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2 | Europe’s New Energy ERA

EuropE’s NEw ENErgy ERA MAnuEl Pinho

4 | Europe’s New Energy ERA Europe’s New Energy ERA | 5

The world is facing a massive energy and environmental challenge, a challenge that is particularly acute for Europe. Europe already imports half of its energy, and this is forecast to rise to nearly two thirds by 2030 unless action is taken.While the economic impact of Europe’s reliance on energy imports may be cause for concern, the security consequences could be dire. Energy security is an issue with geopolitical overtones. Diversification of Europe’s energy supply base is an urgent priority.

Growing energy consumption is not just a threat to Europe’s economy and political stability, it is also linked to environmental challenges – and climate change in particular. The world’s output of carbon dioxide (CO2) is set to increase by 55% by 2030 with the EU’s emissions increasing by 5%. The impact of this scenario on Europe’s environment, economy and way of life would be tremendous. Just think of some of the possible consequences of climate change. A six-metre rise in sea level would submerge large parts of Barcelona, Venice, Amsterdam, London, Stockholm and Lisbon.

While energy and the environment are the greatest challenges for Europe in the 21st century, they also represent an enormous opportunity. Europe can become the leader in renewable energy and low-carbon technologies, and make its economy much more robust in the process. In short, Europe has the opportunity to usher in a new industrial revolution in energy.

To realise this vision, the European Commission has tabled a seven-point action plan foreseeing a range of measures:1. Creating an efficient and competitive EU energy market.2. Ensuring security of supply for oil, gas and electricity and

promoting solidarity between Member States.3. Promoting energy efficiency. 4. Supporting renewable energy. 5. Backing research.6. Building a framework for nuclear energy.7. Developing a common External EU Energy Policy.Recognising the seriousness of the challenge, as well as the inherent opportunity, we at the European Commission have put forward a comprehensive European Energy Policy – the most far-reaching reform of Europe’s energy policy ever attempted.

To reach this objective, Europe needs to develop clean, efficient and low-emission energy technologies. This is why, during the Portuguese Presidency, the Strategic Energy Technology plan became one of the main drivers of the newly born European Energy Policy. Minister Pinho has made an important contribution to the technological debate of the energy policy through consolidation of important research and tangible solutions. New technologies will become an engine for growth and job creation whilst sustaining a high quality of life. This book, including the ERA Vision Paper, is an important contribution to the energy debate and to positioning the EU as a leader in technological developments. It is a roadmap for Europe’s secure, clean and prosperous energy future.

by AndRis PiEbAlgs, Eu EnERgy CoMMissionER

FoREwoRd

Foreword


introduction

15 years ago, the main issue was how to stimulate economic growth, employment and global trade and investment. It was the economy! Things have changed in a positive direction, which is epitomized by the ITC and biotech revolutions, the formidable performance of countries like China and India and the successful enlargement of the EU. Europe’s competitiveness has improved markedly. Europe has the largest share of the world’s exports of manufactured goods. Now, it is all about energy and the environment!

The combination of a high dependency on fossil fuels with increasing demand has created a serious challenge for Europe and the world, in terms of security of supply, competitiveness and greenhouse gas emissions. Current trends are unsustainable, both from an energy , competitiveness and environment perspective.

Europe must transform this challenge into an opportunity. Europe has already demonstrated the capacity to take bold initiatives in the areas of energy and the environment. Europe has the resources and the skills. Europe has the chance to lead a process which will involve technological change on a massive scale and trillions of Euros of investment.

Europe has a comprehensive energy agenda. The Strategic Energy Technology Plan (SET Plan) is part of the European energy agenda. It is a blueprint to guide Europe in the choices needed for the adoption of new energy technologies and the creation of a low carbon energy model. The SET Plan was approved during the Energy Council of December 2007. It was one of the main priorities of the Portuguese Presidency of the EU, during which the Lisbon Treaty was signed.

The Vision Paper presented by the Portuguese Presidency to the Energy Council was based on this report. Portugal has been successful in promoting renewable energies, in creating an integrated regional market for electricity and in promoting competition. The secret to this was the capacity to commit to clear goals and to creating a movement in the right direction. Setting the right incentives is critical to attract private money to finance investment in research, renewable energies and new infrastructures. I believe that we can transform the energy challenge into an opportunity to create jobs, promote leading industries and stimulate innovation. I believe Europe will not miss this opportunity.

Manuel Pinho

15 yEARs Ago, it wAs thE EConoMy... now, it’s EnERgy And thE EnviRonMEnt!

Europe’s New Energy ERA | 9

This book presents the background material which has inspired the Vision Paper on the

SET Plan. I supervised this work during the EU Presidency in the second half of 2007,

assisted by João Conceição and Miguel Barreto.

Medium term scenarios have been performed by the E3M Lab (PRIMES model) of the

National Technical University of Athens and by a team of the Boston Consulting Group.

We have benefited from exchanges of views with the EU Commission, Jeremy Rifkin and

his team, the International Energy Agency Energy Outlook 2007, Shell and BP, among others.

Andris Piebalgs, Carlos Pimenta and Antonio Sá da Costa have been a source of inspiration.

Thank you to EDP and Galp Energia for their support and sponsorship of this important work.

MEthodology

Methodology


05 FoREwoRd

07 intRoduCtion

09 MEthodology

13 ExECutivE suMMARy

21 EuRoPE’s EnERgy ChAllEngE

23 Examining Europe’s dependency on fossil fuels 24 Medium term forecasts predict a worsening scenario 25 The internal market, 20-20-20 goals and

strategic Energy plan 26 A stern warning to take action on the environment 29 A global solution for a global problem

31 A vision FoR EuRoPE: A nEw EnERgy ERA

32 Defining a reduction of 60% to 80% in real terms 34 No ‘silver bullet’- but a ‘wedge strategy’ can be just as effective 36 reducing fossil fuel consumption = reducing costs 37 A new energy ErA

ContEnts 41 wEdgE stRAtEgiEs: iMPlEMEnting thE nEw EnERgy ERA sECtoR by sECtoR

43 wedge A: The residential and tertiary sectors 46 Case study: Freiburg tackles climate change 49 wedge B: Transforming the transport sector 52 Case study: personal Travel plans – uK 55 wedge C: revolutions in the industrial sector 58 wedge D: Tomorrow’s energy generation

65 govERnAnCE stRAtEgiEs: AdoPting APPRoPRiAtE govERnAnCE ModEls

67 Cooperating and coordinating Eu member roles and responsibilities

71 invEstMEnt And iMPlEMEntAtion stRAtEgiEs: invEst MoRE, invEst bEttER

74 Invest more in r&D 75 Invest better in r&D 81 Adopting appropriate market

and regulatory mechanisms 82 Case study: Incentives in energy – portugal

84 tEChnology solutions – todAy And toMoRRow

88 The residential sector 92 The transport sector 96 The industrial sector 98 power generation technologies 106 Technologies for advanced infrastructure

109 REsEARCh dAtA

122 glossARy oF AbbREviAtions

Contents

wedge strategies: implementing the new energy era sector by sector


ExECutivE suMMARy

Europe’s New Energy ERA | 15 14 | Europe’s New Energy ERA

Executive summary

Europe is developing an ambitious agenda, which identifies governance strategies and technologies that will support this shift without choking economic growth. The moves

towards a competitive and diversified energy market, towards the so-called 20-20-20 targets to reduce carbon emissions and towards increases in energy efficiency have defined much of Europe’s agenda until 2020.

In November 2007, the next stage in Europe’s energy strategy was outlined when the European Strategic Energy Technology (SET) Plan was approved by the European Commission. The SET plan goes further than the 20-20-20 targets and advances a low carbon energy model based on the adoption of technologies such as renewable energy generation and carbon capture and storage. SET also seeks to create the appropriate governance and

implementation models to coordinate the response at the supply and demand level across member states.

Acknowledging the need to further cut fossil fuel dependency and CO2 emissions, the 2007 European Spring Council suggested to go further than the 20-20-20 targets. These targets ask for a 60% to 80% reduction in carbon emissions by 2050 compared with 1990 levels. While these targets were set, there was no elaboration

on what their implementation would mean in real world terms.So what does the implementation of a 60% to 80% reduction

and the SET plan really mean? This report envisions one way in which Europe’s targets can be met. A new energy ERA, comprising of energy Efficiency, Renewable and other clean energy generation, and Advanced infrastructure, is a real world strategy for how to achieve these objectives by 2050.

The projections used in this book have been made by the PRIMES model and predict Europe’s energy use up to 2050. In line with the SET plan, the new ERA looks beyond the 2020 goals and proposes one way in which the targets could be met, based on technologies currently available and soon to be available.

There is no ‘silver bullet’, which would solve all issues of security of supply and carbon emissions. However, a coordinated deployment of current and near available technologies and a strong R&D development of new generation of clean energy technologies could deliver the necessary reductions in emissions and energy consumption. This ‘wedge strategy’ approach would

new energy ERA, comprising of energy Efficiency, Renewable and other clean energy generation, and Advanced infrastructure, is a real world strategy for how to achieve these objectives by 2050

Executive summary

1US light crude oil reached $100 per barrel on January 2, 2008 before dropping again

concerns over price stability, security of energy supply, increasing demand and environmental impacts have aligned to make a ‘perfect storm’

EU 27 Fossil Fuel consumption 1990-2005Mtoe

Source: E3MLab, PRIMES model; Energy Information Administration,International Energy Annual 2004 (July 2007 updated) Eurostat

~60% of total

energy

1990 1995 2000 2005

1,340 1,365 1,430

0

500

1,000

1,500

2,000

2,500

Oil

Natural Gas

Coal

1,370

CAGR0,3%

oil and gas currently meet 60% of Europe’s energy requirements; 50% of these requirements are imported

The ‘wedge strategy’CO2 emissions

Time

Energy

Industrial

Transport

Residential

A business as usual scenario: emissions rise

The target scenario: emissions drop

A ‘wedge strategy’ combines emission savings from all sectors

A ‘silver bullet’ technology which generates clean, cheap and abundant energy would solve Europe’s energy problems but there is no silver bullet technology currently available. however, a wedge strategy approach, combing the emission savings from the residential, transport, industrial and energy sectors can successfully meet Europe’s reduction targets

enable the 60% to 80% reductions by effectively improving efficiency and reducing energy use in each of the residential, tertiary, transport, industrial and energy sectors.

Strategies will be different for each member state according to its resource endowments, institutional capabilities and political preferences. However, an economical response to implementation requires looking at European policies in a horizontal manner and

As oil hovers around the $100 per barrel mark1, concerns over price stability, security of energy supply, increasing demand and environmental impacts have aligned to make a ‘perfect storm’. The current situation demands an urgent shift from Europe’s dependency on fossil fuels towards a low-carbon economy.

The ‘silver bullet’ strategyCO2 emissions

Time

A hypothetical ‘silver bullet technology solves problems of security of supply,

CO2 emissions and cost


The target scenario:emissions drop


putting in place governance structures that coordinate national and community-wide efforts.

The task is demanding, but Europe is well-positioned to lead the world in what will be a new industrial revolution in the energy sector. Public awareness on climate change means that there is widespread support among Europeans for a move to a low carbon economy.

The increase in oil and gas prices has also made renewable and other clean technologies more competitive than ever before. If it acts swiftly, Europe will be able to position itself to win a first mover advantage, particularly in technological innovation. For example, while R&D and new technology deployment will require an investment of trillions of Euros, this investment is estimated to create over one and a half million direct and indirect jobs in businesses and research.

Given the need to attract private investment at an unprecedented scale, Europe’s governments must provide a clear picture of medium term objectives, set a stable regulatory framework and create the right incentives. An increase in public budget expenditure and other resources allocated to R&D is crucial to spur investment in energy. We must invest more and invest better.

Yet, Europe’s decisions must be made in a global context, for climate change is truly a global problem. Presently, Europe only accounts for 14% of global carbon emissions, making a unilateral response futile in a global sense, and potentially hazardous for Europe’s competitiveness.

there is no ‘silver bullet’, which would solve all issues of security of supply and carbon emissions. however, a coordinated deployment of current and near available technologies and a strong R&d development of new generation of clean energy technologies could deliver the necessary reductions in emissions and energy consumption

The projected 2050 energy-use patterns demand that Europe act now to move to a low-carbon economy, as action taken now will only produce results after several years. The 2050 predictions outlined in this book echo those in the Review on the Economics of Climate Change by Sir Nicolas Stern, which delivered a stark warning to European governments in 2007: although the cost of action to reduce carbon emissions is high, inaction is even costlier, in both economic and environmental terms.

It is clear that Europe must act. By leveraging its move towards a low carbon economy, by setting standards in innovation and new technology, Europe can lead the world in a revolution in energy. We must all of us, view this responsibility as an opportunity to work together toward building a more energy independent and sustainable future.

An increase in public budget expenditure and other resources allocated to R&d is crucial to spur investment in energy. we must invest more and invest better

Executive summary


Europe’s energy challenge


Europe’s opportunity: the first mover advantageEurope is well placed to obtain a first mover advantage as it moves towards a new energy model. While the cost of developing new generation technology will be significant, the associated benefits in GDP growth and job creation could mitigate, if not outweigh, the cost. If Europe moves quickly to develop the world standards in renewable and new technology, it will benefit from being able to export these technologies elsewhere. However, innovation requires investment which should be encouraged at both the public and private level.

For example, the power sector is expected to invest approximately 2 trillion 05€ until 2050 in new generation capacity. The extra investment in smaller, more dispersed and more renewable-based generation will create, by itself, over 1.5 million new jobs in and around the energy sector. European companies will be able to export these products, services and know-how to the rest of the world and ‘spill-over’ from cutting-edge research in the energy sector will take place. This is expected to more than offset the extra investments and costs.

A number of European companies are already considered worldwide leaders in energy manufacturing, particularly in power generation, transport and industry. In power generation, there are several European examples of renewable, carbon capture storage and nuclear component manufacturers whose technology is currently exported to other parts of the world. Furthermore, many European power, gas and oil utilities are today world leaders in terms of production, efficiency and environmental standards.

Executive summary

EuRoPE’s EnERgy ChAllEngE




Evolution of EU-27 energy imports€ Bn

1999 2000 2001 2002 2003 2004 2005 2006

Oil

GasCoal0

100

200

300

400

Figure 1.7 Source: Eurostat; BP Statistical Review Full Report; Global Upstream Performance Review 2007 – John S. Herold Inc.;The Economist Intellegence Unit; www.x-rates.com

36.0%

18.7%7.3%

5.7%4.8% 4.1%

23.4% 100.0%

Six countries contribute to more than 75% of EU total imports (EU 25)

% of total imports (2004)

Russian Fed Norway Saudi Arabia Libya Algeria Iran Others Total0

25

50

75

100

Source: EIA; European Commission; E3MLab, PRIMES ModelFigure 1.8


A number of factors relating to the energy sector have collided to create a ‘perfect storm’ that is forcing Europe to re-examine its dependency on fossil fuels. High oil and

gas prices, a dependency on fuel imports from a small number of countries and clear evidence of the negative impact of carbon emissions on the environment demand decisive action to change Europe’s current energy equation.

Europe has been leading the way and pushing forward important measures and initiatives to tackle these pressing issues. The creation of a single internal energy market, greater interconnection and exchange of energy between Member States, specific regulatory improvements on CO2 markets and the setting of self imposed greenhouse gas emission targets are clear examples of the EU’s commitment and efforts.

Yet, despite these inspiring examples, the EU will find it hard to meet the self-imposed targets on energy use and greenhouse gas emissions reduction if it continues with business as usual. Despite the EU’s relatively better performance in comparison to other developed regions of the world, final energy demand in Europe is expected to rise at an average annual rate of around

High oil and gas prices, a dependency on fuel imports from a small number of countries and clear evidence of the negative impact of carbon emissions on the environment demand decisive action to change Europe’s current energy paradigm. Europe has already set a number of ambitious targets to change patterns in energy use and consumption. The internal energy market, the so-called 20-20-20 goals and the European Strategic Energy Technology (SET) plan, adopted by the European Commission in 2007, are examples of Europe’s concern. However, the ambitious target indicated by the European Council of a 60% to 80% reduction in emissions in developed countries by 2050 are feasible, but they requires a more comprehensive approach than currently set out.

1% under business as usual scenarios. This increases pressure on the entire energy generation system.

Final energy demand forecasts maintaining the current trend

Source: European Commission; E3M lab; Primes model

0

500

1,000

1,500

2,000CAGR: +1,1%

Mtoe

2050204520402035203020252020201520102005200019951990

under business as usual scenarios, Europe’s energy demand will increase at an annual rate of 1%

Examining Europe’s dependency on fossil fuelsThe combination of sustained population growth and economic development in Europe has resulted in a continuous increase in energy demand. Today, oil and gas account for approximately 60% of Europe’s primary energy needs; a steady increase in consumption over the past fifteen years. This picture is further aggravated by the current trend of switching from coal as the fuel of choice for electricity and heating generation to natural gas. Natural gas-based power plants and industrial thermal generation equipment will reduce carbon emissions but increase the supply risk as Europe has more coal reserves than natural gas.

Given the importance of fossil fuels in providing Europe’s final energy demand, ensuring a regular supply of oil and gas is crucial to the economy. Yet, Europe currently imports the majority of the fossil fuels it consumes with imports increasing from 44.5% in 1990 to 52.6% in 2005. Imports have also become notably concentrated in a handful of countries raising serious questions regarding Europe’s dependency.

While securing supply is one factor, concerns have also been raised in regards to competitiveness and the economic impact of

Europe has a high dependency on fossil fuels for its current energy demands, 60% of total energy use is from oil and gas

our fossil fuel dependency given current prices. In 2007 oil prices reached historic highs on par with the 1979 crisis levels. Formerly pessimistic forecasts predicting oil prices close to $100 per barrel have recently become a reality.

These price trends, together with the fact the EU is a net importer, are having a negative impact on the balance of payments. In economic terms, the EU-27 foreign bill for primary energy imports has grown at approximately 21% on an annual basis since 1999 as a result of increasing demand and most importantly due to the

imports have also become notably concentrated in a handful of specific countries raising serious questions regarding Europe’s dependency on these partners




Historic oil price peaks followed by significant decreases in GDP growth and increases in inflation rate

OECD countries GDP annual growth rate (current prices)

1970 1975 1980 1985 1990 1995 2000 2005 2007

OECD countries inflation rate

Source: IMF; BP Statistical Review Full Report; Global Upstream Performance Review 2007 – John S. Herold Inc.;The Economist Intellegence Unit; www.x-rates.com; Datastream

Figure 1.6

-5%

0%

5%

10%

15%

20%

25%OPECcrisis

Iraq/IranWar

Oil price duplicated in only three years (2004-2007)US$ (2007)/ bbl

1970 1975 1980 1985 1990 1995 2000 2005 2007

Asiancrisis

0

20

40

60

80

100

120

OPECcrisis 1st Gulf War Demand

recovery

Iraq/IranWar

Figure 1.5


oil prices are at historic highs but so far have not led to the same negative effects on economic growth that have occurred in the past

Medium term forecasts predict a worsening scenarioMedium term forecasts of supply and demand are no more optimistic than current scenarios and exacerbate the concerns raised above over competitiveness and security of supply. Energy demand is expected to outstrip supply sooner than expected as production on a reasonable cost basis peaks.

While oil remains plentiful, particularly so-called ‘oil sands’ and ‘shale oil’, the more cost effective or readily accessible supplies and deposits of oil are becoming exhausted. This effect is aggravated by a failure on the part of oil producing countries to invest in infrastructure to meet future demand.

This raises concerns about medium and long-term prices and access to oil and gas. With the growth of worldwide demand driven by Asia - China’s total energy consumption is expected to increase threefold by 2030 - and with the depletion of the more cost effective oil deposits, the marginal cost of oil will necessarily increase.

The aggregation of factors – demand pressure in Europe combined with increasing worldwide consumption and decreasing production capacity – could realistically create a serious situation in the near future. Furthermore, as oil and gas gain relevance as geopolitical weapons, it becomes clear that Europe must move swiftly to ensure a significant element of independence in order to secure security of its energy supply.

Oil upstream cost evolutionE&P Costs

Conven-tional

Deep-water

Ultra Deep-water

Oil SandsShale Oil

Cummulative Demand(Bn BBL)

Source: Eurostat; BP Statistical Review Full Report; Global Upstream Performance Review 2007 – John S. Herold Inc.;The Economist Intellegence Unit; www.x-rates.com

Europe's Oil & Gas production

Real

Mtoe

1990 1995 2000 2005 2010 2015 2020 2025 2030

Source: Eurostat; BP Statistical Review Full Report; Global Upstream Performance Review 2007 – John S. Herold Inc.;The Economist Intellegence Unit; www.x-rates.com

0

100

200

300

400

500

Europe’s oil and gas production will continue to decline as oil prices continue to rise due to the cost of extraction

the aggregation of factors –demand pressure in Europe combined with increasing worldwide consumption and decreasing production capacity – could realistically reach crisis levels in the near future

The International Energy Agency (IEA) reference scenarios project that fossil fuels will become the dominant source of primary energy – accounting for 84% of the increase in world demand between 2005 and 2030. Demand for oil is projected to grow by 37% and demand for coal by more than 73% - mainly driven by China and India. OPEC’s part in the supply of oil is projected to grow from 42% today to 52% by 2030.

fossil fuel price surge. Last year’s expenditure on oil and gas of over €300bn was equivalent to financing 150 years of R&D in the energy sector at the current rate.

So far this combination of factors has failed to produce the same negative effect on economic growth and inflation as it did during the 1979 crisis. However, there is still uncertainty about the future impact this level of prices will have on the global economy.

