Climate Energy Priorities in Europe

Climate and energy priorities for Europe: the way forward

Presentation of J.M. Barroso President of the European Commission, to the European Council of 20-21 March 2014

1 Presentation of J.M. Barroso to the European Council, 20-21 March 2014

Europe's priorities

Our goals

Need for cost-effective and joint solutions

Predictability for policy-makers

and investors

Speaking with one voice

Why now?

Competitiveness

Security of supply

Sustainability

2 Presentation of J.M. Barroso to the European Council, 20-21 March 2014

Europe is on its way to meeting its 2020 targets

Source: European Commission

Reduce greenhouse gas levels by 20%

Increase share of renewables to 20%

Reduce energy consumption by 20%

Estimate in 2020:

-24%

Estimate in 2020:

21%

Estimate in 2020:

-17%

3 Presentation of J.M. Barroso to the European Council, 20-21 March 2014

AT

BE

BG

HR

CY

CZ

DK

EE

FI

FR DE

EL HU

IE

IT

LV LT

LU

MT

NL

PL

PT

RO

SK

SI

ES

SE

UK

EU

-

1

2

3

4

5

6

7

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Progress is visible at national level

Carbon intensity, by country (greenhouse gas emissions / real GDP)

Reduction in carbon intensity between 2000 and 2011 (%)

Ca

rbo

n in

ten

sity in

20

11

(in

de

x E

U=

1)

Source: European Commission

US

JP

0

6

4

3

2

1

0

000

4 Presentation of J.M. Barroso to the European Council, 20-21 March 2014

Climate policies are not the main driver of price increases

EU electricity prices, broken down,

compared to support for renewables

* excludes VAT and other recoverable taxes in the case of industry

0

5

10

15

20

2008 20120

5

10

15

2008 2012

Eurocents / kWh

Energy supply Network costs Taxes and levies*

Households Industry

16.6

19.6

10.6

12.4

2008 2012

Support for renewables

(% of total - estimate)

Eurocents / kWh

3%

2008 2012

7% 4% 9%

Source: European Commission

+36%

+127%

+18% +30%

+8%

-3%

5 Presentation of J.M. Barroso to the European Council, 20-21 March 2014

Energy

efficiency: review in 2014

A renewed ambition for 2030

40% greenhouse

gas reduction

20% greenhouse

gas reduction

20% renewable

energy

20% energy savings

≥27%

renewable energy

2020

2030

Dedicated governance

National plans

Common indicators

Monitoring

6 Presentation of J.M. Barroso to the European Council, 20-21 March 2014

40

60

80

100

120

140

160

180

200

1990 2000 2010 2020 2030

Growing while saving

Decoupling GDP from greenhouse gas emissions (GHG), 1990-2030

GDP GHG

19

90

=1

00

Reducing the EU fuel import bill with our 2030 proposal

(import expenditure, in € billion)

0

100

200

300

400

500

600

700

2010 2015 2020 2025 2030 2035 2040 2045 2050

current policies

2030 proposal

Source: European Commission

7 Presentation of J.M. Barroso to the European Council, 20-21 March 2014

Energy costs to rise in all scenarios until 2030, but clear benefits from decarbonisation

Energy costs, broken down by components (annual average in % of GDP)

Investment in

infrastructure

Investment in

energy efficiency

Fuel imports Other energy purchases

(domestic)

0%

4%

8%

12%

16%

-1.2 imports

2010

Business-

as-usual

With 2030

proposal

With 2030

proposal

2030 2050

+2.5 investment

12.8

14.3 14.1

Source: European Commission

-1.2 imports

8 Presentation of J.M. Barroso to the European Council, 20-21 March 2014

This is about investing in our future: 45% of our power generation capacity is more than 30 years old

0 MW

50.000 MW

100.000 MW

150.000 MW

200.000 MW

250.000 MW

300.000 MW

<10 11-20 20-30 30-40 40-50 >50

Years

Age of power generating capacities in the EU in 2013 (in years)

Coal Oil Gas Nuclear Renewables

(including hydro)

Source: Platts Power Vision

300.000 MW

250.000 MW

200.000 MW

150.000 MW

100.000 MW

50.000 MW

0 MW

9 Presentation of J.M. Barroso to the European Council, 20-21 March 2014

A cost-effective reduction in emissions

Emissions trading system*

Non-ETS sector*

-21%

-43%

-10%

-30%

-20%

-40%

EU GHG target (1990 base)

HOW? 'Cap and trade'

Market stability reserve

Protection against

carbon leakage

Effort-sharing through

binding national targets

Support measures

(e.g. standards)

2020

2030

* Compared to 2005

10 Presentation of J.M. Barroso to the European Council, 20-21 March 2014

0%

20%

40%

60%

80%

100%

1990 2000 2010 2020 2030

All sectors should contribute

Share of greenhouse gas emissions, per sector and gas

CO2 power sector CO2 heating buildings CO2 industry CO2 transport Other greenhouse gases

current policies

Source: European Commission

11 Presentation of J.M. Barroso to the European Council, 20-21 March 2014

0

100

200

300

400

500

600

700

2011-2015 2016-2020 2021-2025 2026-2030

Estimated savings from current

commitments on energy efficiency

Energy efficiency is key

Necessary investment Resulting savings

Source: European Commission

€ b

illio

n

21

Net savings/year (in € bn)

178

311

363

12 Presentation of J.M. Barroso to the European Council, 20-21 March 2014

Connecting and diversifying

Reaping the benefits of a fully integrated energy market up to 2030

Internal market: € 43 - 70 bn per year in gas and

electricity

Potential for renewable energy

Future potential for gas sources

Potential for shale gas

Hydroelectric

Wind

offshore

Wind

onshore

15 years of the EU

current gas consumption

250 years of the EU

current gas consumption

5 years of the EU

current gas consumption

Solar

13 Presentation of J.M. Barroso to the European Council, 20-21 March 2014

Next steps

Today: orientations Later in 2014: energy efficiency review

Sept. 2014: UN Secretary General leaders' summit

Agreement on 2030 framework at EU level

Dec. 2015 (Paris): global climate talks