Cagliari, 27th May 2016Eloy Alvarez PelegryDirector of the Energy ChairOrkestra-Basque Institute of Competitiveness
Member of the Royal Academy of Engineering
The Future of Energy Union.
European integration, Italian opportunities and Regions contribution
"Towards the Energy Union. The Contribution of the Regions”
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INDEX
q ENERGY UNION§ “Approaches” to the Energy Union§ Motivations and Dimensions§ Lines of Action§ Road map and indicators§ Main Issues. A Summary and a personal approach
q REGIONS§ An approach of Interreg § Energy. Proximity and Contiguity. Electricity Interconnections and gas pipes § Energy. From Contiguity to Interaction. The case of LNG§ Competitiveness and regional specialization strategies (RIS 3)§ The case of the Basque Country 3E-2025§ Territorial competitiveness and Energy competitiveness§ Main posible topics of regional cooperation related to energy
q THE ROLE OF REGIONS IN ENERGY IN THE CONTEXT OF THE ENERGY UNION. A REFLECTION AND SOME SUGGESTIONS
§ Main issues and topics§ Road Map § A proposal to start a dialogue
"Towards the Energy Union. TheContribution of the Regions”
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q ENERGY UNION
"Towards the Energy Union. TheContribution of the Regions”
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q ENERGY UNION§ “Approaches” to the Energy Union§ Motivations and Dimensions§ Lines of Action§ Road map and indicators§ Main Issues. A Summary and a personal
approach
"Towards the Energy Union. TheContribution of the Regions”
Motivations
"Towards the Energy Union. TheContribution of the Regions”
Dimensions
Lines ofaction Road Map
Indicators
§ “APPROACHES” TO THE ENERGY UNION
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"Towards the Energy Union. TheContribution of the Regions”
MOTIVATIONS AND DIMENSIONSMAIN MOTIVATIONS
Energy: secure, sustainable,competitive, affordable
European firms: creditworthy andinnovative
European labour force: qualified
Prices: reflecting needs andobjetives on the long run
Citizens: empowerment
From fossil fuels to renewablesand from centralized todescentralized generation
FIVE DIMENSIONS
ü Energy security, solidarity,reliability
ü Internal Energy Market (IEM)
ü Energy efficiency and moderationof demand
ü Research, innovation andcompetitieness
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§ LINES OF ACTION
1. Compliance with legislation2. Diversification on gas supply3. Intergovermental agreements to comply with EU Legistation 4. Energy infrastructures5. Internal Energy Market6. Development of the Third Energy Package7. Regional approaches. Key for market integration 8. Greater transaparency in energy costs and prices9. Energy savings: 27% from 2015 to 203010. Energy savings and improvements in buildings11. Energy efficiency and descarbonization in transport systems12. Reduction in GHG emissions13. 27% renewables in 2030 at european level14. R&D in energy for technological leadership15. External diplomacy and policy. A single voice in Climate&Energy
"Towards the Energy Union. TheContribution of the Regions”
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"Towards the Energy Union. TheContribution of the Regions”
§ Infrastructure. 10% interconnection. PCI - (1) -• Electricity‒ Market design. Renewables integration‒ SoS
- -
§ Retail markets - -
§ Gas. SoS, LNG Strategy (1) - -• Regulation. Revision of ACER functioning - -
• Renewables. 2030, auto consumption, bioenergy, energywaste
- -
• Climate action. Revision of ETS, LULUCF - (2) -• Transport • Energy efficiency. Buildings, products, finance - -
• Heating and cooling - -
• External policy on climate and energy ‒ Diplomacy, interchange of information on
intergovernmental agreements. (Ukraine,Turkmenistan, Azerbaijan)
‒ Reinforce of Euro Mediterranean cooperation in EE andRES
-
§ Industrial competitiveness‒ Strategic European plan on energy technologies ‒ Strategic Agenda on R&D in transport‒ Energy cost and prices‒ Commercial policy for exports of technologies
- -
§ Transversal measures‒ Revision of subsidies‒ European strategy report (Euromed road map, energy
storage, southern gas corridor)
- -
§ Nuclear energy- -
(1) Depends on the location of the region (2) Action can be taken at regional level for decreasing of GHG
§ Infrastructure. 10% interconnection. PCI - -
• Electricity‒ Market design. Renewables integration‒ SoS
- -
§ Retail markets - -
§ Gas. SoS, LNG Strategy - -
• Regulation. Revision of ACER functioning - -
• Renewables. 2030, auto consumption, bioenergy, energywaste
- -
• Climate action. Revision of ETS, LULUCF - -
• Transport
• Energy efficiency. Buildings, products, finance - -
• Heating and cooling - -
• External policy on climate and energy ‒ Diplomacy, interchange of information on
