The Friday Express
Energy week highlights
(1) Spain walks out of Energy Charter Treaty (2) PV production equipment sales to Europe surpass China’s for the first time (3) EU closer to a deal to meet its energy crisis (price caps and joint purchase on the table) (4) OPEC+ to decrease oil production- a reaction to price cap proposals by US and EU.
1)
Spain leaves the Energy Charter Treaty (ECT). Last week’s Friday Express mentioned that Spain was amongst several EU countries (France, Germany, Netherlands, and Poland) threatening to follow Italy by leaving the ECT. This week, Spain decided it’s denouncing the treaty.
The ECT allows energy companies to sue governments for financial compensation over perceived losses over policy changes via arbitral courts. Since 2015, fossil fuel companies won over $52 Billion in lawsuits. Governments who want to speed up policies for energy transition find themselves at the mercy of expensive litigation.
A period of renegotiation of the ECT started in 2020. The EU commission tries to find a compromise text that seems ever more unlikely.
2)
The German engineering association VDMA announced that European orders for PV manufacturing equipment surpassed Chinese orders for the first time since 2008, when compiling such data began (6)
3)
European Union continues discussion to achieve a deal to meet EU’s energy crisis. Currently, there is agreement over the need for demand reduction measures coupled with some form of natural gas price cap and EU joint gas purchases.
4)
The prospect of a US price cap on Russian oil drove OPEP+ to decrease oil production. OPEP+ fears the precedent where countries weaponize commodities prices via sanctions, according to Indonesia’s finance minister.
