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LNG Markets and Sustainability: How to include emissions intensity information in LNG agreements?
This online debate organized in the context of the EU-funded project LNGnet, will discuss how to include emissions intensity information in LNG Agreements
The importance of Liquefied Natural Gas (LNG) in Europe’s overall energy mix has considerably increased in the last three years: since the Russian aggression to Ukraine in February 2022 and its impact on EU gas supply strategy, LNG imports to Europe have grown and LNG has proven to be a valid and reliable instrument to quickly compensate for the sudden shortage of Russian gas via pipeline.
LNG is likely to remain as part of the EU energy mix for some decades, particularly for its important contribution to energy stability and security of supply. At the same time, Europe cannot forget its climate targets and commitments. Upstream and import regulations are going to evolve in the next few years, as to facilitate the achievement of decarbonisation commitments; in parallel, technological pathways are going to evolve, affecting market conditions and global players’ behaviours and drivers.
Therefore, it’s reasonable to think that, going forward, in LNG contracts (Sales and Purchase Agreements, SPAs) a differentiation of the product depending on its carbon or emission intensity will automatically emerge: the more emissions associated with the production of feed-gas or its liquefaction and transport, the higher the costs of both its production and use in the destination market.
How should this information be tackled? What are the possible challenges in making it compatible or even standardized as to facilitate trading in a global market like LNG?
While not addressing the question of measurement, reporting and verification of said emission intensity values, this workshop will debate how carbon intensity can be taken into account and translated into LNG contracts, how it may be structured and which information would need to be considered for the relevant provisions.
Programme
Introduction to the Debate and Opening Presentations
14.00 – 14.05 Introduction to the Debate
Ilaria Conti | FSR
14.05 – 14.20 Specialised WG5: LNG Trading Arrangements in the Context of the Energy Transition
Gunnar Steck | LNGnet Team Leader
14.20 – 14.30 EU Energy Prospects
Adam Szolyak | Policy Officer, DG ENER
Panel Discussion: Introductory Remarks, Polls and Comments
Moderator: Alberto Pototschnig | FSR
14.30 – 14.50 Introductory remarks from the panellists
Luis Ignacio Parada | President of Gas LNG Europe, Gas Infrastructure Europe
Kim Talus | Professor of Energy Law at UEF Law School, University of Helsinki
Andreas Guth | Policy Director, Eurogas
Michaela Duve | Chair Legal Committee, Energy Traders Europe
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
Presentations
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25th Florence Rail Forum: Evaluating the Recast Directive
The 25th Florence Rail forum aims at discussing the current situation of competition across the Single European Railway Area
Introduction
The Recast Directive opens the Single European Railway Area to competition.Competition is gradually emerging across the EU, but there are obvious asymmetries across Member States in particular in the passenger commercial segment, which includes high-speed services (see RMMS 2023, Figure 79). While some markets have vibrant competition in high-speed services, others have competition for the market in public service obligation services, and yet in some markets no significant evolution has taken place.
Barriers to entry to railway markets are particularly relevant. Rail infrastructure is a natural monopoly. Traditionally, infrastructure managers were vertically integrated and enjoyed exclusive right for the provision of downstream rail services (freight, passenger, etc.). The elimination of such exclusive rights enables competition in (commercial services) or for the market (PSO services). But barriers to entry can deter newcomers. Access to infrastructure is the key factor, as in the rest of network industries, as well as access to service facilities.
The Recast Directive aims at reducing the barriers to entry related to access to infrastructure: rules on capacity allocation, traffic management, temporary capacity restrictions, etc. Furthermore, it defines the basic principle of non-discrimination by infrastructure managers in favour of the vertically integrated railway undertaking, when vertical integration exists, as well as specific rules for the governance of vertically integrated undertakings.
Article 63 of the Recast Directive requires the Commission to evaluate the impact of the Directive by the end of 2024, and in particular to draft a report assessing whether discriminatory practices or other types of distortion of competition persist in relation to infrastructure managers which are part of a vertically integrated undertaking, and in particular evaluate the development of high-speed rail services and assess the existence of discriminatory practices regarding access to high-speed lines.
