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Daily Energy News

Policy & Regulatory

The European Commission has proposed to revise the EU Emission Trading System (ETS) state aid guidelines for the post-2021 period; the current guidelines, aimed at reducing the risk of carbon leakage (companies transferring production to non-EU countries with lower climate ambitions and constraints), will expire at the end of the third ETS period, on 31 December 2020.

The government of Hungary has presented the main goals of its National Energy and Climate Strategy, which aims at reaching a 90% carbon-neutral power generation by 2030, mostly from nuclear and solar. Hungary will maintain nuclear capacity, promote renewable power generation and substitute fossil fuels in the transport sector. It will also reduce electricity imports from the current average of 30% of electricity consumption (46% in 2018) to less than 20%.

The government of Indonesia plan to set up an experimental emissions trading scheme before the end of 2020. It would include power generation, cement production, fertilisers, and pulp and paper. A draft regulation could be submitted for approval to the president in March 2020. After the pilot phase, full ETS could be launched in 2024.

The German federal government and state governments of Brandenburg, Saxony, North-Rhine Westphalia and Saxony-Anhalt have reached an agreement on the coal-fired power plant shutdown schedule and on financial compensation and structural aid for coal and lignite producing regions.

The Supreme Court of Mexico has rejected a revision of a fuel regulation by the Energy Regulatory Commission (CRE) that would have increased the ethanol content in gasoline from the current 5.8% to 10% as in the United States, considering that the CRE exceeded its authority. The measure, which was proposed by the CRE and blocked by a judge in 2017, would have excluded the three largest cities of Mexico, namely Mexico City, Guadalajara, and Monterrey.

Energy & Climate Markets

According to preliminary data from the National Bureau of Statistics, China’s fossil fuel production continued to rise in 2019. China’s raw coal production increased by 4.2% in 2019, in line with the continuing of the supply-side structural reform. Coal imports also rose by 6.3%, benefiting from declining prices. The decline in crude oil production since 2015 reversed in 2019, as the major domestic oil fields had a stable production growth trend and crude oil production rose by 0.8%. In addition, crude oil imports rose by 9.5% and inputs to Chinese refineries rose by 7.6%.

In 2019, trading volumes on the EEX markets in Europe reached records. On the power markets, volumes traded on the sport markets rose by 4% to 598 TWh, including 506 TWh traded on the day-ahead markets (+2.5%) and 92 TWh on the intraday market (+11%). Traded volumes soared by nearly 33% on the power derivatives markets to 5,830 TWh, including 1,857 TWh of US power derivatives (+79%) and 3,973 TWh of European power derivatives (+19%). In mid-2019, EEX included financially settled futures for Bulgaria, Serbia and Slovenia, thereby extending trading for a total of 20 European market areas.

According to the Ministry of Energy and Mines of Peru, power generation in Peru rose by 3.8% in 2019. Thermal power generation grew by 5%, while renewable power generation increased significantly: wind power generation rose by 10% and solar generation by 2%. Hydropower generation posted a 29% surge in December 2019, compared to December 2018. In December 2019, most of electricity output was generated in the central zone of Peru (80%), 12% in the southern regions, 6% in the northern region and 1.5% in the east.

The Hiroshima High Court (Japan) has ordered Japanese power utility Shikoku Electric Power to suspend operations at its 846 MW Ikata 3 nuclear reactor, reversing a 2019 ruling by the Yamaguchi District Court, which considered that the plant operator had sufficiently proved that the plant would remain safe in case of earthquakes or volcanic eruptions. Ikata-3 is the only operable nuclear reactor of Shikoku Electric. Shut down for regulator maintenance since late December 2019, it was expected to restart in a few months but it will now have to remain idle pending a court appeal.

Infrastructure & Investments

South Africa has selected three additional Renewable Energy Development Zones (REDZs) for developing wind and solar photovoltaic energy projects. Two new REDZs for developing solar PV projects have been identified in the eMalahleni (Eastern cape province) and Klerksdorp (North West province) areas and the third REDZ for developing wind projects would be located near Beaufort West (Western Cape province).