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EDF pitches to become leading e-mobility provider in Europe, Renault builds storage plant from EV batteries

October 16, 2018 by Karel Beckman

ENERGY WATCH #3 - October 16, 2018

EDF pitches to become leading e-mobility provider in Europe, Renault builds storage plant from EV batteries

by Karel Beckman

EDF subsidiary Sodetrel supplies EV charging

In the electricity sector, the energy transition comes in the form of renewable energy. In the transport sector, a similar transition is taking place, in the form of electric cars.

It is still a slow, almost stealthy transition, which has no impact yet on oil demand, but it has all the signs of a gathering storm. We have been following developments in the EV market closely on Energy Post Weekly, and almost every week has brought major news from major companies (such as here, here, and here – and you can go through our archives for more.)

This week is no exception. On 10 October, French state-owned EDF – the largest utility company in Europe – has announced it “intends to become Europe’s leading e-mobility energy company by 2022”.

EDF launched what it calls its Plan Mobilité Electrique (Electric Mobility Plan) in order to become the sector’s leading energy company on its four biggest European markets: France, UK, Italy and Belgium.

This comes after launching the Plan Solaire (Solar Plan) in December 2017 and the Plan Stockage Electrique (Electricity Storage Plan) in March 2018.

In France, “EDF is already a standard-bearer in the electric mobility sector”, notes the company – which has a great advantage in that its own electricity generation is 87% CO2-free thanks to its nuclear power stations. “The Group has put together dedicated offerings that include the supply of low-carbon electricity and charging solutions. It is also one of the biggest charging network operators thanks to its subsidiary Sodetrel, which operates 5 000 charging points in France and provides access to 60 000 charging points in Europe for customers with a Sodetrel Pass.”

With the Electric Mobility Plan, EDF is “stepping up the pace” by setting three concrete targets on its four main European markets:

Becoming the leading power supplier for electric vehicles by 2022

EDF is aiming to supplying power for 600 000 electric vehicles, equating to 30% of market share in France, the UK, Italy and Belgium. Starting in 2019, the Group will present each of these markets with a fully integrated range of offerings including low carbon electricity, a charging solution for all its customers with access to a parking space, and services geared towards optimised charging and use of the vehicle’s battery.

Becoming the biggest charging network operator

EDF will become the leading public and private charging network operator in the four core European countries. Through its subsidiary Sodetrel, the Group is aiming to deploy 75,000 charging points and provide its customers in Europe with access to 250,000 interoperable terminals by 2022. EDF will also be developing novel charging solutions for all customers without access to a parking space, in particular through collaborative innovation initiated by EDF New Business and EDF R&D.

Becoming Europe’s “smart charging” leader

Electric mobility will transform power systems as the electric vehicle is also a battery that can be used for the grids to balance load during periods of high demand. With its Electric Mobility Plan, the Group will become Europe’s smart charging leader, aiming to operate 4 000 smart charging points by 2020.

EDF notes that “the Plan Mobilité Electrique relies on new partnerships with innovative players who are leaders in their respective markets.”

The first series of partnerships has been formed between:

EDF and NUVVE: EDF Renewables North America holds a minority interest in NUVVE, a Californian start-up based in San Diego specialising in the aggregation and harnessing of flexible solutions for energy markets, associated with the charging of electric vehicles. EDF and NUVVE have signed a strategic partnership agreement with a view to forming a joint venture to develop these solutions in Europe.

EDF and Ubitricity: EDF and German-based start-up Ubitricity have been commercial and technological partners since 2014. Ubitricity has developed an innovative solution to convert existing streetlights into charging points and delivered several projects in Europe and across the world. Citelum (100% affiliate of

EDF Group) and Ubitricity are partnering to integrate this innovative solution to Citelum’s “smart city” range of product.

EDF and Renault have formed a partnership to develop shared offerings and to experiment electric mobility solutions in isolated regions and big cities.

EDF and Toyota have been electric mobility partners with a focus on R&D since 2007 and have extended this partnership to low-carbon industrial performance on the Onnaing site in Valenciennes since 2017. The expertise of both EDF and Toyota is now opening the way to new cooperative endeavours in the areas of smart charging and hydrogen charging station specifications.

