European Energy Sector Research Articles

Digital platforms across the European regional energy markets

Digital platforms increasingly propose business models that improve economic organisation -by better coordinating supply and demand under imperfect information- and attain higher efficiency levels. At the same time, the energy generation gradually reshapes into decentralised network with lower capacity, but able to manage demand and supply in real-time. However, the penetration of online platforms within the energy sector poses policy questions that are specific to platforms' business models. This study investigates a sample of 217 digital platforms running energy-related activities across the EU regional markets. These energy platforms make about 20% of the world energy platforms. By observing their characteristics and those of their surrounding markets, it appears that the digital platforms in the European energy sector still tend to be relatively small and concentrated in specific regions, often in the neighbourhood of capital cities. Furthermore, the quantitative analysis suggests that market size, digital readiness and regulatory quality are the most important features relating to platforms' presence in the EU regional markets. This paper offers empirical evidence and reflections to provide energy policy with key information to best ripe the potential of new technologies while being aware of their inherited complexities.

Putting Forests to Work? Enrolling Vegetal Labor in the Socioecological Fix of Bioenergy Resource Making

Large-scale European electricity providers are increasingly replacing coal with renewable biomass wood pellets produced from working forests of the U.S. South. Adopting a posthumanist interpretation of the labor theory of value, this article argues that wood pellet manufacturing constitutes an attempt by energy capital to substitute the “dead labor” of prehistoric plants, embodied in fossil fuels, with the living, “vegetal labor” of forests of the present day. More specifically, the article contends that by capitalizing on the hybrid labor regimes through which the real subsumption of nature in working forests is achieved, energy interests seek to position wood pellets not merely as a viable alternative resource for electricity generation but as a socioecological fix for capitalist crisis linked to climate change in the European energy sector. The legitimacy of this apparent fix depends, however, on normalizing a view of forests not as gradually accumulating carbon sinks but as high-throughput carbon conveyors. Wood pellet manufacturing thus has important implications for conceptual understandings of the role played by labor—both human and vegetal—in efforts to institute socioecological fixes and also for practical efforts to challenge the inherently productivist logics of expanding forest-based bioenergy systems, whether rooted in the U.S. South or elsewhere.

Modeling the co-combustion of coal and biocoal from the novel process of frictional pyrolysis for reducing the emissions of coal plants

Coal industry is a significant pillar of the European economy and is responsible for a quarter of the energy production. The gradual decarbonization of the energy sector must take into consideration the regions that require a transition period. In this framework, this study presents the case of co-combusting conventional fuels and biocoals from agrowaste in order to reduce the carbon footprint of existing coal plants during this transition period. Along with the more common case of torrefied biomass, two novel biocoals that are produced by means of frictional pyrolytic conversion are also considered in this analysis and the co-combustion is modeled thermodynamically. The scope of the study has been the calculation of CO2 and NOx emissions for the different potential fuel blends. Of biocoals with conventional coal fuels, i.e., anthracite bituminous, subbituminous, and lignite coal. The heating values of the fuel blends varied significantly from 12.5–30 Mj/kg. The CO2 emissions per kg of input ranged from per kg of input 1.4–3 kg of CO2, with subbituminous coal projected the best performance in this metric. Coals of higher heating values, i.e., anthracite and bituminous coal, performed also well but the metric of CO2 emissions per MJ of input was not comparatively as good and exceeded the level of 95 g of CO2 per MJ of input. On the contrary, lignite CO2 emissions per MJ of input was closer to 90 g of CO2 per MJ of input and this could be explained from the fact that the higher carbon content of anthracite and bituminous coal did not translate to analogically higher heating values. The comparative performance of lignite coal becomes the optimal choice in respect to CO2 emissions per MJ of input for fuel blends that use biocoal ratios higher than 40%. This is an interesting outcome that provides an insight of an alternative pathway for reducing the carbon footprint of low rank coal energy production facilities and can be a helpful tool during the transition of European energy sector towards renewable energy systems.

