CASES

1
CASES Cost Assessment for Sustainable Energy
Systems
2
Outline of the presentation

• What is CASES
• Context
• Objectives
• Expected results
• Interaction with other projects
• The actors
• Organisation of work
• Description of Work Packages
• Description of dissemination activities

3
Outline of the presentation

• What is CASES
• Context
• Objectives
• Expected results
• Interaction with other projects
• The actors
• Organisation of work
• Description of Work Packages
• Description of dissemination activities

4
What is CASES

• CASES is the acronyms of Cost assessment of
  sustainable energy costs, which is an European
  Commission funded Coordination Action.
• A Coordination Action
• aims at promoting and supporting the
  coordination, cooperation or networking of a
  range of research and innovation projects or
  operators for a specific objective, normally to
  achieve improved integration and coordination of
  European research for a fixed period of time.

5
What is CASES

• Types of co-ordinated collaborative activities
• studies, analyses, benchmarking exercises
• exchanges and dissemination of information and
  good practice
• organisation of conferences, seminars, meetings
• setting up of common information systems, setting
  up of expert groups
• definition, organisation and management of joint
  or common initiatives
• joint memoranda of understanding
• pre-standardisation and standardisation
  activities in specific fields
• establishment of roadmaps for research in
  specific topics.

6
Outline of the presentation

• What is CASES
• Context
• Objectives
• Expected results
• Interaction with other projects
• The actors
• Organisation of work
• Description of Work Packages
• Description of dissemination activities

7
Context

• While effort has been devoted in recent years to
  the estimation of the external costs of energy,
  more attention is now being paid to the
  examination of both the private and external
  costs in one framework.
• Energy policy making is concerned with both the
  supply side and the demand side of energy
  provision.
• The geographical dimension is also important
  since environmental damage from energy production
  crosses national borders.
• Costs are dynamic the private costs and the
  external costs are changing with time, as
  technologies develop, knowledge about impacts of
  energy use on the environment increases and
  individual preferences for certain environmental
  and other values change.
• The least well and least systematically covered
  area of external cost is the one related to
  energy security.

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Outline of the presentation

• What is CASES
• Context
• Objectives
• General objective
• Detailed objectives
• Expected results
• Interaction with other projects
• The actors
• Organisation of work
• Description of Work Packages
• Description of dissemination activities

9
Objectives

• General Objective
• CASES aims to evaluate policy options for
  improving the efficiency of energy use,
  underpinning this evaluation with a consistent
  and comprehensive picture of the full cost of
  energy, and to make this crucial knowledge
  available to all stakeholders.

10
Objectives

• Detailed Objectives
• To compile estimates of full costs of the use of
  different energy sources in EU and selected other
  countries under agreed energy scenarios to 2030.
• To use resulting datasets to undertake
  comparative cost assessments of introducing
  alternative policy options over the time period.
• To disseminate research findings to energy
  producers and users and to the policy makers.

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Outline of the presentation

• What is CASES
• Context
• Objectives
• Expected results
• Objective one
• Objective two
• Objective three
• Interaction with other projects
• The actors
• Organisation of work
• Description of Work Packages
• Description of dissemination activities

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Expected results

• Objective One will produce
• Best predictions about the evolution of the
  private costs of major technologies for
  generating energy from different sources over the
  next 25 years.
• Best estimates of the major environmental
  external costs of different types of energy in
  different countries and how will these change in
  the next 25 years.
• Best estimates of the major energy
  security-related external costs of different
  types of energy in different countries and of
  their changes in the next 25 years.
• Best estimates of the likely prices of major
  sources of energy over the next 25 years.
• Determination of the greatest uncertainties and
  of the most relevant research directions for the
  future.

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Expected results

• Objective Two will produce comparative
  assessments of
• the investment and operational costs of different
  energy options taking account of only private
  costs and taking account of private plus external
  costs. This assessment is dynamic and will
  provide the implications of different levels of
  internalisation on the investment decisions and
  on key social indicators.
• the impacts of the use of different methods of
  decision-making on the selection of projects -
  e.g. cost-benefit analysis with externality
  adders versus multi-criteria decision analysis
  tools.
• the implications of different taxes/charges on
  energy and/or on emissions on (a) the degree of
  internalisation and (b) the comparative cost
  comparisons, now and over time.

14
Expected results

• Objective Three will produce
• An interactive web site for the dissemination of
  project related information (partnership,
  activities and results, reports and deliverables,
  useful policy documentation, etc).
• An electronic mailing list to ensure prompt,
  updated and easy communication on project news.
• Two stakeholders workshops and a final conference
  organised to present main results of the project.

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Outline of the presentation

• What is CASES
• Context
• Objectives
• Expected results
• Interaction with other projects
• The actors
• Organisation of work
• Description of Work Packages
• Description of dissemination activities

16
Interaction with other projects

• This Coordinated Action builds on the formidable
  amount of research produced by several projects,
  focused to measure the full costs of the use of
  different energy sources such as fossil fuels,
  nuclear energy and renewable energy sources.
• CASES will interact with other projects to
  assess energy scenarios, external costs and
  private costs.

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Interaction with other projects

• Former and current projects related to CASES
• Projects focused on External Costs of Energy
• ExternE, NewExt and ExternE-Pol,
• DIEM,
• ECOSIT,
• INDES,
• MAXIMA
• Project focused on both the private and external
  costs
• NEEDS
• Projects focused on energy scenarios
• Primes,
• Poles,
• NEEDS.
• Projects producing national energy models for non
  EC countries
• Markal (India),
• AIM (India),
• IPAC (China).

