The Big Drill: All Eyes on Cyprus’ Aphrodite

By Ana-Maria Tolbaru

It’s Spring 2013. The time is now for Noble Energy men to start gearing up for a new drilling leg in the Eastern Mediterranean waters, offshore of Cyprus. In a usual so-called ‘appraisal’ procedure, several wells will be drilled in various spots of Cyprus’ Aphrodite gas field to determine its size and quantify the hydrocarbon reserves. A rig should be made available by June, so that the operation can kick off as planned. Cyprus, together with the Noble Energy team, is holding its breath: this discovery could turn Cyprus into Russia’s main competitor in European gas supply. But are they right to be hopeful? European Energy Review looks into the level of certainty of the recent gas finds.

Lowering the Price of Russian Gas: A Challenge for European Energy Security Part II

An uphill battle on Russian gas prices on the horizon

By Adnan Vatansever and David Koranyi

Europe's energy discourse has been unjustifiably preoccupied with concerns about potential physical disruptions of Russian gas. The real challenge for European-Russian energy relations, and in fact, for European energy security, lies in settling on a price that leaves both sides content. While Europe will come under increasing pressure to acquire affordable energy resources to enhance its competitiveness, Gazprom may find it increasingly difficult to deliver gas at lower prices in the coming years.

Lowering the Price of Russian Gas: A Challenge for European Energy Security

By Adnan Vatansever and David Koranyi

Europe's energy discourse has been unjustifiably preoccupied with concerns about potential physical disruptions of Russian gas. The real challenge for European-Russian energy relations, and in fact, for European energy security, lies in settling on a price that leaves both sides content. While Europe will come under increasing pressure to acquire affordable energy resources to enhance its competitiveness, Gazprom may find it increasingly difficult to deliver gas at lower prices in the coming years.

Interactive Emissions Trading Scheme map launched

Ecofys and ICAP

An interactive map compiling up-to-date information on the status and design of Emissions Trading Schemes around the world has been launched by the International Carbon Action Partnership (ICAP) and Ecofys. The project was made possible by the Dutch Ministry of Infrastructure and the Environment.

Energy expert Joan MacNaughton on why it is vital to prevent the Clean Development Mechanism – and the EU Emission Trading Scheme – from collapsing

Save the carbon markets!

By Karel Beckman

If the battle cry of Greenpeace once was "Save the whales", the battle cry of Joan MacNaughton, President of the Energy Institute in the UK, senior advisor to the World Energy Council and former Chair of the Governing Board of the International Energy Agency (IEA), might well be: "Save the Carbon Markets". As Vice-Chair of an independent, high-level panel set up by the United Nations to take a good hard look at the Kyoto Protocol's Clean Development Mechanism (CDM), MacNaughton has come to the conclusion that carbon markets, and the CDM that ties them together, are far too valuable to let go to waste – despite all the troubles that they face. She says that "the CDM and carbon markets are essential tools to generate investment in emission reduction projects at the scale that is needed." EER talks with the woman who for many years was the top energy civil servant in the UK and who is still on a mission to save the world from climate and energy disaster.

Why South Stream is the beginning of the end of Gazprom's dominance

A Tale of Two Gazproms

By Matthew Hulbert

Gazprom has done it: with the final decision to build South Stream, they have the won battle against the EU for the Southern Corridor. Surely a severe geopolitical defeat for the EU and South and Eastern Europe in particular. On a global scale, however, Moscow's move to stitch up the European market through an uneconomic pipeline is a monumental mistake, argues energy security specialist Matthew Hulbert. In an uncompromising analysis, Hulbert concludes that Vladimir Putin and his friend Alexei Miller are blind to all parts of the gas market that really matter: LNG, unconventional gas, hub trading and Asia. In that respect, the European Commission's anti-trust probe into Gazprom is a waste of resources, says Hulbert: Gazprom's market power will collapse by its own.

Why America can make or break a new global gas world

By Matthew Hulbert and Andreas Goldthau

These are exciting times for international gas markets. Not only has gas demand grown at twice the pace of oil over the past decade, with the IEA forecasting further consumption growth of 50% over the next twenty (golden) years. What’s more, after decades of long term contracts linked to oil indexed prices, we’re starting to see the first serious signs of global gas prices based on actual gas fundamentals.

Oil Prices: Energy Investment, Political Stability in the Exporting Countries and OPEC’s Dilemma

Paul Stevens, Chatham House and Matthew Hulbert, European Energy Review

During the summer of 2012, there were growing concerns that, faced with global economic upheaval originating in the problems of the eurozone, there was increasing oversupply in the oil market, which threatened prices. At the same time, geopolitical concerns in the context of the Iranian nuclear programme were helping to provide upward support for prices. This paper attempts to consider possible future paths for crude oil prices and their implications.

What it takes to be a successful executive in the energy industry

Energy Delta Institute

Energy Delta Institute has published a survey that presents the results of 40 interviews held with executives of energy companies. 11 questions compose the interviews that aim to identify the most important skills and competencies required by energy executives today and in the future. The report further describes aspects that had a vital contribution to the professional development of the executives interviewed and what they believe are the best ways to develop their successors better and faster.