Artificial Intelligence for Smart Renewable Energy Sector in Europe—Smart Energy Infrastructures for Next Generation Smart Cities

One of the most challenging areas of Future Smart Cities Research is the Smart Energy domain. Critical issues related to optimization, provision of smart customizable networks and sophisticated computational techniques and methods enabled by artificial intelligence and machine learning need further investigation. The renewable energy (RE) is a powerful resource for the future global development in the context of climate change and resources depletion. Artificial intelligence (AI) implies new rules of organizing the activities in order to respond to these new requirements. It is necessary to improve the design of the energy infrastructure, the deployment and production of RE in order to face the multiple challenges that will affect the sector’s growth and resilience.. In this research work we exploit the recent developments on the AI adoption for RE sector in European Union (EU). In this respect, we analysed (i) the efficiency of the transformation processes of the RE within the energy chain from Gross Inland Consumption to Final Energy Consumption, (ii) its implications on the structure of renewable energy by source (solar, wind, biomass etc.), (iii) the labour productivity in RE sector compared to the economy as a whole and its correlation with investments level, (iv) the implication of the adoption of AI for RE towards Future Smart Cities Research. The main contribution of this research is the development of a framework for understanding the contribution of AI in the RE sector in Europe. Another bold contribution of this work is the discussion of the implications for Future Smart Cities Research and future research directions.

In the Name of COVID-19: Is the ECB Fuelling the Climate Crisis?

We offer preliminary evidence drawing on a novel dataset of corporate bonds issued in the European energy sector since January 2020 in combination with the European Central Bank’s (ECB) purchases under the Pandemic Emergency Purchase Programme (PEPP) in response to COVID-19. We show that the likelihood of an European energy company bond to be bought as part of the ECB’s programme increases with the greenhouse gas (GHG) intensity of the bond issuing firm. We also find weaker evidence that the ECB’s PEPP portfolio during the pandemic is likely to become tilted towards companies with anti-climate lobbying activities and companies with less transparent greenhouse gas (GHG) emissions disclosure. Our findings imply that, at later stages of the COVID-19 recovery, an in-depth analysis maybe necessary to understand if and if yes, why the ECB fuelled the climate crisis.

Новые условия конкуренции на европейском рынке газа

This article aims to discuss the process of liberalization of the natural gas market in the European Union (EU). The purpose of this research is to show the fundamental characteristics of the gas industry, the process of reconstruction of the European gas market, taking into account the ongoing changes in the context of geopolitical, ecological, and technological determinants of the international and European energy and gas sector. The article describes the structure of the modern European natural gas market, compares the competitiveness of gas transportation methods through trunk pipelines and gas tankers transporting liquefied natural gas. The article examines the impact of the increase in the supply of liquefied natural gas on the situation with the turnover of gas trade in the European market, in particular, how it affects the delivery of hydrocarbons and the growth in the scale of exchange trading. The article examines the Groningen model, which influences the development of gas exchange trading and natural gas trading through long-term contracts. The evolution of the European policy in the field of natural gas, the established strictly regulated version of the “well-functioning” gas market, remains as one too political and unstable experiment. The importance of natural gas changes all the time, depending on economics, the security of deliveries, and sustainability. Furthermore, the focus on that importance and its practical application vary in different parts of Europe. The conclusion is made that a “well-functioning” gas market is characterized by the presence of a large number of suppliers, and competition leads to a noticeable decrease in prices for natural gas. However, in the current situation, the demand for gas turns out to be unstable, and difficult conditions for pipeline supplies are emerging for traditional suppliers. In the long term, the “well- functioning” gas market scheme will remain highly politicized and unstable, with increased competition in supply and a downward trend in gas prices. Thus, the European gas market is transforming towards the formation of a “buyer’s market”.

Advancing climate services for the European renewable energy sector through capacity building and user engagement

The development of successful climate services faces a number of challenges, including the identification of the target audience and their needs and requirements, and the effective communication of complex climate information, through engagement with a range of stakeholders. This paper describes how these challenges were tackled during the European Climatic Energy Mixes (ECEM) project, part of the Copernicus Climate Change Service (C3S), in order to deliver a pre-operational, proof-of-concept climate service for the European renewable energy sector. The process of iterative user engagement adopted in ECEM is described, from the initial presentation of the team’s first vision for such a service to support external stakeholders, through to evaluation of the final interactive tool for visualisation, data download and supporting documentation (the C3S ECEM Demonstrator). The outcomes of this evaluation are outlined, together with a retrospective reflection on the engagement and development process. The extent to which co-production and co-design were achieved in practice is assessed. The paper also highlights the distance travelled from the start to end of ECEM in terms of building capacity, developing a community of practice, and raising the Technology Readiness Level. The relevance of ECEM for the European climate services market is briefly considered, including the development of downstream commercial services which build upon the public C3S services.