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Outline of the presentation

• What is CASES
• Context
• Objectives
• Expected results
• Interaction with other projects
• The actors
• Partners from pre-existing North European member
  States
• Partners from pre-existing Mediterranean member
  States
• Partners from new member States
• Partners from associated candidate Countries
• Partners from associated non candidate Countries
• Partners from INCO DEV Countries
• Organisation of work
• Description of Work Packages
• Description of dissemination activities

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Partners

• The Consortium of the CASES Co-ordination Action
  is composed by twenty-six partners established in
  twenty States.
• Most of the institutions are established for
  research activities (11) and for higher education
  (9). The other participants are not qualified in
  one particular activity but they provide a
  scientific expertise and carry out complementary
  activities necessary to achieve the objectives of
  this Co-ordination Action.

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Partner
Partners from pre-existing North European member
States
Stockholm Environment Institute (SEI)
University of Bath (UBATH)
Energy Research Centre of the Netherlands (ECN)
Vrije Universiteit Amsterdam-Institute for
Environmental Studies (VU/IVM) Wageningen
Universiteit (WU)
Risoe National Laboratory (RISOE)
University of Stuttgart (USTUTT/IER) University
of Flensburg (UFLENS)
Flemish Institute for Technological Research
(VITO) Centre for European Policy Studies (CEPS)
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Partner
Partners from pre-existing Mediterranean member
States

• Observatoire Méditerranéen de l'Energie (OME)

Fondazione Eni Enrico Mattei (FEEM) Istituto di
Studi per lIntegrazione dei Sistemi (ISIS)
Centro de Investigaciones Energéticas,
Medioambientales y Tecnológicas (CIEMAT)
National Technical University of Athens (NTUA)
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Partners

• Partners from new member States
• Lithuanian Energy Institute (LEI)
• University of Warsaw - Warsaw Ecological
  Economic Center (UWARS)
• Univerzita Karlova v Praze - Charles University
  Enviroment Center (CUEC)
• Partners from associated candidate Countries
• Energy Agency of Plovdiv (EAP)
• Turkiye Bilimsel ve Teknik Arastirma Kurumu
  Marmara Research Center, Institute of Energy
  (TUBITAK)

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Partners
Partners from associated non candidate Countries

• ECON Analysis AS (ECON), Norway
• SWECO Grøner as (SWECO), Norway
• Paul Scherrer Institut (PSI), Switzerland
• Energy Research Institute (ERI), China
• Fundação COPPETEC (COPPETEC), Brasil
• Indian Institute of Management Ahmedabad (IIMA),
  India

Partners from Developing Countries
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Outline of the presentation

• What is CASES
• Context
• Objectives
• Expected results
• Interaction with other projects
• The actors
• Organisation of work
• Description of Work Packages
• Description of dissemination activities

25
Organisation of work
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Organisation of work

• Main steps of the project structure
• Agree upon the storylines of three electricity
  scenarios WP1 (status quo and two options
  developments) this will produce as output three
  reference scenarios
• Calculate average external costs per unit of
  emission, using Ecosense WP2, WP3, WP5, and
  private costs WP4 on the basis of the reference
  scenarios when a dynamic element is needed
• Refine scenario definition on the basis of
  computed external costs by considering full costs
  per each country/technology given by external
  costs plus private costs, where external costs
  are given by average cost calculated by Ecosense
  times the emission determined under energy
  scenarios WP2-7. This second run will include
  policy variables in order to facilitate policy
  assessment WP8-11.
• Analyse how the policy proposed in WP8-10 are
  affected by uncertainty in external costs
  estimates WP12.
• Draw final conclusions on the final output of the
  project.

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Outline of the presentation

• What is CASES
• Context
• Objectives
• Expected results
• Interaction with other projects
• The actors
• Organisation of work
• Description of Work Packages
• Description of dissemination activities

28
Description of Work Packages

• WP1
• Electricity Scenarios

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WP1 Electricity scenarios

• WP1 objective
• Provide electricity scenarios up to 2030 for
  EU-25 countries, Bulgaria, Turkey, Brazil, India
  and China
• WP1 partners
• OME, France (coordinator)
• ECON, Norway
• FEEM, Italy
• EAP, Bulgaria
• TUBITAK, Turkey
• COPPETEC, Brazil
• IIMA, India
• ERI, China

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WP 1 Electricity scenarios
TASK 2 Energy policy and other drivers for power
supply options
TASK 1 Parameters having direct influence on the
evolution of electricity demand
TASK 3 Electricity scenarios by country and
primary fuel for 2010, 2020 and 2030
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WP 1 Electricity scenarios

• Parameters having direct influence on the
  evolution of electricity demand
• Economic factors (growth rate, income, etc)
• Prices and subsidies (for electricity and
  competitive final energies)
• Structure of electricity demand
• Peak load seasonal variation
• Energy intensity
• Industry structure
• Potential for energy savings and DSM

32
WP 1 Electricity scenarios
ECONs European Gas Power Scenarios
Competition
Infrastructure investments then global hard
landing Visionary leadership EU leads
liberalization strong growth w/ volatility
Near-term overbuild creates circumstances for
re-energizing market liberalization
Political uncertainty high oil prices persist
Tough Post-Kyoto settlement
Beyond Kyoto
Scarcity
Tough Post-Kyoto commitments Governments
intervene Gas as intermediate fuel Nuclear
revival
Geo-Political tensions High fuel
prices Governments intervene policies Balkanizatio
n of markets
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WP 1 Electricity scenarios

