The diversity of national energy systems - data & figures

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Institut für Energieforschung 9.07.09

Systemforschung und technologische Entwicklung (IEF-STE) Hake, J.-Fr., Fischer, W., Sander,

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Transforming the Energy Systems of the European Union – between policy and research

• Framework conditions for an EU energy policy: The diversity of

national energy systems - data & figures

• EU Policies and Strategies

• The case of Germany: Between nuclear phase out and climate

protection forerunner

• EU energy technology strategies

• Final conclusion: EU energy policy in Transition



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The diversity of national energy systems - data & figures

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EU27 and Australia in comparison

Population Area

km

Population/

km

GDP GDP/ capita

Australia about 21 Mio. 7. 686. 850 2,8 800,5 Mrd. US $ 38.100 US $

EU 27 about 500 Mio. 4. 300. 000 11,6 18.146,5 Mrd. US $

36.504 US $



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Gross Energy Consumption and Energy Mix in the EU 27 in million tons of oil equivalent, 2006

Absolute Gross Energy Consumption by Fuel; EU27

0

100

200

300

400

500

600

700

800

EU27

mil

lio

n t

on

s o

il e

qu

iva

len

t

Solid Fuels Oil Natural gas Nuclear Renewables

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Gross Energy Consumption & Energy Mix in selected EU States

in million tons of oil equivalent, 2006

Gross Energy Consumption by Fuel

-20

0

20

40

60

80

100

120

140

mil

lio

n t

on

s o

il e

qu

iva

len

t

Solid Fuels

Oil

Natural gas

Nuclear

Renewables

Other



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Source: EU Commission (2009):

EU Energy in Figures 2009

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Final Energy Consumption in the EU 27 in million tons of oil equivalent, 2006

Absolute Final Energy Consumption by Sector; EU27

0

50

100

150

200

250

300

350

400

EU27

mil

lio

n t

on

s o

il e

qu

iva

len

t

Industry Transport Housholds Services



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Final Energy Consumption in selected EU member states

in million tons of oil equivalent, 2006

Final Energy Consumption by Sector

0

10

20

30

40

50

60

70

80

mil

lio

n t

on

s o

il e

qu

iva

len

t

Industry Transport Housholds Services

5



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Gross Electricity Generation in selected EU States

Source: EU

Commission (2009): EU

Energy and Transport

in Figures



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Gross Electricity Generation; Fuel Mix of EU27 and selected Member States

Source: EU

Commission

(2009): EU

Energy and

Transport in

Figures

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Import Depedency of selected EU Countries: Solid Fuels

Source: EU

Commission

(2009): EU

Energy and

Transport in

Figures



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Import Depedency of selected EU States: Oil

Source: EU

Commission

(2009): EU

Energy and

Transport in

Figures

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Import Depedency of selected EU Countries: Natural Gas

Source: EU

Commission

(2009): EU

Energy and

Transport in

Figures



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Oil and Gas Imports of EU27

Source: EU Commission (2009): EU Energy and Transport in Figures

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Diversification of EU27 Oil Imports

Source: EU Commission (2009): EU

Energy and Transport in Figures



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Diversification of EU27 Gas Imports

Source: EU Commission (2009): EU

Energy and Transport in Figures

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Electricity prices household consumers 2008 (1. quarter, EUR/100kWh)



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Source: Eurostat

Electricity prices industrial consumers 2008 (1. quarter, EUR/100kWh)

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Summary

The energy systems of the EU-countries have historically developed as

largely closed national systems (exception EURATOM) based on different resources & policies.

These structures still influence the energy policies of EU-countries and

make the process to an integrated European energy policy burdensome.

But the new challenges the EU faces (climate change, import-dependency,

competiveness) are driving forces for a higher integration at the EU-level, putting pressure on old-fashioned national energy policies &

systems.



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EU Policies & Strategies

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Competiveness: - Open internal markets

- Interconnections (Trans-European Networks)

- European electricity & gas network

- R & D*

Security of Supply: - Diversification

- EU oil & gas stocks & management

- International dialogue (consumer & producer)

- R & D*

Environmental protection: - GHG reduction policies & EU- ETS

- Others (NOx, particles …)

* Focus clean coal, CCS, renewables, efficiency, nuclear.

