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On 6 October 2022, the Council of the European Union adopted a Regulation on an emergency intervention to address high energy prices (the “Regulation”).  The Regulation was published in the Official Journal of the European Union on 7 October. The Regulation has three main elements:

  1. A requirement to reduce electricity consumption by 5% in peak hours;
  2. A measure to return the excess revenues or profits of energy companies to the individual Member States; and
  3. The allocation of proceeds to customers to alleviate retail electricity prices and an extension to Small and Medium-sized Enterprises (SMEs) of the categories of beneficiaries of a possible Member State intervention in the retail price.

The Regulation’s market intervention is exceptional (albeit in response to an extraordinary geopolitical market disruption).  It will have widespread positive and negative impacts for energy market sellers and buyers.  These circumstances may provoke a range of disputes, transaction (re)structurings or additional compliance obligations that will require expert advice and understanding of the details of the Regulation.…

Continue Reading EU Emergency Action on Energy

On 30 May 2022, the European Union (“EU”) adopted the revised Regulation on guidelines for trans-European energy infrastructure (No. 2022/869) (the “TEN-E Regulation 2022”), which replaces the previous rules laid down in Regulation No. 347/2013 (the “TEN-E Regulation 2013”) that aimed to improve security of supply, market integration, competition and sustainability in the energy sector. The TEN-E Regulation 2022 seeks to better support the modernisation of Europe’s cross-border energy infrastructures and the EU Green Deal objectives.

The three most important things you need to know about the TEN-E Regulation 2022:

  • Projects may qualify as Projects of Common Interest (“PCI”) and be selected on an EU list if (i) they fall within the identified priority corridors and (ii) help achieve EU’s overall energy and climate policy objectives in terms of security of supply and decarbonisation. The TEN-E Regulation 2022 updates its priority corridors to address the EU Green Deal objectives, while extending their scope to include projects connecting the EU with third countries, namely Projects of Mutual Interest (“PMI”).
  • PCIs and PMIs on the EU list must be given priority status to ensure rapid administrative and judicial treatment.
  • PCIs and PMIs will be eligible for EU financial assistance. Member States will also be able to grant financial support subject to State aid rules.

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Continue Reading The European Union Adopted New Rules for the Trans-European Networks for Energy

As the world struggles to adjust to the harsh new reality of Russia’s invasion of Ukraine, the most recent instalment of the Sixth IPCC Report slipped out almost unnoticed.  And that is worrying, since the assessment in this section of the Report is even starker than previous assessments – noting in particular that in order to avoid global temperatures increasing by greater than 1.5 degrees C above preindustrial levels, the world needs to halve its emissions this decade: a reduction that the world does not currently appear to be remotely on course to do.

However, whilst the IPCC Report and the Russian invasion of Ukraine are not linked, Russian aggression in Ukraine may serve as a catalyst to speed up the European energy transition and accelerate its retreat from dependency on Russian gas and exposure to volatile international oil markets, which could in turn deliver a more rapid reduction in European emissions.  In the process, perhaps setting the world on a path to achieving an outcome that currently seems unattainable.…

Continue Reading The IPCC and The Ukraine Crisis

Two federal agencies recently released a joint Request for Information (“RFI”) in the latest in a series of concrete steps to meet the Biden Administration’s goal to achieve 100 percent carbon pollution-free electricity (CFE)[1] in federal operations by 2030.  The RFI, issued by DLA-Energy and GSA, offers industry a chance to shape future federal CFE procurements by providing information on carbon-free electricity supplied in competitive retail markets.  Although not itself a procurement opportunity, the information submitted under the RFI will inform the parameters and conditions of CFE competitions that the federal government expects to begin as soon as this year, with contract deliveries starting in 2023.
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Continue Reading RFI Begins to Chart Course for Federal Clean Energy Procurements