• Electricity scenarios by country and primary fuel
  for 2010, 2020 and 2030
• Review and assessment of existing scenarios
• Use of in-house models when available

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Description of Work Packages

• WP2
• Human Health Related External Costs of Different
  Energy Sources

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WP2 Human Health Related External Costs

• WP2 objectives
• Collection of life cycle emissions for
  state-of-the-art conversion technologies
• Description of methodology for external costs
  estimation (human health, materials, crops)
• Including methodologies for other areas
  (eutrophication, acidification, land use change,
  climate change) into framework and tools
• Calculation of marginal costs for
  state-of-the-art technologies in Germany
• Organisation of a joint WP2-7 stakeholder workshop

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WP2 Human Health Related External Costs

• WP2 partners
• USTUTT/IER, University of Stuttgart Institute
  of Energy Economics and the Rational Use of
  Energy (Co-ordination and main work on emissions,
  methodology, tools)
• PSI, Paul Scherrer Institut (nuclear life cycle
  and methodologies for assessment of exposure of
  population with radioactive substances)
• ISIS, Istituto di Studi per lIntegrazione dei
  Sistemi (cooperation concerning stakeholder
  workshop)
• Involvement in estimating data on emissions of
  state of the art technologies outside EU25
• Fundação COPPETEC, Brasil
• IIMA, Indian Institute of Management Ahmedabad
• ERI, Energy Research Institute, China
• EAP, Energy Agency of Plovdiv, Bulgaria
• TUBITAK, Turkiye Bilinsel ve Teknik Arastirma
  Kurumu Marmara Research Center, Institute of
  Energy

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WP2 Human Health Related External Costs

• WP2 description of work
• Task 2.1 to identify and describe the pressures
  to the environment stemming from the latest
  state-of-the-art energy conversion technologies.
• Task 2.2 to describe the current
  state-of-the-art methodology to estimate external
  costs.
• Task 2.3 to incorporate the methodology to cover
  land use change, acidification and
  eutrophication, visual intrusion and climate
  change into the methodology to generate external
  cost estimates and into the ECOSENSE tool to
  calculate marginal external costs.
• Continue

38
WP2 Human Health Related External Costs

• Task 2.4 to demonstrate the application of the
  methodology, by estimating external costs for the
  different technologies at specific sites in
  Germany.
• Task 2.5 to organise a joint WPs 2-7 workshop
  for stakeholders, to discuss the methodology to
  calculate external and private costs and the
  results for selected sites.

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EcoSense Flowchart
Emission inventory
Air Quality Modelling
Valuation
Impact Assessment
Local Model
primary pollutants, local scale
Physical impacts
Concentration / Deposition fields
(e.g. increased mortality, crop losses)

• Emissions (NOx, SO2, NH3, NMVOC, primary
  particles...) according to
• Source
• Location

WTM

primary pollutants and acid species, regional
scale
Dose-effect models
Environmental damage costs
Receptor distribution
Monetary unit values
-
population
-
crop yield
-
building materials
SROM
Ozone formation, Regional scale
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Description of Work Packages

• WP3
• Non Human Health Related Environmental Costs of
  Different Energy Sources

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WP3 Non human health related environmental costs

• WP3 objectives
• To update the estimates of non-human health
  related environmental costs of different energy
  sources based on life cycle impacts for EU and
  non-EU countries with specific attention to new
  impacts (acidification, eutrophication and
  visual intrusion)
• To discuss and confirm ranges of estimates of
  environmental costs with representatives of
  industry.

42
WP3 Non human health related environmental costs

• WP3 partners
• VU-IVM, Institute for Environmental Studies of
  the Free University, Amsterdam (WP coordinator)
• Sweco Grøner, E-Co Tech Ås, Norway
• UW, Wageningen University

43
WP3 Non human health related environmental costs

• WP3 Description of work
• This WP provides a critical review and updates
  external cost estimates of energy-related impacts
  on land use change, acidification,
  eutrophication, visual intrusion and climate
  change across Europe and for selected non-EU
  countries.
• Jointly with WP2 and WPs4-7, research findings
  are presented and discussed in a stakeholder
  workshop. Results on land use change,
  acidification, eutrophication, visual intrusion
  and climate change are shared with the
  coordinator of WP2 to be included in the ECOSENSE
  model.

44
WP3 Non human health related environmental costs

• VU-IVM
• reviews and updates monetary estimates of
  energy-related land use change and climate change
  impacts
• contributes to the review and update of monetary
  estimates of impacts on aquatic ecosystems
• prepares a database on studies concerning
  external cost estimates of land use changes,
  acidification, eutrophication and climate change.
  
• Continue

45
WP3 Non human health related environmental costs

• Sweco Grøner
• reviews and updates monetary estimates of
  acidification impacts on freshwater fish, and
  impacts of eutrophication on use values and
  non-use values, and estimates of landscape
  aesthetic impacts of renewable energy
• provides a state-of-the art review of valuation
  studies on these topics and a discussion on
  benefit transfer methods for these values.
• UW
• studies the impacts of various emissions related
  to energy systems
• focuses on the impacts of acidifying compounds on
  terrestrial ecosystems, including agriculture.

46
Description of Work Packages

• WP4
• Private Costs of Electricity and Heat Generation

47
WP 4 Private Costs

• WP4 objectives
• Determine the private costs for electricity and
  heat generation of different technologies for
  selected countries
• Overview of existing heating technologies and
  electricity generation plants in previous
  studies.
• Updating to the state-of-the-art technologies and
  extending with technologies under development.
• Determination of the levelised lifetime cost of
  the heat and electricity generation technologies.
  
