EU draft shows plan for more fixed-price electricity contracts


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EU Electricity Market Reform advances two-way CfDs, PPAs, and fixed-price tariffs to cut volatility, support renewables and nuclear, stabilize investor revenues, and protect consumers from price spikes across wholesale power markets.

 

Key Points

An EU plan expanding two-way CfDs, PPAs, and fixed-price contracts to curb price swings and support low-carbon power.

✅ Two-way CfDs return excess revenues to consumers

✅ Boosts PPAs and fixed-price retail options

✅ Targets renewables, nuclear; limits fossil exposure

 

The European Union wants to expand the use of contracts that pay power plants a fixed price for electricity, a draft proposal showed, as part of an electricity market revamp to shield European consumers from big price swings.

The European Commission pledged last year to reform the EU's electricity market rules, after record-high gas prices, caused by cuts to Russian flows, sent power prices soaring, prompting debates over gas price cap strategies in response.

A draft of the EU executive's proposal, seen by Reuters on Tuesday and due to be published on Mar. 16, steered clear of the deep redesign of the electricity market that some member states have called for, even as nine EU countries opposed sweeping reforms as a fix earlier in the crisis, suggesting instead limited changes to nudge countries towards more predictable, fixed-price power contracts.

If EU countries want to support new investments in wind, solar, geothermal, hydropower and nuclear electricity, for example - a point over which France and Germany have wrestled - they should use a two-way contract for difference (CfD) or an equivalent contract, the draft said.

The aim is to provide a stable revenue stream to investors, and help make consumers' energy bills less volatile, even though rolling back electricity prices is tougher than it appears. Restricting this support to renewable and low-carbon electricity also aims to speed up Europe's shift away from fossil fuels.

Two-way CfDs offer generators a fixed "strike price" for their electricity, regardless of the price in short-term energy markets. If the market price is above the CfD strike price, then the extra revenue the generator receives should be handed out to final electricity consumers, the draft EU document said.

Countries should also make it easier for power buyers to sign power purchase agreements (PPA) - another type of long-term contract to directly buy electricity from a generator.

Governments should also make sure consumers have access to fixed-price electricity contracts - echoing France's new electricity pricing scheme to reassure Brussels - giving them the option to avoid a contract that would expose them to volatile prices swings in energy markets, the draft said.

If European energy prices were to spike to extreme levels again, the Commission suggested allowing national governments to temporarily intervene to fix prices while weighing emergency measures to limit prices where needed, and offer consumers and small businesses a share of their electricity at a lower price.

 

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Clocks are running slow across Europe because of an argument over who pays the electricity bill

European Grid Frequency Clock Slowdown has made appliance clocks run minutes behind as AC frequency drifts on the 50 Hz electricity grid, driven by a Kosovo-Serbia billing dispute and ENTSO-E monitored supply-demand imbalance.

 

Key Points

An EU-wide timing error where 50 Hz AC deviations slow appliance clocks due to Kosovo-Serbia grid imbalances.

✅ Clocks drifted up to six minutes across interconnected Europe

✅ Cause: unpaid power in N. Kosovo, contested by Serbia

✅ ENTSO-E reported 50 Hz deviations from supply-demand mismatch

 

Over the past couple of months, Europeans have noticed time slipping away from them. It’s not just their imaginations: all across the continent, clocks built into home appliances like ovens, microwaves, and coffee makers have been running up to six minutes slow. The unlikely cause? A dispute between Kosovo and Serbia over who pays the electricity bill.

To make sense of all this, you need to know that the clocks in many household devices use the frequency of electricity to keep time. Electric power is delivered to our homes in the form of an alternating current, where the direction of the flow of electricity switches back and forth many times a second. (How this system came to be established is complex, but the advantage is that it allows electricity to be transmitted efficiently.) In Europe, this frequency is 50 Hertz — meaning a current alternating of 50 times a second. In America, it’s 60 Hz, and during peak summer demand utilities often prepare for blackouts as heat drives loads higher.

