IEEE Power & Energy Magazine - March/April 2014 - 66

11

10

20

09

20

08

20

07

20

06

20

05

20

04

20

03

20

02

20

01

20

20

20

00

TWH

in this context, this article reviews the turbulence endured
by european energy markets in 2013 and provides a bird'seye view of the state of a european energy sector that is profoundly challenged by the twin effects of the 2009 energy
and climate package implementation (now bearing fruit)
and europe's worst economic crisis of the last few decades.
With a view to contributing to this new 2030 discussion, we
then develop six competing scenarios for the future 2030 eU
energy policy framework. We rank these options according
to a set of indicators derived from current eU energy policy.

3,200
3,100
3,000
2,900
2,800
2,700
2,600
0
Year

Current European Energy Markets:
A Bird's-Eye View

figure 1. Electricity demand (including network losses) in
the EU 27, 2000-2011 (source: EURELECTRIC).

europe's energy transition is being challenged by the accumulating effects of the european economic crisis on demand,
the sudden growth of renewable energies-and their impact
on conventional generation-and the absence of a sound
regulatory framework for innovation.

challenging the spirit of existing technology development
policies that rest on deployment support.
these shortcomings are now fueling claims that europe's
energy and climate framework needs to be revisited to keep
europe's decarbonization trajectory at an ambitious yet sustainable level both before and after 2020. a reflection on an adequate
policy framework for 2030 has therefore begun in Brussels, as it
is a widely held view that a new 2030 strategy would let utilities,
new entrants, and eU citizens alike plan ahead and would put
the energy transition onto a more solid track.
in december 2011, the european commission (ec)
developed its energy roadmap 2050. more recently, in
march 2013, the ec elaborated a "green paper" designed to
kick-start a discussion with eU member states and stakeholders on the optimal policy for 2030, thereby paving the
way for the adoption of a new regulatory framework before
the end of the next ec mandate (i.e., by 2018).

The Euro Crisis: Lower Demand for Power
the effect of the european economic crisis on european
industry production has affected the rate of power consumption in europe (there has traditionally been a strong correlation between energy use and industrial output in europe).
the W-shaped economic recession resulted in a clear demand
slowdown for power in europe in 2009, with improvements in
2010 and a sudden dip in 2011. this, coupled with the massive
investment cycle spurred by the opening of the generation business to cross-border competition (with combined-cycle gas
turbines being the "usual suspect" technology used for entry
into new markets), has led to a situation of overcapacity that
has in turn led to low load factors and asset underutilization. it

Percent Per Year
Annualized Shareholder Return1
30
Utilities
Banks
Basic Materials
Chemicals
Health
Care
Oil and Gas
20
Insurance
Food
Media Products
10
Food Products
Auto Parts

Before Economic Crisis
(Dec 2004-Dec 2007)
After Economic Crisis
(Jan 2008-Dec 2012)
Chemicals

Health Care
0

Media
Oil and Gas

-10
-20
1

Utilities

6

10

14

18

Insurance

Auto Parts
Basic Materials

Banks
22

26
30
34
Annualized Standard Deviation

Utilities includes grid companies. The shareholder return shown is the total shareholder return, calculated
as the change in the share price plus the dividends paid, divided by the initial share price, and
calculated on an annual basis.

figure 2. The relative financial performance of the European utilities sector (source: EURELECTRIC).
66

ieee power & energy magazine

march/april 2014



Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - March/April 2014

IEEE Power & Energy Magazine - March/April 2014 - Cover1
IEEE Power & Energy Magazine - March/April 2014 - Cover2
IEEE Power & Energy Magazine - March/April 2014 - 1
IEEE Power & Energy Magazine - March/April 2014 - 2
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IEEE Power & Energy Magazine - March/April 2014 - Cover3
IEEE Power & Energy Magazine - March/April 2014 - Cover4
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