With the global energy crisis and even more since Russia’s unlawful invasion of Ukraine, EU gas markets underwent an unprecedented period of extreme price volatility leading to record-breaking price peaks. Additionally, the gradually reduced flow of gas from Russia (going from approximately 40% of total EU gas consumption in 2020 to less than 9% at present) posed urgent questions regarding security of supply. Considering the large dependence of Europe on Russian gas imports and the overall tight gas market at global level, unable to provide a real replacement for Russian gas supply, the risk of energy shortages during the winter ahead was a real, tangible, dramatic one. 

Europe responded to this dramatic threat with a number of initiatives addressing the emergency, while at the same time taking into account a medium-long term scenario. Diversification strategies, a revised regulation for gas storage, increased targets for biomethane and renewable hydrogen and a number of other EU regulatory and practical initiatives were undertaken as to tackle and mitigate the potentially detrimental effects of the energy crisis.  

According to the recent IEA Energy Outlook “there remain huge uncertainties over how this energy crisis will evolve and for how long fossil fuel prices will remain elevated, and the risks of further energy disruption and geopolitical fragmentation are high”. Also, the role of investments has been and will remain crucial: “The world has not been investing enough in energy in recent years […]. A smooth and secure energy transition will require a major uptick in clean energy investment flows”.  

Speaking at a press conference about the outlook on EU gas supply in 2023, the President of the European Commission Ursula von der Leyen gave an overview of EU actions to address the energy crisis so far, as well as the planned strands of work in 2023. “Russia’s blackmail has failed” she reassured, and “we are safe for this winter”.  

With the emergency for this winter finally behind us, which lessons have we learnt? What is the energy outlook for Europe in the next months? Which instruments or activities should Europe prioritise as to secure a safe winter 2023/2024? 

Against this background, the Debate will explore the current outlook for European gas markets and will aim at identifying which are the priority actions and initiatives to be undertaken in the next months as to ensure security of supply to Europe. 

On the occasion of International Women’s Day, this debate aims at maximising the contributions of female speakers, with the scope of “shedding a light” on their knowledge as subject matter experts. 

Draft Programme

Introduction to the Debate and Opening Presentations

14.00 – 14.05   Introduction to the Debate

Ilaria Conti | Florence School of Regulation

14.05 – 14.15   The gas market demand and supply outlook

Sylvia Beyer | IEA

14.15 – 14.30  The EU policy perspective

Monika Zsigri | EU Commission‘s DG ENER

Panel Discussion: Introductory Remarks, Polls and Comments

Moderator: Alberto Pototschnig | Florence School of Regulation

14.30 – 14.50   Introductory remarks from the panellists

Boyana Achovski | GIE

Annegret Groebel | CEER

Eva Hennig | Eurogas

14.50 – 14.55   Polls

14.55 – 15.20   Comments on the polls outcome and Q&A from the audience
Panellists

15.20 – 15.30   Concluding remarks
Ilaria Conti | Florence School of Regulation
Alberto Pototschnig | Florence School of Regulation

EUI Seminar with Theodoros G. Iliopoulos

Attaining an energy transition proves more pressing and more challenging than expected. In late 2019 the ‘Green Deal’ emphasised the need to revise EU energy law, as it had just been formed after the ‘Clean Energy Package’. In 2022, after the Russian invasion of Ukraine, a rethink of these revision plans was also necessitated. In this regard, it is common ground that we need more energy from renewable sources, so that a clean energy transition and a phaseout of Europe’s dependence on (fossil fuel) imports can be attained. In the lack of a sufficient supply of such energy, the law needs to regulate and ensure an intervention in the market that will boost the development of renewable energy sources, without aggravating the energy price crisis that Europe is experiencing.

Given the above, the question raised is, how does and should secondary EU renewable energy support law evolve to ensure a sustainable financing of RES projects? It is noted that the supranational intervention in the field has so far relied on conditions, mostly expressed in State aid Guidelines and in a Commission’s Guidance, that impact on the design and implementation of national support schemes. Support allocation support has always been at the epicentre of the EU legal order, but after the ‘REPowerEU Plan’ one can notice that attention is shifting towards the administrative procedures that necessarily accompany the relevant investments. This seminar presentation will give a critical overview of these developments and will investigate the role of the EU legal order (including considerations of competences and harmonisation) in the design, enactment and implementation of support policies for renewable energy sources.

This seminar presentation is part of dr. Iliopoulos’s research stay at EUI Florence School of Regulation, and is linked with his postdoctoral research ‘Quo vadis, European renewable energy support law?’, funded by Flanders Research Foundation, and conducted within the premises of Hasselt University and Ghent University.

