ENERGY POLICY WEEKLY Policy & Regulation from Brussels and beyond

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ENERGY POLICY WEEKLY Policy & Regulation from Brussels and beyond
ENERGY POLICY WEEKLY
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Policy & Regulation from Brussels and beyond
Contents
Competition law
Commission approves state aid
for Hinkley nuclear plant E3
Foreign affairs
EU and US divided over energy
chapter in trade deal E3
European elections
Industry concerned over
Cañete’s calls for single
gas buyer E4
Investment & finance
Price caps, subsidies blamed for
tariff deficits – EC E5
Data page
EU gas demand expected to
drop by 9% in 2014 E6
Editor, EU Policy and Regulation
Andreas Walstad
[email protected]
Correspondent, EU Policy and
Regulation
Annemarie Botzki
[email protected]
Chief Sub-editor
Rhys Timson
Sub-editors
Doug Kitson, Rob Loveday
Layout & Design
Joseph Williams
www.interfaxenergy.com
Energy union suffers setback after
Bratušek rejection
European elections
Bratušek’s parliamentary hearing
The European Commission’s vision of an energy
union seems to have suffered a setback this week
after it became clear that MEPs have rejected
Alenka Bratušek as candidate for the job of
overseeing its creation.
President-elect Jean-Claude Juncker
nominated the former Slovenian Prime Minster
as the commission’s vice president for energy
union in September.
However, it became clear after a meeting in the
European Parliament’s energy and environment
committees on Wednesday afternoon that Bratušek
does not have the necessary backing from MEPs
and she will not stand as a candidate at the plenary
vote on 22 October.
Meanwhile Miguel Arias Cañete, commissionerdesignate for climate action and energy, received
the necessary support from MEPs and is expected
to be sworn in as commissioner after the plenary
vote on 22 October. Following the rejection of
Bratušek, Frans Timmermans – the most senior vice
president in Juncker’s team – is tipped to oversee
energy and climate in his portfolio, however at the
time of writing this has not been confirmed.
During this week’s public hearing in the
European Parliament, Bratušek was openly criticised
by MEPs for lacking clarity when trying to address
their questions about energy and climate policy.
“I was rather surprised by a weak performance.
I had expected better,” Krišjanis Karinš (Latvia, EPP)
told journalist after the hearing.
This view was backed by several MEPs,
including Matthias Groote (Germany, S&D) who
told journalists Bratušek’s performance was “the
low of all hearings” and said her apparent lack of
preparation was “a provocation”.
During the Q&A session, it quickly became
clear that MEPs were dissatisfied with what they
considered as pre-fabricated and blunt statements,
dodging their pressing questions.
“I think I speak on behalf of many when I say
we have difficulties in seeing beyond the standard
answers,” said Esther de Lange (Netherlands, EPP).
Bratušek – speaking in Slovenian – repeatedly
said Europe needs more and better infrastructure,
■ MEPs were frustrated by Bratušek’s lack of
clarity and repetitive answers during Q&A
session in parliament.
■ No-show at press conference after hearing
caused concern.
■ Common purchaser of gas proposal not
addressed during hearing.
■ Energy union remains vague concept,
according to MEPs.
Source: Interfax
that the EU’s dependence on imports is too
high and that renewables will play a key role
in the future.
Asked by MEPs whether she would advocate a
more ambitious renewables and climate targets f
or 2030 than those tabled by the commission
earlier this year, Bratušek said: “I truly believe
that renewables are the future of Europe...
however, it is also true that things cannot be
changed overnight.”
Bratušek said several times that the commission
could do little without backing from member
states. Most EU legislation needs approval from
both the parliament and European Council to
pass into law.
“We need to set ambitious yet realistic targets.
The commission cannot act alone – we need the
parliament on one hand, and on the other hand we
need to reach an agreement with member states,”
said Bratušek.
“I am prepared to advocate higher targets... but
there is no point setting ambitious targets if we
don’t reach them,” she added.
October summit nears
Heads of the 28 EU member states will meet
in Brussels on 23-24 October to try to reach
an agreement on the proposed 2030 energy
and climate targets. The EU is calling for 40% cuts
in carbon dioxide emissions below 1990 levels,
...continued on page E2
Energy Policy Weekly | 9 October 2014 | E1
ENERGY POLICY WEEKLY
European elections
...continued from page E1
energy savings of 30% and a 27% share
of renewables in energy consumption.
