The final agreement on the Renewable Directive
A. first Strategic Energy Review: the 20/20/20
targets
B. 2nd Strategic Energy Review: An EU
Energy Security and Solidarity Action Plan
A. Climate change effects (3)A. Climate change effects (3)
a. World energy demand (3)a. World energy demand (3)
Source: World energy outlook 2008
a. World oil reserves (2)a. World oil reserves (2)
Source: World energy outlook 2008
A. Population growth – overall A. Population growth – overall (1)(1)
Year World Population (thousands) Medium variant
1980 4 451 470
1985 4 855 264
1990 5 294 879
1995 5 719 045
2000 6 124 123
2005 6 514 751
2010 6 906 558
2015 7 295 135
2020 7 667 090
2025 8 010 509
2030 8 317 707
2035 8 597 050
2040 8 823 546
2045 9 025 982
2050 9 191 287
Source: Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World Population Prospects: The 2006 Revision and World Urbanization Prospects: The 2005 Revision, http://esa.un.org/unpp, Monday, November 24, 2008).
Source: World energy outlook 2008
a. World oil reserves (3)a. World oil reserves (3)
Source: World energy outlook 2008
1960-1969: 9, 371970-1979: 1, 981980-1989: 0, 981990-1999: 0, 622000-2009: 0, 49
Ratio discovery/production
b. Oil reserves per capita (1)b. Oil reserves per capita (1)
Source: World energy outlook 2008, World Energy outlook 2007,Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World Population Prospects
it is assumed in this graph that the 2007 world oil reserves are estimated at 1.3 trillion barrels, the oil demand in 2008 is around 31724 million barrels, it increases by 1.3% per year and the world population increases from 6.6 billion in 2007 to 8.8 billion in 2040.
Projected World Oil Reserves in Barrels per Capita
0
50
100
150
200
2010 2015 2020 2025 2030 2035 2040
years
ba
rre
ls p
er
ye
ar
pe
r c
ap
ita
F. Car ownership (1)F. Car ownership (1)
Source: Vehicle Ownership and Income Growth, Worldwide 1960-2030, Joyce Dargay, Dermot Gately and Martin Summer, January 2007
F. Car ownership (3)F. Car ownership (3)
Source: Vehicle Ownership and Income Growth, Worldwide 1960-2030, Joyce Dargay, Dermot Gately and Martin Summer, January 2007
Years USA cars/1000pers China
Cars/1000 pers
India
Cars/1000 pers
OECD Europe
Cars/1000 pers
1960 411 0.38 1 80
2002 812 16 17 498
2030 849 269 110 725
Years USA total vehicles (millions)
China total vehicles (millions)
India total vehicles (millions)
OECD Europe total vehicles (millions)
1960 74.4 0.2 0.4 29.18
2002 233.9 20.5 17.4 243,4
2030 314 390 156 358,9
IntroductionIntroductionWhat is in the package?What is in the package?
• Overall Communication
• Revision of EU Emissions Trading System (the ETS)
• Effort sharing in non ETS sectors
• Directive on promotion of renewable energy, report
on renewable energy support schemes
• Directive on carbon capture and storage, and
Communication on demonstration plants
• Revised environmental state aid guidelines
• Accompanying integrated impact assessment
GHG Target:
-20% compared to 1990
-14% compared to 2005
EU ETS-21% compared
to 2005
Non ETS sectors -10% compared to 2005
27 Member State targets, stretching from -20% to +20%
A shared A shared effort effort between between sectorssectors
The European Path towards 2020 in The European Path towards 2020 in climate and renewableclimate and renewable
• 20% GHG reduction compared to 1990
– Independent commitment
• 30% GHG reduction compared to 1990
– In context of international agreement
• 20% renewables share of final energy consumption
• 10% Renewable energy in transport, with
– production being sustainable
– second generation biofuels commercially available
A shared effort - Cost efficient A shared effort - Cost efficient achievements of the GHG and Renewables achievements of the GHG and Renewables
targetstargets
• Allocating targets between sectors and Member States on the basis of pure cost efficiency causes high compliance
0.00.10.20.30.40.50.60.70.80.91.0
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0
Cum
ulati
ve C
ompl
ianc
e Co
st (%
)
Cumulative GDP/capita in %MS in ascending order of GDP/capita
Gini coefficient = 0.19costs compared to GDP for poorer Member States
• Package approach is to increase fairness but foresees policy instruments to achieve cost efficiency
Cost-effectiveness Fair distribution
Solution:
Fairness: differentiate efforts according to GDP/capita• national targets in sectors outside EU ETS• national renewables targets (partially – half)• redistribution of auctioning rights (partially – 10%)
Cost-effectiveness: introduce flexibility and use market based-instruments (EU ETS, transferability of Guarantee of Origin for renewables, access to JI/CDM)
A shared effort:A shared effort:Approach EU packageApproach EU package
A Fair shared effortA Fair shared effort
• The package requires all Member States and sectors to take action to reduce GHG and increase renewables
• The package create a competitive level playing field
• The package distributes costs more fairly between Member States
-0.10.00.10.20.30.40.50.60.70.80.91.0
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0
Cum
ulati
ve C
ompl
ianc
e Co
st (%
)
Cumulative GDP in % MS in ascending order of GDP/capita
Renewable energy
• Security of Supply • Sustainability • Climate Change abatement • Shift towards a new energy mix • Decentralised Energy supply • Regional and green industry development• Encouragement of households and industry to
save energy and to take care of own supply in sustainable way
Why Renewables?Why Renewables?