A climate projection dataset tailored for the European energy sector

Climate information is necessary for the energy sector. However, the use of climate projections has remained limited so far for a number of reasons such us the lack of consistency among climate projections, the inadequate temporal and spatial resolution, the climate model biases, the lack of guidance for users, and the size of data sets. In this work, we develop and assess a consistent ensemble of high time and space resolution climate projections that address these problems. First, a methodology for sub-ensemble selection is developed and proposed. Our ensemble dataset includes eleven 12 km-resolution EURO-CORDEX simulations of temperature, precipitation, wind speed and surface solar radiation on 3-hourly and daily time scales. These variables are bias-corrected for a more effective use into impact studies. The assessment of bias-corrected model simulations against observational data indicates reduced biases and increased coherence in projected changes among models compared to the raw climate projections. We provide a well-documented dataset for energy practitioners and decision-makers to facilitate the access and use of energy-relevant high-quality climate information in operation and planning. The new dataset is freely available via the Earth System Grid Federation (ESGF) platform.

Sector Coupling in the North Sea Region—A Review on the Energy System Modelling Perspective

Sector coupling is one of the emerging topics in recent energy and climate change policy discussions. It can play a significant role in creating the pathway of a renewable-based energy system in the European energy sector. The North Sea region is very likely to play a key role in the transition to a sustainable energy system. Although different energy modelling approaches allow a versatile use, they lead to the problem of an unclear understanding of specific aspects of sector coupling, and the relevance of existing tools and techniques to model and analyze such a system. This paper is aimed at providing a comprehensive understanding of sector coupling and its incorporation in energy system models. Following a thorough literature review on sector coupling and energy system modelling, the paper outlines an approach to select an appropriate tool based on the specific rationales of the research. The paper also presents the open energy modelling framework, ‘Oemof’, as an open model tool to address the complex challenges of energy systems. The conclusions from the literature review provide a detailed understanding of the concept of sector coupling and indicate that it can be advantageous from the viewpoints of decarbonization, flexibility, network optimization, and system efficiency. To solve the coupling barriers, diversified techno-socio-economic circumstances should be taken into account through the use of model collaboration. It is also demonstrated how a list of appropriate tools for model collaboration can be picked up methodologically from an available wide range of models. Finally, ‘Oemof’ is hypothesized as a progressive tool to design a sector-coupled and renewable-based energy system in the North Sea region.

The influence of weather regimes on European renewable energy production and demand

The growing share of variable renewable energy increases the meteorological sensitivity of power systems. This study investigates if large-scale weather regimes capture the influence of meteorological variability on the European energy sector. For each weather regime, the associated changes to wintertime—mean and extreme—wind and solar power production, temperature-driven energy demand and energy shortfall (residual load) are explored. Days with a blocked circulation pattern, i.e. the ‘Scandinavian Blocking’ and ‘North Atlantic Oscillation negative’ regimes, on average have lower than normal renewable power production, higher than normal energy demand and therefore, higher than normal energy shortfall. These average effects hide large variability of energy parameters within each weather regime. Though the risk of extreme high energy shortfall events increases in the two blocked regimes (by a factor of 1.5 and 2.0, respectively), it is shown that such events occur in all regimes. Extreme high energy shortfall events are the result of rare circulation types and smaller-scale features, rather than extreme magnitudes of common large-scale circulation types. In fact, these events resemble each other more strongly than their respective weather regime mean pattern. For (sub-)seasonal forecasting applications weather regimes may be of use for the energy sector. At shorter lead times or for more detailed system analyses, their ineffectiveness at characterising extreme events limits their potential.

