IEEE Power & Energy Magazine - November/December 2014 - 40

Power Cycling
CCGTs: The Critical Link
Between the Electricity
and Natural Gas Markets

By José Gil, Ángel Caballero,
and Antonio J. Conejo

THIS ARTICLE PROVIDES AN OVERVIEW OF THE
European Union (EU) electricity and natural gas sectors by
focusing on the specific case of mainland Spain. The integration of renewable production has created a strong link
between the operations of the electricity and natural gas
systems. This calls for a coordinated gas and electricity
operation and for the coordinated long-term planning of both
electricity and natural gas facilities.

The EU Electricity
and Natural Gas Markets
EU energy policies have pursued a common energy market to improve supply security and reduce prices. To this
purpose, the electricity and natural gas markets have been
restructured and liberalized to various degrees in the member countries.
This liberalization of the electricity and gas sectors is
based on directives 2009/72/EC (for electricity) and 2003/55/
EC (for gas), both of which have the force of law for the
entire EU and promote competition among producers to
achieve lower prices while maintaining supply security. Significant barriers hinder the achievement of these objectives,
however. The barriers include the need for infrastructure
development, particularly transmission and storage facilities
in both the electricity and natural gas areas, and the need

Digital Object Identifier 10.1109/MPE.2014.2347631
Date of publication: 20 October 2014

ieee power & energy magazine

to reconcile the diverse and often conflicting interests of the
various EU member countries.
Unlike the United States, the EU is highly dependent on
energy imports. In 2012, the EU produced 794 million tons
of oil equivalent (Mtoe) but consumed 1,683 Mtoe, which
amounts to a deficit of 53% of its consumption. Figure 1
shows a sustained growth in EU energy consumption from
1995 to 2005 and then a moderate decrease from 2006 to
2012. No deficit reduction measures other than integrating
renewables and promoting conservation and efficiency are
currently available.
Renewable sources constitute an important energy supply option in the EU because other energy resources are
scarce. The "20-20-20" EU objective (a 20% reduction in
greenhouse-gas emissions, a 20% increase in renewable
production, and a 20% improvement in energy efficiency,
all from 1990 levels) targeted for 2020 is being redefined
to achieve by 2030 further reductions in carbon emissions,
higher energy consumption efficiency, a more effective
carbon-trading system, and more efficient market rules.
The electricity sector in the EU, with a production
capacity of about 919 GW and an annual energy production of about 3,280 TWh in 2011, started its liberalization
process in the 1990s. This process has resulted in a number
of regional markets with limited coordination and limited
interconnection. This is particularly so within the peripheral areas of the EU. An issue currently being debated
among European market operators and other market agents
is the seamless integration of different regional electricity

november/december 2014

Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - November/December 2014