intergovernmental agreements. (Ukraine,Turkmenistan, Azerbaijan)
‒ Reinforce of Euro Mediterranean cooperation in EE andRES
-
§ Industrial competitiveness‒ Strategic European plan on energy technologies ‒ Strategic Agenda on R&D in transport‒ Energy cost and prices‒ Commercial policy for exports of technologies
- -
§ Transversal measures‒ Revision of subsidies‒ European strategy report (Euromed road map, energy
storage, southern gas corridor)
- -
§ Nuclear energy- -
(1) Depends on the location of the region (2) Action can be taken at regional level for decreasing of GHG
Macroeconomicimportance of energysector
Valued added of energy sectorEmployment in energy sector
Energy security,solidarity and trust
Net import dependencyAggregate country-specific Supplier Concentration IndexN-1 rule for gas infrastructure
A fully integratedinternal energy market
Electricity interconnection capacityMarket concentration index for power generationMarket concentration index for wholesale gas supplyWholesale electricity pricesWholesale gas pricesAnnual switching rates on electricity retail marketsAnnual switching rates on gas retail marketsEnergy poverty index
Energy efficiency andmoderation of demand
Primary energy consumptionPrimary intensity of the economyFinal energy intensity in industryFinal energy consumption per m2 in residential sector, climatecorrectedAverage CO2 emissions from new passengers cars
Decarbonisation Gap between non-Emissions Trading System greenhouse gas emissionsprojections and target in 2020Gap between latest proxy inventory of greenhouse gas emissions in thenon-Emissions Trading System sector and targetsShare of renewable energy in percentage of gross final energyconsumptionGreenhouse gas intensity of the economy
Research, innovationand competitiveness
Share of energy and environment in total public civil R&D spendingLow-carbon technology patents application per million inhabitantsReal unit energy costs
ROAD MAP INDICATORS
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§ MAIN ISSUES. A SUMMARY
ü Internal Energy Market (I.E.M): (interconnections,electricity and gas markets)
ü Decarbonization (GHG)ü Energy efficiency and renewable Energyü Energy security, solidarity and trustü Research and innovationü Competitiveness
"Towards the Energy Union. TheContribution of the Regions”
I.E.MInterconnectionsElectricity and GasMarket
"Towards the Energy Union. TheContribution of the Regions”
Decarbonization
Competitiveness
Researchand
Innovation
Energyefficency
§ MAIN ISSUES. A SUMMARY
SecuritySolidarityTrust
"Towards the Energy Union. TheContribution of the Regions”
§ ENERGY UNION. MAIN ISSUES. A SUMMARY, AND A PERSONALAPPROACH
Competitiveness
GHGEnergy EffiencyRenewablesBuildingsTransport
Research & Innovation
SolidarityRegional Cooperation
IEM
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q REGIONS
"Towards the Energy Union. TheContribution of the Regions”
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q REGIONS
§ Interreg evolution§ Energy. Proximity and Contiguity. Electricity Interconnections and
gas pipes § Energy. From Contiguity to Interaction. The case of LNG§ Competitiveness and regional specialization strategies (RIS 3)§ The case of the Basque Country 3E-2025§ Territorial competitiveness and Energy competitiveness§ Main posible topics of regional cooperation related to energy
"Towards the Energy Union. TheContribution of the Regions”
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"Towards the Energy Union. TheContribution of the Regions”
§ INTERREG EVOLUTION
Source: European Union (2015)
v Progressive enlargment of elegible areas
INTERREG I and V elegible áreas. A comparison
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"Towards the Energy Union. TheContribution of the Regions”
§ INTERREG EVOLUTION
ü Support programme for cross-border cooperation dates back to mid-1980s
ü 1987: the Association of European Border Regions is foundedü Five phases. The last one from 2014 to 2020 is part of the EU´2020
strategy
ü Involve local and regional stakeholders in eliminating barriers to thefree move of goods, people, capital and services
ü Diminish the influence of national borders: peripheral regionsü Strengthen economic, social and territorial cohesion
§ Objectives
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§ From proximity to network§ From contiguity to interaction§ Continuous increase in the importance of
regions
"Towards the Energy Union. TheContribution of the Regions”
§ INTERREG EVOLUTION
The three strands of Interreg*
Source: INTERACT. The Community Initiative INTERREG:LRDP LTD. Expost Evaluations
*Beginning with Interreg II
v Some concepts are very applicable to energy in the XXICentury
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"Towards the Energy Union. TheContribution of the Regions”