EDF and Valeo: EDF, the low carbon energies champion and Valeo, the leader in high and medium voltage electrification, have formed a partnership to monitor the development of future battery technologies and charging solutions, as well as the development of mobility services. This partnership will be supported by the installation of shared demonstrators.

EDF Energy (100% subsidiary of the EDF Group) and Nissan International have formed a UK-based partnership for the development of shared offerings in the areas of electric mobility, smart charging, second-life battery use, energy storage and renewable energy sources. The two partners will be pooling their international experience and know-how in these areas, thereby helping to develop low-carbon, innovative and responsible transportation systems.

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What is particularly noteworthy about EDF’s announcement is that it comes from a major incumbent company. In this respect there is an important difference between the EV revolution and the renewables revolution. In the latter case, incumbent utility companies initially resisted the transition. In the case of EVs, they have an interest in advancing it.

For incumbent European car companies the story is different of course. They have needed competition from Tesla to be shaken out of their lethargy.

Arguably with one exception: French-Japanese car maker Renault-Nissan has long been in the forefront of the EV revolution. As far back as 2008, Renault and Nissan formed a joint venture with Israeli entrepreneur Shai Agassi, based on an inventive battery swap scheme. The company, Better Place, went bankrupt in 2013.

But Renault-Nissan-Mitsbushi, as the company is now called (it is said to be the biggest car manufacturer in the world) has not given up on its EV ambitions. The Nissan Leaf, for example, has been Europe’s bestselling car in the lower price segment.

Recently, at the end of September, the Renault Group launched Advanced Battery Storage, “a stationary storage system for energy developed exclusively from EV batteries.”

The new battery system, with a storage capacity of at least 60 MWh, making it the biggest system of its kind ever built in Europe, will solve two problems at one stroke: it will help integrate intermittent power generation from renewables – and it will be built with used EV batteries.

The first facilities will be developed in early 2019 on three sites in France and Germany: at the Renault plants in Douai and Cléon and at a former coal-fired plant in North Rhine-Westphalia. The storage capacity will then be gradually expanded over time to contain the energy of 2,000 EV batteries. At this phase, the system will have reached – or more likely, exceed – the 60 MWh, equivalent to the daily consumption of a city of 5,000 households, notes Renault.

The system will use both second-life batteries, as well as new batteries stored for future use in standard replacement during after-sales operations.

What is important about this move is that it will extend Renault’s role as a vehicle manufacturer “to become a player in the smart electric and energy ecosystems”, as the company notes, “with the help of its partners. As part of the “Advanced Battery Storage” program, Groupe Renault has joined up with several players including La Banque des Territoires, the Mitsui Group, Demeter (via le Fonds de Modernisation Ecologique des Transports), andThe Mobility House.”

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How fast the EV revolution could happen, if the right incentives are put in place, is demonstrated by Norway, global leader in EV sales.

The latest data show that this oil and gas exporter achieved record EV sales in September. As the website The Driven reports, “Of 10,620 new passenger vehicles registered in Norway, nearly half were electric, according to the Norwegian Road Traffic Advisory Council (OFV).”

“The car market in September was particularly special, new Norway records and a new world record were introduced for the sale of electric cars,” said Øyvind Solberg Thorsen, director of the OFV.

For the first time in modern history, electric cars stood for almost half of passenger car sales for a month, notes The Driven. “New electric cars had a market share of 45.3 per cent, and including imports of almost new electric cars, the proportion was 47.7 per cent.”

“Such an increase in electric car sales caused a record low CO2 emissions of 55 g/km. Although we in Norway are accustomed to average CO2 emissions falling from month to month, this is the lowest level we have ever measured,” said Solberg Thorsen.

One of the reasons behind the record-breaking month is the introduction of stricter methods of measuring fuel consumption and CO2 emissions, notes The Driven. “The new measurement method means higher consumption and CO2 emissions and therefore entails that taxes increase on most passenger cars with internal combustion engines, including rechargeable hybrids.”

Comparing CO2 emissions levels from the previous year, average emissions for all first-time registered new passenger cars in September 2018 came in at 55g/km, a full 16g/km lower than September 2017.

Of the 10,620 passenger cars sold, 4810 new passenger cars were registered with zero emissions, 954 more than 12 months previous when the market share was 28.6 per cent. Only eight of the new registered passenger cars in September were hydrogen cars, the rest were battery electric cars.

