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FERC rules aim to curb utility 'cash pool' abuses

WASHINGTON -- The Federal Energy Regulatory Commission recently finalized rules that would prevent distressed electric utilities from raiding their affiliates for cash by requiring them to give notice if their capitalization drops below 30 percent.

Reacting to abuses by bankrupt energy trader Enron Corp. and others, FERC is cracking down on the way utilities move money from parent to subsidiary units through so-called "cash pool" programs.

FERC's finalized rules require utilities to give notice if their capitalization drops below 30 percent, and when it rises above that level. The agency is trying to prevent financially weak utilities from improperly draining cash from their subsidiaries.

FERC proposed the rules in August 2002 after completing an investigation that found that Enron improperly borrowed about $1 billion from two of its pipeline affiliates before it filed for bankruptcy in December 2001.

"We just had no idea how much of this cash was being swept up into the holding companies and therefore would be potentially unreachable in the event of a bankruptcy," FERC Chairman Pat Wood said.

FERC has withdrawn a prior proposal that would have required utilities to maintain a 30 percent capitalization to participate in cash management programs.

Utilities say the cash pools are helpful because they allow subsidiaries to benefit from a parent firm's access to lower-cost funds and avoid higher borrowing costs. Chicago-based Exelon Corp. , one of the nation's largest utilities, had warned the 30 percent barrier sends improper signals to investors that the utility is financially weak.

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GM president: Electric cars won't go mainstream until we fix these problems

Electric Vehicle Adoption Barriers include range anxiety, charging infrastructure, and cost parity; consumer demand, tax credits, lithium-ion batteries, and performance benefits are accelerating EV uptake, pushing SUVs and self-driving tech toward mainstream mobility.

 

Key Points

They are the key hurdles to mainstream EV uptake: range anxiety, sparse charging networks, and high upfront costs.

✅ Range targets of 300+ miles reduce anxiety and match ICE convenience

✅ Expanded home, work, and public charging speeds adoption

✅ Falling battery costs and incentives drive price parity

 

The automotive industry is hurtling toward a future that will change transportation the same way electricity changed how we light the world. Electric and self-driving vehicles will alter the automotive landscape forever — it's only a question of how soon, and whether the age of electric cars arrives ahead of schedule.

Like any revolution, this one will be created by market demand.
Beyond the environmental benefit, electric vehicle owners enjoy the performance, quiet operation, robust acceleration, style and interior space. And EV owners like not having to buy gasoline. We believe the majority of these customers will stay loyal to electric cars, and U.S. EV sales are soaring into 2024 as this loyalty grows.

But what about non-EV owners? Will they want to buy electric, and is it time to buy an electric car for them yet? About 25 years ago, when we first considered getting into the electric vehicle business with a small car that had about 70 miles of range, the answer was no. But today, the results are far more encouraging.

We recently held consumer clinics in Los Angeles and Chicago and presented people with six SUV choices: three gasoline and three electric. When we asked for their first choice to purchase, 40% of the Chicago respondents chose an electric SUV, and 45% in LA did the same. This is despite a several thousand-dollar premium on the price of the electric models, and despite that EV sales still lag gas cars nationally today, consumer interest was strong (but also before crucial government tax credits that we believe will continue to drive people toward electric vehicles and help fuel market demand).

They had concerns, to be sure. Most people said they want vehicles that can match gasoline-powered vehicles in range, ease of ownership and cost. The sooner we can break down these three critical barriers, the sooner electric cars will become mainstream.

Range
Range is the single biggest barrier to EV acceptance. Just as demand for gas mileage doesn't go down when there are more gas stations, demand for better range won't ease even as charging infrastructure improves. People will still want to drive as long as possible between charges.

Most consumers surveyed during our clinics said they want at least 300 miles of range. And if you look at the market today, which is driven by early adapters, electric cars have hit an inflection point in demand, and the numbers bear that out. The vast majority of electric vehicles sold — almost 90% — are six models with the highest range of 238 miles or more — three Tesla models, the Chevrolet Bolt EV, the Hyundai Kona and the Kia Niro, according to IHS Markit data.

