1

Energy

Challenges and opportunities

to a European Energy Policy

The energy transition in Europe

WEC – Edison workshop, Rome, 29 May 2013

Tudor Constantinescu Principal Adviser, European Commission, DG Energy

Energy

Major energy challenges in Europe

. Import Dependency

. High Energy Prices

. Decarbonisation

2

3

100

80

60

40

20

GAS OIL

2005 2008 2020 2030 2005 2008 2020 2030 in %

82,4 %

84,3 %

92,7 %

94,1%

57,7%

62,3%

75,9%

82,8%

The EU faces growing dependence on import of fossil fuels

Based on 2009 baseline scenario

4

The supply structure in the EU as a whole is diversified,

although there are significant regional differences

Source: ENTSO-G

Breakdown of gas supplies in the EU-27, % (2010)

Total = 525bcm/a (GCV)

Breakdown of gas supplies in the EU-15 and EU-12, %

5

An integrated EU market delivers best allocation of resources,

security of supply and better prices

6 6

…in part due to the shale gas boom

- US wholesale prices for gas are 3-4 times lower than in the EU

Sourc

e:

Euro

pean C

om

mis

sio

n

7

0%

25%

50%

75%

RES Gas Nuclear Oil Solid fuels 0%

25%

50%

75%

RES Gas Nuclear Oil Solid fuels

2030 2050

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

2005

Energy

Priority Actions for European Energy Policy

. Complete the internal market - placing consumers into focus . Improve EE- attract investments, behaviour change . Increase RES – lower technological costs, market integration,

reform support schemes . Diversify Energy Supply – Available Domestic Resources (including

nonconventional gas), External Relations - new routes . Improve and develop infrastructure – interconnections, smart grids . Develop synergies btw. RES and fossil fuels (e.g. Power to Gas)

Stimulate and leverage financing

8

Energy

The internal market helps keeping prices in check

Wholesale electricity prices in the EU have risen three times less than the import price of gas and

four times less than the price of crude oil in the last 10 years.

Energy

LEGISLATION NEW ENERGY EFFICIENCY DIRECTIVE

Services Energy

supply

House-

holds

Industry

General

measures

promoting EE

New

EED

Sectoral

measures

Monitoring &

Reporting

Indicative

national EE

targets

Public

sector

11

Technology Results from the National Renewable Energy Action Plans

0

50000

100000

150000

200000

250000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Heat pumps

Biomass

Wind

Tide, wave, ocean

Solar

Geothermal

Hydro

ktoe

12 *Source: IEA

Drivers for Gas demand growth

• Fight against climate change*: Natural gas is the less CO2 – intensive fossil fuel.

• Availability of resources*: Abundant resources with a good geographical distribution.

• Gas-to-power is a suitable backup solution for renewables*:

Intermittent renewables need to backed-up with fast start-up and ramp-up/down. Compared to other traditional thermal technologies (coal, nuclear, oil-boiler), gas-to-power technologies have a lower investment per capacity unit.

• Energy Policy in some countries favours the increasing use of gas*: Nuclear phase-out in Germany, Shale gas development in the US, etc.

&

• Power-to-Gas will help integration of RES and balance the operation of electricity and gas networks

• Gas in mobility (LNG, CNG)

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Connecting Europe Facility (CEF)

For the period 2014-2020 a budget of €29.3 billion for:

upgrading Europe's transport infrastructure, including support from

the Cohesion Fund for transport projects in the cohesion

countries.

investments in trans-European energy infrastructure.

support investment in fast and very fast broadband networks and

pan-European digital services.

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Energy

- Looking at the whole

energy system

-Bridging research and energy policy

-Making better use of existing financial resources

Energy Technologies Communication - 2013

SET Plan – focus on key technologies Key principles for new challenges post 2020:

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Energy

Roadmap

2050

2030 Green

Paper

Proposals

for the 2030

framework

for climate

and energy

policies

2011 March 2013 By end 2013

The 2030 framework will build on the 2050 Roadmap

On-going discussions with Member States, EU institutions and

stakeholders

Public consultation open until 2 July

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Thank you!