Europaudvalget 2012-13, Det Udenrigspolitiske Nævn 2012-13
Det Europæiske Råd 22/5-13 Bilag 3, UPN Alm.del Bilag 209
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Energy challenges and policy
Commission contribution
to the European Council of
22 May 2013
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Energy challenges and policy
Commission contribution to the European Council of 22 May 2013
Ahead of the 22 May 2013 European Council, this paper reviews some energy challenges confronting
Europe, focusing on topical issues linked to the competitiveness of the economy. It does not deal with
the broader issue of the climate and environmental dimension of energy use, which is the topic of
an on-going public consultation.
1
Some background facts and figures on Europe's energy mix and
challenges, as well as on the main elements of the EU policy and legislative framework, are presented
in annex to this paper.
Member States have very different energy mixes.
On average in 2011, the total energy needs of the
EU, in terms of gross inland consumption, were covered by the following sources: 35% oil, 24% gas,
17% solid fuels such as coal, 14% nuclear power, 10% renewable sources such as hydropower or wind
energy. This mix varies widely across countries (see Annex 5) and evolves over time as a result of
their geographical conditions, such as the availability and access to natural resources, national policy
choices, such as the decision to make use or not of nuclear power, changing financial incentives,
progress in technologies, decarbonisation requirements and the development of the internal
market.
2
They share similar objectives…
In spite of their differences, Member States have three common
policy objectives: reducing the energy bill for households and businesses ("competitiveness"),
ensuring a reliable and uninterrupted supply of energy ("security of supply") and limiting the
environmental impact of energy production, transport and use ("sustainability"). In many cases,
these objectives are best achieved through a common framework and joint action at EU level. This is
why three headline targets to be achieved by 2020 were agreed by Heads of State or Government
(often referred to as "20 20 20 by 2020"): to reduce CO2 emissions by 20% compared to 1990 levels,
to raise the share of renewable sources as part of the overall EU energy mix to 20% and to increase
energy efficiency by 20%. These goals are also at the core of the Europe 2020 strategy for smart,
sustainable and inclusive growth.
… and a common framework.
A legislative framework is in place to deepen and unify the European
energy market, through the development of infrastructure interconnections, safeguards to secure
supply of gas and electricity, consumer rights and a level-playing field for competition and
supervision among energy actors. EU legislation has been put in place to promote the use of
renewable energy sources, to strengthen efforts on energy efficiency and to ensure the safe
exploitation of offshore oil and gas. A number of these instruments still have to be implemented
(see Annex 3).
1
The European Commission presented a consultative Green Paper for a post-2020 energy and climate framework on
27 March 2013 (COM(2013)169). The outcome of the consultation period (end of March until beginning of July)
will feed into the Commission's preparation for concrete proposals by the end of 2013.
More detailed information on possible scenarios can be found in the roadmaps produced by the European Commission:
"Roadmap for moving to a competitive low carbon economy in 2050" (COM(2011)112) and "Energy roadmap 2050"
(COM(2011)885).
2
1
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1.
Key energy challenges for Europe
Europe is increasingly dependent on importing energy from third countries
Today, we are far from producing the energy needed to cover our own demand.
Europe's import
dependence has increased in the last two decades and is set to grow to more than 80% in the case of
oil and gas by 2035. Some Member States rely on one single Russian supplier and often on one single
supply route for 80%-100% of their gas consumption. This exposes them to the market power of their
sole supplier whose price setting may not always follow a market rationale.
Europe is in a global race for energy sources.
According to the International Energy Agency (IEA),
global energy demand is expected to grow by more than one-third over the period to 2035 with
China, India and the Middle East accounting for 60% of the increase. Increased energy demand in
other parts of the world might have direct impacts on Europe. For instance, due to the high prices
Japan and Korea pay for Liquefied Natural Gas (LNG) – around 60% higher than the average price of
LNG imports to the EU in February 2013 – imports of LNG to the EU fell by 30% in comparison to
2011.
Member States with a diverse portfolio of gas suppliers and supply routes and with well-developed
gas markets reap the benefit by paying less for imports.
On average the estimated border prices for
gas imports to the UK, Germany and Belgium are well below (by about 35%) the estimated border
prices for gas imports to countries that rely on a limited number of suppliers like Bulgaria and
Lithuania.
While Europe's dependence on fossil fuel imports is increasing,
the US is on its way from being a gas
importer to a net exporter.
