MorganEnergy

The fashion for new nuclear plant has moved closer to becoming a reality in the USA. Exelon Generation has submitted a formal request to build and operate a new nuclear power station in Victoria County, Texas. The twin reactors would be capable of producing 3,000 MW of power.

Meanwhile the EU Energy Policy blog has a long article by William Nuttall and David Newbery of Cambridge on policy attitudes towards new nuclear build around Europe.

According to EurActive the European Commission has approved a deal for a Northern European energy market that would link the Nordic region to Germany. The European Market Coupling Company will provide congestion management services and transmission rights trading to companies operating in NordPool and EEX. The deal is due to be finalized on September 29th.

The ERGEG (European Regulators´ Group for Electricity and Gas) and CESR (Committee of European Securities Regulators) have launched a joint consultation on trading regulations in energy and gas markets. The core element of their concern is expressed in their press release as follows:

The existing EU securities legislation (i.e. the Market Abuse Directive – MAD) may not properly address potential market integrity issues in the electricity and gas markets. MAD applies almost exclusively to financial instruments admitted to trading on a regulated market. Physical products (e.g. spot market products) are not covered, and derivatives markets products are covered only if they are admitted to trading on a regulated market.

A consultation document has been issued asking market participants to comment on the effectiveness of the current regulations and, in particular, so say whether they think that a greater obligation for transparency would improve the situation. Details of responses received and public hearings to be held will hopefully be posted on the pages made available for them at the ERGEG web site.

Back in 2006 Germany power company, E.ON, attempted to buy Endessa, a Spanish company. Although the European Commission approved the bid, it was blocked by Spain’s National Energy Commission. The wheels of European justice grind fairly slowly, but yesterday the European Court of Justice ruled that Spain had no right to block the purchase. More details on EurActive.

Well, their electricity network anyway. Platts reports that negotiations are taking place between Switzerland and the European Union regarding increased integration of their respective electricity transmission networks. This is doubtless particularly welcome news for Italy as the famous blackout of September 2003 was triggered by the failure of lines in Switzerland. A report (in English) on the incident produced by the Swiss government is available here (PDF).

Last month we reported on a possible compromise deal in EU market liberalization whereby transmission owners (in particular large “national champions”) would not be required to sell off capacity to promote competition, but instead would simply cede operational control of their networks to independent Transmission System Operator. That plan now appears to have foundered on the rock of the European Parliament which has voted, by a majority of 449 to 204, to insist on actual ownership unbundling of the networks. EurActive has more details.

The French financial regulator, AMF, has approved a merger between Gaz de France and Suez. The merger is now free to go ahead provided that it receives shareholder approval at a meeting on July 22nd. According to a Platts report, the new company, to be called GdF Suez, will be the world’s fourth largest energy utility by market capitalization, behind only Gazprom (Russia), EdF (France) and E.ON (Germany). The company will control 25% of Europe’s LNG market. It is not clear what effect the merger will have on the European Commission’s ongoing anti trust investigation into GdF.

The European Commission has begun formal proceedings against E.ON and Gaz de France, alleging that the two companies colluded to restrict competition in each other’s national gas markets. An anti-trust investigation has been ongoing for some time, but this new development means that actual charges of wrongdoing have been filed against the two companies who must now defend themselves or risk being subject to substantial fines. Further details from Platts and the BBC.

Inevitably there will be days when no earthshaking story comes across our desks. Our plan is to fill at least some of those days with brief reviews of others places around the Internet where discussion of energy economics issues can be found. We would like to start with the EU Energy Policy Blog.
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Further to our discussion of EU market liberalization, RWE has announced that it will follow E.ON‘s example and look to sell off its gas transportation network in order to settle the anti-trust case being brought against it.