27th OCTOBER 2015
GREEN TUESDAY • Data Management • Legislation • Compliance
A Unique Perspective
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A Unique Perspective | Green Tuesday | 27.10.2015
EU: EU heating strategy draft favours renewables and district heating The European Commission is working on a strategy to reduce energy wasted in heating homes and offices, prompting concern among utilities which fear it will reduce their power sales.
The European Commission is working on a strategy to reduce energy wasted in heating homes and offices
Heating and cooling new directives Early next year, the European Commission plans to formulate recommendations on heating and cooling with a view to update EU energy legislation and possibly draft new directives. In five “issue papers�, seen by Reuters, the Commission presents options for a heating and cooling policy more focused on renewable energy and district heating systems that bring hot water into homes via underground pipelines. The papers state that the use of renewables in heating should be reinforced with public investment, public procurement and tax measures to stimulate the development of markets. Choices between electricity or gas, between more efficient heaters or better insulation, and between individual or collective heat production could have a major impact on the business models of EU energy firms. Big power suppliers are already struggling with the switch to renewable energy, fear that more renewables in heating and a change to collective heating will further cut down on power demand. Heating and, to a lesser degree, cooling account for around 40% of European Union energy consumption, but are only indirectly targeted by existing EU policies, which focus more on power production with renewable energy. Renewable energy already accounts for 26% of electricity production in the European Union but just 16.4% of heating and cooling.
the Commission presents options for a heating and cooling policy more focused on renewable energy and district heating systems that bring hot water into homes via underground pipelines
Heating and cooling account for around 40% of European Union energy consumption
The European Commission will publish its heating and cooling strategy in February 2016.
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A Unique Perspective | Green Tuesday | 27.10.2015
Europe’s heat demand depends on the population density The European Commission estimates that half of Europe’s heat demand is in areas where population density is high enough for district heating infrastructure, which would be more efficient than alternatives and could cover 40% to 70% of EU heat demand.
The EC estimates that half of Europe’s heat demand is in areas where population density is high enough for district heating infrastructure
District heating systems are regularly run by local authorities and use biomassfired or gas- cogeneration plants that produce both power and heat close to residential areas, reducing the need for central power production and heavy power grids. In less dense areas, electric heat pumps - which upgrade heat from air or ground water - and other new technologies offer the most energy savings for individual houses. The papers also highlight the efficiency of “Combined Heat and Power” (CHP), or cogeneration, which produces heat and electricity in the same plant and is widespread in Scandinavia.
In less dense areas, electric heat pumps and other new technologies offer the most energy savings for individual houses
The change to district heating would be a huge change for most of Western Europe, where households mainly rely on individual gas-fired boilers for hot water and space heating. In coming weeks, trade groups and country representatives will lobby the European Commission to try to steer the drafting of the communication, which will be a first step towards integrating heating and cooling into the energy legislation for EU.
In coming weeks, trade groups and country representatives will lobby the European Commission
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A Unique Perspective | Green Tuesday | 27.10.2015
UK: The Office of Gas and Electricity Markets (OFGEM) warning on market abuse in power and gas markets
OFGEM published an open letter highlighting market manipulation and insider dealing concerns
On 8 September 2015, days after the Financial Conduct Authority (FCA) published the findings of its review, the UK energy regulator OFGEM published an open letter highlighting market manipulation and insider dealing concerns arising from its monitoring of compliance with the EU Regulation on Wholesale Energy Market Integrity and Transparency (REMIT). OFGEM identified various market behaviours it had witnessed as likely to be or potentially manipulative, including: • Layering; • Marking the close; • Pre-arranged trading; • Submitting small bids ahead of large offers (or vice versa). OFGEM also raised concerns as to the confidentiality of inside information, especially information regarding the availability of assets, pending required disclosure, the timeliness of such disclosures, and the methodologies used to identify inside information. The letter concludes with a reminder of OFGEM’s powers to deal with breaches of REMIT – which include criminal prosecution powers since April 2015.
OFGEM also raised concerns as to the confidentiality of inside information
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