Differences in electricity prices are significantly determined by the price
of fossil fuels and the recent rebound in indigenous production of oil and gas in the US, in particular
shale gas, is leading to a widening gap between EU and US industrial energy prices. In 2012, industry
gas prices were more than four times lower in the US than in Europe. This erodes the
competitiveness of European companies. This development also has an impact in the rest of the
world. The IEA's industrial price index for real electricity prices has increased by 37% in European
OECD members within only 7 years (between 2005 and 2012), while the corresponding change in the
US was minus 4%. The index for households increased less in Europe (+22%), but still significantly
more than in the US (+8%).
Another effect of the US shale gas boom is the increasing use of CO2 emitting coal in Europe's
power plants.
The high consumption of gas in the US frees up US coal for export to Europe.
EU consumption and imports of coal (hard coal and lignite) have increased by, respectively, 2% and
almost 9% over the first 11 months of 2012, relative to the same period in 2011. In the UK and Spain,
coal consumption (hard coal and lignite) increased by 28% in the first 11 months of 2012; France's
coal consumption grew by 16% and Germany's by 3%. The largest growth was seen in Ireland
(doubling of coal consumption in the first 11 months of 2012) and Portugal (+38%).
A recent study by the European Commission's Joint Research Centre included scenario analysis on
the
possible impact of indigenous shale gas production on import dependence.
While it is highly
unlikely that Europe will become self-sufficient in natural gas, in an optimistic scenario indigenous
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unconventional gas could replace declining conventional production with import dependence
maintained at a level of around 60%. Unconventional sources are already exploited in Europe:
Estonia covers 90 % of its power needs from shale oil mining.
Some of the EU's price increases come from national policy choices
Energy bills for consumers are rising
and account for a growing share of the average expenditure of
households, varying between 7% and 17% including personal transport, across Member States.
Poorer parts of the population are faced with energy expenditures of 22 % of total expenditure in
some Member States. Household expenditure on energy, taxation and levies included, is expected to
rise further even if all possible gains from completing the internal energy market are taken into
account. This is in part due to the pressure of rising global demand on resources, as well as to the
costs linked to an ageing and more difficult to maintain infrastructure.
However, energy prices are also to a large extent the result of Member State's decisions on tariffs,
levies (including support scheme fees) and taxes.
For the EU15 (data for EU27 not available), they
represented 28% of the final price for domestic consumers in 2010, against 22% in 1998. The
corresponding figures for industrial users were 19% in 1998 and 27% in 2010. In some Member
States, such as Denmark, taxes and levies for some categories of electricity and gas consumers
constitute up to 50% of the final energy bill.
Investments in the energy sector at historically low levels
According to the Commission's 2050 low carbon and energy roadmaps the
transition to a secure,
competitive low carbon energy
requires sustained increased investment in power equipment, grids,
transport technologies, infrastructure and efficient buildings. This increased investment is estimated
to be equivalent to 1.5% of GDP on an annual basis over the period until 2050. By 2020, investment
in the order of EUR 1 trillion is needed in the EU to ensure security of supply, diversification of
sources, cleaner energies and competitive prices within an integrated energy market.
Some Member States still find themselves on an "energy island" as a result of
insufficient
infrastructure connections
with the rest of the EU. Single-source gas import dependence still prevails
in Northern and Eastern Europe. In certain regions of Europe, increasing amounts of intermittent
renewable energy cannot be transported to consumers due to the lack of sufficient infrastructure.
To overcome these deficiencies, there is a need for new investment (of about EUR 200 billion) in
transmission lines, interconnectors, storage facilities etc. by 2020. This requires an increase in
investment by over 50% for electricity and about 30% for gas from the period 2000-2010 to 2010-
2020. However, the impact on costs for consumers is expected to remain very limited (about 1% in
electricity) and largely offset by the benefits from price convergence, increased security of supply
and lower back-up needs as well as higher penetration of renewables.
Up to 2020, almost a fifth of the EU's total coal capacity,
comparable to the total installed capacity
for electricity in Poland, is due to be retired. 11% of the UK national power generation capacity will
go off the grid. In the EU, Switzerland and Norway, known retirements of power plants are 70%
greater than those in the previous five years. Due to low energy demand and increasing electricity
production from renewable energy sources, roughly 40 GW of gas power plant projects and 25 GW
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of coal power plant projects have been postponed or cancelled in the last three years. This roughly
corresponds to the combined capacity of the Netherlands, Belgium and Denmark. Investment in
renewable energy sources dropped in the first quarter of 2013 by 25% in Europe with an almost
complete standstill in countries like Spain (-96%), Italy and France.
