The Challenge for Ireland of European Energy and Environment policies

1
The Challenge for Ireland of European Energy and
Environment policies

• Presentation to the
• Institute of Physics in Ireland

Owen Wilson 1st April 2007
Disclaimer The views expressed are those of the
author and do not necessarily reflect those of ESB
2
Energy policy

• A new energy paradigm now exists
• Irelands response is determined within an EU
  framework
  
• Irelands approach will critically determine
  future welfare of society and relative level of
  economic development
  
• Scale of costs involved (8.5bn ) and resulting
  economic, social and environmental consequences
  makes it imperative we get it right first time

3
Previous energy paradigm

• I oppose the Kyoto Protocol because it
  exempts 80 percent of the world, including major
  population centres such as China and India, from
  compliance, and would cause serious harm to the
  U.S. economy.
• (President George W. Bush, March 2001)

4
New energy paradigm

• No matter how we define sustainable
  development, current systems of energy supply and
  use are clearly not sustainable in economic,
  environmental or social terms.
• (IEA, Report to Dutch Presidency of EU,
  November 2004)

5
Strategic EU Energy Review

• The mainstay of the new policy is a core
  energy objective for Europe
  
• that the EU should reduce greenhouse gas
  emissions by 20 by 2020.
  
• This objective will enable the EU to measure
  progress in re-directing today's energy economy
  towards one that will fully meet the challenges
  of sustainability, competitiveness and security
  of supply.
• Endorsed by European Council, 8/9 March 2007

Developed countries should continue to take the
lead by committing to collectively reducing their
emissions of greenhouse gases . with a view to
collectively reducing their emissions by 60 to
80 by 2050 compared to 1990. European Council
Conclusions, 8/9 March 2007
6
Background to 2020 objectives

• Liberalisation of Energy markets
• Maintenance of competitiveness
• Security of Supply
• Access to range of primary energies
• Access to range of sources
• Environment - Sustainable Development
• Climate change (CO2)
• Acid gases (SO2, NOx)

7
Environment to fore

• Energy has traditionally been a source of
  economic power
  
• Climate change alters this dynamic
• Is not a political or economic development issue
• Welfare of future generations at risk
• Scientific evidence deemed sufficient for
  urgent action

8
Energy Package documents

• Energy policy for Europe
• Climate change 2020 and beyond
• Internal energy market and DG Competition sector
  inquiry reports
  
• Renewables roadmap
• Priority Interconnection Plan
• Illustrative Nuclear Programme
• Sustainable Fossil Fuels (CCS)
• Strategic Energy Technology Plan
• Energy Efficiency Action Plan

9
Key EU energy policy targets

• GHGs (1) - 30 reduction in emissions by 2020
• GHGs (2) - Unilateral 20 binding target
• RES (1) - 20 of TFC by 2020 binding target
• RES (2) - 10 biofuels binding target
• RES (3) - Suggested RES-E target of 34, (18
  intermittent)
  
• Efficiency - 20 reduction in TFC by 2020
• Clean Coal - CCS for all coal plant post 2020
• Nuclear - High Level Group to support nuclear
  safety
  
• RD - 1bn p.a. to 2013 integrated Technology
  Plan
  
• Common binding network security standards
• Further market development objectives
• ISO or ownership unbundling
• Harmonised powers for National Regulators
• Minimum transparency requirements
• Energy part of international policy, development
  policy
  

10
Derivation of 2020 / 2050 targets

• UNFCCC commits signatories to avoiding
  dangerous anthropogenic climate change
  
• This limits the mean global temperature increase
  to no more than 20C
  
• Assumes earth can absorb an increase of this
  magnitude
  
• Equates to a concentration of GHGs in the
  atmosphere (550 ppm CO2e)
  
• Achieving this requires developed country GHG
  reductions of 30 by 2020 and 60-80 by 2050

11
Probability of achieving target
12
Implications of 80 reduction for Ireland??
(69.95 Mt CO2e)
Allowed 2050 emissions

• 55.78 Mt
• 54.81 Mt
• 2050 13.70 Mt

13
Burden sharing criteria for targets

• 20 GHG reduction
• Differentiated approach is needed that is fair
  and transparent
  
• Take account of relevant base years
• Take account of Community policies
• Take account of socio-economic parameters
• Consider other relevant and comparable
  parameters
  
• No nuclear policy does not provide an
  exemption
  
• 20 RES in TFC target
• None established
• RES-E to be addressed in context of EUs
  emissions trading scheme
  
• Existing GHG (Kyoto) BSA - Ireland (113 of
  1990) vs. EU (92)
  
• 13th from 15 in terms of economic development
  (1997)
  
