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This business case analyses why and how E.ON reacted to the EU climate regulations and to the changing environment of the European energy market. In December 2008 the European Parliament adopted the EU Climate and Energy Package to significantly decrease greenhouse gas emissions by 2020 and to promote renewables. The overcapacity on the market and the drop of wholesale price of electricity hit traditional oil, gas and coal energy utilities such as E.ON. The fast development of renewables also impacted the market structure. Faced with a disrupted market, E.ON carried massive losses. This business case analyses the corporate answers to this profoundly changing environment, from 2008 more common responses to E.ON’s drastic decision to split in two firms in 2014.
Elżbieta Bieńkowska’s word: The internal market and industry commissioner, who will also attend the Council meeting, was adamant about one point yesterday afternoon: Sure, we can talk about improving the legislation, but don’t even think about any changes that might postpone the implementation of real-driving emissions tests and a tougher type approval regime. “I will never accept a situation when such amendments or changing the regulation are leading to the delaying of the whole process. If it’s not delaying but just improving the system then I’m very much open to this. If it’s only about delaying and about protecting somebody, then not,” she said at a press conference in Brussels.
As a reminder, the presidency’s discussion paper ahead of the policy debate on nitrogen oxide emissions from diesel cars. http://bit.ly/1Wy9otL
LET THE MARKET HANDLE IT (OPEC): Another OPEC meeting concluded yesterday without a decision to impose a limit on oil output. The explanation: the market is working it out for itself. Non-OPEC supply peaked in 2015, and supply is expected to further decline this year, the cartel said in the late afternoon. Meanwhile, global demand is expected to continue growing, albeit at a slightly slower pace than in 2015. “This demand growth remains relatively healthy considering recent economic challenges and developments,” OPEC said in its concluding remarks. Crude oil prices have also gone up by more than 80 percent since December. The different developments put together “is testament to the fact that the market is moving through the balancing process,” it said. One area of concern, however, are “very low” investment levels. There’s a need to increase upstream investment to make sure the oil markets are balanced in the long term. The International Energy Agency’s Fatih Birol made a similar call last time he was in Brussels. As a reminder: http://politi.co/1TRA8oP
New OPEC Secretary General: Mohammed Sanusi Barkindo, from Nigeria, has been appointed for a three-year term to head the cartel. He’ll take office on August 1. Barkindo takes over from Abdalla Salem El-Badri. And more news: Gabon has been admitted to the club, as of July 1. So mark your calendars for the next meeting, on November 30 in Vienna.
Transparent power and gas prices: The Council’s state of play on talks about improving the transparency of gas and power price statistics. http://bit.ly/1Vzu4k0
Spanish Supreme Court deals blow to renewables: By backing a 2014 government decree that resulted in cuts of nearly €1.7 billion in subsidies. The court is expected to give the same ruling in a slew of similar appeals in the coming months. El País: http://bit.ly/1UxsYCX
EU on Nord Stream 2 — don’t be ‘gullible fools:’ That’s what the EU will be if it welcomes the Russia-to-Germany gas pipeline project, a Slovak Foreign Policy Association adviser writes. Because Gazprom is even more a tool in the Kremlin’s policy now than it was when Nord Stream 1 was announced 10 years ago. http://bit.ly/1Y4MDwY