Christian Egenhofer, Head of the Energy and Climate Program, CEPS Brussels

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Slides presentate in occasione del Seminario "The Energy transition in Europe: different pathways, same destination? organizzato da Edison in collaborazione con WEC Italia il 29 maggio 2013 a Roma - TWITTER #NRGstrategy

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Christian Egenhofer, Head of the Energy and Climate Program, CEPS Brussels

  1. 1. The EU Energy Policies: straight ahead or time to steer the wheel? Christian Egenhofer Associate Senior Research Fellow, Centre for European Policy Studies (CEPS)Visiting Professor, SciencesPo (Paris), College of Europe (Bruges & Natolin), Guido CarliLUISS University (Rome)Hotel Majestic, Rome, 29 May 2013Thinking ahead for Europe • Centre for European Policy Studies (CEPS) • www.ceps.euTHE ENERGY TRANSITION IN EUROPE: DIFFERENT PATHWAYS, SAME DESTINATION?
  2. 2. 5/29/2013 2Centre for European Policy Studies (CEPS) • Place du Congrès 1, 1000 Brussels, Belgiumwww.ceps.eu2007/08 Climate and Energy Package was meant to setout long-term framework to address EU energy andclimate challenges1. Climate change2. Security of Supply3. Competitiveness
  3. 3. 2007/08 Climate & Energy Package• “Increase security of supply• Ensuring the competitiveness of European industry andthe availability of affordable energy;• Promoting environmental sustainability and combatingclimate change”“… to transform Europe into a highly energy-efficient and low greenhouse-gas-emittingeconomy …”“Europe 2020” Strategy (Mission StatementBarroso II Commission)2030 framework for climate and energypolicies
  4. 4. Improved energy efficiencyImproved energy efficiencyPromotion of new technologies, growth and jobsPromotion of new technologies, growth and jobsAffordable and competitive pricesAffordable and competitive pricesCompetitivenessCompetitivenessAdequate energy infrastructuresAdequate energy infrastructuresGrid StabilityGrid StabilityDiversification of fuels, supply countries and routesDiversification of fuels, supply countries and routesSecurity of energy supplySecurity of energy supplyDevelopment of alternative energy sourcesDevelopment of alternative energy sourcesReduction of energy consumptionsReduction of energy consumptionsReduction of emissionsReduction of emissionsSustainabilitySustainabilityEuropean Commission “2030 framework”… “must ensure progress towardsthree objectives”Source: European Commission (DG Energy)
  5. 5. 5/29/20135Centre for European Policy Studies (CEPS) • Place du Congrès 1, 1000 Brussels, Belgiumwww.ceps.euThe (new) EU in search of a new consensus1. Economic crisis undermines EU climate ambition (20% target =almost reached) + not in line with 2 C target, international finance, EUdecarbonisation … ETS etc.2. New EU is more heterogeneous (GDP per capita ranges from 274% to45% of EU average)3. Industrial competitiveness matters more4. US energy prices (vs EU prices)5. EU share of global emissions is fast falling & no global climatechange agreement in sight6. EU energy prices go up7. Old framework must be renewed
  6. 6. 5/29/2013 6Centre for European Policy Studies (CEPS) • Place du Congrès 1, 1000 Brussels, Belgiumwww.ceps.euThe 2007/8 Climate and Energy Package was adopted within a unique politicalconstellation- Consensus within and between EU Institutions (European Council, EuropeanCommission, European Parliament, certainly for EU-15)- Strong and committed leaders (‘positive EU cycle’)- Economy on track- Expectation of a Global Agreement- EU dominated by EU-15 (?)LessonsInteractions between different policies exists (irrespective of targets). Existingmechanism (i.e. linear reduction factor, ex-ante Impact Assessment, threetargets) were not sufficient to address interactions
  7. 7. 5/29/2013 7Centre for European Policy Studies (CEPS) • Place du Congrès 1, 1000 Brussels, Belgiumwww.ceps.eu• Industrial policy benefits (technology leadership, export-led growth, greenjobs/growth/ economy etc.) have lacked evidenceLessons (2)• Regulation works, e.g. car efficiency standards, regulation for houses …• Least-cost policy (ETS) faces political obstacles while high-cost policy issuccessful• Carbon price is indispensible but not ETS !• We know what works! We have experiences with hybrid instruments.
  8. 8. 5/29/2013 8Centre for European Policy Studies (CEPS) • Place du Congrès 1, 1000 Brussels, Belgiumwww.ceps.euLessons Learned (3)• Importance of national/local energy and other policy choices have beenunderestimated (German energy transition, UK price floor, contract fordifferences, nuclear policies ….)Continuity but no roll over
  9. 9. 5/29/2013 9Centre for European Policy Studies (CEPS) • Place du Congrès 1, 1000 Brussels, Belgiumwww.ceps.euIs there an issue?What is main issue?• Climate change policy? (carbon pricing)• EU energy policy? (Renewables)• Investment economics ?• Member states exert national/local energychoices (Art. 194 II Lisbon Treaty)? (Energytransition) ?
  10. 10. 5/29/2013 10Centre for European Policy Studies (CEPS) • Place du Congrès 1, 1000 Brussels, Belgiumwww.ceps.euIssue is price of energy• European or national prices ?• Real or published prices? Transparent or non-transparent?• Sustainable or non-sustainable energy?• Short-term or long-term vision?
  11. 11. 5/29/201311CEPS Energy M arkets ForumKey challenges and potential remedies to addressChallenge M easures/ remedies To be dealtwith in WorkProgramme1 Spill-over effects of nationalenergy choices (e.g. loopflows, negative prices)Reveal divergent national preferencesregarding the future energy mix andpoint to increasing constraintsresulting from the EU frameworkWP 1Increase regional coordination andcooperationWP 1Incentivise greater cross-border TSOcooperation (e.g. cross-border re-dispatching)WP 1Facilitate international exchangebetween national governments,regulatory authorities, TSOs & DSOsand energy market participantsAll WP2 Electricity network expansion(How to optimise electricity/energy networks?)Improve methodologies to allow forcross-border cost-benefit allocationWP 1Identify and build institutionalcapacity to address distributionaleffects, i.e. deal with winners andlosersWP 1Identify ways (for TSOs) to betterincorporate DSO related flexibilityWP 2Develop new ways of improvingpublic acceptance of cross-borderinfrastructures or those with asignificant cross-border impact, forexample by authoritative analysis orother meansWP 2
  12. 12. 5/29/201312Centre for European Policy Studies (CEPS) • Place du Congrès 1, 1000 Brussels, Belgiumwww.ceps.eu
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