While all-electric and hydrogen vehicles registrations increased, hybrids dropped, notes The Driven.

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Swiss nuclear phaseout “challenges energy security” of Switzerland … and Europe

October 16, 2018 by Express Editor

EXPRESS #3 - October 16, 2018

Swiss nuclear phaseout “challenges energy security” of Switzerland … and Europe

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Switzerland is not Belgium of course. But could the Swiss decision to phase out its nuclear power stations result in power shortages, as Belgium is currently fearing?

Well, perhaps not quite. Still, according to a review of Switzerland’s energy policies by the International Energy Agency (IEA), published on 8 October, the country’s nuclear exit “presents challenges for maintaining electricity security”.

“With the country’s 2017 decision to gradually phase-out nuclear power, Switzerland faces a considerable energy-sector transition in coming decades”, notes the IEA.

Nuclear power has been – and still is – a pillar of Switzerland’s energy system. According to the review, “nuclear power has provided a high and stable share of Switzerland’s energy supply since the 1980s, accounting for 22% of the total primary energy supply in 2017. Nuclear accounted for 16% of the installed capacity in 2016 and generated 34% of total electricity in 2017, which was the sixth highest among International Energy Agency (IEA) member countries (see Figure 6.1).”

However, “the Energy Strategy 2050 (ES 2050), which came into force on 1 January 2018, prohibits the construction of new nuclear power plants (NPPs). Existing NPPs are allowed to continue operation until their technical lifetime comes to an end, and are subject to regular safety reviews. Therefore, the nuclear fleet will be closed down eventually, and will not be replaced by new reactors as previously intended. The first reactor closure is planned for 2019 due to commercial reasons.”

“The ES 2050 envisions replacement of existing nuclear capacity by renewable sources of energy. The Swiss Federal Office of Energy (SFOE) has evaluated scenarios for how this can be achieved. However, such replacement capacity may not be in place in time for the nuclear phase-out, under current conditions and policy instruments”, notes the IEA.

What should be worrying for Europe is that, according to the IEA, “Switzerland will be increasingly relying on imports from its European neighbours to meet electricity demand, especially during the winter months when low water levels impact production from hydro plants.”

Wasn’t Belgium also hoping to import more electricity? Isn’t Germany considering closing its coal power stations after also phasing out its nuclear power? Hasn’t the Netherlands announced the closing of all its coal power stations?

And Switzerland is already a net importer of electricity. The IEA reports that Switzerland imported 36.4 TWh and exported 30.9 TWh of electricity in 2017. This resulted in 5.5 TWh net imports, which provided 8% of the total electricity supply (net imports plus domestic generation) in the country.

Germany is the main exporter to Switzerland. In 2016, Germany provided 51% of Switzerland’s electricity imports, followed by France (25%), Austria (20%) and Italy (4%).

For exports, 70% was delivered to Italy and the rest to France (18%), Germany (10%) and Austria (1%).

Over the past two decades, Switzerland has gone from being a net exporter of up to around 10 TWh to having net imports in some years.

On a positive note, the IEA states that “Switzerland’s CO₂ levy on fossil fuels and its automatic upward adjustment in case intermediate emission targets are not met, has proven highly effective in shifting energy demand from oil towards gas and renewables, and supporting investments in energy efficiency.

“The CO2 levy represents a best policy practice example to inspire other countries”, said Paul Simons, IEA Deputy Executive Director “but transport fuels are exempt from the CO₂ levy and emissions in that sector are actually growing”.

The IEA encourages the Swiss government to more proactively develop a strategy for electric mobility to limit emissions from the transport sector.

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The Aquind case: private interconnector between France and UK hangs in balance as EU refuses to give exemptions

September 18, 2018 by Sonja van Renssen

BRUSSELS INSIDER #1 - September 18, 2018

The Aquind case: private interconnector between France and UK hangs in balance as EU refuses to give exemptions

by Sonja van Renssen

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European energy regulators (ACER) have refused to give Aquind, a privately-funded electric interconnector from the UK to France the exemptions from EU energy law it says it needs for its business case. Aquind warns of a dangerous precedent: ACER is blocking an official European Project of Common Interest that doesn’t need any subsidies, at a time when the EU is trying to mobilise private investment in energy infrastructure, Director Alexander Temerko tells Energy Post. Temerko, who once served in the government of Boris Yeltsin in Russia, warns that the fate of one of the biggest private energy infrastructure projects in Europe is on the line. Aquind’s problem, he suggests, is French regulator CRE, which “protects its own transmission system.”