Since the 1930s, manufacturers have taken advantage of this feature to keep time. Each clock needs a metronome — something with a consistent rhythm that helps space out each second — and an alternating current provides one, saving the cost of extra components. Customers simply set the time on their oven or microwave once, and the frequency keeps it precise.

At least, that’s the theory. But because this timekeeping method is reliant on electrical frequency, when the frequency changes, so do the clocks. That is what has been happening in Europe.

The news was announced this week by ENTSO-E, the agency that oversees the single, huge electricity grid connecting 25 European countries and which recently synchronized with Ukraine to bolster regional resilience. It said that variations in the frequency of the AC caused by imbalances between supply and demand on the grid have been messing with the clocks. The imbalance is itself caused by a political argument between Serbia and Kosovo. “This is a very sensitive dispute that materializes in the energy issues,” Susanne Nies, a spokesperson for ENTSO-E, told The Verge.

Essentially, after Kosovo declared independence from Serbia in 2008, there were long negotiations over custody of utilities like telecoms and electricity infrastructure. As part of the ongoing agreements (Serbia still does not recognize Kosovo as a sovereign state), four Serb-majority districts in the north of Kosovo stopped paying for electricity. Kosovo initially covered this by charging the rest of the country more, but last December, it decided it had had enough and stopped paying. This led to an imbalance: the Kosovan districts were still using electricity, but no one was paying to put it on the grid.

This might sound weird, but it’s because electricity grids work on a system of supply and demand, where surging consumption has even triggered a Nordic grid blockade in response to constrained flows. As Stewart Larque of the UK’s National Grid explains, you want to keep the same amount of electricity going onto the grid from power stations as the amount being taken off by homes and businesses. “Think of it like driving a car up a hill at a constant speed,” Larque told The Verge. “You need to carefully balance acceleration with gravity.” (The UK itself has not been affected by these variations because it runs its own grid.)

 

“THEY ARE FREE-RIDING ON THE SYSTEM.”

This balancing act is hugely complex and requires constant monitoring of supply and demand and communication between electricity companies across Europe, and growing cyber risks have spurred a renewed focus on protecting the U.S. power grid among operators worldwide. The dispute between Kosovo and Serbia, though, has put this system out of whack, as the two governments have been refusing to acknowledge what the other is doing.

“The Serbians [in Kosovo] have, according to our sources, not been paying for their electricity. So they are free-riding on the system,” says Nies.

The dispute came to a temporary resolution on Tuesday, when the Kosovan government stepped up to the plate and agreed to pay a fee of €1 million for the electricity used by the Serb-majority municipalities. “It is a temporary decision but as such saves our network functionality,” said Kosovo’s prime minister Ramush Haradinaj. In the longer term, though, a new agreement will need to be reached.

There have been rumors that the increase in demand from northern Kosovo was caused by cryptocurrency miners moving into the area to take advantage of the free electricity. But according to ENTSO-E, this is not the case. “It is absolutely unrelated to cryptocurrency,” Nies told The Verge. “There’s a lot of speculation about this, and it’s absolutely unrelated.” Representatives of Serbia’s power operator, EMS, refused to answer questions on this.

For now, “Kosovo is in balance again,” says Nies. “They are producing enough [electricity] to supply the population. The next step is to take the system back to normal, which will take several weeks.” In other words, time will return to normal for Europeans — if they remember to change their clocks, even as the U.S. power grid sees more blackouts than other developed nations.

 

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'Net Zero' Emissions Targets Not Possible Without Multiple New Nuclear Power Stations, Say Industry Leaders

UK Nuclear Power Expansion is vital for low-carbon baseload, energy security, and Net Zero, complementing renewables like wind and solar, reducing gas reliance, and unlocking investment through clear financing rules and proven, dependable reactor technology.

 

Key Points

Accelerating reactor build-out for low-carbon baseload to boost energy security and help deliver the UK Net Zero target.

✅ Cuts gas dependence and stabilizes grids with firm capacity.

✅ Complements wind and solar for reliable, low-carbon supply.

✅ Needs clear financing to unlock investment and lower costs.

 

Leading nuclear industry figures will today call for a major programme of new power stations to hit ambitious emissions reduction targets.

