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The energy transition in Europe and China


Rome and Madrid, December 17th – 19th 2018

The collaboration between Enel Foundation and the research institute of Chinese Huaneng Group, after being awarded a special prize named Soft Science Research Award 2018 for their research report on EU’s Energy Transition, has reached a new landmark in December. The ongoing dialogue between the two institutions focuses on the energy transition and its implications on global scale, especially in the Chinese and European contexts. New meetings took place in Rome and Madrid with the participation of Enel Corporate and Business Line Units with the aim to discuss the latest developments concerning power market design for energy transition in Europe and China.

On the European side, the meeting focused on the Clean Energy Package and its effects on demand response, self- consumption, renewables and local energy communities. The Enel Foundation - Enel delegation targeted some of the game-changing elements in the transition:

  • new market actors, such as independent aggregators and energy communities, that will foster new businesses models and new patterns of generation and consumption;
  • the limitations of capacity mechanisms, both on national and cross-border level;
  • the need to develop renewables under long- term agreements and complement short term dispatching markets for RES with additional long-term markets (e.g. RES auctions and RES PPAs ).

Moreover, a visit to Endesa was the occasion to discuss how RES wind plants can be managed in a more effective way also to provide ancillary services: the Chinese delegation also visited the most innovative plants on field in Spain.

Giuseppe Montesano, Enel Foundation Deputy Director, commented “We focused on the Clean Energy Package which covers energy efficiency, renewable energy, the design of the electricity market, security of electricity supply and governance rules for the Energy Union. The final version of the rules will be soon be published and will start to apply in 2019.”

On the other hand, the ongoing power market reform in China is one of the critical factors in the global power arena and its efforts to accomplish the energy transition are leading to numerous changes in the power market design. The latest round of power market reform in the country, which started 3 years ago, has produced significant achievements in key areas such as establishing competitive wholesale and retail electricity markets (especially for industrial customers) and designing a market-oriented framework for coordination between clean energy and conventional energy.

The Chinese Power transmission-distribution reform continues to expand with an increased focus on renewable energy participation in trans-provincial and trans-regional power trading. In this scenario, exclusive UHV transmission lines for renewable power are under construction in order to face the inadequate capacity of transmission lines. To increase the use of renewable energy, generation right trading has been intensified by allowing power generation rights to be transferred from fossil fuel power plants to non-fossil fuel power plants.

In the year of 2017, 3,123 power generation enterprises in 30 provinces (districts, municipalities and autonomous regions) have participated in ancillary service compensation, to support real time balancing, and at the beginning of 2019, a green energy certificate trading system will be introduced to identify the quantity of the electricity generated/consumed from the renewable energy. 

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