Insights in a clean energy future for Belgium

Transcription

1 Federal Planning Bureau Brussels, 17 May 18 Insights in a clean energy future for Belgium Impact assessment of the 3 Climate & Energy Framework Dominique Gusbin & Danielle Devogelaer Energy-Transport team (Sectoral Directorate)

2 Content 1. Introduction: context, scenarios, hypotheses 2. Some key results : GHG emissions-energy-cost figures 5 dimensions of the Energy Union (1) Decarbonisation (GHG, RES) (2) Energy efficiency (3) Energy security (4) Internal energy market (5) Research, innovation and competitiveness + some economic impacts 2

3 1. Introduction 3

4 Context FPB s Long Term Energy Outlook (since 1 & every 3 years) Scenario analysis (REF, policy scenarios, sensitivities) Complemented by Impact Assessment for BE of EU climate & energy strategies (since 8) 3 EU Climate and Energy Framework & Low carbon economy Roadmap (11-14) The Clean Energy Package (Nov 16) Governance Regulation Integrated national energy and climate plans (NECP) Interfederal Energy Pact (Dec 17) Belgium s energy vision & strategy to 5 4

5 NECP (NEKP-PNEC) In a nutshell What? 5 dimensions: targets, policies & measures, projections (WEM & WAM), impact assessment, etc. Who? 3 Regions and the Federal State When? Draft by the end of 18, final version by the end of 19 Federal Planning Bureau s involvement Support and expertise for the analytical part of the plan (Part B) Scenario analysis: projections and IA benchmark 5

6 Scenarios Reference scenario (REF): unchanged policy + binding targets Published in Oct 17 Policy scenarios : compatible with the 3 EU Climate and Energy framework and 5 EU GHG reductions Working Paper policy scenarios compared to REF: Alt1, Alt2 and Alt3 which differ according to GHG reductions (in 3 compared to 5) in the Belgian non-ets, reflecting flexibilities provided in the ESR Alt1: -27% < EUCO3 (EC, 16) Alt2: -32% Alt3: -35% = proposed target for BE 6

7 Assumptions REF and policy scenarios: same assumptions as to economic activity, demography, fossil fuel prices, e.g. GDP grows by 1.4% per year on average between 15 and 3; population by.4% and the number of households by.6% Policy scenarios: designed to meet the 3 targets at EU level GHG emission reductions: at least 4% (total); 43% (ETS); 3% (non-ets) RES: at least 27% share in gross final energy consumption EE: 3% reduction compared to PRIMES REF7 and GHG reductions of 8% in 5 (at EU level) Alt1: same approach as for EUCO3 Alt2 Alt3: starting from Alt1, gradual increase in electrification of final uses (e.g. EVs, HP) growing non-ets reductions 7

8 2. Some key results (focus on 3 & 4) 8

9 (1) Decarbonisation GHG emissions (I) Total GHG emissions (Mt CO 2 -eq.) reductions compared to Past evolution REF Alt1 Alt2 Alt3 REF: decrease to (-26%) followed by a stabilisation -5 Policy scenarios: steady decrease; 3: 1/3; 4: ½; 5: -7% vs. -4% in 3 and -8% in 5 at EU level Source: FPB (WP 5-18). 9

10 (1) Decarbonisation GHG emissions (II) ETS GHG emissions (Index 1 = 5) Carbon price (EUR/t CO2) Past evolution REF Alt1 Alt2 Alt3 Source: FPB (WP 5-18) REF Alt123 REF: decrease to (-38%) followed by an increase to 3 and then a stabilisation 3-5 (-32%) Policy scenarios: -34/38% in 3; -42/46% in 4; -72% in 5 vs. -43% in 3 and -9% in 5 at EU level Drivers: lower cap on EU ETS trajectory translates into different carbon prices compared to REF and increasing levels of electrification from Alt1 to Alt3 (power generation belongs to ETS) 1

11 (1) Decarbonisation GHG emissions (III) Non-ETS GHG emissions (Index 1 = 5) Past evolution REF Alt1 Alt2 Alt3 REF: decrease to 35 (-%) followed by a stabilisation to 5 Policy scenarios: steady decrease; 3: -27/35%; 4: -49/56%; 5: -63/67% vs. -3% in 3 at EU level Source: FPB (WP 5-18). Drivers: higher standards, EE values, lower behavioural discount rate compared to REF and different levels of electrification (e.g. EVs, HP) 11