The 19th Nuclear Industry Association annual conference in London will highlight the need for a proven, dependable source of low carbon electricity generation alongside growth in weather-dependent solar and wind power, and particularly the rapid expansion of wind and solar generation across the UK.

Without this, they argue, the country risks embedding a major reliance on carbon-emitting gas fired power stations as Europe loses nuclear capacity at a critical time for energy security for generations to come.

Annual public opinion polling released today to coincide with the conference revealed 75% of the population want the UK Government to take more action to reduce CO2 emissions.

The survey, conducted by YouGov in October 2019, has tracked opinion trends on nuclear for more than a decade. It shows continued and consistent public support for an energy mix including nuclear and renewables, with 72% of respondents agreeing this was needed to ensure a reliable supply of electricity.

Nuclear power was also perceived as the most secure energy source for keeping the lights on, compared to other sources such as oil, gas, coal, wind power, fracking and solar power.

Last month both the Labour and Conservative Parties committed to new nuclear power as part of their election Manifestos and the government's wider green industrial revolution plans for clean growth. At the same time, 27 leading figures in the fields of environment, energy, and industry signed an open letter addressed to parliamentary candidates, which set out the benefits of nuclear and underscored the consequences of not, at least, replacing the UK's current fleet of power stations.

The Nuclear Industry Association said there is no time to be lost in clarifying the ambition and the financing rules for new nuclear power which would bring down costs and unlock a major programme of investment.

Tom Greatrex, Chief Executive of the NIA, said "We have to grow the industry's contribution to a low carbon economy. The independent Committee on Climate Change said earlier this year that we need a variety of technologies including nuclear power/1 for net zero to reach the UK's Net Zero emissions target by 2050".

"This is a proven, dependable, technology with lower lifecycle CO2 emissions than solar power and the same as offshore wind/2. It is also an important economic engine for the UK, supporting uses beyond electricity and creating high quality direct and indirect employment for around 155,000 people."

"Right now nuclear provides 20%/3 of all the UK's electricity but all but one of our existing fleet will close over the next decade, amid the debate over nuclear's decline as power demand will only increase with a shift to electric heating and vehicles."

"The countries and regions which have most successfully decarbonised, like Sweden, France and Ontario in Canada, have done so by relying on nuclear, aligning with Canada's climate goals for affordable, safe power today. You are not serious about tackling climate change if you are not serious about nuclear".

 

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Hydro One crews restore power to more than 277,000 customers following damaging storms in Ontario

Hydro One Power Restoration showcases outage recovery after a severe windstorm, with crews repairing downed power lines, broken poles and crossarms, partnering with utilities and contractors to boost grid resilience and promote emergency kit preparedness.

 

Key Points

A coordinated response by Hydro One and partners to repair storm damage, restore outages, strengthen grid resilience.

✅ Crews repaired downed lines, broken poles, and crossarms

✅ Partners and contractors aided rapid outage restoration

✅ Investments improve grid resilience and emergency readiness

 

Hydro One crews have restored power to more than 277,000 customers following back-to-back storms, with impacts felt in communities like Sudbury where local crews worked to reconnect service, including a damaging windstorm on that caused 57 broken poles, 27 broken crossarms, as well as downed power lines and fallen trees on lines. Hydro One crews restored power to more than 140,000 customers within 24 hours of Friday's windstorm, even as Toronto outages persisted for some customers elsewhere.

'We understand power outages bring life to a halt, which is why we are continuously improving our storm response, as employee COVID-19 support demonstrated, while making smart investments in a resilient, reliable and sustainable electricity system to energize life for families, businesses and communities for years to come,' said David Lebeter, Chief Operating Officer, Hydro One. 'We thank our customers for their patience as our crews worked tirelessly, alongside our utility partners and contractors, including Ontario crews in Florida, to restore power as quickly and as safely as possible.'

Hydro One thanks all of its utility partners and contractors who assisted with restoration efforts following the windstorm (alongside similar Quebec outages that highlighted the broader impact), including Durham High Voltage, EPCOR, ERTH Power, K-Line Construction Ltd., Lakeland Power Distribution Ltd., North Bay Hydro, Sproule Powerline Construction Ltd. and Valard Construction.