Lithium-ion batteries, which power virtually all electric cars on the road today, are rapidly improving, increasing range with each generation. At GM, we recently announced that our 2020 Chevrolet Bolt EV will have a range of 259 miles, a 21-mile improvement over the previous model. Range will continue to improve across the industry, and range anxiety will dissipate.

Charging infrastructure
Our research also shows that, among those who have considered buying an electric vehicle, but haven't, the lack of charging stations is the number one reason why.

For EVs to gain widespread acceptance, manufacturers, charging companies, industry groups and governments at all levels must work together to make public charging available in as many locations as possible. For example, we are seeing increased partnership activity between manufacturers and charging station companies, as well as construction companies that build large infrastructure projects, as the American EV boom approaches, with the goal of adding thousands of additional public charging stations in the United States.

Private charging stations are just as important. Nearly 80% of electric vehicle owners charge their vehicles at home, and almost 15% at work, with the rest at public stations, our research shows. Therefore, continuing to make charging easy and seamless is vital. To that end, more partnerships with companies that will install the chargers in consumers' homes conveniently and affordably will be a boon for both buyers and sellers.

Cost
Another benefit to EV ownership is a lower cost of operation. Most EV owners report that their average cost of operation is about one-third of what a gasoline-powered car owner pays. But the purchase price is typically significantly higher, and that's where we should see change as each generation of battery technology improves efficiency and reduces cost.

Looking forward, we think electric vehicle propulsion systems will achieve cost parity with internal combustion engines within a decade or sooner, and will only get better after that, driving sticker prices down and widening the appeal to the average consumer. That will be driven by a number of factors, including improvements with each generation of batteries and vehicles, as well as expected increased regulatory costs on gasoline and diesel engines.

Removing these barriers will lead to what I consider the ultimate key to widespread EV adoption — the emergence of the EV as a consumer's primary vehicle — not a single-purpose or secondary vehicle. That will happen when we as an industry are able to offer the utility, cost parity and convenience of today's internal combustion-based cars and trucks.

To get the electric vehicle to first-string status, manufacturers simply must make it as good or better than the cars, trucks and crossovers most people are used to driving today. And we must deliver on our promise of making affordable, appealing EVs in the widest range of sizes and body styles possible. When we do that, electric vehicle adoption and acceptance will be widespread, and it can happen sooner than most people think.

Mark Reuss is president of GM. The opinions expressed in this commentary are his own.

 

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Power bill cut for 22m Thailand houses

Thailand Covid-19 Electricity Bill Relief offers energy subsidies, tariff cuts, and free power for small meters, helping work-from-home users as authorities waive charges and discount kWh rates via EGAT, MEA, PEA for three months.

 

Key Points

Program waiving or cutting household electricity bills for 22 million homes in March-May, easing work-from-home costs.

? Free power for meters <= 5 amps; up to 10M homes

? Up to 800 kWh: pay February rate; above, 50% discount

? >3,000 kWh: 30% discount; program valid March-May

 

The Thailand cabinet has formally approved energy authorities' decision to either waive or cut electricity charges, similar to B.C. electricity relief measures, for 22 million households where people are working at home because of the coronavirus disease.

Energy Minister Sontirat Sontijirawong said after the cabinet meeting on Tuesday that the ministers acknowledged the step taken by from the Energy Regulatory Commission, the Electricity Generating Authority of Thailand, the Metropolitan Electricity Authority and the Provincial Electricity Authority and noted parallels with Ontario's COVID-19 hydro plan rolled out to support ratepayers.

The measure would be valid for three months, from March to May, and cover 22 million households. It would cost the state 23.68 billion baht in lost revenue, he said, a pattern also seen with Ontario rate reductions affecting provincial revenues.


"The measure reduces the electricity charges burden on households. It is the cost of living of the people who are working from home to support the government's control of Covid-19," Mr Sontirat said.

The business sector also wants similar assistance, echoing sentiments from Ontario manufacturers during recent price reduction efforts. He said their requests were being considered.

Free electricity is extended to households with a power meter of no more than 5 amps. Up to 10 million households are expected to benefit, although issues like electricity payment challenges in India highlight different market contexts.

