Energy EU ENERGY POLICY Context and Challenges Objectives, 2020 Targets, RM 2050, GP 2030, Growth and Jobs… MARC DEFFRENNES DG ENERGY.

EnergyEnergy

EU ENERGY POLICY

Context and Challenges Objectives, 2020 Targets, RM 2050, GP 2030, Growth and Jobs…

MARC DEFFRENNES

DG ENERGY

EnergyEnergy

EU energy challengesEU energy challenges

1. Sustainability (= Env Protection: GHG, +…)

2. Security of energy supply (ia stability and reliability of electricity supply…)

3. Competitiveness (incl "affordability for final consumer")

In which order ???

To tackle these challenges, EU needs:

• an ambitious set of energy efficiency measures• a proper mix of a wide range of low carbon energy

sources (+ large investments!!!)

EnergyEnergy

Energy policy for EuropeEnergy policy for Europe• Integrated energy and climate policy

Objective: 80 to 95 % GHG reduction in 2050

• Year 2020 targets (2007): 3x20% AND SET Plan – needs 80 Billion Euros over 10 y

• 2nd Strategic Energy Review (2008)CO2 free electricity in 2050

• Energy Strategy 2020 (2010): 5 priorities (EE, Market Operation and Infrastructures, Innovation SET

Plan, Safety and Security, International Cooperation)

EnergyEnergy

Energy Strategy 2020 and MFF(ia!):Energy Strategy 2020 and MFF(ia!):

- PM: EERP and NER300: 1.5 BEuros for CCS and Wind + 1.2 BEuros for 43 RES Projects

- Critical Infrastructures – ia energy networksEC proposed 10 Beuros – reduced in Council proposal

- SET Plan:H2020 EC proposed 6.5 BEuros for Energy + Euratom

- Regional/Structural FundsEnergy and Innovation are priorities

NEEDS ARE MUCH BIGGER - global endeavour: need MS and Industry on board… INVESTMENTS !!! Will the "Market" deliver ???

EnergyEnergy

Energy Roadmap 2050Energy Roadmap 2050

• Adopted by the Commission in December 2011; Presidency conclusions in June

2012

• An exploration of possible futuresfor the EU energy system: 7 scenarios

• Diverse Long-term Perspectives and Mixes

• Discussion with Member States and stakeholders

• A basis for policy action = regulatory framework and financing/investment

policy

EnergyEnergy

6

Basis of scenarios 80% domestic GHG reduction in 2050

Efficient pathway:-25% in 2020-40% in 2030-60% in 2040

Context: Low-Carbon Economy Roadmap (Mar 2011)

0%

20%

40%

60%

80%

100%

1990 2000 2010 2020 2030 2040 2050

0%

20%

40%

60%

80%

100%

Current policy

Power Sector

Residential & Tertiary

Non CO2 Other Sectors

Industry

Transport

Non CO2 Agriculture

EnergyEnergy

Energy Roadmap 2050 - scenarios

1 Business as usual (Common Reference Scenario)

1bis Current Policy Initiatives scenario

2 High Energy Efficiency

3 Diversified supply technologies

4 High Renewables

5 Delayed CCS

6 Low Nuclear

EnergyEnergy

EU-27 resultsReference scenario: GDP, energy consumption and CO2 emissions 40 years back and ahead (1990 = 100)

0

50

100

150

200

250

300

1970 1980 1990 2000 2010 2020 2030 2040 2050

GDP

Gross energyconsumption

CO2emissions

EnergyEnergy

ResultsCurrent Policy initiatives scenario: Primary energy demand, savings from REF and carbon intensity

0

200

400

600

800

1.000

1.200

1.400

1.600

1.800

2.000

1990 2010 2030 2050

0

20

40

60

80

100savingsfrom REF

RES

nuclear

gas

solids

oil

carb. int.(REF)

Mtoe Carbon intensity

EnergyEnergy

Results Gross energy consumption: range in current trends and decarbonisation scenarios (in Mtoe)

1000

1100

1200

1300

1400

1500

1600

1700

1800

1900

2000

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

REF/CPI: effects of additional policies and updated assumptions

Decarbonisation cases: effects from different policy focus / technology availability

EnergyEnergy

ResultsShare of electricity in final energy demand under current trends and with decarbonisation (in %)

15%

20%

25%

30%

35%

40%

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Range for current trends scenarios:

Range regarding decarbonisation scenarios

FROM 3100 to 4800 TWh PA

EnergyEnergy

ResultsImport dependency under current trends and decarbonisation in (%)

30

35

40

45

50

55

60

2010 2015 2020 2025 2030 2035 2040 2045 2050

CPI

low Nuclear

Energy Efficiency

Div. Supply Techn.

delayed CCS

RES

EnergyEnergy

ResultsRatio of energy system costs to GDP under current trends and decarbonisation (average over 2011-2050)

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Reference CPI EnergyEfficiency

Div. SupplyTechn.