Power market headed for potential oversupply

By Twan Vollebregt

The economic crisis in Europe is having a far-reaching impact on the electricity market. The collapse of economic growth combined with the growth of renewable energy is leading to a situation of potential oversupply. But this broad European picture hides strong regional differences. Twan Vollebregt, CEO of Energy Fundamentals, a Swiss company that provides data and models to help energy companies with investment decisions, unravels the real story behind the development of European power demand.

The birth of a European gas infrastructure market

By Karel Beckman

At the same time that the European gas market is being liberalised and integrated, a separate development is taking place, with a dynamic of its own, namely the Europeanisation of the gas infrastructure sector. This is a development that gets much less public attention but is no less important for the success of a competitive European gas market. What is happening, in effect, is that the (unbundled) gas infrastructure companies are 'following the market': rather than confining themselves to their traditional national markets, they are expanding internationally, competing with each other, innovating and diversifying. They have to do this, they say, to be able to service the trading markets efficiently. EER's chief editor Karel Beckman discussed this new development with the management of one of the companies that is taking the lead in this process: Dutch gas infrastructure company Gasunie. The company's message: don't stop us now - we are making the European gas market work.

The Energy Showdown in Argentina - Interview with Sam Logan

Jen Alice, Oilprice.com

Angering Spain by seizing and nationalizing a majority of Repsol’s shares in YPF and ramping up the rhetoric over the Falkland Islands as exploration deals promise to make the territory a major oil player overnight, Argentina is making few friends in the fossil fuels industry these days. Sam Logan, owner of the Latin America-focused private intelligence boutique, Southern Pulse, speaks to Oilprice.com about the politics of populism behind Argentina’s energy aggression.

How Beijing is targeting physical assets to maximise leverage over global energy prices

China's super smart acquisitions strategy

 By Matthew Hulbert & Christian Brütsch

Just when you thought it was a good time for summer vacations, China has been busy rewriting the upstream acquisitions script, and doing so on an entirely new level. The Chinese do not limit themselves any longer to investing in far-flung and exotic locations, they're taking key stakes right inside OECD countries, with the clear intention of hedging their international price risk exposure. China is deliberately targeting North America (WTI) and North Sea (Brent) plays, alongside sinking major investments into North American LNG export facilities, to be able to dictate what happens on the trading markets.

The political perils of low oil prices

By Matthew Hulbert

Oil prices have rapidly dropped in recent months, and some analysts predict a further (steep) decline. This might seem like good news to consumer states, but there is a catch. Whereas producer states could balance their budgets at $30 a barrel less than ten years ago, they now need $100 a barrel to make ends meet. If oil prices continue to correct, expect instability to hit producer states across the board. That might (ironically) help to set a price floor and push prices up again, but it's not a development that consumer countries should be happy about. Keeping oil prices at $100/b remains a better plan than seeing producer states collapse.

Continental European Gas Hubs: Are They Fit for Purpose?

Patrick Heather, Oxford Institute for Energy Studies

This paper by Patrick Heather assesses the development of the European Continental Gas Trading Hubs. It is a natural successor to his 2010 paper ‘The Evolution and Functioning of the Traded Gas Market in Britain’.

High oil prices are caused by consumers, not speculators

By Steven Kopits

High oil prices are often blamed on speculators, but it is perfectly possible to explain recent oil price history in terms of supply and demand forces, argues energy consultant Steven Kopits. His analysis shows that it was the reluctance of US consumers to reduce oil demand in the face of rising oil prices that led to the price spike in 2008. If this is true, then why did prices peak again in 2012, although US consumers had adjusted their consumption? Because, says Kopits, prices are not set anymore in the US, but in China. That's the bad news: in the battle for barrels, China and the other emerging economies will force the US and other OECD countries to yield consumption.

How Shell is trying to help develop the European gas storage market (after selling its storage assets)

By Karel Beckman

Shell was one of the first companies in the European gas market to toe the EU's unbundling line. Early on the company made a radical decision to divest its gas pipeline and storage assets and focus exclusively on gas production and trading. Now, it has started offering its services to independent storage operators to help them commercialise their storage assets. Is Shell moving back into the gas infrastructure business? No, says Thorsten Dinkela, Head Of Business Development Northern Europe at Shell Energy Europe in an interview with EER. "What we are doing is supporting the market. That is in our own interest as well."

The Financialization of Oil Markets: Potential Impacts and Evidence

Oxford Institute for Energy Studies

The financialization of oil futures markets has been held responsible for a variety of phenomena including changes in price volatility, increased co-movement between oil futures prices and other financial asset and commodity prices, a breakdown of the statistical relationship between oil inventories and the price of oil, and an increased influence of the decisions of financial investors such as swap dealers, hedge funds and commodity index traders on the oil futures price.