An EU agreement in October could set
the tone for negotiations on global CO2
cuts at the UN climate change summit in
Paris next year. However, several Eastern
European nations are sceptical about
ambitious climate goals.
Lower-income countries are lobbying
for a burden-sharing agreement between
member states. They also want financial
compensation to finance modernisation
and innovation in the energy and industrial
sector, according to a letter signed by
ministers of six nations – Poland, Czech
Republic, Hungary, Slovakia, Bulgaria
and Romania – on 30 September. The
letter also called for protective measures
for energy-intensive industries to prevent
carbon leakage.
Bratušek reiterated the need for EU
nations to ‘speak with one voice’ when
negotiating with third parties such as
Russia. However, she did not address
the proposal for a common purchaser
of gas on behalf of member states. To
this end, MEPs voiced concerns that
the energy union remained a vague
concept. “There is still no substance
in this [energy union] idea,” said Martin
Edouard (France, S&D).
MEPs also addressed concerns that
Bratušek’s workload could prove too
challenging. According to the job description,
the vice president for energy union will
steer and coordinate the work of the
commissioners for climate action and
energy, transport and space, the internal
market, entrepreneurship and SMEs,
environment, maritime affairs and fisheries,
regional policy, agriculture and rural
development as well as research, science
and innovation.
Bratušek did not attend a scheduled press
briefing after the public hearing.
Andreas Walstad
[email protected]
TSOs urge council to prioritise Iberian interconnectors
Investment & finance
The heads of the 28 member states in the
European Council must show the political
will to help foster investment in cross-border
infrastructure in electricity and gas when
they meet on 23-24 October, representatives
from Spanish and Portuguese TSOs said in
Brussels this week.
LNG imports and electricity from
renewables in Spain and Portugal could
help Europe overcome a potential supply
crisis from Russia this winter. However,
export potential remains limited because
of a lack of cross-border interconnectors,
delegates heard at an event hosted by
Iberian TSOs REN and REE.
“The Iberian Peninsula will not be able to
contribute [in case of Russian supply disruptions] this winter due to low interconnection
capacity with the rest of Europe. That is unfortunate,” said Rui Marmota, system and management planner at Portuguese TSO REN.
A third gas interconnection point
between Portugal and Spain has been given
Project of Common Interest status by the
European Commission.
The project is an extension of the existing
pipeline connecting to Zamora in Spain.
However, the problem was not in financing
the project, but in convincing the national
www.interfaxenergy.com
regulator that it was necessary to carry on
with the project despite a lack of commercial
interest from the market players because of
the current market conditions, Marmota told
Interfax at the sidelines of the event.
“We are trying to convince national
regulators that we are not building white
elephants here. This is about the fulfilment
of security of supply criteria and creating the
conditions for the proper functioning of the
the Iberian region gas market. We know from
experience that the interconnectors will be
used,” Marmota told Interfax.
Delegates also heard member states
should commit to a binding interconnection
target of 15% of total power production
capacity by 2030 to foster the penetration
of renewables and enhance security of
supply. The EU heads of state are meeting
in Brussels on 23-34 October to try to reach
an agreement on energy and climate targets
for 2030.
“A provision for energy infrastructure
was absent in the 2020 targets. It would
be unacceptable if that happens again,”
Domingos Fezas Vital, Portugal’s ambassador
to the EU, told the event. He added that
the non-binding 10% infrastructure target
had not been met by 2012.
“It is important to have binding targets
for interconnectors,” added Alfonso Dastis
Quecedo, Spain’s EU ambassador. Financing
for interconnectors in electricity and gas
could come from the Connecting Europe
Facility, the European Investment Bank and
private funds, he added.
A second electricity interconnector
between Spain and France is expected to
become operational later this year. Despite
this, João Faria Conceição, executive director
at REN, said the Iberian peninsula remained
an energy island. “We are not satisfied with
the integration of Iberia and the rest of
Europe,” he told the event.
Speaking at an event in Brussels this week,
outgoing Energy Commissioner Günther
Oettinger said French incumbent energy
companies including EDF should increasingly
open up the domestic energy market to
foreign competition. “[Interconnectors
between] Spain and France are not a question
of investment. It is French policy. The French
government must open up its own market – it
is more or less a closed shop,” he said.
Meanwhile Graeme Steele, head of
UK TSO National Grid’s Brussels office,
played down the immediate prospects
for the proposed electricity interconnector
between the UK and Iberia. “I think this one
is a little bit further into the future, certainly
beyond 2020,” he said.