The renewables The renewables DirectiveDirective
1. Sets mandatory national targets for renewable energy shares, including 10% biofuels share in transport, in 2020
2. Requires National Action Plans, 3. Gives flexibility for Member States to reach part of their target
through 1. Statistical transfer2. Joint projects between Member States and third countries with
existing or planned interconnector capacity (under certain conditions and provided RES energy reaches the EU) )
4. Encourages joint Support mechanisms between MS5. Sets clear rules for disclosure quality of Guarantees of origin6. Requires reduction of administrative and regulatory barriers,
improvements in provision of information and training and improves renewables’ access to the electricity grid
7. Creates a sustainability regime for biofuels
5%
5.3%
1.1%
2.6%
9.1%
6.7%
2.4%
7.4%
5.6%
5.8%
7.2%
6.3%
4.6%
1.6%
2.5%
4.6%
3.2%
4.5%
6.1%
5.2%
2.3%
2%
3.5%
1.8 %
4%
5.6%
8.2%
0%
Additional effort weighted by GDP per capita
RES share in 2005
Flat rateincrease of 5.5%
BEBGCZDKDEEEIEELESFRITCYLVLTLUHUMTNLATPLPTROSISKFISE UK
EU-27
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
0.7
4.7%
1.4
7.5%
1.5
Figures adjusted byearly starter bonus
2.2%
9.4%
6.1%
17.0%
5.8%
18%
3.1%
6.9%
8.7%
10.3%
5.2%
2.9%
32.6%
15%
0.9%
4.3%
2.4%
23.3%
7.2%
20.5%
17.8%
16%
6.7%
28.5%
1.3%
39.8%
EU package:EU package:Effort Member Effort Member
States States RenewablesRenewables
National action plansNational action plans
• Sectoral targets now set by Member States
• Measures adequate to achieve the targets including planned development of biomass resources
• Provides policy stability for investment
Administrative reformsAdministrative reforms
Reforms, or requires reforms of administrative and regulatory barriers to the growth of renewable energy
• simplification and streamlined procedures
• planning authorities to consider renewable energy and district heating and cooling systems
• minimum levels of renewable energy in building codes for new or refurbished buildings
• promotion of energy efficient renewable energy
• Certification regimes for installers; mutual recognition
Grid accessGrid access
Improves renewables’ access to the electricity grid
• Repeats existing access conditions given in 2001/77/EC
Requires Member States
• to provide priority access to the grid system for electricity from RES
• to develop grid infrastructure
• to review cost sharing rules
BiofuelsBiofuels
Sustainability criteria for biofuels :• GHG savings – minimum of 35%
• No raw material from sensitive areas (old forest, grasslands, protected areas)
• No conversion of wetlands and continuously forested areas
• EU biofuels must meet “cross compliance” environmental rules
Consequences of not meeting the criteria:• Don’t count towards targets; no public support/tax breaks
Member States to give a bonus in their biofuel obligations to biofuels from wastes, residues, cellulosic and lignocellulosic material
Impactsfrom the package
What are the benefits of the package?What are the benefits of the package?
