The third energy market package agreed between EU and EEA/EFTA states

The Third Energy Market Package – EU energy market rules, were incorporated into the EEA/EFTA Agreement last week. Norway and the EU are closely connected through the energy market – by including the Third Energy Market Package into the EEA/EFTA Agreement, Norwegian actors are secured access to the EU-market. 

NSP 18-05-2017

The aim of the Third Energy Package is to improve the functioning of the Internal Energy Market. The package separates energy supply and generation from the operation of transmission networks, and strengthens the independence and cooperation of energy regulators. It also covers cross-border cooperation between transmission system operators and increases transparency in retail markets to benefit consumers. The Joint Committee Decision (JCD) contains substantial adaptations necessary for the participation of the EEA EFTA States in the Internal Energy Market. The approval of the Third Energy Package – by both sides – is the result of constructive discussions between the EU and the EEA EFTA States.

25th anniversary – The EEA Joint Committee provides a forum for the EEA EFTA States and the EU to exchange views and take decisions by consensus to incorporate EU legislation into the EEA Agreement. The meetings last week marks the 25th anniversary of the signing of the EEA Agreement since the first one in Porto, Portugal. The Agreement brings together the EU and EEA EFTA States in a Single Market, ensuring legal homogeneity. Since its entry into force in 1994, a lot of  acts have been incorporated.

EEA – The European Economic Area (EEA) brings together the EU Member States and three of the EFTA States (Iceland, Liechtenstein and Norway). It was established by the EEA Agreement, an international agreement which enables these three EFTA States to participate fully in the Single Market. The objective of the EEA Agreement is to create a homogenous European Economic Area. All relevant EU legislation in the field of the Single Market is integrated into the EEA Agreement so that it applies throughout the whole of the EEA, ensuring uniform application of laws relating to the Single Market.

NSP 18-05-2017 - v2

Renewable energy sector – The Third Energy Package Agreement between EEA/EFTA and EU is also of importance for the renewable sector in Norway – this means that there will be a close connection to the EU renewable energy market.

Renewable Energy Technology Development: Short Term Policy Recommendations for Nordic Countries

nsp-26-01-2017

There is a clear technological and economical pathway for the Nordic region to push towards a more near carbon-neutral energy system in 2050. The Nordic countries want to send a strong signal to the global community that the ambitious aims of the Paris Climate Agreement are achievable. This is the conclusion from the; Nordic Energy Technology Perspectives Report 2016 – from The International Energy Agency and Nordic Energy Research.

The ambitious pathway outlined by the Nordic countries, who specifically wants to act in four key areas:

  1. Strengthen incentives for investment and innovations in energy technologies.
  2. Boost European cooperation on grid infrastructure and electricity markets.
  3. Reduce process-related emissions in industry
  4. Accelerate transport decarbonisation

 

1.Strengthen incentives for investment and innovation in energy technologies.

The Renewable Energy Policy should accelerate the  roll-out of key flexibility technologies and  incentivise their utilisation for flexibility through market mechanisms and regulation. Markets must also adequately compensate flexibility services such as demand response in industry and  buildings, as well as the flexible operation of small power plants. Information technology (IT) infrastructure (smart meters) and IT platforms (consumer Apps or control systems) will be important  in achieving a rapid penetration of these flexibility services.

2. Boost European cooperation on grid infrastructure and electricity markets.

Coordinated effort to strengthen domestic grids and install new transmission lines is needed to  establish the future Nordic and European electricity system (‘The Green Battery Strategy’).  Regional collaboration on infrastructure planning is needed to ensure optimal investments and avoid bottle-necks in the grid. Coordination among Nordic governments is vital to ensure that policy accelerates  technological and regulatory progress in order to reduce total costs. Cooperation in reforming the common Nordic electricity market to allow greater flexibility and accommodate higher shares of variable renewables will also be important.

3. Reduce process-related emissions in industry.

The Renewable Energy Policy should take steps to ensure long-term competitiveness of Nordic industry while reducing process-related emissions. More variable and potentially higher electricity prices will put additional pressure on energy-intensive industry in the Nordic region, stressing the need to step up low-carbon industrial innovation. Governments should act to reduce the risk of such investment and use public funding to unlock private finance in areas with significant emission reduction potential.

4. Accelerate transport decarbonisation.

Even as Nordic countries pursue different technology strategies in parallel, they should not wait to draw on  the wide range of available policy instruments to stimulate fuel efficiency, low carbon technologies and shifts to more efficient transport modes. Governments should build upon positive experiences with measures such as congestion charging in urban settings, differentiated vehicle registration taxes, bonus-malus regimes, and altered parking fees, while also stepping up investments in infrastructure  for cycling, public transport and rail. Policies should also incentivise modal shifts from road freight to sea and rail, and from cars to public transport and cycling.

Nordic and European collaboration on energy policy can play a role to reach the ambitious aims of the Paris Climate Agreement.