PBL 2012 Climate and Energy Roadmaps 500269001

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    Climate and

    Energy Roadmapstowards 2050in north-western

    EuropeA concise overview of long-term

    climate and energy policies in Belgium,

    Denmark, France, Germany, the

    Netherlands and the United Kingdom

    Policy studies

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    Climate and Energy Roadmaps towards2050 in north-western EuropeA concise overview of long-term climateand energy policies in Belgium, Denmark,France, Germany, the Netherlands andthe United Kingdom

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    This publicaion can be downloaded rom: www.pbl.nl/en. Pars o his publicaion may be reproduced, providing hesource is saed, in he orm: Noenboom J e al. (), Climae and Energy Roadmaps owards in norh-wesernEurope. The Hague: PBL Neherlands Environmenal Assessmen Agency.

    PBL Neherlands Environmenal Assessmen Agency is he naional insiue or sraegic policy analyses in he elds ohe environmen, naure and spaial planning. We conribue o improving he qualiy o poliical and adminisraivedecision-making, by conducing oulook sudies, analyses and evaluaions in which an inegraed approach isconsidered paramoun. Policy relevance is he prime concern in all our sudies. We conduc solicied and unsoliciedresearch ha is boh independen and always scienically sound.

    Climate and Energy Roadmaps towards in north-western Europe

    PBL Neherlands Environmenal Assessmen AgencyThe Hague/Bilhoven, ISBN: ----PBL publicaion number:

    Corresponding [email protected]

    Author(s)

    Jos Noenboom, Pieer Boo, Rober Koelemeijer, Jan Ros

    Acknowledgements

    Acknowledgemens: This repor has proed rom inormaion, commens and oher help provided by expers romseveral counries and insiuions. In paricular, we hank he ollowing people or heir help: Gudi Alkemade (Minisryo IenM, he Neherlands), Dominique Auverlo (CAS, France), ienne Beeker (CAS, France), Michel Colombier (IDDRI,France), Annemarieke Grinwis (Minisry o I&M, he Neherlands), Koen de Groo (CIEP, he Neherlands), Olivier deGuiber (French Governmen), Emmanuel Guerin (IDDRI, France), Jan Ole Kiso (DECC, Unied Kingdom), Richard

    Lavergne (French Governmen), Sean Lechenbhmer (Wupperal Insiue, Germany), Harry Lehmann (UBA,Germany), Jochen Luhmann (Wupperal Insiu, Germany), Jacques de Jong (CIEP, he Neherlands), Tone Madsen(Energy Agency, Denmark), Joannete Polo (Duch Embassy, Paris), Vincen van Seenberghe (Belgium Federal ClimaeChange Secion). Furhermore, we hank he paricipans in wo inernaional seminars on climae and energyroadmaps or heir valuable inpu ino he discussion; he rs seminar was organised by he Duch Minisry oInrasrucure and he Environmen (IenM), and he second by he Clingendael Inernaional Energy Programme incollaboraion wih PBL Neherlands Environmenal Assessmen Agency.

    English-language editing

    Annemieke Righar

    Graphics

    Durk Nijdam, Marian Abels, Filip de Blois

    Production co-ordination

    PBL Publishers

    Layout

    Texceera, Den Haag

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    Contents

    Summary

    Climate and Energy Roadmaps towards in north-western Europe

    Inroducion Poins o deparure Visions and arges Fuure energy sysem The European dimension Main insrumens Wha seems o be missing?

    Reasons or cooperaion Conclusions

    Reerences

    Annex

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    | Climae and Energy Roadmaps owards in norh-wesern Europe

    Summary

    Many European counries are developing plans or

    a ransiion owards a low-carbon economy in .These plans are oen named climae and energyroadmaps. Alhough roadmaps are also developedand discussed a EU level, his paper expressly ollowsa botom-up approach by looking a developmens insix norh-wesern European counries. These counriesroadmaps are in various sages o developmen andcanno be compared in deail. Main dierences, commonapproaches and possible needs or closer cooperaionare hereore explored in a sylised way. In general,developmen o low-carbon ransiion plans remainsdominaed by naional approaches. Inerdependenciesand cos-ecien common approaches receive

    litle atenion. This is remarkable in he ligh o hedevelopmen o he common energy marke, heransnaional elecriciy and gas inrasrucure, andbecause policy measures in one counry may impache invesmen climae or low-carbon echnologies inanoher; aer all, energy companies increasingly operaeon an inernaional level.

