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Internal (energy) market
Achieving our 2030 renewables & efficiency objectives
Thomas PELLERIN-CARLIN, Research Fellow, European Energy Policy Jacques Delors Institute 19 November 2015, Vrije Universiteit Brussel
Jacques Delors Institute An European Think-Tank Founded in 1996 by
Jacques Delors Two offices: Paris
(since 1996) and Berlin (since 2014)
Launched the Energy
Union idea in 2010 (Buzek, Delors, Padoa-Schioppa)
Setting the scene The four freedoms I – Internal goods market and
energy efficiency II – Internal capital market matters
for RES & EE III – Building a genuine EU electricity
market
Internal (goods) market and energy efficiency
Thomas PELLERIN-CARLIN, Research Fellow, Jacques Delors Institute 19 November 2015, Vrije Universiteit Brussel
Goods & energy efficiency
• Label & ban:
– Direct or – Indirect (e.g. car emissions)
– Most efficient policies on: • Oil, • Security of gas supply.
Goods & energy efficiency Energy efficiency does work !
Goods & energy efficiency
• Key Limits: – Lack of political support:
• EU level: uncertain support (Ševčovič vs. Timmermans),
• National level: narrow vision of the national interest,
• Businesses (esp. ‘old’ energy utilities and car manufacturers).
– In ETS sectors, EE does not reduce EU GHG emissions
Internal (capital) market RES & EE
Thomas PELLERIN-CARLIN, Research Fellow, Jacques Delors Institute 19 November 2015, Vrije Universiteit Brussel
Capital: ensuring low interest rates Lower interest more RES & EE
Sources: Andreas Rüdinger, IDDRI 2015
Capital: helping ‘crisis countries’
Sources: Diacore
Estimated cost of debt for wind projects
Capital: ensuring low interest rates • Trans-sector policies:
– Capital Market Union (for all EU-28), – Eurozone policies (for ‘crisis countries’), – Crowdfunding (Commission’s
communication).
• Energy-specific policies: – EFSI targeting on RES & EE, – Network of EU/National public banks: EIB,
KfW, CDC, CDP etc.
Internal (electricity) market
Thomas PELLERIN-CARLIN, Research Fellow, Jacques Delors Institute 19 November 2015, Vrije Universiteit Brussel
A single electricity market Why? • To better integrate RES, and • Deliver low electricity prices
(excluded taxes).
A single electricity market How ? ‘United in diversity’:
• Diversity
– of RES production levels – of Electricity demand patterns
• Unity – of back-up capacities – of storage capacities
Diversity of RES production
Electricity generation from wind turbines at the local, regional, national, macro-regional and european level
Sources: Fraunhofer 2015
Diversity of electricity demand patterns Diversity of cultures diversity of electricy demand peak: • Intra-day:
– Germany: ± 11h – France: ± 19-20h – Spain: ± 21-22h
• Yearly: – EU Southern countries peak in summer – EU Northern countries peak in winter
Unity of back-up/storage A back-up capacity (gas, battery, hydro) in south-east of France can produce at: • 11.00 for DE peak • 19.00 for FR peak • 22.00 for ES peak
Link our ‘natural batteries’ (i.e. mountains)
An EU-wide electricity market enhances cost-efficient security of electricity supply for all
The needed hardware Interconnections
Pan-European significance investments post 2019 Source: ENTSO-E, 2014
The needed software Electricity Market Design fit for a 2030 market w/ 50% of electricity coming from RES. It entails: • Develop demand side management:
– real-time pricing, – liberalisation of DSOs, – consumer empowerement.
• A European approach to security of electricity
supply articulating: – EU level and, – NUTS II level (< 3Million inhabitants)
Conclusion & Recommendations 1. Go further and faster on energy
efficiency of goods, esp. buildings, cars & trucks
2. Lower interest rates, esp. for RES & EE projects
3. Develop an EU-wide electricity market to better integrate RES
4. Further reduce ETS quotas to anticipate EE & RES development
Questions? [email protected]
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Back-up Slides
Thomas PELLERIN-CARLIN, Research Fellow, Jacques Delors Institute 19 November 2015, Vrije Universiteit Brussel
Jacques Delors Institute An European Think-Tank Founded in 1996 by Jacques Delors One Mission: produce original & independent
policy proposals Two offices: Paris (since 1996) and Berlin
(since 2014). Donors:
EU Energy Mix (in mtoe)
EU Energy Objectives
Sources: Jacques Delors Institute
Goods & energy efficiency
• Conclusion: – Regulating goods’ energy efficiency does work
• Recommendation, more regulatory action from the Commission: – Implementation of existing legislation (esp.
Buildings), – Push on car energy consumption, then trucks, – Further reduce ETS quotas to anticipate EE
gains, – Wait after Brexit to go further on the rest.
Transport
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• Juncker, EPP candidate, 16 April 2014
• Energy Union communication, 25 February 2015
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Juncker’s U-turn on EcoDesign
Capital: ensuring low interest rates • Lower interest more RES & EE
Sources: Andreas Rüdinger, IDDRI 2015
0%10%20%30%40%50%60%70%80%90%
100%
Gaz Charbon Nucléaire Eolien Solaire
Coût d'investissement Maintenance
Combustible CO2
121€ 133€ 158€
201€ 232€
-
50
100
150
200
250
2% 3% 5% 8% 15%Taux d'intérêt
Capital emprunté Cumul des intérêts
Gas Coal Nuclear Wind Solar Investment cost
Fuel cost Estimated CO2cost Maintenance Loan
Euros
Cumulated interest paiements (on 20 years)
Interest rates
Unity of storage Example of links between Europe’s ‘Big Natural Batteries’
Sources: mappsite.blogspot.fr
Interconnections
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Swedish RES cheaper than PL coal
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The needed software for electricity market reform • Implementing the existing legislation
• Electricity Market Design for a 2030 market w/ 50% of
electricity coming from RES
• Develop demand side management (real-time pricing, liberalisation of DSOs, consumer empowerement)
• Energy poverty communication
• A European approach to security of electricity supply
• Capacity mechanisms have to be thought at: – EU level and/or, – NUTS II level (< 3Million inhabitants)
DSOs concentration
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