On 19 June, the Agency for the Cooperation of Energy Regulators (ACER) ruled that Aquind, a new 2GW interconnector planned for between France and the UK, should not get any exemptions from EU internal energy market law.

Aquind told Energy Post that the decision “creates a serious regulatory risk for any private investment in energy infrastructure in Europe”.

The Aquind interconnector is a European Project of Common Interest (PCI). It features in the third list of PCIs drawn up by the European Commission last November and approved by the European Parliament in March.

Despite Brexit, there are currently a number of new electricity interconnectors being planned between France and the UK, which will serve to further integrate the UK electricity market into the wider EU market: FAB, IFA2, ElecLink and Gridlink.

Only ElecLink has requested – and received – the kinds of exemptions that Aquind wants. ElecLink has “a 25-year regulatory exemption from certain clauses of the Third Energy Package to forward sell under long term contracts up to 80% (800MW) of the interconnector capacity in each direction”, its website explains.

Go ask for subsidies

PCI projects are key infrastructure projects that link up the energy systems of different EU countries. They must increase competition, bolster security of supply and contribute to the EU’s climate and energy goals. In return, they get a suite of regulatory benefits – such as accelerated permitting – intended to speed up their realisation. They also win the right to apply to the Connecting Europe Facility (CEF) for EU funding.

Aquind doesn’t want any EU funding. Nor has it asked for national subsidies. It is an entirely privately funded project that has instead requested exemptions from parts of EU energy market law to make its business case.

The EU’s third energy market liberalisation package from 2009 introduced the opportunity for such exemptions for private projects. The same package, incidentally, created ACER.

The legislation says that national regulatory authorities may grant, upon request, exemptions from requirements on for example unbundling, third party access, and terms and conditions for connection and access (including tariffs), provided that specific conditions are met. In this case, they are not, ACER ruled on 19 June. National regulators CRE and Ofgem had referred the case to ACER in December 2017.

More exactly, the Aquind project does not meet one condition, ACER said. This requires that the risk attached to the investment is such that the project would not be realised unless an exemption were granted.

In a statement, ACER said it was “not able to identify with the required certainty” this level of risk. In fact, the regulators suggested that since Aquind has been labelled a PCI, it should put in an “investment request” to the French and British regulators “that could result in a decision to recover its… costs via regulated tariffs”.

In other words, ACER recommended that the private project go public.

Hinckley Point C but cheaper

Aquind’s Director Alexander Temerko is frustrated. “Europe needs more interconnectors, it wants to mobilise private investment and we want to invest,” he tells me when we meet in Brussels on 6 September. “But we need that exemption. We can’t build the interconnector without it.”

Alexander Temerko visits Downing Street 10

(source: http://www.alexandertemerko.co.uk/en/)

Temerko is one of three men listed as the company’s management on the Aquind website. He’s a “prominent British industrialist” who served as a junior minister and key negotiator in the Boris Yeltsin government before joining Yukos Oil in 2000 and moving to the UK in 2005. Kirill Glukhovskoy, who joined him at our Brussels meeting, is Aquind’s Managing Director. An ex-litigation lawyer for “major Russian energy companies” among others, he has led Aquind since its inception in 2014. Finally, Richard Glasspool, a non-executive director with the project, is a former partner at KPMG Russia. All three ended up working for the Offshore Group Newcastle (OGN), which spun out Aquind as a private company.

The Aquind interconnector is one of the biggest private energy infrastructure projects in Europe and the longest, at 250km. “It’s [of] the same [scale] as Hinckley Point C, but cheaper,” says Temerko. With a price tag of £1 billion, it’s a “mid-scale” investment, he says. The £50 million raised so far has been put up by British private investors like himself.

Getting the rest of the money is not the problem, Temerko continues. The problem is regulatory.

France vs. the EU

Aquind’s problem is France, or more specifically the French regulator CRE. “Each country protects its own transmission system” he explains. “French law requires an exemption for any project that is not carried out by national transmission system operator RTE.”

