dec 19 2005 - june 19 2007 commission energy 2030 belgium’s energy challenges towards 2030...

Dec 19 2005 - June 19 2007Commission ENERGY 2030

Belgium’s Energy Challenges

Towards 2030

Commission ENERGY 2030

Final Report

William D’haeseleer, Chair

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Energy Commission 2030

CE2030 established by Royal Decree

of December 06, 2005published in MB/BS of December 19, 2005

Duration of activities 18 months;Final report submitted on June 19, 2007

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Objectives

«To provide the scientific and economic analyses necessary to evaluate Belgium’s options with

regard to the energy policy up to 2030»

…so as to assure an energy system that

- guarantees security of supply

- is environmentally friendly

- at affordable cost for society

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Objectives

«To provide the scientific and economic analyses necessary to evaluate Belgium’s options with

regard to the energy policy up to 2030»

…so as to assure an energy system that

simultaneouslysimultaneously

- guarantees security of supply

- is environmentally friendly

- at affordable cost for society

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Summary of Approach

1. State of affairs in Belgium

2. Scenario analysis1. Belgian domestic situation

2. European context

3. Broader issues

4. Conclusions & Recommendations

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Practical Implementation (Part 3)

Review process through Review Panels

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Review Process

External Review Panels

- Federal-Regional Consultation Cell (CONCERE/ENOVER)- Central Council for the Economy (CCE/CRB)- National Bank (NB/BN) & Ass Belgian Banks- Regulators (CREG, VREG, CWaPE, IGBE/BIM)- Fed Council Sust Develop (FRDO/CFDD)- Academy Council for Applied Science (BACAS)- DG TREN European Commission- International Energy Agency (IEA)

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Practical Implementation (Part 3)

Review process through Review Panels

About ~ 50% of preliminary report rewritten;

more supporting documents and explanatory boxes.

Available at http://www.ce2030.be Final report

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Important Remark

Study focuses on longer term: 2030

Global legal tendency taken into account (EU directives etc)

No detailed analysis of current legal & regulatory intricacies

But perceived shortcomings pointed out

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Baseline Scenario

Same baseline as

- DG TREN of European Commission

- Climate study (Min Tobback) – but till 2030

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Baseline Scenario

Same baseline as

- DG TREN

- Climate study (Min Tobback) – but till 2030

Current measures implemented

• No-post Kyoto imposed

• Nuclear phase out implemented

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Baseline Scenario Fuel prices

0

10

20

30

40

50

60

70

1990 1995 2000 2005 2010 2015 2020 2025 2030

$05/

boe

Oil-baseline Gas-baseline Coal-baseline

Oil-ref PP95 Gas-ref PP95 Coal-ref PP95

Gas-HGP sc PP95

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Baseline Scenario – soaring variant

Apr. 2006 E3mlab - NTUA 22

Oil-Soaring

Oil-Base

Gas-Medium

Gas-Soaring

Gas-Base

Coal-Soaring

Coal-Base

0

20

40

60

80

100

120

1990 1995 2000 2005 2010 2015 2020 2025 2030

$ o

f 2005 p

er

barr

el of oil e

quiv

ale

nt

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Baseline Scenario – GDP evolution

Gross Domestic Product

0

50

100

150

200

250

300

350

400

450

500

2005 2010 2015 2020 2025 2030

Year

GD

P [

G€'

00]

GDP in [G€ '00]

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Baseline Scenario -- Results

Final Energy Demand; Total & per Sector

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

2000 2005 2010 2015 2020 2025 2030

Year

FE

D [

kto

e/a]

FED total

FED_industry

FED_residential

FED_tertiary

FED_transport

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Baseline Scenario – FED Intensity

FED/GDP

0,0

20,0

40,0

60,0

80,0

100,0

120,0

140,0

160,0

2005 2010 2015 2020 2025 2030

Year

FE

D/G

DP

[to

e/M

EU

R'0

0]

FED/GDP [toe/MEUR'00]

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Baseline Scenario -- Results

Energy-related CO2 emissions

0,0

20,0

40,0

60,0

80,0

100,0

120,0

140,0

160,0

2000 2005 2010 2015 2020 2025 2030

Year

CO

2 em

issi

on

[M

ton

/a] CO2 emissions total

Electr sector

Industry

Residential

Tertiary

Transport

Energy branch

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Baseline Scenario -- Results

-10

-5

0

5

10

15

20

25

30

35

2000 2010 2020 2030

Mt o

f CO

2

supply side industry and buildings transport total

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Baseline Scenario – soaring variant

Apr. 2006 E3mlab - NTUA 22

Oil-Soaring

Oil-Base

Gas-Medium

Gas-Soaring

Gas-Base

Coal-Soaring

Coal-Base

0

20

40

60

80

100

120

1990 1995 2000 2005 2010 2015 2020 2025 2030

$ o

f 2005 p

er

barr

el of oil e

quiv

ale

nt

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Baseline Scenario Soaring Variant Results

Baseline vs Soaring Price GIC & FED Comparison

33000

38000

43000

48000

53000

58000

63000

2000 2005 2010 2015 2020 2025 2030

Year

GIC

&

F

ED

[k

toe/

a]

GIC_tot BL

FED_tot BL

GIC_tot Soar BL

FED_tot Soar BL

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Baseline - Conclusion

The Baseline scenario is

NOT SUSTAINABLE !NOT SUSTAINABLE !

