1.
COVID-19, Energy Transition & Climate
Prof. AndreasLöschel
University of Münster
Head of German Expert Commission „Energy of the Future“
Aurora Energy Research

2.
2CONFIDENTIAL: NOT FOR EXTERNAL DISTRIBUTION
2,9 2,3
1,2 0,6 1,3 0,3
2,0 1,4
6,1
-6,0
-7,3
-9,1
-6,6
-11,4 -11,5
-2,6
12
-12
0
-6
6
-18
ChinaWorld
Output
United
States
Euro Area Germany
-3.7
France Italy Spain United
Kingdom
India
-11.3 -11.1
4.2
Sources: IMF, OECD
1) Annual GDP % change projection by OECD Economic Outlook published in June 2020. Numbers shown are based on single-hit scenario 2) Numbers shown are for all advanced and emerging
economies within the OECD June 2020 Economic Outlook not just those on the slide.
2019 20201 2008 Financial CrisisWorld Economic Outlook annual GDP growth projections for
selected countries1, annual % change
- 7.9 p.p. - 5.8 p.p.Change for all
advanced economies2
Change for all
emerging economies2
COVID-19 impact on GDP

3.
3CONFIDENTIAL: NOT FOR EXTERNAL DISTRIBUTION
COVID-19 impact on sectors
Impact of each month of containment measures on expected
annual GDP by sector, %
Sector
Global 1-year trend
(Jun-19 - Jun 20)1
Communication Services
Consumer Service
Consumer Goods
Energy (Oil & Gas)
Financials
Health Care
Industrials
Information Technology
Materials
Utilities
-5% -1%-2%-3%-4% 0%
United Kingdom
Germany
Italy
France
Spain
United States
Australia
India
World
China
Hotel, restaurants and other services
Agriculture, mining and quarrying
Business, trade and public services
Transport services
Manufacturing, utilities and construction
Overall GDP
+15.49%
-0.57%
-25.5%
+6.54%
-2.35%
+8.45%
+35.47%
+4.14%
Daily stock market performance by sector,
%
+1.94%
+2.06%
Sources: Aurora Energy Research, IEA, ADB Asian Development Outlook 2020 (April 2020), CEBR (March 2020), Dorn, F.
et al. (March 2020), INSEE (April 2020), ISTAT (April 2020), OECD (March 2020), Fidelity
1) Daily global stock performance index, including all public companies globally grouped by sector, performance as of 05/ 06/ 2020.)

4.
4CONFIDENTIAL: NOT FOR EXTERNAL DISTRIBUTION
COVID-19 impact on energy demand & emissions
-20
-15
-10
-5
0
5
10
15
20
25
30
35
19201910 1930 1940
5
1960 19701950 1980
-15
25
20
-20
-10
2020
-5
2010
0
2000
10
1990
15
30
35
1900
8 %
Yearly change in global primary energy demand,
%
Evolution of energy demand and global emissions through financial crises
Global energy related emissions,
Gt
Spanish
flu
Great
Depression
WorldWarII
Firstoil
shock
Secondoil
shock
GlobalFinancial
Crisis
Covid-19
Sources: Aurora Energy Research, IEA, UN Environment Programme

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5CONFIDENTIAL: NOT FOR EXTERNAL DISTRIBUTION
COVID-19 impact on prices
Average monthly German
baseloadpower price,
EUR/ MWh (nominal)
Min-max corridor (Jan 10 - Jun 19)
Preliminary for June 2020
Mar-
20
Dec-
19
Jun-
20
Sep-
19
0
40
45
50
35
0
10
20
30
Mar-
20
Dec-
19
Jun-
20
Sep-
19
Average monthly gas price,
EUR/ MWh (nominal)
Average monthly EUA price,
EUR/ tonne CO2 (nominal)
0
10
20
30
Jun-
20
Mar-
20
Dec-
19
Sep-
19
(Jul 15 – Jun 19)
Sources: ENTSO-E, Aurora Energy Research
1) ENTSO-E data (actual demand). Data does not include demand from embedded renewables or BTM/ storage.

