RAP Responds to European Commission Consultations on Market and Policy Issues


RAP provides international power sector expertise to European decision makers and stakeholders on key market design and policy issues in the form of comments and replies to European Commission consultations.

In particular, RAP responded to the 2013 Commission Consultation regarding the future of carbon capture and storage (CCS) in Europe. Drawing on those responses, RAP also developed a follow-up briefing paper addressing the role of an Emissions Performance Standard (EPS) in meeting Europe’s energy policy goals and in enabling CCS as an option to meet those goals. A well-designed CO2 EPS could effectively complement the EU Emissions Trading Scheme (ETS). An EPS would help manage disinvestment in the most carbon intensive plant and provide a strong investment signal for CCS — two needed outcomes that the ETS on its own is unlikely to provide no matter how it is reformed. RAP also recommends that public support for CCS commercialisation should be initially focussed on energy-intensive industry rather than the power sector as few options are available to industry whereas a number of lower cost, low-carbon alternatives are available to the power sector.

RAP also submitted extensive comments in response to the 2014 Commission Consultation on generation adequacy, capacity mechanisms, and the internal market in electricity. RAP emphasizes the importance of establishing effective market mechanisms to encourage investment in resources capable of providing critical system services, including energy efficiency and demand response resources. RAP also recommends reframing the issue to consider resource adequacy, instead of generation adequacy. As the share of variable renewable resources on Europe’s power systems increases, existing capacity market models may no longer be up to their intended task of driving the investments required to deliver least-cost reliability. Mechanisms to reward resource flexibility will be needed. Based on the broad expert consensus that sharing system resources and services over the largest feasible geographical footprint is the lowest cost pathway to the low-carbon power sector, RAP encourages regional cooperation on questions of resource adequacy and investment.

RAP’s response to the Commission’s 2014 review of progress towards the 2020 energy efficiency objective and a 2030 energy efficiency policy framework emphasizes the need for a high-level savings target — expressed as absolute energy savings — as the most effective way to drive continuous energy savings. Energy efficiency represents the cheapest “scrubber” for greenhouse gases and conventional pollutants available, and investing in “negawatts” is several times cheaper than building new power plants.

Finally, in its response to the Commission’s 2014 review of retail markets, RAP includes a list of key market design improvements that would empower consumers and reduce retail prices:

  • Unbundling generation and supply;
  • Incorporating demand resources into the formation of energy and balancing market clearing prices;
  • Greater transparency and liquidity in forward markets and balancing or ancillary services markets;
  • Increasing cross-border trading, including in balancing markets;
  • More independent and cross-border governance of the system operation function; and
  • Removing market barriers to new entrants and new business models, particularly those relating to the demand side.