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EREF Political Report

EREF Political Report. Dr. Doerte Fouquet EREF representing Director May 2010. 2 o C. Reasons for Concern – “The Red Embers”. Source: Smith et al. PNAS, 2009. A view on the global situation A view on forecasts A view on the Commission/Europe A view on the support mechanisms

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EREF Political Report

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  1. EREF Political Report Dr. Doerte Fouquet EREF representing Director May 2010

  2. 2 oC Reasons for Concern – “The Red Embers” Dr. Doerte Fouquet, Director EREF,May 2010 Source: Smith et al. PNAS, 2009

  3. A view on the global situation A view on forecasts A view on the Commission/Europe A view on the support mechanisms A view on EREF and 2010/2011 Dr. Doerte Fouquet, Director EREF,May 2010

  4. Dr. Doerte Fouquet, Director EREF,May 2010 A view on the Global Situation

  5. Dr. Doerte Fouquet, Director EREF,May 2010 The World and Europe hit by the worst economic crises since….. Destabilizing of Europe’s economies Risk of Euro collapse Strong policies for a change in energy structure weakened in Europe ( “more important things to do”) “Shock Therapists” are coming back – crucial who from IMF will advise in Greece etc.

  6. State of Affairs Globally in EnergySource Ren 21 Dr. Doerte Fouquet, Director EREF,May 2010

  7. ConnectionsSource: Thomas B. Johansson 2010 Dr. Doerte Fouquet, Director EREF,May 2010

  8. Net Increase/Decrease of capacity in electricity in EU 2000-2007 (in MW) Source: Prioritising Wind Energy Research Strategic Agenda, EWEA; Platts Dr. Doerte Fouquet, Director EREF,May 2010

  9. Sustainable future - ante portas? • RWE CEO Says New Coal-Fired Projects "On Hold" • May 27, 2009--RWE Power • Building of new coal-fired plants is no longer economically feasible. Dr. Johannes Lambertz, President and CEO of RWE Power, announced that new coal-fired power plant are now too expensive to build because of • rising construction costs, • fluctuating electricity and fuel prices in a liberalised marketplace, and the cost of implementing carbon capture and storage (CCS) technologies. http://www.industrialinfo.com/showAbstract.jsp?newsitemID=147100 Dr. Doerte Fouquet, Director EREF,May 2010

  10. Energy market structure unchanged • In the EU, market concentration is a fact • Calls for breaking up of giants even from state advisory bodies ( such as Monopoly Commission by the German Government) without great effects so far. • Energy consumption reduced – good- but nuclear and fossil block the grids • RES deployment in times of overcapacity -difficult Dr. Doerte Fouquet, Director EREF,May 2010

  11. 100 % RES is the objective for 2050 • Drastic change especially of the electricity sector towards RES • Investment decision outside RES and outside Energy Efficiency will jeopardize to reach 95 % GHG reduction in Europe • Same for prolonged life of Nuclear • Renewable energy and Efficiency Impact assessment (REEI) needed for all policies • Structured sectoral roadmap on demand side bases as guiding line for policies • 30 plus % for RES in 2030 in EU 27 Dr. Doerte Fouquet, Director EREF,May 2010

  12. EU Trajectory to 2020Source: JRC

  13. Leadership of Spain and Germany in RES is weakening • Visions are gone • Clarity is out • All policies in Energy focusing on “what is good for the oligopolies” • False prophecies (DESERTEC) weaken distributed agenda • Legislator’s attack against PV in Germany and Spain has its reasons partly in industry -made greed and wrong signals but also in the fact that utilities see distributed demand and supply as threat and not as market chance by change • The success story is no longer strongly advertised Dr. Doerte Fouquet, Director EREF,May 2010

  14. Low Carbon Myth • Nuclear tries all and hard to get a new aura by being “almost renewable” • Carbon sequestration policies • Small Country assaults by Nuclear (Finland, Switzerland) • United Kingdom will be key for success or failure in Europe • First signs from new government problematic /Nuclear yes, if no subsidies Dr. Doerte Fouquet, Director EREF,May 2010

  15. Grid and Storage Weakness • RES and especially EREF needs to combine all forces to enhance financing and structural policies • Workshop with DUH (and GEODE) to be planned for late fall • Short report from Andrea on latest DUH Workshop in Berlin Dr. Doerte Fouquet, Director EREF,May 2010

  16. A view on forecasts Dr. Doerte Fouquet, Director EREF,May 2010

  17. Costs for restructuring • Restructuring of the global electricity sector requires investment of $14.7 trillion up to 2030. • This compares with $11.3 trillion under a Reference Scenario based on International Energy Agency projections. • While the average annual investment required to implement the EREC/Greenpeace Energy [R]evolution Scenario would need just under 1% of global GDP, it would lower fuel costs by 25% - saving an annual amount in the range of $750 billion Dr. Doerte Fouquet, Director EREF,May 2010

  18. A variety of Augurs • The political scene in Brussels is preparing the ground for a 2030/2050 energy policy agenda. • Several studies have been (European Climate Foundation, EREC, Eurelectric, etc.) or will be (SRU, Greenpeace, etc.) advocating either for a “low-carbon economy” (with more or less big shares of CCS and nuclear) or a “sustainable economy” (with 100% or nearly-100% RES). • At the same time the European Commission is working on its 2050 Roadmap with a public consultation starting end of June and a first consideration of a 2050 draft at the informal Energy Council beginning of September. Dr. Doerte Fouquet, Director EREF,May 2010

