Eurelectric not pushing for new EU carbon tax at present

Author: Riccardo Patrian

2019/05/20

LONDON (ICIS)--Europe’s leading electricity industry association will continue to lobby EU institutions for the electrification of the energy mix, but will not push the case for a new EU-wide carbon tax for the time being, Eurelectric secretary general Kristian Ruby said on Monday.

“The association doesn’t have a shared position on the matter at the moment,” Ruby said at the annual Eurelectric conference in Florence, Italy. The association will wait to see what positions emerge in the political debate on carbon tax before adopting a position on the matter, Ruby added.

The subject of carbon taxation has come to the forefront in recent months, after the European Commission told the European Parliament and Council in April that veto powers of member states on the subject should be reduced.

New president, same priorities

The comments came as Eurelectric presented its president for the next two years. Magnus Hall, CEO and president of Swedish electricity company Vattenfall, will succeed Francesco Starace, CEO of Italian energy group Enel, who took charge in 2017.

Eurelectric is still very much in favour of the EU emission-trading system (ETS), where the cost of carbon emissions has ballooned over the past year.

“We are happy that ETS prices have gone up,” Hall said, adding that higher ETS prices give a clearer indication that the industry needs to move towards decarbonisation. Hall refrained from indicating a specific price level that Eurelectric would consider desirable.

The change at the helm of Eurelectric will not change the organisation’s lobbying push in Brussels towards the electrification of the energy mix, as well as the power industry’s target to become carbon-neutral by 2045.

This should include measures to ensure that the transition from fossil fuels to a decarbonised industry is “fair”, Hall said, including the promotion of a new fund within the 2021-2027 EU budget to support carbon-intensive regions during the transition.

Renewables key, nuclear marginal

Renewables will be the main driver of the sector’s decarbonisation, Hall said, dismissing nuclear power as not being the “key technology” to achieve this.

Corporate power-purchase agreements (PPAs) will help lead the increase in renewables, although PPAs will develop relatively slowly, outgoing president Starace said.

“Europe has lost the art of PPAs in 2003-2004, so it will take time for corporate PPAs to become as common as in the US, but surely in the next few years these will become common practice also in Europe,” Starace commented.

Public renewables tenders will show compelling prices for renewable production and this will make private companies and large consumers pay attention, Starace pointed out.

ICIS’s recently launched corporate PPA statistics page shows that just over 400MW of deals have been signed over 2019 to date, a slower rate of growth than both 2016 and 2018.

By Riccardo Patrian

ICIS Power Perspective customers have access to our new European corporate PPA statistics page . If you have not yet subscribed to our analytics products, please get in contact with Justin Banrey (justin.banrey@icis.com).