For households with a power meter over 5 amps, if their consumption does not exceed 800 units (kilowat hours), they will pay as much as they did in their February bill. The amount over 800 units will be subject to a 50 per cent discount, while elsewhere B.C. commercial consumption has fallen sharply.

Large houses that consume more than 3,000 units will get a 30 per cent discount, at a time when BC Hydro demand is down 10%.

 

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Ireland: We are the global leaders in taking renewables onto the grid

Ireland 65% Renewable Grid Capability showcases world leading integration of intermittent wind and solar, smart grid flexibility, EU-SysFlex learnings, and the Celtic Interconnector to enhance stability, exports, and energy security across the European grid.

 

Key Points

Ireland can run its isolated power system with 65% variable wind and solar, informing EU grid integration and scaling.

✅ 65% system non-synchronous penetration on an isolated grid

✅ EU-SysFlex roadmap supports large-scale renewables integration

✅ Celtic Interconnector adds 700MW capacity and stability

 

Ireland is now able to cope with 65% of its electricity coming from intermittent electricity sources like wind and solar, as highlighted by Ireland's green electricity outlook today – an expertise Energy Minister Denish Naugthen believes can be replicated on a larger scale as Europe moves towards 50% renewable power by 2030.

Denis Naughten is an Irish politician who serves as Minister for Communications, Climate Action and Environment since May 2016.

Naughten spoke to editor Frédéric Simon on the sidelines of a EURACTIV event in the European  Parliament to mark the launch of EU-SysFlex, an EU-funded project, which aims to create a long-term roadmap for the large-scale integration of renewable energy on electricity grids.

What is the reason for your presence in Brussels today and the main message that you came to deliver?

The reason that I’m here today is that we’re going to share the knowledge what we have developed in Ireland, right across Europe. We are now the global leaders in taking variable renewable electricity like wind and solar onto our grid.

We can take a 65% loading on to the grid today – there is no other isolated grid in the world that can do that. We’re going to get up to 75% by 2020. This is a huge technical challenge for any electricity grid and it’s going to be a problem that is going to grow and grow across Europe, even as Europe's electricity demand rises in the coming years, as we move to 50% renewables onto our grid by 2030.

And our knowledge and understanding can be used to help solve the problems right across Europe. And the sharing of technology can mean that we can make our own grid in Ireland far more robust.

What is the contribution of Ireland when it comes to the debate which is currently taking place in Europe about raising the ambition on renewable energy and make the grid fit for that? What are the main milestones that you see looking ahead for Europe and Ireland?

It is a challenge for Europe to do this, but we’ve done it Ireland. We have been able to take a 65% loading of wind power on our grid, with Irish wind generation hitting records recently, so we can replicate that across Europe.

Yes it is about a much larger scale and yes, we need to work collaboratively together, reflecting common goals for electricity networks worldwide – not just in dealing with the technical solutions that we have in Ireland at the fore of this technology, but also replicating them on a larger scale across Europe.

And I believe we can do that, I believe we can use the learnings that we have developed in Ireland and amplify those to deal with far bigger challenges that we have on the European electricity grid.

Trialogue talks have started at European level about the reform of the electricity market. There is talk about decentralised energy generation coming from small-scale producers. Do you see support from all the member states in doing that? And how do you see the challenges ahead on a political level to get everyone on board on such a vision?

I don’t believe there is a political problem here in relation to this. I think there is unanimity across Europe that we need to support consumers in producing electricity for self-consumption and to be able to either store or put that back into the grid.

The issues here are more technical in nature. And how you support a grid to do that. And who actually pays for that. Ireland is very much a microcosm of the pan-European grid and how we can deal with those challenges.

What we’re doing at the moment in Ireland is looking at a pilot scheme to support consumers to generate their own electricity to meet their own needs and to be able to store that on site.

I think in the years to come a lot of that will be actually done with more battery storage in the form of electric vehicles and people would be able to transport that energy from one location to another as and when it’s needed. In the short term, we’re looking at some novel solutions to support consumers producing their own electricity and meeting their own needs.