Theodoros G. Iliopoulos is an FWO (Research Foundation – Flanders) postdoctoral fellow in Energy and Environmental Law, working at Hasselt University and Ghent University.

In this episode of FSR Insights, we will discuss the key findings of Despoina Mantzari’s recently published book Courts, Regulators, and the Scrutiny of Economic Evidence.

The book presents the first systematic examination of economic regulation and the crucial role of economic evidence in regulatory authorities and courts.

This work brings together strands of scholarship from law, economics, and political science to explore two key themes: the influence of economic evidence on the discretionary assessments of economic regulators, and the limits of judicial review of economic evidence, supplemented with comparative examination of both UK and US systems.

Host

• Lucila de Almeida | Florence School of Regulation & Nova School of Law

Keynote Speaker

• Despoina Mantzari  | UCL

Discussants

• Adrien De Hauteclocque | Court of Justice of the European Union
• Selçukhan  Ünekbas | European University Institute, Law Department

Dr Despoina Mantzari is Associate Professor in Competition Law and Policy at University College London (UCL), Faculty of Laws.

Air Traffic Management (ATM) is a set of services which every State must provide for the safe and efficient operation of air traffic. Today, it is almost entirely financed by user fees according to the “user pays” principle. Until today, the “user” has always been assumed to be the airspace user, normally an airline. This system comes under pressure today: current Single European Sky (SES) regulation is built on the assumption that air traffic in Europe continuously increases. Thus, the financing of ATM would be secured by increasing revenue due to higher traffic volumes.

Technological progress and efficiency gains should lead to reduced cost and lower environmental footprint of aviation while increasing safety and capacity. Two crises – the financial and banking crisis of 2008 and more recently the COVID-19 pandemic – show that the assumptions of this regulatory framework are wrong. Additionally, there is the question of who the actual “users” are. Does ATM only serve paying airlines, or are there some services which are provided in the public interest?

Turning the wheel back and promoting a full cost recovery financing model would be contrary to the logic of regulating monopolistic infrastructure providers. But it is a fact that recent events raise the question as to whether the current financing model, which is ultimately market based, is still adequate.

With the pressure to increase the efficiency of the SES for environmental reasons, one may wonder whether some baseline public financing for the critical infrastructure portion of the ATM – which could be different from country to country – could not mean a step towards a better charging scheme and therefore a step towards the leading ideas behind the SES and the European Green Deal.

In light of the above, the 19^th Florence Air Forum will be answering the following questions:

1. What have we learnt from COVID-19 about ATM financing? Is there a threshold below which ANSPs can be financially supported?
2. How are ATM services to actors delivering services in the general interest being financed? How are these financed in other network industries?
3. Could part of ATM be financed publicly and if so under what conditions?
4. Is there a need for a change in approach?

This would lead to four sessions spread over two days (27th and 28th March 2023), which should be preceded by an introduction about the shortcomings of current financing. In a concluding session we could design the way forward.

Please kindly note that participation at this Forum is by invitation only.

PRESENTATION SLIDES

Matthias Finger – FSR Transport

Alexander Holzrichter – Lufthansa Group

Raine Luojus – Fintraffic ANS

Jan Klas – ANS Czech Republic

Denis Bouvier – SES Performance Review Body

Patricia Nieto Valiente – ESA, Spain

Kalliopi Lykou – Hellenic Civil Aviation Authority

Alex Bristol – Skyguide

Arndt Schoenemann – DFS Deutsche Flugsicherung

Achim Baumann – Airlines for Europe – A4E

Eric De Vries – Dutch Ministry of Infrastructure and Water Management

Igor Pirc – Swiss Federal Office of Civil Aviation FOCA

The Performance Review Commission (PRC) is an independent body supported by EUROCONTROL with a remit to review and report on European Air Traffic Management (ATM) performance. While performance has improved over time this has not always been consistent and the PRC believes that future improvements will require transformation change rather than just evolution.

With an objective to identify, review and champion successful transformation projects based on the ATM Masterplan and the European Green Deal the PRC has created a Transformation Support Strategy. It shall enable the analysis of the contribution of new technologies and concepts on the future performance of the ATM-system. Through this process the PRC aims to identify flagship projects, monitor their performance delivery over time, help stakeholders understand the challenges and benefits of implementing these innovative transformational projects and thereby stimulate and encourage ATM improvements.

To engage key executive stakeholders in this process the PRC is hosting a workshop entitled “in search of flagships for ATM transformation” which will take place in Brussels on 22^nd February 2023. The focus will be on understanding the business level benefits of delivering transformation and overcoming the challenges, rather than on operational and technical details.

