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1 EU ENERGY POLICY Energy Bart Castermans European Commission DG ENER.

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Presentation on theme: "1 EU ENERGY POLICY Energy Bart Castermans European Commission DG ENER."— Presentation transcript:

1 1 EU ENERGY POLICY Energy Bart Castermans European Commission DG ENER


3 3 The backdrop: Rising global energy demand Global energy demand to go up by a third by 2035 CONTEXT

4 4 While dependence on imported oil & gas rises in many countries, Import dependence 0% 20% 40% 60% 80% 100% 20%40%60%80%100% Oil imports Gas Imports United States China India European Union Japan 2010 2035 20% Gas Exports the United States swims against the tide Data Source: Gould, IEA 05/03/2013 CONTEXT

5 5 Dependence by supply country CONTEXT

6 6 Managing external policy risks CONTEXT

7 7 Challenge 2: Climate Change CONTEXT

8 8 Challenge 2: Climate Change Source IEA 2013 CONTEXT

9 9 Towards 2030 Challenge 3: Competitiveness

10 10 Challenge 3: Competitiveness CONTEXT

11 11 Challenge 4: Investment CONTEXT

12 12 The three EU policy objectives

13 13 Energy A 2030 framework for climate and energy policies 22 January 2014 EC proposal

14 14 Investment security Economic recovery and energy security UNFCCC 2015 Agreement on 2030 framework essential for: Towards 2030

15 15 On instruments Towards 2030

16 16 On targets Towards 2030

17 17 Proposal: GHG. GHG target found to be least cost pathway to a low carbon economy. Binding Target GHG reduction 40% (vs 1990) to be translated into binding national targets » ETS Sector: 43% » Non ETS: 30% (both vs 2005) Towards 2030

18 18 Proposal: RES. Focus on market based approach. Binding target at global EU level 27% (minimum) of the energy consumed » No national binding targets. » MS flexibility on individual commitments » "Governance" mechanism to monitor and foster progress. Review of Directive on renewable energy Towards 2030

19 19 Proposal: Energy Efficiency Towards 2030. Assessment of the EE Directive in 2014 (transposition deadline June 2014). Shortfall vs the 20% 2020 is expected.. Review could lead to proposal for amendments. Current EC estimate: need of 25% EE to meet the GHG target of 40% in 2030

20 20 The context: ETS price Concerns about energy prices and energy security ETS price Towards 2030

21 21 Proposal: Reform of ETS. Dec 2013 decision to postpone auction of 900 Million tons ETS until 2019/2020. Address structural surplus through a "market stability reserve" to start 2021 (Phase 4) –. Automatic adjustments, based on rules to be further elaborated (no discretionary measures) Towards 2030

22 22 Proposal: IEM. Target: operational by end 2014. Avoid distortive effects: » DG COMP cases (ia UK HPC, RES in DE,…) » costs/prices and state aids/subsidies (study) Towards 2030


24 24 1. Context and timeline (1) - The Energy Roadmap to 2050 Nov. 20082 nd SER: EC to prepare an energy policy roadmap towards a low carbon energy system; in line with the EU growth agenda set out in the Europe 2020 strategy Feb. 2009, Oct. 2009The European Parliament and the EU Council support an EU objective to reduce GHG by 80- 95% 1990 levels, as estimated by IPCC Feb. 2011The EU Council reconfirms the reduction commitment, recognizes it will require a revolution in the EU energy systems; fixing intermediary targets discussed Dec. 2011The EC adopts the Communication, IA and scenario analysis of the Energy Roadmap to 2050 Employment

25 25 1. Context and timeline (2) The study of empl. effects of RM2050 scenarios 2012Following a recommendation from the IAB, DG ENER commissioned a study analysing potential impacts of decarbonisation scenarios on jobs and skills Dec. 2012 - Oct. 2013Work on the study Nov. 2013 – Dec. 2013Discussion of results with stakeholders Dec. 2013 – Jan. 2014DG ENER to decide on the dissemination of the findings and conclusions of the report Employment

26 26 2. Project details The tender under an existing framework contract was awarded to a Consortium led by COWI which included Cambridge Econometrics, Exergia E3M Lab, NTUA, Enrst&Young Warwick Institute for Employment Research Final draft (159 p.) & appendices (57 p.) Employment

27 27 3.1 Collection of disaggregated statistical and market employment data in the energy sector 2,5 million people directly employed in the energy sectors across EU28 (1% of the total employment in all sectors) 0.6 million directly employed in power generation fossil fuels (32 800), hydro (160 400), nuclear (141 700), solar (88 200), wind (55 200), geothermal (8 000), biomass (106 500) and tidal (100) 0.5 million directly employed in transmission (67 500) and distribution (425 900) of electricity and about 140 000 were employed in transmission and distribution of natural gas Employment

28 28 3.3 The models Cambridge Econometrics uses E3ME, a structural (Keynesian) macroeconometric model of Europe’s economic and energy systems and the environment. Exergia E3M Lab from the National Technical University of Athens uses GEM-E3, a multi-regional, multi-sectoral, recursive dynamic computable general equilibrium (CGE) model which provides details on the macro-economy and its interaction with the environment and the energy system. Employment in the models is determined by a combination of structural change, the revenue recycling, aggregate GDP effects and the reaction in the labour market Employment

29 29 3. Main results 3.3 The decarbonisation scenarios Employment S1 : Higher Energy Efficiency S2 : Diversified Supply technologies S3 : High RES S4 :Delayed CCS S5 : Low Nuclear

30 30 3. Main results 3.3 Selected empl. results – broader economy Employment

31 31 3. Main results 3.3 Selected empl. results – broader economy Employment

32 32 3. Main results (9) 3.3 Selected empl. results – energy sector Decomposed results for the whole energy sector by NACE (such as in Section 3.1) are not available (energy sector spread around several lines in the previous slide) Employment results in the power generation sector in the electricity sector are determined by:  input assumptions on the electricity fuel mix (consistent between the models);  coefficients used to determine number of jobs per unit of generation capacity.  (Not by differences in modelling specification) Employment

33 33 3. Main results (10) 3.3 Selected empl. results – power gen sector Baseline Employment

34 34 3. Main results (11) 3.3 Selected empl. results – power gen sector Baseline vs other scenarios Employment

35 35 3. Main results (11) 3.3 Selected results – sensitivity analysis Results across models are fairly robust. Relatively low sensitivity  Labour intensity of new technologies (measured as jobs per GW capacity);  baseline rates of GDP growth Relatively high sensitivity (E3ME)  Recycling options of carbon tax revenues(E3ME)  Fossil fuel prices (oil price depends partly on the level of decarbonisation ambitions of the EU trading partners)(E3ME)  Investment crowding out effects Employment

36 36 Thank you

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