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The “Global Energy Regulation Roundup” is dedicated to capturing and understanding emerging climate, energy, and reporting measures. Currently, international governments are increasingly establishing stricter policies on emissions reporting, trade, and energy. The purpose of this monthly blog is to highlight approaching regulations and educate key stakeholders about their effects on a range of industries.
The United States:
The Federal Energy Regulatory Commission has addressed regional transmission policy for the first time in a decade. This new plan is to ensure the transmission grid can meet the nation's growing demand for reliable electricity with a new rule that outlines how to plan and pay for facilities that regions of the country will need to keep the lights and power the American economy through the 21st century. It requires transmission operators to conduct and periodically update long-term transmission planning over a 20-year time horizon to anticipate future needs. It also provides for cost-effective expansion of transmission that is being replaced, when needed, known as “right-sizing” transmission facilities. It expressly provides for the state's pivotal role throughout the process of planning, selecting, and determining how to pay for transmission lines.
Following a review conducted by the United States Trade Representative President Biden has announced new tariffs on products from China to deter “unfair trade practices.” The tariffs are for products such as steel, aluminum, semiconductors, electric vehicles, batteries, critical minerals, solar cells, ship-to-shore cranes, and medical products.
For example:
Certain steel and aluminum products under section 301: from 0-7.5 to 25% in 2024.
Semiconductor tariffs will increase from 25% to 50% by 2025.
Electric Vehicles (EVs) Under section 301, the tariff will increase from 25% to 100% in 2024.
Europe:
The European Union Government formally cleared the Net Zero Industry Act (NZIA) which will enter into force in early July 2024. This new law is to ensure the EU bloc produces 40% of its solar panels, wind turbines, heat pumps, and other clean tech equipment domestically. This act seems to be a response to other laws that prioritize domestic manufacturing versus international importation.
At the beginning of the month, the EU adopted an amendment to the existing templates for Member States to report their climate action data. The new templates that were adopted implement several new EU reporting regulations including the use of revenues generated by the EU Emissions Trading System, emissions at the national level, and the emissions/ removals under the Land Use Change and Forestry (LULUCF) Regulation. The data that is collected through these templates will be used to calculate if the member countries are on track to meet their climate targets, which are reported via the EU Climate Action Progress Report.
Asia:
Perhaps a glimpse into the future, Google has signed a long-term power supply agreement with Clean Energy Connect (CEC) and Shizen Energy. Their agreement includes a newly constructed solar farm dedicated to providing electricity to Google's data centers in Japan. They will begin service to Google in 2024 and provide up to 72 megawatts of solar power by 2026. This is one of the first times a company such as Google has signed such an agreement on Japanese soil.
On May 14th China’s National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) jointly issued the “Basic Rules for the Operation of the Power Market” also referred to as the rules. This is the first time in two decades that China’s power market operation rules have undergone changes. The new rules further clarify the qualifications of power market participants and make specific provisions on the rights and obligations of various types of market players. According to the announcement, new types of business entities such as energy storage companies, virtual power plants (VPPs), and load aggregators have been added to the list of eligible and qualified power market members, while the market registration management system has been widely promoted. For the first time, capacity trading has also been included in the scope of power trading. It has grown to be one of the three major types of transactions alongside energy trading and ancillary service trading. The rules will officially come into force on July 1st, 2024.