A 2030 framework for climate and energy policies Energy

Proposals for the 2030 framework for climate and energy policies The 2030 framework will build on the 2050 Roadmaps - Concrete proposals by the end of 2013 2050 Roadmaps 2030 Green Paper Proposals for the 2030 framework for climate and energy policies 2011 March 2013 September 2013 On-going discussions with Member States, EU institutions and stakeholders

Early agreement on the 2030 framework is essential Increased certainty for Memeber States and reduce regulatory risks for investors Growth and jobs through demand for efficient and low carbon technologies Definition of EU ambitions in view of a new international climate change agreement

Security of energy supply The 2030 framework must ensure progress towards three objectives Sustainability Security of energy supply Competitiveness Reduction of emissions Diversification of fuels, supply countries and routes Affordable and competitive prices Grid Stability Reduction of energy consumptions Promotion of new technologies, growth and jobs Development of alternative energy sources Adequate energy infrastructures Improved energy efficinecy The 2030 policy framework should take into account lesson learned from the 2020 framework and the economic and political context of today

The EU is making good progress towards meeting the 2020 RES target - But most Member States are still some distance away Source: Eurostat Renewable sources accounted for 12.7% of the EU's energy consumption in 2010

EU energy consumption is going down, but 2020 target likely to be missed with current policies projections Source: European Commission

Challenges in meeting 2020 targets - to be considered in the 2030 framework Increasing concern about energy import dependency and rising energy prices Stability and costs of renewables support schemes, impacts on the internal energy market, on grid stability and capital allocation Need for massive investments in energy transmission and distribution infrastructure, e.g. due to renewables expansion Differences between Member States in improving energy efficiency; implementation of directives Current large surplus of ETS allowances, resulting in a low carbon price and low investment incentives Need for coherence of policy instruments

More Energy Efficiency "No Regrets" options from the Energy Roadmap 2050 More Energy Efficiency More Renewables More infrastructures

(1) Energy savings throughout the system are crucial Gross energy consumption (in Mtoe) Current policy initiatives Decarbonisation scenarios Source: European Commission

(2) The share of renewables rises steadily over time Share of renewables in gross final energy consumption (in %) Source: European Commission The share of renewables is between 28% and 31% in the decarbonisation scenarios. 10

(3) Large investment for power generation is needed ~ 2 (3) Large investment for power generation is needed ~ 2.5 trillion Euros up to 2050. Cumulative investment expenditure for power generation from 2011 to 2050 (in billion €2008) Source: European Commission More investments also needed in grid infrastructure, storage, etc. 11

Import dependency falls, especially after 2030 with electification of transport Net energy imports (in Mtoe) Current policy initiatives Decarbonisation scenarios Source: European Commission All decarbonisation scenarios will reduce the EU’s energy import dependency.

Competitiveness & Security of Supply These are the main issues to be considered for the 2030 framework Should climate and energy targets be set for 2030? If so, which ones? Targets Which are the most appropriate policy instruments to meet potential new targets for the period up to 2030? How can Research and Innovation best support the 2030 framework? Instruments How can EU policies take account of international developments? Eg. Climate negotiations How can internationally competitive and affordable energy prices be ensured? Competitiveness & Security of Supply How can an equitable distribution of efforts be ensured among Member States? How to best consider the different investment capacities of industry sectors and consumer groups? Effort Sharing

Electricity prices – the US is increasing its advantage… Evolution of end-user electricity prices for industry, taxes excluded Source: IEA, Energy Prices and Taxes, 4th quarter 2012

…in part due to the shale gas boom - US wholesale prices for gas are 3-4 times lower than in the EU Source: European Commission 15

- "non-energy" component is very significant End-user electricity prices for households differ substantially between MS - "non-energy" component is very significant Source: Eurostat

Lower differences between MS for industry end-user prices Source: Eurostat

Building on the past towards the future….! 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 11/2010 Commission Communication on the Energy 2020 Strategy 03/2006 Green Paper on a future common European Energy Policy 01/2007 Commission proposal for 2020 climate and energy package 12/ 2008 Head of State and Government reached agreement on the package 12/2011 Commission Communication Energy Roadmap 2050 03/2006 Green Paper More concrete proposals for the 2030 framework 04/2009 RES Directive 06/2011 Energy Efficiency Directive Window of opportunity 2015 Global Climate Change Agreements

Concrete steps towards the 2030 framework in 2013 Jan. Feb. Mar. Apr. May Jun. Jul. Aug Sept. Oct. Nov. Dec. Adoption of the Green Paper consultation procedure 22 May European Council 22-24 April Council meetings Update of reference scenario Impact Assessment Assessment of responses to the consultation Commission proposals for the 2030 framework

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GAP Progress towards the 2020 Energy Savings target 2009 20% objective 1678 Mtoe 20% objective 2009 1842 Mtoe business as usual 2007 2020 Projections from 2007 Projections from 2009 20% EE objective 1474 Mtoe Primary energy consumption*, Mtoe 1400 1450 1500 1550 1600 1650 1700 1750 1800 1850 1900 2005 2010 2015 GAP Source: European Commission * Gross inland consumption minus non-energy uses

The share of renewables rises steadily over time Share of renewables in primary energy consumption (in %) Source: European Commission 22

Source of data: Eurostat Retail electricity prices paid by households and industry in 2012 Note: Euro/kWh, first half of 2012, consumption bands DC and IC, all taxes included Source of data: Eurostat