2.
The right policies are in place but implementation is too slow
At least in the short to medium term, Europe will not be able to compete with its largest trading
partner, the US, on energy prices due to a difference of exploitable natural resources. As a net
energy importer, Europe's strategy for a secure, competitive and sustainable energy system crucially
depends on following a broad approach based on energy efficiency, the creation of competitive
markets based on smart infrastructures, diversification of fuels and supply routes, the exploitation of
conventional and unconventional energy sources, and innovation.
(1) Energy efficiency: investing in a cheaper and cleaner source of energy
Meeting the EU's 20% energy efficiency target by 2020 means saving the equivalent of 1.000 coal
power plants or 500.000 wind turbines.
Energy efficiency curbs demand for energy, reduces energy
imports and mitigates pollution. It also provides a long-term solution to the challenge of fuel poverty
and high energy prices. Despite the vital role that energy efficiency plays in cutting demand only a
small part of its economic potential is currently exploited.
Europe still remains the world's most important market for energy efficiency
(accounting for 40 %
of global investments in energy efficiency in 2011) and the EIB is the world's biggest clean energy
lender. China (investing 3-4 % of the energy sector revenues per annum) and the US (more than
doubling its energy efficiency spending between 2007-2010) are catching up quickly.
Box 1: Minimum energy efficiency standards on industrial products (Ecodesign Regulations)
The first four Ecodesign Regulations on electric industrial products (motors, circulators, fans and
water pumps)
3
are expected to lead to annual energy savings by 2020 equivalent to the current final
energy consumption of Hungary (195 TWh) and contribute significantly to the EU 2020 targets. These
regulations are the first in the world which take a set of related products together (extended product
approach) as well as the needs and changing user-patterns of the consumer (user-pattern sensitive).
The innovative nature of the legislation has also already led to significant technology development.
The success of some of these regulations has triggered a European and global standardisation
process. China was the first to use the European Regulation on motors as a basis for their national
legislation. Saudi-Arabia is now considering setting requirements identical to the European motor
Regulation. The US government is in the process of replicating the requirements set of European
legislation for pumps and fans and is also using the accompanying measurement standard.
3
Ecodesign regulations (EC) 640/2009 on electric motors, (EC) 641/2009 on circulators, (EC) 327/2011 on fans driven by
motors with an electric input power between 125 W and 500 kW, (EC) 547/2012 on water pumps.
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(2) Open and competitive energy markets – meeting EU needs
Market opening, increased cross-border trade, market integration and stronger competition, all
fostered by EU legislation and the enforcement of competition and State aid rules, are keeping
energy prices in check.
While prices of primary energy commodities have increased annually by 14%
for crude oil, almost 10% for gas and 8% for coal between 2002 and 2012, wholesale electricity prices
in the EU have risen much less, namely by 3.4%.
4
Market liberalisation has put downward pressure
on prices in wholesale markets where liberalisation was allowed. Competitive markets also provided
for the optimisation of the use of electricity infrastructure and for price signals for investment.
There is plenty of room for improvement. On-going work on the cost of not having an integrated
European energy market for gas estimates that the market benefits of the full implementation of the
third energy package in 2015 compared to 2012 (base case) could reach a maximum of EUR 8 billion
per year. These benefits could reach up to EUR 30 billion per year if the EU27 was a fully integrated
market. In electricity, the benefit of integration (as opposed to national self-sufficiency) would be an
annual costs saving of up to EUR 35billion.
According to estimations from the Agency for the Cooperation of Energy Regulators (ACER) savings
equivalent to EUR 15 billion per year (10 % of the gas wholesale prices) are possible if existing market
imperfections that allow for uncompetitive price differentials between EU Member States are
addressed. In retail, market opening is still held back by end-price regulation. This is detrimental to
competition and investment; and in cases where prices are regulated below costs, this leads to
deficits which ultimately fall back to taxpayers.
Box 2: Investments in cross-border energy infrastructure
The EU needs to invest in cross-border links as part of building the internal market for energy and
ending "energy islands". Thanks to the European Energy Programme for Recovery (EEPR), several
reverse flow gas projects are up and running in Central and Eastern Europe. They helped to avoid gas
supply problems as seen in the recent February 2012 cold spell. The recently adopted Guidelines for
trans-European energy infrastructures introduce a new way to identify infrastructure projects of
common interest and to accelerate their implementation through enhanced regional cooperation,
streamlined permit granting procedures, adequate regulatory treatment and through European
financial assistance under the proposed Connecting Europe Facility.