• Accomplishment of some sensitivity analysis for
  different
• load factors
• workers salaries and
• annual energy production.

48
WP 4 Private Costs

• WP4 partners
• USTUTT/IER, University of Stuttgart Institute
  of Energy Economics and the Rational Use of
  Energy (WP coordinator)
• VITO, Flemish Institute for Technological
  Research
• COPPETEC, Fundação COPPETEC
• IIMA, Indian Institute of Management Ahmedabad
• ERI, Energy Research Institute, China
• EAP, Energy Agency of Plovdiv, Bulgaria
• TUBITAK, Turkiye Bilimsel ve Teknik Arastirma
  Kurumu - Marmara Research Center, Institute of
  Energy

49
WP 4 Private Costs
WP4 description of work - overview of
technologies (proposed by WP leader)
Electricity generation plants nuclear power plants (EPR, PBMR) fossil-fired (oil, hard coal, lignite) power plants integrated coal gasification combined cycle (IGCC) plants combined cycle gas-steam power plants hydropower (run of river, dam) plants wind mills (onshore and offshore) solar photovoltaic systems (roof, open space) combustible renewable power plants
CHP plants coal-, gas-fired CHP plants with a back-pressure turbines coal-, gas-fired CHP plants with an extraction condensing turbines internal combustion engines biomass CHP plants (gasification) fuel cells (high temperature fuel cells)
Heat generation technologies gas, oil and wood chips combustion boilers heat exchangers heat pumps
50
WP 4 Private Costs

• Components of static social cost for electricity
  generation
• (From EUSUSTEL project)
• global external costs due to
• specific emissions
• other external life cycle cost
• costs of system integration due to
• stochastic wind, solar and hydro power supply
• spatial distribution, share of total generation
• private generation cost
• from an overall system oriented point of view
• Average Lifetime Levelised Electricity Generation
  Cost
• Solve for the price that makes costs equal to
  revenue over the lifetime of the project
• from an investors point of view additional
  premium due to risks in liberalised markets (e.g.
  electricity prices, economics, regulatory and
  political factors) should be considered

51
Description of Work Packages

• WP5
• Externalities of Energy Security

52
WP5 Externalities of Energy Security

• WP5 objectives
• To derive estimates of externalities related to
  energy supply insecurities for EU and other
  selected countries
• To use estimates of externality costs in policy
  assessment of measures addressing energy security
  in the EU and other selected countries.

53
WP5 Externalities of Energy Security

• WP5 partners
• UBATH, University of Bath (WP coordinator)
• ECN, Energy Research Centre of the Netherlands
• CEPS, Centre for European Policy Studies

54
WP5 Externalities of Energy Security

• WP5 description of work
• University of Bath (WP leader) reviews and
  updates existing estimates of external costs of
  energy insecurity for primary fuels
• use published outputs of existing macro-economic
  and inter-sectoral models to make estimates of
  the costs of the use of these fuels
• make predictive estimates of aggregated costs up
  to 2030 for the EU and selected other countries.
• Energy Research Centre of the Netherlands (ECN)
  critically reviews current estimates of values of
  loss of load (VOLLs) of electricity for EU and
  other selected countries
• Include costs of recent blackouts in EU and other
  countries (e.g. Italy, UK, Denmark etc)
• Provide basis for deriving country estimates to a
  time horizon of 2030.
• Continue

55
WP5 Externalities of Energy Security

• Energy Research Centre of the Netherlands (ECN)
  and Centre for European Policy Studies, Belgium
  (CEPS) assess the policy options to reduce - and
  insure against - the costs of energy insecurity
• by comparing costs of a number of policy options
  with the benefits in terms of reduced energy
  insecurity.
• policy options to include
• increased maintenance of strategic stockpiles,
• feed-in tariffs and tradable certificates as
  methods to increase renewable energy sources
  share in the EU energy mix,
• taxes on fossil fuels,
• requirements of increased capacity in the
  electricity sector and
• other market-based instruments.
• ? Policy recommendations

56
Description of Work Packages

• WP6
• National Level Estimates of Energy Costs in EU
  Countries

57
WP 6 National Level Estimates of Energy Costs
in EU Countries

• WP6 objectives
• To develop a consistent set of national level
  full costs estimates for the 25 EU countries for
  different energy sources.
• To develop a comparative full cost assessment and
  a consistency analysis of the set of national
  level full costs estimates.

58
WP 6 National Level Estimates of Energy Costs
in EU Countries

• WP6 partners
• FEEM, Fondazione Eni Enrico Mattei (WP
  coordinator)
• VITO, Flemish Institute for Technological
  Research
• USTUTT/IER, University of Stuttgart - Institute
  of Energy Economics and the Rational Use of
  Energy
• UWARS, University of Warsaw
• LEI, Lithuanian Energy Institute
• CIEMAT, Centro de Investigaciones Energéticas,
  Medioambientales y Tecnológicas
• SEI, Stockholm Environment Institute
• CUEC, Univerzita Karlova v Praze
• NTUA, National Technical University of Athens

59
WP 6 National Level Estimates of Energy Costs
in EU Countries

• WP6 Task 6.1 full cost estimation
• Analysis and Integration of costs A data
  template for private and external estimates is
  developed and filled for each country and for
  each energy source.
• The marginal costs of different technologies and
  the total external costs are calculated for the
  energy sector by technology for each EU-25
  country.
• Estimates on costs are dynamic as result of the
  scenarios of energy use for the years 2010, 2020
  and 2030.
• Full cost calculation The private and external
  cost data are harmonised and assembled in a
  coherent and systematic way to derive the total
  costs estimations.
• The total cost calculation is extended to the EU
  25 countries.
• Full cost estimates for each EU country and for
  different energy sources are integrated into a
  dynamic framework, carefully choosing among
  different scenarios.

