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European Regional Energy Strategy

European Regional Energy Strategy. Country Overview: Germany. Typical European energy layout: 34% oil, 23% natural gas, 26% coal 11% nuclear; 7% renewable energy Changes by 2030: Increase of renewable energy Decrease of nuclear energy and oil, But, increase of natural gas

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European Regional Energy Strategy

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  1. European Regional Energy Strategy

  2. Country Overview: Germany • Typical European energy layout: • 34% oil, 23% natural gas, 26% coal • 11% nuclear; 7% renewable energy • Changes by 2030: • Increase of renewable energy • Decrease of nuclear energy and oil, • But, increase of natural gas • 80% of natural gas from Russia without changes • Diversification - LNG, Caspian Sea, Iran, North Africa

  3. Country Overview: France • Main source of energy: nuclear • 121 Mtoe out of 137 Mtoe primary production is nuclear • 50.5% independence rate • 5.1 Mtoe export of electricity • LNG hub • Changes by 2030: • Renewable sources, gas and nuclear expected to grow • Oil remains steady • CO2 and energy intensity objectives won‘t be met • Oil exposure will remain high

  4. Country Overview: Italy • Current Energy Mix: • Coal 9%; petroleum 44%; gas 37%; renewables 7% + 3% nuclear (from France) • 2030 BAU: • CO2 +38% (1990) - TPES +25%: coal +28%; gas +40%; renewables +70%; Nuclear +? • Objectives(?): Security, Sustainability, Affordability

  5. Country Overview: UK • Energy profile: • Ninth largest global consumer of energy (2008: 165M barrels of oil equivalent) • Shifts in fuel consumption/production: • Once an energy exporter, recently became net importer of petroleum (2005), gas (2004) and coal (2001) • Highly dependent on Norwegian petroleum (70+% of UK imports) • Gas and renewables replacing coal

  6. Country Overview: Norway • Western Europe’s Producer Country • Energy Profile • Self-sufficient to 2030 • Consumes oil (44%) and electricity (42.3%) • OIL Reserves – 6.7bn barrel / 2.47bpd produced, net exporter • GAS Reserves – 81.7 tcf3 / 3.5tn cf3 produced for export • ELECTRICITY – 50% European reservoir capacity / production = consumption • Economic Impact • NORWAY – 25% GDP / 52% exports / 31% gov’t. revenue / 30,000 workers • STATOIL – NOC, public in 2001, 62.5% state owned • EU – Oil to U.K., NLD, FR, GER, BEL / Gas to GER, U.K., FR, BEL, NLD • Energy Vulnerability / Security • PRODUCTION – Oil peaked in 2001 / Gas peaked in 2006…2010…2013 • Will Norway run out of oil/gas before it can re-invent its economy?

  7. Country Overview: Norway • Creating wealth for future generations • The Petroleum Fund • Estimated value of $400bn • Could reach $1trn and provide a 15yr safety net • Drill, drill, drill…

  8. Regional Comparison • Commonalities • Differences • Same prospective 2030 trends for renewable energy and natural gas • European directives regulatory constraints : CO2, market deregulation • High geopolitical importance of Russia in the gas and oil supply market • EU integration of markets and policies in medium- to long-term • Nuclear power • National resources • Domestic opinion towards nuclear • Government incentives through investment/tax (renewable vs nuclear)

  9. Summary of country strategies • Germany • Technology change from oil to hydrogen • Diversification of natural gas supply plus increase of efficiency & renewables • Markets and Institutions scenario: EU-Russia, EU-Caspian Sea, EU-Africa • France • Short term: internal markets deregulation • Domestic public opinion: tax debates, nuclear • Diplomacy: Central Asia, Caucasia, Turkey, North Africa • EU integration of energy market and policy • Italy • Short term: Energy Efficiency • Long term: Nuclear; Renewables, Gas (from North Africa, Russia, Caspian Region and LNG from Middle East) • EU integration of energy market and policy

  10. Summary of country strategies • United Kingdom • Short-term: Implement CHP to increase energy efficiency and capture waste • Long-term: Expand nuclear energy program and increase use of renewables to decrease dependency on foreign suppliers • Overall: Increase cooperation with EU for EU-wide strategy • Norway • Expand resource base • Exploration and technology on the NCS • International expansion • Emphasize natural gas • Develop off-shore wind / become an electricity exporter • Leverage LNG success in Barents Sea • Grow wealth in petroleum fund - slow production • Environmental sustainability – wind / CCS / smart grid

  11. Impact of standalone strategies? • Europe is a special case • European Union was founded to centralize the national steel and coal strategies of its member states • Lisbon Treaty will further current integration • Net consumers versus net producers • Most strategies are complimentary • All diversifying sources and moving away from fossil fuels to more sustainable, cleaner forms of energy • However, different national-level incentive structures and views on nuclear energy

  12. What EU action means • Until now the only common energy policy was on Climate Change • Eastern European Member States still in a “cold war” mode in their behavior toward Russia With the Lisbon Treaty: • Solidarity among EU Member States (short-term) • Common Energy Market • Common Foreign Policy (and Energy Policy) • Buyer market power (?)

  13. Critical geopolitical implications • Regional balance of power • Norway’s political stature increases in the region • Delivers more gas/oil from CNS (Barents Sea) and feeds European electricity grid • Brings international resources to EU and U.S. • Balances U.S. / EU vs. Russian interests in the development of arctic region fields • As a fringe producer, Norway is not immune to OPEC or “energy weapon” politics • EU’s relationship with Russia • By 2030 Russia will provide about 50% of the EU's gas imports • Current focus on bilateral agreements with Russia versus common front – impact of Lisbon Treaty? • Renewables offer freedom from dependency on Russia or other foreign powers • Future of the EU • Could EU expansion be driven by energy needs? • E.g. Turkey, which is poised as an energy conduit to Europe • New EU neighbors are increasingly energy producers • EU comfort level with growth of nuclear power varies by country

  14. Regional Takeaways • EU cooperation is critical and the Lisbon Treaty should facilitate compromise and collaboration • Common EU-strategy rather than individual country approach towards Russia, Caspian Sea region, Iran • Common energy market in the EU • Potential common strategy for technology change to hydrogen? • As net consumers, reducing EU dependence on foreign energy is critical – renewables are part of the solution • Norway: “No” to EU, but integrated into EU/world markets

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