Repsol down - European mid-caps out

by Matthew Hulbert

The nationalisation of Spanish oil producer Repsol's Argentinian assets cannot be seen in isolation. It points to a much wider problem for mid-sized European energy producers: they are being squeezed out of the market on one side by independent wild-catters and on the other by increasingly powerful emerging market governments that prefer to deal with Big Oil companies. To get out of this bind, the Repsols of this world may have to band together - or seek Asian assistance. What they cannot afford to do is stand still, argues energy analyst Matthew Hulbert.

Oil Markets in 2012: Calm or Turbulent Waters?

Bassam Fattouh, Oxford Institute for Energy Studies

To most analysts, the combination of geopolitical and economic factors constitutes a ‘perfect storm’ that will keep an upward pressure on oil the price for the rest of 2012. The purpose of this short article is to broaden the debate and consider some potential weaknesses in the dominant story.

Oil, Alternatives, and Nuclear Weapons - An Interview with Marc Faber

James Stafford, Oilprice.com

As the world economy teeters on the brink and rising oil prices threaten to de-rail the delicate roots of recovery we asked legendary investor Dr. Marc Faber to join us and give his views on high gasoline prices, the shale boom, alternative energy, developments in the Middle East and much more.

Interview: Jean-François Conil-Lacoste, CEO of Epex Spot

"We are confident that we will continue to play a key role in integrating European electricity markets"

By Karel Beckman

Epex Spot, the joint venture that was set up in 2008 between the German and French power exchanges EEX and PowerNext, is now pursuing cooperation with the Nordic power exchange Nord Pool. The overriding goal of the Paris-based power exchange is to be the prime mover in the creation of a single EU-wide integrated electricity market, says Jean-François Conil-Lacoste, CEO of Epex Spot in an interview with European Energy Review. Conil-Lacoste is confident that the investigation the EU antitrust authorities have started into the Epex-Nord Pool joint venture, will not affect this plan. In the ongoing process of European energy market integration, "one exchange will emerge as the best one", he says. 

Rosneft – On the Road to Global NOC Status?

Oxford Institute for Energy Studies

Since the election of Vladimir Putin as president of Russia in 2000 Rosneft has become one of the cornerstones of the strategy for the Russian state to retake control over the ‘commanding heights’ of the economy, and in particular the energy sector.

Power and gas exchange APX-Endex branches out into wood pellets

Dutch launch world's first biomass exchange

By Karel Beckman

The Dutch power and gas exchange APX-Endex has opened the world's first Biomass Exchange in Amsterdam. The new Exchange will serve as a platform for trade in standardized industrial wood pellets, which are increasingly used as a renewable alternative for coal in coal-fired power stations. 'We hope that our Exchange will bring long-term security and stability to this growing market', says Pieter Schuurs, COO of APX-Endex.

Interview: Fulvio Conti, CEO Enel and President Eurelectric

"We are ahead of the pack and we will try to stay ahead"

By Karel Beckman

'I want to make this the best company in our sector in the world.' Fulvio Conti, CEO of Enel and newly elected President of Eurelectric, has a clear vision of where he wants to go with Europe's most internationalised "utility" company. His ambition is to create the world's leading utility multinational on the model of the multinational oil companies: through vertical integration, geographical and technological diversification, innovation and transparency. 'I think we are ahead of the pack', he says in an interview with EER, 'and we'll try to continue to be ahead.' But he sounds a warning note about the internal European energy market. 'The European energy sector is becoming uninvestable.'

Saving electricity in a hurry

International Energy Agency

Electricity shortfalls occur when demand outpaces electricity available to customers. Shortages in energy supply for electricity generation can cause electricity shortfalls, as can insufficient generation, transmission and distribution capacity.

A strategic slip from the IEA

By Matthew Hulbert

The IEA's unexpected intervention in the oil market looks to be an all-around bad call. It will serve to heighten volatility in the already highly volatile market. At the same time, it will only hamper the things that need to be done by OECD countries (investing in oil exploration and production) and emerging countries like China (cutting price subsidies), argues Matthew Hulbert.

China’s Natural Gas Price Dilemma

Saltanat Berdikeeva

As the Chinese government began making clean energy sources and energy efficiency a priority in recent years, the role of natural gas has become increasingly important. The Chinese government’s 12th Five-Year Plan put a particular emphasis on the use of clean energy, including natural gas.

Seasonal Flexibility in the Northwest European Gas Market: An Outlook for 2015 and 2020

Clingendael International Energy Programme

This paper examines whether the Northwest Europe has sufficient supply capacity to physically meet the cumulative gas demand over a severe winter in 2020. It is argued that the current outlook does not give rise to major concerns.

The Oil Trading Markets 2003-2010: Analysis of market behaviour and possible policy responses

Oxford Institute of Energy Studies

In this working paper Adair Turner et al. consider price movements in the oil trading markets between 2003 and 2010 and provide an analysis of factors which potentially explain the significant trends in this period.

