May 2024 Summary of Global Energy Regulations

““Global Energy Regulation Summary” deals with capturing and understanding emerging climate, energy and reporting indicators. Today, international governments are increasingly establishing more stringent rules for reporting emissions, trade and energy. The purpose of this monthly blog is to highlight upcoming regulations and educate key stakeholders on their impact on a range of industries.

United States:

The Federal Energy Regulatory Commission has addressed regional transmission policy for the first time in ten years. This new plan aims to ensure that the transmission grid can meet the nation’s growing demand for reliable electricity with a new rule that outlines how to plan for and pay for the infrastructure that regions of the country will need to keep the U.S. economy lit and powered in the 21st century. . age. It requires transmission system operators to conduct and periodically update long-term transmission planning over a 20-year horizon in order to anticipate future needs. It also ensures cost-effective expansion of the transmission system, which is replaced if necessary, the so-called “right-sized” transmission facilities. It clearly provides for a key role for the state throughout the process of planning, selecting and determining how to pay for transmission lines.

Following a review by the United States Trade Representative, President Biden announced new tariffs on products from China to stop “unfair trade practices.” The tariffs affect products such as steel, aluminum, semiconductors, electric vehicles, batteries, critical minerals, solar cells, cranes for transporting ships to land and medical products.

For example:

• Certain Section 301 steel and aluminum products: 0-7.5 to 25% in 2024

• By 2025, semiconductor rates will increase from 25% to 50%.

• Electric Vehicles (EV) Under Section 301, the tariff will increase from 25% to 100% in 2024.

Europe:

The European Union government has formally approved the Net Zero Industry Act (NZIA), which will come into force in early July 2024. This new law aims to ensure that the EU bloc produces 40% of its solar panels, wind turbines, heat pumps and other clean equipment technology in the country. This law appears to be a response to other regulations that favor domestic production over international imports.

Earlier this month, the EU adopted a change to existing templates allowing member states to report data on climate action. The new templates adopted implement several new EU reporting rules, including the use of revenues generated by the EU Emissions Trading Scheme, emissions at national level and emissions/removals under the Land Use Change and Forestry (LULUCF) Regulation. The data collected through these templates will be used to calculate whether member countries are on track to meet their climate targets, which are reported in the EU’s Climate Action Progress Report.

Asia:

Perhaps a glimpse into the future: Google has signed a long-term energy supply agreement with Clean Energy Connect (CEC) and Shizen Energy. Their deal includes a newly constructed solar farm designed to supply electricity to Google data centers in Japan. They will begin serving Google in 2024 and will provide up to 72 megawatts of solar energy by 2026. This is one of the first times a company like Google has signed such an agreement on Japanese soil.

On May 14, China’s National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) jointly issued the “Basic Principles of Energy Market Operation”, also known as the Principles. For the first time in two decades, the rules of operation of the Chinese energy market have changed. The new regulations further specify the qualifications of energy market participants and contain detailed provisions regarding the rights and obligations of individual types of market participants. As announced, new types of business entities, such as energy storage, virtual power plants (VPP) and load aggregators, were added to the list of eligible and qualified capacity market members, and at the same time, the market registration management system was widely promoted. For the first time, power trading was also included in the scope of energy trading. It has become one of the three main types of transactions, along with energy trading and ancillary services trading. The official rules will go into effect on July 1, 2024.