitehall as to whether coal-fired power plants, that are partially retrofitted with carbon capture and storage (CCS), would be allowed to run beyond 2025 – the cut-off date given by the UK's Department for Energy and Climate Change (DECC) last autumn.

Just days before Ofgem launches a consultation on possible modification of ‘embedded benefits’ for distributed generation, UK Power Reserve has published a report by KPMG warning that removing such incentives would reduce distributed generation at a time when short-term capacity margins are already tight.

The Prime Minister of Tanzania, Kassim Majaliwa, has announced government plans to invest $1.9 billion per year until 2025 in energy projects in an effort to end electricity shortages and boost generation capacity to 10,000 MW, up from currently just 1,500 MW.

Calling Belgium’s plans to phase out its remaining three nuclear plants by 2025 a “serious challenge to low-carbon electricity and security of supply,” the International Energy Agency (IEA) has urged policy makers to adopt a national long-term energy strategy “without delay”.

Implementation of the US Environmental Protection Agency’s (EPA) Clean Coal Plan would reduce the share of coal in the US power mix to 21% by 2030 and 18% by 2040, according to EIA projections. The legality of the CPP is still unclear since it has been suspended by the Supreme Court.

The U.S. senate has approved an energy bill designed to strengthen the country’s power grid and improve the process for gas trading. The Energy Policy and Modernization Act is expected to strenghten the grid and may help drive investment in new gas power plants.

French gas power operator Engie expects CCGT gas power plants may soon become profitable again if French plans for a carbon tax are implemented successfully.