60
WP 6 National Level Estimates of Energy Costs
in EU Countries

• WP6 Task 6.2 comparative full cost assessment
• A comparative full cost assessment is developed
  to identify inconsistencies and structural
  variations in the total costs composition.
• The full cost estimates are compared across
  countries, to pay particular attention to local
  geographical variations.
• Private and external costs are integrated within
  one dynamic framework.
• The most critical parameters that have an
  influence on the total cost estimates are
  identified.

61
Existing literature
New investigations
WP2 Private costs of energy production
WP3 Human health related external costs
WP5 Costs of energy security
WP4 Non-human health related external costs
WP6
WP1 Time dimension
WP12 Uncertainty dimension
Complete cost datasets. Fill in data gaps.
Calculate full (private external) cost for
different energy sources.
Compare full cost across countries. Compare full
cost composition.
62
Description of Work Packages

• WP7
• National Level Estimates of Energy Costs in Non
  EU Countries

63
WP7 National Level Estimates of Energy Costs in
Non EU Countries

• WP7 objectives
• Develop a methodological framework for the
  extraction of private and social costs of energy
  fuel cycles in a set of non EU countries
• Derive new insights into the costs of fuel cycles
  in EU as compared to the group of non EU
  countries
• The group on non EU collaboration countries
  Brazil, Bulgaria, China, India and Turkey.

64
WP7 National Level Estimates of Energy Costs in
Non EU Countries

• WP7 partners
• RISOE, Risoe National Laboratory (WP coordinator)
• COPPETEC, Fundação COPPETEC, Brasil
• IIMA, Indian Institute of Management Ahmedabad
• ERI, Energy Research Institute, China
• EAP, Energy Agency of Plovdiv
• TUBITAK, Turkiye Bilimsel ve Teknik Arastirma
  Kurumu - Marmara Research Center, Institute of
  Energy

65
WP7 National Level Estimates of Energy Costs in
Non EU Countries

• WP7 description of work
• Estimates of private and social costs
• Twentyfive years time frame
• Based on available fuel cycle cost assessments
  for the collaboration countries.
• Two fuel cycles in each country
• Special focus on social costs of human health
  impacts from pollution
• Fuel cycles considered as of yet
• Brazil Renewable energy options and ethanol for
  transportation (COPPETEC)
• Bulgaria Fossil fuel based power production and
  renewable energy (EAP).
• China Coal and biomass or other renewable
  (ERI)
• India Coal and ethanol for transportation (IIMA)
• Turkey Coal and biodiesel (TUBITAK)

66
WP7 National Level Estimates of Energy Costs in
Non EU Countries

• Challenges in harmonizing computations to ExternE
  standards
• Differences across developed and developing
  countries arise in
• Issues related to incomplete markets,
  inefficiencies and informal sectors
• The kinds of externalities that arise
• The relative magnitude of impact from similar
  kinds of externalities
• Data availability
• Modelling issues
• Valuation issues

67
WP7 National Level Estimates of Energy Costs in
Non EU Countries

• Challenges in monetarisation of damages in
  developing countries
• Final estimate of costs associated with e.g. the
  use of coal are context specific.
• Challenges are inherent to
• Data constraints
• Modelling issues
• Valuation issues

68
Description of Work Packages

• WP8
• Assessment of Policy Instruments to Internalise
  Environment-Related External Costs in EU Member
  States, Excluding Renewables

69
WP8 Assessment of policy instruments to
internalise environment-related external costs in
EU Member States, excluding renewables

• WP8 objectives
• Comparative assessment of investment and
  operational costs of different energy options
  taking account of only private costs and taking
  account of private plus external costs.
• Impact of the use of different methods of
  decision-making on the selection of projects -
  e.g. cost-benefit analysis with externality
  adders versus multi-criteria decision analysis
  tools.
• Implications of different taxes/charges on energy
  and/or on emissions on (a) the degree of
  internalisation and (b) the comparative cost
  comparisons, now and in the future.
• Continue

70
WP8 Assessment of policy instruments to
internalise environment-related external costs in
EU Member States, excluding renewables

• Implications of different policies to reduce
  energy insecurity on (a) the degree to which
  energy security concerns are internalised and (b)
  the comparative costs of different energy
  sources, now and over time.
• Comparison of the effectiveness of emissions
  trading instruments for internalising
  externalities versus the use of externality based
  taxes.
• Comparison of different instruments to promote
  renewable energy sources, in terms of the degree
  to which they internalise the positive
  externalities associated with renewable energy
  use.

71
WP8 Assessment of policy instruments to
internalise environment-related external costs in
EU Member States, excluding renewables

• WP8 partners
• VITO, Flemish Institute for Technological
  Research (WP coordinator)
• FEEM, Fondazione ENI Enrico Mattei
• NTUA, National Technical University of Athens
• ISIS, Istituto di Studi per lIntegrazione dei
  Sistemi
• PSI, Paul Scherrer Institut

72
WP8 Assessment of policy instruments to
internalise environment-related external costs in
EU Member States, excluding renewables

• WP8 methodology
• WPs 8-10 share a common investigation
  methodology
• First, they look at a taxonomy of policy
  instruments (taxes, permits, emissions trading
  system, feed in tariffs, tradable emissions
  certificates, etc.) currently available and
  discussed in the energy arena.
• Second, they consider how successful the
  different instruments are in internalising the
  external costs of energy production and in
  promoting the use of renewables.
• WPs 8-10 will have a dynamic outlook by comparing
  policies at the current time and in the future,
  considering the energy use scenarios identified
  in WP 1 and the uncertainties assessed in WP 12.

