CESSA a retrospective. William J. Nuttall University of Cambridge

Transcription

1 CESSA a retrospective William J. Nuttall University of Cambridge wjn21@cam.ac.uk WJN copyright notice: These slides have been produced for a single not-for-profit use at the EPRG Cambridge, November 2008.

2 Why CESSA? Coordinating Energy Security in Supply Activities A European Commission Sixth Framework Programme in the series Scientific Support to Policies. EC contribution approximately 400k (see:

3 Who are the CESSA team? CESSA is led by Professor François Lévêque from Ecoles des Mines in Paris, France. He is supported by Professor Jean-Michel Glachant, now Director of the Florence School of Regulation in Florence, Italy. Other core participating institutions include: Universidad Pontificia Comillas, Madrid Université Paris-Sud 11 Deutsches Institut für Wirtschaftsforschung, Berlin University of Cambridge

4 When was CESSA? CESSA followed an earlier EC funded project involving many of the same people. The first project was called SESSA (see: SESSA ran for 18 months from April SESSA was concerned with Sustainable Energy CESSA started in January 2007 It will end next month December 2008.

5 What is CESSA s remit? CESSA addresses European energy security. It has two broad concerns: Starting from consideration of today s context, to consider EU energy security with respect to natural gas and nuclear energy Looking ahead to consider prospects for a European hydrogen economy and its possible role in EU energy security

6 How was CESSA delivered? The CESSA project was built around a series of international conferences: 31 May 1 June 2007 Gas and Nuclear Economic Mechanisms Conference organised by DIW Berlin (D) December 2007 European Energy Supply Security in a Carbon Constrained World. Conference organised by EPRG, University of Cambridge (UK) in association with the 2007 EPRG Winter Seminar April 2008 Prospects for a European Hydrogen Economy Conference organised by University Pontificia Comillas Madrid (S) June 2008 Enhancing Security of Supply in Europe Conference organised by FLE Florence (It) 2 October 2008 Final Conference in Brussels

7 CESSA s Conclusions? For a full treatment of this question please see the CESSA project website, and most especially the CESSA Policy Briefs which are available at: In the following slides I shall present my subjective impression of the main messages

8 Overarching observations First when thinking of energy security consider diversified supplies and trade routes rather than energy independence Trade and markets are hugely beneficial to energy security for all participants. Short-term crises must not be confused with long-term problems. Energy Security can be greatly affected by policy measures introduced for non-energy issues. Some policies intended to improve energy security can actually make things worse.

9 The limits of the possible The EU must continue to build its internal energy market it greatly improves energy security for all Europeans The EU should seek to build wider global markets and improved trade But the EU must recognise the limits of its power and the need to deal effectively and pragmatically with outside actors that approach energy trading with a different philosophy EU member states should act with greater solidarity when dealing with important third parties from outside the EU. There is a moral obligation for all member states to place European interests above more narrowly defined notions of the national interest Efforts by which Europe might be better able to speak with one voice on matters of energy policy are to be encouraged

10 CESSA s Fuel Specific Conclusions: Hydrogen Theme led by Pontifical Comillas University, Madrid

11 Hydrogen Observations For a full set of conclusions and recommendations please consult the relevant CESSA Policy Brief. CESSA observes that: Hydrogen has the potential to play an extremely helpful role in connection with economic energy storage. This is likely to be of particular importance in a future European electricity system with a high proportion of renewables Hydrogen could play a key role in decarbonising transport. One route would be to spill surplus low carbon electricity into transport Hydrogen is not the only option that could deliver these benefits c.f. the plug in hybrid concept. Hydrogen can be made using electricity or high-grade process heat sources. In both cases (and restricting our interest to low CO2 options) the source could be either renewables or nuclear

12 Hydrogen Observations Contd CESSA observes that: A hydrogen economy requires major infrastructure investments and there remain some important technology gaps requiring research and development CESSA directs its hydrogen comments to the European Commission s DG-Research as well as to DG-Transport & Energy DG-Research must greatly increase support for public goods (pre-competitive) energy research and development this should include hydrogen research

13 CESSA s Fuel Specific Conclusions: Natural Gas Theme led by DIW Berlin

14 Natural Gas Observations For a full set of CESSA conclusions and recommendations please consult the relevant CESSA Policy Brief. CESSA observes that: Issues relating to short-term supply interruptions must not be confused with issues relating to longterm gas security Diversity is key to long-term security and markets help such security China and India are still to define their approach to energy security and to gas sector restructuring their decisions will affect Europe

15 Natural Gas Continued CESSA observes that: The role of Russia in European gas security is often exaggerated and its share of imports is predicted by CESSA not to increase from today s 35% The Russian-European Energy Dialogue is to be encouraged Most Continental EU Member States must take the reform agenda more seriously and ownership unbundling should be introduced Regulation should promote an expansion of gas storage

16 Natural Gas Continued CESSA observes that: Noting the role of long-term contracts with major suppliers external to the EU, the gas market should have a European-level regulator responsible (at a minimum) for cross border operations Gas is expected to decline in importance in the European energy mix after In speaking to the CESSA community Jonathan Stern has described gas as a sunset industry