The 25th Florence Rail forum aims at discussing the current situation of competition across the Single European Railway Area:
- Are there discriminatory practices or other types of distortions of competition in relation to vertically integrated infrastructure managers?
- What is the impact on the market?
- How is competition evolving in high-speed?
- Has vertical integration impacted the evolution of competition?
- How are the rules to govern vertically integrated infrastructure managers implemented? Are they effective?
- What new rules could be introduced?
Access to the FSR Policy Brief ‘
Presentations
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Building resilience: strategies for strengthening Ukraine’s energy future
The FSR Policy debate will focus on the strategies and partnerships needed to strengthen Ukraine’s energy resilience and pave the way for a greener, more sustainable future.
In the wake of targeted attacks on civilian infrastructure by Russia, Ukraine’s energy sector has suffered significant damage, resulting in supply chain disruptions and economic setbacks. The destruction of coal-fired generation facilities has added pressure to expedite the restoration of existing capacities while simultaneously pursuing sustainable, forward-looking solutions.
Despite these challenges, Ukraine is forging ahead with ambitious green recovery initiatives aimed at modernizing its infrastructure, bolstering energy security through decentralization, and prioritizing domestic energy resources. By embracing clean energy technologies, Ukraine seeks not only to recover from war-induced setbacks but also to accelerate its transition towards a sustainable future.
However, achieving these objectives amidst ongoing war and economic instability demands increased international support. Join us for a discussion on the strategies and partnerships needed to strengthen Ukraine’s energy resilience and pave the way for a greener, more sustainable future.
Programme
Introduction by Andris Piebalgs and Christopher Jones, FSR
Keynote presentation: Olena Pavlenko, PhD, President and co-founder of the Ukrainian DiXi Group think tank and the Ukrainian Energy website.
The presentation will be followed by a panel debate with Albéric Mongrenier, Executive Secretary, European Initiative for Energy Security and Walter Boltz, Senior Advisor – European Energy, as speakers.
Conclusions by Andris Piebalgs and Christopher Jones, FSR
Presentations
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Hydrogen Sales & Purchase Agreement: Challenges Contract Standardization
In this FRS Talk, Dr. Nuno Antunes joins us to present some results of the research & development conducted by the Hydrogen Task Force of AIEN, Association of International Energy Negotiators, which ultimately has the purpose of developing model contracts within the hydrogen realm, including the Hydrogen Sales and Purchase Agreement (H2 SPA).
Background
Many projects of renewable and low-carbon hydrogen are currently in the design or pre-FEED stage. The issue of hydrogen offtaking (and offtakers) has proven to be a critical concern. Sale and purchase agreements for hydrogen and its derivatives have thus moved into the spotlight, and have become one of the key contracting instruments for the emerging hydrogen market. The AIEN, known for its track record in developing model agreements for the oil and gas sector, initiated a “Hydrogen Taskforce” in 2022 to explore contract standardization in the hydrogen field. This webinar will provide an overview of some of the task force’s efforts, forthcoming steps, and specific challenges that have been faced.
The FSR Talks series monthly invites policy-makers and academics to talk about relevant topics related to energy and climate regulation addressed to a global audience. It is co-hosted by Prof. Lucila de Almeida representing the European University Institute/Robert Schuman Center for Advanced Studies/Florence School of Regulation ((EUI/RSCAS/FSR), Carol Awuor from the African School of Regulation (ASR), and Swetha Ravi Kumar from FSR Global based in India.
Speaker
Dr. Nuno Antunes | Lead of the AIEN Hydrogen Taskforce, Invited Professor at Universidade Católica de Portugal, and Partner at Miranda & Associados, Portugal.