§ ENERGY. PROXIMITY AND CONTIGUITY. ELECTRICITY INTERCONNECTIONS ANDGAS PIPELINES
Source: GIIGNL, GLE (2015) Source: ENTSOE (2016)
Gas infrastructures in Europe Electrity infrastructures in Europe
v Energy interconnections are the phisical base for the Internal Market Enlargementv Cooperation between contiguous regions are key for a progressive development of
energy markets based on electricity grids pipelines
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"Towards the Energy Union. TheContribution of the Regions”
§ ENERGY. FROM CONTIGUITY TO INTERACTION. THE CASE OF LNG
Source: GIIGNL, GLE (2015)
v Since the 70´s LNG and its developments maybe a clear exampleof the change from proximity to network and from contiguity tointeraction
Existing and planned LNG terminals inEurope
Comparison of two European regasificationplants
BBG (Bilbao, Spain) PANIGAGLIA (Fezzano, Italy)
3 LNG storage tanks 2 LNG storage tanks
Storage capacity: 450,000 m3 Storage capacity: 100,000 m3
Send out rate: 800,000Nm3/h -
Jetty capacity: vessels of270,000m3 storage capacity
Jetty capacity: LNG carriers from25,000 m3 up to 65,000/70,000 m3
Truck tank loading station todeliver LNG to satellite plants byroad and the necessary facilitiesfor LNG carrier load +connections to pipelines
Connection to national gaspipeline network
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"Towards the Energy Union. TheContribution of the Regions”
REGIONAL SPECIALIZATIONSTRATEGIES (RIS3)
Integrated agendas for the Economictransformation
- Support of the policy and investmentsto the priorities and needs of the territory-Take advantage of the strengths,competitiveness advantages andexcellence-Support technological innovation, basedon practice; to stimulate privateinvestmentFoster innovation and experimentationincluding all the agentes
§ COMPETITIVENESS AND REGIONAL SPECIALIZATION STRATEGIES(RIS3)
COMPETITIVENESS
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§ THE CASE OF THE BASQUE COUNTRY 3E-2025
ü Relevant role of the Basque Government developing continous Energystrategies since 80´s
ü Energy policies coordinated with other territorial policiesü As a consequence: transformation of the Basque energy sectorü Preparing the new Energy strategy: 3E-2025
ü Long term: 2050 (subject to approval by the Parliament)‒ Zero oil consumption in 2050‒ GHG reduction
‒ 2030 40% vs. 2005‒ 2050 80% vs. 2005
‒ By the end of the XXIst century no fossil fuels, only renewables
"Towards the Energy Union. TheContribution of the Regions”
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§ THE CASE OF THE BASQUE COUNTRY 3E-2025
ü Main Objectives
‒ Promotion of the competitiveness of the Basque network of science andtechnology related to energy with the RIS3 strategies
‒ 2,790 M€ to be invested in 10 years (mainly energy effiency and renewables)‒ Exemplifying measures in the Basque Public Administration of energy
consumption in its facilities (25% in 10 years), 40% of renewables in publicbuldings
"Towards the Energy Union. TheContribution of the Regions”
2025 Objectives (%) (Save as indicated)Base Years Primary
Energy (PE)(*)
RenewableFinal Energy
Cogeneration GHH
2008 - - - -2013 - 7,5 - -2015 - - 20 -2025 - + 16 31 - 1,6 Mton/yr
(*) In 2025 the same PE as in 2015
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§ The CASE OF BASQUE COUNTRY 3e-2025
"Towards the Energy Union. TheContribution of the Regions”
Basque Energy Agency(EVE)
Energy Agency PuntoEnergia Provincia di Sassari
Energy strategydevelopment
Energy strategydevelopment
Gas -Renewables RenewablesEnergy efficiency Energy efficiency in supplyQuality of the electricsystem and security ofsupply
Ensure grid stability andenergy security
Reduce oil dependency intransport
Decrease reliance on oilproducts
Technological and industrialdevelopment
Creation of the RES Clusterv The Basque Energy Agency- Ente Vasco de Energía (EVE) was
founded in 1982v EVE has a key role in the development of the Basque Energy
strategy and support and implement energy policies
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§ Territorial competitiveness and energy competitiveness
ü Analysis of the industrial and energy transformation of the BasqueCountry in the context of a decarbonised and competitive economy
ü Energy is a key issue in Economic competitiveness: as an input and as adriver for industrial competitiveness
ü Electricity, gas and oil infrastructures: guarantee high quality of supplyü From 2000, the price of oil, electricity and gas rose more or less
continuouslyü Industry accounted for between 48% in 2000 and 45% in 2012 of total
energy consumption (Basque Country)ü For Spanish energy intensive industries, the price of energy has
increased by 19% more than the price of the products they market(2010-2014)
ü Greater impact on those industries that have to compete oninternational markets
