10 commandments for European consistency
on the road to 2050
Jean –Michel Glachant (Florence School)
CEDEC Congress in Brussels, 20 March 2012
Intervention based on THINK policy research report:
Project Leader Manfred Hafner
Research Coordinator Leonardo Meeus
Research team Isabel Azevedo, Claudio Marcantonini,
Jean-Michel Glachant
Project advisors Pantelis Capros, Christian von Hirschhausen

Output

(consistent)… introduction…
 Consistency inside EC
 2050 roadmaps by DG Climate, Move, and Energy
 Consistency outside EC
 Collected evidence
 2050 stakeholders visions: Eurelectric, EGAF, IEA, ECF, EREC-Greenpeace
 2050 states strategies: Denmark, Finland, France, Germany, Ireland & UK
 Consistency for a European path
 Our 10 recommendations for a consistent European path
 “EU”: what consistency tools in today’s institutional context?
 “Energy policy” 6 key challenges: EE, GHG, RE, IEM, INFRA and R&D
 “THINK Path”: 10 useful EU-interventions to guide member states’ first
steps on the road towards 2050

Introduction
EC consistency: 2050 roadmaps
DG Climate 2050 Roadmap DG Energy 2050 Roadmap
Targets for energy consumption
Targets for CO2 emissions’ reduction reduction compared to 2005
compared to 1990 32 to 40% among all sectors (p.e.)
80% within all sectors 40 to 50% within the building sector (f.e.)
88 to 91% within the building sector
* Building sector stands for “Residential and Tertiary” sector
4

Presentation outline
Stakeholders
1. Same key 2050 policy challenges?
visions
Member Consistent 2050 approach from pioneer
2. States Member States already dealing with these
strategies challenges?
EU policy What are then “consistency adding” EU
3.
consistency interventions in this 2050 context?

6 Policy Areas What are the key 2050 policy Examples from the visions
challenges?
Energy Ambitious energy savings • Eurelectric: 20% more savings than baseline
• ECF: 45% buildings emissions’ reduction due to EE
efficiency • IEA: 30% of the emissions’reduction due to EE
• EREC/Greenpeace: 40% more savings than baseline
GHG emissions Decarbonization of the electricity • Eurelectric: highest electrification levels
sector • IEA and EREC/Greenpeace: higher direct use of RES
Renewable Ambitious renewable energy levels The use of RES in electricity generation ranges from
• 30 (EGAF) to almost 100% (EREC/Greenpeace)
energy • All inside the EU, except EREC/Greenpeace up to 60
GW
Energy Electricity grid adequacy • Eurelectric: 40% increase of interconnections
infrastructure (expansion and smartening of the grid) • ECF: up to 90% increase of interconnection
Internal energy Electricity supply security additional back-up capacity
market (timely investments and system flexibility) • ECF: 170 (40% RES) to 270 (80%RES) GW
R&D Technology development is a Commercial availability CCTS
• Eurelectric: 2025; EGAF: 2030
precondition for most of the above • IEA: 2015-2025; ECF: 2020
challenges

Presentation outline
Stakeholders
1. Same key 2050 policy challenges?
visions
Member Consistent 2050 approach from pioneer
2. States Member States already dealing with these
strategies challenges?
EU policy What are then “consistency adding” EU
3.
consistency interventions in this 2050 context?

6 Policy Areas What are pioneer Member States doing?
(Denmark, Finland, France, Germany, Ireland and UK)
Energy efficiency New opportunities for cooperation with shared focus on building
sector, even though approaches are currently diverging
GHG emissions New risks for policy fragmentation regarding future generation
technology portfolios, e.g. UK carbon floor price for electricity
generation from 2013
Renewable energy New risks for policy fragmentation with diverging views on relative
importance renewable energy and other low carbon technologies
Energy infrastructure New opportunities for cooperation in the development of electricity
grids, and pioneering member states seem to be willing to further
integrate their electricity transmission grids to enable their low-
carbon energy strategies
Internal energy market New risk of market fragmentation with market reforms triggered by
electricity supply concerns (UK & France)
R&D New opportunities for cooperation with shared view that it is
important, even though approaches are currently diverging

Presentation outline
Stakeholders
1. Same key 2050 policy challenges?
visions
Member Consistent 2050 approach from pioneer
2. States Member States already dealing with these
strategies challenges?
EU policy What are then “consistency adding” EU
3.
consistency interventions in this 2050 context?