Invited Discussant
James Kneebone (FSR)
Co-Hosts
Prof. Lucila Almeida | Part-time Professor, EUI/RSCAS/FSR
Carol Awuor Ofafa | Research Associate, ASR – African School of Regulation
Swetha Ravi Kumar | Executive Director, FSR Global
Presentations
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State-of-play in international carbon markets 2024
During this event we will dive into the recent trends in regulated carbon markets and explore their links and connections, including with voluntary carbon markets (VCMs). In the last years, the number of carbon taxes and Emissions Trading Systems (ETSs) has grown worldwide. However, the integration of these systems has progressed slowly due to divergent design features, such as permit types, sectoral coverage, and monitoring methods, reflecting each domestic context. Connections between ETSs and VCMs have also stalled due to concerns about credit quality, monitoring, reporting, and verification issues connected with offsets. Do the recent findings reflect progress towards further integration, and can we detect a trend towards more aligned ambition and more consistent market regulation?
This panel represents the first part of the annual Net Zero Carbon Market Policy Dialogue (NZCMPD) organised under the framework of the LIFE COASE project. The aim of the policy dialogue is to facilitate international carbon market cooperation between the EU and partner jurisdictions on key topics around net-zero regulation and integration of carbon markets. It will assess the state of play on international carbon markets in view of addressing in a later phase the methods and findings of ex-ante and ex-post assessments of the EU ETS and other ETSs worldwide.
This event is organised by FSR Climate and will take place before the opening of the EUI Climate Week 2024.
Moderator:
- Simone Borghesi, Director Florence School of Regulation – Climate, European University Institute
Panellists:
- Baran Doda, Head of Programme Carbon Markets and Pricing, Adelphi
- Jean-Yves Benoit, Director General, Carbon Regulation and Emissions Data, Québec Ministère de l’Environnement, de la Lutte contre les changements climatiques, de la Faune et des Parcs
- Hannah Lewis, Head of Policy for the UK Emissions Trading Scheme, UK Department for Business, Energy and Industrial Strategy
- José Pedro Bastos Neves, Ministry of Finance, Brazil
- Michael Mehling, Deputy Director, Center for Energy and Environmental Policy Research, MIT
Conclusions:
- Mette Quinn, Deputy Director, EU and International Carbon Markets, DG CLIMA, European Commission
Participation in this event is by invitation only and all deliberations will take place under the Chatham House rule (no views or positions may be attributed publicly to any participant).
More information and the full programme of the EUI Climate Week 2024 can be found here.
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Resilient economies and institutions to mitigate and adapt to climate change
The frequency of natural disasters due to climate change is increasing, and institutions across different geographic areas are not equally ready to cope with such events. In fact, the lack of adequate institutional responses is likely to exacerbate the consequences of these events. Making the EU and developing countries better able to cope with the devastating consequences of climate change requires an articulated policy mix around carbon price, and resilient and reactive institutions and processes. Many economical, political and social lessons can be drawn from the recent health and war crises but also natural disasters.
This panel will explore feasible manners to enhance resiliency to climate change pursuing the European Green Deal agenda, taking in consideration the climate mitigation policies. It will also address how to better prepare agriculture, biodiversity, the health system and our economies in general to cope with climate change and how to protect the most vulnerable populations in developing countries and in Europe.
Moderators:
- Simone Borghesi, Director of the Florence School of Regulation – Climate, EUI
- Fabrizia Mealli, Professor of EconometricsEuropean University Institute, EU
Panellists:
- Hans-Martin Füssel, Climate Change Adaptation Expert, European Environment Agency (EEA)
- Shonali Pachauri, Research group leader, International Institute for Applied Systems Analysis (IIASA)
- Massamba Thioye, Project Executive UNFCCC Global Innovation Hub, UN Climate Change Secretariat
- Mira Manini Tiwari, Research Associate, RSCAS, EUI
FSR Climate, together with the Policy Outreach Committee of EAERE (European Association of Environmental and Resource Economists), organises this session to promote a more integrated dialogue between academia and policy world, providing advice and support to EU policy makers and institutions in designing policy interventions.
The event is organised under the framework of the Horizon Europe project SPES and will take place during the EUI State of the Union 2024. SPES is funded by European Union’s Horizon Europe Programme under Grant Agreement No. 101094551.