Programme

Please note that participation in this workshop is by invitation only.

To request more information you may contact FSR.Transport@eui.eu

In an effort to bring some clarity to the evolving landscape of industrial policy going into 2023, we dedicate this instalment of FSR Debates to what is happening in the US and EU.

There has been much consternation in Europe about the US Inflation Reduction Act (IRA) and the impact it could have on the competitiveness of European industry. The European Commission is responding with its own measures, including revised State Aid Guidance to allow Member States to match the subsidies of third countries. These exchanges come in the midst of an energy crisis which has hit energy-intensive industries in energy import-dependent regions especially hard, Europe has seen a major reduction in industrial output over the past year as a result.

As emissions targets squeeze and technological cycles close, industry are taking their next investment decisions, looking at where the strongest case is to establish the next generation of industrial value chains. Clean energy vectors such as renewable hydrogen will be amongst the key components for the buildout of these economies, and as such, their cost-effectiveness and availability will contribute to the decision-making of industrial players.

 “We are not exaggerating when we say that European industry — starting with the energy-intensive industries on the frontline — is facing an existential crisis.” (Luc Triangle, IndustriALL)

To open the session, Laima Eicke will cover the factors for success in different segments of industrial value chains based on her recent paper published with Nicola de Blasio. She will detail different classifications of countries based on their assets and limitations, as well as providing some case study examples – including Germany, the US, and Thailand. In the second part of the debate, the floor will be opened for debate amongst our panelists, covering expertise from around the world, with a focus on Europe and the US. The last minutes will be left for Q&A from the audience.

Programme

Introduction and moderation

Ilaria Conti | FSR

Keynote presentation

Laima Eicke | IASS, Harvard

Discussants

Michael Mehling | MIT, University of Strathclyde Law School

Matthew Bravante | BNEF

Laima Eicke | IASS, Harvard

Ruud Kempener | European Commission

Andris Piebalgs | FSR

Conclusions

Christopher Jones | FSR

The European energy crisis is dragging on, and voices to reform electricity markets are getting louder. Market reforms are going to be discussed (and potentially already implemented) within the first months of 2023. Reforms may involve changes in pricing rules to eliminate so-called windfall profits and give consumers access to cheap renewables. Leading academics are advocating for hybrid markets that encompass spot markets with marginal pricing as well as mandated long-term fixed-price contracts. The systematic integration of mandated long-term contracts into electricity markets would be the largest change in electricity markets since they were established some twenty years ago. Such long-term contracts can take the form of Contracts-for-Difference, allocated via competitive procurement.

Contracts-for-Differences have been used by governments in the procurement of renewable energy for many years now. But, what are these Contracts-for-Differences precisely? In which form and function do they come on different European markets?

In this FSR Insights event, Lena Kitzing will give an overview of Contracts-for-Differences used for renewable energy procurement, and their role as risk management tool to facilitate financing. Lena will also reflect on how Contracts-for-Difference have never seemed to be intended to stay here for good – the ultimate goal of supporting renewable energies was getting them ‘market-ready’ after all. This raises the question of how the design of Contracts-for-Difference must be rethought so that they can become a permanent part of electricity market design?

Hosts

• Leonardo Meeus | Florence School of Regulation (FSR)
• Lucila de Almeida | FSR & Nova School of Law

Keynote Speaker

• Lena Kitzing | DTU Department of Wind and Energy Systems

Discussants

• Pablo Rodillas  | Comillas Pontifical University
• Anne Held  | Fraunhofer Institute for Systems and Innovation Research ISI

Want to know more about the topic? Check out our course on Regulation and Integration of Renewable Energy, directed by Lena Kitzing and Mario Ragwitz.

Lena Kitzing is Associate Professor in Energy Economics and Policy, and Head of Section ‘Society, Market and Policy’ at the Technical University of Denmark, DTU Wind and Energy Systems. Her research spans across the energy-economy-society nexus and especially concerns the effective governance of energy systems through policy instruments, with particular focus on deployment and financing of renewables and their integration into the energy system. Lena is a leading expert in the economics and policy for offshore wind energy with a number of highly published articles in the area. She has participated in and coordinated many international research projects, often gives scientific advice to public and private organisations, is regularly invited to key note speeches and conference panels, and appears in the Danish national media on energy related issues. Lena is a registered expert for the European Commission, has been board member of the Joint Programme for wind energy of the European Energy Research Alliance, and serves on the board on several energy initiatives in Denmark.  Lena is member of the European Scientific Advisory Board on Climate Change, which advises policymakers and stakeholders on climate and energy related decisions.

This debate will explore the state of the art in the development of prosumption and will aim at identifying any remaining barriers and the ways to overcome them.