• The ultimate goal: avoid the cost of climate change impacts: 5-20% of global GDP (Stern)
• Large scale innovation in the energy sector
• First mover advantage, aiming for technological leadership in low carbon technology
• Significant energy efficiency improvements
• Energy security: reduction of oil and gas import of €50 billion per year (at $61 per barrel of oil)
• Reduced air pollution giving significant health benefits
• Reduced need for air pollution control measures: €11 billion per year in 2020
• Worldwide energy gap in 2020 calls for min. ~5TW of Renewables (IPCC)
Renewables Role as Climate supporter will be strengthened
Emissions avoided through the useof renewable energy sources in Germany in 2007
22.5 million t 34.0 million t 20.1 million t
19.3 million t
2.4 million t
0.5 million t
0.9 million t
14.3 million t
0 10 20 30 40 50 60 70 80 90
Fuels
Heat
Electricity
CO2-avoidance [million t]
Hydropower Wind energy Biomass Photovoltaics Geothermal energy Solar thermal energy Biofuels
79.0 million t
20.7 million t
14.3 million t
Total: approx.114 million t from this approx. 57 million
t through the EEG
Version: March 2008; all f igures provisionalSource: BMU according to Working Group on Renew able Energies / Statistics (AGEE-Stat)
The future a combination of big and small or The future a combination of big and small or just small vs just big? Source “Future Energy just small vs just big? Source “Future Energy
Systems in Europe” commissioned by EP Systems in Europe” commissioned by EP STOA and carried out by ETAG 2008STOA and carried out by ETAG 2008
Reaching a final agreement on the Renewable Directive
Overview on National Support schemesOverview on National Support schemes
Harmonisation and coordination of Harmonisation and coordination of National Support MechanismsNational Support Mechanisms
Can be a good instrument to help smooth transition and target reaching To be studied and elaborated jointly between StatesTask is challenging: example: Spain and GermanyIn Spain, solar-thermal power plants play an especially important role as a result of that country's abundance of sunshine. Energy from the sea is also of special importance and receives special rates.Germany, on the other hand, has differentiated more strongly in the areas of offshore wind, structurally integrated photovoltaic systems and various biomass applications
(Source Feed In Co-operation)
Renewable Energy Investment Potential in times of Economic Crises
Current Global CrisisCurrent Global Crisis
I’ve never seen financial insiders this spooked — This time, market players seem truly horrified — because they’ve suddenly realized that they don’t understand the complex financial system they created. The bottom line is that policy makers left the financial industry free to innovate — and what it did was to innovate itself, and the rest of us, into a big, nasty mess.” (Paul Krugman in 2007)The new Renewable Directive may indeed become one of the best tools for Member States to recover economically and socially and to shift towards sustainability in energy and away from dependency
Sustainable Energy Policy - at the heart Sustainable Energy Policy - at the heart of the healing processof the healing process
The RE plus Efficiency sector could be at the forefront of economic dynamism for recovery in all Member StatesThe effort consumers or state aid programmes pay to receive the benefit of RES looks like a quantité négligeable in view of the current bail outs paid from public money to banks and industry worldwide. In November 08 financial rescue initiatives in the US alone reached $8.5 trillion ( Bloomberg News) RE industry guarantees qualified jobs, regional development, real income, shift to sustainable energy supply and consumption, energy independence –
Currently about 2.3 million people worldwide work either directly in renewables or indirectly in supplier industries (Worldwatch Institute)
UN EP (WorldWatch) Green Jobs Report 2008- UN EP (WorldWatch) Green Jobs Report 2008- the key drivers of green employmentthe key drivers of green employment
Global market volume for environmental products and services currently about $1,370 billion (€1,000 billion), projected $2,740 billion (€2,200 billion) by 2020.Forward-thinking government policies needed. Important for providing funding of green projects; overall goal- and standard-setting beyond the time horizons typical in the business world; providing infrastructure that private enterprises cannot or will not create; and creating and maintaining a level playing field for all actors. Key policies include: Phase out subsidies for environmentally harmful industries, shift those funds to renewable energy, efficiency technologies, clean production methods, and public transport.Fix the current shortcomings inherent in carbon trading and Kyoto Protocol related innovations like the Clean Development Mechanism Tax Reform. Scale up eco-taxes, such as those adopted by a number of European countries, and replicate them as widely as possible. Eco-tax revenues can be used to lighten the tax burden falling on labour while discouraging polluting and carbon-intensive economic activities.
Effects from the packageEffects from the package
• EU showing leadership in climate change• EU on a path towards a low-carbon economy• Cost-efficiency and fairness at the heart of
the package • A significant effort, but future benefits far
outweigh the costs• Will deliver important economic, energy
security and environmental co-benefits, also in the short term
• http://ec.europa.eu/environment/climat/climate_action.htm
• http://ec.europa.eu/environment/climat/future_action.htm