CRE reportedly voted against granting the exemption along with most of the other national regulators at ACER. Only the UK voted the other way, Energy Post understands.

The Commission has warned France that it is breaking the rules of the third energy package with its preferential treatment of RTE. “The French legislation prevents undertakings other than the national incumbent system operator for electricity from building and operating interconnectors to other EU Member States,” it said in July 2016, when it sent a so-called reasoned opinion to France. This was the second step in an infringement procedure that started with a letter of formal notice in February 2015.

France has sent a reply, but there has been no decision by the Commission since on whether to follow up through the EU Court of Justice. In February 2018, in response to a question from the European Parliament, EU Climate and Energy Commissioner Miguel Arias Cañete said the case is “ongoing”.

Dangerous precedent

“ACER has not enaged with this issue at all,” Temerko complains. Instead, it has indulged in some “creative thinking” about the conditions that merit an exemption. “It has put the threshold very high,” explains Temerko’s colleague Kirill Glukhovskoy, Aquind’s Managing Director. “It is setting up a yardstick to evaluate exemptions that we believe goes beyond the legislation.”

In a press release on 20 August, three days after it appealed the decision, Aquind summed up: “The decision incorrectly disregarded provisions of the French energy code…, wrongly applied and interpreted key EU regulations, and failed to properly assess the project risks.”

It is the first time that ACER has ruled on such exemptions (the ElecLink exemptions were dealt with at national level). Glukhovskoy says the ruling sets a dangerous precedent: ACER is rebuffing a way to build energy infrastructure without increasing tariffs, and a PCI at that. “Regulated returns do not work for a project funded on the market,” he explains. “A private project needs to provide higher returns than tariffs can offer.”

From ACER’s perspective the project can follow a regulated route. It appears to disregard the French legal situation, which receives no mention in its press release on the ruling on 28 June.

A representative for ACER directed Energy Post to this press release in response to a request for comment; he said the Agency could not comment further at this time.

Brexit

Aquind says it requested the exemption because CRE left it no choice. Aquind potentially could have applied for the “cap and floor” regime created by Ofgem. This aims to encourage investment in electricity interconnectors by moving beyond tariffs to set minimum and maxmum revenue levels. “It strikes a balance between commercial incentives and appropriate risk mitigation,” Ofgem explains in a note.

But CRE refused to countenance such a regulated arrangement, even for one end of the interconnector, Temerko says. It insisted on an exemption for the full project and then referred the decision to ACER on the back of a study suggesting that the interconnector’s benefits were uncertain in light of the uncertainty around Brexit.

“It seems preferable to wait to know the Brexit context before deciding on financing projects,” concluded consultancy Artelys, who led the study. (see the study and CRE’s decision).

Temerko says the study was done because France needed to decide the money that RTE would get for the FAB interconnection.

At the request of CRE and Ofgem, Aquind did its own modelling on the potential impact of Brexit and concluded that: “The Aquind Interconnector benefits remain strong for both countries under any scenario.” Its status as a PCI is testimony to its value, Temerko says. The project’s benefits have been “independently assessed and approved by ENTSO-E, Ofgem and ACER itself”, the company says in its press release of 20 August. As well as being a European PCI, the Aquind interconnector has been named a Nationally Signficant Infrastructure Project in the UK.

A representative for CRE told Energy Post that all interconnector projects with the UK are on hold until after Brexit. The spokesperson pointed out that other private interconnectors have received exemptions of the kind requested by Aquind but said CRE cannot comment on the ACER decision.

Actions not words

For Temerko, there are four years of work and £50 million on the line. Temerko says the European supply chain is almost in place, with benefits especially for France. The project is due to be completed in 2022.

The exemption would be “the simple solution”. A decision on Aquind’s appeal is due within two months i.e. by 20 October. “It’s easier to get the exemption than to change French law,” Temerko estimates. “And anyway, it’s not our job to change French law.”

That’s for the EU to do. Can Brussels break national grips on power and enforce an internal energy market? The ACER decision comes as the organisation’s remit is revisited under the market design talks of the Clean Energy Package and at a time when there is an ever stronger push for more private investment amid a debate on the EU’s next budget.

What is Aquind?

The Aquind interconnector is a new subsea, underground High Voltage Direct Current (HVDC) electric power link planned for between the South Coast of England and Normandy.