Andreas Walstad
[email protected]
Energy Policy Weekly | 9 October 2014 | E2
ENERGY POLICY WEEKLY
Commission approves state aid for Hinkley nuclear plant
Competition law
The European Commission said on
Wednesday that the UK’s plans to subsidise
the construction and operation of the nuclear
power plant at Hinkley Point are in line with EU
state aid rules. Opponents of the project said
they will legally challenge the EU’s decision.
The UK plans to establish a price support
mechanism – a ‘contract for difference’ – to
ensure the plant’s operator will receive stable
revenues for 35 years. The UK government
and EDF group previously agreed on a ‘strike
price’ of £89.50/MWh ($42.15/MMBtu).
“For me it is important Hinkley C is a special
case – that it is not a blueprint for [other
new] reactors,” Europrean Commissioner for
Energy Günther Oettinger said following
the announcement.
Joaquín Almunia, the commission’s vice
president for competition, said the case will
not mark a precedent and state aid will be
assessed on a case-by-case basis in the future.
According to the commission, the UK
will need about 60 GW of new electricity
generation capacity to come online between
2021 and 2030 as a result of the closure of
existing nuclear and coal power plants.
The commission said the project could not
be financed by markets alone, and therefore
the public support would address a genuine
market failure – a necessary precondition for
state aid.
Eliza Petritsi, a partner at law firm Holman
Fenwick Willan, said the case was a highly
controversial subject from the beginning.
“The commission initially expressed
serious doubt about the case, but state aid
decisions are always very political cases and
the commission has a wide margin to assess
if state aid is compatible with EU law,” Petritsi
told Interfax.
Austria has already said it would challenge
the commission’s decision at the European
Court of Justice, stating that only alternative
forms of energy should receive subsidies, not
nuclear energy. Opposition against the project
has also formed within the UK. “In waving
through the massively problematic Hinkley C
deal, the commission is giving a cynical boost
to nuclear power,” MEP Molly Scott Cato (UK,
Green) told Interfax.
“This deal, and the precedent it creates,
is a massive setback for renewable energy.
Greens will fully support in any way possible
any legal challenges that may now present
themselves,” Cato added.
The commission presented new guidelines
on state aid in April that said feed-in tariffs
– a fixed price for electricity generated by
renewables – should be phased out. It also
said capacity mechanisms – designed
to enhance the profitability of gas-fired power
generation – will be allowed under certain
conditions. However, nuclear energy projects
were excluded from the guidelines and the
Hinkley decision represents the first time state
aid has been assessed under EU treaties.
French utility EDF will build the £34 billion
project in southwest England. The start of
operations is scheduled for 2023, while the
plant has an operational lifetime of 60 years.
The two reactors will produce 3.3 GW of
electricity – accounting for 7% of the UK’s
electricity generation.
“There are of course always construction
risks and that includes a political risk – if there
should be a political shift [in the UK after the
general election in May 2015] this could also
affect the project,” Almunia said.
Annemarie Botzki
[email protected]
EU and US divided over energy chapter in trade deal
Foreign affairs
The United States and the EU are split on
whether or not to include a chapter on energy
in the Transatlantic Trade and Investment
Partnership (TTIP), it transpired last week at
the end of the seventh round of negotiations.
The ongoing dispute between Ukraine and
Russia has prompted EU officials to lobby
hard for an energy chapter to be included in
the TTIP to facilitate LNG imports from the
US. However, the US remains undecided if an
additional chapter on energy is needed.
“We haven’t agreed on the necessity of a
separate energy chapter or whether energy
might be covered under other chapters, such
as ‘services and goods’,” Dan Mullaney, the
chief US negotiator, told journalists following
the latest round of negotiations.
“We are discussing export liberalisation
www.interfaxenergy.com
– and are aware of [the EU’s] requests. Gas
exports would already be easier under the
broad trade agreement,” he added.
A leaked document from the EU Directorate
General for Competition said the EU wants
gas export licences from the US to be
“automatically” approved once the TTIP is
implemented. “Exports of energy goods... shall
be deemed automatically to comply with any
conditions and tests foreseen in [EU and US]
legislation for the granting of export licences,”
the paper reads.
“We [the EU] have been quite clear that we
see the need for having an energy chapter.
