Dec 19 2005 - June 19 2007Commission ENERGY 2030
Belgium’s Energy Challenges
Towards 2030
Commission ENERGY 2030
Final Report
William D’haeseleer, Chair
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Energy Commission 2030
CE2030 established by Royal Decree
of December 06, 2005published in MB/BS of December 19, 2005
Duration of activities 18 months;Final report submitted on June 19, 2007
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Objectives
«To provide the scientific and economic analyses necessary to evaluate Belgium’s options with
regard to the energy policy up to 2030»
…so as to assure an energy system that
- guarantees security of supply
- is environmentally friendly
- at affordable cost for society
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Objectives
«To provide the scientific and economic analyses necessary to evaluate Belgium’s options with
regard to the energy policy up to 2030»
…so as to assure an energy system that
simultaneouslysimultaneously
- guarantees security of supply
- is environmentally friendly
- at affordable cost for society
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Summary of Approach
1. State of affairs in Belgium
2. Scenario analysis1. Belgian domestic situation
2. European context
3. Broader issues
4. Conclusions & Recommendations
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Practical Implementation (Part 3)
Review process through Review Panels
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Review Process
External Review Panels
- Federal-Regional Consultation Cell (CONCERE/ENOVER)- Central Council for the Economy (CCE/CRB)- National Bank (NB/BN) & Ass Belgian Banks- Regulators (CREG, VREG, CWaPE, IGBE/BIM)- Fed Council Sust Develop (FRDO/CFDD)- Academy Council for Applied Science (BACAS)- DG TREN European Commission- International Energy Agency (IEA)
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Practical Implementation (Part 3)
Review process through Review Panels
About ~ 50% of preliminary report rewritten;
more supporting documents and explanatory boxes.
Available at http://www.ce2030.be Final report
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Important Remark
Study focuses on longer term: 2030
Global legal tendency taken into account (EU directives etc)
No detailed analysis of current legal & regulatory intricacies
But perceived shortcomings pointed out
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Baseline Scenario
Same baseline as
- DG TREN of European Commission
- Climate study (Min Tobback) – but till 2030
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Baseline Scenario
Same baseline as
- DG TREN
- Climate study (Min Tobback) – but till 2030
Current measures implemented
• No-post Kyoto imposed
• Nuclear phase out implemented
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Baseline Scenario Fuel prices
0
10
20
30
40
50
60
70
1990 1995 2000 2005 2010 2015 2020 2025 2030
$05/
boe
Oil-baseline Gas-baseline Coal-baseline
Oil-ref PP95 Gas-ref PP95 Coal-ref PP95
Gas-HGP sc PP95
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Baseline Scenario – soaring variant
Apr. 2006 E3mlab - NTUA 22
Oil-Soaring
Oil-Base
Gas-Medium
Gas-Soaring
Gas-Base
Coal-Soaring
Coal-Base
0
20
40
60
80
100
120
1990 1995 2000 2005 2010 2015 2020 2025 2030
$ o
f 2005 p
er
barr
el of oil e
quiv
ale
nt
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Baseline Scenario – GDP evolution
Gross Domestic Product
0
50
100
150
200
250
300
350
400
450
500
2005 2010 2015 2020 2025 2030
Year
GD
P [
G€'
00]
GDP in [G€ '00]
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Baseline Scenario -- Results
Final Energy Demand; Total & per Sector
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
2000 2005 2010 2015 2020 2025 2030
Year
FE
D [
kto
e/a]
FED total
FED_industry
FED_residential
FED_tertiary
FED_transport
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Baseline Scenario – FED Intensity
FED/GDP
0,0
20,0
40,0
60,0
80,0
100,0
120,0
140,0
160,0
2005 2010 2015 2020 2025 2030
Year
FE
D/G
DP
[to
e/M
EU
R'0
0]
FED/GDP [toe/MEUR'00]
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Baseline Scenario -- Results
Energy-related CO2 emissions
0,0
20,0
40,0
60,0
80,0
100,0
120,0
140,0
160,0
2000 2005 2010 2015 2020 2025 2030
Year
CO
2 em
issi
on
[M
ton
/a] CO2 emissions total
Electr sector
Industry
Residential
Tertiary
Transport
Energy branch
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Baseline Scenario -- Results
-10
-5
0
5
10
15
20
25
30
35
2000 2010 2020 2030
Mt o
f CO
2
supply side industry and buildings transport total
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Baseline Scenario – soaring variant
Apr. 2006 E3mlab - NTUA 22
Oil-Soaring
Oil-Base
Gas-Medium
Gas-Soaring
Gas-Base
Coal-Soaring
Coal-Base
0
20
40
60
80
100
120
1990 1995 2000 2005 2010 2015 2020 2025 2030
$ o
f 2005 p
er
barr
el of oil e
quiv
ale
nt
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Baseline Scenario Soaring Variant Results
Baseline vs Soaring Price GIC & FED Comparison
33000
38000
43000
48000
53000
58000
63000
2000 2005 2010 2015 2020 2025 2030
Year
GIC
&
F
ED
[k
toe/
a]
GIC_tot BL
FED_tot BL
GIC_tot Soar BL
FED_tot Soar BL
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Baseline - Conclusion
The Baseline scenario is
NOT SUSTAINABLE !NOT SUSTAINABLE !