Regional cooperation between Member States can be very useful in delivering the necessary
investment. On 25 March 2013, the Member States cooperating in the Baltic Energy Market
Interconnection Plan (BEMIP) agreed on a comprehensive natural gas infrastructure development
package and a roadmap for its implementation. The proposed investments in a new LNG terminal
which could cover up to 40% of the current gas needs of these countries and pipeline projects (Baltic
connector, intra-Baltic connections and Poland-Lithuania interconnector) would cost around EUR 1.3
billion, ending the isolation of the Baltic States and Finland and increasing security of supply.
4
The difference between whole sale and retail prices is determined by national taxes and levies, the non-energy
components of energy costs.
5
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(3) Savings in the costs of renewable energy and other conventional and unconventional
indigenous energy resources
To cut CO2 emissions, to reduce dependence on third country energy supplies and to reduce fossil
fuel import bills, Member States increased the share of renewable energy sources to 13.0 % of
Europe's final energy consumption
in 2011 (up by 5 percentage points in 6 years). 20.6% of
electricity was renewable in 2011. This development has the potential to keep wholesale electricity
prices in check as the key technologies of wind and solar power have near zero marginal costs.
Investments in renewable energies have the potential to create three million new jobs by 2020
(today there are already 1.19 million employees in this sector in the EU). The EU is so far on track to
achieve the 20% renewables share in final energy consumption target foreseen in the EU Renewables
Directive, although the situation varies from one Member State to another.
National support schemes, in line with the EU Renewables Directive, have been instrumental in
fostering strong growth in renewables.
However, the growth of renewables is still to a large extent
based on subsidies and some rigid support schemes have not taken into account the significant price
decreases when technologies matured. This resulted in overcompensation at a time of serious
economic constraints. At the same time, sudden changes to support schemes, in some cases
retroactive, have contributed to investor uncertainty. Cooperation mechanisms available under the
Renewables Directive have not been used yet and national support schemes need to converge to
exploit the European dimension of an integrated energy market. It is estimated that EU-wide
renewable energy trading and achieving the 20% renewable energy target cost efficiently in all
Member States would reduce the costs in the overall energy system by up to EUR 8 billion by 2020.
A high share of renewable energy in the electricity mix raises the question of the adequacy of
generation capacities and grids.
This becomes an issue at times where intermittent renewable
energy generation from sun and wind need to be backed up by other sources. Some Member States
envisage paying for the availability of generation capacity at national level ("capacity markets"), and
this capacity is most often fossil fuel based. This approach risks being economically inefficient, and is
likely to perpetuate the fragmentation of the internal energy market and lock in fossil fuel generation
capacities. There are other measures to add system flexibility to address possible adequacy problems
which are economically more sustainable and preserve or even strengthen the internal energy
market. These measures include investing in cross-border infrastructure (the wider the grid, the
easier the balancing out of renewable energy sources), demand response measures and storage.
(4) Technology and innovation
The technological shift needed to achieve the EU's energy objectives will only be possible with a
substantial modernisation of our existing energy infrastructures. Energy R&D and innovation
continue to play an essential role in developing cheaper, more efficient and reliable energy
technologies.
Despite the crisis, EU expenditure on R&D is catching up with Japan and US. Public and private
investments in technological development in the sectors included in the Strategic Energy Technology
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Plan (SET Plan) increased from EUR 3.2 billion in 2007 to EUR 5.4 billion in 2010. Today, industry
makes up about 70% of the total research and innovation investment in the SET Plan priorities while
Member States account for about 20 % and the European Commission for 10%. R&D efforts remain
fragmented among Member States. Better coordination and pooling of resources between Member
States has the potential to increase the efficiency of research efforts, avoiding duplications and
allowing to reach critical masses for technological breakthroughs.
EU research efforts significantly contributed over the last two decades to price decreases and
technological development in various key energy sectors such as wind power and the Photovoltaic
(PV) system. For this and other reasons, the cost of PV modules decreased sharply (by 3 times in a
couple of years). The SET Plan target of EUR 1/kW by 2030 may be a reality already by 2020. Also in
transport, EU efforts have allowed for a positive start on 'second generation' biofuels. Since 2007,
the Intelligent Energy in Europe (IEE) programme has promoted the market uptake of technologies
and tackled non-technological barriers through more than 300 projects, triggering over EUR 4 billion
of related investment. IEE II has also established co-operation with financial institutions to mobilise
investments of around EUR 2 billion (with EUR 38 million EU funding) into sustainable energy through
its Project Development Assistance Facilities (ELENA and Mobilising Local Energy Investment - MLEI).