Participation in this panel is via invitation only. Find out more about the full programme of the State of the Union here.
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Workshop on the role of carbon markets in reaching carbon neutrality
As the number of carbon markets grows, the long-term contribution of market-based instruments to reach carbon neutrality by 2050 should be further assessed. In general, the size, scope, parameters, and prices of Emissions Trading Systems (ETSs) vary and evolve depending on the social, economic, political, and legal context of each jurisdiction. All these aspects of regulated carbon markets are to be considered by policymakers. To tackle challenges, regulators may find insights from new scientific evidence.
This workshop aims to collect insights from policy-relevant research on recent trends in carbon markets, with a particular focus on the EU ETS. It will address topics such as future allowance prices, scope expansion of ETSs and market oversight, among others. Furthermore, it will focus on the methodologies used to assess ETSs (i.e., ex-post and ex-ante model-based assessments) and their results.
The 3-day event will comprise a keynote lecture, paper presentations, a policy roundtable and a guest lecture.
It is organised by FSR Climate under the framework of the LIFE COASE project, which is co-funded by the European Union’s Life Programme. The workshop combines the ex-post and the ex-ante model based assessment of ETSs and will take place during the Joint Session of Workshops of the Robert Schuman Centre in the context of the 30 anniversary of the Centre.
Participation in the event is via invitation only. Find out more about the programme of the Joint Session of Workshops here.
Programme
18 June
10:00-10:45 Introduction, Tour de Table, Ice Breaker
11:15-12:05 Keynote speech: The merits and shortcomings of the EU carbon markets
- Sonja Peterson | Kiel Institute for the World Economy
12:15-13:00 Session 1: Chinese National ETS Model
China’s national ETS price outlook: long-term forecast and policy scenarios [Introduction]
- Boyang Jin | London Stock Exchange Group
14:00-15:30 Session 2: EU ETS Models
Economic interaction between climate policy instruments [Abstract]
- Jakub Boratyński | KOBiZE
Sequencing CDR into the EU ETS [Abstract]
- Sebastian Osorio | Potsdam-Institute for Climate Impact Research
16:00-17:10 ETS Model Comparison
- Sebastian Osorio
19 June
10:00-11:30 Session 3: Carbon leakage
Carbon border adjustments: an examination of the direct and indirect effects of the European Carbon Border Adjustment Mechanism (CBAM)
- Antton Haramboure |Organization for Economic Cooperation and Development
Carbon prices, emissions and international trade in sectors at risk of carbon leakage: evidence from 140 countries [Abstract]
- Jonas Teusch | OECD
12:00-13:30 Session 4: Carbon pricing and firm behaviour
The effects of carbon pricing along the production network [Abstract]
- Thomas Stoerk | National Bank of Belgium & LSE
Realist analysis of UK ETS trading and abatement behaviour [Introduction]
- Mary Anderson | CAG Consultants
14:30-15:30 Policy panel: ETS Endgame – Including new sectors and removals ETSs
- Edoardo Croci | Bocconi University
- Sebastian Osorio | Potsdam-Institute for Climate Impact Research
- Elena Marro | European University Institute
16:00-17:30 Session 5: Beyond the EU ETS: Offsets & China ETS Policy Overlap
Willingness-to-claim voluntary carbon offsets: market evidence of revealed-preferences [Abstract]
- Tara L’Horty | Université de Lorraine
Interactions between emissions trading systems and other policies: insights from theory and an application to China [Abstract]
- Carolyn Fischer | World Bank
20 June
09:15-11:30 Session 6: Decarbonising industry and agriculture
Steel in the EU CBAM: will scrap-resource shuffling delay the sector’s global decarbonization? [Abstract]
- Maxime Gérardin | France Stratégie
Market design options for integrating negative emissions into the ETS [Introduction]
- Carlotta Von Bebenburg | Oxera
Options to expand emissions trading to emissions from agriculture in Europe [Abstract]
- Benjamin Görlach | Ecologic Institute
12:00-13:30 Session 7: Legislation for carbon pricing
The integration of negative emissions in the EU legislation [Introduction]
- Elena Bonfiglio | European Roundtable on Climate Change and Sustainable Transition
Enhancing climate policies through the implementation of regulated carbon markets in Brazil: reflecting on strategies for closing the policy-science loop [Introduction]
- Adriana I. B. S. L. Di Pasquale | University of Pisa
14:30-15:30 Guest lecture: Stopping climate change
Paul Ekins | UCL
16:00-17:30 General discussion & conclusions
17.30 Close
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FSR Alumni Day – 2nd edition
Following the success of the first edition, we are delighted to announce the 2nd FSR Alumni Day. This event will offer former alumni a unique opportunity to reconnect and stay updated on the latest policy developments in fields they previously studied.