EuropeanEnergy Policy

Internal Energy Market

"20-20-20" Targets

Strategic Energy

Technology Plan

3

1 2

the internal market, 20-20-20 goals and strategic Energy PlanEurope’s dependency on imported fossil fuels is exacerbating world supply and demand. The EU has recognised the seriousness of these problems and has already undertaken a number of measures to create an ambitious integrated energy policy. The EU has:1. Defined guidelines to establish a comprehensive and effective

European-wide internal market for energy 2. Established the so-called 20-20-20 goals agreed by the European

Council in March 2007 that set binding targets by 2020 for renewable sources, energy efficiency and emissions reductions, along with market mechanisms and other related implementation strategies

3. Agreed on the European Strategic Energy Technology Plan which establishes guidelines for technological investment and governance and drives down the cost, while simultaneously encouraging take up or new technology.

the three main parts of Europe’s current energy policy





A stern warning to take action on the environmentOne effect of our high dependency and increasing demand for fossil fuels is the generation of high levels of greenhouse gas emissions, which could cause irreversible damage to our planet. It is generally recognized that a reasonable limit for CO2 emissions is equivalent to double the concentration in the atmosphere before the Industrial Revolution of the late 18th and early 19th centuries. However, there are indications that in a business-as-usual scenario, the level of CO2 emissions may actually triple.

The impact of a build up in GHG emissions is already visible and evidence supports the argument that the cost of inaction will be tremendous. Sir Nicholas Stern’s Review on the Economics of Climate Change, 2007 (The Stern Report) not only demonstrates that inaction is costlier than action, but also that action becomes more costly the longer it is delayed.

According to the report, a 10-year delay in taking action almost doubles the required annual rate of decline in subsequent years. If action is not taken, estimates show

that the annual costs of stabilising CO2 concentration levels in the atmosphere at 500-550 parts per million will represent about 1% of GDP by 2050.

However, a 2ºC increase in the average global temperature is a real possibility if the status quo is maintained. This increase is held by many of the world’s climate scientists to be the point at which serious and irreversible damage will occur.

Some results of the temperature increase are already apparent. For example, the de-icing of the legendary Northwest Passage in the Arctic Ocean could soon make it “fully navigable”. Warm-water plankton species have already become more than twice as abundant as cold-water species.

Predicted medium- to long-term consequences include a rise in sea levels, the flooding of coastal cities, increased desertification of dry areas and the extinction of a fifth to a half of all animal species.

Preventing these outcomes demands our immediate action.

Global average temperature change in the business as usual scenarioºC (compared with

pre-industrial level)

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 2090 2095 2010

Threshold point beyond which significant and irreversible damage might take place

EU long-termsustainable target (6th EAP)

0

1

2

3

4

5

Source: Stern Report

The first objective being undertaken by the EU is to create a competitive internal market for energy. The creation of such a market would create a level playing field for energy suppliers and this would make the European market more competitive for consumers. The EU is also working towards developing an efficient emission trading scheme. Making the internal market a reality will depend on large infrastructure investment but would diversify the energy network and contribute to security of supply.

In March 2007, as the second part of its response, the EU established a comprehensive set of targets to inform choices until 2020. The so-called ‘20-20-20 targets’ consist of targets of renewable energy penetration of 20%, a 20% reduction in greenhouse gas emissions, a 20% improvement in efficiency levels and a 10% share of diesel & petrol consumption from biofuels. Finally, in November 2007, the European Commission adopted the European Strategic Energy Technology (SET) Plan. The SET Plan is a blueprint to:

Guide the main choices until 2020 and beyond towards the establishment of a low carbon energy model based on the adoption of new technologies

Create the appropriate governance and implementation model to coordinate the response at the demand and supply level.

The SET plan gives an overview of the perceived short and long-term potential of a number of technologies to the extent that they can impact energy efficiency and reduction targets. This overview attempts to bridge the gap between the targets proposed thus far, and the technology available to meet these goals.

Some technologies are classified as “currently available”, others that are expected to add considerable value in both the short and the long term are referred to as “structural changes”, and those expected to pay dividends only in the long run are considered “long shots”.

Combined, the internal market, 20-20-20 and SET plan goals are important steps in energy and environmental policies in the EU for a number of reasons. Firstly, they help create the conditions for an effective emissions reduction trend aligned with the most recent scientific studies. Secondly, the binding nature of the objectives give clear regulatory signals for all stakeholders, but particularly for

Global average temperature change in the BAU scenarioºC (compared with pre-industrial level)

Source: The Stern Report

0

1

2

3

4

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 2090 2095 21000

Sea level rise threatens major cities

Sea level Significant decreases in water availability in many areas

Rising number of species face extinction

Rising intensity of storms, forest fires, droughts, flooding and heat waves

Small mountain glaciers disappear – water supplies threatened in several areas

Extensive damage to coral reefs

Sea level rise threatens major cities

Sea level Significant decreases in water availability in many areas

Rising number of species face extinction

Rising intensity of storms, forest fires, droughts, flooding and heat waves

Small mountain glaciers disappear – water supplies threatened in several areas

Extensive damage to coral reefs





the private sector, to adjust their future strategies and behaviours. Finally, the goals establish a path for additional long-term targets that will put the EU on track towards an energy model that is sustainable and compatible with protecting the environment.

However, the European Council has recognized that the 20-20-20 targets are only an intermediate objective and has emphasised the importance of more ambitious goals for the reduction of greenhouse gas emissions in the long run. As well

the sEt Plan public consultation found that a broad range of technologies are available to help reduce emissions, but some are more likely to be useful in the short-term than others

Source: E3MLab, PRIMES Model

EE buildings EE transport

On-shore wind Biomass EE Power Generation

EE Industry Hybrid vehicles

Offshore wind 1st Generation Biofuels

LT solar thermal Photovoltaic Small Hydro

Electric vehicles StorageNG Vehicles

N. Fission 2nd Generation Biofuels

Stationary fuel cellsH2 vehicles

H2 carrier

N Fusion

Short term(2020)

Long term(2050)

Higherpotential

Lowerpotential

Lower potential Higher potential

Unclear Long shots

Currently available technology Structural changes

SET-Plan Public Consultation

A global solution for a global problem Rising awareness of the disastrous impact of allowing greenhouse gas emissions to grow at present rates has sparked a significant change in the public’s perception of the problems associated with excessive dependence on fossil fuels. However, were Europe to act alone, this could hit energy prices and aggravate industrial displacement and unemployment.

Security of supply and economic competitiveness are problems that Europe needs to address and is able to address for itself. However, since Europe accounts for 14% of global greenhouse gas emissions, whereas together the US and China are responsible for 40%, unilateral action by Europe is insufficient to solve the problem.

Still, Europe can set an example that will inspire other regions to follow a similar path by developing technologies that could be implemented throughout the world. Since some technologies require a strong R&D effort, critical mass, large investments and reliable interconnections, these would benefit from efforts on an international scale.

At a global level, the EU should promote the discussion of environmental issues (for example, at the United Nations) and ensure a serious commitment from the bulk of CO2 emitters (US, China, India, etc) to this problem.

It is critical for Europe to avoid going it alone on climate change or imposing costly unilateral measures that do not apply to its competitors. It should be remembered that at present, more than 1.5 billion people have no access to regular energy services and that the swift rise in fossil fuel consumption by emerging economies could potentially offset any CO2 savings won by Europe. The post-Kyoto negotiations open a critical opportunity for real international cooperation by 2020 and beyond.

World Carbon Dioxide Emissions fromthe Consumption of Energy (2005)

0

10,000

20,000

30,000

5,957

5,323

Mt of CO2

3,9471,696 1,230 1,166 1,043

7,831 28,193

USA China EU 27 Russia Japan India Africa Other World Total

21,1% 18,9% 14,0% 6,0% 4,4% 4,1% 3,7% 27,8%

Source: Energy Information Administration, International Energy Annual 2005

Europe’s Co2 emissions are just 14% of the world’s total emissions

A unilateral approach will have little impact on a global scale as growth in carbon emissions is expected to come from outside Europe

Actual and projected CO2 emissions (1990-2030) under IEA “Reference” and EU 27 “Baseline” Scenario

0

2,500

5,000

7,500

10,000

12,500Mton of CO2

1990 2005 2015 2030Japan

Latin America

Russia

Economiesin Transition

India

EU27USA

China

Source: E3MLab, PRIMES Model; International Energy Agency, World Energy Outlook 2007

as establishing these targets, in 2007 the European Council reaffirmed its commitment to reducing absolute carbon emissions by challenging developed countries to collectively reduce their emissions by 60% to 80% by 2050 relative to their 1990 level.

Stepping up to this challenge is a great opportunity for Europe to fulfil the promise of the Lisbon Agenda1 in terms of growth and job creation through R&D, innovation, commercial deployment and the international diffusion of technology.

1The Lisbon Agenda is an action plan for the European Union. Its aim is to make the EU the most dynamic and competitive knowledge-based economy in the world capable of sustainable economic growth with more and better

jobs, greater social cohesion, and respect for the environment by 2010 . This is set against the background of productivity in the EU being below that of the US. It was set out by the European Council in Lisbon on March 2000.

A vision for Europe: a new energy era


A vision FoR EuRoPE: A nEw EnERgy ERA


EconomicalCompetitiveness

EnvironmentalSustainability

Security of SupplyEU should promote economic growth and employment in a context in which energy costs are a critical factor of competitiveness

Energy sector is a source of economic growth given its contribution to investment, GDP and employment

EU needs to guarantee permanent access to primary energy sources with stability of prices and volumes

EU should promote a supply mix that assures permanent reliability of the system under all weather and demand conditions

EU's dependence on imports has steadily increased, accounting for ~50% of current needs

EU should minimize environmental impacts caused by CO2 emissions Nevertheless, EU's business as usual approach has not managed to reduce CO2 emissions2005 CO2 emissions below the 1990 level, although since 1995 emissions have been constantly rising

A vision for Europe: a new energy ERA A vision for Europe: a new energy ERA

Europe must act swiftly to meet the ambitious targets set by the Spring Council in 2007 to stabilise energy consumption at 1990 levels by 2050 and to reduce CO2 emissions by 60% to 80%. There is no ‘silver bullet’ technology which will solve the energy crisis. However, a ‘wedge strategy’ that improves efficiency on the energy requirements and emissions of all sectors can be just as effective. This approach forms a basis of a new energy ERA, a real-world strategy which combines Efficiency, Renewables and clean thermal generation and Advanced grid and storage infrastucture, to achieve Europe’s ambitious goals.

“We have the time and knowledge to act. But only if we act internationally, strongly and urgently”, sir nicholas stern

Final energy demand forecasts considering both 2020 and new 2050 targets

Mtoe

20-20-20 targetsNew 2050 proposed targets

0

500

1,000

1,500

2,000

Reducing demand pressure with efficiency gains and

minimized energy loss

Vision 2050

Current trend

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

Source: E3MLab – Primes Model

Meeting the 2020 targets set by the Eu will reduce the ‘slope’ of our energy demand, but our demand will still increase. however, the ERA vision suggests ways of making a ‘curve’ possible, that is, strategies where energy demand will peak after 2020 and then actually fall

the three main goals of the ERA model

transportation, industry and power must make gains in efficiency to meet these ambitious targets.

To commit to reductions in energy consumption and an increase in sustainable energy generation, Europe must effectively encourage a number of different stakeholders, including members of the public and the private sector. Behavioural changes by consumers, clear sector targets to enable private sector investment in new technologies, and public-private investment in R&D are three areas that require attention now, in order to reap future rewards. But we know change is possible. The electricity sector in particular has witnessed spectacular transformations in a surprisingly short time span, including an increase in the number of wind and gas-powered plants in the past two decades.In order to make coordinate our actions, a new compelling, realistic and executable vision for Europe’s technological and regulatory choices for 2020 and beyond is critical. This vision could be described as the genesis of a new Industrial Revolution: a decentralized model based on greater efficiency and cleaner

energy forms supported by new technologies. The ultimate goal of the EU’s executed vision should be to simultaneously address the following imperatives:

SECURITY OF SUPPLY Aspire to ensure permanent access to primary sources of energy, guaranteeing price stability and capacity as well as maintaining high-quality service levels independently of climate conditions and demand.

ENVIRONMENTAL SUSTAINABILITY Contribute to long-term environmental sustainability by encouraging the reduction of CO2 emissions through a wider and more efficient use of cleaner energies;

SUPPORT ECONOMIC COMPETITION Foster economic growth through competition and support for the continuous social development of the various member states. The energy sector will contribute directly through investments and employment opportunities, and indirectly through energy prices influencing the competitiveness of various sectors in the economy;

defining a reduction of 60% to 80% in real terms In the following chapters we outline real-world solutions in which a 60% to 80% reduction in emissions could be achieved. One way of achieving these goals would be to move towards a zero-emission electricity sector, reducing emissions in the transportation sector by 40%, while aiming for a residential sector with zero-emission houses.

In order to do this, Europe would need to double the present energy efficiency targets (the equivalent of achieving a 40% improvement) and see the expansion of the renewable energy contribution to more than one third of total primary energy.

Excluding the above objectives for carbon emissions reduction, the 60% to 80% targets also foresee a reduction in the EU’s fossil fuel needs of 40% by 2050. This is challenging but still feasible. Set against a context of rising energy prices, these targets should enable Europe to keep energy costs at least below 10% of total GDP.

The implication of a 60% to 80% reduction in carbon emissions requires an approach which tackles energy use across all sectors. All energy consuming sectors including residential,


no ‘silver bullet’- but a ‘wedge strategy’ can be just as effectiveAt present there is no “silver bullet” technology capable of achieving all of Europe’s objectives at once. No single technology encompasses the necessary scalability, short and long-term economic competitiveness, reliability, environmental friendliness or technical maturity. Instead, Europe must address the specific situation of each of the different sectors in the economy - transport, residential, industry and power – and make efficiency gains in each.

Research conducted by Dr Robert Socolow of Princeton University shows that this kind of strategy, known as a ‘wedge strategy’, is collectively capable of achieving the 60% to 80% objectives in terms of CO2 emissions by using existing and new technologies. The targets set out for 2050 in the previous section represent a scenario where each sector, or wedge, has specific measures for emission reductions that are unique to that sector.

Efficiency gains in the electricity sector (responsible for 68% of total reductions), transport (17%), housing (11%) and industrial sector (4%), can together achieve Europe’s ambitious targets. The significant contribution of the electricity sector can

CO2 emissions forecast according to business as usual scenario and new targets for both 2020 and 2050Mtoe

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


0

1,000

2,000

3,000

4,000

5,000

Business as usual

Vision

4

11

17

68

IndustryResidentialTransportPower

the combined ‘wedges’ of efficiency and emission savings in the transport, residential, industrial and power sectors can together meet the 2050 targets

1For a full explanation of wedge strategies see Pacala, S. and R. Socolow, 2004, Stabilization wedges: Solving the climate problem for the next 50 years with current technologies, Science 305, 968-72

EU 27 – Fossil fuel consumptionM toe


2005 2050 Business as usual 2050 Vision

1,430 1,470

943

0

600

1,200

1,800

under the ERA vision, fossil fuel consumption will be significantly reduced

be achieved through different portfolios of technologies, that is, renewable, carbon capture and storage or nuclear. Still, in all cases, the weight of renewable sources should be higher than today, while other “wedges” must also contribute to reaching the objective.

A wide range of technologies can currently be applied to make these reductions across all sectors. But such technologies differ in maturity, in how they contribute towards solving Europe’s challenges, in the resources needed to ensure tangible results and in the expected timing of their delivery. A successful energy model requires an approach that focuses equally on promoting the adoption of available or near available clean technologies in the first instance, and developing a new generation of technologies in the second.

Technologies that are available now include hydro, wind, first generation biofuels and biomass. These will soon be supplemented or replaced by off-shore wind, second generation biofuels, concentrated solar power and smart energy transportation grids. However, by 2020, scientific breakthroughs including hydrogen cells, carbon capture and storage and 4th

no single technology encompasses the necessary scalability, short and long-term economic competitiveness, reliability, environmental friendliness or technical maturity

The ‘wedge strategy’CO2 emissions

Time

Energy

Industrial

Transport

Residential


The target scenario: emissions drop

A ‘wedge strategy’ combines emission savings from all sectors

The ‘silver bullet’ strategyCO2 emissions

Time

A hypothetical ‘silver bullet technology solves problems of security of supply,

CO2 emissions and cost


The target scenario:emissions drop

A ‘silver bullet’ technology which generates clean, cheap and abundant energy would solve Europe’s energy problems but there is no silver bullet technology currently available. however, a wedge strategy approach, combing the emission savings from the residential, transport, industrial and energy sectors can successfully meet Europe’s reduction targets

generation nuclear fission reactors will be transforming the way we produce and manage energy.

Developing a diversified technology portfolio will help Europe to make smarter use of the energy it produces, imports and uses. There is a great deal of potential to make rational choices - aided by developments in technology - that will increase efficiency in all sectors. For example, implementing the scenario we envisage for the industrial sector would halve the energy input needed to produce the same industrial value. Meanwhile, in the residential sector, the weight of the energy bill on household disposable income would decrease by more than half.

Any strategy which takes advantage of advances in technology also needs to incorporate Europe’s very distinct national realities. Diverse patterns of energy consumption across a number of economic sectors create different concerns in terms of energy supply and demand. Each member state must choose which path to follow in order to meet the 2020 and beyond targets.

Discussions about a new energy model tend to focus on electricity generation. However, while this sector has an important role in the transition to this new model, it cannot bear all the costs of the adjustment. Major changes must also take place in the transport and residential sectors, which account for almost 40% of total CO2 emissions. This is approximately three times the share of the industrial sector and more than 55% of total energy demand in Europe.



Reducing fossil fuel consumption = reducing costs An increase in the share of renewable energy generation, in conjunction with greater energy efficiency in consumption, may be able to offset lower European oil and gas production. The net-effect is a fall in the weight of fossil fuel imports in total fossil fuel consumption to 52% vs. 68% in business as usual scenarios. This represents approximately 190 billion €’05 of savings per year.

While this change naturally represents an increase in energy costs (an annual average increase of approximately 0.3% between 2005-2050), the weight of energy expenditure in GDP will be lower in 2050. By 2050, the weight of energy expenditure in GDP will be 9.4% instead of the current 2005 figure of 9.9%.

A number of factors may be able to dampen the cost, namely, economies of scale and experience and efficiency improvements. This price effect may be expected to be somewhat compensated by energy efficiency gains. For example, the 2050 average household fuel bill is expected to be ~100 € lower.

under an ERA model consumer energy costs will rise more than a business as usual scenario. however, the cost of energy per unit of gdP is expected to fall

EU 27 – Average price of energy purchases by consumers in 2050€'2005/MWh


Business as usual Vision

105119

0

50

100

150

EU 27 – Total direct and indirect cost of energy per unit of GDP%


2005 2020 2050

10,19,9 9,4

0

5

10

15

A new energy ERAResearch commissioned by the Portuguese Ministry of Economy and Innovation and conducted by The University of Athens has allowed us to project Europe’s energy needs up to 2050. Based on the projections made by the PRIMES model, by 2050 Europe will be in the middle of a new ‘ERA’:

Energy Efficiency: Energy Efficiency consists of a series of European government policies designed to foster both the development of more energy-efficient technologies and a more efficient use of energy in all sectors of society. It includes measures that foster a higher degree of flexibility to enable the optimization of supply and demand.

Renewable and clean generation: This comprises of policies and incentives that will promote the shift from energy derived from fossil fuels to energy from a diversified portfolio of renewable energy sources. This measure also means policies are aimed at optimizing electric generation from thermal.

Advanced, state-of-the-art, open and intelligent grid and storage infrastructure. The section consists of the implementation of a more decentralized model based on new transport and storage technologies. These technologies will enable a more flexible and decentralized energy model with higher capillarity.

Security of supply

Envi

ronm

ent s

usta

inab

ility Competitiveness

enewables and clean thermal generation

dvanced state-of-the-art

open and intelligent grid and storage

infrastructure

Energy fficiency

the three pillars by which ERA addresses the three issues of security of supply, environmental sustainability and competitiveness

A new energy ERA is required to meet the goals agreed by Europe’s Spring Council in 2007 to stabilise energy consumption at the 1990 level by 2050 and reduce CO2 emissions by 60 to 80%. These goals imply the following specific targets for 2050:

Double the present energy efficiency targets, i.e., achieve a 40% improvement;

Expand the contribution from renewables to more than 1/3 of total primary energy;

Tend towards a zero-emission electricity generation sector; and

Reduce emissions in the transportation sector by 40% while tending to zero emission houses within the residential sector.

homes, industries and vehicles will contribute to the general supply in the same order of magnitude as they contribute to demand



A vision for Europe: a new energy era


These principles dictate the technologies that must be promoted in the coming decades: renewable, distributed generation and advanced thermal generation technologies on the production side, efficient appliances, state-of-the-art grid and storage infrastructure on the network; vehicles on the consumption side. However, the major innovation will be the interaction between two formerly opposed poles:

on an organizational levelThe ERA transformation will make the energy production and consumption systems multi-directional instead of top-down. Homes, industries and vehicles will contribute to the general supply in the same order of magnitude as they contribute to demand.

on a technological levelERA requires two major developments that will constitute the new basic infrastructure of the 21st century: open and intelligent energy grids, and diversified and decentralized storage solutions.The underlying approach consists of accelerating the commercial deployment of existing and emerging technologies up to 2020, giving priority to those with greater potential. From 2020 onwards, focusing R&D in these fields will enable quantitative breakthroughs on both sides of the energy systems’ value chain: generation and consumption. Given the long life cycle of these technologies, investment is needed as soon and as systematically as possible so that they can be commercially deployed between 2020 and 2050.Over time, Europe as a whole (and member states individually) must carefully and continuously monitor the results for each pillar against the proposed targets. The complexity of the new energy model will require flexibility when using the “wedge” strategy.