The energy transition, to achieve the ambitious energy and climate goals to which the European Union has committed, requires a significant increase in the share of renewables in final energy consumption over the next years. As has been the case so far, the electricity sector is expected to contribute more than proportionally to the overall target, with renewables expected to cover 70% or more of final electricity consumption by 2030.

The greater penetration of renewables in the electricity generation mix will be achieved partly with large-scale installations – for example, large offshore wind parks –, but a substantial contribution is also expected to come from distributed, small-scale installations. These will include installations at end-consumers’ premises. In such cases, consumers turn into ‘prosumers’, i.e. consumers which produce part or all of the electricity they consume, and possibly sell the excess electricity.

The current EU legal framework provides specific rights and obligations for prosumers, as active consumers, in particular in Article 15 of the Electricity Directive.

There are different forms of prosumption, ranging from individual households to collective prosumers in one building, from small and medium enterprises and public institutions to energy communities and cooperatives. The number of prosumers is increasing rapidly, at least in some countries. Moreover, there seem to be enormous potentials for electricity production from prosumers, mostly based on renewable energies. Estimates quoted by the European Environment Agency suggest that the share of total electricity demand in the EU, which could be covered by electricity production by prosumers could technically exceed 60% by 2050, with shares for individual Member States ranging from 26% in Malta to 77% in Cyprus.

Prosumption is expected to deliver benefits in different dimensions, but its development appears to be hampered by barriers. The European Environment Agency has identified barriers of five types: (i) regulatory barriers; (ii) financial barriers; (iii) technical barriers; (iv) social barriers; and (v) lack of knowledge and expertise.

Programme

 Introduction to the Debate and Opening Presentations

 14.00 – 14.05 Introduction to the Debate

Alberto Pototschnig | Florence School of Regulation (FSR)

14.05 – 14.15     The policy perspective

Adela Tesarova | Head of Unit, Consumers, Local Initiatives, Just Transition, DG ENER, European Commission

14.15 – 14.25     Energy prosumers in Europe

Javier Esparrago | Energy and Environment, European Environment Agency

Panel Discussion: Introductory Remarks, Polls and Comments

Moderator: Ilaria Conti | FSR

14.25 – 14.50     Introductory remarks from the panellists

Alessandro De Cristofaro | EnelX

Edwin Edelenbos| Netbeheer Nederland

Natalie McCoy | Customers and Retail Markets Working Group Co-Chair, CEER

14.50 – 14.55     Polls

14.55 – 15.20     Comments on the outcome of the polls and Q&A from the audience

Panellists

15.20 – 15.30     Concluding remarks

Ilaria Conti | FSR

Alberto Pototschnig | FSR

The Fit for 55 package is a set of proposals for European Union (EU) legislation to put the EU on the path to becoming climate neutral by 2050. The European Commission tabled the proposals in July and December 2021.

In May 2022, the REPowerEU communication proposed amendments in response to the energy crisis provoked by Russia’s aggression in Ukraine. The EU legislators have concluded a number of legislative files at the end of 2022, and others are under negotiation. Several additional proposals, such as electricity market reform, are expected to be tabled by the EU Commission in the first quarter of 2023. Even with some elements missing, the new shape of the EU’s energy policy is emerging.

This FSR Debate will feature an overview of what can be expected in 2023, the key challenges facing the co-legislators in reaching an agreement, and the main options.

The debate panellists will be asked what they think the legislators should do: What are the key elements of this new design? What impact will it make on stakeholders? Where do the legislators still need to pick the best choice?

Keynote presentation 

Christopher Jones | FSR

Discussants

Ilaria Conti | FSR

Lisa Fischer | E3G

Jesse Scott | Hertie School

Andris Piebalgs | FSR

Ronnie Belmans | FSR

Multimodal digital mobility services (MDMS) are instrumental to fostering multimodality as they promote comparability, transparency, and the selling of products across operators and modes. MDMS stand to directly benefit passengers by helping them to navigate, access and compare an increasingly complex and diverse range of transport offerings. Services that support multimodal transport can also render transport more efficient and sustainable by improving the consumer access to broader variety of transport options.

As part of its Sustainable and Smart Mobility Strategy (SSMS), published in 2020, the European Commission committed itself to assessing the need for regulatory action on rights and duties of multimodal digital service providers and to issuing a recommendation to ensure public service contracts do not hamper data sharing and support the development of multimodal ticketing services, together with an initiative on ticketing (Action 37).

