wp6: the overall climate & energy frameworktowards2030.eu/sites/default/files/the overall...

Towards2030-dialogue – Mid-term Conference, Brussels, 12 November 2015 Slide 1

WP6 – The overall climate and energy framework Towards2030-dialogueTowards2030-dialogue

WP6: The overall climate & energy framework

Author: Jaap Jansen, James Rawlins, Francesco Dalla Longa, Karina Veum

ECN

Contact:Web: www.ECN.nlEmail: …@ecn.nl


WP6 – The overall climate and energy framework Towards2030-dialogue

Toassessfromanintegrated,overallpolicyperspective,relevantmajorexternaldevelopmentsimpactingonpost-2020 RESdevelopmentandpolicymakingintheEU

Coreobjectiveoftheworkpackage



– Gassecurityissuepapercompleted(OCT14)

– Gassecuritybackgroundreport completed (NOV14)

– Draft issuepaperspertopic(DEC15)

• Fossilfuelprospects

• Nuclearpolicyframework

• ClimatepolicyoutsideEU

• CarbonpricingintheEU

• GlobalREStechnologydevelopments

• InterlinkagesbetweenRESandclimatepoliciesintheEU

Work packagedeliverablesdeliveredand inprogress



Motivation:

• ¼ of the energy used in the EU stems from natural gas

• High gas import dependency –Russia as the major supplier

• Current political developments• Russian-Ukraine gas conflict

2009• Ongoing conflict in East-Ukraine

• Focus on 12 vulnerable Eastern European member states

BGCZ

EE HR

LV

LT

HU

PL ROSI

SK

FI

0%

10%

20%

30%

40%

50%

0% 10% 20% 30% 40% 50%Shareo

fRussia

ngasimpo

rtsingr

ossinlandconsum

ptionin201

2[%

]Shareofoverallgasuse

ingrossinlandenergyconsumptionin2012[%]

IssuePaper #1:RES/EEcontributions toimprovegassecurityinselectedMemberStates



IssuePaper #1:Methodology

Assessmentofenergyefficiencyoptions

Assessmentofrenewableenergyoptions

Estimationofreplacednaturalgasuse

Referenceprojectionoffutureenergyuseandsupply

Gasmarketmodelling

Workingsteps: Scenariosderived: Remarks:

Baselinecase

LPIscenario

…basedonPRIMESreferencecase,correctedforimpactoffinancial/economiccrisis

…energyefficiencyscenarioderivedbyFraunhofer ISIetal.(2014),consistentwithabout 30%EEby2030 atEUlevel

Baselinecase

Limited(RES)cooperation

Full(RES)cooperation

…alternativeRESpolicypathwaysfor2030,developedbyuseofTUWien’sGreen-Xmodelandconsistentwith30%RESby2030atEUlevel,reflectingacontinuationofthe2020logic

(limitedcooperation)oramoreharmonisedEUsystem(fullcooperation)

Baselinecase

Re-negotiatedscenario

Breakingupscenario

…alternativegasmarketpathsrelatedtolong-termcontractsongassupplywithRussia



IssuePaper #1:Results– effectsongasdemand

Increaseinenergy

efficiency

Increaseinrenewables

0

50

100

150

200

250

300

350

2010 2015 2020 2025 2030

Savingsa

t12MSlevel(inte

rmso

fgrossfinal

energydem

andtobecoveredbyfo

ssilfuels,

comparedtobaseline)[TWh]

IncreaseinrenewablesIncreaseinenergyefficiency

663

522 514

95 95

47 55

0

100

200

300

400

500

600

700

Baselinecase Limited(RES)cooperation

Full(RES)cooperation

Gasc

onsumptionby203

0at12MSlevel

[TWh]

SavingsduetorenewablesSavingsduetoenergyefficiencyGasconsumption

-14.3%* -14.3%*

-7.0%* -8.2%*

*comparedtobaseline

• Theanalysedeffortsforenergyefficiencyanddeployment ofrenewablesleadtoagasdemandreductionbetween142and150TWh

IssuePaper #1:Results– effectsongasdemand



GasMarketModel



• Natural gas demand can be reduced by more than 20% until 2030 if a 30% target for renewables and energy efficiency is reached

• The impact of the reduced import is highly dependent on the handling of the long term take-or-pay contracts

• From a gas market perspective the infrastructural and reverse flow projects are a key factor to reach the above mentioned benefits

• The currently planned gas infrastructure does not allow to be completely independent from Russian gas imports

• Having implemented strong EE and RES policies along with upgrading gas transmission interconnectivity, the 12 countries can weather well possible emergency events with Russian gas supply

Findings onenhancing gassecurityinthe 12selected MemberStatesEnhancinggassecurityinthe12assessedMemberStates



Task6.2.1– Fossilfuelsupply:keyquestions• Whatistherationaleofscopeonissuesrelatedtoglobalenergytrendswithfocusonfossil

fuels?• Whatarethekeyglobalenergytrends;historical1990-2012andprospectiveupto2030-

2040?– Mainsource:IEAWEO2014– Global;ROTWvsEU-28;focalROTWplayers:China,USA,India,Middle East– Somespecific attentiontoprospectsofnon-conventional oilandgas– Assessment ofcredibility ofIEAcentralscenarioFFprojections

• Whatarethetrendswrt EU-ROTWtradeinfossilfuels?– Recentevolution oftheEUenergyimportbill:byfuelandmainexportcountry/region– EUCIFfossilfuelimportpricetrendsandtrendsofselectedworldcoal/oil/gas pricebenchmarks– WhataretheresourcerentimpactsinmainFFexportcountries/regions upongeopoliticalstability?