PRinCiPAl 1 EFFiCiEnCy / reducing energy waste across sectors and stages of the value chain:

Increasing the level of energy output compared to input - a natural consequence of the successful implementation of energy efficiency measures and an obvious improvement for European competitiveness

Developing cutting-edge R&D in energy efficient technologies. Implementing them successfully to create new jobs, a highly qualified workforce and the option of exporting these technologies

PRinCiPAl 2 low CARbon ContEnt / aiming for zero emissions in each sector, while creating jobs:

Guaranteeing environmental sustainability in the very long-term and improving the commercial balance of the EU, based on a low carbon content economy

Ensuring a diversified portfolio of technologies that can guarantee a higher security of supply

Investing in renewable energy sources (RES) and other clean technologies to allow significant job creation in Europe, including more deprived and isolated areas. With state-of-the-art RES and low carbon technologies, European industries will be able to export know-how, services and products around the world. World-class knowledge in these areas will have a knock-on effect in other sectors, strengthening the region as a whole

PRinCiPAl 3 dECEntRAlizAtion / empowering all actors in the system:

Making consumers aware of, and thus responsible for, their choices

Providing consumers with the opportunity to interact and exchange energy and information with other parties

Evolving towards a supply model with a higher share of microgeneration

PRinCiPAl 4 A holistiC APPRoACh / creating a comprehensive global vision across multiple sectors, bearing in mind that each sector will have specific action plans:

Developing a global vision encompassing and articulating the needs and goals of all sectors

Eliminating the traditional division between demand and supply;

Incorporating all major energy needs, namely electricity, heat and motion



wEdgE stRAtEgiEs: iMPlEMEnting thE nEw EnERgy ERA sECtoR by sECtoR


CO2 emissions per capita in Residential sector

1.080.99

0.81

0.54

Tons

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1990 Today 2020 2050


EUR27 Evolution of the Number of Houses

245

225

206

2005

Number of Houses (in millions)

2020 20500

210

220

230

240

250


wedge strategies: implementing the new energy ERA sector by sector wedge strategies: implementing the new energy ERA sector by sector

the EU’s proposed vision of a transformed energy sector is highly ambitious and making it a reality will be complex and difficult. The key challenge is to ensure a safe, swift

and effective implementation within an environment where technologies are at different stages of maturity. Different sectors demand specific technological solutions and decisions on the energy mix varies from member state to member state. A flexible approach is required if the European Union is to successfully embrace the new technologies that can provide it with the envisaged sustainable future.

Up to a point, the technological options for the next 10 to 15 years are already set, and need only financial support to ensure scalability and market penetration. It is critical that Europe focuses on the technologies most likely to transform the energy landscape to 2020 and beyond - to 2050.

On one hand, Europe has to contend with an asymmetry in the development of the different technologies. Different levels of technological maturity demand specific levels of investment in R&D as well as instruments for effective market deployment and scalability.

Research commissioned by the Portuguese Ministry of Economy and Innovation and conducted by The University of Athens in the PRIMES model has allowed us to project Europe’s energy needs up to 2050. This research forms the basis of the new energy ERA model which predicts that combined emission reductions in the residential, transportation, industrial and power generation sectors can tilt the business as usual scenarios. By 2050, if the ERA guidelines are followed, energy efficiency will be maximised as the cumulative result of a raft of measures.

wEdgE A: thE REsidEntiAl And tERtiARy sECtoRs

The depth and breadth of change of energy consumption and production in the residential and tertiary sectors in Europe’s new energy ERA will be extraordinary. Transformation here is important for several reasons. First, the sector is a significant contributor to global carbon emissions. In Europe, its share of total emissions is about 11%. Second, it accounts for 26% of total energy consumption, putting it third after the transportation and power sectors. Third, if we maintain business as usual, the sector’s weight in relative and absolute terms will grow to unmanageable proportions.

Several key drivers will foster change. Of these, behavioural changes in energy consumption and construction, coupled with technological innovation, will play leading roles. The

On the other hand, different sectors rely on different technologies according to their particular production processes and economic or social requirements. If we take a close look at the residential, transportation, industrial and power generation sectors, as well as the four action levers on which the EU needs to focus (energy efficiency, renewables, advanced thermal generation, and infrastructure), it is easy to spot substantial divergence. Clearly, a wide spectrum of market mechanisms is necessary to accommodate all these requirements.

by 2050, the number of houses are expected to grow in Europe, but the Co2 emissions per capita are expected to fall

present vision establishes ambitious, but realistic targets for the residential sector:

Reduce average household energy consumption by around 30% by 2050

Tend towards zero emission houses by 2050.These targets are attainable without adversely effecting living standards. By 2050, average household energy consumption will be reduced by 8% in absolute terms with respect to the 2005 level by a number of factors outlined below. However, in the medium term up to 2020, the changes at aggregate level will be minimal. This is due to the fact that reductions in energy consumption per dwelling will be offset by an increase in the number of homes.

Reductions in emissions in the residential sector will be achieved through a combination of factors influencing the way in which new homes are built in the first instance, and a increase in energy efficiency within each household in the second instance.

The impact of legislation and regulation standards in 2050 will ensure that buildings remain environment-friendly. Building codes and regulatory standards will encourage the more efficient use of energy and periodic energy audits will occur throughout Europe’s cities in order to assure compliance. Best of all, such legislative measures will lead to the creation of a new market,

the key challenge is to ensure a safe, swift and effective implementation within an environment where technologies are at different stages of maturity. different sectors demand specific technological solutions, and decisions on the energy mix varies from member state to member state

the sector is a significant contributor to global carbon emissions. in Europe, its share of total emissions is about 11%


Energy intensity relative to household income Toe / m Euro 05

2005 2050 ERA vision

47.5

23.0

15.00

23.75

32.50

41.25

50.00

with an expected net gain of more than 250,000 jobs.By 2050, average household energy consumption will be reduced

by around 30%. The trend in carbon emissions will be similar. In the medium term, an 18% drop in the residential sector’s level of CO2 emissions is anticipated relative to 2005 levels. This vision of the future predicts that an average consumer in 2050 will be far more sensitive to energy and environmental issues than their current counterpart. By 2020, consumers will benefit from the availability of best-practice handbooks, comparison guidelines and an energy efficiency helpline to help them make the right choices. Children will learn at school of the environmental consequences of their actions. Overall, tomorrow’s consumer will be “greener” in his choices – and will profit from a more energy-conscious lifestyle.

Together with the evolution of consumer preferences, technological innovation will also fuel significant changes in energy consumption and the level of carbon emissions. The impact will be felt in every energy-dependent activity of the 2050 household. Broadly, these comprise improvements in energy efficiency and the wide-scale adoption of renewable energy sources.

Greater information – allied with technology and pricing incentives – will help users to monitor and modify their consumption. For example, houses will be equipped with smart

by 2050, average household energy consumption will be reduced by around 30%. the trend in carbon emissions will be similar

Although it accounts for just 6% of total emissions and 15% of total final energy consumption, the service sector has significant potential and will face similar changes to the household sector. In fact, current energy intensity figures of about 24 Toe/M€1 will substantially decrease to 16 Toe/M€ in 2020 and 11Toe/M€ in 2050, mainly through better use of technology in heating, cooling and ventilation, lighting and data-processing equipment (energy intensity refers to the amount of energy consumed per unit/euro of output).

meters that monitor electricity use, and thus cost, by appliance. They will have automatic controls installed to enable more efficient use of air-conditioners and other similar devices, (for example, programmable thermostats). The medium-term forecast is for a 10% reduction in final energy demand for these purposes.

Similar improvements are envisioned in ventilation, such as centralized whole-house fans and increased air-tightness of building materials. These applications will cut consumption by lighting and entertainment devices, as well as heating and cooling, to a bare minimum and ideally will interact with network operators to flatten demand peaks.

When combined with appliances lighting today accounts for approximately 12% of household energy consumption. In future, the absolute consumption value per household for lighting will fall partly through the increased longevity of light bulbs: by 2020, it is expected that incandescent bulbs will no longer be available in the EU.

The average consumption of household appliances is expected to fall since homes will be furnished with only class A and A+ appliances. Likewise, the energy intensity of the “stand-by” mode feature is also expected to go down.

Av household energy consumptionToe

2005 2050 business as usual 2050 ERA vision

1.49 1.44

1.09

0.0

0.5

1.0

1.5

2.0

Total energy consumptionMil Toe

0

100

200

300

400

2005 2050 business as usual 2050 ERA vision

302.2

352.6

268.2

by 2050, under an implemented new energy ERA scenario, total energy consumption and average household energy consumption will drop compared with 2005 levels.

Perhaps one of the most significant changes in energy use in the residential sector will be the evolution of the individual dwelling into an energy producer, tending towards energy self sustainability producing more than 80% of the energy consumed by 2050. Small-scale renewable energy use will occur within individual buildings on multiple fronts – one example commonly seen today is solar panels. In future, these will be assimilated into other building materials such as roof tiles and windows. Additionally, cogeneration (combined heat and power) could take place on an individual building scale, such as using the heat generated by a water pump to warm a house.

The production and design of household appliances will comply with enhanced national versions of the European Commission’s Eco-design Directive, and performance reports will enable consumers to buy those that consume the least amount of energy. Greater purchasing power will encourage consumers to update appliances with newer, cleaner and less energy-intensive models. These measures will be of the utmost importance and compensate for a natural tendency to increase the total number of domestic appliances.

The energy requirements for heating and cooling houses will be cut due to superior and integral thermal insulation. For example, the 2050 window is likely to comprise multiple panes with gas-filled gaps, a special coating to reflect infrared rays and improved frame materials.

Naturally, changes in the residential sector will also be visible on a city scale. 2050 Urban planning criteria will be more environment-friendly and energy-conscious than they are today. Economies of scale in heating and public lighting will be explored in denser urban centres. For example, buildings will have more south-facing windows to maximise exposure to sunlight throughout the day. These developments will be particularly beneficial to residents, since total household energy expenditure is expected to grow by 50% until 2050 if Europe upholds the status quo.

greater purchasing power will lead to the purchase of more energy efficient appliances

1Toe stands for Tonne of Oil Equivalent and means a unit of energy corresponding to the output of a tonne of oil



CAsE study: FREibuRg onE town tACklEs thE issuEs oF CliMAtE ChAngE

In 1986, the same year as the Chernobyl nuclear disaster, the south-west German town of Freiburg, home to over 200,000 people, resolved to develop alternative energy sources to power their houses. This model eco-town has made a name for itself by pioneering solar technology in the residential sector.

Between 1992 and 2005, Freiburg achieved a 5.5% reduction in carbon emissions. By the same year advances in photovoltaic, or solar, technology and combined heat and power technology (CHP) provided the means to generate 65% of the city’s energy requirements. These advances saved 28 gigajoules and 2100 tonnes of carbon dioxide annually. In 1996 the city resolved to cut its own carbon emissions a further 25% by 2010. It now aims to increase the percentage of total power produced via bioenergy from the 2006 figure of 1.6% to 2.7% by 2010.

Eco-architect Rolf Disch designed the city’s signature building, the Heliotrop, which he himself lives in. Built just over ten years ago, it features a rooftop photovoltaic array which revolves to absorb maximum sunlight, while the building below turns the opposite way to remain in the shade. The Heliotrop generates around five times as much energy as it consumes. Disch’s newer Sonnenschiff development combines office, retail and living space with solar technology and conforms to Freiburg’s own energy-efficiency guidelines.

Freiburg is not only a model for innovation but also for community participation. It operates a community forum in accordance with the UN Local Agenda 21 initiative developed at the 1992 Rio Earth Summit in recognition of the need for local solutions to global problems. City officials cite the model districts within the town of Vauban and Rieselfeld as examples of this interactive approach. Environmentally friendly planning initiatives such as the use of biofuels, Rolf disch’s heliotrop features a

photovoltaic array which rotates to absorb maximum sunlight

©Rolf Disch 2008

low-energy building, and car-free areas were developed with the input of future residents, NGOs and environmental bodies.

Solar technology plus effective insulation and use of water result in a minimum low energy standard for Vauban houses, as in other areas of Freiburg, of 65 kWh/m2a. In addition some houses have the higher ‘passive house’ standard – 15 kWh/m2a – or ‘plus energy’ standard, meaning that the houses produce more energy than they need. Citizens are also shareholders in renewable energy investment funds and Freiburg’s proximity to the Black Forest serves its biofuel initiatives well. A co-generation – CHP – wood-chip plant has operated in the district since 2002 providing citizens with heat and electricity.

But there are challenges to the Freiburg experiment, including the expense and lack of operational experience relating to new technology. Disch’s Heliotrop cost approximately €2m to build, making it an unlikely candidate for mass replication. However, the Sonnenschiff development is more viable for this purpose as combining a number of functions in a single building makes it more economical.

Freiburg’s solar and wind projects depend on state subsidies but its environmental ideas are now ‘mainstream’ according to the mayor. The Vauban wood heating plant has also experienced the ‘childhood diseases’ common to pilot projects of its kind, say city officials. Demand to live in Freiburg has also created a problem - property is expensive in Freiburg because the community is such a desirable place to live.

between 1992 and 2005 Freiburg achieved a 5.5% reduction in carbon emissions



Medium term long term

Engine technology

Hybrids

Plug-in HybridsElectric cars

Fuel cells H2 engines

Advanced combustion engines

Fuel shifts 1G biofuels2G biofuels 3G biofuels

systems

Car poolingPublic transportation

Improved urban spatial planningImproved intermodality

Improved network infrastructureImproved network infrastructure

Improved intermodality

wEdgE b: tRAnsFoRMing thE tRAnsPoRt sECtoR

Reshaping Europe’s transport sector is crucial for a new energy ERA as it currently accounts for around 31% of the region’s energy consumption and around 27% of its CO2 emissions. It is essential to focus on road transport since this represents around 84% of the sector’s emissions, while aviation accounts for just 14%, rail 1% and inland navigation 1%.

The present vision sets out ambitious, but realistic targets for the transport sector of a 40% emission reduction by 2050 relative to 2005; 30% penetration of biofuels in road transport fuels by 2050; and at least 40% gains in energy efficiency up to 2050 – twice the target set for 2020 relative to 2000.

Synchronized action is expected on three main levels: engine technology, fuel mix and systems. The widespread adoption of combustion engines with fewer emissions and lower energy consumption per kilometre is a first step. New standards at a

European level, such as the Euro 5, which impose stricter emission caps and fuel consumption rates will help lift this to a new level. This measure alone will be insufficient since, historically, lower consumption has been offset by growth in the number and power of vehicles.

In the medium to long-term, a progressively higher penetration of hybrid cars and eventually the development of hydrogen, fuel cell and electrical vehicles will lead to a more sustainable transport sector. By 2050, a relevant share of Europe’s car stock (more than 40%) should consist of what today are considered non-conventional vehicles.

synchronized action is expected on three main levels: engine technology, fuel mix and systems

Engine technology, fuel shifts and transport systems will all contribute to a reduction in energy use from the transport sector

tRAnsPoRt

wedge strategies: implementing the new energy ERA sector by sector


biofuels will improve in efficiency over the next 50 years, and be developed not to compete with food crops

Biofuels in Gasoline and Diesel (%)% road transport fuel


2005 2020 20500

10

20

30

Long-term forecasts suggest that conventional cars will lose market share to hybrid vehicles. However, other types (for example, fuel cells and hydrogen internal combustion engines) are also expected to gain in popularity. In fact, the Hydrogen and Fuel Cells European Technology platform (HFP) is promoting a plan to ensure the market penetration of these technologies across several sectors by 2020.

Other transport sub-sectors may also contribute to a drop in both emissions and energy consumption. Greater rail travel, both passenger and freight, will translate into significant emissions reductions – for example, where high-speed trains replace air travel over short distances.Furthermore, a new fuel mix is expected to be a key element of the future landscape. Biofuels – especially second and third-generation fuels, which should not compete with food crops – will play an important part in weaning us from our dependency on fossil fuels.

First-generation biofuels have already been deployed commercially but still represent less than 1% of fuel for road transport, although this share is expected to evolve to 10% in 2020 and about 30% in 2050. A 30% biofuels penetration by 2050 would cut CO2 emissions by about 18%.

0

20

40

60

80

100

Evolution of car type in total car stock

Today

%

Other1

Hybrid2

Conventional

1. Electric car, Hydrogen internal combustion engine, Fuel cells. 2. Conventional hybrids and plug-in hybrids


2020 2050

hybrid technology cars are expected to form a significant proportion of all cars on the road by 2050

by 2050, over 25% of gasoline and diesel fuels will come from biofuels

Until 2010, mainstream biofuel technology will be the first generation, based on vegetable oils and methanol. From 2010, hydrogenation will roll out, making animal fat and hydrogen viable and second-generation of biomass to liquid technology should also start gaining share. The latter will be extremely important since they will not compete with food crops but with other biomass production units, for example, biomass power plants around 2015.

Electricity’s importance in the fuel mix will also grow. The appearance of non-conventional vehicles, the expansion of electric-powered urban transportation systems such as underground and urban light rail systems, as well as better long-distance rail connections for passengers and freight will translate into an increase in electricity as an energy input for transport. The ambition of creating a near zero-emission power sector will lead to a free-riding phenomenon regarding CO2 emissions in all electricity-based transport systems. However, this trend will increase the pressure on the electric system.

biodiesel 1.0 hydrogenation biomass to liquid

description

• Maturity: Current technology• Feedstock: Vegetable oils and

methanol• Cost position: end-product

quality depends highly on the type of feedstock

• Maturity: Novel niche technology being rolled out in refineries

• Feedstock: Vegetable oils or animal fat and hydrogen

• Cost position: uses cheaper oils to produce high quality diesel

• Maturity: Currently in R&D• Feedstock: biomass (cellulose)• Cost position: high cost

advantage with previous technologies due to abundant feedstock (paper, lumber)

typical Capex (300 kt)

€50-60 M €110 M €250 M (100 ktons)

Feedstock availability

Co2 reduction



and evaluate the impact of the scheme over long periods of time. According to the DfT, the limited evidence that does exist suggests that changes in travel behaviour continue for up to five years after the personal transport adviser’s visit.

Before coming to the UK, the scheme has been used most extensively in Australia and Germany, with similar successes reported. In 2004, the Australian Road Research Board found the scheme ‘to be a highly effective means of achieving voluntary travel behaviour change, substantially reducing the level of car use.’

Personal travel plans, also known as integrated travel Marketing, use home visits and phone calls to tailor travel advice and information to individuals, giving practical alternatives to using cars

CAsE study: PERsonAl tRAvEl PlAns A sustAinAblE tRAvEl initiAtivE REPoRting suCCEss in ChAnging AttitudEs in thE uk

The British government has taken a personal approach to cutting carbon emissions, providing a door-to-door travel advice service to more than 92,500 homes in a pilot scheme aimed at encouraging more people to walk, cycle or take the bus.

Three cities were chosen to take part in the pilot in April 2004. They will share £10m (€13.5m) over five years, using ‘personal travel plans’ in homes to see what impact a sustained approach to changing travel habits can have without requiring radical lifestyle changes or large amounts of public spending.

Personal travel plans, also known as Integrated Travel Marketing, use home visits and phone calls to tailor travel advice and information to individuals, giving practical alternatives to using cars. These include personalised route maps, advice on how to cut down the number, frequency and/or length of journeys, and information on bus timetables and walking and cycle paths. In some cases, councils have offered free travel and walking accessories, free travel for a limited period on public transport and arranged discounts on cycles through local businesses.

170,000 people in Darlington, Peterborough and Worcester had taken part in the scheme by May 2007, (the mid point of the project.) The Department for Transport reported a 10% reduction in car use, a 20% increase in walking and public transport use and a 30% increase in cycling to that date.

In 2005, trials targeted around 13000 families across Peterborough and Worcester. In Peterborough, there was a 13% reduction in car trips, a 21% increase in walking, a 35% increase in cycling, and a 13% increase in public transport usage. Worcester saw a 12% reduction in car trips, and a 17% increase in walking. Public transport usage went up by 22%, and cycling by 36%. Darlington saw a 65% increase in cycling between 2004 and 2006.

Schools and business have also been supported to take part in the scheme. Schools have fitted cycle racks, produced travel plans, organised ‘walking school buses’ and in some cases, teachers have been provided with electric bicycles.

Analysis by the Department for Transport (DfT) shows that the scheme typically costs between £20 and £38 (€25-€50) per household targeted and becomes more cost effective the more widely it is used. UK sustainable transport charity Sustrans estimates that introducing the scheme to the 25m households in the UK would cost around £500m (€665m); and says this is the equivalent of building just 17 miles of new motorway.

The British government has endorsed the success of the plans, saying it will work with councils to implement the scheme. Some have already taken the initiative. Transport for London, the capital’s transport body, has implemented the plans in Sutton (south London); they are also being used in the cities of Exeter, Watford and Lowestoft. The DfT will publish a best practice guide, drawing on the findings of its 2007 study into the scheme, later this year.

In the long term, the scheme benefits local areas, cutting spending on car parks and roads and contributing to the general health and fitness of the population. Other reported benefits include increased use of local shops and services, decrease in congestion on roads at peak times and improved interaction between different sections of the community.