73
WP8 Assessment of policy instruments to
internalise environment-related external costs in
EU Member States, excluding renewables

• WP8 description of work
• Task 8.1 Synopsis of all relevant policy
  instruments (taxes, permits, command and control,
  voluntary agreements, etc.) for non-renewable
  energy sources and systems used by EU Member
  States. Synergies with WP 9 and WP 10 are
  exploited.
• Task 8.2 Analysis of the extent to which
  different policy instruments succeed to
  internalise external costs of fossil fuels and
  nuclear energy with reference to 2010, 2020, 2030
  scenarios of energy use provided by WP1. A
  comparative full cost assessment is undertaken
  emphasising the comparison of nuclear and fossil
  fuels.
• Continue

74
WP8 Assessment of policy instruments to
internalise environment-related external costs in
EU Member States, excluding renewables

• Task 8.3 Analysis of policy linkages for fossil
  fuels use reduction and GHG emissions trading
  regimes.
• Task 8.4 Development of suggestions to improve
  the instruments for reducing negative social and
  fiscal impacts while increasing their power to
  achieve an extensive internalisation of the
  external costs of the use of fossil fuels and
  nuclear energy and of a suggestion for an
  integrated EU policy for the external costs of
  fossil fuels and nuclear energy. Finally, an
  analysis of the hidden costs of the
  implementation of different policy instruments
  for internalisation of external costs of fossil
  fuels and nuclear energy is carried out. D.8.1
  WP8 Report on the assessment of policy
  instruments.

75
WP8 Assessment of policy instruments to
internalise environment-related external costs in
EU Member States, excluding renewables

• Criteria for analysis
• 1. Efficiency of allocation
• how far ? (MCMB or equal total cost)
• 2. Cost efficiency
• who does the efforts ? (MCaMCb)
• 3. Dynamic efficiency
• stimulate clean technologies
• 4. Verifiability measurement
• 5. Political practicability

76
Description of Work Packages

• WP9
• Policy Assessment of Instruments to Internalise
  Environment Related External Costs in EU Member
  States, via Promotion of Renewables

77
WP9 Policy Assessment of Instruments to
Internalise Environment Related External Costs in
EU Member States, via Promotion of Renewables

• WP9 objectives
• Provide overview of instruments used to stimulate
  the use of renewables
• Compare different instruments with respect to
  degree of internalisation achieved
• Analyse social and fiscal implication of
  different instruments especially on poor and
  vulnerable groups
• Suggest modifications to minimize negative and
  maximise positive impacts
• Analyse hidden costs of implementation
• Investigate stakeholder preferences

78
WP9 Policy Assessment of Instruments to
Internalize Environment Related External Costs in
EU Member States, via Promotion of Renewables

• WP9 partners
• UFLENS, University of Flensburg (WP coordinator)
• FEEM, Fondazione ENI Enrico Mattei
• NTUA, National Technical University of Athens
• RISOE, Risoe National Laboratory

79
WP9 Policy Assessment of Instruments to
Internalise Environment Related External Costs in
EU Member States, via Promotion of Renewables

• WP9 tasks
• Synopsis of all relevant policy instruments
• Analysis of extent of success of internalisation
• Analysis of extent of future success 2010, 2020,
  2030
• Analysis of linkages between Renewable Energy
  policies and GHG emissions trading
• Analysis of social and fiscal implications
• Development of suggestions to improve policy
  measures
• Development of a suggestion of an integrated EU
  policy
• Analysis of the hidden costs of implementation

80
Description of Work Packages

• WP10
• Assessment of Policy Instruments to Internalise
  Environment-Related External Costs in non-EU
  Member States

81
WP10 Assessment of policy instruments to
internalise environment-related external costs in
non-EU Member States

• WP 10 objectives
• To assess policy instruments to internalise
  externalities in non EU Member States, via
  promotion of renewables, focusing on Turkey,
  Bulgaria, India, China and Brazil
• To investigate stakeholders preferences for
  policy instruments to promote renewable energy
  sources through Stakeholders Workshop 2 (together
  with WPs 8-11).

82
WP10 Assessment of policy instruments to
internalise environment-related external costs in
non-EU Member States

• WP 10 partners
• UBATH, university of Bath (WP leader)
• NTUA, National Technical University of Athens
• COPPETEC, Fundação COPPETEC
• IIMA, Indian Institute of Management Ahmedabad
• ERI, Energy Research Institute
• EAP, Energy Agency of Plovdiv
• TUBITAK, Turkiye Bilimsel ve Teknik Arastirma
  Kurumu - Marmara Research Center, Institute of
  Energy

83
WP10 Assessment of policy instruments to
internalise environment-related external costs in
non-EU Member States

• WP 10 structure of work
• Task 10.1 Synopsis of policy instruments for the
  promotion of renewables in non-EU Countries
  (UBATH)
• Task 10.2 Comparison of instruments used in
  non-EU Countries with those used in EU-Countries
  for the internalisation of externalities in the
  production of energy (UBATH)
• Task 10.3 Analysis of the extent to which
  different policy instruments succeed in
  internalising the net external benefits of
  renewables in year 2010, 2020, 2030 (UBATH).
• Continue

84
WP10 Assessment of policy instruments to
internalise environment-related external costs in
non-EU Member States

• Task 10.4 Analysis of the social and fiscal
  implications of different internalisation
  instruments, focusing on the impacts on the most
  vulnerable groups in society and on the fiscal
  burdens created by some instruments working
  through positive incentive schemes on the basis
  of government payments (UBATH - TUBITAK).
• Task 10.5 Suggestions to reduce negative social
  and fiscal impacts of instruments while
  increasing their power to achieve an extensive
  internalisation suggestions for an integrated EU
  policy for the internalisation of the positive
  net external benefits of renewables analysis of
  the hidden costs of the implementation of
  different policy instruments for the
  internalisation of net external benefits of
  renewables (UBATH).

