I.%20OBJECTIVES%20AND%20CHALLENGES

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I. OBJECTIVES AND CHALLENGES
Communications of the Commission An Energy
Policy for Europe and the Energy Package
2007 Limiting Global Climate Change to 2C The
way ahead for the EU and the World for 2020 and
beyond
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THE THREE CHALLENGES

Competitiveness LISBON

• Internal Market
• Interconnections (Trans-European networks)
• European electricity and gas network
• Research and innovation
• Clean coal
• Carbon sequestration
• Alternative fuels
• Energy efficiency
• Nuclear

FULLY BALANCED INTEGRATED AND MUTUALLY
REINFORCED
Sustainable Development KYOTO
Security of supply

• Renewable energy
• Energy efficiency
• Nuclear
• Research and innovation
• Emission trading

• International Dialogue
• European stock management (oil/gas)
• Refining capacity and energy storage
• Diversification

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INTEGRATING ENERGY ENVIRONMENT

• Meeting the 2c objective and responsibility of
  the developed countries to act in breaking the
  international deadlock for post-2012

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ENERGY FOR A CHANGING WORLD

• THE STRATEGIC OBJECTIVE
• 20 unilateral EU reduction of GHG by 2020
• 30 GHG reduction in the framework of an
  international agreement

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THE KEY DRIVERS 3x20 by 2020

By 2020 20 EU GHG
20 by 2020 EFFICIENCY
By 2020 binding 20 RENEWABLES at EU level
BIO-FUELS Min 10 binding
E-ELECTRICITY MS binding target
HEATING COOLING
MS binding target

NATIONAL TARGETS and ACTION PLANS
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II. THE ACTION PLAN
Actions for a post -industrial revolution
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1. Internal Energy Market

• The Challenges
• Incomplete and incorrect transposition 26
  infringement cases against 16 MS
• Different powers and competences of regulators
• Markets are not integrated sufficiently
  national markets concentrated
• Lack of cross border capacity and need for
  interconnections
• Incompatible market design in some cases e.g.
  balancing, transmission tariff regimes
• Limited wholesale trading

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Concentration of national gas markets
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Concentration in electricity markets
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Electricity interconnectors are often chronically
congested
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Prices for commercial electricity users
Average industrial electricity prices 2002-2006
Member States with regulated tariffs such as
France and Spain are not representatives
Euro/MWh net of tax
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Internal Market Policy Actions (1)

• Enhancing the role of national regulators and
  reinforcing co-ordination of regulators at EU
  level
• Options cooperation between national regulators
  ERGEG a new, single Community body
• Interconnection more co-ordination between
  TSOs
• Binding network security standards
• Assessment of Investment needs
• Non-discriminatory access to networks through
  efficient unbundling
• Options Ownership unbundling as the most
  efficient means/Independent System Operator (ISO)
  second-best

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Ownership unbundling major points of
criticism

• ? Trip into unchartered waters?
• In many Member States already applied
  successfully (13 MS in electricity, 6 MS in gas)
• ? Expropriation?
• increased shareholder value by resolving the
  conflict of interest and providing new focus
• ? Less investment?
• TSO no longer stymied by producer interest, more
  investment in UK, NL (LNG) and Northern Europe
  (Interconnections)
• Weaker position vis-à-vis gas supply countries?
• Todays national orientation is weakening the EU
  (asset swaps), ownership unbundling is a means
  to protect networks.
• More regulation can achieve the same objectives?
• Limitation of entrepreneurial freedoms a
  regulator in each board meeting?

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Internal Market Policy Actions (2)

• Transparency of the market
• Energy Customers Charter

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Priority Interconnection Plan

• Policy Actions for Infrastructure
• Continuous identification of missing
  infrastructure
• European coordinators for 4 priority projects
• Power-Link Germany, Poland Lithuania,
• Connections to off-shore wind power Northern
  Europe,
• Electricity interconnections France-Spain,
• Nabucco pipeline
• TEN-projects of European interest - planning
  and approval procedures for maximum 5 years
• Increased funding of Trans European Energy
  Networks (TEN-E)

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2. Solidarity in Security of Supply

• A fully functioning internal energy market is the
  best guarantee of supply security.
• Electricity and Gas Interconnections
• Gas Coordination Group
• Oil Supply Group
• Energy Correspondents Network
• Communication on strategic stocks

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3. Energy Efficiency (1)

