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Towards2030-dialogue – Mid-term Conference, Brussels, 12 November 2015 Slide 1
WP6 – The overall climate and energy framework Towards2030-dialogueTowards2030-dialogue
WP6: The overall climate & energy framework
Author: Jaap Jansen, James Rawlins, Francesco Dalla Longa, Karina Veum
ECN
Contact:Web: www.ECN.nlEmail: …@ecn.nl
Towards2030-dialogue – Mid-term Conference, Brussels, 12 November 2015 Slide 2
WP6 – The overall climate and energy framework Towards2030-dialogue
Toassessfromanintegrated,overallpolicyperspective,relevantmajorexternaldevelopmentsimpactingonpost-2020 RESdevelopmentandpolicymakingintheEU
Coreobjectiveoftheworkpackage
Towards2030-dialogue – Mid-term Conference, Brussels, 12 November 2015 Slide 3
WP6 – The overall climate and energy framework Towards2030-dialogue
– Gassecurityissuepapercompleted(OCT14)
– Gassecuritybackgroundreport completed (NOV14)
– Draft issuepaperspertopic(DEC15)
• Fossilfuelprospects
• Nuclearpolicyframework
• ClimatepolicyoutsideEU
• CarbonpricingintheEU
• GlobalREStechnologydevelopments
• InterlinkagesbetweenRESandclimatepoliciesintheEU
Work packagedeliverablesdeliveredand inprogress
Towards2030-dialogue – Mid-term Conference, Brussels, 12 November 2015 Slide 4
WP6 – The overall climate and energy framework Towards2030-dialogue
Motivation:
• ¼ of the energy used in the EU stems from natural gas
• High gas import dependency –Russia as the major supplier
• Current political developments• Russian-Ukraine gas conflict
2009• Ongoing conflict in East-Ukraine
• Focus on 12 vulnerable Eastern European member states
BGCZ
EE HR
LV
LT
HU
PL ROSI
SK
FI
0%
10%
20%
30%
40%
50%
0% 10% 20% 30% 40% 50%Shareo
fRussia
ngasimpo
rtsingr
ossinlandconsum
ptionin201
2[%
]Shareofoverallgasuse
ingrossinlandenergyconsumptionin2012[%]
IssuePaper #1:RES/EEcontributions toimprovegassecurityinselectedMemberStates
Towards2030-dialogue – Mid-term Conference, Brussels, 12 November 2015 Slide 5
WP6 – The overall climate and energy framework Towards2030-dialogue
IssuePaper #1:Methodology
Assessmentofenergyefficiencyoptions
Assessmentofrenewableenergyoptions
Estimationofreplacednaturalgasuse
Referenceprojectionoffutureenergyuseandsupply
Gasmarketmodelling
Workingsteps: Scenariosderived: Remarks:
Baselinecase
LPIscenario
…basedonPRIMESreferencecase,correctedforimpactoffinancial/economiccrisis
…energyefficiencyscenarioderivedbyFraunhofer ISIetal.(2014),consistentwithabout 30%EEby2030 atEUlevel
Baselinecase
Limited(RES)cooperation
Full(RES)cooperation
…alternativeRESpolicypathwaysfor2030,developedbyuseofTUWien’sGreen-Xmodelandconsistentwith30%RESby2030atEUlevel,reflectingacontinuationofthe2020logic
(limitedcooperation)oramoreharmonisedEUsystem(fullcooperation)
Baselinecase
Re-negotiatedscenario
Breakingupscenario
…alternativegasmarketpathsrelatedtolong-termcontractsongassupplywithRussia
Towards2030-dialogue – Mid-term Conference, Brussels, 12 November 2015 Slide 6
WP6 – The overall climate and energy framework Towards2030-dialogue
IssuePaper #1:Results– effectsongasdemand
Increaseinenergy
efficiency
Increaseinrenewables
0
50
100
150
200
250
300
350
2010 2015 2020 2025 2030
Savingsa
t12MSlevel(inte
rmso
fgrossfinal
energydem
andtobecoveredbyfo
ssilfuels,
comparedtobaseline)[TWh]
IncreaseinrenewablesIncreaseinenergyefficiency
663
522 514
95 95
47 55
0
100
200
300
400
500
600
700
Baselinecase Limited(RES)cooperation
Full(RES)cooperation
Gasc
onsumptionby203
0at12MSlevel
[TWh]
SavingsduetorenewablesSavingsduetoenergyefficiencyGasconsumption
-14.3%* -14.3%*
-7.0%* -8.2%*
*comparedtobaseline
• Theanalysedeffortsforenergyefficiencyanddeployment ofrenewablesleadtoagasdemandreductionbetween142and150TWh