Areas with poor public transport, high traffic speeds, anti-social neighbourhoods and transient populations provide big challenges for the PTP scheme. It is also difficult to monitor

0%

10%

20%

30%

40%

Reduction in car trips Cycling increase Walking increase Public transport increase

Peterborough Worcester

Peterborough and worcester councils in the uk saw significant increases in the use of emission-friendly transportation and decreases in car trips after encouraging personalised travel plans

Changing our behaviourThe impact of technological change will be almost insignificant if there is no change in our behaviour. Only with changes in behaviour can we anticipate a reduction in emissions per vehicle and significant energy and emission savings immediately.

Improving the quality, reliability and accessibility of current public transport systems will help stimulate such changes. Other behavioural changes such as car-pooling and paying a toll at the entrance to urban centres, are already in common use around the world today. Economic incentives such as taxes that favour public over private transportation can also be adopted. Spatial and road network infrastructure planning can drive the more rational use of energy resources and the development of better (and more) connections between mass transport modes will be essential.

The general public must learn to drive in a more eco-friendly manner and use alternative transport, such as bicycles, over shorter distances. At the infrastructure level, greater attention must be paid to more “fuel efficient” designs when building new roads.

Current predictions for cargo transportation indicate that the number of kilometres travelled per euro of GDP will fall. Nonetheless, as a first step, the full cost of goods transport including the environmental cost, should be internalised.

In industrial decisions, in the same way, incentives will help people perceive and choose the advantages of public and/or non-CO2 emitting modes of transport.

Finally, changes in business relationships also have the potential to contribute to positive trends in the transport sector. For example, greater flexibility by companies combined with sophisticated telecommunications may lead to many more people working from home and greater use of video-conferencing.



Evolution of Industry Sector Final Energy Demand by Fuel

370Total(KToe)

1. Biomass, waste, hydrogen etc. 2. From CHP Source: E3MLab, PRIMES Model

Other1

Heat2

OilSolids

Electricity

Gas

315 335 355 370 345 305

1990 2000 2010 2020 2030 2040 20500

102030405060708090

100

wEdgE C: REvolutions in thE industRiAl sECtoR

Europe’s industrial sector consumes more energy than any other after transport, accounting for 27% of total final energy consumption and 14% of total CO2 emissions. For these reasons, it is impossible to change the current energy paradigm without remodelling the sector. Such modifications will naturally target those industries accountable for the larger share (64%) of the problem: iron & steel, chemicals, non-metallic minerals, pulp & paper and non-ferrous metals.

Europe’s industrial energy profile will continue to evolve over the next 50 years according to the PRIMES model. First, industries will become less energy intensive – by 2020, the levels of the five most intensive industries are expected to fall by 20% in real terms versus the 2005 level. Second, efficiency standards will improve as energy waste in industrial processes is minimized. Third, industry as a whole will contribute towards the low-carbon economy.

The present vision establishes targets for the industry sector of around a 25% emissions reduction by 2050. The ongoing emergence of new industries will rebalance the current portfolio in favour of cleaner, less energy-intensive types, and the eventual relocation of heavy industry to other areas in the world is also likely.

These changes will significantly improve energy performance indicators and contribute to the end-objective of improving security of supply. While this is beneficial at a European level (from the point of view of reducing emissions), relocation does not solve the emissions problem on a global scale.

The positive trend will also be explained by a more rational use of energy as a production input. For example, widespread use of advanced energy management systems is anticipated in order to reduce energy bills. Industries will install on-site networks with intelligent meters, improvement simulators and monitoring & target systems linked to a central server. These systems will enable industries to monitor energy consumption in detail and so manage their usage with unprecedented rigour.

By 2050, the efficiency levels of non-core processes will be far more superior than they are today. Regulation and compliance with minimum standards will serve as incentives for industries to upgrade from older, more pollutant forms. Cross-cutting technologies – those that are common to most industrial processes – will consume energy more efficiently. Improvements are expected in an array of systems including motor, pump and compressed air.

An example of this efficiency is industrial onsite cogeneration, also known as combined heat and power (CHP), which will be

by 2050, much of the industrial sectors energy demand will be provided by electricity generation.

Web Browser Wireless Devices

Mainframe & Software

Intelligent EnergyManagement Solution

Intelligent MetersFacility 1 Facility 2 Facility 3


Advanced energy management systems will reduce energy bills.


a significant factor in the anticipated trends. Industries will use industrial waste heat (heat generated as a by-product of other activities) to feed “heat engines” to produce additional electricity and useful heat. A current example can be found in the pulp and paper industry’s backpressure steam-turbine plants. The amount of heat produced from CHP technologies in total energy demand in industry is expected to rise by more than 40% by 2020 compared with 2000 levels, and more than 50% by 2050. Joint research programmes at a European level will propel this already mature technology forward.

In the medium term, total energy consumption is expected to rise but at some point this trend will start to reverse. The forecast for 2050 puts total energy consumption as equal to today’s value as

MtonsAccumulated CO2 captured


2010 2020 2030 2040 2050

230

580

770

0

200

400

600

800

Carbon capture and storage (CCs) will account for large carbon savings once the technology becomes widely available

improvements in the ways the sector consumes energy offset its growth over the next half-century. Similarly, industry’s carbon emission levels and carbon intensity levels are predicted to diminish. By 2020, carbon intensity will have dropped by 14% relative to 2005 (1,677 ton CO2/toe). By 2050, the decrease will be even steeper, reducing up to 0,900 ton CO2/toe, i.e., a 45% fall relative to 2005 level. Another common feature of the future industrial sector will be the widespread use of carbon capture and storage (CCS) technologies. Their commercial deployment is expected some time between 2020 and 2030 and once cost competitive, they will drastically reduce emissions, particularly in the more pollutant industries.

Government and EU regulations, in conjunction with public opinion, will encourage the rapid adoption of CCS technologies throughout the various industrial sectors. Carbon trading will be part of everyday business, complying with the 2050 version of the EU emissions trading scheme.

The other factor underlying the emissions trend is an increase in the proportion of renewable energy sources in the sector’s fuel mix. Small and medium-sized enterprises will embrace small

Cross-cutting technologies – those that are common to most industrial processes – will consume energy more efficiently

wind and solar installations over the next 50 years. For example, recent EU Commission experts estimate that in the long term, approximately 400 tonnes of CO2 emissions can be avoided with each gigawatt hour (GWh) of electricity generated from photovoltaic systems. Biomass will also become an important energy source for industry as a whole.

A greater adherence to renewable energy sources in industry will have other advantages. Know-how and manpower will be required to make the newly developed systems, leading to the development by 2050 of a large, highly skilled job market dedicated to renewable energy sources. Experts predict that for photovoltaic systems alone, an average of 16 specialised jobs are created per new megawatt.

Finally, energy production in the industrial sector, from small wind installations to micro-CHP units, will contribute towards the decentralized system of 2050. Developments in fields such as fuel cell technology will lead to the creation of advanced storage systems. Consequently, industry in 2050 will have the ability to buy energy from a smart grid in times of shortage and sell it back in times of surplus. More importantly, it will be able to anticipate its needs and buy in advance, reducing peak loads dramatically – as well as the energy wasted in production, transmission and distribution.

Simplified CCS Value Chain Capture Transport

Storage

CO2 - EOR / EGR1

CO2 Source(eg. Power Plant)

CO2 Captureand Separation Plant

CO2 CompressionUnit

CO2 Injection

CO2 Storage

Pipeline transport most likely, just as for natural gas.Boat transportation could be an alternative with small volumes and long distances

Several options exist (in theory) for storage• depleted oil / gas fields• onshore / offshore aquaifers• bottom of the ocean storage

CO2 can be used to recover oil in depleted oil field or gas in coal bed methane fields.

CO2 Transport

1. EOR (Enhanced Oil Recovery) and EGR (Enhanced Gas - Coal bed Methane - Recovery) with CO2 as potential revenue source options. Source: CO2CRC

Carbon capture and storage (CCs) technology is anticipated to dramatically reduce carbon emissions




which hydro is the main source). However, Europe still has the capacity to increase this, as well as promote a wider exploration of endogenous energy resources.

The European renewable energy landscape of 2020 will be very different from today, encompassing a broad portfolio of diverse technologies. Ultimately, Europe will be better placed to explore the energy potential of the earth, water, sun and wind. These changes are already visible and will be evident by 2020 as Europe meets the 20-20-20 targets.

The potential of proven technologies such as large and small hydropower will be further explored with due regard for

environmental and landscape constraints. Biomass will continue to grow rapidly, reaching around 9% of total net electricity generation by 2020 and photovoltaic (solar) energy will also become a major player in the coming decades. Today’s incipient technologies, such as wave energy or new sources of biomass such as algae, might therefore play a significant role in generation sooner than expected as the power sector continues to develop these technologies and improve their competitiveness compared with conventional alternatives.

By 2050, RES should account for more than one third of total EU27 final energy demand, largely in the shape of new generations of biomass and photovoltaic energy, together with the large-scale deployment of offshore wind. New RES plants installed capacity is expected to increase by more than 620TW from 2005 till 2050, representing an accumulated direct investment of more than €820 Billion (€’05) By 2050, it will be common to encounter wind farms on and offshore, photovoltaic systems installed in all kinds of buildings, small biomass plants, and both cogeneration and microgeneration.

The rapid progress in fields such as nanotechnology, distributed IT and biotechnology combined might also have a far greater impact than we anticipate today. Finally, the period between

2020 and 2050 will experience a strong uptake of RES in power production backed by substantial investment in infrastructure, making it necessary to increase storage capacity and improve the transmission network.

By 2020, therefore, Europe will have witnessed an expansion of existing technologies and a maturing of nascent technologies, subsequently RES will increase their share of the power generation market. However, this increase will only be possible at a competitive cost if there are the expected cost decreases resulting from economies of scale and the maturing of technologies. To achieve such cost competitiveness, it is will be necessary to continue investing in emerging technologies, an area in which SET plan experts expect more revolutionary changes (in mature technologies, they expect innovation to be limited to the discovery of more efficient materials).

Weight of RES in electricity production

1519

3036

4246

%

2000 2010 2020 2030 2040 2050


0

15

30

45

60%

Solar and Others

Wind

Biomass and Waste

Hydro

Evolution of the share of Renewables in Net Electricity Generation (%)

Today


2020 20500

25

50

by 2050, renewable energy sources should provide for almost half of our electricity demand

three main directions should be pursued: increasing the share of renewable energy sources (REs), developing clean thermal generation and preparing for more decentralised production

by 2050, REs should account for more than one third of total Eu27 final energy demand

wEdgE d: toMoRRow’s PowER gEnERAtion

Today’s power sector is responsible for 37% of total European CO2 emissions and 39% of primary energy consumption. So far, it has also been one of the sectors where policy has had a relatively swift and effective impact due to the historically limited and concentrated number of actors, seen for example in the rapid development of wind generation in Europe.

However, there is still huge potential for transformation, especially in those countries with a highly carbon-dependent generation portfolio. Three main directions should be pursued: increasing the share of renewable energy sources (RES), developing clean thermal generation and preparing for more decentralised production supported by a distributed storage and network infrastructure.

The present vision establishes bold, but achievable, targets for the power sector of near-zero carbon emissions by 2050; and a smart-grid, multidirectional electricity system by 2050. RES currently account for approximately 15% of total electricity produced and less than 10% of current total energy demand (of


REsHydro

Wind on-shore1G Biomass

Wind off-shorePhotovoltaic2G Biomass

thermal generation

Fuel switch (coal to gas)CSS

Nuclear fusion

storage/ transmition

Hydro reservoirsGas caves

Better interconnection

Fuel cellsHi-power batteries

Smartgrids

Renewable power generation will use familiar technology in the short term, but technological breakthroughs will increase renewable options

PowER



Capturing relevant energy potential Europe’s member states must be free to choose what form of RES (renewable energy source) they use since potential varies widely from country to country. Northern European countries, for instance, have much more limited solar potential than their southern counterparts, while the ability to generate wind energy also varies from place to place. Thus, each country will opt for renewable sources that best fit their geography, while sharing the aim of a carbon-free, economically viable and diversified energy portfolio.

Thermal generation will continue to play a significant role in the system over the coming decades, especially as a back-up or shock absorber. This role may diminish with the introduction of storage technologies but it will still be essential to fund improvement in the efficiency of thermal power plants. Until 2020, the most frequent method of reducing thermal generation emissions will be through fuel switching. Gas plants substituting coal plants will reduce emissions – but increase Europe’s supply risk.

If thermal generation is to retain its relevance in a low carbon economy in the long term then CCS will be crucial. CCS (carbon capture storage) technology is a solution with worldwide potential since coal is a common and cheap resource for energy production and will remain so, particularly in countries such as India and China. Estimates suggest a significant potential of about 700-800 megatons (Mtons) of CO2 sequestered by 2050.

CCS technology requires significant investment if it is to become commercially viable on a large scale, and assist the development of sequestered carbon transportation and storage infrastructure. CCS will have enormous potential in the retrofitting of the world’s current and near-future coal plants, and Europe can benefit from the anticipated increase in worldwide

environment protection measures if it leads developments in CCS and becomes a net exporter.

Some countries might opt to extend the life of their nuclear plants or even increase existing capacity as a way to ensure clean thermal generation. By 2020, a new generation of nuclear technology will be in place (G4) and further improvements can be expected. It is vital, of course, to improve nuclear power’s safety and minimize its residues. This will be especially important for emerging economies that anticipate substantial increases in their nuclear power plants. It is also important to dedicate resources to R&D in nuclear fusion, the expected long-term solution for abundant, cheap and clean energy. This is even though experts predict that the first demonstration project will not be ready before 2030 or 2040, despite massive investment.

it is vital, of course, to improve nuclear power’s safety and minimize its residues

The weight of nuclear generation in total non-RES-based generation is very high in some European countries, particularly those which have limited potential for thermal generation. A possible solution for them to keep power generation CO2 free could be to extend the life cycle of their current plants. Elsewhere in Europe the weight of coal is high. For these countries, fuel switching to gas is a short-term option (pondering the eventual socio-economic impacts that might follow), as is installing CCS technologies in both coal and gas plants in 2020. Although CCS technology is widely recognized as having great potential to reduce emissions, not all countries have the same storage potential. This might not be a viable solution for everyone. In countries that are more gas-based, CCS will be the main vehicle to reduce emissions from the remaining thermal generation.

Each country in the Eu must opt for the renewable sources which best fits their geography

Wind potentialWind Speed (m/s)

Solar potentialHours/year equiv

Source: EWEA, Danish Wind Association; BNB 2007

Wind potentialWind Speed (m/s)

Solar potentialHours/year equiv

Source: EWEA, Danish Wind Association; BNB 2007



improving energy infrastructureA key driver behind a more efficient and decentralized energy model is infrastructure. Swift advancement and development in interconnection capacity and national grid infrastructure is mandatory in the short term and is crucial to diminish the barriers to entry for companies entering new markets.

Besides better interconnection between countries, the aim should be to evolve towards a smarter grid system, including a wider implementation of telemeter systems, bi-directionality and real-time management capacity. The established targets for RES require huge investment in technology, as well as in transmission and distribution networks. SET plan experts recently agreed that

Generation

GridInfrastructure

Consumers

Current Model Future decentralized and bidirectional model

Centralized generation

supported by big conventional power plants

Unidirectional flow through the grid infrastructure to

the end-consumer (from consumer to

consumer)

Consumer as “energy users” only

Regular electricity flow from

conventional power plants

Decentralized smarter grid systems,

with telemeter systems, biodirectionality and real time

management capacity

Consumer with microgeneration

units, acting as both “energy users” and “energy emitters”

under the new infrastructure vision a number of factors will work together to improve the efficiency of storage and transfer

it is crucial to define standards and to harmonize regulations in this area in order to speed up the development of infrastructure.

Meanwhile, Europe must work on immediate opportunities relating to its storage capacity, such as hydro reservoirs and gas caves, as well as on technologies with long term potential that will further improve this capacity such as hydrogen and other fuel cells. This set of solutions will allow RES energy produced during low-consumption periods to be used in peak periods.

Since there isn’t always sunshine and wind, droughts occur and agricultural yields vary. It is important to implement storage mechanisms that allow electricity generated when renewable

energy is abundant to be used later. For example, windmills will be able to produce electricity overnight for daytime consumption and plug-in cars will be able to sell stored energy to the grid during peak periods. If proper storage systems are not in place, even a temporary break in RES production can result in a supply shortage, a spike in prices and, in extreme cases, brownouts or blackouts.

Looking even further into the future, it should be possible to produce excess electricity in abundant years for storage and use later when generation suffers occasional restrictions. SET plan experts claim that an extra push is necessary as Europe is lagging behind in this field, mainly due to insufficient funding and appropriate incentives.

The result of these changes will enable European energy production to evolve towards a more decentralized model in which microgeneration will be abundant and more widespread. The IT revolution applied to energy networks will enable a similar change of paradigm to that introduced into the world of communications by the Internet, that is, the creation of an open and multi-directional network in which generation and transport are piloted in real time. Small and medium size enterprises will have the opportunity to produce and sell power to the grid with the same ease and transparency that they share information via the internet.

since there isn’t always sunshine and wind, droughts occur and agricultural yields vary. it is important to implement storage mechanisms that allow electricity generated when renewable energy is abundant to be used later.


storageHydro reservoirs

Gas caves1G Biomass

Fuel cellsHi-power batteries

Carbon storage

transmission Better interconnection Smartgrids

improvements in storage and transmission infrastructure will improve energy efficiency

inFRAstRuCtuRE

This vision represents a transformation of our energy system. It acknowledges that Europe has entered into an era in which fossil fuels, the so-called “sunset” energies, will progressively retreat from their current preponderance not just because they are growing ever scarcer, but because they are incompatible with a sustainable future.

This necessary change of paradigm is also a tremendous opportunity to create many new jobs in the European knowledge-based economy and boost its future growth. Overall, Europe will be less dependent on fossil fuels and will have leveraged “green” technologies to implement the Lisbon Agenda.

wedge strategies: implementing the new energy ERA sector by sectorwedge strategies: implementing the new energy ERA sector by sector



govERnAnCE stRAtEgiEs: AdoPting APPRoPRiAtE govERnAnCE ModEls


governance strategies: adopting appropriate governance models

the magnitude of the goals set by the EU demands a fundamental change and commitment from all sectors of society. Given the large number of actors, the scale and the

lead time of new technologies, an appropriate governance and implementation structure for the SET Plan is crucial.

The integration of national and EU efforts towards implementation will require significant improvements in Europe’s governance model. This must be based on cooperation at the EU level that still respects each member state’s decision-making independency. For this purpose, the European Commission has already defined a set of governance proposals for the R&D agenda:

New joint strategic planning based on a Steering Group for Energy Research and Innovation, a European Technology Summit to be held on an annual basis and a Technical Information System

Six new European industrial initiatives in the form of public-private-partnerships or joint programmes to be launched in 2008 on wind, solar, bio-energy, CO2 capture, transport and storage, electricity grid and sustainable fission

The shift from a fossil fuel dependent energy economy to one based on clean generation technology envisaged by the SET plan presents an opportunity for Europe to lead the world to a future in which energy consciousness is an inherent part of society. By 2050, a new ERA comprising of energy Efficiency, Renewable, clean generation and Advanced infrastucture will exist in Europe. To achieve this ERA a new governance model is required to help coordinate the different efforts of each member state and, at the same time, public and private R&D expenditure and technology investment.

Cooperating and coordinating Eu member roles and responsibilitiesThe new governance model needs to clearly define each member state’s responsibility and the EU’s role both as an internationally influential entity and as an internal intermediary. The current system of 27 national programmes is unlikely to be challenged and many decisions will remain the responsibility of individual countries. However, cooperation and coordination between states is essential.

Member states will have a fundamental role to play if the 2050 vision is to become a reality. Different national circumstances in terms of the acceptance and potential of different technologies require individual national plans, whereby member states should have the freedom and flexibility to define their own strategy, as well as their own energy policy. Although European directives would set the path, effective execution depends on each country’s attitude and actions. For instance, increasing public investment and providing better market conditions to diminish risk and stimulate investment should mainly be the responsibility of member states.

Plans on a national level encompassing such initiatives would generate change and promote a stable environment for investment. These must be monitored regularly to assess results, review measures and identify the right levels of resource allocation.

Individual nations should also be responsible for introducing a new level of public-private dialogue and leadership so the burden of pre-competitive research is shared. Public-private partnerships (PPPs) are one example of new business models that need ongoing

A European Energy Research Alliance focused on implementing programmes, instead of collaborating on projects, eventually using the European Institute of Technology as a vehicle.

These proposals should be complemented with additional and broader measures and policies. Given the importance and the complexity of the task at hand, these structures must be empowered with the adequate level of decision-making authority and financial resources. There are three issues deserving priority:

First, the need to create the right incentives to attract private investment to the process on an unprecedented scale, namely market mechanisms, stable regulation, and mandatory ceilings among others

Second, the right coordination of policies at an horizontal level, for example, bio fuels agricultural policy, hydro-environment policy, biomass-forest policy; and the adoption of measures targeting energy- intensive industries in Europe

Third, the creation of a European-wide energy transmission grid with a strong interconnection capacity. This is beneficial because it will allow energy to flow all across Europe enabling, for example, electricity generated from wind farms in the north of Europe to send power to customers in the south of Europe.

the current system of 27 national programmes is unlikely to be challenged and many decisions will remain the responsibility of individual countries




Finally, the EU can promote further moves to bring added value to the energy sector and enhance its development, for example, by establishing an EU-sponsored energy technological forum. This could play an important role in bringing together different contributions from all around Europe. A strategic group composed of energy-related specialists from governments, research, energy and the financial community could be set up to prepare an annual report on the region’s requirement and resources. It would be responsible for examining opportunities to create a new European mechanism/fund for industrial scale demonstration, early deployment and market replication of low- carbon technologies.