Must consider other scenarios…

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Dec 19 2005 – June 19 2007Commission ENERGY 2030

GHG Effect

• The Earth’s surface temperature increases (IPCC)

Dec 19 2005 – June 19 2007Commission ENERGY 2030 Sarmiento and Gruber ,2002

GHG Effect

Dec 19 2005 – June 19 2007Commission ENERGY 2030

GHG Effect

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Alternative Scenarios

Two philosophies:

• 15% and 30% domestic reduction of energy-related CO2 in 2030 wrt 1990 (within Belgium w/o emission trading)

• European-wide reduction limit of 30% GHG in 2030 wrt 1990, with perfect emission trading scheme for all sectors

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Domestic Alternative Scenarios

Eight scenarios

• 15% and 30% domestic reduction of energy-related CO2 in 2030 wrt 1990

• Each time with nuclear phase out on-off

• Each time with CCS and without

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Domestic Alternative Scenarios Results

Carbon value Post-Kyoto -15%

0

100

200

300

400

500

600

1 2 3 4

Scenarios -15%

CO

2 va

lue

[E

UR

/to

n C

O2]

no nuc; w ith CCS

nuc allow ed; w ith CCS

no nuc; no CCS

nuc allow ed; no CCS

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Domestic Alternative Scenarios Results

Carbon value Post-Kyoto -30%

0

500

1000

1500

2000

2500

5 6 7 8

Scenarios -30%

CO

2 va

lue

[E

UR

/to

n C

O2]

no nuc; w ith CCS

nuc allow ed; w ith CCS

no nuc; no CCS

nuc allow ed; no CCS

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Domestic Alternative Scenarios Results

Domestic CO2 reduction scenarios transparant, but unrealistic

30% domestic energy-related CO2 reduction is effectively IMPOSSIBLE

Realistic domestic Belgian CO2 reductions are ~ …15%...

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Domestic Alternative ScenariosResults

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Domestic Alternative Scenarios Results

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Comparison DLR (Greenpeace) - CE2030 for primary energy in 2030

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

DLR bpk30 bpk30n bpk30s bpk30ns

Scenarios

Mto

e p

er a

nn

um

.

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Comparison DLR (Greenpeace) - CE2030 for renewable electricity in 2030

0

5000

10000

15000

20000

25000

30000

35000

40000

DLR bpk30 bpk30n bpk30s bpk30ns

Scenarios

GW

he

pe

r a

nn

um

.

import

PV

wind

biomass

total domestic

Dec 19 2005 – June 19 2007Commission ENERGY 2030

European Alternative Scenarios

Two extra scenarios:

• European-wide reduction limit of 30% GHG in 2030 wrt 1990, with perfect emission trading scheme for all sectors

• Belgian nuclear phase out on-off

• No CCS assumed

Dec 19 2005 – June 19 2007Commission ENERGY 2030

European Alternative ScenariosResults

EU wide cost of Carbon Value (price of emission allowances):

- Without nuclear in Belgium ~ 200 €/ton

- With nuclear in Belgium ~ 190 €/ton

Dec 19 2005 – June 19 2007Commission ENERGY 2030

European Alternative ScenariosResults

Dec 19 2005 – June 19 2007Commission ENERGY 2030

European Alternative ScenariosResults

Limited reduction of CO2 in case of nuclear phase out means that marginal abatement cost is then much higher than in neighboring countries.

With nuclear allowed, a cheap CO2 reduction method is available in Belgium.

Dec 19 2005 – June 19 2007Commission ENERGY 2030

European Alternative ScenariosResults

Consider same GHG commitment in Belgium as in EU;

i.e. 30% reduction in 2030 wrt 1990

- Not all to be reduced domestically,- But responsible for reduction abroad

via emission allowance purchase

Dec 19 2005 – June 19 2007Commission ENERGY 2030

European Alternative ScenariosResults

Cost for Belgium ~ 15 – 20 G€, or

about 6-8% of GDP2000; 4-5% of GDP2030

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Beyond the ScenariosReflections

Extension of networks: - for HV if off shore ~ 3800 MW ~ 700 M€ - for distribution grid adaptation ~ 2 G€ over 10 yr

Subsidies required for renewable expansion: - current 846 MW wind offshore planned ~ 6 G€ - next 3000 MW wind offshore ~ 21 G€ - 2000 MW wind onshore ~ 7 G€ - 1000 MW photovoltaic (PV) ~ 7.2 G€ - 1500 MW Biomass ~ 9.6 G€

50 G€ over 20 years, (or 1/5 GDP2000 or 1/10 GDP2030)

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Beyond the ScenariosReflections

Security of supply

Import dependency on scale ~ 1-2 yr:

Up to 88-90% without nuclear in energy terms

Up to 95-97% in instantaneous power terms

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Beyond the Scenarios

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Beyond the Scenarios

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Beyond the ScenariosReflections on Gas Dependence