These investments are expected to generate energy savings of more than 2000 GWh/year.
Annexes:
1. Progress towards the 2020 targets
2. Follow-up to the orientations on energy given by the 4 February 2011 European Council
3. Implementation of key EU energy legislation
4. Overview of EU financial instruments to support energy policies
5. Key facts on energy in Europe
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Annex 1: Progress towards the 2020 targets
(1) EU target for GHG emission reductions of 20% relative to emissions in 1990
In 2011 GHG emissions were estimated at 16% below 1990 levels. This target is implemented
through the EU Emissions Trading System (EU ETS) and the Effort Sharing Decision.
(2) 20% share for renewable energy sources (RES) in the gross final energy consumption in the EU
In 2011, the RES share in the final energy consumption of the EU was 13.0% compared to 8.5% in
2005. With binding national targets, growth in renewable energy has increased but needs to average
6.3% per year to meet the overall 2020 target. The Commission has thus identified four areas where
efforts should be stepped up: energy market, support schemes, cooperation mechanisms and
cooperation in the Mediterranean
5
and it is now preparing orientations to address them (i.a. on the
internal electricity market opening, better market integration of RES, cooperation and trade,
infrastructure and consumers and technology innovation).
(3) 20% savings in EU's primary energy consumption compared to projections made in 2007
This target is not legally binding for Member States. Primary energy consumption peaked in
2005/2006 (around 1825 Mtoe) and is slightly decreasing since 2007 (to reach 1730 Mtoe in 2011).
This is due to the economic crisis, the effectiveness of existing policies and reduced energy intensity
of EU industry.
5
Communication "Renewable Energy: a major player in the European energy market" (COM(2012)271).
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Annex 2: Follow-up to the orientations on energy
given by the 4 February 2011 European Council
On Energy efficiency
The Energy Efficiency Directive was adopted in October 2012 and is expected to allow the EU to
approximately reach up to 17% of the 20% energy efficiency for 2020. Also in 2012 the EU-US Energy
Star agreement on labeling of energy efficiency office equipment was concluded and the Energy
Efficiency Fund was set up with a EUR 265 million budget. The Commission proposal for the Horizon
2020's Energy Challenge, with a proposed allocation of EUR 6.5 billion, is under negotiation and is
expected to integrate programmes promoting energy efficiency. Finally, the Smart Cities and
Communities European Innovation Partnership was launched in July 2012 to boost innovative
energy-transport-and-ICT technologies' solutions enhancing sustainability in cities and communities.
On the Internal Market
'A fully functioning, interconnected and integrated internal energy market by 2014':
Progress has
been seen in the increased coupling on the electricity market and the convergence of wholesale
prices as well as increased gas-to-gas competition due to better interconnections. The Electricity
Coordination Group set up in November 2012 is expected to enhance Member States' co-ordination
to identify risks and ensure adequate response to security of supply crisis. An Action Plan
(COM(2012)663) to address the remaining challenges towards the 2014 deadline was proposed as
part of the Commission Communication on the internal energy market.
'End the isolation of certain Member States from the European gas and electricity networks by
2015':
Preparatory work concerning the development of infrastructure in Europe continues while
waiting for the final Multiannual Financial Framework and the Connecting Europe Facility, in which
the Commission proposed EUR 9.1 billion for energy infrastructure. The Guidelines for Trans-
European energy infrastructure were adopted in March 2012 setting 12 strategic Trans-European
energy corridors and providing a way to identify projects of common interest and accelerate their
implementation. ENTSO-E and ENTSO-G also made considerable progress in preparing the Ten-Year
Network Development Plans (TYNDP) for gas and electricity.
'Better coordination of EU and Member States' activities to ensure consistency and coherence in
the EU’s external relations':
Work continued on strengthening the external dimension of the EU
energy policy in response to the European Council's call for better coordination. Progress was made
in the negotiations on a Trans-Caspian pipeline and the Southern Gas Corridor. The EU-Russia 2050
Energy Roadmap was agreed and the negotiations with Russia and Belarus on electricity system
operation of the Baltic Member States continued. As regards China, an EU-China Urbanization
Partnership and an Energy Security Dialogue were set up. In relation with the European Council's call
for information on bilateral energy agreements with third countries, an information exchange
mechanism with regards to intergovernmental agreements between Member States and third
countries was adopted and entered into force in November 2012.