An annual event in Florence to welcome the Alumni community
Since its establishment in 2004, the FSR has been training more than 10.000 participants. In 2014, the FSR launched its first online course and since then, more than 60 online courses have been welcoming energy professionals and academics from worldwide.
To hear back from our community of Alumni and celebrate their successful paths, we designed a special event gathering participants from all our courses, course directors, instructors, and coordinators in a friendly atmosphere to offer an additional learning experience.
Another step in your professional path
You will have the chance to network while you get up to speed on the latest developments in your area of expertise. The format will include a keynote address from the European Commission, insights from your peers, working groups (details below), networking activities and a cocktail reception.
Workshop: Gas and Hydrogen
“An Incentive Scheme for Developing a European Hydrogen Industry”
Course Directors: Ilaria Conti and James Kneebone
The integration of renewable and low-carbon gases into Europe’s energy mix has become a priority for the European Union and national governments. However, there are differing views about how to fairly and efficiently achieve this.
For example, fostering the development of the hydrogen industry may require significant subsidies, and/or its cross-subsidisation by current gas market players and consumers, with a long-term impact. However, this approach would not only involve a burden for consumers or taxpayers but may lead to stranded assets. Furthermore, there are ongoing technology races between clean hydrogen and other decarbonisation options in many of the most likely use cases, for example in high-temperature heat or transportation. Given the limited public resources of the EU and Member States, investing in one technology will come at the cost of supporting other solutions.
Given all of these variables and more, how should the EU go about supporting the ramp-up of clean hydrogen? On what grounds should it be justified? And what are the most efficient and lowest-risk options available?
Workshop: Regulation and Integration of Renewable Energy
Should renewable energy characteristics drive electricity market re-design?
Course Directors: Lena Kitzing, Mario Ragwitz
Renewable energy will become the backbone of the European energy system. There is presently an intense debate, whether or not current electricity market design accommodates the characteristics of renewable energy technologies properly, for example regarding generation patterns, supply-demand dependencies, flexibility and financing needs for investment. This session will discuss the question how a better match between renewable energy characteristics and electricity market design can be achieved. Should it be by re-designing electricity markets to accommodate these new characteristics, should it be by adapting renewable energy projects so they can better integrate into existing markets, should it be a combination of both, or something completely different? We will go into depth with the topic of market integration, and discuss how to increasingly facilitate efficient layouting and operational decisions by renewable energy projects, increasing flexibility provision. We will explore smart design of long-term contracts and support schemes including sector coupling options to increase the market value of variable renewable technologies. We will also explore how multi-criteria selection of projects that consider system and market integration. Finally, we will explore if smart electricity market re-designs can alleviate some of the existing market integration issues that renewable energy technologies currently face. We will emphasise the interplay between policy design for renewable energy and electricity market design, and also explore the coupling to other energy markets.