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6CONFIDENTIAL: NOT FOR EXTERNAL DISTRIBUTION
Two Degrees World
60 71 42 3 5 8 9 10 11
0
2
4
6
8
10
0
10.000
20.000
30.000
40.000
50.000
60.000
0 2 4 6 8 10 12 14 16 18 20 22
US
China
Germany
Spain
France
UK
India
Italy
GDP per capita,
2020 USD constant PPP
CO2 emission and GDP per capita by country, 1991 - 2014
Correlation = 0.991
Correlation = -0.432
China USA
India Europe
Decrease in CO2 intensity of GDP
in Two Degrees world, %
GDP growth and CO2 intensity required for Two Degrees
Annual GDP growth in Two
Degrees world, %
2000 - 2020
2021 - 2050
Carbon emissions per capita,
tonne
Sources: IEA, Aurora Energy Research
1) Average correlation of emission and growth for emerging countries. 2) Average correlation of emission and growth for developed countries.

7.
7CONFIDENTIAL: NOT FOR EXTERNAL DISTRIBUTION
Economic stimulus policies & environment benefits
C
A
B H
E
D
F
GI
L
JP
K
M
N
O
Q
R
S
T
U
V
W X
Y
PotentialClimateImpact
Long-Run Multiplier HighLow
High
positive
impact
High
negative
impact
Number of experts
rating policy in Top 10
157 experts
34 experts
Speed of
implementation
Fast
Slow
Policy is green in nature
Policy is brown in nature
Source: Aurora Energy Research, Stiglitz, Hepburn, Stern et al. (2020)
A. Temporary waiver of interest payments
B. Assisted bankruptcy
C. Liquidity support for large corporations
D. Liquidity support for households, start-ups and SME’s
E. Airline bailouts
F. Not for profits, education, research, health inst. Bailouts
G. Reduction in VAT and other goods and services taxes
H. Income tax cuts
I. Business tax deferrals
J. Business tax relief for strategic and structural adj.
K. Direct provision of basic needs
L. Education investment
M. Healthcare investment
N. Worker retraining
O. Targeted direct cash transfers or temporary
wage increases
P. Rural support policies
Q. Traditional transport infrastructure investment
R. Project based local infrastructure grants
S. Connectivity infrastructure investment
T. Clean energy infrastructure investment
U. Building upgrades (energy efficiency)
V. Green spaces and natural infrastructure
investment
W. Disaster preparedness, capacity building
X. General R&D spending
Y. Clean R&D spending

8.
8CONFIDENTIAL: NOT FOR EXTERNAL DISTRIBUTION
German rescue and economic stimulus package
Source: German Ministry of Finance
1) Including spending for the public health system, digitisation, 5G, Quantum Technologies and Artificial Intelligence. 2) Including: innovation and facilitation for EVs and charging infrastructure,
innovations for busses and trucks, ships, aircrafts. Aid for trains, and public transport, 3) RES buildout is part of the recovery package, but not quantified therein. We estimate CAPEX costs of
the stated measures at 29 bn Euro. Alternatively, feed-in-tariffs would amount to 15 bn Euro approximately.

9.
9CONFIDENTIAL: NOT FOR EXTERNAL DISTRIBUTION
German rescue and economic stimulus package
Sources: Aurora Energy Research, Öko-Institut, Stiglitz, Hepburn, Stern et al. (2020)
1) Bubble sizes for suggested measures are to be discussed. The measures ‚Reduction of power tax‘and ‚Buildout quota for 65% target‘are Aurora estimates. 2) Bubble size represents the
amount stated in the recovery package or the necessary CAPEX investments for RES bulidout in case of the measures ‚Solar cap‘and ‚Offshore target raise‘.