    Denmark and Germany have ambiious sraegies wihnaional arges or emission reducion, renewableenergy and energy eciency, wih imeables up o ,and arges going beyond he agreed EU arges.

    In he sraegies o boh counries here is no room ornuclear energy, and renewable energy (wind, solar,biomass) plays a cenral role. Denmark even srives or% renewable energy by . In conras, he UniedKingdom, which is a counry wih ambiious legally

    binding greenhouse gas emission goals, wans o achieve

    hese goals hrough reorm o he elecriciy marke, wihhe possibiliy o expand on nuclear energy. In he pasyears, Denmark and he Unied Kingdom have olloweda relaively sable climae and energy policy wih broadpoliical backing. In he las ew years, Germany has hada combinaion o boh sable and unsable policies.Is approach owards he expansion o renewable energywas consisen, bu owards nuclear energy he approachhas been very unsable. This has creaed uncerainies orbusinesses and neighbouring counries. France, Belgiumand he Neherlands, relaively speaking, are sillsearching or new, sable approaches o a cos-eeciveenergy ransiion.

    The sysem and marke inegraion o solar and windpower is a prioriy ransnaional issue or which a highereeciveness could be obained i a closer join approachcould be ound. This is eviden rom he sudy o naionalroadmaps and his issue is also addressed by heEuropean Commission. Clearly, he balancing o anincreasing load o variable solar and wind power in hepower sysem requires inegraed sraegies which soonwill surpass he naional level, and elecriciy markereorm canno be implemened in one counry alone.Anoher prioriy issue promping closer cooperaion

    beween norh-wesern European counries is he role ogas in he uure energy mix. Naional visions are verydieren, while ransmission sysems operaors or gasare increasingly working a ransnaional level. Also heincreasing role o biogas mus be incorporaed.

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    Summary |

    Oher issues or collaboraion beween counries indesigning a low-carbon economy are hose around hedevelopmen o carbon capure and sorage (CCS)echnologies, low-carbon energy or road ranspor, andhe regulaion o susainable biomass. In his way, morejoin approaches by counries wih broadly comparablemind ses in he energy and climae debae no only couldsolve issues o join ineres in a more cos-eecive way,bu also may enhance he European debae.

    The main ndings are presened below:

    . Naional sraegies dominae he hinking on he

    ransiion owards a low-carbon economy, bunaional acions will impac invesmen decisions byenergy companies ha operae inernaionally and,hence, may have an impac in neighbouring counries,as well.

    . Driving orces, saring poins and possibiliieso develop renewable energy sources (RES) diersignicanly beween he six counries sudied.These dierences are clearly reeced in he dierenroadmaps.

    . The Danish roadmap is characerised by he aim oachieve a % renewable energy sysem by ;he German roadmap involves deploymen o RESand he creaion o indusrial opporuniies; in heUnied Kingdom, a long-erm climae ambiion is obe achieved agains he lowes coss; he roadmapor he Neherlands provides litle inormaion on helong-erm sraegy and cos consideraions prevailin shor-erm seps o be aken; France and Belgiumare jus saring heir hinking on pos- energyand climae policies, wih nuclear energy clearlyconinuing o play an imporan role in he uureenergy mix o France.

    . An imporan similariy beween he naionalroadmaps is heir emphasis on he elecriciy secor.Obvious dierences relae o he role o nuclearenergy and, o a lesser exen, o he imporanceo carbon capure and sorage (CCS) and non-CO

    greenhouse gases. Commonly considered

    building blocks in he roadmaps are he increasein energy eciency, he generaion o CO

    -ree

    elecriciy and he use o biomass (Secion ).