Then, there wouldn’t be any problem in
addressing all energy-related issues in this
part of the trade deal,” Wojtek Talko, the
spokesman for EU trade, told Interfax. “LNG
export licences are not the main issue,
because the US grants these licences to all
trade partners once there is a deal.”
According to Ken Culotta, partner in the
Houston office of law firm King & Spalding,
the split in views is not surprising. “Given the
administration’s environmentalist base, [the
US] can’t be seen to be aiding hydrocarbons
exports as a matter of policy,” he said.
US gas producers are largely in favour
of LNG exports as they could help raise the
currently low price of gas in the US. However,
others in the industry are sceptical as cheap
energy is a major competitive advantage.
The European Commission negotiates
the provisions in TTIP on behalf of the 28 EU
member states. The European Parliament
will then vote on whether the deal should be
accepted. However, no breakthrough has been
made and no firm deadline has been set for a
conclusion to negotiations.
Annemarie Botzki
[email protected]
Energy Policy Weekly | 9 October 2014 | E3
ENERGY POLICY WEEKLY
Industry concerned over Cañete’s calls for single gas buyer
European elections
Miguel Arias Cañete, commissionerdesignate for Climate Action and Energy,
defined his energy and climate priorities in
a hearing of the European Parliament on
1 October. These include the possibility of
further fracking regulation, a platform for
joint purchasing of gas, and the advanced
introduction of the proposed market stability
reserve (MSR) for the European Emission
Trading System (ETS).
While the establishment of an ‘energy
union’ has been named as a top priority of
the new European Commission, it is not yet
clear if the concept will include establishing
a single purchaser of gas on behalf of all
member states, as suggested Donald Tusk,
Polish prime minister and incoming president
of the European Council.
Cañete made it clear he supports the idea
of ‘joint negotiating’ if it would be in line with
WTO trade rules.
“We must negotiate with one voice when
buying fuels. I will try my best to convince
people to work in a collaborative way to
have more negotiating power when the
EU is negotiating [gas] prices,” Cañete told
parliament this week.
“I would be happy to support a platform
of joint purchasing, within the WTO rules –
the EU could support its buyers’ positions
internationally,” he added.
Speaking at a Eurelectric event in Brussels
this week, outgoing Energy Commissioner
Günther Oettinger said he was not in favour
of a single gas buyer. “This is one point
where I don’t agree with Tusk. It should be
a market-based system.”
Johannes Teyssen, chief executive of E.On,
backed Oettinger’s view. “A true energy union
should not be an alliance against somebody
out there,” Teyssen told the event.
The oil and gas industry has also expressed
concerns about the idea, which it says could
undermine fundamental principles of free
trade as well as liquidity in energy markets
(see Gas union is not a solution to EU supply
concerns – industry, 3 July 2014).
“We have concerns about [the joint
purchasing body], because we are afraid
it will distort competition and hinder
www.interfaxenergy.com
the functioning of the internal energy
market. It also risks adding complexity,”
Alessandro Torello, spokesperson for the
International Association of Oil & Gas
Producers, told Interfax.
Cañete said legally binding fracking
regulation could potentially be introduced
in 2015. “I will consider further legislation of
fracking, after studying the results of the first
European projects; we will establish new rules
if needed,” he told parliament.
“The commission has taken the approach
to [only] make recommendations now, and
research groups have been set up to establish
best practice and find out about the social
and economic impacts of fracking,” he added.
The EU gave free rein to member states
aiming to explore shale gas by presenting
non-binding guidelines in January this
year. The commission will review the
implementation of the recommendation
by 22 July 2015 and will consider making
the recommendations legally binding.
“We don’t see the need for any additional
regulation on shale gas – there are already
17 pieces of EU legislation in place, not
counting the national laws,” Torello said.
The future of the ETS
Cañete told parliament he supports an earlier
introduction of the MSR mechanism.
“I am very much committed to developing
the ETS. If I can find enough support in [the
parliament] I will try to convince and support
the council to advance the establishment of
the MSR,” Cañete said.
“The backloading [of allowances] should
be a onetime measure. When allowances are
reintroduced in the market, this could send a
bad price signal,” he added.
Cañete also said the EU will have to link its
carbon markets internationally with China, the
United States, Switzerland and other global
carbon markets in the future.
According to Andrei Marcu, head of the
Carbon Market Forum at the Centre for
European Policy Studies, linking carbon
markets is in some cases a necessity as
markets are ‘not deep enough’.
“This will be a complex process that could
be done under an international framework to
be reached at the Paris climate summit next
year,” Marcu told Interfax.