EU Energy Policy Challenges

how to balance ?



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Coping with challenges: development of EU-Energy & Climate Policies*

Source: Eurostat, Panorama of Energy, 2009

*Not included: Adaptation to Climate Change, Commission Whitebook 2009.

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Limited EU-Competences in Energy Policy

- Absence of a specific article on Energy competence sharing within EU

- No clear allocation of competences between States and Community

Institutions, but intergovernmental character dominates

- But: strong influence of Commission through market regulation,

increasingly through emission trading, partly through R & D

- But: Lisbon Treaty defines Energy as a shared competence, has a new

Title on Energy (energy mix & taxation still national competence)



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Market Opening 1

Liberalization of the EU gas and electricity markets proceeded in three steps.

First Directives were issued in 1996 for electricity (96/92/EC) and in

1998 (98/30/EC) for gas. Free choose of suppliers (for larger costumers) Open access to grids and gas networks. Soft provisions (e.g. no mandate for independent regulatory

authorities).

Market Opening 2

Inadequate results led to second directives on gas (2003/55/EC)

and electricity (2003/54/EC) and to a regulation on cross-border exchange of electricity (EC 1228/2003.

Full market opening by 1 July 2007.

Mandatory unbundling of supply and transmission companies either by legal separation or by full ownership unbundling.

Mandatory establishment of independent regulators.

Market based allocation of cross-border transmission capacity.

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Market Opening 3

At present, proposals on a Third Liberalization Package are discussed

between the Commission, the Council and the Parliament. These proposals include:

Mandatory full ownership unbundling of transmission system operators.

Establishment of an Agency for Co-Operation of Energy Regulators (ACER) with powers in regulating cross-border-trade.

Establishment of a European Network of Transmission System Operators (ENSO) to develop common commercial and technical codes.



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Renewables 1

Directive 2001/77/EC On the Promotion of Electricity Produced from Renewable Energy Sources.

EU level - 21% of all electricity should be generated from renewable sources by 2010.

national level - each member state should increase the share of renewable in electricity generation by 8 percentage points to 2010.

Directive 2003/30/EC on the promotion of biofuels.

In each member state, biofuels should account for 5,75% of energy consumption in transport by 2010.

Failure to meet the indicative targets of 2005 led the Commission to

propose a new directive that would cover renewable share in power generation and transport.

Sustainable produced biofuels should cover 10% of energy in transport by 2020.

Differentiated targets for the share of renewables in electricity generation by 2020.

Renewables 2

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National distribution of EU-renewable targets 2020



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Development of the Share of Renewables in Final Energy Consumption

Source: EU

Commission (2009):

EU Energy and

Transport in Figures

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Biofuels & other renewables for transport

Directive on the Promotion of the use of biofuels and other renewable

fuels for transport (2003) - biofuels directive

Renewable energy sources should cover 5, 75 % (2010) and 10%

(2020) of transport fuel.*

Differentiated targets for the share of renewables in electricity

generation by 2020.

*On January 14 2008 the EU Environment Commissioner Dimas announced

the EU is rethinking its biofuel program due to environmental and social

concerns (impact of biofuels on rising food prices, rainforest destruction,

notably from palm oil production). New strategy: keep the target, but the

biofuels have to be produced according new sustainability criteria (use must

save 35% of GHG emissions of fossil fuels, from 2017 onward 50%; more

second-generation biofuels; renewable biofuel-electricity consumed by cars

will be counted a 2.5 times its input; hydrogen is counted as renewable).



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Energy Efficiency

At present, a proposal by the Commission on an Energy Efficiency Action

Plan is under discussion. The plan includes measures in six priority areas, leading to an additional reduction of energy consumption of 20%:

1) Introduction of minimum performance standards and transparent labeling according to these standards.*

2) Setting minimum standards for energy efficiency of new and renovated buildings.

3) Setting minimum requirements for transformation facilities.

4) Increasing fuel efficiency in transport to reduce CO2-emissions to 120 g/km.

5) Increasing public awareness through education courses e.g. for professionals and students.

6) International cooperation.