A freezing rain impact indicator tailored for the European energy sector

A freezing rain impact indicator tailored for the European energy sector

Beyond the regulatory state: rethinking energy security governance and politics in the European Union

The regulatory state model has traditionally been used to analyse the process of integrating the European energy sector, including the sensitive area of security of gas supply. This article argues that, due to recent innovations, this conceptualisation has become increasingly problematic and cannot provide an accurate picture of the current governance and politics of European energy security. This article applies the catalytic state model to the EU and contrasts it with the regulatory state approach. The catalytic state describes a peculiar pattern of governance which combines—rather than resolves—the tensions between market-centred and state-centred approaches and supranational and national views on EU energy security. This article also illustrates how this stylised form of state can be used to better frame the guiding principles, strategies and tools that are currently emerging as EU institutions address the issue of security of gas supply.

Concentrated Solar Power Plants with Molten Salt Storage: Economic Aspects and Perspectives in the European Union

Concentrated solar power plants belong to the category of clean sources of renewable energy. The paper discusses the possibilities for the use of molten salts as storage in modern CSP plants. Besides increasing efficiency, it may also shift their area of application: thanks to increased controllability, they may now be used not only to cover baseload but also as more agile, dispatchable generators. Both technological and economic aspects are presented, with focus on the European energy sector and EU legislation. General characteristics for CSP plants, especially with molten salt storage, are discussed. Perspectives for their development, first of all in economic aspects, are considered.

European Natural Gas Markets: Taking Stock and Looking Forward

Recent natural gas price dynamics in Europe show convergence to the extent that locational price differentials approached transport tariffs, and hence, arbitrage was largely saturated: a sign of a well-functioning pan-European gas wholesale market. This contribution seeks to understand how we got to where we are in terms of the evolution of the gas industry structure in Europe and its institutional setup. It does so using a transaction-cost economics framework. The paper concludes that the move—which is still ongoing—towards a single market in gas has allowed European gas consumers to benefit from transparently set market-based wholesale prices and increased market competition among suppliers. However, as the gas market in Europe matures and with the increased penetration of renewable energy generation in the electricity sector as well as the overall decarbonisation of the energy sector in Europe, the gas market and its current regulatory regime face a number of challenges. Addressing these challenges may require an update of the current market design and possibly drastic reforms of tariff-setting for the gas transport market.

Perspectives of the convergence of domestic and european energy markets in the context of Ukraine-European integration

The article examines the prospects of cooperation between the European Union and Ukraine in the context of the globalization of energy markets. The issues of the most beneficial ways of forming long-term partnerships in the energy sector, which can lead to a strong economic and political partnership, are described in detail. The Ukrainian attempts to borrow the positive features of the European energy sector are analized here. The aim of the work is to study theoretical aspects, generalization of methodological approaches to substantiate ways to improve the functioning of the Ukrainian energy market in the way of its convergence with the EU energy market. The tasks that stemming from this goal, which were decided during the study, are to examine the process of convergence of the Ukrainian and European energy markets and to find and suggest ways to accelerate this process. The object of the study is the process of convergence of Ukrainian and the EU energy markets. In analyzing the tendencies of integration of Ukrainian energy market into the energy market of the European Union, the methods of statistical grouping and logical analysis were used. The results of the study are as follows. Convergence of the European and domestic energy markets will contribute to expanding Ukraine's fuel self-sufficiency, as the introduction of new technologies borrowed from European partners will intensify. It will also create a legal basis for expanding trade turnover and investment flows in the field of energy resources for each of the players within international relations, will form the basis for creating a common economic space between the partners. Conclusions. The first opportunity for Ukraine is to use the EU experience in creating a stable energy market, as well as its system of regulation; modernizing the economy and using the European experience of institutional development.

Innovation in the European Energy Sector and Regulatory Responses to It: Guest Editorial Note

The European energy sector is an important economic sector that is also traditionally highly regulated. With the increasing tempo in which innovations in technology and markets occur, catalysed inter alia by the energy transition and accompanied by new formats of innovation (disruptive and bottom-up), the question arises whether existing regulatory frameworks sufficiently allow for such innovation and support its further development. From an editorial perspective, we argue that decentralization of energy production on the national level and that of regulatory responses to it, need more scholarly attention. In this guest editorial, the contributions of nine articles to our special issue on innovation in the European energy sector and regulatory responses to it, are addressed. First, lessons on regulatory response to innovations in European energy markets are drawn. Second, several types of responses are deduced and discussed. Finally, key observations and suggestions for further research are presented.

