European Energy Traders Broadly Approve of EC Strategies

The European Federation of Energy Traders (Efet) welcomed July 9 the European Commission's Strategy for Energy System Integration and its Hydrogen Strategy from the previous day while calling for strict technological neutrality on the different methods of delivering net zero carbon energy.

"We reiterate the need for ensuring a level-playing field for technology developers and a framework that recognises the environmental benefit of a wide range of available technologies and rewards carbon abatement in a market based, technology neutral way," it said. And electrons could displace molecules but only if that made economic sense, it said: it should not be a policy goal.

It said also that Europe's energy markets needed a strengthened and expanded EU Emissions Trading Scheme to drive the cost-effective decarbonisation of the sector and the EU economy. Observers have said that carbon capture and sequestration only makes economic sense if the carbon price is about €80-100/metric ton, or at least three times today's price.

It also needs a hydrogen market within the internal energy market, if that gas is to become an integral element of the continent's energy supply. "We also strongly support the EC's commitment to preserving sectoral unbundling rules, featured in the Hydrogen Strategy," it said.

But more needs to be done, it said. The future quota system must cover decarbonised and low carbon gases as well as hydrogen, it said. 

Both strategies also fail to recognise the need for market arrangements across electricity and gas to ensure that market participants are rewarded or penalised for the savings or costs they impose on the system. These will include flexibility services for grid operators and changes to grid tariffs to reflect the costs imposed by market participants. At the moment, renewable energy suppliers do not bear the costs of their intermittency, for example.

Efet quoted the EU Climate Law proposal that "in taking the relevant measures at Union and national level to achieve the [2050] climate neutrality objective, member states and the European Parliament, the Council and the EC should take into account [...] cost-effectiveness and technological neutrality in achieving greenhouse gas emissions reductions and removals and increasing resilience."

Efet said it looked forward to continuing its dialogue with the EC on the two strategies and with relevant external parties on the future integration of the gas and power systems.