*Eco-design Directive (2009 in force): at the design stage manufacturers of energy-using products will be obliged to reduce the energy consumption and other negative environmental impacts occurring throughout the product life cycle (minimum energy performance standards (MEPS) or other mechanisms).

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In the focus of EU policy: EU-GHG Policies and the Emissions-Trading-System

EU 20-20-20 target for 2020

(December 2008 “Climate action and renewable energy package”):

• Cutting GHG emissions of EU 27 by at least 20% of 1990 level (30% if other

developed countries commit to comparable cuts).

• Increasing renewables to 20% of total energy production.

• Cutting energy consumption by 20% of projected 2020 levels by improving

energy efficiency

Main instrument > EU ETS: - phase I (test-phase, NAPs, overallocation & free

allocation emission rights), - phase II 2009-12 (NAPs with Commission control

and reduced emission rights), - phase III after 2013 (EU allocation system

without NAPs, differentiated auctioning, new sectors).



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What has to achieved: EU-15 Kyoto targets for 2012 and their distribution (“EU-bubble”)

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Source: EU Commission (2009): EU Energy and


What has been achieved:

Development of EU-15 CO2-Emissions

Source: EU

Commission (2009):

EU Energy and




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*

What has to be done: EU-GHG Emissions and Kyoto targets

*Only three of EU-15-countries on track up to now

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What will be done: EU legislation to implement the 20 - 20 -20 target

- A Directive revising the EU Emissions Trading System (EU ETS), which covers

some 40% of EU greenhouse gas emissions;

- An "effort-sharing" Decision setting binding national targets for emissions from

sectors not covered by the EU ETS;

- A Directive setting binding national targets for increasing the share of renewable

energy sources in the energy mix;

- A Directive creating a legal framework for the safe and environmentally sound use

of carbon capture and storage technologies;

- A Regulation requiring a reduction in CO2 emissions from new cars to an average of

120g per km, to be phased in between 2012 and 2015, and further to 95g per km

in 2020. (contributing more than one-third of the emission reductions required in

the non-ETS sectors);

- A revision of the Fuel Quality Directive requiring fuel suppliers to reduce

greenhouse gas emissions from the fuel production chain by 6% by 2020.



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The Main instrument: a modified EU-ETS for phase III

> Capped EU emissions: 21% below 2005 levels by 2020 to 1,720 Mt/y, 1.74 % linear reduction of emission rights per year.

• Enlarging the ETS on new sectors (petrochemical, aluminium, aviation)

• GHGs avoided through CCS are to be credited as 'not emitted‘. > up to 300 million allowances available to subsidise (among others) the construction of 12 CCS demonstration plants.

• EU ETS auctioning:

- power sector full auctioning from 2013 onwards (exception for eastern Europe countries full auctioning in 2020 ) - industry 20% auctioning in 2013, 70% in 2020, 100% in 2027; but energy & export intensive industries (most of them) all allowances for free if “significant risk of carbon leakage" (sectors to be determined by Commission 12/2009).

• EU solidarity fund: 10% of ETS emission quotas reserved for a "solidarity fund" to help poorer countries from Central and Eastern Europe.

• Flexibility and third countries: Limited use of CDM & JI. 3% of member states' total emissions in 2005 or more, depending on international agreement.

> Sectors not covered by the ETS (transport, buildings, agriculture, waste): 10% below 2005 by 2020. > different national targets according to countries' GDP.

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EU GHG reduction targets for 2020 and its distribution



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EU-countries: GHG reduction in non ETS sectors

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Conclusion: Diversity of EU Energy Policies

National states are the predominant actors in European energy policy, as guaranteed by the ECT (e.g. national veto in Art. 175 II).

This leads to an interconnected but diversified European energy system, where interests, problems and assets are allocated on the national rather than the EU level.

The EU increasingly influences these national energy systems indirectly, mostly through the common market policy, the Emission Trading Scheme and the Trans-European-Network program.

While the Lisbon Treaty gives the EU more weight in energy policy, the position of the member states will remain strong. Therefore EU energy policy will remain a fragile balance of national and European interests, problems and instruments.



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Conclusion: EU Policies and Strategies

The EU is influencing national energy policy by setting the agenda and using

her competencies in “neighboring” policy fields.