Moreover, although human resources are predominantly a country competency, the EU could play a part in ensuring an attractive working environment for the world’s best researchers. At the same time, and given the fact that this sector faces a shortage of young people, it should promote better inter-state coordination and encourage the sharing of knowledge and staff. The EU should use all its leverage in the various international institutions, bilateral relations and programmes to promote these policies and technologies.

A strategic group composed of energy-related specialists from governments, research, energy and the financial community could be set up to prepare an annual report on the region’s requirement and resources

encouragement. These are now springing up around Europe, for instance, the Pôles de Compétitivité in France, and Energy Technologies Institute in the UK.

The transnational characteristics of the challenges require action at an EU level, however, and so the EU should set the pace and define general shared policies, targets and priorities. Its role will be critical at various levels such as: the definition of CO2 emission targets; caps on fossil fuel energy; targets for energy efficiency gains; promotion of co-coordinated action among member states, cross-cutting initiatives and flagship programmes; pooling of resources and risk sharing; as well as in the promotion of change at a global level. In this sense, it seems reasonable to create a European entity, responsible for managing the entire process and for which the European Institute of Technology (EIT) can be a first approach.

The EU should work as the essential intermediary between member states, promoting coordination and cooperation. First, there is a need to better coordinate national programmes, which entails sharing programmes, know-how and resources to achieve greater efficiency. Second, the nature of the investments and research needed, as well as the urgency to foster change, justifies countries working together. Fragmented efforts do not contribute to exploring synergies or scale – which is particularly important for capital-intensive technologies.

Centralizing efforts at a European level could answer several problems since it would enable efficient coordination of programmes, priorities, targets and investments. Cooperation among member states could nurture the creation of technological clusters and technology platforms, which is why the EU must supervise the process at its highest level.

governance strategies: adopting appropriate governance models

the Eu should work as the essential intermediary between member states, promoting coordination and cooperation

20-20-20 and the European strategic energy technology plan


invEstMEnt And iMPlEMEntAtion stRAtEgiEs: invEst MoRE, invEst bEttER


investment and implementation strategies: invest more, invest better investment strategies: invest more, invest better

it is well-documented that technological change has been relatively slow in the energy sector. This must change. It is important to understand why this has happened and to what

extent the obstacles to innovation can be removed using the appropriate policies.There are two important exogenous factors that help explaining why technological change has been so slow in the past:

The low price of fossil fuels until the beginning of the decade

The market failure created by the difference between private costs faced by investors and social costs given the absence of a carbon price.

These two obstacles have been removed or are in the process of being eliminated and this should facilitate technological change in the future. However, several endogenous factors may persist:

The nature of the learning process. It may take several decades before new technologies are deployed on a large scale because the costs of new technologies are initially more expensive than that of the ones they replace and because there are only a few niche markets which allow innovators to sell at a profit during the early stage. In any case, cumulative investment, R&D, feed-in tariffs and operating experience

Europe faces an array of hurdles in the journey towards sustainability but if it is committed to leading the transformation of the energy sector decisive action must be taken now. Europe must invest more and invest better in R&D and adopt appropriate market and regulatory mechanisms which will ensure a coordinated response from all member states and maximise private sector investment. The cost of inaction is too great.

tend to accelerate maturity and improve the scale economies and costs of new technologies to the point where they become competitive and ready to replace existing solutions.

The nature of infrastructure. National grids tend to be tailored to specific technologies and to the needs of incumbents. With the available equipment and expertise it is already possible to upgrade national grids and increase their interconnection capacity. This should be a priority for Europe1.

Market distortions resulting from direct and indirect subsidies and the nature of competition in markets usually dominated by a small number of players

Low level of expenditure on R&DTo remove the barriers to technology development and innovation, a different set of policies and incentives to attract industry and private capital should be tailored to each step of the R&D value chain: Discovery, Demonstration and Deployment.

to remove the barriers to technology development and innovation, a different set of policies and incentives to attract industry and private capital should be tailored to each step of the R&d value chain: discovery, demonstration and deployment

In fact, Europe’s current development paradigm is not aligned with its very demanding vision and self-imposed ambitious targets. Realignment requires that Europe invests more and invests better:

By mobilizing more resources, both human and financial.

By distributing resources more evenly across the most promising technologies.

By developing consistent and coherent market mechanisms to promote the deployment and market penetration of these technologies.

1Investment in improving the interconnection capacity helps the appearance of newcomers and fosters technology innovation. The deployment of renewables in Europe is an example of the benefits Europe can achieve by leveraging

the network infrastructure. Investments in infrastructure accommodated the fragmented nature of this type of generation while mitigating the constraints associated to its higher volatility. Europe should follow this example in

other areas like the CCS technologies, for which transportation and storage are key elements.

1 10 100

Purchase incentives and/or CO2 price

Competing technology

10000

20

40

60

80

100Discovery: Significant R&D will be needed for new energy technologies

Demonstration: Essential and may need direct support

Deployment: Purchase incentives and/or the CO2 market

Earlier deployment

Number of installations/products

Source: Shell Business Scenarios

}}

Europe’s current development paradigm is not aligned with its very demanding vision and self-imposed ambitious targets


Million€, EU (24 MS) in 2005

>70%

France Germany Italy Netherlands Spain Finland Sweden United Kingdom

Hungary Belgium Denmark Others Total0

625

1,250

1,875

2,500

Source: Eurostat GBAORDNote: Data for the European countries refers to Absolute Government Budget Appropriations and not to the total Public R&D investments; Funding from the EU through the research framework programmes and the Intelligent Energy Europe Programme are not included in the EU-figure; data for Poland relate to 2004; no data for Bulgaria, Cyprus and Luxembourg

Public R&D investments (1974-2005)Million �

0

2000

4000

6000

8000

1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

CAGR 74-05

JapanUSEurope

~3.9%~0.5%~1.2%

3,144

2,429

2,139

Note: Data for Europe relative to UE-15 Source: IEA – Energy Technology R&D Statistics Service (http://www.iea.org/RDD/);Eurostat Databases GBAORD

invest better in R&dIn Europe the energy R&D budget is highly concentrated in a few countries. Specific research priorities vary among member states, with a wide heterogeneity in energy investments, and each country having its own R&D agenda. Europe runs the risk that insufficient and uncoordinated allocation of resources will result in losses in synergies and projects with insufficient critical mass. Considering the intensive capital investment energy R&D often requires, coordination among member states is a clear priority for future budgets.

Deeper analysis also shows that Europe’s current energy research and development budget is strongly biased towards nuclear, at more than 40% of total expenditure. In this case, Europe needs to review its fund allocation in light of the new priorities for technological development – renewable sources and energy efficiency, which together account for only 30% of the budget. Meanwhile, investment in infrastructure and carbon capture and storage accounts for only 11% of total expenditure. Substantially greater investment will be needed in the latter, considering its substantial long-term potential for emissions reductions.

Clearly, a coordinated, clear and flexible implementation roadmap that reflects and accommodates each member state’s technological options is required. Implementation should be based on a rich and focused portfolio of initiatives designed to eliminate weaknesses in the energy R&D process and foster market deployment.

Public R&D investments (1974-2005)Energy R&D investments

02-05 (Million �)

Number of filed patents

EU

US

Japan

R2= 77%

500

2002

2002

2002

2003

20032003

1.000 1.500 2.000 2.5000

1.000

2.000

3.000

4.000

Note: Data for Europe relative to UE-15

2005

2005

2005

20042004

2004

Source: IEA – Energy Technology R&D Statistics Service (http://www.iea.org/RDD/); Micropatent

Europe must invest more if it is to compete with the us and Japan

invest more in R&dThis new model for development requires agreement among member states in the short term. Europe is currently spending comparatively less than it did in the past – for example, in 2005, in order to maintain a similar share (that is, share of energy R&D investments in total R&D) to 1981, the EU should have spent four times more than it did.

Greater funding would not only enable more research, infrastructure development, faster R&D and new solutions with earlier market deployment, but would also be particularly important for industrial-scale demonstration projects. Data show the historical strong correlation between investment levels and the number of deployed solutions, an area in which Europe has recently been losing its lead.

While it may be difficult to estimate exactly how much Europe should spend, it is clear that the current level of investment is insufficient. Although Europe is moving in the right direction (seen for example, in the increased budget for the Seventh Framework Programmes of the European Union, and the Intelligent Energy-Europe Programme), it still lags behind the US and Japan, as the statistics show.

the 12 new Member states account for less than 3% of total Eu spending in energy sector research

For example, to equal US funding in absolute terms by 2005, the EU would have had to invest about €290 million more in energy R&D than it did. If it had spent the same percentage of GDP as the US, it would have had to spend an extra €377 million. To have equalled Japan, the current leader in Energy R&D, the EU would have to have spent €1,005 billion more than it did. And if it had spent the same percentage of GDP as Japan, this would have meant spending almost five times more than the actual figure (€7.927 billion more).

In light of such comparisons, it seems reasonable to consider at least doubling energy R&D public expenditure within three years. This should constitute a clear priority on which member states must agree, so that a new impetus can be given to the development and deployment of low-carbon technologies. By doubling the dedicated budget from €2.1 billion to €4.2 billion, the EU would probably spend more than it’s US and Japanese counterparts in absolute terms and overtake the US in terms of percentage of GDP dedicated to energy research. It may be feasible for Europe’s member states to achieve this objective in three years, and also ensures Europe acts sooner rather than later.

Considering the intensive capital investment energy R&d often requires, coordination among member states is a clear priority for future budgets

investment and implementation strategies: invest more, invest better investment and implementation strategies: invest more, invest better


ExAMPlEs oF: new standards of technologies and solutions that lead energy to efficiency gains

lightingLED – Light Emitting DiodeOLED – Organic Light Emitting diode

insulation

VIP – Vacuum Insulation Panels Cellulose insulation Radiant barriers Weather-stripping and storm windows

heating

Combined space and water heating hybrid solutions Solar water heating Heat-pump water heater

iron & steelLED – Light Emitting DiodeOLED – Organic Light Emitting diode

Pulp and Paper

Black liquor gasification Impulse drying Condebelt dry

Chemicals

Autothermal reforming-Ammonia Heat recovery technologies Levulinic acid from biomass New catalysts

Cross-cutting

Cogeneration e.g. advanced CHP turbine systems Motor system optimization Fuel Cells Compressed air system management

otherSmart meters Digital Programmable Thermost

iMPlEMEnting nEw stAndARds FoR EnERgy EFFiCiEnCy, inFRAstRuCtuRE And stoRAgE

Creating standards and legislation for energy efficiency, infrastructure and storage is of the utmost importance to achieve Europe’s goals since through these, the necessary scale may be attained and synergies that justify a project may be explored. Although Europe’s energy efficiency record is good, there is scope for improvement, for example, establishing initiatives to boost conservation and eliminate the least efficient elements from each market by:

instrument Examples of possible initiatives

new standards for Energy Efficiency,

infrastructure and storage

1. Establish a unique standard protocol for energy related issues at the European level

2. Define clear and ambitious targets for energy efficiency in order to guide agents' actions and allow continuous assessment of the execution level

3. Define strict norms, codes and standards for building construction (e.g. mandatory use of insulating materials in order to save and conserve energy; impose the integration of RES terminals as electricity providers)

4. Define strict norms, codes and standards for transports (e.g. establish efficiency standards for vehicle engines standards that producers will have to obey)

4. Define strict norms, codes and standards for home appliances (e.g. establish electricity consumption efficiency standards that producers will have to comply with)

5. Define strict norms, codes and standards for industrial machinery (e.g. establish electricity consumption efficiency standards that producers will have to comply with)

6. Set detailed and compulsory guidelines for intelligent and open grids (e.g. establish intelligent grid penetration targets for utilities)

7. Make sure that pricing mechanisms reflect all the externalities related to energy consumption and its emissions

8. Establish energy prices incorporating the environmental cost in order to discourage energy waste and inefficient equipments (e.g. implement progressive taxation on home energy consumption)

9. Launch information campaigns to accompany the introduction of these standards and influence consumer behaviour in order to ensure compliance

10. Ensure that public investment and procurement abides the strictest standards (important to lead by example)

Adopting appropriate market and regulatory mechanismsA second priority of the implementation roadmap is the development of consistent, coherent and coordinated market mechanisms to promote the effective deployment and penetration of new technologies. Implementation needs to go far beyond political intentions and targets and requires real commitment and tangible measures, supported by regulation, legislation, fiscal policies and incentives, and programmes to influence consumer behaviour. These should combine to increase competition, protect consumers, enhance reliability, promote renewable energy, improve efficiency and restructure network and storage facilities.

Once it has dealt with additional spending and the development of market mechanisms, Europe must concentrate its efforts on measures that significantly boost progress towards achieving the energy policy objectives – security of supply, climate change and economic competitiveness – supported by the following types of instruments, described over the next 4 pages, in more detail:

New standards for energy efficiency, infrastructure and storage;

Stable regulatory environment;

Fiscal policies and taxes;

Definition of ceilings.

Although Europe’s energy efficiency record is good, there is scope for improvement




stable Regulatory

Environment

1. Define clear long-term priorities and targets able to actively engage the private sector by creating a safer and more stable business environment; (e.g. set time-framed targets for technology penetration levels, clearly indicating established priorities –20/20/20 targets are a good example to follow and must be applied in longer-term perspectives)

2. Implement a European wide independent system of Energy market regulation and create conditions for true competition in every national market

3. Enforce a truly open and competitive sector with transparent rules such as a strict loading order for power generation

4. Enforce a complete split between energy production and distribution in all Member States

5. Establish clear and stable sector rules that can increase the supply of venture capital financing besides ensuring a better and stronger linkage between research and industry

6. Foster the adoption of new utility revenue models (disconnected from power sales) designed to promote energy efficiency in a similar way as that of the Californian example

7. Ensure Intellectual Property Rights (economic and moral rights) on R&D according to IPRframework

8. Reinforce the implementation and development of a CO2 market –based on reduction targets and based on establishing emission credit prices

CREAting And MAintAining A stAblE REgulAtoRy EnviRonMEnt

Together with the message sent by these rising standards, Europe must ensure that appropriate instruments are established to promote a secure and predictable market environment. Given the long development cycles intrinsic to the energy sector, reduction of uncertainty and risk is a key element of fostering sound innovation, technological development and rapid market deployment. It is vitally important that energy sector stakeholders are given stable conditions for investment, and have a comprehensive understanding of the “rules of the game” (such as market structure and regulation, existing competitors and so on) so they can make informed and safe investment decisions. Moreover, reducing investment risk means reducing investment costs.

investment and implementation strategies: invest more, invest better



definition of Ceilings

1. Establish clear and mandatory reduction targets for main pollutants. Phasing reductions over a reasonable period of time is preferable

2. Set other intermediate goals such as biofuel penetration, the weight of renewables in energy demand or energy efficiency gains

3. Define clear consequences for those disrespecting established targets and make sure penalties are effectively enforced so that the system's credibility remains intact


Fiscal Policy

1. Grant tax credits for investments in clean energy R&D technologies besides ensuring such investments are 100% fiscally deductible

2. Increase Public subsidies for R&D investments and clean technology acquisition

3. Increase incentives to create flagship projects for the most promising technological options which due to size and scale will impose cooperation among Member States (e.g. Hydrogen Technological Platform)

4. Establish different taxation policies for different goods according to their energy efficiency or level of CO2 emissions ensuring that higher taxes and penalties are applied to goods with higher levels of inefficient energy consumption and energy waste

5. Discriminate automobile taxation according to pollution –the more it pollutes, the more it pays (with retroactive effects)

6. Consumer tax deductions when purchasing clean technologies or environment-friendly products (e.g. Solar Panels)

stAbilising FisCAl PoliCiEs And tAxEs

It has become critical to define a coherent and consistent fiscal policy that encourages both the supply and demand side (companies and consumers) to behave in a more environment-friendly way by favouring more efficient and cleaner technologies. Taxes from non-environment-friendly products could be allocated to relevant projects such as energy R&D programmes. This redirection of resources would ensure a minimum annual investment in energy R&D.

The differentiated fiscal treatment should enable a better match between targets and day-to-day investment decisions since such policy has the power to influence consumers and businesses by encouraging or penalising different behaviour. It is critical that these instruments are designed to drive agents in the right direction by:

dEFining CEilings As An indiRECt MARkEt MEChAnisM

Ceiling instruments are also crucial to push forward the implementation of Europe’s energy vision. Unlike other world regions, Europe has been proactively engaged in defining binding targets. Defining targets, objectives and penalties can be seen as an indirect market mechanism that gives agents with an option to comply with targets or suffer the stated consequences – for example, pay a fine.

Despite being ahead of numerous other countries and regions, Europe needs to reinforce the following measures:It is important to frame all these initiatives in a way that distinguishes which incentives are designed for each stage of the technological value chain since R&D requires dedicated incentives that differ from the commercial deployment and market penetration stages.



viana do Castelo: inside the blade factory on the day of the inauguration

by 2011, more than 60% of the total production of the new manufacturing plants will be exported to neighboring countries or other markets across the Mediterranean or the Atlantic ocean

lanheses: the generator factory and the administrative and training center


53% per year, and by the end of the first semester of 2007 more than 2,000 MW had already been installed. The investment and efforts in developing wind power capacity, and the results reached so far, are reflected in the European Union rankings, both in absolute and relative terms. In 2005 and 2006, Portugal achieved Europe’s first and second highest growth rate (95% and 56% respectively), currently being the sixth country in terms of total installed capacity among the EU Member States.

Yet the tender represented much more than a mere boost to the continuing development of wind energy: it introduced no less than a revolution of the paradigm in the sector. Until then, the high growth rates in installed capacity were fuelled almost exclusively by imports of technology and equipment, as more than 80% of the components of a typical wind farm had to be imported. From now on, the country will become a net exporter of wind turbines, in addition to producing virtually every component to be installed in Portugal. By 2011, more than 60% of the total production of the new manufacturing plants will be exported to neighbouring countries or other markets across the Mediterranean or the Atlantic Ocean.

Several candidates participated in both tenders, involving major European utilities in joint-venture with worldwide OEM leaders in wind technology.

The first tender was concluded in October 2006. In this bid, 1,000 MW of installed capacity were awarded, with an additional 200 MW in capacity upgrade. In the second tender, concluded in September 2007, an additional 400 MW were granted.

Following these two tenders, the implementation of two industrial clusters linked to wind power has already started in Portugal, with an investment of ~€2,285 million, involving the creation of ~1,800 direct and 1,230 indirect jobs. These clusters will create cutting-edge industrial units and capabilities in wind power technology, such as rotor blades, nacelles, towers, generators, and other electrical and electronic equipment.

In addition, both winning clusters have contributed with €35 million each for the set-up of a national R&D fund. Envisaging the promotion of advanced R&D technology centers, this fund is to be applied to innovation and research in the field of renewable energies. Portugal thus proves its capacity to capture significant foreign investment and attract top international players in this area (e.g. OEMs Enercon and Repower).

Portugal also demonstrates how wind power promotion can form part of a global economic and social development policy, in addition to being a priority for Portugal’s energy strategy. Between 2005 and 2007, Portugal’s installed capacity grew, on average, by

The revised and increased targets for renewable energies demanded a new incentive structure to guarantee the necessary private investment at the most affordable cost to consumers. The feed-in tariff system did minimize the long-term risk for investors, but was not perfectly adjusted in terms of cost.

Therefore, the Portuguese Government decided to launch two large-scale public tenders to award new interconnection capacity for future wind farms. This tender gave points to candidates offering discounts on the feed-in tariff, but also aimed to leverage technological progress and industrial policy. Indeed, one of the key needs was the creation of a wind energy, R&D and industrial cluster. This would maximize the overall value-added from the wind investment and create new economic growth and jobs, particularly in less developed areas of the country. This policy made it possible to negotiate additional proposals and commitments assumed by promoters, giving rise to private initiatives in R&D, know-how transfer and development of domestic products.

CAsE study: inCEntivEs in EnERgy PubliC-PRivAtE PARtnERshiP in PoRtugAl

In 2005, Portugal undertook a significant review of its national energy policy. The new Energy Strategy Plan established renewable energy sources (RES) as an essential pillar of the future Portuguese energy paradigm. This Plan set out an integrated strategy for the promotion of low-carbon energy sources, relying on the strong support of two major complementary components – wind and hydro power. A diversified policy for biomass and new energy technologies such as wave energy, solar power and biofuels were also adopted.

At this times Portugal’s wind power development was in its very early stages. The installed capacity was slightly above 500 MW, a very low figure in comparison to the national potential. Also, the tariffs and capacity-awarding systems were creating a burden for consumers, without necessarily giving the right incentives for efficiency and economic development.


Needless to say, this change of paradigm will have a deep impact on the country’s balance of payments, through this creation of new, high-value, export products, and through the more general reduction in the need to import raw materials (natural gas) and emission licenses, thanks to the connection of 1600MW of new wind capacity to the grid. Just for the first of the two tenders, the impact on the balance of payments has been estimated at more than €300 million, annually.

It will also, and this is what is meant by a global economic and social development policy, make a real difference for many people in less-developed areas of Portugal. Not only will the new clusters become major sources of new, high-tech, job creations in formerly depressed industrial areas (even amounting to 25% of the regional GDP around Viana do Castelo), but the wind farms themselves represent a powerful tool for economic redistribution and regional planning. The compensations to farmers, associated with the use of land sections by wind turbines, represent more than €10 million every year. In addition, the law establishes a municipal tax for wind farms of 2.5% of gross revenues. This represents, in many rural towns, a significant influx of funds which, combined with the possible job creations in wind farm maintenance, contribute to counter the rural exodus from which many areas of inner Portugal have been suffering.