The transition to hub-based gas pricing in Central Europe

Jonathan Stern and Howard Rogers, OIES

This paper argues that Continental European gas markets are moving inexorably from oil-linked to hub-based pricing.

Investment needs for future adaptation measures in EU power production sector due to effects of climate change

European Commission

This Final Report of the study: “Investment needs for future adaptation measures of in EU nuclear power plants and other electricity generation technologies due to the effects of climate change” is based on previous comments received from the Commission on the Draft Final Report, on feedback from the stakeholder consultation the Consortium conducted among a representative distribution of power plants throughout the EU and on the Ecorys Risk Assessment Model for analyzing the potential climate change risk thresholds for EU power plants and necessary accompanying investments.

Uncertainty, expectations and fundamentals - whatever happened to long-term oil prices?

Bassam Fattouh and Pasquale Scaramozzino

One of the major features of the oil market during the 1990s was the relative stability of the long-term oil price. While the spot price and the price of near-term futures contracts sometimes exhibited sharp price volatility that volatility was only partially transmitted to the back end of the futures curve which was anchored around the $20-22/barrel range.

The financial situation of the electricity industry

Eurelectric

This report intends to show how the financial crisis has affected the European electricity industry and to provide a view on its ability to meet its future challenges.

KEMA white paper finds competitive electricity markets spur innovation

Kema - 04/03/2011

According to new research from KEMA, competitive electricity markets around the United States have promoted and accelerated innovation and will likely continue to foster future innovation.

Energy Taxation in Europe, Japan and The United States

Finnish Energy Industries

A summary of the energy taxation survey of electricity, fuels, district heat and transport in the EU and EFTA countries, Japan and the United States released by Finnish Energy Industries in November 2010.

The G-factor is back

By Matthew Hulbert

Energy analyst Matthew Hulbert wonders, if markets are already jittery about unrest affecting small players such as Egypt and Tunisia, what will happen if major oil producers are affected? One thing is certain: after two years of “fundamentals” dictating oil prices, the “geopolitical factor” has returned to the oil market. And it is sending a strong message to OPEC: better quell the market now, or it might crush you later.

A goodbye to stability in the Middle East

By Cyril Widdershoven

What will be the effects of the Egyptian crisis on the oil and gas market? The first indications at present are that there is no real threat to the position of Egypt’s main transit route, the Suez Canal. This could change of course if the current protests were to turn ugly. Military action is still possible and could induce opposition groups to economic sabotage. Suez, one of Egypt’s largest cities, is already known to be a breeding ground for opposition.

North West European gas market: integrated already

By Rudolph Harmsen and Catrinus Jepma

The gas hubs in North Western Europe already form one integrated market for natural gas. That is the main conclusion that emerges from recent research carried out by Rudolph Harmsen and Catrinus Jepma at the University of Groningen in the framework of the Edgar research programme. Harmsen and Jepma analysed price movements on six major North West European gas markets and discovered that there are strong statistical correlations which show that the markets function as an integrated whole. The authors describe the result of their research as ‘striking’, since there are ‘numerous reasons that could have prevented expedient market integration’.

BP: Back to Petroleum

By Chris Cragg

BP’s deal with Russia's Rosneft is indeed, as it is claimed to be, "a groundbreaking strategic global alliance", for lots of reasons, not just those advanced by the two companies. It is also a deal fraught with ironies and shadows of the past. In the view of our energy editor at large, Chris Cragg, who happened to work for BP for a number of years, it means above all that BP is returning to its core business after having strayed "beyond petroleum". Russia is probably the only place where it can now do what it is best at: offshore and often deep-water exploration and drilling!

It’s all in the fine print

By Chris Cragg

The 337 page “Circular” detailing the “combination” of International Power plc with GDF Suez Energy International, which is to become effective early 2011, has just thudded through my letter box. It explains the “compelling industrial logic” and the excellent geographical and operational “fit” of the merger. It will give “Enlarged International Power” a robust capital structure and access to the committed financial support of GDF Suez.

Russia proposes “electricity pipeline” to Germany

By Karel Beckman

Russia is proposing to build a high-voltage electricity cable from Kaliningrad to Germany across the Baltic Sea to export power produced from a newly to be built nuclear power plant. The cable would be laid alongside the last part of the gas pipeline Nordstream that Gazprom is building together with western partners and that will be used to transport gas direct from Russia to Germany across the Baltic Sea. The electricity cable would similarly bypass third countries, in this case Poland. A representative from the German Ministry of Economic Affairs says he does not expect Germany to be willing to acquiesce to the plan. ‘I cannot imagine that the German public will want to import nuclear power (“Atomstrom”) from Russia’, he says.