It would join the 1.4GW FAB link and 1.4GW GridLink (both also planned), the 1GW ElecLink and 1GW IFA2 (both being built) and the 2GW IFA link (already in use) between the two countries.

The idea is that by linking up the French and British grids, it will make energy markets more efficient, improve security of supply and enable greater flexibility to absorb variable renewables.

With 2GW capacity, Aquind would be able to transmit 16TWh of electricity each year, or 5% and 3% of the total consumption of the UK and France respectively, its backers say. It would be designed as two separate 1GW links to minimise the potential impact of any fault.

Electricity could flow both ways and the interconnector could provide various system services to the TSOs in both countries.

The project could include fibre-optic data transmission cables alongside the electric cables.

In May 2017, Aquind submitted a request for exemptions from EU internal market law to CRE and Ofgem. In December 2017, the national regulators referred the matter to ACER. ACER decided against granting the exemptions in June 2018. That decision is now under appeal, with a response due by 20 October.

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Brussels Insider: EU news roundup

August 7, 2018 by Express Editor

BRUSSELS INSIDER #1 - August 7, 2018

Brussels Insider: EU news roundup

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Note: our EU correspondent Sonja van Renssen is on holiday as long as the Parliament is not in session. We are providing an overview of relevant EU energy news instead.

French President Emmanuel Macron has said increased power links with Spain can be part of a bigger plan for reducing carbon emissions in energy generation, reports Bloomberg.

“The issue of energy interconnections needs to be seen within a broader strategy of sovereignty and the much broader energy transition,” Macron said in Lisbon, where he reiterated that France plans to close coal plants by 2022.

Macron spoke at a joint press conference with Portuguese Prime Minister Antonio Costa and Spanish Premier Pedro Sanchez following a meeting between the three countries about improving energy interconnections between the Iberian Peninsula and the rest of Europe.

“The leaders signed an agreement on European Union grants totaling €578 million for a power line crossing the Bay of Biscay that will double the electricity exchange capacity between France and Spain by 2025.”

Macron also said Spanish and French regulators “will study if it makes sense to have a new natural gas pipeline link between the two countries. There are already two gas pipelines linking those nations. Beyond links to Spain, Macron said the three governments agreed to work on possible links with African countries that could lead to greater interconnections in Europe.”

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Europe added 4.5 GW of wind energy in the first half of 2018, according to figures released by Wind Europe. This is down on last year (6.1 GW), but “in line with expectations”, says Wind Europe.

There was 3.3 GW of onshore wind, driven by Germany (1.6 GW), France (605 MW) and Denmark (202 MW). The 1.1 GW of offshore wind was mainly in the UK (911 MW), Belgium (175 MW) and Denmark (28 MW). Germany is set to install new offshore wind in the second half of the year.

For the whole of 2018, Wind Europe expects to see 3.3 GW new offshore wind and 10.2 GW of onshore wind. This will mean 13.5 GW of new wind capacity in total for the year.

WindEurope Chief Policy Officer Pierre Tardieu said: “We are on track for a solid year in new wind farm installations but the growth is driven by just a handful of markets. The figures also mask some worrying trends. France has installed a lot of new onshore wind this year but they haven’t issued a single new permit for onshore wind permit in the last eight months because of an administrative issue – which has also resulted in their latest auction being under-subscribed. So there’ll be a drop-off in their new build now, creating uncertainty in the supply chain.”

“In Germany it’s good that projects now need a permit to bid into onshore auctions, but that rule now needs to be made permanent. Also, there’s no clarity yet on when the 4 GW new onshore wind promised in the coalition agreement for 2019-20 is going to be auctioned. And the new Government is slow in confirming the auction volumes beyond that. Like all Member States they now need to give five years’ visibility on future auction timetable and volumes – under the terms of the new Renewables Directive.

“And in offshore wind, Europe is too dependent on the UK, which is striding ahead in current installations and in committing to future volumes. By contrast, the rate of new installations has slowed down in Germany. Other countries also need to beef up and speed up their plans on offshore wind.”

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Spain’s coal mining companies may have to pay back up to €2bn in government subsidies, after environmental groups alerted the European Commission that they could be using the money to support their ongoing activities, rather than to close down, according to a press release from NGO ClientEarth.