    . On he basis o he currenly available naional plans

    i is expeced ha muual inerdependencies willincrease, paricularly in areas such as he inegraiono renewable energy in he European energy marke(especially regarding incenives or renewable energyechnologies) and ransnaional inrasrucure

    (including elecriciy, gas and ulimaely CCS), heinroducion o elecric vehicles (sandardisaion),and developmen and implemenaion o crieriaor he susainable producion o biomass. Manyo hese issues will require some level o Europeancoordinaion (Secion ).

    . Because o increasing problems o inermitencyo he power sysems due o increasing supply ovariable wind and solar elecriciy, he low-carbonplans by hese counries may lead o echnicalproblems in heir elecriciy grids. Cooperaion couldhelp solve hese problems in a cos-eecive way

    (Secion ).

    . Cos-eecive sraegies or he ransiion owardsa low-carbon economy make cerain demands on heuncioning o he marke, due o increasing uproninvesmens and expeced price volailiy. Naionalsoluions probably will no be eecive and a joinapproach could be helpul (Secion ).

    . Many physical ineracions exis beween he energysysems o he six counries. Moreover, mos energycompanies operae inernaionally. Since, generally,

    hese counries have similar ambiions bu dierenpolicy approaches, hey could learn rom each ohersexperiences.

    . Roadmaps owards a low-carbon economy by ,in ac, reer o dynamic policy hinking on srucuralchanges o he uure energy sysem. Some counrieshave made more progress han ohers in hedraing and implemenaion o long-erm visions.Analyically, he curren versions o he individualroadmaps canno be compared on a deailed level.Thereore, his paper mainly describes he generaldirecion in which each counry expecs o move in

    heir ransiion owards a low- carbon economy.

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    | Climae and Energy Roadmaps owards in norh-wesern Europe

    Climate and EnergyRoadmaps towards 2050 innorth-western EuropeA concise overview o long-erm climae and energy policies inBelgium, Denmark, France, Germany, he Neherlands and heUnied Kingdom

    1 Introduction

    In March , he European Commission published isroadmap or moving owards a compeiive low-carboneconomy by (EC, a). In i, he Commissionpresens possible acions up o , which could enablehe EU o achieve greenhouse gas reducions in line wihhe poliical objecive o he European Council, whichis o achieve reducions o % o % by i oher

    developed counries ake similar acion. The Commissionalso calls on EU Member Saes o soon develop naionallow-carbon roadmaps i hey have no done so already.Many EU Member Saes have drawn up such naionalplans, or are in he process o doing so.

    The Duch Governmen has announced in is naionallow-carbon roadmap (Klimaabrie ) o discuss isplan wih neighbouring counries. To aciliae discussionbeween counries, he Duch Minisry o Inrasrucureand he Environmen has asked he PBL NeherlandsEnvironmenal Assessmen Agency o compare he long-

    erm climae and energy plans o norh-wesern Euro-pean counries. This comparison is dedicaed o heprinciples, dierences and similariies regarding he long-erm climae and energy plans o Belgium, Denmark,

    Germany, France, he Neherlands and he UniedKingdom.

    The PBL analysis has been discussed during wo workingconerences, he rs organised by he minisry on May, and he second by Clingendael Inernaional EnergyProgramme (CIEP) ogeher wih PBL on June .Aim o hese conerences was o learn rom he variouscounry experiences and he viewpoins o companies

    operaing in hese counries, and o ideniy issues oinerdependencies where enhanced collaboraionsbeween counries may be desirable.

    Commens made by expers rom hese counries and hebusiness secor have been incorporaed in he presenrepor.

    2 Points of departure

    The curren siuaion in each o he six counries denes

    he various poins o deparure or he decarbonisaionpahs owards . These saring poins are deer-mined by he curren energy mix, policies alreadyimplemened, exising inrasrucure, economic

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    Climae and Energy Roadmaps owards in norh-wesern Europe |

    Roadmaps

    The various naional policies on he ransiion owards a low-carbon economy by are shaped verydierenly and are in dieren sages o developmen. A brie overview is given below.