However, most policy instruments of the EU failed to deliver the desired effects:

The prices for gas and electricity raised despite open market policies.

The EU 15 Kyoto target (-8%) are difficult to meet. Energy dependence is increasing, a common foreign EU energy strategy is still quested:

Import dependency of the EU is high and projected to rise even further

Since 2004, oil and gas imports to the EU have been disrupted several times, harming especially the new member states in Eastern Europe.

Despite several attempts to address the topic, EU crisis reaction mechanisms remain weak and no common foreign policy approach exists. This is evident in the cases of the Nabucco and the Nord Stream Pipeline

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The case of Germany



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Germany: climate & energy targets

• Government Climate Protection Program, IKEP (2007)

Reduction GHG emissions by 40 % until 2020 (reference year 1990).

Increase share of renewables for electricity generation up to 25-30% until 2020.

Increase share of electricity from Combined Heat and Power up to 25% until 2020.

Increase share of biofuels up to 17% of energy related fuels.

• Government Declaration (2007)

Reduction electricity consumption by 11% through increase in energy efficiency in 2020.

Increase renewables in the heat sector up to 14% in 2020.

• Government Coalition Agreement (2005) Increase energy productivity (GDP/primary energy) by 100% between 1990 – 2020.

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Measures to implement IKEP 2007 (I)



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Measures to implement IKEP (II)

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Kraus, DENA 2008

Challenge: Increase productivity

target: average increase/

year 2005-20



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Challenge: nuclear reactor phase-out in Germany

based on the 2001 agreement companies/government & stipulated in federal atomic law (2002)

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Challenge: Decreasing acceptance for new efficient Coal Power Plants



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Challenge: CCS projects in peril ?

CCS power plant (planning)

Potential pipelines

Strorage areas

Ketzin-project

Local resistance, contributed to the failure to implement the EU CCS directive in Germany;

has to be dealt with in next legislative period.

Map-source: Eurosolar

Blue areas: electoral

districts

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Desertec: the new Shangri-La?

- aims to cover 15% of Europe’s electricity demand by 2050.

- electricity is generated by using Concentrated Solar-thermal Power Plants

in different locations in North Africa & Middle East.

- transmission via High-Voltage Direct Transmission Lines.

- investments will add up to app. 400 bn. .

Desertec Memorandum of Understanding signed on June 13 2009.

Members of the Consortium with focus on German companies: ABB,

Deutsche Bank, E.ON, Münchener Rück, RWE, SCHOTT Solar, Siemens …

> Established a Desertec Industrial Initiative planning entity.

> Aims to extend it‘s scope by including interested companies from

other states.



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Possible Infrastructure for Desertec within a visionary European Electricity Supply System

Source: Desertec Foundation/ www.desertec.com

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Possible Infrastructure for Desertec within a visionary European Electricity Supply System

Source: Desertec Foundation/

www.desertec.com



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Desertec - Critique

- Necessary Investments for installation, maintenance and transmission

may lead to comparatively high electricity prices.

- Desertec may impede domestic policies to support renewables.

- Electricity from politically unstable states in North Africa may reduce

security of electricity supply.

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Transeuropean networks – the case of electricity

Source: UCTE



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Transeuropean networks – the case of electricity

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Transeuropean networks – the case of gas

Source: Petrouleum Economist



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Transeuropean networks – the case of gas LNG

Source: E.ON Ruhrgas

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A side-note: DESERTEC Australia

Part of the global DESERTEC network.

Until now only publication of a roadmap (Australia 2050: Clean Energy

Superpower).

Founder fights extradition due to illegal investments in solar power

companies.

Aims to reduce costs for renewable electricity by using economy of scale

effects through joint development of wind, solar and hydro energy.

Improving regional interdependence by creating energy links throughout

the whole Asia-Pacific region.



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Possible Infrastructure Desertec Australia

Source: Desertec Australia

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DESERTEC Australia: Possible regional infrastructure




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DESERTEC Australia: Expected Development of Electricity Prices


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Conclusions: The Case of Germany

Germany has an ambivalent effect on the EU‘s energy policy. While in

principle supporting and strengthening it, she sometimes contradicts it in everyday politics (e.g. free emission certificates for export oriented

industries, CO2-tax for cars, “special relation” with Russia, opposition to nuclear “revival”).

