Wind energy and Climate policy Fixing the Emission Trading System

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1 Wind energy and Climate policy Fixing the Emission Trading System Rémi Gruet Senior Advisor - Climate Change & Environment European Wind Energy Association 1st February 2012

2 EWEA Members Across entire supply chain

3 Outline EU power A clear shift towards renewables Reducing emissions is possible - 30% is a minimum Macro-economic benefits of wind Fixing the Emission Trading System Additional content

4 Current status Cumulative installations in EU (GW) Annual installations in EU (GW)

5 EU installed power generating capacity per year (MW) 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5, Wind PV Large hydro Geothermal Biomass Waste Small hydro CSP Ocean Gas Coal Nuclear Fuel oil Peat

6 Net electricity generating installations in EU (GW) Gas Wind PV Large hydro Biomass Waste CSP Small hydro Geothermal Peat Ocean Coal Nuclear Fuel oil

7 Wind and nuclear 2/3 New global annual wind and nuclear capacity from 2001 to % more wind capacity installed in 2010 than nuclear capacity during the decade.

8 Wind share of electricity consumption Denmark Spain Portugal Ireland Germany EU Cyprus Greece Sweden UK Estonia Netherlands Italy Romania Bulgaria Austria Lithuania Belgium France Poland Hungary Luxembourg Latvia Czech Finland Slovakia Slovenia Malta 6.3% 5.4% 5.2% 4.5% 4.5% 4.4% 4.4% 4.2% 3.7% 3.4% 3.3 % 3% 2.9% 2.8% 2.3% 1.7% 1.3% 0.9% 0.7% 0.5% 0% 0% 0% 12.0% 10.6% 15.9% 15.6% 25.9% Wind is a key generation technology in several EU Member States Source: EWEA 2010 production from Wind compared to 2008 consumption 0% 5% 10% 15% 20% 25% 30%

9 Wind power installed in Europe by end of 2011 (MW) FINLAND 197 FAROE ISLANDS 4 DENMARK 3,871 NORWAY 520 SWEDEN 2,907 ESTONIA 184 LATVIA 31 LITHUANIA 179 European Union: Candidate countries: EFTA: Total Europe: 93,957 MW 1,930 MW 565 MW 96,607 MW PORTUGAL 4,083 IRELAND 1,631 SPAIN 21,674 UNITED KINGDOM 6,540 FRANCE 6,800 NETHERLANDS 2,328 BELGIUM 1,078 LUXEMBOURG 44 GERMANY 29,060 SWITZERLAND 46 ITALY 6,747 CZECH REPUBLIC 217 AUSTRIA 1,084 POLAND 1,616 SLOVENIA 0 CROATIA 131 SLOVAKIA 3 HUNGARY 329 FYROM 0 GREECE 1,629 ROMANIA 982 BULGARIA 612 UKRAINE 151 TURKEY 1,799 MALTA 0 CYPRUS 134

10 Wind installed capacity - Development and 230GW scenario to Capacity: 94 GW Production: 206 TWh 6.3% of EU Demand Similar targets in other 2020 scenarios IEA = 199 GW NREAPs = 213 GW EC = 222 GW GW 581 TWh 16% of EU demand

11 Outline of presentation EU power A clear shift towards renewables Reducing emissions is possible - 30% is a minimum Fixing the Emission Trading System Macro-economic benefits of wind Additional content

12 EWEA Report Wind Energy and EU climate policy Objectives: Evaluating mitigation potential of wind energy Examining EU targets and UNFCCC pledges Analysing the EU Emission Trading System Conclusions on the ideal climate policy mix

13 Wind power will avoid as much CO 2 as... Renewable electricity makes a move to 30% possible in the EU Mt Mt Mt 31% 31% of the EU s Kyoto target 31% 30% 31% of the EU s 20% target 20% 20% 20% of the EU s 30% Target

14 Wind power = domestic reductions EU climate package allows for about 60% CDM/JI Domestic reductions can be only 40% of the total effort 39 % 30 % 31 % Renewables Wind energy

15 Wind power = domestic reductions EU climate package allows for about 60% CDM/JI Domestic reductions can be only 40% of the total effort 39 % 20% 31 % 30 % 20% Renewables Wind energy

16 Reduction Effort and wind-avoided CO2 Kyoto Protocol + Climate Package ( ) Mt Wind-avoided CO2 Emissions 400 Emission Reduction Effort Wind-avoided EU-27 s CO2 Kyoto = 35% Target of EU Kyoto (7,8%) target Wind-avoided EU 2020 target CO2 = 20% = 31% of of EU EU GHG 2020 emissions target

17 EU 2020 Wind power versus car emissions 2010 Wind avoids 126 MtCO 2, eq. to 64 million cars 30% of EU fleet! EU fleet million cars 2020 wind avoids 342 MtCO 2, eq. to 173 million cars 81% of EU fleet!