10.
Promoting climate protection, enhancing
prosperity –
Comments on central fields of action for the
German energy transition in the European
context
Berlin · Münster · Nuremberg · Stuttgart, June 2020

11.
1. Enhance European added value and ensure international integration
3. Align certification with the Green Deal
4. Phase-out coal efficiently and improve the effectiveness of market signals
5. Expand renewable energies more quickly
6. Develop key global technologies for hydrogen and synthetic energy carriers
7. Accelerate industrial transformation through climate-neutral production
8. Expand infrastructures in a coordinated manner
9. Deal systematically with energy efficiency
10. Intensify activation of private capital for Green Finance
11. Formulate governance of the Energy Union coherently
2. Address CO2-based energy price reform rapidly and design it appropriately
Agenda
15.06.2020 Commission on the Monitoring Process ‘Energy of the Future‘ 11

12.
① Increase resilience of the EU economy
(diversify critical dependencies,
strengthen European markets, increase
competitiveness)
② Create climate-neutral value chains in
the EU
③ build international cooperations.
④ Check possibilities of international
compensation and
⑤ monitor international energy and
climate policy.
1. Enhance European added value and ensure
international integration
12Commission on the Monitoring Process ‘Energy of the Future‘
②
Stylized stages of an exemplary, climate-neutral value chain for synthetic energy
sources
①
Production
Distribution Processing
Final
consumption
Komponenten-
Produktion
Stylized stages of other value chains
Distribution
③
EU
International
⑤
Production
④

13.
2. Address CO2-based energy price reform
rapidly and design it appropriately
13Commission on the Monitoring Process ‘Energy of the Future‘
Reform and expand
European climate protection
instruments.
Design and communicate energy price reforms correctly.
Reform the German
energy price system.
CO2 ○
• Take distributional effects into account.
• Use income in a targeted and transparent manner.
• Communicate reforms convincingly.
• Secure and tighten CO2
price path.
• Elimination of levies on
electricity and partially
compensation via
revenues from CO2
pricing
• Reduce electricity tax
to the minimum rate of
the EU energy tax
directive.
• Energy tax directive
• European emissions
trading
• Border carbon
adjustments

14.
5. Expand renewable energies more quickly
14Commission on the Monitoring Process ‘Energy of the Future‘

15.
Renewable generated
electric power
Heat
heat pump
fuel cell
high-temperature process heat
…
Industry
refineries
steel production
fertilizer production
…
Mobility
battery
fuel cell
synthetic fuels
…
Electricity
pumped-storage power plant
fuel cell
gas turbine
…
Examples of sector coupling:
Coupling via electricity
Coupling via hydrogen
Coupling via synthetic energy carriers
H2
H2
H2
H2
H2
H2
H2
H2
H2
6. Develop key global technologies for hydrogen
and synthetic energy carriers
15Commission on the Monitoring Process ‘Energy of the Future‘

16.
7. Accelerate industrial transformation through
climate-neutral production
15.06.2020 16Commission on the Monitoring Process ‘Energy of the Future‘
Pull measures (industry):
- Strategic corporate goals
- Carbon disclosure
- Certification
- Commitment of suppliers
- …
Push measures (politics):
- European emissions
trading scheme (ETS)
- Non-ETS measures
- Carbon border
adjustment
- Research, development
and demonstration
- Financial compensation
for green products
- Investment in
infrastructure
- Training of skilled workers
- …

17.
8. Expand infrastructures in a coordinated
manner
17Commission on the Monitoring Process ‘Energy of the Future‘

18.
11. Formulate governance of the Energy Union
coherently
15.06.2020 18Commission on the Monitoring Process ‘Energy of the Future‘
Dimensions*) Regions**)
Sectors***) Technologies****)
Important regulatory
levels of governance of
the Energy Union
④ Use local knowledge and strengthen
participatory processes.
① Make use of centralized, market-
based mechanisms.
② Resolve conflicts between individual
political instruments.
③ Align counterparts of European and
national regulations.
*) Dimensions of the Governance Directive (see text)
**) EU, member states, subnational political entities
***) For example, EU ETS vs non-EU ETS sectors, energy intensive vs other sectors, energy sector, steel
industry, automobile industry, pharmaceutical industry, …
****) For example, renewable energies, energy efficiency, energy storage, sector coupling

19.
Thank you for your attention
• Prof. Dr Andreas Löschel
• Tel. +49 176-18300202
• Email loeschel@uni-muenster.de
• Twitter andreasloeschel
• Expert Commission on the Monitoring Process "Energy of the Future":
Promoting climate protection, enhancing prosperity,
June 2020
• Download:
https://www.loeschel.org/app/download/7723549411/EWK_Stellungnahme_2020+EN.
pdf?t=1593811459
19Commission on the Monitoring Process ‘Energy of the Future‘