1. Owen WILSON Environment and Sustainable Development Committee, EURELECTRIC POWER CHOICES EURELECTRIC Study on low-CO2 Europe by 2050 POWER CHOICES EURELECTRIC Study on low-CO2 Europe by 2050 Geneva, 13 th April 2010

2. Background EURELECTRIC “Role of Electricity” Study (2007) –Changed Energy landscape Climate Challenge; Security of supply; Competitive EU economy –Partners: University of Leuven (Demand); VGB (Supply); Technical University of Athens (Modelling); McKinsey (co- ordination) –Focus: How to provide low-carbon, secure energy at least cost –Outcome: 50% reduction in EU27 GHG emissions by 2050 European Council decisions on Climate-Energy package and 2050 objective Economic and financial crises Electricity industry CEOs Declaration

3. EURELECTRIC CEO Declaration 18 March 2009 1.Cost-efficient, reliable supply through an integrated market 2.Energy efficiency & electricity use as solutions to mitigate climate change Carbon-neutral power in Europe by 2050

4. High Level Strategy to deliver CEO Declaration Build on “Role of Electricity” Study –“Role of Electricity” took technological and policy developments as start point and projected impacts on CO2 emissions to 2050 –New study, “Power Choices”, takes 2050 GHG objective (-75% on 1990) as start point and maps most economic pathway for delivery –Consequential impacts on SO2, NOx emissions also assessed

5. “Power Choices” Study SCENARIO ASSUMPTIONS 75% GHG cut across whole EU economy, consistent with 450 ppm global in 2050 CO 2 price applied uniformly to all sectors Power becomes major transport fuel All power generation options available (with CCS commercially available as of 2025) Major policy push in energy efficiency No binding RES target post-2020; RES support mechanisms withdrawn by 2030 CO 2 price is the only driver for low-carbon generation post 2030 Rational behaviour by economic agents SCENARIO ASSUMPTIONS 75% GHG cut across whole EU economy, consistent with 450 ppm global in 2050 CO 2 price applied uniformly to all sectors Power becomes major transport fuel All power generation options available (with CCS commercially available as of 2025) Major policy push in energy efficiency No binding RES target post-2020; RES support mechanisms withdrawn by 2030 CO 2 price is the only driver for low-carbon generation post 2030 Rational behaviour by economic agents BASELINE ASSUMPTIONS No new policy developments post 2009 No new policy developments post 2009 ETS 1.74% p.a. reduction continues ETS 1.74% p.a. reduction continues No CO2 price in non-ETS sectors No CO2 price in non-ETS sectors Bottom up measures to support energy efficiency, new renewables Bottom up measures to support energy efficiency, new renewables BASELINE ASSUMPTIONS No new policy developments post 2009 No new policy developments post 2009 ETS 1.74% p.a. reduction continues ETS 1.74% p.a. reduction continues No CO2 price in non-ETS sectors No CO2 price in non-ETS sectors Bottom up measures to support energy efficiency, new renewables Bottom up measures to support energy efficiency, new renewables MODELLING PROMETHEUS to evaluate global energy supply/demand and prices PROMETHEUS to evaluate global energy supply/demand and prices PRIMES to evaluate EU27 energy supply/demand (as per DGTREN Dec 2009) and emissions PRIMES to evaluate EU27 energy supply/demand (as per DGTREN Dec 2009) and emissionsMODELLING PROMETHEUS to evaluate global energy supply/demand and prices PROMETHEUS to evaluate global energy supply/demand and prices PRIMES to evaluate EU27 energy supply/demand (as per DGTREN Dec 2009) and emissions PRIMES to evaluate EU27 energy supply/demand (as per DGTREN Dec 2009) and emissions

6. “Power Choices” Output Summary Energy efficiency in buildings, houses, electricity use (appliances, lighting, heat pumps, motor drives … ) –Domestic sector savings -16% in 2030 relative to Baseline; -39% in 2050 relative to Baseline –Electrification of road transport 10% in 2030; 80% in 2050 Renewables in heat and power generation –37% in 2030; 40% in 2050 CCS in power generation –63 GW in 2030; 191 GW in 2050 (85% of CO2 captured) Nuclear energy –132 GW in 2030 (85 GW new); 175 GW in 2050

7. Energy Efficiency is Key Stationary uses - 10% on Baseline by 2030 - 30% on Baseline by 2050 Transport uses - 7% on Baseline by 2030 - 29% on Baseline by 2050

8. Composition of electricity demand Electricity demand on Power Choices vs. Baseline

9. Overall energy demand -30% vs. Baseline in 2050 Paradigm shift to efficient electric technologies More electricity = less energy

10. Need for all low-carbon generation options In 2050 RES: 40% of total mix (1910 TWh) Wind: 56% of RES Nuclear: 28% of total mix (1330 TWh) CCS: 28% of total mix (1320 TWh) Other fossils: 4% of total mix (210 TWh) In 2050 RES: 40% of total mix (1910 TWh) Wind: 56% of RES Nuclear: 28% of total mix (1330 TWh) CCS: 28% of total mix (1320 TWh) Other fossils: 4% of total mix (210 TWh) Net power generation in EU-27

11. Carbon emissions from power fall by >90% Deep emission cuts take place between 2025-2040. But investments are needed NOW! NOW: 1423 MtCO 2 2050: 128 MtCO 2

12. Decomposition of emissions reduction in Power Sector

13. Decomposition (ex-post) of emissions reduction

14. Investment needed across the period Gross investment in generation capacity MW 2010 – 2050 13% 17% 4% 52% 14%

15. Significant investments… … but a reasonable cost for society Investment needed in power generation by 2050: €2 trillion

16. What if… Commercial deployment of CCS is delayed to 2035? One-third of onshore wind power is not built due to planning problems? Nuclear phase- out is reversed in Germany and Belgium?

17. All technologies are really needed More nuclear = more rapid reduction curve 10-year delay of CCS = delayed CO 2 emission reductions from power & whole economy! 1/3 onshore wind not built = more CCS & nuclear, off-shore wind not likely to fill gap. 0 20002005201020152020202520302035204020452050 200 400 600 800 1000 1200 1400 1600 Mt CO2 emissions from power, EU-27 CCS delay Power Choices Nuclear+

18. Power Sector SO2 and NOx emissions SO2 emissions 3.3 Mt in 2000 3.3 Mt in 2000 0.2 Mt in 2050 0.2 Mt in 2050 NOx emissions 1.6 Mt in 2000 1.6 Mt in 2000 0.5 Mt in 2050 0.5 Mt in 2050 Major impact on urban air quality

19. Key outcomes EU carbon-neutral power by 2050 is realistic -75% GHG on whole economy can be reached Energy efficiency is critical –Electrification of the demand side essential All power generation options needed Significant investment but at acceptable cost to society The major CO 2 reductions in power are achieved from 2025 onwards CCS delayed &/or nuclear phase-out = slower CO 2 reduction Significant co-benefits with air pollutants

20. Policy recommendations Technology choices Enable the use of all low-carbon options for power generation Encourage public support for modern energy infrastructure: onshore wind, CCS, smart grids… Demand-side Major policy push in energy efficiency Facilitate electrification of road transport and spatial heating & cooling Cost Significant investment cost but reduction in share of GDP Recognise that cost of technology deployment differs substantially across the EU CO2 reductions Support CO 2 market to deliver cap at least cost All sectors to internalise cost of GHGs Promote an international agreement on climate

21. EURELECTRIC’s partner organisations in Power Choices study: National Technical University of Athens Verband der Großkraftwerks-Betreiber