Hydro One encourages customers to restock their emergency kits following these storms, which utilities such as BC Hydro have also characterized as atypical, and to be aware of support programs like our pandemic relief fund that can help during difficult periods, to ensure they're prepared for an emergency or extended power outage.

 

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By Land and Sea, Clean Electricity Needs to Lead the Way

Martha's Vineyard 100% Renewable Energy advances electrification across EVs, heat pumps, distributed solar, offshore wind, microgrids, and battery storage, cutting emissions, boosting efficiency, and strengthening grid resilience for storms and sea-level rise.

 

Key Points

It is an islandwide plan to electrify transport and buildings using wind, solar, storage, and a modern resilient grid.

✅ Electrify transport: EV adoption and SSA hybrid-electric ferries.

✅ Deploy heat pumps for efficient heating and cooling in buildings.

✅ Modernize the grid: distributed solar, batteries, microgrids, VPP.

 

Over the past year, it has become increasingly clear that climate change is accelerating. Here in coastal New England, annual temperatures and precipitation have risen more quickly than expected, tidal flooding is now commonplace, and storms have increased in frequency and intensity. The window for avoiding the worst consequences of a climate-changed planet is closing.

At their recent special town meeting, Oak Bluffs citizens voted to approve the 100 per cent renewable Martha’s Vineyard warrant article; now, all six towns have adopted the same goals for fossil fuel reduction and green electricity over the next two decades. Establishing these targets for the adoption of renewable energy, though, is only an initial step. Town and regional master plans for energy transformation are being developed, but this is a whole-community effort as well. Now is the time for action.

There is much to do to combat climate change, but our most important task is to transition our energy system from one heavily dependent on fossil fuels to one that is based on clean electricity. The good news is that this can be accomplished with currently available technology, and can be done in an economically efficient manner.

Electrification not only significantly lowers greenhouse gas emissions, but also is a powerful energy efficiency measure. So even though our detailed Island energy model indicates that eliminating all (or almost all) fossil fuel use will mean our electricity use will more than double, posing challenges for state power grids in some regions, our overall annual energy consumption will be significantly lower.

So what do we specifically need to do?

The primary targets for electrification are transportation (roughly 60 peer cent of current fossil fuel use on Martha’s Vineyard) and building heating and cooling (40 per cent).

Over the past two years, the increase in the number of electric vehicle models available across a wide range of price points has been remarkable — sedans, SUVs, crossovers, pickup trucks, even transit vans. When rebates and tax credits are considered, they are affordable. Range anxiety is being addressed both by increases in vehicle performance and the growing availability of charging locations (other than at home, which will be the predominant place for Islanders to refuel) and, over time, enable vehicle-to-grid support for our local system. An EV purchase should be something everyone should seriously consider when replacing a current fossil vehicle.

The elephant in the transportation sector room is the Steamship Authority. The SSA today uses roughly 10 per cent of the fossil fuel attributable to Martha’s Vineyard, largely but not totally in the ferries. The technology needed for fully electric short-haul vessels has been under development in Scandinavia for a number of years and fully electric ferries are in operation there. A conservative approach for the SSA would be to design new boats to be hybrid diesel-electric, retrofittable to plug-in hybrids to allow for shoreside charging infrastructure to be planned and deployed. Plug-in hybrid propulsion could result in a significant reduction in emissions — perhaps as much as 95 per cent, per the long-range plan for the Washington State ferries. While the SSA has contracted for an alternative fuel study for its next boat, given the long life of the vessels, an electrification master plan is needed soon.

For building heating and cooling, the answer for electrification is heat pumps, both for new construction and retrofits. These devices move heat from outside to inside (in the winter) or inside to outside (summer), and are increasingly integrated into connected home energy systems for smarter control. They are also remarkably efficient (at least three times more efficient than burning oil or propane), and today’s technology allows their operation even in sub-zero outside temperatures. Energy costs for electric heating via heat pumps on the Vineyard are significantly below either oil or propane, and up-front costs are comparable for new construction. For new construction and when replacing an existing system, heat pumps are the smart choice, and air conditioning for the increasingly hot summers comes with the package.