IssuePaper #1:Results– effectsongasdemand
Towards2030-dialogue – Mid-term Conference, Brussels, 12 November 2015 Slide 7
WP6 – The overall climate and energy framework Towards2030-dialogue
GasMarketModel
Towards2030-dialogue – Mid-term Conference, Brussels, 12 November 2015 Slide 8
WP6 – The overall climate and energy framework Towards2030-dialogue
• Natural gas demand can be reduced by more than 20% until 2030 if a 30% target for renewables and energy efficiency is reached
• The impact of the reduced import is highly dependent on the handling of the long term take-or-pay contracts
• From a gas market perspective the infrastructural and reverse flow projects are a key factor to reach the above mentioned benefits
• The currently planned gas infrastructure does not allow to be completely independent from Russian gas imports
• Having implemented strong EE and RES policies along with upgrading gas transmission interconnectivity, the 12 countries can weather well possible emergency events with Russian gas supply
Findings onenhancing gassecurityinthe 12selected MemberStatesEnhancinggassecurityinthe12assessedMemberStates
Towards2030-dialogue – Mid-term Conference, Brussels, 12 November 2015 Slide 9
WP6 – The overall climate and energy framework Towards2030-dialogue
Task6.2.1– Fossilfuelsupply:keyquestions• Whatistherationaleofscopeonissuesrelatedtoglobalenergytrendswithfocusonfossil
fuels?• Whatarethekeyglobalenergytrends;historical1990-2012andprospectiveupto2030-
2040?– Mainsource:IEAWEO2014– Global;ROTWvsEU-28;focalROTWplayers:China,USA,India,Middle East– Somespecific attentiontoprospectsofnon-conventional oilandgas– Assessment ofcredibility ofIEAcentralscenarioFFprojections
• Whatarethetrendswrt EU-ROTWtradeinfossilfuels?– Recentevolution oftheEUenergyimportbill:byfuelandmainexportcountry/region– EUCIFfossilfuelimportpricetrendsandtrendsofselectedworldcoal/oil/gas pricebenchmarks– WhataretheresourcerentimpactsinmainFFexportcountries/regions upongeopoliticalstability?
• WhataretheprospectsforCCS?– IsCCS likelytomateriallyslowdown therisingshareofrenewablesintheenergymix?
• ExpectedeffectsandmajoruncertaintiesregardingEUconsumptionandimportsoffossilfuels?– Findings oneffectsupon 2030REStargetachievement– Findings regardingEUfossil-fuel relatedpolicies
Towards2030-dialogue – Mid-term Conference, Brussels, 12 November 2015 Slide 10
WP6 – The overall climate and energy framework Towards2030-dialogue
Task6.2.1– Fossilfuelsupply:keytrends
Scenario GHGreduction Competitive-ness
Energy security Air quality
Projected trendsonglobalfossilfuelsevolutionwouldbearhighglobalandEUsocioeconomiccost
IEAcentralscenario
450 ppmin2100targetwouldbehighlyillusive
The EUasamajorimporteroffossilfuelswouldhavetosustainadeterioratingtrendintheUnion’stermsoftrade
Negativeimpactoffossilfuelpricevolatilityandgeopoliticaltensions
Negativeimpactwithknock-oneffects onnon-GHGenvironmentalimpactcategories
HighEE cumRESscenariocouldbringinhighglobalreturns
Alternativescenariowithstrongpolicydrivenbutatthesametimesocioeconomicallycost-effectiveEEcumRESpush
The450 ppmin2010scenariocouldbewithinreachcontingentonsocioeconomicallycost-effectiveimplementation
World-wide,governmentsareincentivised toimplementmoreservices-orientedeconomicdevelopmentpolicieswithcountry/region-specificcompetitiveedges.
Positiveeffectsofreduceddependencyonfossilfuelsonexposuretovolatilityoffossilfuelpricesandgeopoliticalturmoil
Positiveeffectsofreduceddependencyonfossilfuelsonenvironmentalimpacts
Towards2030-dialogue – Mid-term Conference, Brussels, 12 November 2015 Slide 11
WP6 – The overall climate and energy framework Towards2030-dialogue
• Howcanclimatepolicy(focussingoncarbonpricing)outsidetheEUaffectEURESpolicygoals?