Workshop: Electricity Markets
Offshore systems: current challenges and comparison with onshore systems
Course Directors: Tim Schittekatte, Ellen Beckstedde
The EU Wind Power Action Plan acknowledges the importance of offshore systems to reach the European Union’s ambitions to become the first climate-neutral continent by 2050. The rapid growth and specific nature of offshore systems bring new challenges compared to how we traditionally design electricity markets. While the Electricity Market Design proposal includes some fundamental principles on the market design of offshore systems, open issues remain about the implementation of offshore bidding zones and the allocation of congestion rents between stakeholders. Also the interaction of these mechanisms with long-term instruments, such as power purchase agreements (PPAs) and contracts for difference (CfDs), remains unclear. In this session, participants will learn about the ongoing challenges in offshore systems and the proposed solutions. Using interactive poll discussions, participants will be engaged to think and share about some of these open issues. Furthermore, a comparison will be made with the onshore market design. As a result, participants will learn why some of the proposed solutions in offshore market design might be seen as experiments to the way we traditionally design electricity markets in onshore systems.
Workshop: EU Green Deal
What comes after the European Green Deal? Europe’s New Competitiveness Deal and its effects on EU climate and energy policy
Course Directors: Nicolò Rossetto, Torbjørg Jevnaker
Competitiveness of Europe’s economy is set to take centre stage among the EU’s priorities for the next five years. Following calls from several stakeholders, including energy intensive industries and business associations, the European Council in April 2024 announced a new European Competitiveness Deal, suggesting that this will be put at the core of the European Strategic Agenda for 2024-2029. The European Council called for work to be taken forward decisively and swiftly on the key competitiveness drivers. The latter included an industrial policy that decarbonises Europe’s industry in a competitive manner; achieving a genuine energy union by securing the supply of abundant, affordable and clean energy to pursue European energy sovereignty and climate neutrality; and efforts at increasing circularity and resource efficiency.
The next European Commission is expected to develop an overarching initiative in the months after the June 2024 European Parliament elections. While details will emerge only in the coming months, there is already growing interest on the relation between such a new initiative and the European Green Deal (EGD). The latter was one of the main priorities of the 2019-2024 European Commission, aiming at putting the EU on a robust path towards climate neutrality by 2050. By consistently developing a broad number of legislative proposals that covered multiple policy areas, the Commission claimed in the EGD the possibility to achieve a transition towards an environmentally sustainable energy system that is compatible with a secure and competitive energy supply and that does not leave anyone behind. Although it is difficult and probably too early to assess whether the EGD has delivered on its promises, it is apparent that more attention is needed to the link between the energy transition and competitiveness, also considering that energy prices in Europe are high according to international standards. Similarly, the EU’s increasing emphasis on strategic autonomy points towards the need to avoid external dependencies for strategic resources, such as energy and critical materials, which can undermine Union’s security in a more turbulent world.
In this session, participants will learn about the role of the EU’s overarching strategic priorities for the development of energy and climate policy initiatives in the next political cycle. Participants will have the opportunity to discuss how the energy transition in Europe will be affected by a more competitiveness-oriented agenda, and how this builds on or departs from the EU Green Deal. Polls will be used to engage participants and facilitate an exchange of views and national experiences. As a result, participants will not only become more aware of the multiple objectives and tensions associated with the different goals of energy and climate policies, but also learn how, in some circumstances, it is possible to deal with those tensions successfully.
Event Details:
- Event Fee: 250€
- Registration Deadline: 6 October 2024
Additional Information:
The event will be held exclusively in a residential format, allowing for a limited number of participants. Admission will be granted on a first-come, first-served basis.
Directions to reach the venue
The EUI Badia is easily reachable by taxi from Florence centre or from Fiesole (about 20€) and from Florence Airport (about 35€).
If you prefer public transport (ticket 1,50€ to be bought in official ticket offices, machines and authorised retailers that display the Autolinee Toscane sticker): take bus line number 7 from the center, the main railway station or from Fiesole, and get off at the stop ‘San Domenico 01’ (map) From there walk to our main building, Badia Fiesolana (map).
Logistic info
Please arrange your travel and accommodation as soon as possible as Florence is very popular. Paid registration fee is non-refundable. Please note that the course fee does not cover travel and accommodation costs.
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Speakers
Experimentalist governance in energy: insights from the EU
On 29 May 2024, the FSR Insights series will start looking at ‘Developments in European energy and climate policy’, the new theme that will be the focus of the series until the summer break.
