European Energy Markets Observatory (2010) : 2009 and Winter 2009/2010 Data Set - Twelfth Edition, November 2010

Capgemini’s European Energy Markets Observatory (EEMO) is an annual report that tracks the progress in establishing an open and competitive electricity and gas market in EU-27 (+ Norway and Switzerland) as well as the progress on the EU Climate-Energy package objectives. Launched in 2002 with the primary objective to assess the progress of deregulation in the European Member States, the report now tackles all the major issues faced by the Utilities industry. Through 70+ indicators, the report scans all the segments of the value chain and analyses the hot topics of the moment, to identify the key trends of the electricity and gas industries. The report includes country focus highlighting the local key issues and topic focus on leading edge themes. Capgemini’s partners – Société Générale Global Research and Strategy for their expertise in financial analysis, VaasaETT for their in-depth knowledge of customers’ behaviours and CMS Bureau Francis Lefebvre for their understanding of European energy policies and instances – enrich the report on their respective area of expertise. The twelfth edition of the European Energy Markets Observatory covers the full year 2009 and the winter 2009/2010. Key messages developed in the report include the following: -New energy trends are emerging after the crisis. -The crisis and some new investments resulted in an improved security of supply. -There has been little progress towards the creation of a single European energy market. -EU greenhouse gas emissions reduction objective will be met, but renewables and energy efficiency targets are a challenge. -Generation mix and customers' behavioral changes are calling for smart grids. -Utilities are focusing on reducing their debts. Front Matter....Pages 1-3 A Strategic Overview of the European Energy Markets....Pages 4-11 Competitive Power: Electricity Generation....Pages 12-21 Electricity Wholesale Markets....Pages 22-27 Electricity Retail Markets....Pages 28-33 Competitive Gas: Upstream....Pages 34-39 LNG....Pages 40-43 Gas Wholesale Markets....Pages 44-48 Gas Retail Markets....Pages 49-55 Infrastructures and Regulated Activities: Electricity Transmission....Pages 56-63 Electricity Distribution....Pages 64-67 Gas Transmission....Pages 68-71 Gas Storage....Pages 72-76 Gas Distribution....Pages 77-78 Sustainable Energy and Climate Change....Pages 79-88 Finance and Valuation....Pages 89-95 Back Matter....Pages 96-102 European Energy Markets Observatory; Contents; A Strategic Overview of the European Energy Markets; The economic situation impacted energy trends; Energy consumption decreased in 2009 and has started to increase again in early 2010; The European energy mix is slowly becoming greener; Energy usages; Many Utilities are focusing on reducing their debts; Electricity and gas security of supply have generally improved except during the very cold winter in certain regions; Electricity security of supply was threatened during extreme weather conditions; What to do? In the long-term, the decarbonizationof the economy, an aging fl eet andbaseload generation issues areleading countries towards nuclear andRESA growing group of countries planto build new reactors as part of theirenergy mix target; Other countries have decided the end ofnuclear phase-out but have not securedtheir long-term energy mix as nodecision has been made on nuclear andas coal is being rejected; As Member States are moving towardsnuclear, they are organizing to addressthe related issues raised; Electricity Wholesale Markets Gas security of supply is a long-term concernWhile the EU CO2 reduction objectiveis likely to be reached, the renewablesand the energy effi ciency objectivescould be more diffi cult to attain; On the international front, very little has been achieved; EU CO2 emissions reduction objective is likely to be reached; Renewables share in fi nal energy consumption is a challenging target; Improving energy efficiency by 20% is a difficult but achievable goal; CO2 prices were too low to trigger switches to lower carbon generation Generation mix and customer behaviors changes are calling for smart gridsCompetitive Power; In the short-term, the drop in electricity demand due to the economic crisis combined with the continuing momentum in capacities1 construction ensured security ofsupply in most European countries; The economic crisis strongly hit electricity demand in 2009; Hopes of recovery arise in Q1 2010; The growth of generation capacity was supported by investments in wind plants and gas turbines planned before the crisis Demand-Offer equilibrium was securedin 2009 but exceptional factors led totensions on supply in several countriesIn the mid-term, plans for plants'construction have been less impactedthan expected by the economic crisis; The crisis and the need for fl exibleand low-carbon energies resultedin a sharp decrease in coal plants'projects and favored gas projects; Europe's move towards a low-carboneconomy is boosting RES; Major Utilities have managed to adjustto the crisis while independents arestruggling Electricity demand across Europe was deeply affected by the economic downturn and commodity prices decreased