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Energy Supply in the European Union
Daniel Erni and Stefan Horlacher
Helsinki, 5th October 2005
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Energy Supply in the EU
A presentation by Daniel Erni and Stefan Horlacher
Introduction
Introduction
EU Energy Policy
Energy Sources

• 1951 European Coal and Steel Community (ECSC)
• Belgium, West Germany, France, Italy,
  Luxembourg, Netherlands
• First step of European integration
• 1957 European Atomic Energy Community (Euratom)
• ECSC-countries
• Article 1 of the treaty It shall be the task
  of the Community to contribute to the raising of
  the standard of living in the Member States and
  to the development of relations with the other
  countries by creating the conditions necessary
  for the speedy establishment and growth of
  nuclear industries.

Oil
Natural Gas
Solid Fuels
Nuclear Energy
Renewable Energy Sources
Supply Security
Reduction of Dependence
Saving energy
Alternative Sources
Helsinki, October 5, 2005
3
Energy Supply in the EU
A presentation by Daniel Erni and Stefan Horlacher
Introduction
EU Energy Policy
EU Energy Policy
Energy Sources

• No common European responsibility except from
  ECSC and Euratom
• Impacts of other policies on energy sector
• Obstacles for a common energy policy
• Different availability of energy sources
• The use of nuclear energy
• The degree of federal control over energy
  supply
• Crucial importance ? Green Paper

Oil
Natural Gas
Solid Fuels
Nuclear Energy
Renewable Energy Sources
Supply Security
Reduction of Dependence
Saving energy
Alternative Sources
Helsinki, October 5, 2005
4
Energy Supply in the EU
A presentation by Daniel Erni and Stefan Horlacher
Introduction
Energy sources
EU Energy Policy
Energy Sources
EU primary energy balance (1998)
Oil
Natural Gas
Solid Fuels
Nuclear Energy
Renewable Energy Sources
Supply Security
Reduction of Dependence
Saving energy
Alternative Sources
Source European Commission, 2002.
Helsinki, October 5, 2005
5
Energy Supply in the EU
A presentation by Daniel Erni and Stefan Horlacher
Introduction
Energy Sources Oil
EU Energy Policy
Energy Sources

• Reserves
• Europe (incl. Norway) lt 2 of the worlds oil
  reserves
• Production
• Demand cant be covered by production in the
  Northern Sea
• Cost-intensive production
• Demand
• Rise in the last decades
• Transportation sector 100 dependence on oil
• Trend to replacement by alternative fuels
• Imports
• 80 of oil demand imported share is expected to
  grow
• Weak position, high dependence
• Main suppliers OPEC countries, Russia, Norway

Oil
Natural Gas
Solid Fuels
Nuclear Energy
Renewable Energy Sources
Supply Security
Reduction of Dependence
Saving energy
Alternative Sources
Helsinki, October 5, 2005
6
Energy Supply in the EU
A presentation by Daniel Erni and Stefan Horlacher
Introduction
Energy Sources Oil
EU Energy Policy
Energy Sources
Origin of oil imports in the EU
Oil
Natural Gas
Solid Fuels
Nuclear Energy
Renewable Energy Sources
Supply Security
Reduction of Dependence
Saving energy
Alternative Sources
Source European Commission, 2005.
Helsinki, October 5, 2005
7
Energy Supply in the EU
A presentation by Daniel Erni and Stefan Horlacher
Introduction
Energy Sources Natural Gas
EU Energy Policy
Energy Sources

• Compared to coal/oil High effectiveness,
  environment-friendly
• Reserves
• EU or close to it 80 of the worlds oil
  reserves
• Production
• Rising world wide, declining in the EU ?
  dependence rises
• Prices are expected to increase (transportation
  costs)
• Demand
• Imports
• Main suppliers Russia, Norway, Algeria
• Further suppliers have to be found ? Higher
  prices

Oil
Natural Gas
Solid Fuels
Nuclear Energy
Renewable Energy Sources
Supply Security
Reduction of Dependence
Saving energy
Alternative Sources
Own diagram Data source European Commission
(undated).
Helsinki, October 5, 2005
8
Energy Supply in the EU
A presentation by Daniel Erni and Stefan Horlacher
Introduction
Energy Sources Solid Fuels
EU Energy Policy
Energy Sources