So I think this is complex from a technical point of view at the moment, I don’t think there is an unwillingness from a political perspective to do it, and I think working with this particular initiative and other initiatives across Europe, we can crack those technical challenges.

To conclude, last year, the European Commission allocated €4 million to a project to link up the Irish electricity grid to France. How is that going to benefit Ireland? And is that related to worries that you may have over Brexit?

The plan, which is called the Celtic Interconnector, is to link France with the Irish electricity grid. It’s going to have a capacity of about 700MW. It allows us to provide additional stability on our grid and enables us to take more renewables onto the grid. It also allows us to export renewable electricity onto the main European grid as well, and provide stability to the French network.

So it’s a benefit to both individual networks as well as allowing far more renewables onto the grid. We’ve been working quite closely with RTE in France and with both regulators. We’re hoping to get the support of the European Commission to move it now from the design stage onto the construction stage. And I understand discussions are ongoing with the Commission at present with regard to that.

And that is going to diversify potential sources of electricity coming in for Ireland in a situation which is pretty uncertain because of Brexit, correct?

Well, I don’t think there is uncertainty because of Brexit in that we have agreements with the United Kingdom, we’re still going to be part of the broader energy family in relation to back-and-forth supply across the Irish Sea, with grid reinforcements in Scotland underscoring reliability needs.  But I think it is important in terms of meeting the 15% interconnectivity that the EU has set in relation to electricity.

And also in relation of providing us with an alternative support in relation to electricity supply outside of Britain. Because Britain is now leaving the European Union and I think this is important from a political point of view, and from a broader energy security point of view. But we don’t see it in the short term as causing threats in relation to security of supply.

 

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Altmaier's new electricity forecast: the main driver is e-mobility

Germany 2030 Electricity Demand Forecast projects 658 TWh, driven by e-mobility, heat pumps, and green hydrogen. BMWi and BDEW see higher renewables, onshore wind, photovoltaics, and faster grid expansion to meet climate targets.

 

Key Points

A BMWi outlook to 658 TWh by 2030, led by e-mobility, plus demand from heat pumps, green hydrogen, and industry.

✅ Transport adds ~70 TWh; cars take 44 TWh by 2030

✅ Heat pumps add 35 TWh; green hydrogen needs ~20 TWh

✅ BDEW urges 70% renewables and faster grid expansion

 

Gross electricity consumption in Germany will increase from 595 terawatt hours (TWh) in 2018 to 658 TWh in 2030. That is an increase of eleven percent. This emerges from the detailed analysis of the development of electricity demand that the Federal Ministry of Economics (BMWi) published on Tuesday. The main driver of the increase is therefore the transport sector. According to the paper, increased electric mobility in particular contributes 68 TWh to the increase, in line with rising EV power demand trends across markets. Around 44 TWh of this should be for cars, 7 TWh for light commercial vehicles and 17 TWh for heavy trucks. If the electricity consumption for buses and two-wheelers is added, this results in electricity consumption for e-mobility of around 70 TWh.

The number of purely battery-powered vehicles is increasing according to the investigation by the BMWi to 16 million by 2030, reflecting the global electric car market momentum, plus 2.2 million plug-in hybrids. In 2018 there were only around 100,000 electric cars, the associated electricity consumption was an estimated 0.3 TWh, and plug-in mileage in 2021 highlighted the rapid uptake elsewhere. For heat pumps, the researchers predict an increase in demand by 35 TWh to around 42 TWh. They estimate the electricity consumption for the production of around 12.5 TWh of green hydrogen in 2030 to be just under 20 TWh. The demand at battery factories and data centers will increase by 13 TWh compared to 2018 by this point in time. In the data centers, there is no higher consumption due to more efficient hardware despite advancing digitization.

The updated figures are based on ongoing scenario calculations by Prognos, in which the market researchers took into account the goals of the Climate Protection Act for 2030 and the wider European electrification push for decarbonization. In the preliminary estimate presented by Federal Economics Minister Peter Altmaier (CDU) in July, a range of 645 to 665 TWh was determined for gross electricity consumption in 2030. Previously, Altmaier officially said that electricity demand in this country would remain constant for the next ten years. In June, Chancellor Angela Merkel (CDU) called for an expanded forecast that would have to include trends in e-mobility adoption within a decade and the Internet of Things, for example.