In view of this, a public stakeholder consultation for the implementation of MDMS was carried out, and a legislative proposal to advance MDMS is planned for 2023. This Commission initiative will seek to implement Action 37 of the SSMS and address existing challenges for MDMS services. The latter will focus on ticketing, booking and payment services by addressing a number of market-related problems, namely potential resistance by some transport service providers to provide access to all their data to other actors (much more present in rail) and potential discriminatory practices by online intermediaries in access to their services. Remedies in the form of access regulation can be considered, but what kind of access obligations? What lessons might be learnt from horizontal regulation (particularly the Digital Markets Act and the Data Regulations): asymmetric regulation, FRAND access conditions? Whether the liberalisation and competition of the EU Aviation Market necessitates a lighter form of regulation?

Against this backdrop, the 11^th Florence Intermodal Forum will bring together stakeholders representing aviation policymakers, airlines, travel intermediaries, meta-search companies, consumer organisations, and academics, among others, for an aviation-focused discussion on the following three critical issues:

1. Is it necessary to regulate data sharing on airlines to better integrate them in MDMS? What kind of obligation? On which airlines?
2. What potential obligations should be considered for online intermediaries selling or relinking to air mobility products? Which intermediaries should be regulated?
3. FRAND conditions: What are the necessary and proportionate FRAND conditions in the aviation sector? Who decides what is FRAND?

Please kindly note that participation at this Forum is by invitation only.

PRESENTATION SLIDES

Juan Montero – FSR Transport – Introduction

Juan Montero – FSR Transport – Session B

Emmanuel Mounier – eu travel tech

The Florence School of Regulation (FSR) will organise a high-level, closed-door discussion in Brussels, Belgium, about the upcoming European electricity market design review.

The European Union (EU) is facing an unprecedented and multifaceted energy crisis. While some features of this crisis are common to the ones faced by the rest of the world, there are also very distinctive European features.

Following the mandate from the European Council, the European Commission will present proposals to reform the electricity market design in 2023. The EU electricity market has been built over several decades. It is now at the heart of the EU’s internal energy market, and a crucial tool for the energy transition: the planned review of the electricity market design should be carefully crafted to help the EU navigate the energy turmoil and reach its 2030 climate targets.

Reviewing the EU electricity market design is a complex exercise. This is why a debate is needed to understand what should change and for what purposes.

The discussion will explore the short and long-term objectives for the electricity market design reform, identify the options currently on the table, areas of convergence and divergence among European stakeholders and the open issues.

The event is by invitation only and is organised around three sessions gathering high-level panellists with active participation from a select audience of around 40 experts from academia, civil society and industry.

FSR Regulatory Policy Workshop Series 2022 – 2023

The European Union Electricity Target Model (ETM) underpinning the design of the EU Internal Electricity Market, which was developed in the mid-2000s and enshrined in the Third Energy Legislative Package, comprised five pillars: capacity calculation, the forward market, the day-ahead market, the intraday market and the balancing mechanism. For the day-ahead market, the ETM envisaged a single pan-EU price-based market coupling in which a two-sided auction-based market would be established in each market zone, and the emerging prices would be used to couple the zonal markets in the most efficient way. In the intra-day timeframe, continuous trading was envisaged, with the possibility of regular auctions; regulation now provides for three auctions for each day.

In the forward timeframe, the focus was more on the instruments to allocate the available interconnection capacity. It was considered that short-term markets provide the necessary price signals to promote the investment in the resources required to guarantee adequacy.

Therefore, according to the current electricity market legislation, Capacity Remuneration Mechanisms (CRMs) are considered only as a last resort temporary instrument to eliminate residual resource adequacy concerns while implementing measures to eliminate any identified regulatory distortions or market failures.

Other long-term instruments have been neglected by EU legislation. No provisions have been introduced to support the liquidity of long-term electricity (forward or futures) markets, with the results that liquidity of the markets for these instruments is limited to horizons of up to one year and only in a few jurisdictions, and it has been decreasing over the last year . Contracts for Difference (CfDs) have been used in some countries to support the development of renewable-based generation, but again there was no effort to harmonise their use.

However, the increasing penetration of variable renewable energy (VRE) sources in the electricity system is leading to more volatile prices, with the likely prospect of more frequent instances of low prices accompanied by infrequent price spikes. This price pattern creates more risk for investors in the electricity sector and for market participants alike. Therefore, the role of long-term instruments to support resource adequacy is being re-evaluated.

To take stock of the new reality of electricity markets, the European Commission will soon launch a consultation on elements for a future-proof market design.

Against this context, this Workshop will assess whether and how the different instruments currently being discussed – e.g. CRMs, electricity forward and futures contracts and CfDs – can play a role in promoting adequacy beyond the signals provided by short-term market prices.

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