• Reserves
• Huge reserves ? important for supply security

Oil
Natural Gas
Solid Fuels
Nuclear Energy
Renewable Energy Sources
Supply Security
Reduction of Dependence
Saving energy
Alternative Sources
Source Euracoal, 2005.
Helsinki, October 5, 2005
9
Energy Supply in the EU
A presentation by Daniel Erni and Stefan Horlacher
Introduction
Energy Sources Solid Fuels
EU Energy Policy
Energy Sources

• Production
• Rising world wide, declining in the EU
• Low productivity in Europe (mining in big
  depths)
• Price level above world market price
• Regain of attractivenews by new
  environment-friendly technologies
• Demand
• Demand decreasing
• Replacement by other energy sources in
  households
• Steel industry dropped its demand
• Medium term Increase in demand possible after
  2010
• Imports
• Imported coal is cheaper
• Main exporters to the EU Australia, Canada, USA

Oil
Natural Gas
Solid Fuels
Nuclear Energy
Renewable Energy Sources
Supply Security
Reduction of Dependence
Saving energy
Alternative Sources
Helsinki, October 5, 2005
10
Energy Supply in the EU
A presentation by Daniel Erni and Stefan Horlacher
Introduction
Energy Sources Nuclear Energy
EU Energy Policy
Energy Sources

• Production
• 1/3 of electricity consumption produced by
  nuclear energy
• France 75 of electricity produced by nuclear
  energy
• Important for many new Member States
• Finland is planning to build a new nuclear power
  station

Oil
Natural Gas
Solid Fuels
Nuclear Energy
Renewable Energy Sources
Supply Security
Reduction of Dependence
Saving energy
Alternative Sources
Source Microsoft Corporation, 2005.
Helsinki, October 5, 2005
11
Energy Supply in the EU
A presentation by Daniel Erni and Stefan Horlacher
Introduction
Energy Sources Nuclear Energy
EU Energy Policy
Energy Sources

• Reserves
• Uranium reserves spread all over the world
• Long term production assured (extensive amounts
  of secondary sources)
• Demand
• EU demand is stable at 20.000 tons p.a.
• Future demand depends on development of
  renewable energy sources
• Imports
• In the short run limited quantities in the EU
• In the long run more imports required
• Largest suppliers Russia, Niger, Australia,
  Canada
• Some Member States have taken the political
  decision to replace nuclear energy by
  alternative energy sources
• Reasons storing of nuclear waste possible
  accidents (cf. Chernobyl)
• But alternative fuels are not easily available
  cause higher pollution emissions

Oil
Natural Gas
Solid Fuels
Nuclear Energy
Renewable Energy Sources
Supply Security
Reduction of Dependence
Saving energy
Alternative Sources
Helsinki, October 5, 2005
12
Energy Supply in the EU
A presentation by Daniel Erni and Stefan Horlacher
Introduction
Energy Sources Renewable Energy Sources (RES)
EU Energy Policy
Energy Sources

• Major sectors wind, solar thermal, hydro and
  biomass
• Advantages
• Naturally available or quickly replacable
• No imports needed
• Less damaging to the environment
• Unequal and insufficent use in the EU
• EU Commission 12 (instead of 6) of energy
  demand covered by RES in 2010
• Early stadium of development ?
  Incentives/Support required

Oil
Natural Gas
Solid Fuels
Nuclear Energy
Renewable Energy Sources
Supply Security
Reduction of Dependence
Saving energy
Alternative Sources
Helsinki, October 5, 2005
13
Energy Supply in the EU
A presentation by Daniel Erni and Stefan Horlacher
Introduction
Energy Sources Renewable Energy Sources (RES)
EU Energy Policy
Energy Sources