Higher electricity demand
The Federal Association of Energy and Water Management (BDEW) is assuming an even higher electricity demand of around 700 TWh in nine years. In any case, a higher share of renewable energies in electricity generation of 70 percent by 2030 is necessary in order to be able to achieve the climate targets and to address electricity price volatility risks. The expansion paths urgently need to be increased and obstacles removed. This could mean around 100 gigawatts (GW) for onshore wind turbines, 11 GW for biomass and at least 150 GW for photovoltaics by 2030. Faster network expansion and renovation will also become even more urgent, as electric cars challenge grids in many regions.
 

 

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Power Outage Disrupts Travel at BWI Airport

BWI Power Outage caused flight delays, cancellations, and diversions after a downed power line near Baltimore/Washington International. BGE crews responded as terminal operations, security screening, and boarding slowed, exposing infrastructure gaps and backup power needs.

 

Key Points

A downed power line disrupted BWI, causing delays, diversions, and slowed operations after power was restored by noon.

✅ Downed power line near airport spurred terminal-wide disruptions

✅ 150+ delays, dozens of cancellations; diversions to nearby airports

✅ BGE response, backup power gaps highlight infrastructure resilience

 

On the morning of March 3, 2025, a major power outage at Baltimore/Washington International Thurgood Marshall Airport (BWI) caused significant disruptions to air travel, much like the London morning outage that upended routines, affecting both departing and incoming flights. The outage, which began around 7:40 a.m., was caused by a downed power line near the airport, according to officials from Baltimore Gas and Electric Company. Although power was restored by noon, the effects were felt for several hours, resulting in flight delays, diversions, and a temporary disruption to airport operations.

Flight Disruptions and Delays

The outage severely impacted operations at BWI, with more than 150 flights delayed and dozens more canceled. The airport, which serves as a major hub for both domestic and international travel, was thrown into chaos, similar to the Atlanta airport blackout that snarled operations, as power outages affected various critical areas, including parts of the main terminal and an adjacent parking garage. The downed power line created a ripple effect throughout the airport’s operations, delaying not only the check-in and security screening processes but also the boarding of flights. In addition to the delays, some inbound flights had to be diverted to nearby airports, further complicating an already strained travel schedule.

With the disruption affecting vital functions of the airport, passengers were advised to stay in close contact with their airlines for updated flight statuses and to prepare for longer-than-usual wait times.

Impact on Passengers

As power began to return to different parts of the terminal, airport officials reported that airlines were improvising solutions to continue the deplaning process, such as using air stairs to help passengers exit planes that were grounded due to the power outage, a reminder of how transit networks can stall during grid failures, as seen with the London Underground outage that frustrated commuters. This created further delays for passengers attempting to leave the airport or transfer to connecting flights.

Many passengers, who were left stranded in the terminal, faced long lines at ticket counters, security checkpoints, and concessions as the airport worked to recover from the loss of power, a situation mirrored during the North Seattle outage that affected thousands. The situation was compounded by the fact that while power was restored by midday, the airport still struggled to return to full operational capacity, creating significant inconvenience for travelers.

Power Restoration and Continued Delays

By around noon, officials confirmed that power had been fully restored across the main terminal. However, the full return to normalcy was far from immediate. Airport staff continued to work on clearing backlogs and assisting passengers, but the effects of the outage lingered throughout the day. Passengers were warned to expect continued delays at ticket counters, security lines, and concessions as the airport caught up with the disruption caused by the morning’s power outage.

For many travelers, the experience was a reminder of how dependent airports and airlines are on uninterrupted power to function smoothly. The disruption to BWI serves as a case study in the potential vulnerabilities of critical infrastructure that is not immune to the effects of power failure, including weather-driven events like the windstorm outages that can sever lines. Moreover, it highlights the difficulties of recovering from such incidents while managing the expectations of a large number of stranded passengers.