18 Global Wind contribution to Cancun pledges Aggregated Annex I pledges 12%-18% of 1990 emissions Versus Global Wind in GW installed capacity 2650 TWh produced 1591 Mt CO 2 avoided -22 to 25% Source: UNFCCC Secretariat FCCC/KP/AWG/2009/10/Add.4/Rev.2

19 Annex I - Global Wind in 2020 will avoid Copenhagen pledges: 12-18% reduction % 46% 69% 36% of Annex I 2010 Kyoto target 69% of Annex I 2020 pledges (12%) 46% of Annex I 2020 pledges (18%)

20 Report conclusions on Wind energy and climate policy Wind - Extensive development of wind energy will significantly reduce emissions In EU, as much as 31% of the current EU GHG target Renewable electricity could avoid 100% of EU domestic reductions Wind globally could reduce emissions as much as 69% of pledges EU policy framework A move to 30% reduction is very achievable ETS is undermined by economic crisis and needs fixing UNFCCC: Annex I pledges are much too low and need raising Climate signals to investors are rapidly disappearing!

21 Outline of presentation EU power A clear shift towards renewables Reducing emissions is possible - 30% is a minimum Fixing the Emission Trading System Macro-economic benefits of wind Additional content

22 Current build-out of the oversupply to 2020

23 Backloading 900M allowances has a limited impact

24 Backloading 1,2bn Allowances is still not enough

25 The ETS a hidden subsidy to heavy industry 34% oversupply for heavy industry = low CO2-price

26 The ETS A hidden subsidy to heavy industry Heavy industry has received too many free EUAs sells them on the market (or saves them for later use) The power sector doesn t have enough free EUAs buys them cheaply to heavy industry via the market Passes 100% of the cost of carbon to electricity consumers Conclusion: EU electricity consumers pay a subsidy to heavy industry via their electricity bill and electricity companies Power sector and heavy industry don t need to reduce emissions

27 Outline of presentation EU power goes renewable Reducing emissions is possible - 30% is a minimum Fixing the Emission Trading System Macro-economic benefits of wind Additional content

28 Wind brings macro-economic benefits Energy security (EU = 54% dependence) Savings from fossil fuel imports ( 88$/bbl) Avoided health/environmental costs Zero fuel/co2 fluctuation risk Jobs 188,000 in ,000 in 2020 Lower electricity prices the Merit Order Effect Export opportunities / Market

29 54% EU Energy dependency, and growing % of imports in EU consumption 83% import dependency 61% dependency 41% dependency? dependency 0% dependency Source: European Commission, 2008

30 EU market dominated by EU manufacturer s to % 90% 80% 70% 60% 50% 40% 30% 20% 10% 95% 97% 96% 96% 98% 85% 0% EU USA Chinese Indian Japanese Others Source: BTM Consulting data for and MAKE Consulting data for

31 Competitiveness EU manufacturers are leading on world markets Market share per turbine manufacturers EU 27 5% 10% USA 7% 5% 85% 32% 56% PR China 13% 6% 2% India 45% 55% 79% Source: MAKE Consulting data

32 Wind and PV today represent more jobs than nuclear wind PV coal & lignite gas steel cement nuclear wind 2020 Employment Source: EWEA, EPIA, EURACOAL, EUROGAS, EUROFER, CEMBUREAU, FORATOM

33 Wind creates more jobs per kwh than conventional power Jobs (000) ,4% 26,6% 28,5% 30% 25% ,4% 20% ,7% 15% % wind coal & lignite gas nuclear wind 2020 wind 2030 Number of employees % of EU demand 10% 5% 0% Source: EWEA, EPIA, EURACOAL, EUROGAS, EUROFER, CEMBUREAU, FORATOM PRIMES 2009 update for electricity consumption

34 Wind creates more jobs per kwh than conventional power Employment per TWh of electricity produced, wind coal & lignite gas nuclear wind coal & lignite gas nuclear Source: EWEA, EURACOAL, EUROGAS, FORATOM PRIMES 2009 update for electricity consumption

35 Source: Pöyry Wind Power and electricity prices Power market - Wind pushes marginally expensive technologies out of market Emitting plants are pushed off the market More Wind... And lowers electricity prices and CO 2 emissions

36 Global Wind installations per region

37 Conclusions The World will reduce emissions and has already started We can either develop our climate products today or wait and buy everybody else s The EU has a technological advantage in renewables To maintain/enhance EU competitiveness we need: Climate signals Ambitious climate action : 30% domestic reductions Higher price of carbon backloading of allowances in ETS structural measures to reform the ETS and re-install scarcity 2030 Renewable energy targets ETS auctioning revenue to fund investments A market-ready pan-european grid Financing the SET-plan - leadership through innovation

38 During this presentation EU wind turbines saved 2,700 tco2 Thank you very much! Tel: M: rg@ewea.org

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