85
Description of Work Packages

• WP11
• Methods of Assessment

86
WP11 Methods of assessment

• WP11 objectives
• To perform a comparative analysis of policy
  assessment methods and identify common grounds
  and linkages
• To provide guidelines for the dynamic
  implementation of policy assessment methods
• To provide tools and support for implementing
  methods in WPs 8-10 with the involvement of
  energy suppliers and other stakeholders
• To estimate implied monetary equivalents for
  non-monetised impacts.

87
WP11 Methods of assessment

• WP11 partners
• NTUA, National Technical University of Athens (WP
  coordinator)
• UBATH, University of Bath
• VITO, Flemish Institute for Technological
• UFLENS, University of Flensburg

88
WP11 Methods of assessment

• CBA
• Stems from neoclassical economics
• The market as guided by individual preferences
  secures optimal allocation
• Money is the appropriate vehicle to express these
  preferences
• If stated preferences are missing, use of
  hypothetical or surrogate markets.
• Decision Aggregation of costs/benefits expressed
  in monetary terms.

Overview of methods

• MCDA
• Stems from social sciences (decision-behavioral
  analysis)
• Humans do not always value environmental goods
  as consumers within a market
• Preferences do not a priori exist in human mind,
  especially for non familiar or non traded goods.
• A discursive, interactive approach might help
  individuals construct their preferences
• Decision aggregation of weighted performances or
  outranking of global preferences.

89
WP11 Methods of assessment

• Formulation of policy problems
• Clear specification of alternative policy
  instruments to be assessed
• Which
• Where
• When
• How
• Identification of evaluation perspectives
• Cost/benefit component (CBA)
• Criteria (MCDA)
• Identification of people concerned.

90
WP11 Methods of assessment

• WP11 description of work
• Analysis, description and operationalisation of
  assessment methods
• Task 11.1 to review Cost-Benefit Analysis (CBA),
  Cost Effectiveness Analysis (CEA), Multi-Criteria
  Decision Analysis (MCDA) techniques/tools and
  successful applications in energy and
  environmental policy making.
• Task 11.2 to set up guidelines for using CBA,
  CEA and MCDA in policy assessment, with emphasis
  on integrating dynamic aspects in multi-criteria
  assessment.
• Continue

91
WP11 Methods of assessment

• Task 11.3 to set up tools for implementing
  assessment methods in an interactive and dynamic
  way. These tools are developed in a generic form
  assuming a number of alternative policy
  instruments evaluated along a number of aspects.
  The CBA-CEA tool provides rankings of instruments
  according to external cost estimates and discount
  rates. The MCDA tool provides rankings of
  instruments according to the preferential input
  of stakeholders. In both cases a sensitivity
  analysis indicates the robustness of the obtained
  results.
• Task 11.4 to extend and improve the methodology
  for deriving monetary equivalents for
  non-monetised impacts through individual
  preferences elicited in MCDA.
• Continue

92
WP11 Methods of assessment

• Task 11.5 to organise a seminar for WPs 8-10
  partners to validate methods and user guidelines.
  
• Task 11.6 to adapt the tools to the specific
  context and data of WPs 8-10, testing the tools
  through electronic communication and in partners
  meetings.
• Task 11.7 to participate in stakeholders
  workshop 2 and to elaborate results providing
  policy input.

93
Description of Work Packages

• WP12
• Treatment of Uncertainty in Estimates of External
  Costs at the National Level

94
WP12 Uncertainties

• Objectives
• To evaluate the uncertainties of the costs (both
  private and external) estimated in this project
• To evaluate the effect of these uncertainties on
  policy decisions, e.g. choice of energy
  technologies, choice of emission limits, and the
  resulting emission levels
• To evaluate the social costs if the wrong policy
  choices are made because of errors or
  uncertainties in the estimation of the costs
  estimated in this project
• To evaluate the benefit of reducing the
  uncertainties by further research (to help
  identify the priorities for such research).

95
WP12 Uncertainties

• WP12 partners
• ECN, Energy Research Centre of the Netherlands
  (WP coordinator)
• FEEM, Fondazione ENI Enrico Mattei

96
WP12 Uncertainties

• Description of work
• Task 12.1 to review, update and complete the
  estimation of uncertainties (ECN, FEEM). This
  task begins by reviewing the existing uncertainty
  estimates and updating them as necessary. The
  extension of the external cost calculations to
  countries outside the EU entails additional
  uncertainties that will be evaluated, in
  particular with regard to monetary valuation.
  Uncertainties are also estimated for private
  costs here both energy prices and abatement
  costs need to be considered.
• Task 12.2 to assess the effect of the
  uncertainties on different levels of
  internalisation (ECN, FEEM). Tradable permits
  that are given away free make the polluters
  reduce their emissions to the social optimum, but
  without paying anything for the damage caused by
  the residual emissions. By contrast, pollution
  taxes and tradable permits that are auctioned by
  the government make the polluter pay not only the
  abatement cost to reach the optimum but also the
  residual damage the difference in cost to the
  polluter is large. The monetary transfers and the
  effects on the economy are therefore much larger
  in the latter case than in the former, and so are
  the consequences of errors in the estimation of
  the external costs.
• Continue

