Mr Martin Crouch, ERGEG

Electricity Regulatory Forum 2009

Florence, 5 June 2009

Status Review of Sustainable Development in the Energy Sector

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Agenda

• What is sustainable development?

• Themes:• Managing the transition to a low carbon economy in

the energy sector• Monitoring gas and electricity prices, customer choice

and access to affordable energy• Ensuring a secure and reliable gas and electricity

supply in Europe

• Conclusion

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What is sustainable development?

• The key objective is to assess the progress Europe has made in working towards the development of sustainable internal energy markets

• Focuses on an assessment of sustainable development which examines economic, social and environmental perspectives

• This assessment reflects the position taken by various European and international institutions (Brundtland Commission, UK, World Bank, EC)

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Agenda

• What is sustainable development?

• Themes:• Managing the transition to a low carbon economy in

the energy sector• Monitoring gas and electricity prices, customer choice

and access to affordable energy• Ensuring a secure and reliable gas and electricity

supply in Europe

• Conclusion

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Contribution of gas and electricity sectors to total GHG emissions, EU-

27

Total emissions have declined slightly but gas and electricity emissions have been stable. Contribution of gas and electricity

emissions to total emissions has been about 27% over the period.

Source: European Environment Agency

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Evolution of carbon price

Since beginning of Phase 2, carbon price remained above €20/tCO2 due to a more ambitious emissions ceiling than Phase 1. More recently, carbon

price has declined due to decreasing demand and cuts in production.

Source: European Climate Exchange

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Proportion of electricity generation from renewables

Proportion varies considerably across countries. The EU, as a group, has some way to go to achieve its 2010 targets.

Source: Eurostat

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Final energy and electricity consumption, EU-27

Final energy consumption has increased slowly but a more rapid increased occurred in final electricity consumption.

Source: Eurostat

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Agenda

• What is sustainable development?

• Themes:• Managing the transition to a low carbon economy in

the energy sector• Monitoring gas and electricity prices, customer choice

and access to affordable energy• Ensuring a secure and reliable gas and electricity

supply in Europe

• Conclusion

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Household electricity prices, 2007

Electricity, cents/kWh Gas, cents/GJ

The share of taxes in household electricity and gas prices varies considerably across countries reflecting different policy priorities.

Source: Eurostat

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Household income and prices, EU-15

Electricity prices increased from 2004. Gas prices were more volatile but experienced a steep rise in 2005.

Source: Eurostat

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Agenda

• What is sustainable development?

• Themes:• Managing the transition to a low carbon economy in

the energy sector• Monitoring gas and electricity prices, customer choice

and access to affordable energy• Ensuring a secure and reliable gas and electricity

supply in Europe

• Conclusion

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Energy dependency: Net imports as percent of energy consumption*,

2006

The more a country relies on imports to meet its energy demand, the greater its vulnerability to external supply disruptions. As a group, the EU imports a little

over 50% of the energy it consumes.*Energy dependency includes all energy delivered to final consumer’s door (in industry, transport, households and other

sectors) for all energy uses.

Source: Eurostat

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Electricity security of supply: Interconnection capacity as percent of

total installed generation capacity, 2007

Five countries are below the 10% target established at the 2002 EU Summit in Barcelona.

Source: CEER members

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Gas security of supply: Storage capacity as percent of annual

demand, 2007

Taken together, European storage capacity was equal to about 16% of annual European demand in 2007.

Source: Global Markets Direct – Europe UGS Industry Report May 2008

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Agenda

• What is sustainable development?

• Themes:• Managing the transition to a low carbon economy in

the energy sector• Monitoring gas and electricity prices, customer choice

and access to affordable energy• Ensuring a secure and reliable gas and electricity

supply in Europe

• Conclusion

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Conclusion

• This is the first review on sustainable development that CEER has conducted

• The aim is to periodically update it to monitor the progress Europe is making in achieving its sustainability goals

• Feedback is appreciated on structure, content and indicators as well as work that CEER should undertake in this area. Feedback should be received by the end of the 2nd quarter of 2009 to: brussels@ceer.eu

• The report can be found at:

http://www.energy-regulators.eu/portal/page/portal/EER_HOME/EER_PUBLICATIONS/CEER_ERGEG_PAPERS/Cross-Sectoral

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Thank you for your attention!

www.energy-regulators.eu

Mark your diary for the World Forum on Energy Regulation IV

October 18-21, 2009

Athens, Greece

www.worldforumiv.info