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Annex 3: Implementation of key EU energy legislation
Transposition of the Third Energy Package Directives
(Situation as of 30 April 2013)
Common rules for the internal market for
electricity
(Directive 2009/72/EC of 13 July 2009) and
Common rules for the internal market for
natural gas
(
Directive 2009/73/EC of 13 July 2009)
Common transposition dates: 3 March 2011
Transposition status
currently declared by MS
-Electricity Directive-
Belgium
Bulgaria
Czech Republic
Denmark
Germany
Estonia
Ireland
Greece
Spain
France
Italy
Cyprus
Latvia
Lithuania
Luxembourg
Hungary
Malta
Netherlands
Austria
Poland
Portugal
Romania
Slovenia
Slovakia
Finland
Sweden
United Kingdom
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Partial
Full
Partial
Full
Partial
Transposition status as
currently declared by MS
- Gas Directive –
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Partial
Full
Full
Full
Full
Full
Full
Full
Full
Partial
Full
Partial
Full
Partial
Member State
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The third energy package requires national
certification of Transmission System Operators
M
Notified / opinions issued
On-going
Still to be notified
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Implementation of the Renewable Energy Directive
(EU 20% target for renewable energy (RES) share for gross final energy consumption)
Directive 2009/28/EC of 23 April 2009
Transposition date: 5 December 2010
Overview of progress towards the 1
st
interim target*
(according to progress report of 27 March 2013)
>
2% above interim target
<1% from or <2% above interim target
>>1%
below interim target<
Member State
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Germany
Denmark
Estonia
Greece
Spain
Finland
France
Hungary
Ireland
Italy
Lithuania
Luxembourg
Latvia
Malta
2005 RES share
23.3%
2.2%
9.4%
2.9%
6.1%
5.8%
17%
18%
6.9%
8.7%
28.5%
10.3%
4.3%
3.1%
5.2%
15%
0.9%
32.6%
0%
2010 RES share
30.1%
5.4%
13.8%
5.7%
9.4%
11.0%
22.2%
24.3%
9.7%
13.8%
33%
13.5%
8.8%
5.8%
10.4%
19.7%
3%
32.6%
0.4%
1
st
interim
target
25.4%
4.4%
10.7%
4.9%
7.5%
8.2%
19.6%
19.4%
9.1%
10.9%
30.4%
12.8%
6.0%
5.7%
7.6%
16.6%
2.9%
34.0%
2.0%
2020 RES target
34%
13%
16%
13%
13%
18%
30%
25%
18%
20%
38%
23%
13%
16%
17%
23%
11%
40%
10%
Netherlands
Poland
Portugal
Romania
Sweden
Slovenia
Slovakia
UK
EU
*
2.4%
7.2%
20.5%
17.8%
39.8%
16.0%
6.7%
1.3%
8.5%
3.8%
9.5%
24.6%
23.6%
49.1%
19.9%
9.8%
3.3%
12.7%
4.7%
8.8%
22.6%
19.0%
41.6%
17.8%
8.2%
4.0%
10.7%
14%
15%
31%
24%
49%
25%
14%
15%
20%
The most objective measure to discuss progress is to assess Member States against their first interim target, calculated as the average
of their 2011/2012 shares. Whilst on average such progress to 2010 is good, this does not reflect the policy and economic uncertainties
that renewable energy producers appear to face currently.
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Energy efficiency: transposition of the energy
performance of buildings directive
Directive (2010/31/EU of 19 May 2010)
Transposition date: 9 July 2012
Energy performance of buildings directive*
Member State
Transposition
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Malta
Netherlands
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
Sweden
United Kingdom
*
NZEB** report
Cost-optimal
calculations
Transposition status is based on declared transposition by Member States (Green: Full; Orange: Partial; Red: No). The Commission is
undertaking prima facie and conformity checks for those Member States having notified transposition measures. For the NZEB reports
and the cost optimal calculations, the status is based on whether or not reports have been received and not on the completeness of
the reports. The Commission is undertaking analysis of the reports received.