• WhatisthecurrentstatusofcarbonpricinginChina&theUS(andtheEU)
• Howiscarbonpricingexpectedtoevolveoutto2030ina´basecase´scenarioinChinaandtheUS?
• Whatisthebandwidthofpossiblepathwaysaroundthatbasecase?• WhataretheimplicationsofthesepossibledevelopmentsforEURES
policy?• WhatcantheEUdotomonitorandrespondtotheseinfluencesin
future?
Task6.3.1- ClimatechangepoliciesoutsideEU:Keyquestions
Towards2030-dialogue – Mid-term Conference, Brussels, 12 November 2015 Slide 12
WP6 – The overall climate and energy framework Towards2030-dialogue
Task6.3.1:CarbonpricinginChina,USandEU- currentstatus
Source:CAIT;PMRChinaCarbonMonitorMay2015;WorldBankStateofCarbonPricingReport2015;ChinaCarbonPricingSurvey2015;Eurostat;ThomsonReuters2030EUAPriceForecast;USEIA;USEPA;RGGI;CARB
Pricing(US$/tonne)
Coverage
20$
30%
(%Totalnational emissions)
EUETS2015
30$
0$70%0%
China2015
50%10% 20% 40% 60%
10$
5$
15$
25$
Size(TotalCap)
2bntonnes
USARGGI2015
California2015
Towards2030-dialogue – Mid-term Conference, Brussels, 12 November 2015 Slide 13
WP6 – The overall climate and energy framework Towards2030-dialogue
Task6.3.1:Illustrativebasecaseevolutionto2030
Source:CAIT;PMRChinaCarbonMonitorMay2015;WorldBankStateofCarbonPricingReport2015;ChinaCarbonPricingSurvey2015;Eurostat;ThomsonReuters2030EUAPriceForecast;USEIA;USEPA;RGGI;CARB
(NB:Work inProgress)
California2015
Pricing(US$/tonne)
Coverage
20$
30%
EUETS2015
China2025
30$
0$70%0%
China2015
50%10% 20% 40% 60%
EUETS2025
10$
5$
15$
25$
Size(TotalCap)
2bntonnes
USARGGI2015
USA2025?
?
(%Totalnational emissions)
Towards2030-dialogue – Mid-term Conference, Brussels, 12 November 2015 Slide 14
WP6 – The overall climate and energy framework Towards2030-dialogue
Task6.3.3- GlobalREScosts:ImplicationsforEU2030RESpolicy
Factorsthat canimpactEU2030policyobjectives
Globaldevelopmentscenario
Implications for EU2030RESpolicyobjectives
Energysecurity GHGreduction Competitiveness
Costof RES(LCOE) Largeglobaldeployment drivingcostsdown
Positive– enablesdiversificationofsupply
Positive– greaterrangeoflow carbonenergysourcesavailable
Positive– i.e.cheapertechnologiesavailable toEU
Technologicalinnovation
Majortechnologicalinnovations developedoutside theEU
Positiveifinnovationscanbeadopted–enablesdiversificationofsupply
Positiveifinnovationscanbeadopted–greaterrangeoflowcarbonenergysourcesavailable
PositiveifexpertisecanbetransferredtoEU,negativeifexpertisestaysabroad
Newregulation(e.g.integratedoffshore gridinNorth Sea)
Emergence(withinoroutside theEU)ofnovel regulationschemes enablingfaster/cheaper/moreefficientRESdeployment
Positive– enablesdiversificationofsupply
Positive– greaterrangeoflow carbonenergysourcesavailable
PositiveifnewregulationisdevelopedwithintheEU, orcanbeadoptedintheEU
Towards2030-dialogue – Mid-term Conference, Brussels, 12 November 2015 Slide 15
WP6 – The overall climate and energy framework Towards2030-dialogue
– Gassecuritypapercompleted(OCT14)
– Draft issuepaperspertopic(DEC15)• Fossilfuelprospects
• Nuclearpolicyframework
• ClimatepolicyoutsideEU
• CarbonpricingintheEU
• GlobalREStechnologydevelopments
• InterlinkagesbetweenRESandclimatepoliciesintheEU
– Thematicworkshop inAmsterdamortheHague(FEB/MAR16)
– Policybrief:“Theoverallclimateandenergyframework”(APR16)
– FinalReport:“Theoverallclimateandenergyframework”(APR16)
Work packagedeliverables&remaining timeline