Investigations into the Cause of the Outage

As of the latest reports, Baltimore Gas and Electric Company (BGE) crews were still investigating the cause of the power line failure, including weather-related factors seen when strong winds in the Miami Valley knocked out power. While no definitive cause had been provided by early afternoon, BGE spokesperson Stephanie Weaver confirmed that the company was working diligently to restore service. She noted that the downed line had caused widespread disruptions to electrical service in the area, which were exacerbated by the airport’s significant reliance on a stable power supply.

BWI officials remained in close contact with BGE to monitor the situation and ensure that necessary precautions were taken to prevent further disruptions. With power largely restored by midday, focus turned to the logistical challenges of clearing the resulting delays and assisting passengers in resuming their travel plans.

Response from the Airport and Airlines

In response to the power outage, BWI officials encouraged travelers to remain patient, a familiar message during prolonged events like Houston's extended outage in recent months, and continue checking their flight statuses. Although flight tracking websites and social media posts provided timely updates, passengers were urged to expect long delays throughout the day as the airport struggled to return to full capacity.

Airlines, for their part, worked swiftly to accommodate affected passengers, although the situation created a ripple effect across the airport's operations. With delayed flights and diverted planes, air traffic control and ground crews had to adjust flight schedules accordingly, resulting in even more congestion at the airport. Airlines coordinated with the airport to prioritize urgent cases, and some flights were re-routed to other nearby airports to mitigate the strain on the terminal.

Long-Term Effects on Airport Infrastructure

This incident underscores the importance of maintaining resilient infrastructure at key transportation hubs like BWI. Airports are vital nodes in the air travel network, and any disruption, whether from power failure or other factors, can have far-reaching consequences on both domestic and international travel. Experts suggest that BWI and other major airports should consider implementing backup power systems and other safeguards to ensure that they can continue to function smoothly during unforeseen disruptions.

While BWI officials were able to resolve the situation relatively quickly, the power outage left many passengers frustrated and inconvenienced. This incident serves as a reminder of the need for airports and utilities to have robust contingency plans in place to handle emergencies and prevent delays from spiraling into more significant disruptions.

The power outage at Baltimore/Washington International Airport highlights the vulnerability of critical infrastructure to power failures and the cascading effects such disruptions can have on travel. Although power was restored by noon, the delays, diversions, and logistical challenges faced by passengers underscore the need for greater resilience in airport operations. With travel back on track, BWI and other airports will likely revisit their contingency plans to ensure that they are better prepared for future incidents that could affect air travel.

 

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EU Plans To Double Electricity Use By 2050

European Green Deal Electrification accelerates decarbonization via renewables, electric vehicles, heat pumps, and clean industry, backed by sustainable finance, EIB green lending, just transition funds, and energy taxation reform to phase out fossil fuels.

 

Key Points

An EU plan to replace fossil fuels with renewable electricity in transport, buildings, and industry, supported by green finance.

✅ Doubles electricity's share to cut CO2 and phase out fossil fuels.

✅ Drives EVs, heat pumps, and electrified industry via renewables.

✅ Funded by EIB lending, EU budget, and just transition support.

 

The European Union is preparing an ambitious plan to completely decarbonize by 2050. Increasing the share of electricity in Europe’s energy system – electricity that will increasingly come from renewable sources - will be at the center of this strategy, aligning with the broader global energy transition under way, the new head of the European Commission’s energy department said yesterday.

This will mean more electric cars, electric heating and electric industry. The idea is that fossil fuels should no longer be a primary energy source, heating homes, warming food or powering cars. In the medium term they should only be used to generate electricity, a shift mirrored by New Zealand's electricity shift efforts, which then powers these things, resulting in less CO2 emissions.

“First assessments show we need to double the share of electricity in energy consumption by 2050,” Ditte Juul-Jørgensen said at an event in Brussels this week, a goal echoed by recent calls to double investment in power systems from world leaders. “We’ve already seen an increase in the last decade, but we need to go further”.

Juul-Jørgensen, who started in her job as director-general of the commission’s energy department in August, has come to the role at a pivotal time for energy. The 2050 decarbonization proposal from the Commission, the EU’s executive branch, is expected to be approved next month by EU national leaders. A veto from Poland that has blocked adoption until now is likely to be overcome if Poland and other Eastern European countries are offered financial assistance from a “just transition fund”, according to EU sources.