12 (1) Decarbonisation GHG emissions (IV) Sectoral results: GHG = activity * energy/activity * GHG/energy Energy intensity Carbon intensity Power generation: decrease compared to REF which depends on the degree of electrification in the final demand sectors Industry (ETS & non-ets) : similar to REF in 3; slight decrease compared to REF in 4 (< carbon intensity) 12 Buildings (residential & tertiary): dramatic decrease compared to REF < energy and carbon intensity Transport (passenger & freight): decrease compared to REF < energy (3) and carbon intensity (4); pass. vs. freight 3-Alt3 wrt to 5 wrt to REF Power sector -35% -8% Energy branch -22% -3% Industry -35% % Residential -6% -48% Tertiary -59% -41% Transport(*) -% -11% Others -27% % (*) excl. aviation

13 (1) Decarbonisation RES (I) RES in gross final energy consumption Recent development (source: NRP18) Projections RES target in : 13% Recent evolution Indicative trajectory according to NREAP REF Alt1 Alt2 Alt3 REF Alt1 Alt2 Alt3 Overall RES RES-H&C RES-E RES-T

14 (1) Decarbonisation RES (II) RES-H&C REF Alt1 Alt2 Alt3 REF Alt1 Alt2 Alt3 RES-H&C Industry + building; Biomass + solar thermal + heat pumps (HP); FED HP: E RES in ktoe 6 5 Number of HP (thousands) REF Alt1 Alt2 Alt Past evolution REF Alt1 Alt2 Alt3 14 Source: FPB (WP 5-18).

15 (1) Decarbonisation RES (III) RES-T Accounting rules for 2 nd gen. & EVs REF Alt1 Alt2 Alt3 REF Alt1 Alt2 Alt3 RES-T Biofuels (1 st & 2 nd generation) + electricity from RES; FED (ktoe) 1% 5 (thousands) 1% 16 8% 4 8% 1 6% 3 64% 6% 8 4% 48% 4% 4 25% % 7% 7% 7% % REF Alt3 REF Alt st gen. 2nd gen. share biofuel in oil products 1 23% 17% 1% 5% REF Alt1 Alt3 REF Alt1 Alt3 3 4 PHEV 1% electric share EVs in total park % % 15 Source: FPB (WP 5-18).

16 TWh TWh (1) Decarbonisation RES (IV) RES-E REF Alt1 Alt2 Alt3 REF Alt1 Alt2 Alt3 RES-E Electricity imports + domestic generation of electricity 35 3 Net imports 1 Net power generation Past evolution REF Alt1 Alt2 Alt3 Source: FPB (WP 5-18).

17 TWh TWh (1) Decarbonisation RES (V) 6 RES-based production 6 Gas-based production REF Alt1 Alt2 Alt3 REF Alt1 Alt2 Alt Hydro Wind onshore Wind offshore Solar Biomass & waste Geothermal Past evolution REF Alt1 Alt2 Alt3 17 Source: FPB (WP 5-18).

18 (2) Energy efficiency (I) Final energy demand (Mtoe): REF and policy scenarios Mtoe REF compared to 5-5% in 3-6% in Past evolution REF Alt1 Alt2 Alt3 target Source: FPB (WP 5-18). Policy scenarios compared to 5: -14 to -17% in 3; -17 to -21% in 4 compared to REF: -9 to -13% in 3; -12 to -16% in 4 18

19 (2) Energy efficiency (II) Final energy demand: sectoral analysis (Mtoe) REF Alt1 Alt2 Alt3 REF Alt1 Alt2 Alt3 Industry Residential Tertiary Transport Industry: decrease wrt 15; similar consumption level REF/policy scenarios Residential & tertiary: increase in REF wrt 15; decrease in policy scenarios compared to REF (better insulation, more efficient equipment (e.g. HP)) kwh/sqm in kwh/sqm in 4 (Alt3) Transport: almost stable in REF; decrease in policy scenarios compared to REF (more stringent CO 2 standards cars/vans, EVs) 19

20 TWh (2) Energy efficiency (III) Called-up electrical power Volume <> energy efficiency AAGR 5-15.% 15-4 REF:.5% Alt:.8%-1.1% Past evolution REF Alt1 Alt2 Alt3 Source: FPB (WP 5-18).