‘For GDF-Suez, the key word is diversification’

By Yves de Saint Jacob

After the takeover of International Power in August, GDF-Suez has probably overtaken Eon as the largest utility company in the world. Two years after the new French giant was founded and partially freed from the grip of the French state, it is facing an uncertain world, in which it sees its nuclear ambitions thwarted by that very same state, and its LNG operations in the US buffeted by adverse market circumstances. Nevertheless, GDF-Suez, with is broad portfolio of global activities in electricity, gas and energy services, seems in a good position to weather most storms that could come its way. According to Professor Jean-Marie Chevalier, one of the foremost energy experts in France, the key word for GDF-Suez is diversification. ‘The answer to uncertainty is to diversify judiciously.’

The impact of financial market regulation on energy trading and power prices

Paul Dawson, Head of Regulatory Affairs, RWE Supply & Trading and Karl-Peter Horstmann, Head of Markets Regulation, RWE Supply & Trading

Press briefing from RWE on financial market regulation.

Emission trading scheme is starting to bite

By Sonja van Renssen

The future structure of Europe’s flagship climate instrument, its emission trading scheme (ETS), is currently being pieced together in Brussels. Starting in 2013, the power sector will have to buy CO2-allowances for some €15 billion a year at current CO2-prices. The industrial sector will get part, though not all, of its allowances for free, at least until 2020. Power companies complain that it is taking too long for the auctioning of allowances to get started. Industry sources complain that the ETS is going to drive up costs and hamper innovation. How effective the ETS will be in stimulating low-carbon investment remains to be seen.

‘The integration of the European electricity market will transform the European economy’

By Karel Beckman

European power exchanges are fast moving towards the integration of some 80% of the European electricity market. ‘The old ideal of one European copper plate is rapidly coming within reach’, observes Bert den Ouden, CEO of power and gas exchange APX-Endex and one of the long-time champions of European market integration. ‘With highly beneficial consequences for European consumers and producers. It means more efficiency for everybody. An optimal use of generation and transmission capacity in Europe. And a crucial stimulus for the large-scale use of renewable energy.’

Wet barrels versus paper barrels

by Rik Komduur

According to the International Energy Agency, the global population can be expected to considerably force up its daily consumption of oil in the five years to come. This growth is completely due to a highly increasing demand for oil in the developing (non-OECD) countries, particularly in Asia. The increase of production capacity, on the other hand, is expected to be considerably lower. This means reserve production capacity will drop drastically. It is not unlikely that the financial sector will see this as a signal that the time has come to abandon the relatively stable range of around $70 to $80, within  which the oil price has fluctuated for a considerable time now, and once again drive up the oil price.

Lithuania trades in Ignalina for BaltPool

By Karel Beckman

The forced closure of the large nuclear power plant at Ignalina at the start of this year has led to a 30% rise in electricity prices in Lithuania. But, says Vice-Minister of Energy Romas Svedas, the country has used the loss of its nuclear capacity as an opportunity to start with the reform of the electricity market. ‘At the same time that Ignalina was taken down, the new trading exchange BaltPool took off.’ In March, 60% of the electricity that is used in Lithuania was already traded on BaltPool.

Post Copenhagen synthesis report

The reformed financial mechanism of the UNFCCC Part II

The question of oversight

by Benito Müller, Oxford Institute for Energy Studies

This Synthesis Report presents the key results of the second phase of a major analytic project on a reform of the Financial Mechanism of the UN Framework Convention on Climate Change (UNFCCC). It synthesizes four OIES Energy and Environment Papers, and (updated versions) of four preliminary policy briefs by the lead author of this Report, published in the run up to the recent Copenhagen Climate Conference.

A heavy burden on EU policymakers

by Hughes Belin

“Tout Brussels” gathered on Tuesday for the presentation of the “Roadmap 2050”of the European Climate Foundation (ECF). The ECF’s study  – sponsored by companies (among others, RWE, Eon, Siemens) and NGO’s (WWF, GermanWatch) – purports to show that “decarbonising Europe” by 2050 is possible at virtually no extra cost. Provided policymakers take the necessary steps.

BP and Shell: challenged, but ‘doing OK’

by Alex Forbes

Aware that they are not making the best of their assets and people, the two Europe-based energy super-majors – BP and Shell – are pursuing aggressive strategies to match, perhaps even exceed, the financial performance of the sector leader, ExxonMobil. While EER looks at how they plan to close the gap, BP’s chief Tony Hayward sums up the situation: ‘It remains challenging – but we’re doing OK.’

Background paper by the IEA for the 12th IEF Ministerial meeting

Global energy trends and the challenge of transforming the global energy system

International Energy Agency

It has been a turbulent two years for the global energy sector since the last Ministerial meeting of the International Energy Forum (IEF) in April 2008. The crisis in financial markets and the economic recession reversed the growth in global energy demand and caused investment in the energy sector to plunge in 2009. While oil market volatility has subsequently receded, another roller-coaster for prices between September 2008 and June 2009, alongside a loss of public confidence in the functioning of financial markets, led to continuing concern about the relationship between physical and financial markets.

In defence of speculators

by Jerry de Leeuw

Speculators (those who trade in “paper barrels”) have been blamed by politicians and energy companies for causing extreme price volatility in the oil market, and for the record high prices we saw in 2007-2008. Governments, led by the Commodity Futures Trading Commission (CTFC) in the US, are now planning to take measures to limit “speculation” in oil futures.