• Hydropower
• 90 of total production out of RES
• 14 of electricity demand covered by hydropower
• Potential almost tapped
• Wind
• Fast growing technology
• Potential covering 30 of electricity demand
• Problems stable production, efficient saving,
  visual landscape pollution
• Solar Thermal
• Often used in heating building and water
• Problems high investment costs and seasonal
  fluctuations
• Biomass
• Agriculture as the main source
• Potential covering 20 of current energy demand

Oil
Natural Gas
Solid Fuels
Nuclear Energy
Renewable Energy Sources
Supply Security
Reduction of Dependence
Saving energy
Alternative Sources
Helsinki, October 5, 2005
14
Energy Supply in the EU
A presentation by Daniel Erni and Stefan Horlacher
Introduction
Supply Security
EU Energy Policy
Energy Sources

• Several risks political crises, technical
  incidents ? supply interruptions
• Impacts on economy, society and living standard
  (cf. oil crises in 1970ies)
• Means to lower the risk of an energy shortage
• Economically mechanisms of pricing and tax law
  ? decrease demand
• Technically use of other energy sources to
  close the supply gap
• Politically campaigns for energy saving or use
  of existing reserves
• Reserves
• Reserves for gt 1 year recommended in the nuclear
  sector (Euratom)
• Harder competition and common market leads to a
  reduction of reserves
• Risk Reduction
• Dependence on a single sector has decreased
  (oil 60 to 40)
• Growing transport sector high dependence on
  oil, intensive research on new technologies
• New networks and decentralised production
• Diversify energy sources and suppliers

Oil
Natural Gas
Solid Fuels
Nuclear Energy
Renewable Energy Sources
Supply Security
Reduction of Dependence
Saving energy
Alternative Sources
Helsinki, October 5, 2005
15
Energy Supply in the EU
A presentation by Daniel Erni and Stefan Horlacher
Introduction
Reduction of Dependence
EU Energy Policy
Energy Sources
Energy balance of the EU-30
Oil
Natural Gas
Solid Fuels
Nuclear Energy
Renewable Energy Sources
Supply Security
Reduction of Dependence
Saving energy
Alternative Sources
Source European Commission, 2005.
Helsinki, October 5, 2005
16
Energy Supply in the EU
A presentation by Daniel Erni and Stefan Horlacher
Introduction
Reduction of Dependence Saving energy
EU Energy Policy
Energy Sources

• Lower consumption ? smaller dependence on
  imports
• Global energy efficiency just 25
• European Commission improve energy efficiency
  by 1 p.a. till 2010
• gt 40 of energy consumption is used in
  buildings ? reduction by 22 till 2010
  possible
• Lighting 30 50 could be saved by energy
  saving bulbs
• Better balance of means of transport ? shift
  from road to rail

Oil
Natural Gas
Solid Fuels
Nuclear Energy
Renewable Energy Sources
Supply Security
Reduction of Dependence
Saving energy
Alternative Sources
Helsinki, October 5, 2005
17
Energy Supply in the EU
A presentation by Daniel Erni and Stefan Horlacher
Introduction
Reduction of Dependence Saving energy
EU Energy Policy
Energy Sources
Oil
Natural Gas
Solid Fuels
Nuclear Energy
Renewable Energy Sources
Supply Security
Reduction of Dependence
Saving energy
Alternative Sources
Helsinki, October 5, 2005
Source European Commission, 2005.
18
Energy Supply in the EU
A presentation by Daniel Erni and Stefan Horlacher
Introduction
Reduction of Dependence Alternative Sources
EU Energy Policy
Energy Sources

• RES are safe, clean, affordable, not threatened
  by interruptions or depletion
• Aim of EU Commission double the share of RES
  from 6 to 12 till 2010
• Problems technical and practical obstacles,
  high costs
• Subventions or taxes on externalities of
  conventional energy sources required
• With suitable investments (RD, marketing), RES
  can contribute to solve many economical and
  ecological problems!

Oil
Natural Gas
Solid Fuels
Nuclear Energy
Renewable Energy Sources
Supply Security
Reduction of Dependence
Saving energy
Alternative Sources
Helsinki, October 5, 2005
19
Thanks for your attention! Any questions?
Daniel Erni and Stefan Horlacher
Helsinki, 5th October 2005