On June 17, FERC took two actions intended to facilitate greater coordination with and between state regulators on electric transmission policy and development.  First, FERC issued an order establishing a Joint Federal-State Task Force on Electric Transmission (Task Force), and soliciting nominations for state commission representation on the Task Force from the National Association of Regulatory Utility Commissioners (NARUC). According to FERC’s order, the Task Force will focus on topics related to efficiently and fairly planning and paying for transmission, including generator interconnection, that provide benefits from a federal and state perspective. If successful, the Task Force could play a critical role in re-designing FERC’s interstate transmission policy to better accommodate the state-policy-driven development of renewable energy generation facilities across the country. …
Continue Reading FERC Establishes Unprecedented Joint Federal-State Task Force on Electric Transmission, Issues Policy Statement on State Voluntary Agreements

The European Commission has presented a package of key enabling legislation on sustainable finance (the “Sustainable Finance Package”).  This includes the much-awaited first technical screening criteria under the Taxonomy Regulation — outlined in the Taxonomy Climate Delegated Act (“TCDA”) — and a proposal for a Corporate Sustainability Reporting Directive (“CSRD”), which significantly revises and expands on the existing Non-Financial Reporting Directive’s remit and disclosure rules for corporates. While the former is directly aimed at financial institutions and investors, and the latter at large and listed entities, the package has broader implications for all corporates.

Sustainable Finance Package: Context and Comment

The Commission’s intention with its Sustainable Finance Package is twofold: (1) in the short term, to set a clear regulatory framework to encourage investments that will contribute to a sustainable and inclusive economic recovery from the COVID-19 pandemic; and (2) in the long term, to ensure the transition to a carbon neutral EU economy by 2050, in accordance with the 2020 European Climate Law.  Following the adoption of the EU Taxonomy Regulation (explained further below), the Sustainable Finance Disclosure Regulation, and the Benchmark Regulation, which enhances the transparency of benchmark methodologies, the Commission has in this legislative package laid out the next building blocks for its envisioned sustainable finance ecosystem.…

Continue Reading The EU’s Green Capitalism Takes Shape: Taxonomy Screening Criteria and Corporate Sustainability Reporting

FERC has opened a proceeding regarding the shift from non-electric to electric sources of energy at the point of final consumption, such as to fuel vehicles and to provide heating and cooling, including process heat at industrial facilities. To that end, FERC announced an April 29, 2021 conference “to initiate a dialog between Commissioners and stakeholders on how to prepare for an increasingly electrified future.”…
Continue Reading FERC to Address Electrification and the Grid of the Future

Recently, the three sitting Commissioners of the Federal Energy Regulatory Commission (FERC) convened thirty industry experts at a virtual Technical Conference on state adoption of carbon pricing and its implementation in organized, wholesale electricity markets managed by regional transmission organizations (RTOs) or independent system operators (ISOs).  Public interest was high, with more than 2,000 computers across the country logged on to the discussion, which stretched over nine hours.  Although no carbon pricing measures have been filed by RTO/ISOs for consideration by FERC, the sense of the Technical Conference was that proposals from states or from RTO/ISOs acting on their own initiative are right around the corner, irrespective of the election outcomes in November.
Continue Reading FERC Takes Close Look at Carbon Pricing

The FERC approved a final rule that will enable distributed energy resource (DER) aggregators to compete in organized wholesale electricity markets.  DERs are located on the distribution system or behind the customer meter and include electric storage resources, intermittent generation, distributed generation, demand response, energy efficiency, thermal storage, and electric vehicles and their charging equipment.  Aggregators will now be able to aggregate multiple small DERs as a single resource to compete in the markets, smoothing the way for many more of such resources to enter the wholesale market. …
Continue Reading FERC Opens Electricity Markets to Distributed Resource Aggregators

The Federal Energy Regulatory Commission (FERC) approved tariff terms for a Regional Transmission Operator (RTO) to treat electric storage resources as transmission facilities under certain circumstances.  Previously, FERC approved only one case-specific proposal to treat storage as transmission.  Treatment as a transmission facility provides additional deployment opportunities for storage resources and allows cost recovery through cost-of service transmission rates instead of relying entirely on energy market revenues.  Commissioner James Danly, however, dissented from the tariff order, preferring to maintain the bright line between generation and transmission previously established by FERC.
Continue Reading Electric Storage May Be Treated as Transmission