1. 1 There is a major risk that Europe gets off-track in the 2020s The current policies will not achieve the EU ambition as CO 2 intensity will rise without competitiveness benefits EU Power Sector CO 2 emission intensity 1 – scenarios assumes current Member States financial commitment to RES continues at same level for each decade post 2020 and other restrictions, such as no nuclear in Germany, remain in place throughout the period Source: Pöyry analysis for European Gas Forum, 2013 Rising emissions in Current Policies, Coal+RES scenario 9 April 2014 GAS NATURALLY – EC GAS FORUM

2. 2 Continuing with a coal intensive system, and despite continued support for RES, it is not possible to reverse the trend by 2050 To attempt a U-turn requires maximum deployment of all low carbon technologies post 2030 but the resultant CO 2 intensity is still 17x above the 2050 target Installed Capacity in 2030 – Current Policies, Coal+RES Additions/Retirals post 2030 maximising RES, nuclear & CCS Resulting Capacity in 2050 Source: Pöyry analysis for European Gas Forum, 2013 2031-2050 9 April 2014 GAS NATURALLY – EC GAS FORUM

3. 3 Strengthening the carbon price is the most efficient way to promote decarbonisation to at least 2030 Pöyrys analysis of many future electricity market designs shows the optimal decarbonisation pathway has a EU ETS price c.70/tCO 2 by 2030 Relationship between carbon emission intensity and carbon price to 2030 Significant reductions in emission intensity to levels of ~150gCO 2 /kWh (similar to 2030 ambition) can be delivered through progressive increase in carbon price to ~70/tCO 2 using mature technology and at least cost There is likely to be an optimal level of cost effective carbon reduction through the carbon price Absolute Market scenario (AM) Dual Support scenario (DS) 9 April 2014 GAS NATURALLY – EC GAS FORUM Source: Pöyry Point of View: From Ambition to Reality? Decarbonisation of the European Electricity Sector, 2013

4. Intermitent wind & solar will impact all other forms of generation 4 And large scale deployment drives marginal prices towards zero, making intermittent generation economics difficult without long-term support Generation 22-30 Dec 2030 Weather patterns for 25 December 2006 Source: Pöyrys Northern Europe Electricity Intermittency Study, 2011 9 April 2014 GAS NATURALLY – EC GAS FORUM