    Belgium

    Coheren hinking on he ransiion o Belgiums curren energy sysem owards one ha is low-carbon is sillin an early sage. Belgium has a complex ederal srucure and, in he period, has had o deal wih aime-consuming ormaion o is curren governmen. This has conribued o a delay in policy developmen aederal level, bu a sudy ha looks owards is being commissioned by he govenmen. A regional levelsiniiaives are being developed o improve energy eciency and o simulae RES elecriciy.

    Denmark

    Energy policy in Denmark is based on a long radiion o poliical consensus, sabiliy and a number o energy

    agreemens. A broad majoriy in parliamen suppors he arge o an energy sysem wih % renewableenergy wihou any reliance on ossil uels. Key documens are he Energy Sraegy (published inFebruary ), and Our uure energy (released by he new Danish Cabine in November ). The later wasbased on he previous governmens Energy Sraegy , bu raises he bar higher. In March , a newbroadly agreed Energy Agreemen was reached in Denmark and described in Acceleraing green energy owards. This new agreemen conains a wide range o ambiious iniiaives or seps o be aken unil ,including he developmen o RES, increased energy eciency and more research ino energy echnologies.

    France

    In , French energy law already included a greenhouse gas emission arge or (emission reducionby a acor o ). A subsequen process called Le Grenelle Environnemen, in which many sakeholdersparicipaed, resuled in in he rs environmenal round able ac (Loi Grenelle), providing policy goals

    and he main direcions or urher developmen. Climae change miigaion and energy are subjecs o hapolicy documen. Since hen he main ocus o climae policy has been on arges or he shorer erm (a hismomen mainly up o ) and on policy insrumens supporing hese arges. Recenly, a number o sudiesino he developmen o he energy sysem up o have been presened by governmen advisors, bucurrenly here is no clear governmenal roadmap.

    Germany

    In Sepember , Germanys Federal Governmen published he Energiekonzep, an energy concep ouliningis policy or a low-carbon economy by . Aer he decision o accelerae he phase-ou o nuclear power,he Federal Governmen proposed a package o legislaive measures (Energiewende) in he summer o .Togeher, hey orm a roadmap or Germanys low-carbon uure. Scenario sudies ha explore decarbonisaionpahs have been commissioned by he Federal Minisry or Economics and Technology and he Federal Minisryor he Environmen, Naure Conservaion and Nuclear Saey.

    The Netherlands

    In , he Duch Governmen published is Climae Leter (Klimaabrie ). This leter oulines hechallenges ha he counry aces in he ransiion owards a low-carbon economy, idenies he building blocksor a low-carbon sysem and explains he necessiy o a greenhouse gas emission reducion arge or .The Minisry or Inrasrucure and he Environmen has commissioned several scenario sudies o ideniydecarbonisaion pahways. The energy repor (Energierappor ) is a key documen ha describesnaional energy policies.

    United Kingdom

    The UK Climae Change Ac involves carbon budge reducions over a period o ve years. The mos recengovernmen proposal ocuses on he period. The UK policy avours echnology neuraliy as his is

    assumed o minimise coss; i looks sharply a he poenial benes or he UK economy (clean echnology,emphasis on supply chains). A gradually increasing annual reducion in successive carbon budges providesplanning cerainy, simulaes innovaion, and is expeced o reduce coss. An Energy Bill was draed in May, oulining undamenal legal changes in he power marke.

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    srucure, innovaion and research. Moreover, publicopinion on climae change and energy issues also hasa cerain impac on poliical will and choices made orlong-erm policies ha aim or decarbonisaion o heeconomy. For hese counries, we ound kaleidoscopic

    dierences beween he various poins o deparure.