Fraught with uncertainty

by Karel Beckman

Calculating the costs of generating electricity has never been as uncertain as today. This is the result of a number of factors, including the liberalisation of energy markets, the fast pace of technological development, the volatility of fuel prices and questions about climate policy.

Price formation in oil markets: Some lessons from 2009

by Bassam Fattouh, Oxford Institute for Energy Studies

This comment analyses the oil price dynamics in 2009 arguing that 2009 represents a remarkable year in at least two respects: it witnessed the sharpest increase in spot oil prices in decades; and in the second half of 2009 it exhibited a high degree of relative stability despite a very uncertain and volatile global economic environment.

The path from regional electricity markets to a pan-European market

Building a comprehensive EU market integration strategy

Eurelectric

The prospect of introducing an increasingly large share of RES into European electricity markets should be seen as an opportunity, which will bring new impetus to market integration. The combination of larger and more liquid wholesale markets and new grid investment opens up more possibilities to accommodate intermittent generation, reinforce security of supply and allow deployment of RES, with the least cost to society.

LNG trade-flows in the Atlantic basin: trends and discontinuities

Howard V Rogers, Oxford Institute for Energy Studies

LNG trade exerts a defining influence on the development of regional and global gas flows and prices. In this study Howard Rogers models the interactions between LNG and pipeline gas flows and prices in Europe North America and Asia.

It’s the money, stupid!

by Karel Beckman

In the reports and debates on the oil price issue, one explanatory factor seems to be consistenly overlooked. This is the “easy money” policies that have been practised by the US Federal Reserve and most other central banks.

Speculation? What speculation?

by Chris Cragg

The French government’s report on “Oil Price Volatility” which appeared last month is a welcome blast against oil market speculation. It is questionable, though, whether its recommendations will have the desired effect.

Five questions to Jean-Marie Chevalier

‘This report won’t end up gathering dust in a drawer’

by Hughes Belin

Jean-Marie Chevalier, lead author of the French government’s report on oil price volatility, tells EER his work has been ‘warmly received’ by Economy Minister Christine Lagarde. ‘Our work will not be in vain, believe me.’

Plea for a European oil strategy

France declares war on oil speculators

by Hughes Belin

France is positioning itself to lead a European bid to reform the international oil market and make it more transparent. The French government has embraced a high-level report that calls for far-reaching measures to further regulate the oil trade, strengthen the dialogue between producer and consumer countries, and to develop, for the first time, a genuine European oil strategy.

Small yet plentiful is the name of the game in power deal-making

PricewaterhouseCoopers

The power deal spotlight in 2009 continued to shift away from the very large deals of earlier years as companies focused their attention on smaller acquisitions. The overall market for power deal activity remained relatively buoyant, with the number of electricity and gas deals only 10% down in the main non-renewables power deal sector despite the more constrained financial and uncertain economic climate. These are among the key findings of PricewaterhouseCoopers annual Power Deals review.

Dealing rooms drive prices

by Jerry de Leeuw

Oil prices have never been as volatile as in the past few years. This price instability is giving a lot of people in the world a lot of bad headaches. Governments (of oil exporting and oil importing countries) can’t properly budget. Energy companies are uncertain about when and how much they should invest – not only oil companies, but also producers of renewable energy who compete with oil and gas suppliers. Big energy consumers are uncertain about their production costs.

PwC study:
Germany leads spectacular growth in European gas storage capacity

by Reinhard Rümler, Robert Senger, Stefan Tenner

The liberalisation of gas markets and the increasing dependence on foreign sources of gas supply are shaking up the European gas storage market. Gas storage capacity in western Europe is expected to grow by some 75%  in the coming decade. The most dynamic market, Germany, offers some important lessons for the rest of Europe.

The carbon debate: mother of all Money Matters

by Mathijs van Gool

Climate change on earth is a natural process. Fluctuations in sea levels have been going on for millions of years. Carbon dioxide concentrations  have never been stable. The earth's climate system can't be halted with a few billion euros to combat carbon emissions. But the CO2 debate has become a major catalyst for new forms of politics, innovation and change. Effectively it is becoming the mother of all Money Matters.

Impediments to gas to gas trading in South and South East Europe 2009

PricewaterhouseCoopers

For the purpose of the survey PricewaterhouseCoopers (PwC) sought the opinions of 24 European gas traders which are active in at least one of the markets. The survey results show that there are only certain improvements compared to the last year but also some certain issues are now worse, i.e. access rules to trading location. In total PwC can state that there is only a small progress in the development to a common regional energy market.