A frequent objection to electrification is that fossil-fueled generation emits greenhouse gases — thus a so-called green grid is required in order to meet our targets. The renewable energy fraction of our grid-supplied electricity is today about 30 per cent; by 2030, under current legislation that fraction will reach 54 per cent, and by 2040, 77 per cent. Proposed legislation will bring us even closer to our 2040 goals. The Vineyard Wind project will strongly contribute to the greening of our electricity supply, and our local solar generation (almost 10 per cent of our overall electricity use at this point) is non-negligible.

A final important facet of our energy system transformation is resilience. We are dependent today on our electricity supply, and this dependence will grow. As we navigate the challenges of climate change, with increasingly more frequent and more serious storms, 2021 electricity lessons underscore that resilience of electricity supply is of paramount importance. In many ways, today’s electricity distribution system is basically the same approach developed by Edison in the late 19th century. In partnership with our electric utility, we need to modernize the grid to achieve our resiliency goals.

While the full scope of this modernization effort is still being developed, the outline is clear. First, we need to increase the amount of energy generated on-Island — to perhaps 25 per cent of our total electricity use. This will be via distributed energy resources (in the form of distributed solar and battery installations as well as community solar projects) and the application of advanced grid control systems. For emergency critical needs, the concept of local microgrids that are detachable from the main grid when that grid suffers an outage are an approach that is technically sound and being deployed elsewhere. Grid coordination of distributed resources by the utility allows for handling of peak power demand; in the early 2030s this could result in what is known as a virtual power plant on the Island.

The adoption of the 100 renewable Martha’s Vineyard warrant articles is an important milestone for our community. While the global and national efforts in the climate crisis may sometimes seem fraught, we can take some considerable pride in what we have accomplished so far and will accomplish in coming years. As with many change efforts, the old catch-phrase applies: think globally, act locally.
 

 

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Daimler Details Gigantic Scope of Its Electrification Plan

Daimler Electric Strategy drives EV adoption with global battery factories, Mercedes-Benz electrified models, battery cells procurement, and major investments spanning vans, buses, trucks, and production capacity across Europe, Asia, and the USA.

 

Key Points

Daimler Electric Strategy is a multi-billion EV roadmap for batteries, factories, and 130 electrified Mercedes models.

✅ Eight battery factories across three continents

✅ EUR 10B for EV lineup; EUR 20B for battery cells

✅ 130 electrified variants plus vans, buses, trucks

 

Throughout 2018, we all witnessed the unprecedented volume of promises for a better future made by the giants of the auto industry. All say they've committed billions so that, within a decade, combustion engines will be on their way out.

The most active of all companies when talking about promises is Volkswagen, which, amid German plant closures, time and time again has said it will do this or that and completely change the meaning of car in the coming years. But there are other planning the same thing, possibly with even vaster resources.

Planning to end the year on a high note, Daimler detailed its plan for the electric future once again on Tuesday, this time making no secret of its gigantic size and scope.

As announced before, Daimler plans to build electric cars, but also manufacture electric batteries for its own and others’ use, and has launched a US energy storage company to support this strategy. These batteries will eventually be produced by Daimler in eight factories on three continents.

Batteries are already rolling off the lines in Kamenz, and a second facility will begin doing so next year. Two more factories will be built in Stuttgart-Untertürkheim, one at the company’s Sindelfingen site, and one each at the sites in Beijing (China), Bangkok (Thailand) and Tuscaloosa (USA).

In all, one billion EUR will be invested in the expansion of the global battery production network, but that is nothing compared to the 10 billion to be poured into the expansion of the Mercedes-Benz car fleet.

On top of that, 20 billion EUR will go towards the purchase of battery cells from producers all around the world, echoing other automakers' battery sourcing strategies worldwide over the next 12 years.

“After investing billions of euros in the development of the electric fleet and the expansion of our global battery network, we are now taking the next step,” said in a statement Dieter Zetsche, Daimler chairman of the board.

