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Technology Plan 2020 Conference

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Today (23 November), Energy Commissioner Kadri Simson (pictured) will participate in the Strategic Energy Technology (SET) Plan 2020 conference, which focuses on the theme of ‘Making the SET Plan fit for the EU Green Recovery'. Co-hosted by the Commission and the German Presidency of the Council of the EU, this two-day event will discuss the contribution of the SET Plan to the more ambitious energy and climate targets for 2030 and 2050.

Commissioner Simson will deliver the opening speech and join the high-level ministerial panel to exchange views on the EU's path to clean energy transition and the importance of research and innovation to boost competitiveness and keep Europe at the forefront of clean energy technologies. More details are available on the SET Plan conference website.

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Commission approves support scheme for energy-intensive companies in Spain

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The European Commission has approved, under EU state aid rules, a Spanish scheme to partially compensate energy-intensive companies for the costs incurred to finance support to (i) renewable energy production in Spain, (ii) high-efficiency cogeneration in Spain, and (iii) power generation in Spanish non-peninsular territories. The scheme, which will apply until 31 December 2022 and will have a provisional annual budget of €91.88 million,  will benefit companies active in Spain in sectors that are particularly energy-intensive (hence with high electricity consumption relative to the value added of production) and more exposed to international trade.

The beneficiaries will obtain compensation for up to a maximum of 85% of their contribution to the financing of support to renewable energy production, high-efficiency cogeneration and power generation in Spain's non-peninsular territories. The Commission assessed the measure under EU state aid rules, in particular, the Guidelines on State Aid for environmental protection and energy 2014-2020, which have been extended until the end of 2021. The Guidelines authorise reductions – up to a certain level – in contributions levied on energy-intensive companies active in certain sectors and exposed to international trade, in order to ensure their global competitiveness.

The Commission found that the compensation will only be granted to energy intensive companies exposed to international trade, in line with the requirements of the Guidelines. The measure will promote the EU energy and climate goals and ensure the global competitiveness of energy-intensive users and industries, without unduly distorting competition. On this basis, the Commission concluded that the measure is in line with EU state aid rules. In connection to this scheme, the Spanish authorities have also notified to the Commission a measure granting guarantees in relation to long-term power purchase agreements concluded by energy-intensive companies for electricity from renewable energy sources, the so-called Reserve Fund to Guarantee Large Electricity Consumers (FERGEI).

This guarantee scheme aims to facilitate the production of energy from renewable sources. The Commission assessed the measure under EU state aid rules, in particular, the 2008 Commission Notice on state aid in the form of guarantees, and concluded that the state guarantee scheme does not constitute aid within the meaning of Article 107(1) TFEU. More information will be available on the Commission's competition website, in the State Aid Register.

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Northern German state plans foundation to help complete Nord Stream-2 gas link

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The German state of Mecklenburg-Vorpommern plans to set up a foundation to help the completion of the Nord Stream-2 (NS2) pipeline to bring Russian gas to Germany and to fend off the threat of increased US sanctions that halted work last year, writes .

The Gazprom-led $11 billion pipeline would double the existing Nord Stream-1 pipeline’s capacity and has become a focal point of Russia’s confrontation with the West.

The United States has said Europe is undermining its energy security by increasing its reliance on Russian gas, while Russia says the United States is using sanctions to block the pipeline and protect its own natural gas industry.

State premier Manuela Schwesig told reporters in Schwerin that the local coalition, made up of Chancellor Angela Merkel’s conservatives and Social Democrats, decided to launch a public sector climate foundation.

Similar to two foundations around Nord Stream-1, it would boost the role of renewables and gas as a bridging technology towards cleaner fuels.

It could shield the companies involved in construction and operations of the pipeline from US sanctions by acquiring, holding and releasing necessary hardware in its name.

“We believe that it is right to build the pipeline,” said Schwesig, adding she hoped the sanctions would be removed.

Approval by the state parliament for €200,000 of public money for the foundation was expected to be obtained on Thursday (7 January). This would be topped up by €20 million from the NS2 consortium.

The foundation is to be headed by ex-state premier Erwin Sellering, former Member of the European Parliament Werner Kuhn and Katja Enderlein, an entrepreneur in the town of Greifswald, on an unpaid basis.

It will be far harder for the United States to target a state-backed foundation with measures such as freezing funds, than private companies as it has no interest in commercial activity beyond NS2, which is more than 90% completed.