Money matters

by Mathijs van Gool

Big Oil: Difficult conditions, breathtaking prospects

Oil futures; The role speculators play

Kenneth Medlock and Amy Myers Jaffe, Baker Institute

A new policy paper by Rice University’s Baker Institute for Public Policy shows a clear increase in the size and influence of noncommercial traders, or “speculators,” in the oil futures market since regulations were eased by the Commodities Futures Modernization Act of 2000. Speculators now constitute about 50 percent of those holding outstanding positions in the U.S. oil futures market, compared with only about 20 percent prior to 2002. The report also finds that the correlation between oil and the dollar has strengthened significantly over the past several years.

A historic shift in the global energy market

by Alex Forbes

The latest world energy statistics from BP show that for the first time in history the developing world consumed more energy than the industrialised world. The implications for the future are wide-ranging.

Interview: Bert den Ouden, ceo APX

by Karel Beckman

To arm itself against the ongoing consolidation in the European energy trading market, the Anglo-Dutch gas and power exchange APX has moved ahead of its rivals into gas trading. ‘The sense of urgency to create an integrated market is bigger in gas than in power’, says ceo Bert den Ouden.

Interview: Erik Saether, ceo Nord Pool Spot: ‘Merging exchanges is not the solution’

by Stefan Schroeter

European energy exchanges may be undergoing a process of consolidaton, Erik Saether, ceo of Nord Pool Spot (NPS), is not eager at this moment to merge with his European competitors. ‘It will be better for Europe if local markets are improved first.’

Nord Pool aims for global expansion

by Stefan Schroeter

After its recent partnership with the US-Swedish stock exchange operator Nasdaq OMX, the Nordic power exchange Nord Pool is looking for further international expansion. The next target is the UK.

Energy trading at the cross-roads

by Karel Beckman

Power and gas exchanges in Europe multiply, but, experts say, we are nowhere near a mature, integrated European energy market as yet. Trading regulations need to be improved and harmonised and interconnections expanded. European Energy Review assesses the state of energy trading in Europe and interviews the ceo’s of NordPool and APX.

The ominous parallels between finance and energy

by Mathijs van Gool

The world economy has two lubricants: the financial system and the energy system. There are important parallels between the two. The financial crisis might trigger politicians to act more decisively when it comes to financing the energy transition.

Creating a regional power market

by Karel Beckman

The Netherlands is taking a leading role in the pursuit of a fully integrated North West European electricity market. This is a matter of self-interest: the policy is aimed at transforming the country from a high-priced electricity island and net importer to an electricity exporter.

Trouble breweing on the industrial front

by Chris Cragg

An obscure industrial dispute in northern England may herald increasing labour unrest in the European Union. The freedom of contractors on big industrial projects like power stations and refineries to choose who they employ is likely to be under threat.

Green energy test

by Alex Forbes

Investment growth in clean energy plummeted from phenomenal rates of more than 50% a year in 2005-7 to just 5% in 2008. With credit hard to get hold of and oil prices languishing in the region of $40 dollar/barrel, what does the future hold for what was a booming alternative energy industry? Michael Liebreich – founder and CEO of New Energy Finance, clean energy analysts – is surprisingly bullish.

VNG’s fight for independence

by Stefan Schroeter

East German gas company VNG Verbundnetz Gas has managed to remain independent since the transition to a market economy in 1990. With major shareholder EWE, based in northwestern Germany, now trying to take control, the board and other shareholders are fighting back.

Power in Europe: dirtier, less secure

by Yves de Saint Jacob

Several studies published in France warn that without massive investment, the security of electricity supply in Europe will deteriorate, emissions of CO2 will rise and power will become more expensive.

The impact of the EU ETS on electricity prices.

Final report to DG Environment of the European Commission

by Sijm, J.P.M.; Hers, J.S.; Lise, W.; Wetzelaer, B.J.H.W.

On February 2, 2009, a revised edition of the report has been released, including some adjustments and editorial corrections particularly in Section 2.2 and Appendix A. The present study analyses the impact of the EU Emissions Trading Scheme (ETS) on electricity prices, in particular on wholesale power markets across the EU. To study this impact, it uses a variety of methodological approaches, including theoretical, empirical, model, literature and policy analyses.

‘The euro is our example’

by Stefan Schroeter

Interview Hans-Bernd Menzel, ceo EEX

European Energy Exchange (EEX) in Leipzig is working on an alliance with other European energy exchanges. EEX has established a joint operation for spot market trading with Powernext in Paris. Belpex in Belgium and the Dutch exchange APX may also join in and there are talks with other exchanges. Dr Hans-Bernd Menzel, chief executive of EEX: ‘We could be close to having an electricity market stretching from Portugal to Finland.’

Power exchanges move towards European integration

by Stefan Schroeter

The interlinking of the European Energy Exchange in Leipzig and Powernext in Paris was another step in the consolidation of European energy exchanges. Many other moves are being made, but bottlenecks in market coupling will have to be overcome before trading markets can become truly integrated.

A long way to integration

by Erik Steen Sørensen

The South East European Electricity Market is highly fragmented, with most national markets too small to support a regional market that’s liquid and efficient. There is some reform in the electricity sector, but with many rates still below cost and people not used to paying their electric bills it is not enough to make the region attractive to investors.