** Nearly-zero energy buildings.
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Annex 4: Overview of EU financial instruments
to support energy policies
Overview of EU funds dedicated to energy by programme and financial
instruments (existing and possibly new for the period 2014-2020)
Funds allocated within financial perspectives
2007-2013
Total
Commission proposal for
Funds allocation within financial perspectives
2014-2020
Total
Nuclear
(3)
Electricity & gas
infrastructure
(1)
Sustainable
energy
(2)
Nuclear
(3)
Amounts in M€
Trans-European Networks
Energy (TEN-E)
Connecting Europe Facility
which includes financial
instruments
European Energy Programme
for Recovery (EEPR)
Electricity & gas
infrastructure
(1)
155
Sustainable
energy
(2)
9 121
(1 000)
2 267
1 712
-
-
Which includes financial
instruments (European
Energy Efficiency Fund)
EU
funds
CIP-Intelligent Energy Europe
Programme
which includes ELENA
(technical assistance)
Structural Funds
RTD Framework Programme
Risk Sharing Finance Facility
(EC-EIB)
Enlargement Policy Funding
Nuclear EURATOM FP7 Fission
Nuclear FP7 Fusion
Decommissioning ( LT,SK,BG)
SUB TOTAL
TOTAL
4 029
-
(265)
730 (A)
(132)
-
(B)
1 607
10 100
2 350 (C)
1 400 (D)
112
1 382
4 155
2 848
16 404
28 818
8 385
9 121
17 000
6 500
1 080
3 282
860
23 500
37 843
5 222
A. includes ELENA in cooperation with EIB, CEB, EBRD and KfW
B. part of the new Research Framework Programme ("Horizon 2020")
C. RTD 2007-2013: funds allocated to non-nuclear energy research in general
D. 14% of total Risk Sharing Finance Facility (RSFF) envelope, which are mainly for solar and wind energy
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Annex 5: Key facts on energy in Europe
1. Europe's energy mix
Europe's energy mix is changing
EU gross inland consumption
2011
Renewables
Solid fuels
EU gross inland consumption
2030 (scenario)
Renewables
Solid fuels
Nuclear
Nuclear
10%
14%
17%
18%
14%
12%
24%
Gas
35%
Oil
Gas
22%
33%
Oil
Source: European Commission
Energy powers our society and economy
EU final energy consumption by sector in 2011
Others
Services
1%
Industry
Agriculture
2%
13%
26%
25%
Households and
residential needs
33%
Transport
Source: European Commission
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Energy mixes vary significantly across the EU
Gross inland consumption in the EU Member States in 2011
Oil
Gas
Solid fuels
Nuclear
Renewables
0%
AT
BE
BG
CY
CZ
DE
DK
EE
EL
ES
FI
FR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
RO
SE
SI
SK
UK
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Source: European Commission
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2. Europe's dependence on imports
Europe imports the equivalent of EUR 406 billion (3.2% of GDP) of
oil, gas and coal every year and its dependence is expected to grow
Share of imported fuel in total EU consumption
("business as usual" scenario)
%
100
Oil
Gas
Solid fuels
80
60
40
20
0
2005
2011
2020
2030
2005
2011
2020
2030
2005
2011
2020
2030
Source: European Commission
Europe depends on a few suppliers
EU imports of crude oil in 2011
Mexico
Azerbaijan
1% Others
5%
Kazakhstan
8%
6%
Norway
12%
EU imports of natural gas in 2011
Egypt, Libya, Trinidad
and Tobago, others
1% each
Russia*
30%
Opec
countries
33%
Qatar
11%
Not specified
10%
Nigeria
4%
Russia
35%
Algeria
13%
Norway
28%
* This figure includes gas from other countries
than Russia exported through Russia to the EU
Source: European Commission
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3. World trends affect Europe
World energy demand is on the rise
Evolution of the world energy demand in million tons of oil equivalent (Mtoe)
Rest of world
18 000
16 000
14 000
12 000
China
Rest of OECD
EU
Mtoe
10 000
8 000
6 000
4 000
2 000
0
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
Source: International Energy Agency
Electricity prices: the US is increasing its advantage,
largely thanks to shale gas
Evolution of end-user electricity prices for industry,
taxes excluded (2005 = index 100)
OECD Europe
150
140
130
120
110
100
90
USA
Japan
80
2005
2006
2007
2008
2009
2010
2011
Q3 2012
Source: International Energy Agency
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Rising supplies of unconventional gas
& LNG help to diversify trade flows
Major global gas trade flows in 2035
North America
Africa
Latin America
Middle East
Eurasia
Oceania
Asia (excluding OECD
Asia, China and India)
Source: International Energy Agency
Increasing global investments in renewable sources
New investment in clean energy by region 2004-12 ($ billion)
Asia & Oceania
Middle East & Africa
120
100
80
60
40
20
0
Europe
North America & Caribbean
Central & South America
2004
2005
2006
2007
2008
2009
2010
2011
2012
Source: Bloomberg
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Support for renewable energy is increasing across the world,
with the EU still leading in 2011. Total subsidies amount
to USD 88 billion, 1/6
th
of fossil fuels subsidies.
