ECF Roadmap 2050 project: From Roadmaps To Reality IEA Workshop on integrating carbon pricing with energy policies 18 March 2013 PROPRIETARY Any use of this material without specific permission of the European Climate Foundation is strictly prohibited 1
ECF S ROADMAP 2050 PROJECT WWW.ROADMAP2050.EU Phase 1 Roadmap 2050: a practical guide to a prosperous, low carbon Europe Phase 2 COM low-carbon 2050 Roadmap Power Perspectives 2030: on the road to a decarbonised power sector Technical and economic analysis COM energy 2050 Roadmap Phase 3 From Roadmaps to Reality Policy and Implementation analysis 2
PROJECT STRUCTURE AND PARTICIPANTS Coordinator Participants Utilities Expert panel Prof. Dr. Christian Von Hirschausen, TU Berlin Lead authors Energy Tech Manufacturers TSOs Prof. Dr. Jean- Michel Glachant, Florence School of Regulation Dr. Goran Strbac, Imperial College London Contributing authors DSOs NGO Other organisations IT companies Finance Consumers Georg Zachmann, Brueghel Prof. Jorge Vasconcelos, TU Lisbon Christina Hood, IEA Prof. Dr. Michael Grubb, Cambridge 3 University
PROJECT & POLITICAL TIMELINE July Aug Sep Oct Nov Dec Jan 2013 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2014 Kickoff S1 S2 S3 Take stock 16/04 04/07 Final report Seminars Drafting process Deep-dive sessions Expert survey Energy Summit Policy agenda IEM cons 203 0 GP Informal Council Energy council Informal Council Energy council 2030 initiative
STEP 2 THE ROLE OF ETS SEMINAR ON CARBON PRICING & COMPLEMENTARY MEASURES STARTING POINT ETS is all you need: Caps emissions Optimises across sectors Market driven abatement Selfcorrecting Policy-makers are trying to deliver other important policy objectives. We cannot assume that politicians will leave the cap alone, regardless of the impact it might be having on energy costs or security of supply. A broad policy framework is needed to manage the risks of (1) cost and (2) security of supply excursions. It is this tendency to intervene that undermines the self-correcting features of cap and trade mechanisms and creates the rationale for additional mechanisms. 5
E3G REPORT (2012) - REQUIRED CARBON PRICE IN DIFFERENT COUNTRIES VARY SIGNIFICANTLY Fig. EUA price projections and carbon price necessary to deliver national targets EUR/tCO2 140 120 100 80 60 40 20 0 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Source: E3G - Risk managing power sector decarbonisation in Great Britain, Poland and Germany Investment model - For each market the carbon price develops to find the required level in order to achieve the carbon emission targets (based on current national policies) The difference between countries is a reflection both of different carbon targets and of different starting points and investment cycles In EUA, the carbon price trajectory of the EC s Energy Roadmap 2050 was adopted 6
SEMINAR ON CARBON PRICING & COMPLEMENTARY MEASURES EMERGING CONCLUSIONS Carbon pricing vs complementary measures EU vs MS level governance EU ETS covering power sector post- 2020 is needed MS have different decarb objectives and views on support for technologies What about technology neutrality vs picking winners? Analyses indicates cost benefits from EU-coordinated approach EU-wide or regional cooperation mechanisms for RES post-2020 become more important Best solution may end up close to current model (improved version, Package 2.0 ) Need self-reinforcing mechanisms and governance Debate needs COM initiative soon (within this COM term) 7
SEMINAR ON CARBON PRICING & COMPLEMENTARY MEASURES KEY QUESTIONS Key questions to address Governance and coherence between jurisdictions: over the next decade, will we have a strong or weak Europe concerning energy policy? o What are the advantages/disadvantages for Member States in signing up to pan-eu complementary measures? Instruments and coherence between instruments: will the ETS be the primary driver of decarbonisation or, as present, a backstop instrument to ensure particular goals are met o What complementary measures are needed to ensure broader energy policy objectives, what options do Member States have? o How can complementary policies be designed and implemented to ensure they reinforce the role of ETS rather than undermine it? o Are there any new high level design features that the ETS must have (e.g. to stabilise price) to ensure consistency with complementary measures and support efficient investment?
ECF Roadmap 2050 project: From Roadmaps To Reality Thank you Dries Acke, Policy Manager dries.acke@europeanclimate.org PROPRIETARY Any use of this material without specific permission of the European Climate Foundation is strictly prohibited