NEW – Factcheck: Why expensive gas – not net-zero – is keeping UK electricity prices so high | @drsimevans.carbonbrief.org @mollylempriere.carbonbrief.org w/ comment from @dharavyas.bsky.social Prof Robert Gross, Paul Drummond, Frank S. Aaskov
Read here: buff.ly/DWsC3sZ
Quite possibly the biggest climate story of the year (especially when we look back on this in a few years' time)
For the first time on record, China's emissions are falling due to clean energy growth, not slow power demand...
Kind of mind blowing that Spain has the lowest ratio of grid to clean energy investment in Europe
If you're looking for something to (constructively) blame post power outage under investment in a grid capable of managing a transition is it 👇
⚖️ Policymakers need to allocate electricity system costs equitably based on four principles
🖋️ By @cheussaff.bsky.social @ejueng.bsky.social @tagliapietra.bsky.social and @gzachmann.bsky.social
🔗 Read the Policy Brief here: buff.ly/NYTxvCs
#EconSky
🔌 Who should be charged? Principles for fair allocation of electricity system costs ⚖️
In this Policy Brief, @cheussaff.bsky.social @ejueng.bsky.social @tagliapietra.bsky.social and @gzachmann.bsky.social set out four principles for fair pricing.
🔗 Read the paper here: buff.ly/NYTxvCs
#EconSky
Thoroughly enjoyed speaking about mega electricity network investments on @bruegel.bsky.social's podcast, with @gzachmann.bsky.social & @rebeccawire.bsky.social.
We talk investment targets vs. needs, the role of EU planning, and overcoming distributional challenges.
www.bruegel.org/podcast/wire...
... it's also likely that, due to poor competition in retail markets, suppliers in many European countries use their market power to keep final prices high after wholesale price spikes. more consumer switching would in theory remove this ability to unduly profit
typically there's a lag between wholesale and retail prices because the suppliers have a forward position based on long-term contracts signed months/years ago. I think of the lag as the time it takes for suppliers to adjust their consumer pricing based on their expectation of future prices...
Europe: Weak on gas (and getting weaker), strong on electricity (and getting stronger).
Source: www.acer.europa.eu/monitoring/M...
Tracking European and US investments in clean tech is surely going to become even more interesting in coming years. Will US investments tick down, and EU catch up?
We've reached the point where deploying renewables alone isn't enough.
Grids, storage, and demand flexibility must be equally prioritised to advance electricity decarbonisation.
www.ft.com/content/7939...
Europe's short-term options for reducing electricity prices are all redistribution: shift between consumers, reduce taxation, or subsidise power.
Until we structurally reduce costs, such trade-offs are inescapable.
Thanks to @euractiv.com for the quotes below 👇
www.euractiv.com/section/eet/...
Dependence on expensive liquified natural gas (LNG) is part of the problem for European industry.
Decarbonisation is not only about climate action. Reducing fossil fuel dependence means economic security and energy affordability, too.
Thanks to DW for quoting me here:
www.dw.com/en/is-german...
Here @iriepin.bsky.social, @nworbmot.bsky.social, V.Zavala, and I explore how hyperscale data centres can lower costs&emissions by transporting data instead of energy. Optimised data centre usage across time & location can ease grid expansion needs & stabilise prices.
www.bruegel.org/first-glance...
🆕 The EU needs to address its energy information problem. Information is not available at the level of granularity, reliability and consistency needed for informed decision-making.
With @gzachmann.bsky.social @tagliapietra.bsky.social @bruegel.bsky.social
1/3
www.bruegel.org/policy-brief...
🚨 Exceptionally important paper. Accessible, accurate, and timely data is needed to make informed energy policy decisions.
From my colleagues @bmcwilliams.bsky.social, @gzachmann.bsky.social, and @tagliapietra.bsky.social.
www.bruegel.org/policy-brief...
The challenge isn’t just spending more on grids—it’s also about spending smarter. Independent planning, innovative regulation, and fair cost distribution will determine if Europe efficiently delivers an grid ready for net-zero.
Full policy brief: www.bruegel.org/policy-brief...
Fair cost recovery ⚖️
Electricity affordability is required to ensure public support. National funds could smooth cost recovery over time. However, common EU rules should be applied to avoid preferential treatment for national industries. See figure for a sketch of how such state funds could work.
Cross-border transmission 🔗
More interconnection = better renewable integration + lower costs, BUT, the people paying aren’t always the ones benefiting.
Expanding EU funding to address cross-border distributional issues could speed up strategic project deployment.
Regulation 📜
Network regulation should encourage network companies to invest in the most efficient solutions.
Current regulatory approaches may favour traditional capital expenditure, potentially missing innovative operational solutions.
Independent planning 📊
Proper investment needs assessment is a prerequisite for efficient spending.
Local and national level planning should be complemented by independent pan-EU assessments.
First-best solution would be for an EU Independent System Operator (ISO) to perform such assessments.
Network layers 🔌
The majority of grid investment will happen at the distribution layer, although transmission, offshore and cross-border are still significant. Appropriate financing sources and cost recovery approaches depend on the network type.
Investment needs and current levels 💰
While huge grid investment over a sustained period is required, tens of billions of euros are flowing into electricity transmission and distribution in the EU and neighbouring countries.
🚨 Europe needs massive investments in electricity grids—but money alone won’t be enough.
Our new paper with @gzachmann.bsky.social for @bruegel.bsky.social discusses the bigger picture. Scroll on for our key points 🧵⬇️
A screenshot from the report reading: "The transmission grids of most neighbouring European countries are interconnected. There are 30 transmission system operators (TSOs) 4 in the EU and several thousand distribution system operators (DSOs). Electricity-distribution grids account for most electricity-grid infrastructure and this is reflected in asset values. For example, the grid operated by the largest French DSO, ENEDIS, is worth €54 billion, while the asset base of French TSO RTE is €17 billion (S&P Global Ratings, 2024). The returns earned by TSOs and DSOs and their investment incentives are determined by national regulators, with each EU country taking a distinct regulatory approach. "
An eye-opening stat from the recent @bruegel.bsky.social report on European grids.
The value of the French DSO's assets are over three times those of the French TSO 🤯
Great work by @cheussaff.bsky.social.
www.bruegel.org/policy-brief...
DYK #EnergySky?
Germany has 873 mostly city-owned DSOs?
Spain is next at 365 mostly private DSOs.
Poland has 185 mostly public (national) DSOs.
From a great report on EU grid investment by @cheussaff.bsky.social and @gzachmann.bsky.social at @bruegel.bsky.social
www.bruegel.org/policy-brief...
🆕 Policy Brief @bruegel.bsky.social with @gzachmann.bsky.social on upgrading Europe's grid.
A few key messages:
- big share of investment needs at distribution level
- cost recovery of investments is as challenging as financing
- EU funds should further accelerate cross border inter connections
The anti-climate backlash seems to be in full swing. The EU (and its member states) are poorly prepared because the EU ETS2, the linchpin of the Green Deal (in terms of emissions reduction potential), covers sectors (transport and buildings) with visible and
www.politico.eu/article/lets...
ETS 2 – carbon pricing for transport and buildings – is critical for EU climate policy, but it must be carefully managed to protect vulnerable citizens and maintain support for the transition.
Glad to be quoted in Correctiv's reporting on this important issue: correctiv.org/en/europe/20...