"Towards the Energy Union. TheContribution of the Regions”
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§ MAIN POSIBLE TOPICS OF REGIONAL COOPERATIONRELATED TO ENERGY
‒ Decarbonization
o Energy Efficiencyo Renewables
‒ Research&Innovation
‒ Territorial competitiveness and EnergyCompetitiveness
"Towards the Energy Union. TheContribution of the Regions”
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q THE ROLE OFREGIONS
"Towards the Energy Union. TheContribution of the Regions”
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q THE ROLE OF REGIONS IN ENERGY IN THECONTEXT OF THE ENERGY UNION. AREFLECTION AND SOME SUGGESTIONS
§ Main issues and topics§ Road Map § A proposal to start a dialogue
"Towards the Energy Union. TheContribution of the Regions”
27
§ MAIN ISSUES AND TOPICS
"Towards the Energy Union. TheContribution of the Regions”
Main Issues Identified Topics. Preliminary List Role of regions
Decarbonization of Energy andEconomy
-Energy Efficency (EE)Buildings. Heating & Cooling. Design of buildings and Urban Development-Renewables (RES). Primary and finalconsumption. Wind, solar, marine,bioenergy, (energy waste)Decentralized generation. Smart grids-Transport. Mobility
Research and Innovation -Research&innovation proyects-Starts Ups in energy
Competitiveness of Regions -Monitoring of energy prices
Energy Security, Solidarity &Trust at European Level
-D ev e lo p r eg io na l c o o pe r at io ncombining interactions and networking
Internal Energy Market-Energy infrastructure-LNG Strategy-Electricity & Gas Market
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"Towards the Energy Union. TheContribution of the Regions”
ENERGY UNION. ROAD MAP AND MEASURES. POTENTIAL INTEREST. ROLE OF REGIONS (A PROPOSAL FOR DISCUSSION)
High Medium * Low§ Infrastructure. 10% interconnection. PCI - (1) -• Electricity‒ Market design. Renewables integration‒ SoS
- -
§ Retail markets - -
§ Gas. SoS, LNG Strategy (1) - -• Regulation. Revision of ACER functioning - -
• Renewables. 2030, auto consumption, bioenergy, energywaste
- -
• Climate action. Revision of ETS, LULUCF - (2) -• Transport • Energy efficiency. Buildings, products, finance - -
• Heating and cooling - -
• External policy on climate and energy ‒ Diplomacy, interchange of information on
intergovernmental agreements. (Ukraine,Turkmenistan, Azerbaijan)
‒ Reinforce of Euro Mediterranean cooperation in EE andRES
-
§ Industrial competitiveness‒ Strategic European plan on energy technologies ‒ Strategic Agenda on R&D in transport‒ Energy cost and prices‒ Commercial policy for exports of technologies
- -
§ Transversal measures‒ Revision of subsidies‒ European strategy report (Euromed road map, energy
storage, southern gas corridor)
- -
§ Nuclear energy- -
(1) Depends on the location of the region (2) Action can be taken at regional level for decreasing of GHG
ENERGY UNION. ROAD MAP AND MEASURES. POTENTIAL INTEREST. ROLE OF REGIONS (A PROPOSAL FOR DISCUSSION)
High Medium * Low§ Infrastructure. 10% interconnection. PCI - -
• Electricity‒ Market design. Renewables integration‒ SoS
- -
§ Retail markets - -
§ Gas. SoS, LNG Strategy - -
• Regulation. Revision of ACER functioning - -
• Renewables. 2030, auto consumption, bioenergy, energywaste
- -
• Climate action. Revision of ETS, LULUCF - -
• Transport
• Energy efficiency. Buildings, products, finance - -
• Heating and cooling - -
• External policy on climate and energy ‒ Diplomacy, interchange of information on
intergovernmental agreements. (Ukraine,Turkmenistan, Azerbaijan)
‒ Reinforce of Euro Mediterranean cooperation in EE andRES
-
§ Industrial competitiveness‒ Strategic European plan on energy technologies ‒ Strategic Agenda on R&D in transport‒ Energy cost and prices‒ Commercial policy for exports of technologies
- -
§ Transversal measures‒ Revision of subsidies‒ European strategy report (Euromed road map, energy
storage, southern gas corridor)
- -
§ Nuclear energy- -
(1) Depends on the location of the region (2) Action can be taken at regional level for decreasing of GHG
§ ROAD MAP
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§ A PROPOSAL TO START A DIALOGUE
"Towards the Energy Union. TheContribution of the Regions”
1 Based on the Energy Union Road Map and Measuares. Potencial Interest/Role of Regions. A proposal for Discussión. (Seepage 28) 2 Main Issues and Topics. (See page 27)
v Indentify interest (and potencial financing) for a workshop in Bilbao
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THANK YOU!
"Towards the Energy Union. TheContribution of the Regions”
Ø Information about the Energy Chair of Orkestra:http://www.orkestra.deusto.es/es/acerca-orkestra/catedra-energia
Ø Information about the Energy publications of Orkestra:http://www.orkestra.deusto.es/es/investigacion/publicaciones