“With the purchase of battery cells for more than 20 billion euros, we are systematically pushing forward with the transformation into the electric future of our company.”

By 2022, the carmaker plans to launch 130 electrified variants of its cars, as cheaper, more powerful batteries become available, adding to them electric vans, buses and trucks. That pretty much means all the models and variants sold by Daimler globally will be at least partially powered by electricity.

 

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Climate change: Greenhouse gas concentrations again break records

Rising Greenhouse Gas Concentrations drive climate change, with CO2, methane, and nitrous oxide surging; WMO data show higher radiative forcing, elevated pre-industrial baselines, and persistent atmospheric concentrations despite Paris Agreement emissions pledges.

 

Key Points

Increasing atmospheric CO2, methane, and nitrous oxide levels that raise radiative forcing and drive warming.

✅ WMO data show CO2 at 407.8 ppm in 2018, above decade average

✅ Methane and nitrous oxide surged, elevating total radiative forcing

✅ Concentrations differ from emissions; sinks absorb about half

 

The World Meteorological Organization (WMO) says the increase in CO2 was just above the average rise recorded over the last decade.

Levels of other warming gases, such as methane and nitrous oxide, have also surged by above average amounts.

Since 1990 there's been an increase of 43% in the warming effect on the climate of long lived greenhouse gases.

The WMO report looks at concentrations of warming gases in the atmosphere rather than just emissions.

The difference between the two is that emissions refer to the amount of gases that go up into the atmosphere from the use of fossil fuels, such as burning coal for coal-fired electricity generation and from deforestation.

Concentrations are what's left in the air after a complex series of interactions between the atmosphere, the oceans, the forests and the land. About a quarter of all carbon emissions are absorbed by the seas, and a similar amount by land and trees, while technologies like carbon capture are being explored to remove CO2.

Using data from monitoring stations in the Arctic and all over the world, researchers say that in 2018 concentrations of CO2 reached 407.8 parts per million (ppm), up from 405.5ppm a year previously.

This increase was above the average for the last 10 years and is 147% of the "pre-industrial" level in 1750.

The WMO also records concentrations of other warming gases, including methane and nitrous oxide, and some countries have reported declines in certain potent gases, as noted in US greenhouse gas controls reports, though global levels remain elevated. About 40% of the methane emitted into the air comes from natural sources, such as wetlands, with 60% from human activities, including cattle farming, rice cultivation and landfill dumps.

Methane is now at 259% of the pre-industrial level and the increase seen over the past year was higher than both the previous annual rate and the average over the past 10 years.

Nitrous oxide is emitted from natural and human sources, including from the oceans and from fertiliser-use in farming. According to the WMO, it is now at 123% of the levels that existed in 1750.

Last year's increase in concentrations of the gas, which can also harm the ozone layer, was bigger than the previous 12 months and higher than the average of the past decade.

What concerns scientists is the overall warming impact of all these increasing concentrations. Known as total radiative forcing, this effect has increased by 43% since 1990, and is not showing any indication of stopping.

There is no sign of a slowdown, let alone a decline, in greenhouse gases concentration in the atmosphere despite all the commitments under the Paris agreement on climate change and the ongoing global energy transition efforts," said WMO Secretary-General Petteri Taalas.

"We need to translate the commitments into action and increase the level of ambition for the sake of the future welfare of mankind," he added.

"It is worth recalling that the last time the Earth experienced a comparable concentration of CO2 was three to five million years ago. Back then, the temperature was 2-3C warmer, sea level was 10-20m higher than now," said Mr Taalas.

The UN Environment Programme will report shortly on the gap between what actions countries are taking to cut carbon, for example where Australia's emissions rose 2% recently, and what needs to be done to keep under the temperature targets agreed in the Paris climate pact.

Preliminary findings from this study, published during the UN Secretary General's special climate summit last September, indicated that emissions continued to rise during 2018, although global emissions flatlined in 2019 according to the IEA.

Both reports will help inform delegates from almost 200 countries who will meet in Madrid next week for COP25, following COP24 in Katowice the previous year, the annual round of international climate talks.

 

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