1. Dutch Reference Outlook Energy and Greenhouse Gases 2001-2010 Remko Ybema, ECN Policy Studies Workshop on Energy-related National and EU-Wide Projections of Greenhouse Gas Emissions, 27 to 28 February 2002 Brussels

2. Main clients and reports Clients -Ministry of Environment (Evaluation report climate policy) -Ministry of Economic Affairs (Energy report) Three main reports: -Reference Outlook Greenhouse gas emissions -Reference Outlook Energy and CO 2 -Reference Outlook non-CO 2 greenhouse gas emissions

3. Timing of projections Previous 1997 (scenario) Reference outlook was prepared in 2001 and released in January 2002 Next update expected in 2004

4. Reference outlook: Objectives Make most likely projection of developments in energy supply, energy use and CO 2 emissions until 2010 Specific instructions -Include implemented and adopted measures -plus two variants: include planned measures exclusion of new measures since 1999 -Pay ample attention to sensitivity of results to uncertain developments

5. Description of the procedures used in latest projection Detailed analysis of past monitoring trends Key uncertainties: identification In depth analysis of some sectors and markets Choice of key assumptions (GDP growth, oil price, etc) Simulation of energy use development per sector Calculation of CO 2 emissions Key uncertainties: estimation of impact Several reviews and iterations

6. Overview of models used Monitoring tool for historic analysis Market simulation models -Western European gas market (GASTALE) -Dutch electricity market (POWERS) Calculation sheet for end-use prices (tariffs) Model for energy demand (partly) driven by economic factors Simulation models for most end-use sectors: -Industry, Households, Service sector, Agriculture, Transport -detail in bottom up elements varies per sector Specific energy supply models -Refinery model, Electricity, CHP, Renewables

7. How were the policies and measures quantified? Action by an actor depends on: -availability of measures -information for actors -incentives (regulation, financial, etc) -possible barriers Simulation models of behaviour of actors -actors as economic agents -include “soft” elements -include interaction between policy instruments -calibrated with analysis of historic trends

8. Description of the critical assumptions used in the projections Assumptions -base year : 2000 -economic growth: 2.5% (optimistic outlook of CPB) -economic structureless energy intensive -crude oil price:22 $/vat (1 Euro = 1 dollar) -population size:16.6 million inhabitants -electricity market:not much competition

9. Crude oil price, gas commodity price, electricity commodity price

10. Summary of policies and measures

11. Example: P&Ms in household sector Minimum efficiency standards new dwellings Regulating energy tax Energy labels in combination with subsidies Subsidies for solar boilers, solar PV, etc Existing dwellings: energy advisors

12. 140 150 160 170 180 190 200 210 1980198519901995200020052010 [Mton] HistoricalReference outlookOld reference Total CO 2 emissions: projected rate of growth will drop to 0.6 %/yr

13. Main results for energy and GHGs (1) For non-CO 2 GHGs: 20% reduction by 2010 Total GHG emissions almost constant Sectors: fuel use and CO 2 -decrease for households, services and agriculture -increase for transport, industry and energy sector

14. Direct CO 2 emissions by sector

15. Main results for energy and GHGs (2) Liberalised energy markets -reduced gas price -commodity price electricity relatively high Energy savings and CHP -Rate of energy conservation remains at 1.2 %/yr -Growth of CHP half of period 1990-2000 Fuel mix -Almost constant for fossil fuels -Renewable energy: from 1.5% to 3.5%

16. Key uncertain developments for energy and CO 2 Import of electricity -Natural gas price -Level of competition on market -Commodity price in other countries -Transport capacity Growth in production capacity of energy intensive industry Success of renewable energy Growth in new end-uses of electricity

17. Comparison of latest projections with previous projections Lower CO 2 level 2000 ( difference 6 Mton ) -more favourable economic structure than projected -higher import of electricity Lower CO 2 level 2010 ( difference 12 Mton ) -impact of new policies and measures more renewables more energy savings -lower economic growth -(higher: electricity production and transport)

18. Recommendations Start with analysis of past trends Explicitly consider uncertainties Consider the effects of liberalisation of energy markets Use a common approach to estimate impact of policy instruments Aim at transparency Include reviews