• 3rd from 27 (2007)
• Existing RES-E BSA Ireland (13.5) vs. EU (21)

14
Energy White Paper

• First review of energy policy in 30 years
• Based on October 2006 Green Paper and responses
• Contextual framework
• EU strategic energy review outcome
• Security of supply
• Climate change, environmental sustainability
• Market structures to deliver competitive prices
• Single electricity (all-island) market and
  prospective extension
  
• 8.5bn projected energy investment
• 4.9bn for gas and electricity transmission/distri
  bution
  
• 1.5bn on interconnection
• 2.1bn generation investment
• 275m in supports for sustainable energy (RES,
  energy efficiency)
  
• 150m for energy RD (to 2013)
• Significant focus on electricity sector

15
White Paper themes

• Security of supplies (gas and electricity)
• Sustainable supply and use
• Competitiveness of energy supply
• Integrated approach
• 210 Action items identified

16
Security of Supplies

• Ensure electricity supply consistently meets
  demand
  
• 240MW new competitive mid-merit plant by 2009
  (CER/Eirgrid)
  
• Fast build competition for new generation if
  required (CER/Eirgrid)
  
• ESB to transfer generating station sites to
  private sector
  
• Ensure security and reliability of gas supplies
  to Ireland
  
• Enhance diversity of fuels for power generation
• No nuclear (at EU disallow nuclear as a CO2
  reduction option)
  
• Commercial new clean coal with CCS by 2020
• Co-fire peat and biomass
• RES to provide 15 (2010) 33 (2020) of
  electricity consumption in RoI
  
• All Island 2020 RES target
• 30 biomass at peat stations by 2015, test at
  Moneypoint by 2010
  
• Extend REFIT
• 50 dependency on NG by 2020
• Efficient, reliable and secure gas and
  electricity networks
  
• 4.9bn investment 1.25bn on interconnection
• More towns to extended gas grid
• Creating attractive environment for gas/oil
  exploration
  
• Prepare for energy supply disruptions

17
White Paper forecast (electricity)
05-20 05-10 10-20 2005 2 010
2020
18
Observations on Nuclear

• Anecdotal
• DCU lecture experience
• Evidential
• Eurobarometer survey

19
Sustainable Supply and Use

• Reduce energy related GHG emissions
• CHP capacity of 400 MW (2010) and 800 MW (2020),
  with price support
  
• Ocean energy capacity of 500 MW by 2020
• Renewable energy to provide 5 (2010) and 12
  (2020) of heating
  
• Accelerate growth of renewable energy sources
• Promote sustainable energy in transport
• Biofules to provide 5.75 by 2010 and 10 by 2020
  of transport
  
• 5 (2007) and 30 (2012) biofuel use by Dublin
  Bus and Bus Eireann
  
• Integrated approach to development and use of
  bioenergy
  
• Maximise Energy Efficiency
• 20 saving in energy use by 2020 (with objective
  of 30) National Plan to follow
  
• Smart electricity meters in all households by
  2012
  
• Amend building standards to deliver 40
  improvement in energy savings
  
• 33 energy saving in public sector from 2008
• Accelerate RD to support sustainable energy
  goals
  
• 150m in energy RD by 2013
• RD mandate to state energy companies from 2008

20
Competitive supply

• Deliver competition and consumer choice in the
  energy market
  
• Deliver the All-Island Energy Market Framework
• Ensure regulatory framework meets the evolving
  challenges
  
• Ensure a sustainable future for Semi-State Energy
  Enterprises
  
• Ensure affordable energy for everyone
• Create jobs, growth and innovation in the energy
  sector

21
Integrated approach

• Strengthen national capabilities in energy
  policy
  
• Ensure whole of Government approach
• Engage stakeholders in implementation
• Ensure accountability and transparency through
  regular review
  

22
Comparison
Opening negotiating position
Revised target
23
GDP, TPER, Energy CO2 comparison
Source SEI
24
Comment on delivery

• Capacity to deliver
• Willingness to deliver
• Business of scale requirement to address risks

25
Eurelectric Role of Electricity study
26
Role of Electricity summary
27

• END

28
Policy reasons why the rational ideal may not
be attainable

• Competing rationalities mean contestation and
  compromise
  
• Established interests more powerful that
  prospective interests
  
• Some issues can only be addressed through a
  complex multi-sectoral and multi-level approach
  that is inherently difficult to coordinate
  
• Governments commonly take non-optimal route of
  least resistance
  
• Policy evaluations are rare and learning is
  minimal

29
Technological reasons why the rational ideal
may not be attainable

• Governments can exert only a marginal rather than
  a defining influence on the pace or the direction
  of technological change
  
• With existing systems change takes place
  incrementally
  
• Lock-in to existing approaches