97
WP12 Uncertainties

• Task 12.3 to evaluate effect of uncertainties on
  energy choices (ECN, FEEM). Errors in the
  estimation of the external costs could lead to
  inappropriate energy choices, for example too low
  a level of renewable energy sources. Since the
  evaluation of energy choices is a difficult and
  complex undertaking, we will attempt to provide
  at least some initial estimates.
• Task 12.4 to evaluate benefit of reducing the
  uncertainties by further research (ECN, FEEM).
  Previous research has evaluated how much the
  social cost of air pollution abatement is
  increased beyond the optimum if an error is made
  in the estimation of the damage cost or the
  abatement cost curve. This social cost penalty
  can be reduced by further research aimed at
  reducing the uncertainties of the respective cost
  estimates. By examining the relation between a
  measure of the uncertainty (e.g. geometric
  standard deviation) and the social cost penalty,
  the value of such research will be quantified. To
  help identify the priorities the various sources
  of uncertainties are ranked in terms of their
  contribution to the total.

98
Description of Work Packages

• WP13
• Management and Coordination

99
WP13 Management and Coordination

• Objectives
• To ensure the efficient co-ordination and
  management of the project, both in terms of
  scientific co-ordination and administrative
  management
• To review and assess project results and progress
  towards the objectives
• To carry out full communication and dissemination
  on the project activities and findings.

100
WP13 Management and Coordination

• WP13 partners
• FEEM, Fondazione ENI Enrico Mattei (project
  coordinator)
• UBATH, University of Bath (deputy coordinator)

101
WP13 Management and Coordination

• Description of work
• Task 13.1 Project management and coordination
  activities
• overall legal, contractual and administrative
  management maintenance of the Consortium
  Agreement management of the financial flows
  between the Commission and the consortium
  co-ordination of knowledge management issues
  overall co-ordination of the technical activities
  of the project (FEEM and UBATH)
• project reporting
• 12months and 30months Activity and Management
  Reports
• 24months Summary Activity Report (ALL PARTNERS).
• Continue

102
WP13 Management and Coordination

• Task 13.2 Project review and assessment
• monitoring of project implementation, review and
  assessment of project results and progress
  towards the objectives (ALL PARTNERS).
• organisation of project meetings
• Kick-off Meeting (month 2, FEEM)
• Mid-term Project Meeting (month 14, FEEM)
• 3 Project Steering Committee Meetings (month 18,
  IER, month 25, VITO and month 29, ISIS)
• Continue

103
WP13 Management and Coordination

• Task 13.2 Project communication and
  dissemination activities
• development and update of a Plan for using and
  disseminating knowledge (month 6, ALL)
• development and update of a Projects
  communication action plan (month 6, ALL)
• establishment and maintenance of a dedicated web
  site, production of scientific contents,
  publication of project findings and reports,
  linking with partner web sites, etc (FEEM and
  ALL).
• establishment of links with other EU and
  international initiatives (in particular, with
  the NEEDS consortium through active participation
  to the NEEDS Fora) (ISIS and ALL).
• publication of working papers, a book (FEEM),
  articles in peer-reviewed scientific journals,
  and project presentations at international
  conferences (ALL).

104
Outline of the presentation

• What is CASES
• Context
• Objectives
• Expected results
• Interaction with other projects
• The actors
• Organisation of work
• Description of Work Packages
• Description of dissemination activities

105
Description of dissemination activities

• Dissemination of research outputs is a key
  objective to maximize the impact of the project
  activities.
• The dissemination strategy will be implemented
  through a range of means to reach the highest
  number of end-users.
• Target EU/international research community,
  policy sphere, business, public at large.

106
Description of dissemination activities

• Dissemination means
• Interactive web site
• Electronic Mailing List
• Electronic Newsletter
• Project events 2 Stakeholders Workshops and the
  Final Conference
• Other conferences and workshops, seminars
• Publications

107
Description of dissemination activities

• Interactive website
• Intranet service
• To ensure intra-partnership communication on
  project related issues
• External dissemination
• Project-related information (partners details,
  project activities and results, deliverables,
  workshops,)
• Useful links, policy docs, list of stakeholders
• Forum
• Subscribe Electronic Newsletter and Mailing list

108
Description of dissemination activities

• Electronic mailing list
• Prompt, up-to-date and simple communication on
  project news
• Target project partners, organization outside
  the consortium expressing interest in the
  initiative (business, policy, public)
• Electronic news letter
• 6-month update on the progress of the project,
  with direct links to project outputs posted on
  the web
• Target academy, policy-makers, business, public
  at large

109
Description of dissemination activities

• Project events
• Stakeholders Workshops
• At least 2 Workshops are organised in order to
  confront preliminary results of the network with
  academic excellence and key stakeholders and
  end-users outside the network.
• Final Conference
• At the end of the project a Final Conference
  (month 29, ISIS) is organised to present the
  results of the network to the academic, policy
  and business communities and civil society
  organisations.

110
Description of dissemination activities

• Other events
• Conferences and workshops
• The partners will participate to other
  scientific and policy meetings (national and
  international workshops and conferences) in order
  to present the project and its preliminary and
  final results, both during and after the end of
  the project.

111
Description of dissemination activities

• Publications
• FEEM Working Paper series (Economic Research
  Institutes Paper Series of SSRN, RePEc, Econlit)
• Peer-reviewed scientific journals
• Book

112

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02 5203.6934 fax [phone] web http/
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