• Energy Efficiency Action Plan
• (adopted on 19 October 2006)
• Saving 20 by 2020 Realising the Potential
• Improving the efficiency of heat and electricity
  generation, tranmission and distribution
• Transport fuel efficient cars better use of
  public transport introduction of biofuels
• Buildings improving the energy performance of
  the EUs building stock
• Appliances tougher standards and better
  labelling

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3. Energy Efficiency (2)

• Structural Funds and the EIB/EBRD to support
  energy efficiency
• Facilitating investments and financial incentives
  for energy efficiency in cooperation with
  financial institutions, including new Member
  States
• International agreement on energy efficiency
  (improved, internationally agreed minimum energy
  efficiency standards for a wide range of products
  and equiment and a process for the gradual
  raising of these standards) with IEA countries,
  Russia, China and India.

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4. Renewable Energy Sources

• Necessary to increase the level of renewable
  energy in the EUs overall mix
• European Council agreed on a binding overall 20
  target by 2020 and a 10 minimum binding target
  for biofuels
• Member States set national targets and action
  plans on
• RES in electricity
• Heating and cooling
• Biofuels

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5. Research and Technology (1)

• STRATEGIC PLAN by end 2007
• Promotion of technologies to support EPE and the
  low-carbon energy economy with 20 2020 RES
  target
• Second generation biofuels, photovoltaic,
  large-scale offshore-wind, hydrogen fuel cells,
• Generation IV fission power, fusion energy,
• Energy efficient transports, appliances and
  industrial systems,
• Sustainable coal and gas to make plants CCS
  ready by 2020.

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5. Research and Technology (2)Sustainable
Fossil Fuels

• Up to 12 industrial-scale demonstration
  facilities of sustainable power generation from
  fossil fuel in Europe (Early mover incentives,
  Technology platform, Pooling of EU and MS Funds,
  Joint Undertakings)
• Improvement of the legal framework (CCS in ETS)
  and public acceptance
• Clear timeframe for installation of CO2 capture
  storage CCS for coal- and gas-fired power plants
• CCS for new fossil fuel plant after 2020
  RETROFITTING of existing plants

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6. Future of Nuclear

• Around 1/3 of the electricity and 15 of the EU
  energy mix
• CO2-free source with importance in low emission
  scenarios
• Concerns on nuclear waste and decommissioning
• Phasing-out of nuclear energy phasing-in of
  other C02 free energy sources
• Policy Actions
• Commission proposes to establish an
• EU High Level Group on Nuclear Safety
• and Security and High Level Group on
• Innovative Systems

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7. International Energy Policy (1)Regional
Energy Trends

• Oil
• ¾ of increase (2003-2030) in developing regions,
  especially Asia
• China oil demand increased 2.5 times since 1993,
  when first became net oil importer
• Natural Gas
• Growth in every region
• Fastest in India and China
• Coal
• Increase rapidly in China and India (in 2030,
  both 48 share of world coal demand), notably for
  power generation

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7. International Energy Policy (2)

• COOPERATION WITH KEY ENERGY PRODUCERS, TRANSIT
  COUNTRIES AND CONSUMERS
• Through OPEC, GCC, with Central Asia (e.g. MoU
  Azerbaijan, Kazakhstan), Baku Initiative, Latin
  America, Caribbean, Africa-Europe Partnership
• EU RUSSIA ENERGY COOPERATION
• Energy partnership in the framework of the
  post-PCA agreement

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7. International Energy Policy (3)

• ENERGY RELATIONS WITH EU NEIGHBOURS
• Norway, European Neighbourhood Policy,Euromed,
  Mashrek/ Magreb, Turkey, Energy Community
  (South-East Europe)
• NEGOTIATIONS AGREEMENTS on climate, trade and
  technology
• Post-2012 climate regime, World Bank Gas Flaring
  Reduction Partnership, Extractive Industries
  Transparency Initiative, Energy Charter,
  extension of ETS to global partners, energy
  efficiency agreement.

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III. THE WAY AHEAD

• European Council 8-9 March 2007
• gtConsensus on an Action Plan on An Energy
  Policy for Europe
• European Parliament resolution of 14 December
  2006 resolution on Energy Package expected for
  July 2007
• Legislative proposals to be tabled by the
  Commission after this summer
• UNFCCC Kyoto Protocol processes
• G-8

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INFORMATION DOCUMENTATION
All documents on the climate and energy package
are available on http//ec.europa.eu/energy/ener
gy_policy/index_en.htm