17 CESSA s Fuel Specific Conclusions: Nuclear Energy Theme led by University of Cambridge

18 Nuclear Observations For a full set of CESSA conclusions and recommendations please consult the relevant CESSA Policy Brief. CESSA observes that: Nuclear Power can reduce price risks and gas dependency by increasing the diversity of the generation portfolio Nuclear energy could contribute much to GHG emissions reduction New Nuclear Power Stations Can Be Built In Liberalized European Energy Markets European policy interest is moving beyond simply Replace Nuclear With Nuclear

19 4 Specific Suggestions 1. The Creation of a European Agency for Nuclear Safety and Environmental Protection DG-TREN s Fernando de Esteban commented in May 2002 on remarks from then Commissioner and Vice president De Palacio: she does not understand how we in the European Union can adopt detailed standards for the quality of water in rivers and lakes but not have a common approach to nuclear safety. She made it very clear that she wished to propose a Community approach to nuclear safety in the form of common standards and European mechanisms of control that would guarantee the application of the same methods and criteria throughout an enlarged Europe. The objective is to ensure that all States would have equivalent levels of nuclear safety. CESSA concurs with this view and recommends an agency similar in structure to the 3 rd Package s Agency for the Cooperation of Energy Regulators. The new body would build upon much prior good work by WENRA

20 2. An Official EU Nuclear Energy Roadmap Modelled on the EU s January 2007 Renewables Roadmap which addressed the path towards the 2020 goal of 20% Renewable Energy, the EU could produce a roadmap showing how nuclear energy might make a contribution to the EU goal of 20% GHG emissions reductions by 2020 and likely follow-on policy targets. This would follow naturally from the EC s Strategic Energy Review text currently under development. As a point of comparison it might estimate the cost of meeting EU CO 2 targets without nuclear power

21 3. A concerted move to European scale R&D in order to open the option of advanced nuclear fission energy systems for the 2030s and beyond. Such research at scale could provide an affordable technology option, but not an obligation, for EU Member States. Such research would allow Europe to match significant advanced nuclear energy research activity already underway in the USA, Japan, China and India. Such European research could be undertaken in the spirit of the European Research Area

22 4. Creation of a clear and robust market framework for electricity investors and plant operators Electricity generation involves numerous contracts beyond simply those relating to electricity sales. These include many types of longterm contracts The construction and operation of nuclear power plants has historically relied on long-term contracts e.g. in financing new build or relating to the fuel cycle (at both ends) Some long-term contracts are widely believed to erode market competition (e.g. in gas trading) and competition authorities are increasingly concerned about the role of long term contracts in the European energy market On behalf of all electricity technologies, the Nuclear CESSA WP suggests a clarification and strengthening as to what long-term contracts are indeed welcomed by European competition authorities

23 CESSA Nuclear The analytical tasks: 1. Nuclear new build in liberalized electricity markets 2. Nuclear power the European political & policy context 3. Nuclear Energy and Sustainability 4. Nuclear Electricity Security and Fuel Security 5. Nuclear Safety Regulation and its Europeanization 6. Nuclear Wastes and Reprocessing For simplifying the work of WP2 only significant case studies on a short list of core issues will be undertaken. And in addition we shall link to the CESSA Hydrogen WP

24 CESSA Nuclear Working Papers Already available at: : A Bredimas and WJ Nuttall "A Comparison of International Regulatory Organizations and Licensing Procedures for New NPPs" Re: Task 5 WJ Nuttall, I Farnan, R Konings, D Hamilton "The Management of Separated Plutonium: An Introduction" Re: Task 6 L Pouret and WJ Nuttall "Can Nuclear Power Be Flexible?" Re: Task 4 S Taylor "Nuclear Power and Deregulated Electricity Markets: Lessons from British Energy" Re: Task 1 F Romerio "Nuclear power The Swiss experience" Re: Task 2 D Finon & F Roques "Contractual and financing arrangements for new nuclear investment in liberalised markets: Which efficient combination?" Re: Task 1 N Buttery "Issues facing new build in the UK" Re: Task 2 WJ Nuttall and S Taylor "Financing the Nuclear Renaissance" Re: Task 1

25 Working Papers Soon To Appear WJ Nuttall Nuclear Energy in the Enlarged European Union Re: Task 2 JS Ash Another Man s Poison: Risk Management and Nuclear Power Generation Re: Task 2 WJ Nuttall and F Roques Certain Aspects of the Sustainability of Nuclear Power Re: Task 3 WJ Nuttall and D Newbery CESSA Nuclear Policy Brief Re: All Tasks As we approach the close of the CESSA project the Cambridge CESSA team have made an contribution to all of the Analytic Tasks specified for WP2. In addition the links to WP 4 Hydrogen have been most fruitful.

26 A CESSA Innovation: The CESSA Blog A key development emerging from CESSA has been the EU Energy Policy Blog: It has received 110 posts from 46 experts and more than 180 comments in reply. It s good check it out!

27 What next? SESSA-3? One theme of potential interest to the SESSA community is: European Energy Technology Policy for a Difficult Financial Context

28 With many thanks to you and to the CESSA family a true European team effort Thinking more locally, I would especially like to thank: Madie Armstrong, John Ash, Alexandre Bredimas, Sally Daultrey, Ian Farnan, Raphael Heffron, Sidney Ho, Charlotte Kelley, Liz Hooper, David Newbery, Pierre Noel, Laurent Pouret and Simon Taylor