Cañete’s priorities
Energy policy under Spanish
Commissioner-designate for Climate
and Energy Miguel Arias Cañete
will include:
■ Considering further fracking regulation
in 2015
■ Supporting a platform of joint
purchasing of gas
■ Backing the advanced introduction
of the proposed market stability
reserve for the European Emission
Trading System
■ Monitoring South Stream: “South
stream cannot go on, unless it follows
all European legislation”
Source: Cañete hearing in the European
Parliament
Alyssa Gilbert, emission trading expert
at Ecofys, said an earlier introduction of the
MSR is likely to increase confidence in a
higher carbon price, and in the EU ETS
in general.
“The earlier introduction should slightly
increase prices in the EU ETS. Gradually
more member states are showing political
support for the earlier introduction of the
MSR, but it will be a close-run thing to
agreeing early introduction and is quite
dependent on the agreement struck with
the countries that are against the MSR
altogether,” Gilbert told Interfax.
While Cañete outlined his energy
priorities and also stressed the importance
of the EU’s climate policy and the agreement
on 2030 targets, environmental groups said
the EU will not remain a climate leader under
Cañete’s leadership.
“Cañete stands very much for ‘business
as usual’ and continuing the weak line on
decarbonisation set out by the previous
commission,” Geert Decock, director of
EU affairs at Food & Water Europe, told
Interfax. “He pays lip-service to the severity
of the climate crisis, while failing to adopt
an ambitious stance on renewables, energy
efficiency and phasing out fossil fuels.”
Annemarie Botzki
[email protected]
Energy Policy Weekly | 9 October 2014 | E4
ENERGY POLICY WEEKLY
Price caps, subsidies blamed for tariff deficits – EC
Investment & finance
Tariff deficits
Regulated retail prices and national
subsidies for renewables are a major
contributing factor to tariff deficits in the
electricity sector in several EU member
states, a report published by the European
Commission has concluded.
Spain, Portugal and Greece have the
highest tariff deficits, followed by France,
Bulgaria and Malta, according to the report,
which was published in early October.
Tariff deficits are shortfalls of revenues in
the electricity system, which arise when the
tariffs for the regulated retail electricity price
are set below the costs borne by the energy
companies – including generation. In Spain,
the shortfall is as high as €30 billion ($38
billion) (see No quick fix in sight for Spain’s
€30 billion tariff deficit, 23 January 2014).
The report concluded regulated retail
prices and national support schemes for
renewables were major contributing factors to
the deficits. The cost of support to renewable
energy in Spain rose from €1.2 billion in 2005
to €8.4 billion in 2012, the report said. This
has led to suspension of the support to
almost all new renewable energy installations
in Spain since early 2012.
“Support systems, e.g., to renewable
electricity, need to be designed carefully
to avoid both overcompensation and
exploding costs, and should be compatible
with a proper functioning of the electricity
News in brief
The European Commission has adopted
a proposal to implement existing
obligations in the 2009 amendment
of the Fuel Quality Directive. The
directive obliges suppliers to reduce
the greenhouse gas intensity of fuel
supplied for road vehicles by 6% by
2020. Different fuel types will be assigned
a default value based on emissions
produced over its entire lifecycle.
Suppliers will have to use these values
when reporting the carbon intensity of
their fuel supply to member states.
www.interfaxenergy.com
■ The total accumulated tariff deficit in the electricity sector is estimated at €30 billion
in Spain, €3.7 billion in Portugal and €700 million in Greece. Tariff deficits occur when
retail prices cannot cover the cost borne by the energy companies. This is typically
because retail prices are regulated (capped) and cannot cover the rising cost of
producing electricity from renewables among other factors.
■ In most EU countries, national subsidies for renewables are paid for by end-users. In
2010, total support from 17 member states amounted to €25 billion, 73% of which
came from Germany, Spain and Italy.
■ The tariff deficits have led to retroactive cuts in feed-in tariffs in several countries,
including Spain and Greece. In Spain, other measures to reduce the deficit include
a tax on electricity production and nuclear waste, a levy on hydro generation, and a
carbon tax on fossil fuels used for electricity generation.
■ In Portugal, the regulated tariffs for households are gradually being abolished – a
process which began in January 2013, with a transition period of three years until the
end of 2015. The regulated tariff for industrial electricity users was abolished in 2010.