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Beyond the ScenariosReflections on Gas Dependence

Gas Demand for Electricity Generation

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Beyond the ScenariosReflections

Major gas reserves

05

10

152025303540

455055

USA

Venez

Kazah

Nethe

rl

Norway

Russia

Turkm

en UKIra

nIra

q

Qua

tar

Saud

Arab

UAE

Alger

ia

Niger

ia

China

Indo

nesia

Mal

aysia

Country

Gas

vo

lum

e [t

rill

ion

m3 o

r 10

9 m3]

Largest reserves

European

Other

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Reliable; Security of Supply GasUkraineUkraine

01.01.0601.01.06

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Reliable; Security of Supply GasUkraineUkraine

01.01.0601.01.06

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Beyond the Scenarios

Increasing Electricity Demand

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Beyond the Scenarios

Needed Investments for Electricity Generation

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Beyond the Scenarios

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Nuclear Phase Out ?

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Cost of Nuclear Phase Out

- Phasing out nuclear power entails to throwing away a cheap means to reduce CO2

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Cost for Belgium ~ 15000 – 20000 M€, or

about 6-8% of GDP2000; 4-5% of GDP2030

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Cost of Nuclear Phase Out

- Phasing out nuclear power entails to throwing away a cheap means to reduce CO2

- Phasing out nuclear power will lead to higher electricity prices

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Electricity Prices

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Cost of Nuclear Phase Out

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Cost of Nuclear Phase Out

- Phasing out nuclear power entails to throwing away a cheap means to reduce CO2

- Phasing out nuclear power will lead to higher electricity prices

- Phasing out nuclear power gives up concession fee to help support renewable sources

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Cost of Nuclear Phase Out

- Phasing out nuclear power entails to throwing away a cheap means to reduce CO2

- Phasing out nuclear power will lead to higher electricity prices

- Phasing out nuclear power gives up concession fee to help support renewable sources

- Phasing out nuclear power increases energy import dependency, with extra cost

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Cost of Nuclear Phase Out

- Postponing nuclear phase out allows growth of decommissioning fund by ~ 1 G€

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Cost of Nuclear Phase Out

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Cost of Nuclear Phase Out

- Postponing nuclear phase out allows growth of decommissioning fund by ~ 1 G€

- Postponing nuclear phase out allows negotiations with GdF/Suez to keep certain aspects of electricity generation Belgian

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Cost of Nuclear Phase Out

- Postponing nuclear phase out allows growth of decommissioning fund by ~ 1 G€

- Postponing nuclear phase out allows negotiations with GdF/Suez to keep certain aspects of electricity generation Belgian

Nuc Ph Out seems too expensive;Nuc Ph Out seems too expensive;

recommended to consider operational extensionrecommended to consider operational extension

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Dec 19 2005 – June 19 2007Commission ENERGY 2030

General Recommendations

Belgium must keep a EU perspective; quick transposition of directives is called for

Need stable legislation & regulatory framework

Belgian energy responsibilities to be harmonized

Do not put all eggs in same basket; need diverse set of contributing elements

Belgium should prepare for a substantial post-Kyoto reduction (no ostrich attitude)

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Concrete Recommendations

Do all that is reasonable for reducing energy demand

…start with EU directives quickly

…go perhaps beyond

Pass on energy prices to consumers

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Concrete Recommendations

Should keep the nuclear option open:

…negotiate concession fee (Borssele scenario); amount to be negotiated; to be used for

“useful purposes”

… continued operation under strict safety rules

(regulators, IAEA, EURATOM, WANO…)

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Concrete Recommendations

Renewable obligation (quota) best on supply; local production to be carefully considered via penalties

Off shore wind to be pursued

… reconsider earlier rejected sites

… develop far off-shore sites meticulously

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Concrete Recommendations

Make commitment for one CCS pilot plant no later than 2030

Security of supply

… diversity of prim sources & technologies

… stable investment climate

… transmission & distribution networks

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Concrete Recommendations

Liberalization of electricity & gas…stable regulatory framework…one wholesale NW-EUR region with sufficient cross border capacity; efficient & strict regulatory supervision…retail market access to be developed over time…vertical unbundling needed (grids outside, at least legally)…guarantee for B: golden share in Suez/GdF?

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Concrete Recommendations

Research & development

…do preferentially in a EU framework

…R&D for energy efficiency

…off shore wind development

…systems integration

…one CCS plant by 2030

…nuclear-energy systems development

…energy-system model development

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Concrete Recommendations

Sustained Strategic Watching Brief

…permanent follow up of recommendations

…supervised by independent core group

…statistics to be improved

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Conclusion

Please do not judge based on emotion or sentiment!

Study the report carefully in all its aspects:Security of supply (LT & ST)Clean energy provision (climate & other)At reasonable prices and cost

We wish to be judged based on facts & figures;Then draw conclusions and define policy!

Dec 19 2005 – June 19 2007Commission ENERGY 2030

Practical Information

Available at http://www.ce2030.be Final report

Dec 19 2005 – June 19 2007Commission ENERGY 2030