The consortium is expected to start laying a remaining stretch in Danish waters from 15 January while the final stretch in German waters was finished last month, Refinitiv Eikon data tracking movements of pipe-laying ships indicated.

($1 = €0.8107)

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Turkish Stream extended to the Balkans

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While the passions around the Nord Stream-2 are not subsiding, and Washington is looking for new ways to stop the project, Russia has launched the second part of the Turkish Stream (TurkStream) in the Southern Balkans. Thus, this large-scale project takes its final shape, writes Alex Ivanov, Moscow correspondent.

On 1 January, Serbian President Aleksandar Vucic launched the Serbian section of the Turkish Stream - an interconnector gas pipeline that expanded the Serbian national gas transportation system.

In the new year, 2021, Serbia joined a number of Balkan countries that use one of the main Russian energy resources, overcame dependence on Ukrainian gas transit and ensured energy stability.

“The number of European countries that receive Russian gas with the help of Turkish Stream has grown to six. Now, along with Bulgaria, Greece, Northern Macedonia and Romania, Serbia, Bosnia and Herzegovina have provided themselves with such an opportunity, said Alexey Miller, Chairman of the Gazprom Management Board. From Russia, gas is supplied via the Turkish Stream offshore gas pipeline to Turkey, from there to Bulgaria, and through the national gas transportation system of Bulgaria, it enters Serbia and Bosnia and Herzegovina.

Two lines of the Turkish Stream will supply 15.75 billion cubic metres of gas per year, about 3 of them will be received by Serbia. Russian gas will allow the Serbs to attract foreign investors, help improve the environmental situation in the country and raise the standard of living of citizens. The festive launch of gas went like clockwork, but Russia and Serbia took a long time to reach this strategically important moment.

According to the initial plan, the entire volume of gas from the second line was planned to serve by transit through Turkey to the border with Bulgaria, where it would be done in the upgraded Bulgarian gas transport system, which is capable of transmitting 12 billion cubic meters of gas on border with Serbia. After the distribution of gas through its territory, the rest of the gas was to be supplied to the border with Hungary. By 2019, it was planned to synchronize all work on the construction of the Turkish Stream branches and simultaneously modernize the Bulgarian and Serbian gas transmission systems.

However, when the gas pipeline was already built by the Russian company Gazprom in 2019, work had only just begun in Serbia, while in Bulgaria it was not carried out at all. Gazprom, as a reliable supplier, booked additional capacities for gas transportation through the Ukrainian corridor for gas supplies to Serbia in 2020, although this was not profitable for Russia either in terms of the economy, or even more so in the political aspect.

In 2020, work on connecting Serbia and Bulgaria to the Turkish Stream was intensified, but in the fall of 2020 it turned out that Serbia (for various reasons) does not have time to fulfill its obligations before March-April 2021. This meant that in order to organize Russian gas supplies to Serbia in 2021, Gazprom would again have to ask Ukraine, contrary to its political and reputational interests, to sell additional transit capacity to deliver gas to Serbia. President Aleksandar Vucic personally had to solve the problem.

Already in November 2020, a Russian-Serbian working group was established, working under the direct control of the Serbian leader. After President Vucic took the situation into his own hands, the construction of the gas pipeline in the country began at a new pace. The round-the-clock work of specialists and builders of the two countries has brought a corresponding result.

In total, about 6 billion cubic metres of gas will be supplied to the domestic markets of these countries. The corresponding amount of fuel can be excluded from the alternative flow in transit through Ukraine. For the Serbian consumer, the launch of the "Balkan Stream" is especially important because the price of a cubic meter of gas will now drop from $ 240 to $ 155 at the exit from Bulgaria (the cost of internal transit will be added to them, about $ 12-14). This also means a revision of the cost of connecting households to gas. Alexander Vucic called this event "great and important for Serbia" and sincerely thanked the Russian leadership. "This is an important day for our country. I would like to thank our Russian friends who participated in the construction of the gas pipeline together with us. I congratulate you on your great work, it is of great importance for the industry, the development of the Serbian economy, as well as all the inhabitants of Serbia," he said at the launch ceremony of the gas pipeline.

Russia is completing its ambitious project in the Balkans. All the countries that wanted to get gas already have it. Turkish Stream is there in the Balkans. At the time, it was not possible to implement the South Stream, but now there is another route and it works.

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