Dr. Bernardo Rangoni will illustrate some of the results of his extensive research on the governance of various industries, which was recently published in a book by Oxford University Press (Experimentalist Governance: From Architectures to Outcomes). He will focus on two issues at the heart of both the electricity and gas industry – network access and tariffication – and also touch upon more recent ones, such as market manipulation and renewables. By comparing the developments within and across the two sectors, he will show what conditions can lead to the emergence and resilience of non-hierarchical governance in energy and beyond.
Max Münchmeyer and Torbjørg Jevnaker from the FSR will discuss the contribution by Dr. Rangoni before opening the floor to questions from the audience.
Keynote speaker
Bernardo Rangoni | University of York, Antwerp and EUI
Discussants
Max Münchmeyer | EUI
Torbjørg Jevnaker | Cicero, FNI and EUI
Moderators
Marzia Sesini | EUI
Nicolò Rossetto | EUI
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20th Florence Air Forum: Assessing the airport ecosystem: which way forward?
Co-organised by the Transport Area of the Florence School of Regulation together with the European Commission’s DG MOVE, aims at discussing and evaluating holistically the current airport regulations and the interplay with other legislation as far as it affects the efficient function of the airport ecosystem.
Aviation is crucial for Europe’s mobility, connectivity, and competitiveness. With over 900 million air passengers travelling to, from, and within the European Union each year, Europe makes up a third of the global aviation market.
The liberalisation of the internal aviation market has been a major EU success in terms of enabling significant growth for the sector and delivering benefits to consumers. It has also supported the EU’s competitiveness globally. At the same time, there have also been unintended environmental impacts in terms of CO2 emissions, pollution and noise.
The Commission’s Smart and Sustainable Mobility Strategy sets the goal of developing a resilient, competitive and sustainable transport sector that can deliver affordable connectivity to all EU regions. These goals are set against the background of an aviation market that has been substantially changing in recent years with more pressing and new challenges, such as increasing capacity constraints, evolving market power, consolidation in the air services sector and the strategic goals of enhancing sustainability, digitalisation and resilience.
Efficient airport capacity management is a key component of a well-functioning aviation market. Being able to access competitively priced, sustainable and quality capacity is a necessary ingredient of a well-functioning aviation market that can deliver affordable connectivity to consumers. The access, pricing and quality of airport capacity have been traditionally governed by EU legislative pieces on the allocation of slots at airports, on ground handling services and airport charges facing airlines.
Given the Union’s strategic goals of decarbonisation, digitalisation, competition and affordable connectivity, it is only logical to take a step back and assess the current regulations affecting airports from a holistic and systemic perspective – are they functioning well? can anything be done to make airport capacity management more efficient? are the rules sufficient to enable investment and effective deployment of green and digital solutions at airports? is there any scope
for a more holistic and systemic approach to airport capacity management? can greater reliance on communication, digital solutions or AI make airport capacity management more efficient?
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Promoting Competition in the Retail Energy Market
Despite the energy retail market having been fully open to competition, also for residential consumers, for more than fifteen years, it has proven extremely difficult to engage these energy consumers in this market. It could therefore be of value to look at alternative ways to ensure that consumers benefit from retail competition in the energy market. This FSRDebate assessed the recent Italian experience of running auctions among suppliers to allocate bundles of consumers who were still in the regulated market. These auctions resulted in significant savings with respect to the benchmark defined by the regulator.
The energy retail market has been fully open to competition (i.e. also for residential consumers) since July 1st, 2007. However, it has proven extremely difficult to engage energy consumers in this market. The switching rate of consumers is generally considered as one of the key indicators of well-functioning retail energy markets. While switching rates do not provide conclusive evidence, they have remained low – typically in the 5-6% per year – in many countries for many years after liberalisation. More recently, some Member States have witnessed an increase in the rate at which residential electricity consumers switched their suppliers. In 2021 switching rates sharply increased in many Member States, for example getting to or close to 25% in Belgium and the Netherlands, as a result of the much higher energy prices in that year, which encouraged consumers to look around for better terms, difficult though to find at that time. In 2022, switching rates decreased once again, with their levels for residential electricity consumers staying above 20% only in Belgium and Spain, while France, Greece, Slovenia, the Czech Republic, Romania, Latvia, Austria, Estonia, Croatia, and Slovakia still had switching rates at or below 10% – below 1% in Luxembourg.