    The resources used by hese counries or heir nalenergy producion are summarised in Figure ..The overview shows ha Germany and Denmarkcurrenly depend or % or more on coal (includinglignie), while nuclear energy conribues abou % ohe energy consumpion in France. The Unied Kingdomand he Neherlands have a % o % dependency onnaural gas, and Denmark has he larges share orenewable energy sources (RES) (%) and has no nuclearenergy. The smalles shares o RES are ound in Belgium,

    he Neherlands and he Unied Kingdom. Shares o ossiluels in he energy consumpion range rom % inFrance o % in he Neherlands. These gures illusraeha or all counries proound srucural adjusmens in

    he energy mix are required, in order o achieve a low-carbon economy.Regarding energy use and greenhouse gas emissions,Belgium sands ou as he counry wih he mos energy-inensive economy and highes emission levels per uni o

    GDP. The economy o Denmark, he counry wih hehighes GDP per capia, has he lowes energy inensiyand greenhouse gas levels. Germany, he mosindusrialised counry o he six, has a raher highgreenhouse gas emission level per uni o GDP, buperorms relaively well in energy inensiy (Table .).Generally, he counries are highly dependen on ossilenergy impors. Excepions are Denmark, which is anexporer o boh naural gas and oil, and he Neherlands,an exporer o naural gas. O he six counries, Franceand, o a lesser exen, Germany are curren exporers oelecriciy (Annex ).

    According o rough esimaes o he domesic poenial odevelop renewable energy sources (RES), such as wind,solar, biomass and hydropower, here are very clear

    Table .Some basic eatures o the national economies, per country (see Annex or details)

    Belgium Denmark France Germany Netherlands United

    Kingdom

    GDP (euros/capia) 32,600 42,500 29,800 30,300 35,400 27,400

    GHG inensiy (g CO eq/GDP) 437 376 317 413 373 352

    Energy inensiy (Kg oil equivalen / euros GDP) 213 104 167 150 182 115

    Elecriciy prices households (euros/ kWh) 22.2 30.8 14.8 27.8 22.0 16.8

    Elecriciy prices indusry (euros/ kWh) 11.8 10.9 7.6 13.4 11.8 11.5

    Figure .

    Belgium

    Denmark

    France

    Germany

    Netherlands

    United Kingdom

    0 20 40 60 80 100

    % of gross inland energy consumption

    pbl.nl

    Coal / lignite

    Oil

    Natural gas

    Nuclear energy

    Renewables

    Energy mix, 2010

    Source: Eurosa

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    dierences in he relaive posiions o he six counries(Figure .). Denmark has he highes poenial capaciy,per capia, or wind energy, boh onshore and oshore.None o he oher counries come close o Denmarksposiion. O he oher ve, he Neherlands has arelaively large poenial capaciy, per-capia, or oshorewind energy, and or France his is rue or onshore windenergy. Belgium and Germany have a relaively smallpoenial capaciy, per capia, or wind energy. France andDenmark are he counries ha have he relaively largesagriculural and ores areas available per capia, whichgives an indicaion o heir biomass producion poenial.Belgium and he Neherlands have airly ew possibiliies

    or bio-energy producion, in boh agriculure andoresry. To he souh, solar irradiaion increases. This isadvanageous or France, wih a relaively large poenialcapaciy, per capia, or solar energy producion in hesouh o he counry. France is also he counry wih helarges amoun o hydropower per capia. Figure . helpso undersand he relaive posiions o he counies. Eveni a counry scores relaively low, RES may play asignican role in is regional energy producion.Examples are solar power in souhern Germany andoshore wind parks in he Unied Kingdom.

    Worldwide perspecives or marke growh in herenewable energy secor are subsanial (IEA, ).Counries dier considerably in heir abiliies o prorom hese marke developmens. The rankings(Figure .) show he relaive imporance o he so-called

    clean echnology secor or he naional economies andhow well counries are posiioned o ake advanage ohe economic opporuniies relaed o his developmen.According o Van der Slo and Van den Berg (),relaively speaking, Denmark is he global leader in heclean echnology secor, wih Germany in hird place(China holds he second posiion). Alhough Denmark isa comparaively small counry, i is home o largecompanies in his secor (e.g. Vesas, Siemens andRockwool). Germany is presen in mos clean echnologysegmens. The oher counries in his sudy are no in heglobal op o perormers in he clean echnologysecor, he Unied Kingdom is no even in he op .

    The success o Denmark and Germany is atribued oa long-lasing combined energy and indusrial policy(Van der Slo and Van den Berg, ).