Must consider other scenarios…
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Dec 19 2005 – June 19 2007Commission ENERGY 2030
GHG Effect
• The Earth’s surface temperature increases (IPCC)
Dec 19 2005 – June 19 2007Commission ENERGY 2030 Sarmiento and Gruber ,2002
GHG Effect
Dec 19 2005 – June 19 2007Commission ENERGY 2030
GHG Effect
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Alternative Scenarios
Two philosophies:
• 15% and 30% domestic reduction of energy-related CO2 in 2030 wrt 1990 (within Belgium w/o emission trading)
• European-wide reduction limit of 30% GHG in 2030 wrt 1990, with perfect emission trading scheme for all sectors
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Domestic Alternative Scenarios
Eight scenarios
• 15% and 30% domestic reduction of energy-related CO2 in 2030 wrt 1990
• Each time with nuclear phase out on-off
• Each time with CCS and without
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Domestic Alternative Scenarios Results
Carbon value Post-Kyoto -15%
0
100
200
300
400
500
600
1 2 3 4
Scenarios -15%
CO
2 va
lue
[E
UR
/to
n C
O2]
no nuc; w ith CCS
nuc allow ed; w ith CCS
no nuc; no CCS
nuc allow ed; no CCS
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Domestic Alternative Scenarios Results
Carbon value Post-Kyoto -30%
0
500
1000
1500
2000
2500
5 6 7 8
Scenarios -30%
CO
2 va
lue
[E
UR
/to
n C
O2]
no nuc; w ith CCS
nuc allow ed; w ith CCS
no nuc; no CCS
nuc allow ed; no CCS
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Domestic Alternative Scenarios Results
Domestic CO2 reduction scenarios transparant, but unrealistic
30% domestic energy-related CO2 reduction is effectively IMPOSSIBLE
Realistic domestic Belgian CO2 reductions are ~ …15%...
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Domestic Alternative ScenariosResults
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Domestic Alternative Scenarios Results
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Comparison DLR (Greenpeace) - CE2030 for primary energy in 2030
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
DLR bpk30 bpk30n bpk30s bpk30ns
Scenarios
Mto
e p
er a
nn
um
.
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Comparison DLR (Greenpeace) - CE2030 for renewable electricity in 2030
0
5000
10000
15000
20000
25000
30000
35000
40000
DLR bpk30 bpk30n bpk30s bpk30ns
Scenarios
GW
he
pe
r a
nn
um
.
import
PV
wind
biomass
total domestic
Dec 19 2005 – June 19 2007Commission ENERGY 2030
European Alternative Scenarios
Two extra scenarios:
• European-wide reduction limit of 30% GHG in 2030 wrt 1990, with perfect emission trading scheme for all sectors
• Belgian nuclear phase out on-off
• No CCS assumed
Dec 19 2005 – June 19 2007Commission ENERGY 2030
European Alternative ScenariosResults
EU wide cost of Carbon Value (price of emission allowances):
- Without nuclear in Belgium ~ 200 €/ton
- With nuclear in Belgium ~ 190 €/ton
Dec 19 2005 – June 19 2007Commission ENERGY 2030
European Alternative ScenariosResults
Dec 19 2005 – June 19 2007Commission ENERGY 2030
European Alternative ScenariosResults
Limited reduction of CO2 in case of nuclear phase out means that marginal abatement cost is then much higher than in neighboring countries.
With nuclear allowed, a cheap CO2 reduction method is available in Belgium.
Dec 19 2005 – June 19 2007Commission ENERGY 2030
European Alternative ScenariosResults
Consider same GHG commitment in Belgium as in EU;
i.e. 30% reduction in 2030 wrt 1990
- Not all to be reduced domestically,- But responsible for reduction abroad
via emission allowance purchase
Dec 19 2005 – June 19 2007Commission ENERGY 2030
European Alternative ScenariosResults
Cost for Belgium ~ 15 – 20 G€, or
about 6-8% of GDP2000; 4-5% of GDP2030
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Beyond the ScenariosReflections
Extension of networks: - for HV if off shore ~ 3800 MW ~ 700 M€ - for distribution grid adaptation ~ 2 G€ over 10 yr
Subsidies required for renewable expansion: - current 846 MW wind offshore planned ~ 6 G€ - next 3000 MW wind offshore ~ 21 G€ - 2000 MW wind onshore ~ 7 G€ - 1000 MW photovoltaic (PV) ~ 7.2 G€ - 1500 MW Biomass ~ 9.6 G€
50 G€ over 20 years, (or 1/5 GDP2000 or 1/10 GDP2030)
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Beyond the ScenariosReflections
Security of supply
Import dependency on scale ~ 1-2 yr:
Up to 88-90% without nuclear in energy terms
Up to 95-97% in instantaneous power terms
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Beyond the Scenarios
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Beyond the Scenarios
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Beyond the ScenariosReflections on Gas Dependence
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Beyond the ScenariosReflections on Gas Dependence
Gas Demand for Electricity Generation
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Beyond the ScenariosReflections
Major gas reserves
05
10
152025303540
455055
USA
Venez
Kazah
Nethe
rl
Norway
Russia
Turkm
en UKIra
nIra
q
Qua
tar
Saud
Arab
UAE
Alger
ia
Niger
ia
China
Indo
nesia
Mal
aysia
Country
Gas
vo
lum
e [t
rill
ion
m3 o
r 10
9 m3]
Largest reserves
European
Other
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Reliable; Security of Supply GasUkraineUkraine
01.01.0601.01.06
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Reliable; Security of Supply GasUkraineUkraine
01.01.0601.01.06
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Beyond the Scenarios
Increasing Electricity Demand
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Beyond the Scenarios
Needed Investments for Electricity Generation
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Beyond the Scenarios
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Nuclear Phase Out ?