Many reasons have been given for the reluctance of energy consumers to take full advantage of retail competition and shop for the best offers available on the markets, including the scepticism created by a number of retailers going out of business during the recent energy crises.
It could therefore be of value to look at alternative ways to ensure that consumers benefit from retail competition in the energy market. The recent experience of ARERA, the Italian Regulatory Authority for Energy, Networks and Environment, could provide a useful reference. Concerned with the slow pace at which electricity consumers were leaving the regulated markets and opting for alternative offers available in the free market, ARERA organised a set of auctions through which bundles of consumers were allocated to competing suppliers which bid discounts with respect to the cost-reflective benchmark defined by the regulator, which they offered to apply for a period of three years.
The results of the last auctions, for residential customers, which were held at the beginning of the year imply substantial savings for consumers who are still in the regulated market, in the order of €130 per connection point per year1. Such large savings raise interesting questions regarding the expected future behaviour of consumers as assessed by suppliers.
In this context, the debate will assess whether the Italian experience could serve as a reference for other countries also characterised by a low degree of energy consumers’ engagement and what the results of the Italian auctions could suggest in terms of the expected future behaviour of consumers.
Programme
Introduction to the Debate and Opening Presentations
14.00 – 14.05 Introduction to the Debate
Alberto Pototschnig | Florence School of Regulation
14.05 – 14.20 The scope, design and results of the Italian retail auctions
Massimo Ricci | Director, Energy Division, ARERA
Guido Cervigni | Managing Director, DFC Economics
14.20 – 14.30 Empowering energy consumers
Tadhg O’Briain | Deputy Head of Unit, Consumers, Local Initiatives, Just Transition, European Commission
Panel Discussion: Introductory Remarks, Polls and Comments
Moderator: Ilaria Conti | Florence School of Regulation
14.30 – 14.50 Introductory remarks from the panellists
Elsa Água | Member, Customers and Retail Markets (CRM) Working group, CEER
Pierpaola Pietrantozzi | General Secretary, Adiconsum (Italian Consumers Protection Association)
Rita Mota | Chair of Retail Market Design Working Group, Eurelectric
Elisa Rondella | Vice-President, AIGET
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
Presentations
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Exploring Business Models for Urban Innovation
This is the third and last installment for the quarterly FSR Insights on ‘Innovation in Energy’- Watch the recording
The episode will focus on the pivotal role of innovation in driving decarbonization efforts and navigating the dynamic shifts in the built environment.
The building sector plays a crucial role in achieving European energy and CO2 reduction goals, accounting for over 40% of energy consumption and 36% of GHG emissions. Energy building renovation is key to reaching these targets, offering cost-effective emission mitigation potential and numerous societal and economic benefits. However, despite existing policies, the current renovation rate falls short of what would be socially optimal, necessitating a reimagining of delivery mechanisms.
In this episode, titled “Exploring Business Models for Urban Innovation” we will delve into the transformative potential of one-stop-shop (OSS) innovative business models in the energy renovation sector and how they can revolutionize energy home renovation, contributing significantly to European climate and energy goals.
Our Keynote Speaker will present her latest research on “Boosting energy home renovation through innovative business models: ONE-STOP-SHOP solutions assessment“, guiding us into the potential of OSS initiatives to overcome barriers and accelerate renovation efforts. Alongside our discussants and audience, she will engage in a lively discussion on the topic, exploring the implications and opportunities presented by these innovative approaches.
FSR Insights is an online series hosted by Marzia Sesini and Nicolò Rossetto (FSR).
Keynote speaker
Annamaria Bagaini | Bocconi University
Discussants
Daniele Stampatori | FSR and Comillas Pontifical University
Isabel Azevedo | INEGI
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