Germany presents itself as a technology leader mainly regarding

renewable energies, while phasing out of nuclear (despite EURATOM) and (politically) delaying partly CCS-legislation because of political

resistance. This will make it difficult to meet the visionary country’s

CO2-reduction target of 80% (> VDI-study).



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The German Energy system in transition

Projections of the energy system of Germany until 2050

A study within the framework of the project „Future Climate“

in cooperation with the German Association of Engineers (VDI)

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IKARUS-LP energy system model for Germany



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Boundary conditions and demands

GDP growth: 1.4 %/a

Population: From 82.4 millions in 2009 to 77.3 millions in 2050

Prognosis of

demand figures in the transport sector

(cargo, passenger transport), domestic

sector (living

space), small consumer sector

(workforce) and in the industry sector

(gross product)

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Scenarios

• Reference scenario, low prices, nuclear power retention

• Reference scenario, high prices, nuclear power retention

• Reference scenario, high prices, nuclear power phase out

• CO2-Scenario -50% compared to today, low prices, nuclear power retention

• CO2-Scenario -50%, compared to today, high prices, nuclear power retention

• CO2-Scenario -50%, compared to today, high prices, nuclear power phase out

• CO2-Scenario -75%, compared to 2000, low prices, nuclear power extension



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Overwiew of reference scenarios

The most important exogenous guidelines

Industry:

• Efficiency improvements

• Energy intensive parts of industrial gross product declining • Additional options of measures for saving of process heat

demand and electricity demand

Residence, small consumers:

• Tightening up of the federal laws of energy saving from 2020 Insulation of buildings

Reduction of electricity demand for light, power, communication, washing, cooking etc.

Transport: • 120 g/km CO2 for new cars from 2020

• Similar for trucks • Further transfer of freight traffic from road to rail

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Reference scenarios

Primary (PE)- and final (EE) energy CO2-Emissions



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CO2-Reduction scenarios

Guideline of VDI/STE

(-60% as compared to 1990)

Guideline of “Future Climate“ advisory board

(-78% as compared to 1990)

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Primary energy



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Final energy

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Final energy residential sector



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Final energy transport sector

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Net installed capacity of power plants



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Net electricity generation

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CO2 Emissions



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CO2-Reduction costs: Marginal costs

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Annual additional costs: Costs of nuclear phase-out



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Annual additional costs: Additional costs of a -50% reduction scenario

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Annual additional costs: Additional costs of a -75% reduction scenario



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EU energy technology strategies

Research and Development

Energy related activities within the 7th research framework program should

contribute to a sustainable energy system.

Supported technologies include:

Hydrogen and fuel cells

Renewables (fuel, electricity, heating and cooling)

development of CCS technologies as proposed by the Zero

Emissions Fossil Fuel Power Plants European Technology Platform

(ZEP)

Energy efficiency

Smart grids

Nuclear security, new fission reactor types and fusion

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The Strategic Energy Technology Plan

On November 22 2007, the Commission published a Strategic Energy

Technology Plan (SET) that defined the following key challenges:

Market competitiveness of renewables

Cost efficiency of energy storage

Commercialization of fuel cells

Generation IV fission reactors

Construction of the ITER fusion facility

Networks and other supporting technologies for low-carbon energy

generation

Basic research on energy efficiency



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EU-Commission, European Strategic Energy Technology Plan (SET)

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Conclusion: EU Policies and Strategies in Transition

The EU is influencing national energy policy by setting the agenda and using

her competencies in “neighboring” policy fields.

However, most policy instruments of the EU failed to deliver the desired effects:

The prices for gas and electricity raised despite open market policies.

The EU 15 Kyoto target (-8%) are difficult to meet. Energy dependence is increasing, a common foreign EU energy strategy is still quested:

Import dependency of the EU is high and projected to rise even further

Since 2004, oil and gas imports to the EU have been disrupted several times, harming especially the new member states in Eastern Europe.

Despite several attempts to address the topic, EU crisis reaction mechanisms remain weak and no common foreign policy approach exists. This is evident in the cases of the Nabucco and the Nord Stream Pipeline.

Documents

The diversity of national energy systems - data & figures