RES delayedCCS

low Nuclear

* EU GDP = 15 Trillion Euros per year – 0.5% is 75 Billion Euros !!! per year

EnergyEnergy

Results: Shares in the energy mix

2050 - range of fuel shares in primary energy across scenarios

0%

10%

20%

30%

40%

50%

60%

70%

RES Gas Nuclear Oil Solid Fuels

High RES

Delayed CCS

Low nuclear

High RES

Low nuclear

High RES

Delayed CCS

High RES

Low nuclear

Delayed CCS

EnergyEnergy

Decarbonisation of the energy system: Some conclusions• Decarbonisation under global climate action is feasible; several pathways are possible

and costs do not differ substantially from current trends

• Reduction of energy consumption through energy efficiency improvements

• All decarbonisation options can contribute: EE, RES, nuclear, CCS

• But Renewables increases a lot in all cases

Electricity will play a greater role in energy supplies (20% of final energy demand today, almost 40% by 2050) also in areas such as transport and heating = 4800 TWh per year in 2050

• Power generation almost carbon free by 2050

• Electricity prices increase up to 2030 and slightly decline afterwards (besides the High RES scenario where electricity is 25% more expensive)

• Transition from high fuel / operational expenditure to high capital expenditure

• Reduced import dependency and external fuel bill

• Massive investments in generation capacity and grids to ensure stable and reliable energy supply

EnergyEnergy

0%

25%

50%

75%

RES Gas Nuclear Oil Solid fuels0%

25%

50%

75%

RES Gas Nuclear Oil Solid fuels

2030 2050

Renewables move centre stage – but all fuels can contribute in the long-runDecarbonisation scenarios - fuel ranges (primary energy consumption in %)

2005

1616

Energy Roadmap 2050 – scenarios (2/2) Energy Roadmap 2050 – scenarios (2/2)

EnergyEnergyEnergyEnergy

A 2030 frameworkfor climate andenergy policies

Marten WestrupEuropean Commission,DG ENER Unit A1

EnergyEnergy

EMPLOYMENT ???

•- Not properly taken into account in the RM2050 scenarios

• - Study ongoing (DG ENR A1): "Understanding of the labour market implications of the energy system transformation. The study should provide an analysis of employment effects for selected scenarios of En RM 2050

- 5 Tasks:

1. Collection of statistical data (base Eurostat disagregation)2. Literature review about recent analysis of the labour market challenges associated with the transition of the energy system

• 3. Develop of employment scenarios assessing employment effects of the scenarios RM2050• 4. Sensitivity Analysis (5 parameters)• 5. Provision of "Employment Coefficients" for future En Scenarios (ia jobs created by 1 GW, of per

Euro invested…)

- Contractor: COWI – Warwick+Cambridge+ErnstYoung+Exergia

• - Planning: 7 months – input for Impact Assessment Communication 2030

EnergyEnergy

Energy Roadmap 2050 – scenarios (1/2)Energy Roadmap 2050 – scenarios (1/2)

1919

GHG reduction target in 2050

Energy RM 2050 Scenarii Nuclear in electricity generation in %in 2050 [eq. capacity operating in GWe vs 125 GWe today]

40% Reference Scenario 26,4% [161 GWe]

40% Current Policy Initiatives 20,6% [117 GWe]

80% High Energy Efficiency 14,2% [79 GWe]

80% Diversified supply technologies

16,1% [102 GWe]

80% High Renewables 3,6% [41 GWe]

80% Delayed CCS 19,2% [127 GWe]

80% Low Nuclear 2,5% [16 GWe]

EnergyEnergy

For info - EURELECTRIC Study 20502010 « PowerChoices » Scenario

Target: EU 75% GHG reduction in 2050 vs 1990 to respect IPPC 4th Assessment: 440 ppm CO2 eq and 2 deg C 50% GHG reduction worldwide and 60 to 80% OECD

Means carbon-free electricity in 2050 in EU = 2nd SER

Lot of energy efficiency and savings – primary energy needs decrease from 1800 Mtoe (2005) to 1400 Mtoe (2050)

Electricity demand increases from 3100 to 4800 TWh

Mainly RES – from 15% to 40 % – mainly wind 2x15 % by Coal and GasNuclear from 950 TWh to 1300 TWh (31 to 28%)

Overall cost of PowerChoices: Investment needed: 2 trillion Euros for 2050 (of 2005)…EC estimation Power Infrastructures 2020 1 trillion Euros= 600B plants + 400B grid – of which 200B priority interconnections (10B from MFF Infrastructures Interconnecting Europe

EnergyEnergy

Nuclear in Energy Roadmap 2050 (2/2)Nuclear in Energy Roadmap 2050 (2/2)

• Share of nuclear in decarbonisation scenarios vary depending on assumptions taken from 3 to 19 % in electricity – of 4800 TWh

• … 3 scenarios on 5 between 15 and 20%...

• BUT what does it mean: 20% of 4800 TWh electrical capacity needed in 2050 in terms of

Investments ?

Growth and Jobs ?

2121

EnergyEnergy

20% Nuclear Scenario 2050 (1/2)20% Nuclear Scenario 2050 (1/2)

2222

EnergyEnergy

20% Nuclear Scenario 2050 (2/2)20% Nuclear Scenario 2050 (2/2)

2323

EnergyEnergy2424

20% Nuclear Scenario 2050 - Impact on 20% Nuclear Scenario 2050 - Impact on Investments, Growth and JobsInvestments, Growth and Jobs

Long Term Operation (100 Units)

New Built (100 Units) Several units in construct in parallel

Long term operation(2015-2035)

New Built(2025-2045)

Investments 900 M€ per Unit 5 B€ per Unit

Jobs 900000 (base)

In addition 50 000 jobs(LTO + ST upgrades)

In addition 250 000 jobs(New Built)

Value added70 B€/y (base)

In addition 5 B€/y In addition 25 B€/y

EnergyEnergy

(Perspectives for nuclear in EU…???)(Perspectives for nuclear in EU…???)

Further development is contingent on:• high level of nuclear safety & security - at large (technology, waste mgnt, emerg mgnt, liability,…)

• public acceptance + MS position on nuclear

• climate targets maintained + how well are "others" doing

• positive investment climate

• international cooperation and opportunities

• research and innovation critical – leadership/knowledge

EnergyEnergy

• THANK YOU FOR YOUR ATTENTION

• [email protected] Nuclear• [email protected] Energy Policy• [email protected] Employment

study