  19. REPAP • Solid and distinguished forecast by RES Sector for their respective EU country/market for 2020 • Catalyst for discussion in Member States and with Commission • Indicator for level of ambition in the respective country Dr. Doerte Fouquet, Director EREF,May 2010

  20. Scenario comparisons- PV Dr. Doerte Fouquet, Director EREF,May 2010 Sources: IEA WEO 2009, IEA ETP 2008 , Greenpeace energy [r]evolution, 2008, EPIA SET for 2020

  21. European Climate Foundation Dr. Doerte Fouquet, Director EREF,May 2010

  22. ECF Scenarios for “low carbon” Dr. Doerte Fouquet, Director EREF,May 2010

  23. Dr. Doerte Fouquet, Director EREF,May 2010 The ECF political study at no point tackles the major obstacles Hesitant unbundling Deep market distortion through oligopolistic structure Steep price increase on energy prices without adequate or any environmental or energy security benefit (since oligopolies so far hardly invested before 2008 in new renewables) Ever increasing windfall profits especially from old nuclear power plants No internalization of externalities On the contrary : See Page 8: “The last ten years has been a period of intense activity in the field of European energy policy. The liberalisation agenda has triggered monumental changes in industry structure and ownership and has created a new basis for competition and regulation in power and gas markets. This process has involved three legislative packages at EU level, with the last of these coming into force as recently as 2009, along with a whole series of regulations and statutes being implemented within Member States. In addition to this revolution in the market framework, the energy industry and policy makers have had to come to terms with the extent of the climate change challenge and the implications this has for the way energy is produced and consumed going forward. “ There is no single word or fact on the market concentration since 1996,

  24. Need for clear strategies as consequences from scenarios • Too many cooks may spoil the porridge • A scenario can only be as good as the policies designed and executed from it • EREF needs to develop some focused action points as result from our learning under the REPAP effort and from our own EREC and Greenpeace Scenario • We need clear and crisp rebuttal messages against the “establishment” in Energy (e.g. EURELECTRIC) • EREC has started compiling this, needs input Dr. Doerte Fouquet, Director EREF,May 2010

  25. A view on the Commission Dr. Doerte Fouquet, Director EREF,May 2010

  26. Energy Commissioner GüntherOettinger • Conservative • Close to big utilities • Hesitant • Not unfriendly to renewables • NO visionary • Cabinet full of kind, energy greenhorns • This reflects on work of Commission • Upcoming crucial documents from Commission: • Infrastructure • Roadmap 2030/2050 • Several reports under the new RES Directive Dr. Doerte Fouquet, Director EREF,May 2010

  27. A view on the support mechanisms Dr. Doerte Fouquet, Director EREF,May 2010

  28. The Kriegers’ Flak Dilemma • Big offshore development with participation from different countries could make or break national support mechanisms • Need for a review of Feed-In Tariffs (are they really robust enough, price digression proved?) • Why Quota and Trade is no alternative (British may have a success story to tell; same Sweden/Norway) • Need to look for joint development of FiT from several countries • Need to push for a re-vitalisation of FiT Cooperation Dr. Doerte Fouquet, Director EREF,May 2010

  29. Market incentive programmes revisited • EREF needs to create overview on direct market incentive policies and their problems and chances in member states • Incentives as crisis medicine • Clarity on overall economic benefit of Incentive programmes • Link to specific financing agencies (EIB, KfW,….) Dr. Doerte Fouquet, Director EREF,May 2010

  30. Windfall policies • More ideas needed how to blame and shame in the most effective way the lack of windfall profit taxation Dr. Doerte Fouquet, Director EREF,May 2010

  31. Dr. Doerte Fouquet, Director EREF,May 2010 A view on EREF and 2010/2011

  32. Some points for EREF in 2010/2011 • Supplementary Suggestion from Brussels: • RE-Enforcing participation of DF in board meetings of national associations • Establishing of a formalized column /monthly of policy news from the Members (short, telegram style – contact information for follow-up) • Further re-connecting to APPA/or other Spanish associations • Natural development of new memberships • Complaint pool under new RES • EREF- Barometer for members based on REPAP/Nat. Policies – to be used to outside world as well • Grid/Storage Workshop in fall (partners: DUH, GEODE?) Dr. Doerte Fouquet, Director EREF,May 2010

  33. RES industry Credo • We therefore commit ourselves to promote an economy based on energy efficiency and renewable energy and call on local, regional, national and European leaders to support and advocate a truly sustainable 2050 vision: • Leading by example: 100% renewable energy for the European Union! Dr. Doerte Fouquet, Director EREF,May 2010

  34. RES industry call on leadership • Ensuring the timely, effective and full implementation of the 2009 Renewable Energy Directive in all EU-27 Member States • Setting a legally binding energy efficiency target of at least 20% by 2020 • Removing all subsidies and structural advantages for fossil and nuclear energy • Ensuring that immediate financial support is given to renewable energy and energy efficiency measures in order to overcome the EU´s economic crisis in a sustainable and forward-looking manner • Setting the right incentives for a European smart grid • Redirecting existing and focussing forthcoming EU research & development budgets as well as development and structural funds on sustainable energy priorities, namely energy efficiency, and renewable energy • Providing training and education of the workforce as well as information and market stimulation campaigns Dr. Doerte Fouquet, Director EREF,May 2010

  35. Dr. Doerte Fouquet, Director EREF,May 2010 Thank you !!! Dörte

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