TRANSFORMATION OF ENERGY MARKET

Key findings of the study:
  • The different product life cycle in terms of R&D and Innovation are not reflected in financial instruments used and are the rootcauses of massive problems on the energy market
  • The market rewarded technology rather than the value delivered by suppliers
  • The current regulation practices of the energy market are responsible for market price increases and their causes :
    • in general the regulations shift the investment risk from investors to consumers
    • introduces economic redistribution processes between investors via the energy market
    • creates economic barriers for new investors which limit competition and do not act towards cost savings
  • The transformation of existing buildings seems to be the core of the energy market transformation to clean energy. Slow speed of transformation of existing buildings into nearly zero energy building has been observed as a consequence of:
    • adopted energy market regulations
    • lack of real economic incentives for building owners
    • lack of access to the real knowledge of building transformation

Study recommendations:

  • In order to establish a new energy market regulatory framework the social cost of carbon emissions in its two forms of green credit and consumption tax should be be used
  • The heating market transformation model suggests a shift for the District Heating Companies from holding a monopoly position as energy supplier to their role of safe energy distributor
  • The new organisation model of the heating market should be constructed by application of a cooperation/ competition principle which should:
    • Guarantee indiscriminate access both fossil and renewable energy sources on the market based on delivered values
    • Should pay for real values delivered to the market in form of heating, cooling, electricity and green credits
    • The market should be regulated by value of the green credit and related tax imposed on carbon emission creating real incentives for renewable energies and at the same time providing a penalty for using fossil energy with carbon emission production
    • The so called knowledge line of green credits was built as a tool for technology selection

Results of present energy market regulation policy

The EU regulation of the energy market has been deeply influenced by:

  1. Deregulation policy which provides access to the energy market also for speculative capital which brought free liquidity
  2. New instruments in the form of feed in tariff and preferred access on the energy market which should help finance the research and development of renewable energies technologies and promote co-generation technologies.
  3. Introducing new market for carbon emission with cap and trade scheme

The result of the EU regulation policy over the last eight years was discussed by the European Parliament in May 2013. We hereby present the results of the EU energy regulation policy in their summarised form as formulated by top EU representatives.

The result of this regulation policy was clearly articulated by European President Herman Van Rompuy open wide in The Telegraph. In September 2013 he pointed out that EU’s top priority was to slash energy costs.

"Compared to US competitors, European industry pays today twice as much for electricity, and four times as much for gas." he said.

EU Commisioner Antonio Tajani added: "We face a systemic industrial massacre”.

“We need a new energy policy”