Ursula von der Leyen, the incoming President of the Commission, has promised to unveil a “European Green Deal” in her first 100 days in office designed to get the EU to its 2050 goal. Juul-Jørgensen will be working with the incoming EU Energy Commissioner, Kadri Simson, on designing this complex strategy. The overall aim will be to phase out fossil fuels, and increase the use of electricity from green sources, amid trends like oil majors pivoting to electric across Europe today.

“This will be about how do we best make use of electricity to feed into other sectors,” Juul-Jørgensen said. “We need to think about transforming it into other sources, and how to best transport it.”

“But the biggest challenge from what I see today is that of investment and finance - the changes we have to make are very significant.”

 

Financing problems

The Commission is going to try to tackle the challenges of financing the energy transition with two tools: dedicated climate funding in the EU budget, and dedicated climate lending from the European Investment Bank.

“The EIB will play an increasing role in future. We hope to see agreement [with the EIB board] on that in the coming months so there’s a clear operator in the EIB to support the green transition. We’re looking at something around €400 billion a year.”

The Commission’s proposed dedicated climate spending in the next seven-year budget must still be approved by the 28 EU national governments. Juul-Jørgensen said there is unanimous agreement on the amount: 25% of the budget. But there is disagreement about how to determine what is green spending.

“A lot of work has been ongoing to ensure that when it comes to counting it reflects the reality of the investments,” she said. “We’re working on the taxonomy on sustainable finance - internally identifying sectors contributing to overall climate objectives.”

 

Electricity pact

Juul-Jørgensen was speaking at an event organized by the the Electrification Alliance, a pact between nine industry organizations to lobby for electricity to be put at the heart of the European green deal. They signed a declaration at the event calling for a variety of measures to be included in the green deal, reflecting debates over a fully renewable grid by 2030 in other jurisdictions, including a change to the EU’s energy taxation regime which incentivizes a switch from fossil fuel to electricity consumption.

“Electrification is the most important solution to turn the vision of a fossil-free Europe into reality,” said Laurence Tubiana, CEO of the European Climate Foundation, one of the signatories, and co-architect of the Paris Agreement.

“We are determined to deliver, but we must be mindful of the different starting points and secure sufficient financing to ensure a fair transition”, said Magnus Hall, President of electricity industry association Eurelectric, another signatory.

The energy taxation issue has been particularly tricky for the EU, since any change in taxation rules requires the unanimous consent of all 28 EU countries. But experts say that current taxation structures are subsidizing fossil fuels and punishing electricity, as recent UK net zero policy changes illustrate, and unless this is changed the European Green Deal can have little effect.

“Yes this issue will be addressed in the incoming commission once it takes up its function,” Juul-Jørgensen said in response to an audience question. “We all know the challenge - the unanimity requirement in the Council - and so I hope that member states will agree to the direction of work and the need to address energy taxation systems to make sure they’re consistent with the targets we’ve set ourselves.”

But some are concerned that the transformation envisioned by the green deal will have negative impacts on some of the most vulnerable members of society, including those who work in the fossil fuel sector.

This week the Centre on Regulation in Europe sent an open letter to Frans Timmermans, the Commission Vice President in charge of climate, warning that they need to be mindful of distributional effects. These worries have been heightened by the yellow vest protests in France, which were sparked by French President Emmanuel Macron’s attempt to increase fuel taxes for non-electric cars.

“The effectiveness of climate action and sustainability policies will be challenged by increasing social and political pressures,” wrote Máximo Miccinilli, the center’s director for energy. “If not properly addressed, those will enhance further populist movements that undermine trust in governance and in the public institutions.”

Miccinilli suggests that more research be done into identifying, quantifying and addressing distributional effects before new policies are put in place to phase out fossil fuels. He proposes launching a new European Observatory for Distributional Effects of the Energy Transition to deal with this.

EU national leaders are expected to vote on the 2050 decarbonization target, building on member-state plans such as Spain's 100% renewable electricity goal by mid-century, at a summit in Brussels on December 12, and Von der Leyen will likely unveil her European Green Deal in March.

 

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