• WhataretheprospectsforCCS?– IsCCS likelytomateriallyslowdown therisingshareofrenewablesintheenergymix?

• ExpectedeffectsandmajoruncertaintiesregardingEUconsumptionandimportsoffossilfuels?– Findings oneffectsupon 2030REStargetachievement– Findings regardingEUfossil-fuel relatedpolicies



Task6.2.1– Fossilfuelsupply:keytrends

Scenario GHGreduction Competitive-ness

Energy security Air quality

Projected trendsonglobalfossilfuelsevolutionwouldbearhighglobalandEUsocioeconomiccost

IEAcentralscenario

450 ppmin2100targetwouldbehighlyillusive

The EUasamajorimporteroffossilfuelswouldhavetosustainadeterioratingtrendintheUnion’stermsoftrade

Negativeimpactoffossilfuelpricevolatilityandgeopoliticaltensions

Negativeimpactwithknock-oneffects onnon-GHGenvironmentalimpactcategories

HighEE cumRESscenariocouldbringinhighglobalreturns

Alternativescenariowithstrongpolicydrivenbutatthesametimesocioeconomicallycost-effectiveEEcumRESpush

The450 ppmin2010scenariocouldbewithinreachcontingentonsocioeconomicallycost-effectiveimplementation

World-wide,governmentsareincentivised toimplementmoreservices-orientedeconomicdevelopmentpolicieswithcountry/region-specificcompetitiveedges.

Positiveeffectsofreduceddependencyonfossilfuelsonexposuretovolatilityoffossilfuelpricesandgeopoliticalturmoil

Positiveeffectsofreduceddependencyonfossilfuelsonenvironmentalimpacts



• Howcanclimatepolicy(focussingoncarbonpricing)outsidetheEUaffectEURESpolicygoals?

• WhatisthecurrentstatusofcarbonpricinginChina&theUS(andtheEU)

• Howiscarbonpricingexpectedtoevolveoutto2030ina´basecase´scenarioinChinaandtheUS?

• Whatisthebandwidthofpossiblepathwaysaroundthatbasecase?• WhataretheimplicationsofthesepossibledevelopmentsforEURES

policy?• WhatcantheEUdotomonitorandrespondtotheseinfluencesin

future?

Task6.3.1- ClimatechangepoliciesoutsideEU:Keyquestions



Task6.3.1:CarbonpricinginChina,USandEU- currentstatus

Source:CAIT;PMRChinaCarbonMonitorMay2015;WorldBankStateofCarbonPricingReport2015;ChinaCarbonPricingSurvey2015;Eurostat;ThomsonReuters2030EUAPriceForecast;USEIA;USEPA;RGGI;CARB

Pricing(US$/tonne)

Coverage

20$

30%

(%Totalnational emissions)

EUETS2015

30$

0$70%0%

China2015

50%10% 20% 40% 60%

10$

5$

15$

25$

Size(TotalCap)

2bntonnes

USARGGI2015

California2015



Task6.3.1:Illustrativebasecaseevolutionto2030

Source:CAIT;PMRChinaCarbonMonitorMay2015;WorldBankStateofCarbonPricingReport2015;ChinaCarbonPricingSurvey2015;Eurostat;ThomsonReuters2030EUAPriceForecast;USEIA;USEPA;RGGI;CARB

(NB:Work inProgress)

California2015

Pricing(US$/tonne)

Coverage

20$

30%

EUETS2015

China2025

30$

0$70%0%

China2015

50%10% 20% 40% 60%

EUETS2025

10$

5$

15$

25$

Size(TotalCap)

2bntonnes

USARGGI2015

USA2025?

?

(%Totalnational emissions)



Task6.3.3- GlobalREScosts:ImplicationsforEU2030RESpolicy

Factorsthat canimpactEU2030policyobjectives

Globaldevelopmentscenario

Implications for EU2030RESpolicyobjectives

Energysecurity GHGreduction Competitiveness

Costof RES(LCOE) Largeglobaldeployment drivingcostsdown

Positive– enablesdiversificationofsupply

Positive– greaterrangeoflow carbonenergysourcesavailable

Positive– i.e.cheapertechnologiesavailable toEU

Technologicalinnovation

Majortechnologicalinnovations developedoutside theEU

Positiveifinnovationscanbeadopted–enablesdiversificationofsupply

Positiveifinnovationscanbeadopted–greaterrangeoflowcarbonenergysourcesavailable

PositiveifexpertisecanbetransferredtoEU,negativeifexpertisestaysabroad

Newregulation(e.g.integratedoffshore gridinNorth Sea)

Emergence(withinoroutside theEU)ofnovel regulationschemes enablingfaster/cheaper/moreefficientRESdeployment

Positive– enablesdiversificationofsupply

Positive– greaterrangeoflow carbonenergysourcesavailable

PositiveifnewregulationisdevelopedwithintheEU, orcanbeadoptedintheEU



– Gassecuritypapercompleted(OCT14)

– Draft issuepaperspertopic(DEC15)• Fossilfuelprospects

• Nuclearpolicyframework

• ClimatepolicyoutsideEU

• CarbonpricingintheEU

• GlobalREStechnologydevelopments

• InterlinkagesbetweenRESandclimatepoliciesintheEU

– Thematicworkshop inAmsterdamortheHague(FEB/MAR16)

– Policybrief:“Theoverallclimateandenergyframework”(APR16)

– FinalReport:“Theoverallclimateandenergyframework”(APR16)

Work packagedeliverables&remaining timeline

wp6: the overall climate & energy frameworktowards2030.eu/sites/default/files/the overall...

Documents