EU energy ministers to discuss the electricity market design in Linz

The Austrian EU Presidency will hold an informal meeting of energy ministers in Linz from 17 to 18 September 2018. The ministers will discuss the design of the electricity market as part of the EU’s Clean Energy Package and the potential of hydrogen technologies for integrating variable renewable energy supplies into the energy system. Finland’s representative at the meeting will be Minister of the Environment, Energy and Housing Kimmo Tiilikainen.

The EU energy ministers will discuss the electricity market design in the Clean Energy Package. The working session will focus on the capacity mechanism parameters proposed in the Electricity Regulation and the means of responding to increasing flexibility needs. Capacity mechanisms are measures to ensure the security of electricity supply through guaranteeing adequate capacity to produce electricity at all times. Rewards are usually based on installations’ production capacity.

In Finland’s view, a key means of meeting the increasing flexibility needs is to maintain and reinforce the functioning of the electricity market. The need for capacity mechanisms should be assessed carefully and their potential to distort competition should be minimised.

There have been two trilogue negotiations on 27 June and 11 September, respectively, between the Council, the European Parliament and the European Commission on the Electricity Directive and the Electricity Regulation. The capacity mechanisms were not discussed on either occasion. Austria aims to reach an agreement on the Commission’s proposals before the end of its Presidency by the end of the year.

The ministers will also discuss the integration of renewable energy into the electricity system and Austria’s Hydrogen Initiative, which the Member States and businesses can sign during the informal meeting in Linz. The initiative describes the potential of hydrogen technologies in different sectors and presents targets for researching and promoting hydrogen technologies. Finland will sign the initiative because hydrogen technologies are one means of achieving low-carbon development.

In the future, intermittent electricity supplies from renewable sources (wind and solar power) will produce affordable surplus electricity, highlighting the need for storage solutions. The most important current means of storing electricity are different kinds of battery storage solutions and pumped-storage plants, where energy is stored in the form of gravitational potential energy of water, pumped from a lower elevation reservoir to a higher elevation. Another means of storing energy is to convert renewable electricity to hydrogen. Hydrogen produced from renewable energy is called sustainable hydrogen to distinguish it from fossil-based hydrogen.

Chemical industries, such as oil refining, are already using hydrogen to a great extent. Sustainable hydrogen holds great emission reduction potential for the steel industry, too. Hydrogen technologies could also be deployed in the transport sector. Fuel cell vehicles are a type of electric vehicle, which use hydrogen instead of a battery to power their motor.

Minister Tiilikainen will also meet his Romanian and Croatian colleagues in preparation for Finland’s forthcoming Presidency of the EU.  Romania, Finland and Croatia will make up the Presidency Trio, determining the agenda for the Council of the EU from January 2019 to June 2020.

Inquiries:
Katja Tuokko, Senior Adviser, Ministry of Economic Affairs and Employment, tel. +358 50 465 5533
Tatu Pahkala, Senior Adviser, Ministry of Economic Affairs and Employment, tel. +358 50 396 1285