■ The overall amounts of subsidies to fossil fuel-based electricity generation in the
EU are thought to be lower than subsidies for renewable energy. However, two
studies for the European Commission due in the autumn of 2014 aim to give a more
complete picture of the existing support to electricity and heat production in the EU.
Source: European Commission, Interfax
market,” the report concluded.
Retail price regulation is also a main
contributor to the deficits because price caps
have prevented electricity producers and
operators from being able to cover their costs.
The economic recession exacerbated the
problem by lowering energy demand while
making it difficult for countries to raise retail
prices, the report said.
“Regulated retail prices, for example
through integrated tariffs or price caps, limit
the possibility [for] the electricity companies
to cover their full production costs. The result
is the emergence of losses, and hence a risk
to accumulate a deficit in these firms,” the
report added.
Second package
The Second Energy Package, adopted in
2003, foresaw the abolishment of end-user
price regulation for non-household customers
by July 2004 and for all customers by July
2007. The Third Energy Package, adopted
in 2009, authorises price regulation for
vulnerable customers.
Eighteen member states had regulated
electricity prices for households in 2012, while
five member states (France, Cyprus, Romania,
Estonia and Malta) had regulated electricity
end-user prices for industry, the report said.
The burden of the tariff deficit was
initially borne by the energy utilities. In
Spain, Portugal, France and some other
EU countries, these companies have now
been compensated by their national
governments for the losses accrued.
In Bulgaria however, tariff deficits are not
recognised by the authorities as a public
liability. This has affected the financial
performance of the national incumbent
state-owned electricity supplier NEK as
well as foreign-owned energy distributions
companies. The country’s annual deficit has
been estimated by the World Bank st between
BGN 0.8-1.2 billion ($518-777 million) in 2013
and is expected to increase further in the
coming years if no measures are taken.
In the UK, Labour opposition leader Ed
Miliband pledged in September last year to
freeze energy tariffs if elected prime minister
at the next general election in May 2015.
Andreas Walstad
[email protected]
Energy Policy Weekly | 9 October 2014 | E5
ENERGY POLICY WEEKLY
EU gas demand expected to drop by 9% in 2014
According to the latest forecast from
Eurogas, European gas demand is
expected to drop by 9% in 2014
compared with 2013 as a result of mild
weather, the low price of coal and carbon,
and the growing share of electricity
produced from renewables.
Year-on-year change in European gas demand
0%
-2%
-4%
-6%
-8%
-10%
2011
2012
2013
2014*
*Estimated
460 bcm
€30 per ton
Estimated gas demand for EU
28 and Switzerland’s annual
consumption in 2013
The first half of 2014 saw a decrease
of 18% in demand, compared with the
same period in 2013, the report said.
Highest price for EU carbon
allowances, reached in 2008
417 bcm
18%
€6 per ton
Estimated gas demand for EU
28 and Switzerland’s annual
consumption in 2014
Year-on-year decrease in European gas
demand in H1 2014 according to Eurogas
Current price for EU carbon
allowances
For 2014 as a whole, the annual
gas consumption of the EU 28 plus
Switzerland is expected to amount to
about 417 billion cubic metres, down
from 460 bcm in 2013, the report said.
Europe's economic recovery
2.0%
change in EU GDP
2.0%
change in eurozone GDP
1.5%
1.5%
1.0%
1.0%
0.5%
0.5%
0.0%
0.0%
2013
2014*
2015*
-0.5%
2013
2014*
2015*
*Forecasts
Growing share of renewable energy
Renewables
14.1%
Renewables
8.3%
Share of final
energy consumption
in 2004 by source
Sources: Eurogas, European Commission
www.interfaxenergy.com
“The forecast for the second half of the
year is based on expectations taking
into account normal temperatures,”
Marion Le Roy, economic manager at
Eurogas, told Interfax.
Share of final
energy consumption
in 2012 by source
“The dramatic decline in gas
consumption in the first half of the
year is mainly the result of the very
mild weather, although other factors
such as the slow economic recovery,
low price of coal coupled with a weak
carbon price and growing share of
electricity generation from renewables
played their part,” the report said.
Warm temperatures in the first half of
2014 reduced the demand for heat in
the commercial and residential sectors –
which experienced the biggest decrease,
according to Eurogas.
The weather, combined with the
slow recovery from recession, have
also resulted in a lower demand for
electricity than in 2013, which affected
gas demand for power generation.
Annemarie Botzki
Brussels correspondent
Energy Policy Weekly | 9 October 2014 | E6