Arbitration in the EU Energy Sector: Recent Developments and Case Law

This contribution focuses on arbitration in the European energy sector and sheds a light on some recent developments and cases. The contribution observes that under the current and evolving EU regulatory framework governing the energy sector different forms of dispute settlement are possible, with specific bodies for dispute settlement being developed in the Member States and certain competences for dispute settlement being allocated to the National Regulatory Authorities. With the focus being on arbitration, this contribution furthermore recognizes the importance of commercial arbitration or Investor State Dispute Settlement (ISDS) in the investments made in the energy sector and recognizes that classical discussions, such as on the balance between investor protection and the Member State's right to regulate are currently crucial: firstly because more and more dispute settlement cases are arising in relation to changes to regulatory frameworks such as support schemes that were designed to attract private investments in the first place, and secondly because many of these disputes in the energy sector occur in an intra-EU setting, in which the EU Commission is increasingly scrutinizing the dispute settlement possibilities. In light of various ongoing developments, the contribution provides some observations in two recent arbitral awards Charanne and Eiser Infrastructure and into a case in front of the European Court of Justice Gazprom OAO v. Lietuvos on the jurisdiction and the recognition and enforcement of arbitration clauses and awards in the EU.

Relative value arbitrage in European commodity markets

This study offers insights into the profitability of convergence trading in European commodity markets, thereby shedding light on the compensation for enforcing the Law of One Price. We analyze profits of a cointegration-based statistical arbitrage strategy on a wide range of European energy sectors and indeed find economically and statistically significant risk-adjusted excess returns which are also different from simple contrarian and momentum-based strategies. More importantly, the magnitude of this intermediation fee seems to be linked to commodity specific frictions limiting arbitrage possibilities. Consistent to the limits to arbitrage literature (e.g. Shleifer and Vishny, 1997 or Xiong, 2001), we find that convergence traders in Europe's commodity markets tend to be non-diversified investors focusing on specific market niches.

The Role of Polish Coal in the National and European Energy Sector

PrefaceDear Ladies and Gentlemen,Between 19th and 21st of June 2017 in Andrychów (Poland) took place the national conference entitled ‘Role of Polish coal in the national and European energy sector’. The conference gathered over 120 participants and among them major figures from the mining and energy sector in Poland both from academia and industry. Poland with its largest hard coal mining reserves in European Union struggles with carbon emission limits which in the near future will cause a significant problem for the energy sector and as a consequence – to the mining industry. This meeting was a place of exchange of ideas and views on the future of energy and coal industry in Poland. The following subjects were within the scope of this meeting:• Brown and hard coal sector market analysis.• Energy market analysis.• Mining and energy sector development scenarios for Poland.• Mining and energy production costs.• Health and safety in mining industry.• Modern methods of power generation from coal.• Coal in the heating sector.• Energy storage.• Carbon capture and storage.The conference series is a result of selection of the most important articles. All articles were peer reviewed through process administrated by the Editors.

Efficiency in knowledge transmission in R&D project networks: European renewable energy sector

This study analyses the efficiency in knowledge transmission of organizations and local regions participating in European R&D projects in 2000–2013 within renewable energy (RE) sectors (wind, solar, sea, geothermal, and biomass) using social network analysis (SNA). A review of the collaborative R&D consortium networks as technological transfer structures and public policy support issues was carried out. Then, not only is the traditional SNA centrality perspective of actors employed to identify key players who bridge less connected areas, but also the structural hole approach is applied based on the relative position, role, and potential redundancy of collaborations from the overall network perspective. It reveals that networks of organizations and local regions are neither completely random nor homogenous in terms of cohesion and efficiency. Additionally, the existence of areas between core and peripheral nodes (structural holes) is confirmed. Higher education and research centers, which show a greater influential position and higher experience, take advantage of them. Research concludes that the efficiency in terms of knowledge transmission is not always positively correlated with high centrality values. The most emergent RE sectors still appear less efficient according to the rankings produced integrating both approaches. This paper makes a novel academic contribution to RE policy makers since a new application of centrality and efficiency perspectives is applied. As a result, policy makers should consider it in detail when designing public RE projects with the aim of building an efficient European Research Area.