Assessing regulatory barriers in linking the gas and electricity sectors in the EU
The growth of renewable energy is leading to major changes in the gas and electricity sectors. In the years ahead the role of natural gas will decline, the share of renewable and other low-carbon gases will grow, and power-to-gas technologies will be used for storage and transport of wind and solar energy. Together, these changes will mean an increasing intertwining of the gas and electricity sectors. Current legislation on the two sectors does not anticipate any of this, however. Rules and regulations on gas focus on fossil gas, for example, while the now separate regulations on electricity and gas make no allowance for future intermeshing.
Against this background the European Commission commissioned a consortium, led by Frontier Economics, to describe these developments and identify policy options for addressing legislative barriers and gaps. CE Delft’s task in this was to describe future trends in the EU energy landscape and provide more detailed analysis of the future role of gases (fossil, biogas, power-to-gas). The result is a state-of-the-art review of the projected role of gases in the EU’s energy system from now through to 2050. Among the results is that demand for natural gas is first set to rise, as it substitutes for coal, but subsequently tapers off sharply. At the same time the role of renewable and other low-carbon gases will grow, given their potential for energy storage and in light of existing infrastructure.
This report served as the basis for Frontier Economics’ analysis of the legislative barriers and gaps at present, both at the EU level and in individual member states. That analysis has yielded a broad range of conclusions and recommendations for policy-makers at the EU and national level.