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Cost of Nuclear Phase Out
- Phasing out nuclear power entails to throwing away a cheap means to reduce CO2
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Cost for Belgium ~ 15000 – 20000 M€, or
about 6-8% of GDP2000; 4-5% of GDP2030
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Cost of Nuclear Phase Out
- Phasing out nuclear power entails to throwing away a cheap means to reduce CO2
- Phasing out nuclear power will lead to higher electricity prices
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Electricity Prices
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Cost of Nuclear Phase Out
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Cost of Nuclear Phase Out
- Phasing out nuclear power entails to throwing away a cheap means to reduce CO2
- Phasing out nuclear power will lead to higher electricity prices
- Phasing out nuclear power gives up concession fee to help support renewable sources
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Cost of Nuclear Phase Out
- Phasing out nuclear power entails to throwing away a cheap means to reduce CO2
- Phasing out nuclear power will lead to higher electricity prices
- Phasing out nuclear power gives up concession fee to help support renewable sources
- Phasing out nuclear power increases energy import dependency, with extra cost
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Cost of Nuclear Phase Out
- Postponing nuclear phase out allows growth of decommissioning fund by ~ 1 G€
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Cost of Nuclear Phase Out
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Cost of Nuclear Phase Out
- Postponing nuclear phase out allows growth of decommissioning fund by ~ 1 G€
- Postponing nuclear phase out allows negotiations with GdF/Suez to keep certain aspects of electricity generation Belgian
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Cost of Nuclear Phase Out
- Postponing nuclear phase out allows growth of decommissioning fund by ~ 1 G€
- Postponing nuclear phase out allows negotiations with GdF/Suez to keep certain aspects of electricity generation Belgian
Nuc Ph Out seems too expensive;Nuc Ph Out seems too expensive;
recommended to consider operational extensionrecommended to consider operational extension
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Dec 19 2005 – June 19 2007Commission ENERGY 2030
General Recommendations
Belgium must keep a EU perspective; quick transposition of directives is called for
Need stable legislation & regulatory framework
Belgian energy responsibilities to be harmonized
Do not put all eggs in same basket; need diverse set of contributing elements
Belgium should prepare for a substantial post-Kyoto reduction (no ostrich attitude)
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Concrete Recommendations
Do all that is reasonable for reducing energy demand
…start with EU directives quickly
…go perhaps beyond
Pass on energy prices to consumers
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Concrete Recommendations
Should keep the nuclear option open:
…negotiate concession fee (Borssele scenario); amount to be negotiated; to be used for
“useful purposes”
… continued operation under strict safety rules
(regulators, IAEA, EURATOM, WANO…)
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Concrete Recommendations
Renewable obligation (quota) best on supply; local production to be carefully considered via penalties
Off shore wind to be pursued
… reconsider earlier rejected sites
… develop far off-shore sites meticulously
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Concrete Recommendations
Make commitment for one CCS pilot plant no later than 2030
Security of supply
… diversity of prim sources & technologies
… stable investment climate
… transmission & distribution networks
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Concrete Recommendations
Liberalization of electricity & gas…stable regulatory framework…one wholesale NW-EUR region with sufficient cross border capacity; efficient & strict regulatory supervision…retail market access to be developed over time…vertical unbundling needed (grids outside, at least legally)…guarantee for B: golden share in Suez/GdF?
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Concrete Recommendations
Research & development
…do preferentially in a EU framework
…R&D for energy efficiency
…off shore wind development
…systems integration
…one CCS plant by 2030
…nuclear-energy systems development
…energy-system model development
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Concrete Recommendations
Sustained Strategic Watching Brief
…permanent follow up of recommendations
…supervised by independent core group
…statistics to be improved
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Conclusion
Please do not judge based on emotion or sentiment!
Study the report carefully in all its aspects:Security of supply (LT & ST)Clean energy provision (climate & other)At reasonable prices and cost
We wish to be judged based on facts & figures;Then draw conclusions and define policy!
Dec 19 2005 – June 19 2007Commission ENERGY 2030
Practical Information
Available at http://www.ce2030.be Final report
Dec 19 2005 – June 19 2007Commission ENERGY 2030