Finally, looking ahead it is important to underline the fundamental role of these tenders in preparing the country for the future of electricity. The tender introduces a series of innovations which will actively help prepare the grid of tomorrow, such as the most advanced wind forecasting models, the widespread integration of wind and hydro for energy storage purposes. Also the creation of integrated dispatch centres will be able to manage the production of a series of wind farms in real-time, according to demand and to the needs of the grid. All this, combined with the technology transfer agreements signed with R&D leaders such as Enercon, and with the new R&D fund and networks, truly has the potential to turn Portugal into a key player of renewable energy research and into a state-of-the-art laboratory for the energy model of the future.

Total investmentMillions €

0

600

1,200

1,800

2,400

Phase A Phase B Total

1,750

535

2,285

2,2851.330 700

1,230

1,800

Jobs created

Source: ENOP; Ventinvest; Ministry of Economy and Inovation

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Phase A Phase B Total

Direct jobs

600

1,100

630

1.330 3.030

Indirect jobs

Installed capacityMW

Phase A Phase B Total0

300

600

900

1,200

1,500

1,800

1,200

400

1,600

wind Power Public tender

investment and implementation strategies: invest more, invest better



tEChnology solutions – todAy And toMoRRowour final chapter takes a sector-by-sector look at the energy efficient technology that is currently available and in development; and assesses the technology’s importance and any barriers to its adoption


technology solutions – today and tomorrow

thE REsidEntiAl sECtoRHousehold appliances, lighting systems and cogeneration are all examples of areas in which technology plays an important role in the quest for higher energy efficiency. Several technologies are already available commercially in all three areas, as a result of continuous efforts by companies to develop better products. This is a very competitive sector where market forces drive continuous innovation, however, the deployment of these technologies must be speeded up through the use of financial incentives and clearer standards.

The main challenges common to these areas are poor public awareness, technical difficulties and building regulations. The general public is still unfamiliar with efficient technologies and often considers them too expensive. Increased scale would reduce costs, while public information campaigns, labelling and regulation can all help improve uptake. As well as more coherent building rules, the revision and harmonizing of regulations would boost the deployment of technologies such as cogeneration.

Electric appliancesCurrent status: The efficiency of domestic appliances has improved considerably in the past few years. While residual, in 2004 about 4% of all electric appliances in Europe were categorized in the most efficient class (Class A), a feat achieved through better labelling and minimum standards.

barriers to overcome: Lack of awareness is the key barrier to a greater penetration of Class A appliances since the general public still considers energy efficiency a minor factor when purchasing new appliances.

key challenges for implementation: Decisive steps must be taken towards boosting public awareness. This could entail profile-raising campaigns and more effective labelling, while banning inefficient appliances would promote widespread market deployment of energy-efficient models. Technological barriers are, at this stage, of minor importance but R&D efforts need to be maintained so that improvements are made and the search for more cost-competitive solutions continues.

Future outlook: Residential energy intensity is expected to reduce from the current figure of 24 Toe/M€ (of private income) in 2000 to 17 Toe/M€ in 2020 and 11 Toe/M€ in 2050. This change is expected to be partly driven by the near-100% penetration of efficient household appliances (A category) by 2050.

lighting systems Current status: Several energy-saving lighting systems are now available. Of these, the CFL (compact fluorescent lamp) is one of the most promising, with a market share of about 14%. Other technologies have been deployed but are still in an early stage, for example, light emitting diodes (LED) and organic light emitting diodes (OLED).

barriers to overcome: The outlook is promising as all these technologies are rapidly improving and will continue to benefit from research. However, today consumers are still unaware of their potential environmental and economic benefits. Key challenges for greater market deployment are mainly concerned with consumer awareness and acceptance. The high initial costs of installing efficient lighting and lack of information about its benefits means consumers tend to opt for cheaper systems at present.

key challenges for implementation: Energy-efficient construction standards and regulations are crucial, and policy makers need to raise consumer awareness and impose consistent regulations that favour these technologies. Reducing the difference between start-up costs for efficient and inefficient systems is also important and can be achieved by measures such as imposing higher taxes on the latter.

Future outlook: By 2020 efficient lighting systems will enjoy a significant share of the market, for instance, current predictions give CFLs a 38.4% share by then. By 2050 efficient lighting systems are expected to dominate the market.


Cogeneration/Combined heat and power Current status: Cogeneration, also know as combined heat and power (CHP), is a power generation technology that uses the heat that would normally be expelled to the surrounding environment for producing energy. Cogeneration can take the form of either small/micro systems commonly found in houses and apartment blocks or medium/large systems directed towards district heating (70% of district heating is provided this way). More development is needed in the area of micro systems, together with the removal of current barriers preventing full commercial deployment.

barriers to overcome: The market for micro CHP, while small, is steadily growing. However, technical barriers linked mainly to cost and efficiency still exist. In addition, micro cogeneration has many grid integration problems and has to compete with renewable energy sources (RES) for funding.

key challenges for implementation: The deployment of more efficient and thoroughly tested micro CHP technology is of crucial importance, as is the need for integrated research in the different technologies that are used in CHP. Funding to up-scale micro and small cogeneration is needed. Grid integration is an important area and the next steps involve intelligent network linkages. Systems such as virtual power plants can be applied and buildings should be designed with integrated cogeneration systems. Shortages in system installation and operations personnel should also be addressed.

Future outlook: Co-generation for residences is not expected to be a crucial technology. However, it can offer some efficiency gains in boilers and other heating and cooling technologies.



thE tRAnsPoRt sECtoRThe energy vision’s 2020 and 2050 targets for transport include important changes in current fossil fuel combustion options (petrol and diesel) as well as road vehicle types. The advent of first-generation, followed by second-generation, biofuels is expected to be central in the development of the new energy model. Meanwhile, the expected increase in the penetration of non-conventional vehicles (hybrid and fuel-cell) will spark changes on the road transport landscape.

The transport sector faces some important future challenges, described below. First, it is critical to reduce the cost of non-conventional vehicles to ensure economical viability and ensure their adoption by the public. Second, there is a need to increase consumer awareness of the new technologies in this field so customers are more willing to pay for them. Third, it is important to improve on the costs of biofuels to make them more attractive and enable them to compete with other combustion options. Plus, biofuels need improvements to render them less polluting. Finally, it is crucial to move towards regulatory harmonization at the European level and towards greater consistency among all member states.

First-generation biofuels Current status: Biofuels are essentially a type of fuel extracted from biomass (any organic material made from plants or animals). First generation biofuels are bioethanol, extracted by a fermentation of sugar starch, and biodiesel, which is based on the extraction, refining and sterilisation of plant oil, rapeseed and sunflower. By 2005, the consumption of biofuels for transportation purposes reached around 1% of all gasoline and diesel used. Germany is the leading producer of biodiesel with more than 1 million tons in 2006, followed by France with 300 tons.

barriers to overcome: First-generation biofuel barriers are mainly related to feedstock problems and to the share of biofuels in the final fuel mixture, and combined with low consumer awareness, this means cost-competitiveness is not yet assured. However, first-generation facilities in the EU are steadily increasing

key challenges for implementation: Technological developments should assure an even higher reduction in greenhouse gas (GHG) emissions and improve access to a wider array of feedstock. An integrated import strategy is essential to avoid competition for raw materials between biomass power generation and biofuel. Vehicle technology should target problems related to the small percentage of bioethanol and biodiesel in the mixture, and harmonization of regulations within the EU and overseas should be addressed to lever biofuel implementation.

Future outlook: By 2020, biofuels are expected to represent about one tenth of total gasoline and diesel sales in Europe. After 2020, as first-generation biofuels become obsolete, second-generation biofuels will probably take the lead in biofuels consumption.

second-generation biofuels Current status: Second-generation biofuels are essentially composed of a substance called cellulosic ethanol, which is extracted by using biomass-to-liquid technologies. These have not yet been deployed as a breakthrough in the production technology is still missing. However, this is expected to happen before 2020.

barriers to overcome: Barriers, mainly linked to production technology, are still very high and current production costs are higher than those of first-generation biofuels. Other barriers will appear as mass production begins, for example, shortage of raw materials and a low share of the vehicle fuel mix.

key challenges for implementation: More investment is needed to create second-generation biofuels. Proof-of-concept projects must be addressed to lever potential commercialisation, and coordination between all the sectors involved (agriculture, forestry and vehicle production and so on) is of crucial importance regarding both R&D and deployment.

Future outlook: By 2050, biofuels are expected to represent about a fifth of total road transport fuel, with second-generation biofuels probably accounting for the biggest share of this.




hydrogen and fuel cellCurrent status: Very different from conventional engines, fuel cells use air and fuel to produce energy more efficiently. Fuel cells have applications not only vehicles but are also useful in storage, portable power and micro-power systems.

barriers to overcome: Fuel cells have not yet been deployed in the market, but have potential to reduce CO2 emissions in the future. The main barrier is the high production costs so further R&D is vital to reduce these costs. Moreover, economies of scale should be explored as well. To help the market prepare for deployment demand pull instruments, such as WHAT should also be employed.

key challenges for implementation: The burden of R&D needs to be shared between public and private parties as risks cannot be supported exclusively by private stakeholders. Feed-in tariffs1 should be used as an investment incentive for private investors. The EU must also speed up the development, demonstration and deployment rate of this technology in order to become the undisputed global leader.

Future outlook: By 2020, fuel cell vehicles are expected to have a marginal share. Nevertheless, the outlook for 2050 indicates an expected market share of 3.3%.

hybrid vehicles Current status: Still in an early stage of market deployment, hybrid technology is currently dominated by Japan and hybrid vehicles are not represented in the EU passenger and freight transport sector. Since the technology is very complex, cost competitiveness is an issue. Moreover, while the fuel consumption levels of these vehicles are relatively low for use in urban areas, outside these areas they use the standard amount.

barriers to overcome: Greater production is needed to obtain the necessary economies of scale and improve cost-competitiveness. R&D and advanced component development is also needed to enhance hybrid technology.

key challenges for implementation: The EU could give the automotive industry incentives to develop and deploy commercially viable hybrid vehicles and hence, increase their importance in the international market.

Future outlook: Hybrid vehicles are expected to represent 4.46% of the entire market by 2020, rising to more than 15% by 2050.


1A major instrument of European countries to promote the generation of electricity by means of renewable energy sources. These tariffs have been very effective in stimulating wind power.



thE industRiAl sECtoRImprovements in energy efficiency are expected to be high in the medium/long term. Gains are expected to reach 25% by 2020 and about 50% by 2050, and applying CCS and CHP to industrial processes will contribute significantly to these gains. Coordination among member states towards the development of CCS is fundamental since scale is central to ensuring the cost competitiveness and greater efficiency of this technology when applied to industry. Early demonstration pilot projects are crucial to assist its development, while regulation and funding models are also important issues to extend the deployment of efficient industry technologies.

Carbon capture and storage (CCs) Current status: The purpose of CCS is to capture CO2 produced in power plants, transform it into a transportable liquid and store it in a safe place. Today, CCS is still in development and commercial deployment is only expected to happen by 2020. The European Commission community research is currently developing projects in the three main areas of CCS – CO2 capture, CO2 advanced separation and CO2 storage. In fact, many technical challenges still have to be overcome.

barriers to overcome: Barriers to deployment are essentially of two types: the first is that plants are very expensive, pushing up first-mover costs. The second is the lack of public awareness.

key challenges to implementation: Incentive measures for CCS should be prepared. Financial incentives for power plant retrofitting and the development of a CO2 market framework are crucial to its deployment.

Future outlook: The deployment of CSS technology is not expected before 2020 however, a rapid evolution is likely. In power generation and industry, CCS is expected to capture approximately 770Mt CO2 per year by 2050.

Cogeneration/Combined heat and power Current status: Currently cogeneration/CHP is a mature technology, with Denmark and Finland clear leaders in the region. In the EU, cogeneration has a more than 13% share of electricity generation and more than 18% of steam production.

barriers to overcome: Despite high penetration, there are considerable barriers to penetration, the most important of which are a lack of incentives and clear policies by some member states; the low degree of harmonisation and regulation; problems with grid access and system integration; and high building costs.

key challenges to implementation: To remove these constraints, several key measures can be taken. First, financial support for the implementation of cogeneration systems in industry, since installation costs are high; second, promotion among all member states of joint research programmes for focused, end-use applications; and third, regulatory harmonization on primary energy sources (since biomass and waste can be used as fuel inputs).

Future outlook: The implementation of CHP in industry will continue to gain ground. By 2020, heat from CHP used as a final form of energy will grow by 40% compared with current values, reaching more than 50% by 2050.



Wind power installed capacity in Spain

MW

1. CO2 savings as compared to emissions from CCGT generation

% of total installed power

2000 2001 2002 2003 2004 2005

Source: REE

0

2000

4000

6000

8000

10000

2,298

3,442

4,927

6,138

8,351

9,653

4

#

6 8 10 12 13

CAGR33%

% of Spanish National Allocation Plan (NAP) for power generation

2005 2006E 2007E 2008E 2009E 2010E

Source: REE#

0

5

10

15

CO2 emissions reduction in Spain due to wind power development1

Mt CO2Cumulative (2005-2010) MT CO2)

8.0

9.611.2

12.8

14.415.0

9.3 11.2 13.0 14.9 16.7 18.6

0

20

40

60

80

PowER gEnERAtion tEChnologiEsTargets for 2020 and 2050 require substantial changes in the power generation sector. Renewables, nuclear and carbon capture storage (CCS) are critical technologies that will be developed and benefit greatly from innovation until 2050. Key challenges need to be overcome in all these technologies. For renewables, priorities are to guarantee cost improvements and the removal of environmental barriers and grid connection constraints that are undermining their penetration. Feed-in tariffs are important mechanisms to reduce investment risk and uncertainty. CCS will benefit from a cross-country coordinated effort in pre-competitive R&D to ensure a minimum scale is achieved and demonstration projects are supported. Nuclear technologies, supported by continued coordinated action at the European level, should focus on waste management and safety research.

wind (on-shore)Current status: Today, wind energy in the EU represents roughly 60% of the world’s wind power installed capacity, at around 40 gigawatts (GW). Spain and Germany have the greatest installed capacity but there is significant unexplored capacity in many other European countries. On-shore technologies are on their way to maturity and electricity production costs range between 3.5ct per kilowatt hour (KWh) and 17ct/KWh (2005 values).

barriers to overcome: Technological evolution is occurring rapidly but the technology still faces some challenges. The first is grid integration since wind energy production is intermittent and usually distant from centres of consumption; the second is duplication arising from a lack of coordination by research centres; the third is the shortage of a qualified workforce; and the last a reluctance by new EU members to adopt the technology.

key challenges for implementation: Energy storage and grid management would help overcome the problem of grid integration – energy storage technologies such as super-capacitators and reversible fuel cells are being developed today that will provide a crucial technological base for grid integration. There is also a need to build state-of-the-art research centres with critical mass, and feed-in tariffs are needed, to speed up deployment.

Future outlook: The expectation for 2020 is that on-shore wind power generation will account for 8.1% of total net electricity production, and for about 10% for 2050.


wind (off-shore)Current status: Current installed capacity is approximately 1GW. Initial programmes took place in Denmark, the UK, Sweden and the Netherlands, but potential to develop off-shore projects exists in all European countries on the Atlantic coast.

barriers to overcome: Challenges are mainly related to integration problems with the electricity transport grid, the shortage of a specialized workforce, an inadequate research infrastructure and a lack of acceptance.

key challenges for implementation: Up-scaling present technologies is the main issue. Current generation costs range between 5ct/KWh and 17ct/KWh (2005 values) so feed-in tariffs are crucial to promote deployment. Proper integration in the grid is also crucial. Moreover, workforce shortage and research centre cohesion must be tackled. Off-shore wind should lever on-shore R&D expertise to avoid research duplication.

Future outlook: The expectation for 2020 is that off-shore wind will have 28GW installed – an astonishing increase from today’s value of approximately 1MW. By 2050, estimates foresee an even greater deployment of more than 80 GW of capacity installed.

small hydroCurrent status: With an installed capacity of 44GW, small hydropower generation still has a way to evolve, for instance, turbine efficiency and reliability is expected to improve. The recent deployed technologies have generation costs ranging from 4.5 to 9cts/KWh (2005 values).

barriers to overcome: The main barriers are related to the size of companies in this field. There are many small and medium-sized enterprises active in Europe operating in this field. However, they usually do not have sufficient critical mass to pursue research and demonstration on their own.

key challenges for implementation: In small hydro, generation feed-in tariffs currently used in some member states are important to increase deployment. Uptake developments from other parts of the hydropower sector would also help maximize the evolution potential.

Future outlook: By 2020, small hydro technology is expected to produce as much energy as large hydropower, with 4.5% of total net generation. However, by 2050 it is expected that small hydro’s share of power generation will not change compared to 2020.

large hydroCurrent status: Hydro is the renewable technology with the greatest share in electricity generation today at nearly 10%, and large hydro is the most mature renewable technology. Its generation costs vary between 2.5ct/KWh and 9.5ct/KWh (2005 values). Clearly cost-competitive, it can be used as a storage system, thus diminishing the effect of unpredictable wind power.

barriers to overcome: These are mainly linked to the difficulty of gaining approval for construction in some areas, in view of strict regulations.

key challenges for implementation: Efficiency gains in hydrodynamics are the most important levers for capacity increases in large hydro. The reclassification of potential sites that are currently considered protected areas due to outdated regulations is also an issue. Existing hydropower infrastructure is ageing, and so refurbishment would improve efficiency and increase profitability.

Future outlook: By 2050, hydropower generation as a whole is expected to produce around a quarter more electricity than today, representing 4.5% of all net electricity produced.

biomass Current status: Today, biomass power plants produce 3% of total net electricity generation in Europe. The generation costs of this technology range between 2.5ct/KWh and 8.5ct/KWh, making it cost competitive. Because of the high availability of wood and waste from pulp & paper industries, biomass power generation technology has been growing, for example, in Sweden, Finland and Austria. Portugal, Spain, Germany and other countries are now implementing programmes to promote the use of biomass technology.

barriers to overcome: The main barriers to biomass deployment can be found in the supply of raw materials and the cost of feedstock production, harvesting and transport. Feedstock availability in Europe is also an issue, since the major producers are in South America.

key challenges for implementation: Optimizing the fuel chain and providing confidence for all stakeholders is highly important. In R&D, steps need to be taken in the direction of optimizing woody crops for energetic use.

Future outlook: By 2020, biomass power generation is expected to represent 9% of total net electricity generation but by 2050 this is forecast to have risen to a 20% share.

technology solutions – today and tomorrow technology solutions – today and tomorrow


PhotovoltaicCurrent status: Photovoltaic is one of the newest technologies with the highest employment rate per MW installed – approximately 0.7 jobs/MW. Even though it is responsible for just 0.3% of the EU’s electrical capacity, its capacity has increased significantly in the past few years. Despite having less hours of sun than many southern European countries, Germany is the biggest photovoltaic power generator in the EU, which it has achieved mainly through a strong financial support in the form of feed-in tariffs.

Not yet cost-competitive, photovoltaic generation costs ranges between 20ct/KWh and 45ct/KWh. Payback time depends on the location, and increases as the hours of sunshine decrease; in southern Europe it is typically two years.

barriers to overcome: These are related to component costs partly because of the lack of up-scaling and partly because of the price of silicon. Other barriers, such as a shortage of experts, reliance on precious raw materials (for example, silver), and grid connections, must also be addressed.

key challenges for implementation: Silicon shortage has to eventually be addressed through a large-scale project to diminish its cost from the current 40€/Kg to 10-20€/Kg. Moreover, R&D evolution in manufacturing systems, in particular those related to product optimization, is crucial. At the same time, feed-in tariffs are necessary to assure technological deployment and cost-competitiveness.

Future outlook: Photovoltaic technology is not expected to have an important market share in the next decades. However, as costs decrease, deployment may gain a greater significance.

Cumulative production (MWp)

1 10 100 1,000 10,000 100,000 1,000,000

Cost of global PV production follows 80% experience curvePV module price

(2003 €/Wp)80%

experiencecurve

0.1

1. Assumes 25% annual growth rate

1

10

100

2003 20131

20231

Source: rystal growth and materials research in photovoltaics progress and challenges, Thomas Surek,

National Renewable Energy Laboratory, US (NREL), 2004

1999 2000 2001 2002 2003 2004 2005 2006 2007e

Source(s): PHOTON 04/20071. 2007 estimated

PV Cell production 1999-20071

MW

+55%

0

1,000

2,000

3,000

4,000

+40%

+45%

+67%

+44%

202 287 401 560750

1,256

1,815

2,536

3,931

... driven by cost reduction leversIncrease panel efficiency

Lower raw material cost

Improve manufacturing process

Economies of scale



nuclear fissionCurrent status: With 30% of all the net electricity produced in the EU, the majority of the 154 nuclear fission reactors are light water reactors (LWR). Being a mature technology, nuclear generation costs range between 4ct/KWh and 4.5ct/KWh (2005 values). France, the UK and Germany have the highest share of nuclear electricity generation, with a total of 95 nuclear plants. Despite this, Germany is now questioning its nuclear programme and countries such as Portugal, Ireland, Italy and Austria have so far rejected this form of energy production.