EU consistency policy tools:
Collected evidence  policy tools  10 commandments
Three levels of involvement
EU consistency Effort-sharing Harmonization Level playing
field
Setting targets Framing the choice Creation of a
EU role for member of measures taken EU-wide
state action by member states instrument
EU policy tools 1ST TYPE 2ND TYPE 3RD TYPE

Area 1 FIRST type of EU SECOND type of EU THIRD type of EU
-Energy consistency consistency consistency
Efficiency Binding targets: Harmonization: EU-wide instrument:
Promising? - Transition cost sensitive - Not necessarily opportune to harmonize member state
to achievement of energy approaches due to local character of many of the energy
saving ambitions saving measures
- History of indicative - But, having harmonized proven records that are
targets being not comparable is important to promote spreading of good
achieved practices
- Increased risk of lock-in - See THINK report on smart cities (topic 2)
with “wrong” long life
assets
How could it - Energy saving targets for - Harmonization of - EU-good practices’ forum
be done? 2020, and beyond measuring and reporting or register
- Overall and sector tools for energy saving - EU-cities’ benchmarking
specific energy savings measures

Area 2- FIRST type of EU SECOND type of EU THIRD type of EU
GHG consistency consistency consistency
emissions Binding targets: Harmonization: EU-wide instrument:
Promising? - Transition to 2050 - Already harmonized - A credible long term
requires long term steep approach for the EU ETS carbon price signal
decarbonisation, which applied to carbonized
requires a credible long power sector
term carbon price signal
How could it - Credible GHG reduction - ETS pricing carbon for the - EU-carbon market
be done? target beyond 2020 power sector to be repository, platform and
- More ambitious targets harmonized with renewable authority for EU-ETS
targets - EU-carbon tax (for non-
EU-ETS sectors)

Area 3- FIRST type of EU SECOND type of EU THIRD type of EU
Renewable consistency consistency consistency
energy Binding targets: Harmonization: EU-wide instrument:
Promising? - All scenarios project - Integration process for - Potential in non-EU
much more renewable renewable energy countries, such as the
energy technologies Mediterranean
- With exceptions, the - Multi-lateral nature of
technologies will not all these projects suggests to
be cost competitive by create a level playing field
2020
How could it - Renewable energy - Minimum market - EU-decision bodies of
be done? target beyond 2020 conformity requirements Mediterranean regulators,
for national support transmission companies
schemes and trade platforms

Area 4-Energy FIRST type of EU SECOND type of EU THIRD type of EU
infrastructure consistency consistency consistency
Binding targets: Harmonization: EU-wide instrument:
Promising? - All paths towards 2050 - Smart grids needed to - Fundamental problem of
project big transmission deal with system asymmetric costs and
expansion integration challenges benefits
- Each member state - But, smart grids need - Super grids and off-shore
would have a minimum smart regulation grids
amount of border
capacity
How could it - Ambitious targets would - Mandating energy -EU infrastructure cost
be done? need to be more regulators to support the recovery instrument
sophisticated than the innovation process, and its -EU CostBenef. Analysis
indicative Barcelona Europeanization; to not - EU-grid planner
targets (import capacity) only improving the cost
efficiency of country grids

Area 5- FIRST type of EU SECOND type of EU THIRD type of EU
Internal consistency consistency consistency
balancing Binding targets: Harmonization: EU-wide instrument:
energy
market
Promising? - System flexibility is what - All visions assume an EU internal balancing market so
keeps the lights on in a grid expansion reduces the need for back-up capacity
low carbon electricity - Market redesign of some member states fuelled by
system national system specificities, but EU would avoid that
- Ensuring enough supply security measures being only national in scope
balancing services work against the EU transition process
available requires a
shared effort in an EU
internal balancing market
How could it - Minimum targets for - Regional Initiatives for - Balancing market codes
be done? reservation of balancing balancing markets
services - Minimum requirements
for electricity supply
security measures

Area 6- THIRD type of EU consistency
Energy
Technology EU-wide instrument:
Promising?
THINK report on R&D (topic 1):
The existing SET-Plan is “existing” industry focused and bottom up,
*could be complemented by a more top down approach that can prioritize projects
coming from other industries (and other technologies)
How could **and also improves the balance between :
it be done? ¤“early innovation” to create new options and
¤¤“later stage innovation” to push the most promising options into market

Ten priority EU-interventions to add value to member
states’ first steps on the road towards 2050
Type of EU involvement 1st 2nd 3rd
1) Make energy saving targets binding √
2) Mobilize cities towards a low carbon future √ √
3) Strengthen the carbon price signal √ √ √
4) Integrate renewable energy technologies into the internal electricity market √
5) Create a level playing field for renewable energy cooperation with non-EU √
countries
6) Harmonize the regulation of distribution and transmission grids √
7) Establish an EU infrastructure investment cost recovery instrument √
8) Create an internal balancing market √ √ √
9) Harmonize security of electricity supply mechanisms √
10) Complement the Strategic Energy Technology Plan (SET-Plan) √

…and follow the example of pioneering member states in tracking
progress, i.e. monitoring investments and choices made by private
actors, as well as policy implementation by policy makers
Pioneering member Procedure to track progress to be able to adapt their policies on the road
state towards 2050
France
French government will need to report on the status of the
implementation of its 2050 policy on a yearly basis.
Germany Strategy foresees that the government will need to monitor and report on
progress every three years.
UK Committee on Climate Change makes an annual progress report, and the
government is also required to present regular reports on progress.
These reports have advocated stronger measures, such as the introduction
of a carbon floor prices that was not part of the initial strategy.

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