Global renewable subsidies by region
Rest of the world
Billion $ 250
$ 200
$ 150
$ 100
$ 50
$0
India
China
US
EU
2007
2009
2011
2015
2020
2025
2030
2035
Source: International Energy Agency
4. Europe's internal energy market is not yet completed
Importance of taxes and levies
in household electricity prices
Electricity price for households, first half of 2012
(EUR/kWh)
Net prices (excluding taxes)
0,30
0,25
0,20
0,15
0,10
0,05
0,00
VAT
Other taxes and levies
DK CY DE BE IE IT SE PT AT EU NL ES SK MT LU UK HU FI SI CZ PL FR LV LT HR EE RO BG
Source: European Commission
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Less differences for industry electricity prices across Europe
Electricity price for industry, first half of 2012
(EUR/kWh)
Net prices (excluding taxes)
0,30
0,25
0,20
0,15
0,10
0,05
0,00
VAT
Other taxes and levies
CY DK MT IT DE SK IE EU ES PT LT UK LV HU AT BE CZ NL SI PL HR FR LU RO SE EE FI BG
Source: European Commission
Price-setting mechanisms vary across the EU
Retail price regulation for
electricity and/or gas (LV for
electricity only; IE for gas only)
No retail price regulation /
Phase-out of regulation
foreseen / Non-distortive or
possibly less distortive
regulation (for example due
to isolated markets)
Source: European Commission
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Gas prices vary significantly across the EU
depending on level of competition
Average gas price in
€/MWh
< 25
€
25 - 30
€
30
–
35
€
> 35
€
No data available
28.9
36.7
35.9
37.9
22.9
24.3
24.3
24.5
37.0
26.6
28.8
29.9
30.0
32.3
43.3
24.9
30.1
34.6
33.3
Source: European Commission
Gas prices become more competitive
with more suppliers/sources
Comparison of EU wholesale gas prices (€/ MWh)
Russia to Lithuania
NL to UK
45
€/MWh
45
€/MWh
40
€/MWh
40
€/MWh
35
€/MWh
35
€/MWh
Norway to Belgium
Average German border price
30
€/MWh
30
€/MWh
25
€/MWh
25
€/MWh
20
€/MWh
20
€/MWh
15
€/MWh
15
€/MWh
10
€/MWh
10
€/MWh
5
€/MWh
€/MWh
Source: European Commission
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Large untapped potential for energy efficiency
across the world
Projected energy efficiency potential which will be (un)realised by 2035
Realised energy efficiency potential
100%
Unrealised energy efficiency potential
80%
60%
40%
20%
0%
Industry
Transport
Power
generation
Buildings
Source: International Energy Agency
Significant investments will be required
to renew or refurbish our energy system
Age of power generating capacities in the EU in 2013 (in years)
Oil
140.000 MW
120.000 MW
100.000 MW
80.000 MW
60.000 MW
40.000 MW
20.000 MW
0 MW
Gas
Coal
Nuclear
Renewables
Source: European Commission
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Renewable sources accounted for 13% of
the EU final energy consumption in 2011
2011
60%
2020 target
50%
40%
30%
20%
2020 EU target
10%
0%
MT LU UK BE NL CY IE HU CZ SK PL FR IT EL DE EU BG ES SL LT RO DK PT EE AT FI LV SE
Source: European Commission
The rise of intermittent sources also calls for complementary
measures to ensure generation adequacy
Share of intermittent renewable energy sources (wind and solar)
per Member State in 2010 and 2020
wind and solar power 2010
40%
35%
30%
25%
20%
15%
10%
5%
0%
wind and solar power 2020
AT BE BG CY CZ DE DK EE EL ES FI FR HU IE IT LT LU LV MT NL PL PT RO SE SK SL UK EU
Source: European Commission
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