‘High oil prices are a good thing for the world’

by Hughes Belin

Interview Philippe Chalmin

As general editor of the World Commodity Yearbook, French Economist Philippe Chalmin enjoys a unique perspective on global commodity markets. He does not believe in cheap energy anymore, and even thinks high energy prices are good for curbing demand and boosting alternatives to fossil fuels.

‘Crisis may lead to structural change’

by Yves de Saint Jacob

Interview IEA-expert Eduardo Lopez

The debate is underway over whether the fall in demand for oil-based products in the main consumer countries constitutes a ‘destruction’ of demand or merely a ‘suppression’. IEA-expert Eduardo Lopez believes we are seeing a ‘structural change’.

‘I am convinced that this is a lasting change’

by Yves de Saint Jacob

Interview Jean-Louis Schilansky

As the global economy slows down, consumers are cutting back on their oil consumption. Jean-Louis Schilansky, chairman of the French oil industries, says this change is here to stay. EER caught up with him to find out more about the oil expert’s views of changing behaviours in changing times.

BP Statistical Review in retrospect: the oil industry’s annual fix

by Chris Cragg

Energy journalist Chris Cragg takes a unique look at the history of the most important reference work in the energy industry: the BP Statistical Review. He discovers how much more transparent the world of oil has become when compared to the 1950s.

Energy challenges multiply rapidly

by Alex Forbes

From detailed energy data for 2007 published by BP and Cedigaz a number of worrying themes emerge. With energy demand rising inexorably and supply struggling to keep up, prices are likely to remain high and volatile. We are not running short of hydrocarbons yet – but bringing reserves to market is becoming increasingly difficult. And carbon emissions continue to rise rapidly.

One Step Forward, Two Steps Back? The Governance of the World Bank Climate Investment Funds. By Benito Müller and Harald Winkler, Oxford Institute for Energy Studies, February 2008 Benito Müller and Harald Winkler are looking at the latest World Bank initiative to set up three 'Climate Investment Funds' -- a Clean Technology Fund (Target size US$5-10bn); a $1bn Forest Investment Fund, and a $1bn Adaptation Pilot Fund, and find that the proposed governance of these funds is completely out of step with recent thinking in development circles, indeed with recent events in the field of international funding on climate change. Go to article

Carbon credit supply potential beyond 2012. A bottom-up assessment of mitigation options.

By S.J.A. Bakker et al., Energy research Centre of the Netherlands, November 2007

In the context of climate change mitigation commitments and post-2012 negotiations questions have arisen around the potential and dynamics of the carbon market beyond 2012. This study focuses on gaining insight in the supply side of carbon credits after 2012 by studying potential and costs of greenhouse gas reduction options in the Clean Development Mechanism (CDM) and other flexible mechanisms.

Interview Carlo Tamburi, Enel: Rome rules

by Maarten Veeger

Italian Enel is no longer all that Italian, these days. Head of International Division Carlo Tamburi explains in Rome how ‘global’ the Ente Nazionale per l'Energia Elettrica has become. ‘We are going to be even bigger.’

The elephants are coming

by Stefan Nicola

Like in France, the large German power companies are starting to invest heavily in biomass, wind and solar power. But in Germany they are latecomers.

Industry protests emissions trading

by Jan Berends, Vyanney Schyns

The new emissions trading proposals presented by the European Commission on January 23rd, threaten to seriously hamper the competitiveness of European industry in the global market, according to industry organizations. They demand radical changes in the way Brussels allocates emission allowances. ‘Auctioning of allowances, as the Commission proposes, will drive industry and employment out of Europe.’

Carbon trading: EU stimulates growth

by Joost Kanen

The latest proposals coming out of Brussels will lead to a tremendous growth of emissions trading. Price collapses are a thing of the past.

Pascal Lamy: 'WTO can make contribution'

by Karel Beckman

Energy industry in search of 'fair trade' rules.

World Energy Congress: ‘We need a Nelson Mandela for energy’

by Karel Beckman

The greatest energy conference in the world issued a plea for political leadership. The message of the industry: ‘Give us good rules, and we will solve all your problems.’

Interview Jean-Claude Leny: The merger that failed

by Yves de Saint Jacob

From 1970 to 1996, Jean-Claude Leny was head of Framatome, the builder of nuclear power stations which later gave birth to Areva NP. Now retired and living in Ville d’Avray, near Paris, where European Energy Review met him, he explains why he is opposed to the merger of Areva with Alstom and recalls the relentless saga of the rivalry between Alstom and German giant Siemens, Areva NP’s current partner.

GDF-Suez merger: The remarkable birth of a national champion

by Yves de Saint Jacob

Foremost French energy expert Jean-Marie Chevalier explains why the GDF-Suez merger is a brilliant move.

Power exchanges join forces

by Karel Beckman

Ceo of the APX Group, Bert den Ouden, explains why the integration of the French, Belgian and Dutch power exchanges is a crucial step in the integration of the European electricity market.