Capping IT Off

Capping IT Off

Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

What did the 16th European Energy Market Observatory find out?

Capgemini, along with Natixis, CMS Bureau Francis Lefebvre and VaasaETT, published the findings of the 16th European Energy Markets Observatory on October 28th. The report is published annually, that looks at both the electricity and gas markets in Europe. It tracks the progress of the establishment of an open and competitive energy market in the EU 28 and the progression to the EU’s climate change objectives. 
Electricity markets remain chaotic – with negative wholesale prices, closure of gas plants that ensured peak-time supply and increased retail prices. The EU is initiating some reforms to tackle this. It has set a main objective of 40% reduction in greenhouse gases for 2030. It recommends linking renewable energy feed-in tariffs to market conditions and this would decrease the allocated subsidies. It has created a Market Stability Reserve to manage carbon allowances. It has accepted capacity markets implementation in Member States (though with different designs, that could hamper competitiveness). But while these reforms are a start, more needs to be done, says the report.
The gas supply remains fragile, with the dependence on Russia for gas and the Russia-Ukraine crisis. Mitigating measures like shale gas exploration, new storage capacities, an alternative pipeline bypassing Russia and investments in new LNG terminals have faced road blocks. And so, the report suggests, this winter could be a cold one, for at least some countries in Europe.
The report also looks at the status of the energy transition plans in Member States. Germany has been first off the block, but it has had to adapt these plans after facing some problems. The report suggests other countries to learn from Germany’s experience before creating their own energy transition plans.
Overall, the EC has committed to an ambitious R&D program, where the collection, usage and analysis of data has been a key theme. And the report suggests Utility companies should take advantage of this and become real digital utilities.
The report will be of interest to anyone who has a stake in the Utilities sector. If you want to know more, you can click here. Or write to me for any more information. Happy reading.

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Philippe Vié
Philippe Vié

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