21 (2) Energy efficiency (IV) From 1/5 th to 1/4 th -1/3 th of Final Energy Demand in 4 Electrification Impact 3 Framework on Electricity Demand Import level Domestic generation Investments 4% 35% 3% 25% % 15% 1% 5% % REF Alt1 Alt2 Alt3 Source: FPB (WP 5-18). 21

22 (3) Energy security (I) Primary energy mix: share in REF and policy scenarios (%) REF Alt1 Alt2 Alt3 REF Alt1 Alt2 Alt3 Solid fuels Oil Natural gas Nuclear 15 Electricity RES REF: coal (nuclear) decreases; oil stable; natural gas, electricity and RES increase Policy scenarios compared to REF: coal stable; oil decreases especially after 3; natural gas decreases slightly; RES increases dramatically (2 nd energy form in 4) 22

23 (3) Energy security (II) Oil requirements: Alt3 vs. REF 35 REF 35 Alt Maritime tp Energy branch Non energy uses Industry Residential Tertiary Transport Maritime tp Energy branch Non energy uses Industry Residential Tertiary Transport 23 Source: FPB (WP 5-18).

24 (3) Energy security (III) Natural gas requirements: Alt3 vs. REF 18 REF 18 Alt Maritime tp Non energy uses Residential Transport Energy branch Industry Tertiary Power generation Maritime tp Non energy uses Residential Transport Energy branch Industry Tertiary Power generation 24 Source: FPB (WP 5-18).

25 Mtoe Mtoe (3) Energy security (IV) Domestic energy production Prod-REF Wind Solar Biomass & waste Prod-Alt REF Alt1 Alt2 Alt3-1 Prod-REF Wind Solar Biomass & waste Prod-Alt REF Alt1 Alt2 Alt3 Source: FPB (WP 5-18). 25

26 Mtoe Mtoe (3) Energy security (V) Net energy imports REF Alt1 Alt2 Alt3 REF Alt1 Alt2 Alt3 Source: FPB (WP 5-18). 26

27 (3) Energy security (VI) Not projected to decrease, but marginally smaller than REF Reduction in net imports + reduction in energy needs (EE) Diversified portfolio of supplier countries and routes REF Alt1 Alt2 Alt3 REF Alt1 Alt2 Alt3 %

28 (4) Internal energy market Natural gas and electricity (Net) imports (see previous slides) 28

29 (5) R&D and competitiveness Unit energy cost in industry (in % of VA) Analogy with the unit labour cost Unit energy cost = energy intensity * energy price REF Alt1 Alt2 Alt3 REF Alt1 Alt2 Alt REF: % increase in 3 (< energy price) followed by a decrease by 7% in 4 (< energy intensity) Policy scenarios compared to REF: decrease by some 4% in 3; increase by some 4% in 4 But: more (detailed) figures are needed to address the issue (evolution in other MS and outside EU, at industry level, etc.) 29

30 Some economic impacts (I) Part B of NECPs also refers to the assessment of (macro)economic impacts Our study provides the impact on several cost indicators: Total energy system cost Fossil fuels: external bill and trade balance Energy costs in final demand sectors (investment expenditures, unit energy cost, etc.) Electricity system cost (investment expenditures, average cost of power generation) Our study does not cover the macroeconomic, skills and social impacts 3

31 % of GDP Some economic impacts (II) Total energy system costs Related to GDP Encompasses capital costs energy purchase costs direct efficiency investment cost Evolution CAPEX, OPEX-elec vs OPEX-fuel in REF vs policy scenarios REF Alt1 Alt2 Alt3 Source: FPB (WP 5-18). 31

32 GW Some economic impacts (III) Investments ( - 4) GW Annual investment expenditures ( - 4) billion EUR <>.6 billion EUR in REF Not including expenditures for grid reinforcement <> Current investment climate Wait and see Generation capacity investments -3-4 REF Alt1 Alt2 Alt3 32 Source: FPB (WP 5-18). Hypothesis: Mandatory wholesale market with MC bidding just to obtain optimal unit commitment + a perfect bilateral market of CfD for power supply through which generators recover capital costs

33 EUR'13/MWh Some economic impacts (IV) Average electricity generation cost wholesale price : increase 4: slight decrease vs. further increase 8 6 4? In the LT, it is uncertain whether wholesale prices based on existing market arrangements will be able to provide the revenues necessary to cover the total cost of investments Source: European Commission, REF Alt1 Alt2 Alt3 Source: FPB (WP 5-18). 33

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