Under the Mine Closure Plan, the majority of Spain’s hard coal mines need to close down by the end of 2018, notes ClientEarth. “The government has granted subsidies in excess of €2.1bn to help them do this. But it seems that the companies may be finding ways to use the funds to suit their own ends. ClientEarth warned of this when the closure plan and associated subsidies were approved in 2016.

The aid is given on a ‘no closure, no cash’ basis: receipt of the money is conditional on a commitment to the mines in question closing by the end of 2018. With reason to believe the aid is being misused, NGOs IIDMA, Ecologistas en Acción and ClientEarth have written to the Commission.”

ClientEarth energy lawyer Sam Bright said: “Spanish coal mining companies are receiving significant sums of public money to help them shut down, on the condition that they close their mines by the end of 2018.

“If they were trying to wriggle out of this agreement – taking the money but ignoring their promise to close down – this would be totally unacceptable and a huge waste of public money. This is why we have alerted the European Commission – it has the power to hold the Spanish authorities to account.”

IIDMA lawyer Carlota Jover said: “If mines are using State aid in a way that is contrary to the law, it undermines the objective of the Mine Closure Plan. It is urgent that Spain and the government of Asturias now work to ensure a just transition for mining regions and workers.

“These unprofitable mines are a sinkhole for aid that should be helping to ensure a just transition. We call on the European Commission to monitor the destination and end use of these subsidies, and ensure they are being used as the law and the Mine Closure Plan lays out.”

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The European Commission is referring Germany to the Court of Justice of the EU to ensure a correct implementation of the Electricity Directive (Directive 2009/72/EC) and of the Gas Directive (Directive 2009/73/EC). Both directives are part of the Third Energy Package and contain key provisions for the proper functioning of energy markets, the European Commission has announced.

“Germany has not ensured full respect of rules concerning the powers and independence of the national regulatory authority”, notes the Commission. “In particular, the regulator does not enjoy full discretion in the setting of network tariffs and other terms and conditions for access to networks and balancing services, since many elements for setting these tariffs and terms and conditions are to a large extent laid down in detailed regulations adopted by the Federal government.”

“Furthermore, Germany has incorrectly transposed into national law several requirements concerning the independent transmission operator (ITO) unbundling model. For example, the rules on the independence of the staff and the management of the ITO do not fully respect these Directives and the definition of vertically integrated undertaking incorrectly excludes activities outside the EU.

A letter of formal notice was sent to Germany in February 2015, followed by a reasoned opinion in April 2016. Since compliance with EU law is not yet in place, the Commission has to refer these matters to the Court of Justice.”

The Commission is also referring Hungary to the Court of Justice of the EU to ensure a correct implementation of the Third Energy Package’s requirements on network tariffs. “The Third Energy Package requires that tariffs applied by network operators for the use of electricity and gas networks are regulated in order to prevent anti-competitive behaviours, and entrusts national regulatory authorities with the task of setting these tariffs or their methodologies”, writes the Commission. “After it assessed the legislative measures adopted by Hungary in the energy field, the Commission found that Hungarian law excludes certain types of costs from the calculation of network electricity and gas tariffs, in violation of the principle of cost-recovery of tariffs provided for in the Electricity and Gas Regulations.”

“In addition, the Commission found that Hungary adopted amendments to its energy legislation which jeopardise the right of market operators to a full judicial review of the national regulator’s decisions on network tariffs. The Commission addressed to Hungary a letter of formal notice on these issues in February 2015, and two reasoned opinions, respectively in December 2016 and April 2017. Since compliance with EU law is not yet in place, the Commission has decided to refer these matters to the Court of Justice.”

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Analysts “have raised their forecasts for carbon prices in the EU Emission Trading System (ETS) to 2020 after a bullish start to the year and on expectations that plans to reform the market will significantly curb oversupply”, reports Reuters.

Analysts expect EU Allowances (EUAs) to average 18.59 euros/ton in 2019 and 20.76 euros/ton in 2020, according to the survey of eight analysts by Reuters published on Monday. The forecasts were up 34 percent and 13 percent, respectively, from prices given in April, when the forecasts were for 13.86 euros for 2019 and 18.36 euros for 2020.

Analysts “also for the first time gave forecasts for 2021 which averaged 21.88 euro/ton, almost 30 percent higher than current trading levels for the benchmark European carbon contract.”

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