New generation reactors such as EPR (European pressurized water reactor) strongly optimize safety and economic performance and this technology is now being deployed, with the construction of one nuclear plant in Finland and other in France.

barriers to overcome: Social barriers to nuclear generation are the main explanation for the lack of deployment in some European countries. Other issues are the location of radioactive waste reservoirs and the high consumption of raw materials such as uranium.

key challenges for implementation: The main challenges are ageing of power plants – most reactors are more than 20 years old, so a life-extension investment is needed in many cases. The likely scarcity of uranium is also a problem since future uranium prices are expected to rise to more than €180/Kg by 2050. Anticipating the deployment of low-consumption Generation IV (fast neutron) reactors is crucial, therefore but for this to happen, there must be a coordination of all R&D national research programmes. Pre-industrial demonstrations planned for 2020 are also important for effective deployment. Another important challenge is to improve the social acceptability of nuclear energy.

Future outlook: Industrial deployment of generation IV reactors is expected by 2040. These are expected to multiply by 100 the energy produced from the same amount of supply. Despite this, the share of nuclear fission in Europe is expected to drop – by 2020 it will have a 27% share of the market, and by 2050 only 25%.

nuclear fusion Current status: Still in the R&D stage, nuclear fusion will eventually provide cheap, safe, environmental friendly and widely available energy. The idea behind this technology is to reproduce on earth the same reaction that occurs in stars.

barriers to overcome: Lack of knowledge about this process is the major barrier. Scientific knowledge is profound but knowledge of the industrial process and power plant design is still limited.

key challenges for implementation: The next steps should focus on increasing funding to accelerate the construction of the first demonstrator fusion power plant (DEMO).

Future outlook: DEMO is expected to be operational in 30-35 years’ time.

wave energy

Current status: Early versions of wave energy technology have already been deployed in demonstration projects being deployed and the current capacity is approximately 2MW. Countries along the Atlantic coastline – such as Portugal, Spain, France, Ireland, UK and Norway – have greater potential than those on the Mediterranean.

barriers to overcome: Since projects need to have some ability to withstand off-shore extreme conditions, the cost of initial investment is high. Intermittency of energy generation is also a problem.

key challenges to implementation: The main tool to overcome the barriers is investment on R&D, which must focus on developing solutions for existing technical problems to diminish investment risks.



Source: Interviews, The Battery Handbook

AC DCDC DC

PowerconversionInput Output device

Energy System

ChargeControl

Power Transfer

Energy storage device(s)

Power conditioning

Battery

Capacitator

?

Fuel cell Control ElectronicsTelemetry/sensorsCell balancing circuitryCommunication/ interaction

between componentsSoftware/algorithms

Power requirementEnergy source

Electric gridFuelSolar powerWindNuclear

storage position in the grid

tEChnologiEs FoR AdvAnCEd inFRAstRuCtuREThe 2050 vision demands a much more elaborate grid linking all players in the energy sector. Renewables and dispersed power generation systems will increase the grid’s complexity. Smart grids will be crucial to enable effective management of the grid, and storage will be essential to overcome the problems of intermittent energy coming from RES power generation.

Although some technologies are ready to be deployed in early versions, mainstream still need R&D evolution. Public funding and fiscal incentives are crucial to enable up-scaling and reduce deployment costs.

smartgridsCurrent status: Electricity networks are today a source of reliable power, mostly linking large power generators to disperse consumers; currently Europe’s electrical networks transport 3,350 terawatt hours (TWh). Network losses in the EU-27 account for 6.67% of all the transported energy, and 6.33% in the EU-15.

barriers to overcome: With the liberalization of the market, an increase in international electricity transportation is expected. At the same time, the increasing deployment of RES technologies will make controlling and managing networks more difficult.

key challenges for implementation: To overcome these barriers there are some important tools that can be used. First, the deployment of mature new technologies such as FACTS (flexible AC transmission systems) and WAMS (wide area monitoring) will be important for the network reaction to the intermittency of RES. At the same time, the appliance of known techniques

using mature technologies, such as remote meter reading or grid management platforms controlling the flux in the grid, is crucial. Second, although requiring a large investment, storage equipment in the network will play a key role. The relative technology is being developed and by 2040, storage points in the grid will be available on a wide scale. Demand-side management could also play an important role, essentially providing a quick reduction in the load. Third, non-classic grids and alternative models could also coexist at the grid level. Virtual power plants, micro-grids, active networks and internet model grids are possible schemes to be deployed, but at this level decisions have to be managed regionally.

Future outlook: Smartgrid implementation will be gradual. It is predicted that mass deployment of grid technologies will begin by 2015.



ERA vERsus businEss As usuAl sCEnARio

REsEARCh dAtA:

Research data

Research data: ERA versus business as usual Research data: ERA versus business as usual

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

Primary Production 933011 946298 937567 896393 839898 791732 782722 781998 816183 831113 857561 875752 905310

Solids 365918 277924 213693 196451 159407 128399 104451 94714 108307 113364 118420 124782 131145

Oil 128809 170055 171665 132993 104550 76762 53014 44273 40786 23072 5357 3030 703

Natural gas 162447 188965 207559 188021 165887 124887 110749 95463 82650 72999 63349 38836 14322

Nuclear 202589 223028 243761 257360 254083 264438 263506 262347 269895 266107 264877 268438 275670

Renewable energy sources 73248 86325 100890 121568 155970 197246 251002 285200 314545 355571 405558 440666 483470

Hydro and Geothermal 28291 31499 33785 31788 35517 35847 36426 36879 37266 37488 39498 38618 38226

Biomass & Waste 44737 54203 64774 82903 102391 128290 161816 183875 199151 234068 274859 308258 347766

Wind 67 350 1913 6060 15054 22010 31617 40646 49868 51908 54766 54699 55356

Solar and others 153 273 418 816 3008 11098 21142 23801 28261 32107 36434 39091 42122

Net Imports 748677 730710 818871 975295 1013493 1071301 1088398 1079644 1068978 1033229 1001883 937447 883579

Solids 79289 79183 98575 126702 139085 131366 120555 99701 102385 103570 105851 102697 104287

Oil 530805 504448 525661 589611 605089 627486 632022 623156 614296 588733 563947 513630 468515

Natural gas 135121 145288 192531 256828 265610 303660 312021 326192 317858 307906 301577 295667 291441

Electricity 3321 1508 1687 973 1496 1410 1010 914 1052 1047 1054 1037 1033

Renewable energy forms 141 276 421 1185 2212 7379 22790 29681 33387 31973 29454 24416 18303

Final Energy Demand 1070684 1067391 1102275 1161557 1201922 1220538 1235584 1226126 1230348 1193329 1166415 1110216 1067380

by sector

Industry(A) 367505 325768 314677 318857 334264 346570 354228 359453 366759 353886 344091 322897 305334

Residential 264548 280073 287430 307232 308951 306149 308875 300500 297335 291709 286190 277045 268193

Tertiary 159192 161792 161038 173763 174809 171220 170736 167079 164735 161474 158273 152694 147287

Transport 279440 299758 339129 361705 383898 396598 401745 399094 401520 386260 377862 357580 346566

by fuel (A)

Solids 130160 85279 58677 49820 49542 48311 45046 40848 36975 28230 21599 15089 10543

Oil 443433 455235 476218 493780 511596 513403 507940 492615 484413 450408 419147 375672 336956

Gas 227380 245925 241076 268551 271164 259463 245501 226821 213350 211963 210863 198249 186510

Electricity 184014 194659 217405 237814 250544 264429 279958 303015 328706 338411 353468 361101 373956

Heat (from CHP and District Heating) 48619 44514 69671 68795 64064 69229 79973 88759 93431 89883 85789 83363 80675

Other 36971 41763 39212 42790 55013 65704 77166 74068 73474 74434 75549 76742 78741

CO2 Emissions (Mt of CO2 - sec approach) 4046.9 3819.5 3820.8 3947.0 3781.0 3584.3 3357.7 3170.7 2917.8 2552.9 2212.1 1888.1 1602.2

Power generation/District heating 1468.7 1335.4 1431.1 1475.3 1290.0 1150.4 1025.9 963.2 795.8 594.8 404.4 281.1 170.9

Energy Branch 154.2 172.4 141.6 148.7 137.0 134.0 128.1 119.8 114.1 111.4 107.8 100.7 94.2

Industry 801.7 684.2 552.5 534.6 560.1 551.5 513.6 477.1 456.7 413.8 381.3 322.1 274.8

Residential 507.7 482.4 466.1 483.1 460.8 425.8 399.5 356.1 317.1 300.3 285.4 269.1 254.2

Tertiary 304.7 274.8 242.0 254.6 245.4 223.4 208.7 190.7 174.1 164.3 155.4 145.5 136.3

Transport 810.0 870.4 987.6 1050.6 1087.7 1099.3 1081.8 1063.8 1060.0 968.3 877.7 769.7 671.7

CO2 Emissions Index (1990=100) 100.0 94.4 94.4 97.5 93.4 88.6 83.0 78.3 72.1 63.1 54.7 46.7 39.6

Eu27: ERA sCEnARiosuMMARy REsults (i)


Eu27: businEss As usuAl sCEnARiosuMMARy REsults (i)

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

Primary Production 933011 946298 937567 896393 831936 770868 728301 703539 690258 682526 676169 688418 705679

Solids 365918 277924 213693 196451 164391 154234 143686 137848 130168 135214 140261 150099 159938

Oil 128809 170055 171665 132993 104753 77179 53114 44313 40821 23089 5357 3030 703

Natural gas 162447 188965 207559 188021 168211 128999 114934 98306 84761 74055 63349 38836 14322

Nuclear 202589 223028 243761 257360 245067 243592 224266 211094 202524 198986 195497 203259 212808

Renewable energy sources 73248 86325 100890 121568 149513 166864 192301 211978 231984 251182 271704 293194 317908

Hydro and Geothermal 28291 31499 33785 31788 34178 33902 34606 35581 36633 37011 38170 39074 40260

Biomass & Waste 44737 54203 64774 82903 100836 111435 128218 141419 156730 171772 187052 204083 223496

Wind 67 350 1913 6060 12347 17353 23226 27292 29915 32572 35437 37772 40530

Solar and others 153 273 418 816 2150 4173 6252 7686 8706 9827 11044 12265 13622

Net Imports 748677 730710 818871 975295 1073349 1214106 1301224 1359415 1378759 1385670 1396069 1381118 1374849

Solids 79289 79183 98575 126702 151986 179383 196550 210665 210047 222740 235866 249945 271762

Oil 530805 504448 525661 589611 625314 671624 708112 724858 728488 729389 731166 697593 666302

Natural gas 135121 145288 192531 256828 292658 359135 392277 419090 434897 426728 420527 423081 423936

Electricity 3321 1508 1687 973 1496 1466 1040 927 923 953 987 1032 1086

Renewable energy forms 141 276 421 1185 1895 2499 3245 3875 4402 5860 7522 9467 11763

Final Energy Demand 1070684 1067391 1102275 1161557 1233603 1299604 1345959 1380937 1404373 1392566 1384076 1364582 1352170

by sector

Industry(A) 367505 325768 314677 318857 334919 352758 366226 376630 385413 373250 363089 353170 345277

Residential 264548 280073 287430 307232 320802 330087 336243 340697 343746 344710 345677 349135 352627

Tertiary 159192 161792 161038 173763 187178 198847 205423 210199 212913 213187 213463 213635 213822

Transport 279440 299758 339129 361705 390704 417912 438066 453411 462301 461419 461847 448642 440443

by fuel (A)

Solids 130160 85279 58677 49820 50948 51689 51254 49005 46094 37883 31349 25953 21585

Oil 443433 455235 476218 493780 522186 547022 564358 577489 583336 570556 558612 529622 502418

Gas 227380 245925 241076 268551 280419 287549 288573 292994 298962 294152 289437 282579 275974

Electricity 184014 194659 217405 237814 263096 285786 303714 317752 327608 339556 352951 370663 392299

Heat (from CHP and District Heating) 48619 44514 69671 68795 68207 74260 83742 87907 90554 89673 87615 87809 87166

Other 36971 41763 39212 42790 48747 53298 54318 55789 57819 60746 64112 67956 72728

CO2 Emissions (Mt of CO2 - sec approach) 4046.9 3819.5 3820.8 3947.0 3983.4 4154.0 4246.8 4315.1 4283.9 4253.0 4235.3 4172.1 4134.8

Power generation/District heating 1468.7 1335.4 1431.1 1475.3 1429.4 1526.2 1588.2 1634.1 1597.8 1654.5 1715.2 1783.7 1867.2

Energy Branch 154.2 172.4 141.6 148.7 140.0 142.0 141.8 139.4 136.8 134.2 130.9 124.3 118.4

Industry 801.7 684.2 552.5 534.6 556.6 562.9 556.6 552.2 546.8 497.8 454.9 409.6 369.9

Residential 507.7 482.4 466.1 483.1 488.1 487.6 485.7 484.1 484.4 471.1 460.2 451.5 444.0

Tertiary 304.7 274.8 242.0 254.6 259.7 265.2 263.5 261.7 260.1 250.9 242.8 233.3 224.5

Transport 810.0 870.4 987.6 1050.6 1109.6 1170.1 1211.0 1243.6 1257.9 1244.4 1231.3 1169.6 1110.7

CO2 Emissions Index (1990=100) 100.0 94.4 94.4 97.5 98.4 102.6 104.9 106.6 105.9 105.1 104.7 103.1 102.2





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

Main Energy System Indicators

Electricity Generated/Capita (kWh gross/inhabitant) 5448 5692 6227 6697 6879 7183 7567 8186 8999 9505 10177 10598 11177

Carbon intensity (t of CO2/toe of GIC) 2.45 2.31 2.23 2.18 2.10 1.98 1.85 1.76 1.60 1.42 1.23 1.08 0.93

CO2 Emissions/Capita (t of CO2/inhabitant) 8.60 8.02 7.95 8.07 7.67 7.24 6.76 6.39 5.90 5.21 4.56 3.93 3.37

CO2 Emissions to GDP (t of CO2/MEuro'05) 499.1 438.4 380.3 360.5 304.2 254.9 214.0 183.6 156.1 127.2 103.1 82.9 66.5

Import Dependency % 44.4 43.3 46.7 52.4 54.7 57.5 58.2 58.0 56.7 55.4 53.9 51.7 49.4

Energy intensity indicators (2000=100)

Industry (Energy on Value added) 136.2 118.7 100.0 95.9 89.2 81.9 75.1 69.5 65.9 61.8 58.5 54.0 50.3

Residential (Energy on Private Income) 114.1 112.8 100.0 96.9 86.7 76.7 69.8 61.9 56.7 54.1 51.7 49.2 46.9

Tertiary (Energy on Value added) 126.2 117.3 100.0 97.5 86.0 74.2 66.1 58.7 53.3 50.8 48.5 46.0 43.7

Transport (Energy on GDP) 102.1 101.9 100.0 97.9 91.5 83.6 75.9 68.5 63.6 57.0 52.2 46.5 42.6

Carbon Intensity indicators

Electricity and Steam production (t of CO2/MWh) 0.46 0.40 0.36 0.34 0.29 0.25 0.21 0.18 0.14 0.10 0.07 0.04 0.03

Final energy demand (t of CO2/toe) 2.26 2.17 2.04 2.00 1.96 1.88 1.78 1.70 1.63 1.55 1.46 1.36 1.25

Industry 2.18 2.10 1.76 1.68 1.68 1.59 1.45 1.33 1.25 1.17 1.11 1.00 0.90

Residential 1.92 1.72 1.62 1.57 1.49 1.39 1.29 1.18 1.07 1.03 1.00 0.97 0.95

Tertiary 1.91 1.70 1.50 1.47 1.40 1.30 1.22 1.14 1.06 1.02 0.98 0.95 0.93

Transport 2.90 2.90 2.91 2.90 2.83 2.77 2.69 2.67 2.64 2.51 2.32 2.15 1.94

Electricity and steam generation

Net Generation Capacity in MWe 684334 742774 842755 869183 913174 987146 1099150 1068908 1078337 1062454 1067920

Nuclear 135848 134285 130580 134088 133520 133105 130152 128291 127709 130575 135209

Hydro (pumping excluded and geothermal included) 108621 110179 112266 113926 115162 115780 116481 121217 127850 125119 123997

Wind 12786 40770 83780 113773 159723 204466 253264 259994 270537 266656 266362

Solar 172 1797 4026 7675 17407 26039 46431 62091 81169 84155 88500

Thermal 426908 455744 512102 499723 487362 507756 552822 497314 471071 455949 453852

Solids fired 194119 191380 188043 175138 142802 127507 127060 120439 124488 137660 155989

Gas fired 150086 181569 234463 237484 238881 256661 295667 229511 178108 128431 84659

Oil fired 71893 67579 65095 45839 34220 23925 16300 12208 8951 6381 4198

Biomass-waste fired 10809 15216 24501 41261 71458 99662 113795 132921 154760 174186 194978

Fuel Cells 0 0 0 0 0 0 0 2236 4764 9290 14028

Load factor for net electric capacities (%) 47.1 47.4 43.7 44.7 45.0 45.0 43.9 46.5 48.1 49.9 51.3

Eu27: ERA sCEnARiosuMMARy REsults (ii)


Eu27: businEss As usuAl sCEnARiosuMMARy REsults (ii)

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

Main Energy System Indicators

Electricity Generated/Capita (kWh gross/inhabitant) 5448 5692 6227 6697 7219 7769 8235 8647 8940 9374 9852 10464 11193

Carbon intensity (t of CO2/toe of GIC) 2.45 2.31 2.23 2.18 2.15 2.15 2.15 2.15 2.13 2.12 2.11 2.08 2.05

CO2 Emissions/Capita (t of CO2/inhabitant) 8.60 8.02 7.95 8.07 8.08 8.39 8.55 8.70 8.66 8.68 8.73 8.69 8.70

CO2 Emissions to GDP (t of CO2/MEuro'05) 499.1 438.4 380.3 360.5 320.5 295.5 270.7 249.9 229.2 211.9 197.4 183.3 171.7

Import Dependency % 44.4 43.3 46.7 52.4 56.3 61.2 64.1 65.9 66.6 67.0 67.4 66.7 66.1

Energy intensity indicators (2000=100)

Industry (Energy on Value added) 136.2 118.7 100.0 95.9 89.3 83.4 77.7 72.8 69.2 65.2 61.7 59.1 56.9

Residential (Energy on Private Income) 114.1 112.8 100.0 96.9 90.1 82.7 75.9 70.2 65.6 63.9 62.4 62.0 61.7

Tertiary (Energy on Value added) 126.2 117.3 100.0 97.5 92.1 86.2 79.5 73.8 68.9 67.1 65.4 64.4 63.5

Transport (Energy on GDP) 102.1 101.9 100.0 97.9 93.1 88.1 82.7 77.8 73.3 68.1 63.8 58.4 54.2

Carbon Intensity indicators

Electricity and Steam production (t of CO2/MWh) 0.46 0.40 0.36 0.34 0.31 0.31 0.30 0.29 0.28 0.28 0.28 0.28 0.28

Final energy demand (t of CO2/toe) 2.26 2.17 2.04 2.00 1.96 1.91 1.87 1.84 1.82 1.77 1.73 1.66 1.59

Industry 2.18 2.10 1.76 1.68 1.66 1.60 1.52 1.47 1.42 1.33 1.25 1.16 1.07

Residential 1.92 1.72 1.62 1.57 1.52 1.48 1.44 1.42 1.41 1.37 1.33 1.29 1.26

Tertiary 1.91 1.70 1.50 1.47 1.39 1.33 1.28 1.24 1.22 1.18 1.14 1.09 1.05

Transport 2.90 2.90 2.91 2.90 2.84 2.80 2.76 2.74 2.72 2.70 2.67 2.61 2.52

Electricity and steam generation

Net Generation Capacity in MWe 684334 742764 840051 861597 897819 932419 966973 964967 979520 1001258 1034622

Nuclear 135848 134285 125584 123745 114259 99670 100367 99028 97651 102777 108931

Hydro (pumping excluded and geothermal included) 108621 110179 112195 113838 115046 115557 116416 119868 123679 126689 130585

Wind 12786 40770 70897 91761 119884 138161 147760 160307 173999 184529 197036

Solar 172 1797 4026 6482 10219 14124 18058 22359 27026 30944 35437

Thermal 426908 455734 527349 525771 538411 564908 584372 563405 557165 556320 562632

Solids fired 194119 191377 191657 187253 177313 183467 185169 209359 235866 264993 298761

Gas fired 150086 181563 244845 263018 286646 309276 323009 269370 227816 184850 142901

Oil fired 71893 67578 68303 50121 38201 31393 29065 25455 21540 17684 13434

Biomass-waste fired 10809 15216 22544 25378 36251 40772 47128 56707 66702 77973 90449

Fuel Cells 0 0 0 0 0 0 0 2514 5242 10820 17086

Load factor for net electric capacities (%) 47.1 47.4 46.0 48.7 49.6 50.0 49.7 51.7 52.9 54.4 55.7


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

Sectoral Value Added (in 000 MEuro'05) 1580 1607 1843 1948 2195 2477 2761 3030 3261 3353 3444 3500 3556

Final Energy Demand (in ktoe) (A) 367505 325768 314677 318857 334264 346570 354228 359453 366759 353886 344091 322897 305334

By fuel

Solids 78624 58864 45257 38795 40570 40782 38900 35817 32836 25478 19769 13868 9728

Oil 60756 54765 45712 44276 50224 47836 44489 41327 39682 33295 27936 22582 18255

Gas 111665 105705 87075 93183 92946 92631 85325 80425 79678 82907 86268 78959 72270

Electricity 84093 82234 91893 96940 103127 109687 117367 125871 131240 131541 131842 130863 129891

Heat (from CHP) 18991 9589 37618 37679 34361 42022 53452 64134 70511 66844 63369 60545 57848

Other (Biomass, waste, hydrogen etc.) 13375 14611 7122 7984 13037 13613 14695 11879 12813 13820 14907 16079 17343

Energy intensity (toe/MEuro'05) 170.8 163.7 152.3 139.9 128.3 118.6 112.5 105.6 99.9 92.3 85.9

CO2 EMISSIONS (in kt CO2) 801702 684180 552480 534594 560082 551450 513631 477106 456694 413822 381350 322074 274847

Carbon intensity (in t CO2/toe) 2.181 2.100 1.756 1.677 1.676 1.591 1.450 1.327 1.245 1.169 1.108 0.997 0.900

Eu27: ERA sCEnARioindustRy

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

Sectoral Value Added (in 000 MEuro'05) 1580 1607 1843 1948 2195 2477 2761 3030 3261 3353 3444 3500 3556

Final Energy Demand (in ktoe) (A) 367505 325768 314677 318857 334919 352758 366226 376630 385413 373250 363089 353170 345277

By fuel

Solids 78624 58864 45257 38795 40770 42404 43061 41728 39671 33693 28616 24187 20444

Oil 60756 54765 45712 44276 48787 47728 47061 47186 47159 41458 36446 31468 27171

Gas 111665 105705 87075 93183 93093 95027 92843 94106 95957 93395 90902 86294 81921

Electricity 84093 82234 91893 96940 105737 114575 122650 128736 133036 134657 136299 138176 140079

Heat (from CHP) 18991 9589 37618 37679 36886 42506 51634 55801 59001 57688 56405 56213 56021

Other (Biomass, waste, hydrogen etc.) 13375 14611 7122 7984 9646 10518 8977 9073 10589 12357 14421 16831 19642

Energy intensity (toe/MEuro'05) 170.8 163.7 152.6 142.4 132.6 124.3 118.2 111.3 105.4 100.9 97.1



Eu27: businEss As usuAl sCEnARioindustRy

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

Final Energy Demand (in ktoe) 279440 299758 339129 361705 383898 396598 401745 399094 401520 386260 377862 357580 346566

Final Energy Demand Road Transport 233982 249453 278548 297000 311170 317186 318249 316366 317368 301183 291834 270482 258380

By fuel

Solids 0 0 0 0 0 0 0 0 0 0 0 0 0

Oil 233766 249203 278187 296492 310470 315972 316077 312881 312725 288006 264763 229688 198033

of which biofuels 2 202 624 3206 12671 21127 31309 33505 35592 42190 49844 51696 53617

Gas 216 250 361 508 626 737 833 896 982 805 635 604 604

Hydrogen and Others 0 0 0 0 28 56 110 125 134 1597 3090 4538 6666

Electricity 0 0 0 0 46 422 1230 2464 3526 10775 23345 35651 53078

Final Energy Demand NonRoad Transport 45351 50288 60568 64700 72728 79412 83496 82728 84152 85077 86028 87098 88187

By fuel

Solids 0 0 0 0 0 0 0 0 0 0 0 0 0

Oil 39887 44521 54459 58330 65965 72651 76900 76138 77101 77776 78457 79237 80025


Gas 0 0 0 0 0 0 0 0 0 0 0 0 0


Electricity 5465 5767 6110 6369 6763 6759 6592 6584 7043 7301 7571 7861 8162

Biofuels in gasoline and diesel (%) 0.0 0.1 0.2 1.1 4.1 6.7 9.9 10.7 11.4 14.6 18.8 22.5 27.1



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


Final Energy Demand Road Transport 233982 249453 278548 297000 317054 335706 348985 358437 362740 358571 355592 338985 327273

By fuel

Solids 0 0 0 0 0 0 0 0 0 0 0 0 0

Oil 233766 249203 278187 296492 316374 334872 347975 357266 361464 354402 347279 323367 300334


Gas 216 250 361 508 647 775 884 981 1076 794 519 259 0


Electricity 0 0 0 0 6 8 21 33 34 2553 6184 12833 22979

Final Energy Demand NonRoad Transport 45351 50288 60568 64700 73650 82206 89081 94973 99561 102848 106254 109657 113170

By fuel

Solids 0 0 0 0 0 0 0 0 0 0 0 0 0

Oil 39887 44521 54459 58330 66956 75378 82404 88381 92506 95495 98579 101655 104827


Gas 0 0 0 0 0 0 0 0 0 0 0 0 0


Electricity 5465 5767 6110 6369 6693 6827 6673 6586 7046 7354 7675 8002 8343

Biofuels in gasoline and diesel (%) 0.0 0.1 0.2 1.1 3.9 5.8 7.4 8.5 9.4 9.7 9.9 10.5 11.2



Eu27: ERA sCEnARiotRAnsPoRt

Eu27: businEss As usuAl sCEnARiotRAnsPoRt



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


By fuel

Solids 35449 19573 10347 8390 6944 5890 4882 4059 3359 2237 1489 995 665

Oil 59808 60982 57610 54242 48552 43654 39734 33705 28236 26440 24751 22805 21011

Gas 78267 94341 107944 123132 123432 116628 112201 102754 94212 91203 88263 84611 81104

Electricity 50427 57214 61863 69403 73927 79943 85520 96329 111183 112489 113774 111533 109329

Heat 18414 23046 20542 20718 19256 16900 16293 14597 13307 13397 13054 13302 13323

Other 22183 24916 29124 31347 36839 43134 50245 49056 47037 45943 44859 43800 42762

Energy intensity

Household income related (toe/MEuro'05) 55.9 55.3 49.0 47.5 42.5 37.6 34.2 30.3 27.8 26.5 25.3 24.1 23.0

Population related (toe/capita) 0.562 0.588 0.598 0.628 0.627 0.618 0.622 0.606 0.601 0.595 0.590 0.577 0.564


Carbon intensity

Household income related (t CO2/MEuro'05) 107.3 95.2 79.5 74.7 63.4 52.2 44.2 36.0 29.6 27.3 25.3 23.4 21.8

Population related (t CO2 per capita) 1.079 1.012 0.970 0.988 0.935 0.860 0.805 0.718 0.641 0.613 0.588 0.560 0.535

Fuel consumption related (t CO2 per toe) 1.919 1.722 1.622 1.573 1.492 1.391 1.293 1.185 1.066 1.029 0.997 0.971 0.948

SERVICES AND AGRICULTURE SECTOR

SECTORAL VALUE ADDED (in 000 MEuro'05) 5048 5519 6445 7129 8132 9236 10335 11401 12368 12714 13061 13274 13486


By fuel

Solids 16087 6842 3073 2635 2027 1640 1264 973 780 515 341 226 150

Oil 49216 45763 40250 40439 36386 33290 30741 28564 26668 24891 23240 21359 19632

Gas 37231 45629 45696 51729 54160 49467 47141 42745 38479 37048 35697 34075 32532

Electricity 44030 49444 57540 65102 66679 67619 69249 71767 75714 76305 76936 75193 73497

Heat 11214 11879 11512 10398 10448 10306 10228 10029 9613 9641 9366 9516 9505

Other 1413 2236 2967 3459 5109 8898 12112 13002 13481 13074 12693 12325 11970

Energy intensity

Value added related (toe/MEuro'05) 31.5 29.3 25.0 24.4 21.5 18.5 16.5 14.7 13.3 12.7 12.1 11.5 10.9



Carbon intensity

Value added related (t CO2/MEuro'05) 60.4 49.8 37.6 35.7 30.2 24.2 20.2 16.7 14.1 12.9 11.9 11.0 10.1



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


By fuel

Solids 35449 19573 10347 8390 7894 7214 6391 5712 5044 3302 2162 1406 915

Oil 59808 60982 57610 54242 51408 50211 48965 47260 45335 43845 42394 40894 39444

Gas 78267 94341 107944 123132 129770 132323 134543 137240 140914 140077 139209 138706 138194

Electricity 50427 57214 61863 69403 76839 82971 87397 91026 93447 97557 101822 106962 112353

Heat 18414 23046 20542 20718 20398 20251 20243 20136 19643 19988 19574 19945 19786

Other 22183 24916 29124 31347 34494 37118 38705 39323 39363 39941 40517 41222 41936

Energy intensity

Household income related (toe/MEuro'05) 55.9 55.3 49.0 47.5 44.1 40.5 37.2 34.4 32.1 31.3 30.6 30.4 30.2



Carbon intensity

Household income related (t CO2/MEuro'05) 107.3 95.2 79.5 74.7 67.1 59.8 53.7 48.9 45.3 42.8 40.7 39.3 38.1



SERVICES AND AGRICULTURE SECTOR

SECTORAL VALUE ADDED (in 000 MEuro'05) 5048 5519 6445 7129 8132 9236 10335 11401 12368 12714 13061 13274 13486


By fuel

Solids 16087 6842 3073 2635 2284 2071 1802 1565 1379 887 571 360 227

Oil 49216 45763 40250 40439 38661 38833 37953 37395 36871 35357 33914 32237 30643

Gas 37231 45629 45696 51729 56909 59424 60303 60667 61014 59886 58808 57319 55859

Electricity 44030 49444 57540 65102 73821 81405 86974 91371 94045 97436 100971 104690 108545

Heat 11214 11879 11512 10398 10923 11503 11865 11970 11910 11997 11637 11651 11358

Other 1413 2236 2967 3459 4579 5610 6527 7231 7694 7625 7563 7378 7190

Energy intensity

Value added related (toe/MEuro'05) 31.5 29.3 25.0 24.4 23.0 21.5 19.9 18.4 17.2 16.8 16.3 16.1 15.9



Carbon intensity

Value added related (t CO2/MEuro'05) 60.4 49.8 37.6 35.7 31.9 28.7 25.5 23.0 21.0 19.7 18.6 17.6 16.7



Eu27: ERA sCEnARioREsidEntiAl, sERviCEs And AgRiCultuRE

Eu27: businEss As usuAl sCEnARioREsidEntiAl, sERviCEs And AgRiCultuRE



2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Electricity consumption (in GWh) 3013140 3287899 3575868 3865643 4099848 4301845 4434032 4604486 4792028 5037127 5332010

Final energy demand 2527968 2765279 3059250 3323092 3531556 3694793 3809395 3948324 4104083 4310038 4561622

Industry 1068527 1127207 1229502 1332271 1426160 1496930 1546926 1565782 1584869 1606698 1628829

Households 719335 807010 893474 964774 1016243 1058446 1086589 1134381 1183977 1243746 1306428

Tertiary 669065 756998 858380 946572 1011322 1062449 1093547 1132971 1174081 1217321 1262148

Transport 71041 74064 77895 79476 77831 76969 82334 115190 161157 242273 364217

Energy branch 283349 311648 280557 284664 293825 318730 326544 341030 353971 369623 384931

Own consumption & pumping 220548 240785 171547 174348 185913 211845 219255 231724 244773 261217 280172

Refineries & other uses 62801 70863 109010 110315 107912 106885 107289 109306 109198 108406 104759

Transmission and distribution losses 201823 210972 236061 257887 274466 288321 298093 315132 333974 357466 385457

Gross Electricity supply (in GWh) 3005671 3266426 3575868 3865643 4099848 4301845 4434032 4604486 4792028 5037127 5332010

Net imports 19610 11314 17395 17047 12098 10776 10736 11087 11476 11996 12630

Nuclear power plants production 944823 997519 950530 948231 878002 839099 854265 844359 834098 879430 933746

Generation from hydro, wind, solar, tidal etc. 379601 386075 487870 545247 625522 686716 727903 774199 824863 865768 915089

Thermal power plants production (incl. biomass/waste) 1661637 1871517 2120073 2355117 2584226 2765254 2841128 2974840 3121591 3279932 3470545

Steam consumption (in GWh) 985193 1017706 1037396 1113584 1225801 1271163 1296357 1288923 1265947 1263555 1251757


Industry 437414 438132 428912 494255 600397 648853 686056 670796 655876 653637 651406

Households 238858 240904 237182 235472 235382 234136 228410 232421 227601 231916 230075

Tertiary 133861 120908 127012 133756 137962 139183 138489 139498 135308 135481 132075

Energy branch and distribution losses 175060 217762 244291 250101 252060 248991 243402 246208 247163 242521 238201

Steam supply (in GWh) 985594 1019863 1037396 1113584 1225801 1271163 1296357 1288923 1265947 1263555 1251757

CHP Power Plants production 800345 865592 841105 920747 1041127 1090262 1108200 1098045 1070935 1071187 1055159

District Heating Units production 185248 154271 196292 192837 184674 180901 188157 190878 195012 192368 196598

Net Electricity generation by fuel type (in GWh) 2823415 3087066 3387300 3675292 3903086 4082295 4208667 4366913 4541681 4770591 5046778

Nuclear energy 889638 942440 906807 908916 843079 804425 814617 804414 793890 836248 887059

Renewables 426213 474611 600995 670160 796733 891589 975122 1082895 1201006 1320263 1459460

Hydro&Geothermal 352761 309124 335700 332583 339619 347987 353865 364404 376041 385245 397144

Wind 22242 70451 143574 201775 270068 317343 347852 378548 412061 439171 471282

Solar, tidal etc. 117 1489 3736 6711 11824 16782 21513 26675 32290 37025 42463

Biomass & waste 51094 93547 117985 129090 175222 209477 251892 313268 380614 458822 548571

Fossil fuels 1507564 1670015 1879499 2096216 2263274 2386281 2418928 2478129 2540636 2598111 2669872

Coal and lignite 829500 837576 950994 1059673 1132990 1224473 1275496 1434400 1607109 1795389 2012500

Petroleum products 167793 142829 97459 83516 75387 69344 65827 56848 47606 40191 32563

Natural gas 510271 689610 831047 953028 1054897 1092464 1077605 986881 885921 762532 624809

Other fuels (hydrogen, methanol) 0 0 0 0 0 0 0 1475 6150 15969 30388

CO2 EMISSIONS (in kt CO2) 1431070 1475286 1429428 1526203 1588234 1634113 1597791 1654524 1715180 1783747 1867249

Thermal power plants 1383607 1438882 1388739 1484402 1547887 1592248 1551599 1607828 1667642 1737019 1819662

District heating units 47463 36404 40689 41801 40347 41866 46192 46696 47539 46728 47587

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Electricity consumption (in GWh) 3013140 3287899 3408530 3574682 3768074 4073075 4464742 4669730 4950631 5101643 5323826


Industry 1068527 1127207 1199154 1275426 1364731 1463619 1526050 1529545 1533049 1521660 1510355

Households 719335 807010 859622 929565 994419 1120107 1292828 1308011 1322953 1296899 1271265

Tertiary 669065 756998 775339 786272 805225 834496 880394 887267 894604 874338 854619

Transport 71041 74064 79183 83495 90952 105209 122893 210188 359491 505952 712084

Energy branch 283349 311648 271765 265972 265439 279472 342884 420019 505399 553850 607330

Own consumption & pumping 220548 240785 162006 154724 155353 171667 233693 311729 403030 457825 520401

Refineries & other uses 62801 70863 109759 111248 110085 107805 109191 108290 102369 96025 86930

Transmission and distribution losses 201823 210972 223468 233953 247307 270172 299693 314700 335136 348944 368172

Gross Electricity supply (in GWh) 3005674 3266426 3408530 3574682 3768074 4073075 4464742 4669730 4950631 5101643 5323826

Net imports 19610 11314 17395 16397 11748 10626 12230 12172 12257 12063 12009

Nuclear power plants production 944823 997519 985482 1029124 1030281 1038162 1089160 1079383 1080278 1110463 1156051

Generation from hydro, wind, solar, tidal etc. 379601 386075 529912 614353 744386 865789 1004477 1061880 1137837 1128793 1134631

Thermal power plants production (incl. biomass/waste) 1661640 1871517 1875741 1914808 1981659 2158498 2358874 2516296 2720258 2850324 3021136

Steam consumption (in GWh) 985193 1017706 984301 1042942 1164265 1258752 1306314 1261910 1209203 1169536 1127605


Industry 437414 438132 399542 488632 621538 745741 819896 777261 736844 704014 672646

Households 238858 240904 223907 196513 189453 169729 154735 155780 151789 154670 154914

Tertiary 133861 120908 121483 119840 118929 116616 111778 112110 108909 110652 110522

Energy branch and distribution losses 175060 217762 239369 237957 234345 226666 219906 216759 211661 200201 189523

Steam supply (in GWh) 985594 1019863 984301 1042942 1164265 1258752 1306314 1261910 1209203 1169536 1127605

CHP Power Plants production 800345 865592 788607 866867 1004929 1119755 1182011 1135891 1082274 1045233 1000749

District Heating Units production 185248 154271 195694 176075 159336 138998 124304 126019 126929 124303 126857

Net Electricity generation by fuel type (in GWh) 2823415 3087066 3229834 3404722 3603172 3892918 4224944 4352715 4543132 4640323 4800916

Nuclear energy 889638 942440 940134 986460 989475 995775 1042925 1031525 1030342 1057035 1098249

Renewables 426213 474653 622584 788829 1065960 1313993 1532658 1707212 1922002 2048157 2204778

Hydro & Geothermal 352761 309124 345683 344959 348612 352371 354973 369252 389295 380818 377243

Wind 22242 70451 175047 255936 367645 472629 579859 603599 636818 636012 643675

Solar, tidal etc. 117 1489 4198 9113 24019 36135 64958 84396 107096 107686 109723

Biomass & waste 51094 93590 97656 178822 325684 452858 532867 649965 788793 923641 1074137

Fossil fuels 1507564 1669973 1667116 1629433 1547737 1583149 1649362 1612666 1585198 1524898 1483444

Coal and lignite 829500 837533 876899 774540 660951 580571 671894 770673 888597 982010 1089285

Petroleum products 167853 142923 57604 52662 30303 29634 23935 20849 16879 13045 8938

Natural gas 510211 689516 732614 802231 856483 972944 953533 821144 679722 529842 385222

Other fuels (hydrogen, methanol) 0 0 0 0 0 0 0 1311 5589 10232 14444

CO2 EMISSIONS (in kt CO2) 1431070 1475286 1290009 1150405 1025875 963243 795841 594774 404373 281087 170858

Thermal power plants 1383607 1438882 1249169 1115079 996458 938212 772998 572589 383008 261122 151460

District heating units 47463 36404 40839 35326 29417 25031 22844 22185 21365 19965 19398

Eu27: businEss As usuAl sCEnARioPowER gEnERAtion sECtoR

Eu27: ERA sCEnARioPowER gEnERAtion sECtoR



Research data sector by sector: ERA

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Investment Expenditure (in Meuro'05 - for 5 years period)

by plant type 98899 127998 126242 148618 174494 288246 363664 320056 188046 221614

Nuclear 5620 3368 10723 15311 29028 41392 126184 60759 26143 13578

Renewable energy 38661 57525 46811 77609 73185 129635 103288 121084 71254 104160

Hydro and geothermal 5085 5524 3812 2577 1404 1828 7783 10797 0 0

Wind 25036 42510 30389 47849 48451 74298 46412 39668 43717 47266

Solar, tidal etc. 8539 9491 12610 27184 23330 53508 49094 70619 27538 56894

Thermal 54618 67106 68708 55698 72282 117219 134191 138214 90649 103875

Solids fired 14987 11018 29287 1461 12235 67180 86774 99701 54774 59935

Oil fired 2851 2448 914 816 669 347 1213 483 500 533

Gas fired 27394 38795 12880 8987 18673 26700 17161 8175 2697 4478

Biomass-waste fired 9387 14845 25627 44434 40704 22991 26844 27633 29125 35606

Fuel Cells 0 0 0 0 0 0 2199 2222 3553 3324

Investment Gross GW (for 5 years period)

by plant type 93593 131731 115333 122148 150876 240483 243697 209356 141065 169243

Nuclear 2045 701 4017 4990 10325 15706 57204 29097 13090 7195

Renewable energy 31515 47826 37078 61324 58603 102286 74500 77922 58162 73727

Hydro and geothermal 1903 1947 1512 1166 753 880 4725 6638 0 0

Wind 27987 43650 31910 50425 49218 80949 50380 42453 46544 48924

Solar, tidal etc. 1625 2229 3657 9733 8632 20457 19396 28830 11617 24803

Thermal 60033 83204 74237 55834 81948 122491 111993 102338 69814 88321

Solids fired 9362 8713 29600 3586 14123 45566 47108 56191 32166 36404

Oil fired 3094 2423 1849 1331 1356 533 2506 1003 601 645

Gas fired 42801 61841 23168 17455 34797 57060 36473 17701 5669 12965

Biomass-waste fired 4776 10227 19619 33462 31673 19332 23669 24914 26852 33569

Fuel Cells 0 0 0 0 0 0 2236 2529 4526 4738

Eu27: ERA sCEnARio onlyPowER gEnERAtion invEstMEnts

bbl barrel

CCgt combined cycle gas turbine

bbl carbon capture and storage

CF compact fluorescent lamp

ChP combined heat and power; also known as cogeneration

Co2 carbon dioxide

EPR European pressurized water reactor

ERA Efficiency, renewables and clean thermal generation and Advanced grid and storage infrastucture

gdP gross domestic product

ghg greenhouse gas

gw gigawatt/s

FACts flexible AC transmission systems

lEd light emitting diodes

lwR light water reactor

Mw megawatt/s

Mt megaton

M&t monitoring and target

oEM original equipment manufacturer

olEd organic light emitting diodes

REs renewable energy source/s

sEt (Plan) strategy energy technology (plan)

sMEs small and medium-sized enterprises

toe Tonne of oil Equivalent - a unit of energy corresponding to the output of a tonne of oil

twh terawatt hours

wAMs wide area monitoring

oF AbbREviAtions

glossARy

glossary


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europ e ’s n e w e ne manuel pinho rgy era manuel pinho · which europe’s targets can be met. a...

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