    Public opinion regarding climae change and energydiers beween he six counries. European ciizensconsider climae change and energy supply o be seriousglobal issues, in addiion o opics such as povery, heeconomic siuaion, employmen, errorism and armedconic. In Denmark, public concern abou climaechange is he greaes, while i is he smalles in heNeherlands and he Unied Kingdom. In Germany, public

    concern abou energy supply is relaively large. Incounries wih a high level o concern, many ciizensbelieve ha combaing climae change and using energymore ecienly could boos he economy and increasehe number o jobs wihin he EU. The Danes are mos

    Figure .

    Belgium

    Denmark

    France

    Germany

    Netherlands

    United Kingdom

    0 50 100

    Index (highest of

    six countries = 100)

    Index (highest of

    six countries = 100)

    pbl.nl

    Wind

    Domestic potential of renewable sources per capita, 2009 2010

    Index (highest of

    six countries = 100)

    0 50 100

    pbl.nl

    Biomass production

    Index (highest of

    six countries = 100)

    0 50 100

    pbl.nl

    Hydropower

    0 50 100

    pbl.nl

    Irradiation favourable areas

    Source: EEA (); JRC phoovolaic geographical inormaion sysem; Eurosa (); EurObservER geographic inormaion sysem (see

    Annex or deails)

    Index values are based on the resource potential, per capita.

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    Figure .

    Belgium

    Denmark

    France

    Germany

    Netherlands

    United Kingdom

    0 1 2 3 4

    % of GDP

    pbl.nl

    Relative added value of clean energy technology, 2011

    Source: daa by Van der Slo and Van den Berg ()

    Relative contribution of the clean en ergy technology sector to the national economies in 2011, for north-western European countries, with added value

    weighted by GDP (euros) (see Annex 3 for details).

    Oil and natural gas reserves in north-western Europe

    Four norh-wesern European counries have some ossil-uel reserves le. The Neherlands, especially, sill haslarge reserves o naural gas. Table . gives an overview o gures ha have recenly become available. Thers column presens he proven reserves a he end o . The second column shows or how many years oacual naional producion hese reserves would suce (R/P raio ). This does no necessarily mean hahese counries will run ou o oil or gas wihin ha period, as in he nex decade i may become proable oexrac and exploi new reserves, as has been he case in he pas. To illusrae he eecs o echnologicalimprovemens and price changes, he same indicaor o he reserves o producion raio ha has been used orhe pas en years is shown in he hird column (R/P raio ). Wihou he discovery o new reserves, he R/Praio o would have declined o wihin en years. Alhough his did no happen, he R/P raio has seriouslydeclined in especially he larger producing counries (he Unied Kingdom and he Neherlands).

    Table .Fossil-uel reserves o north-western European countries

    Proved reserves R/P ratio R/P ratio

    End o

    Oil Denmark 0.9 billion barrels 10 9

    Unied Kingdom 2.8 6 5

    Gas Denmark 0.1 billion m3 6 7

    Germany 0.1 7 10

    Neherlands 1.2 16.6 25.8

    Unied Kingdom 0.3 4.5 11.1

    Source: BP Saisical Review o World Energy,

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    srongly o his opinion. Many ciizens also believe ha,by , cars will be uelled more ecienly. Naionalgovernmens as well as he EU are considered o berelaively imporan in ackling climae change, accordingo he people o Belgium, Denmark, Germany and France.German ciizens atach relaively grea imporance obusinesses and indusry aking climae acions (Annex ).

    3 Visions and targets

    There are numerous moivaions behind he ransiion

    owards a low-carbon economy, such as climae change,energy securiy, aordable energy prices, opporuniiesor regional developmen, innovaion, indusrial op-poruniies, and even ehical issues. In he six counries,all hese moives can be ound, wih varying levels osrengh. In he plans ha are currenly being developedby hese counries, a mixure o drivers is presened, wihclearer accens in some counries han in ohers. None ohe plans show a clearly dominaing moive (Table .).

    Visions on a uure low-carbon economy and hepahways owards i dier srongly beween he six

    counries. In par, his sems rom he dieren poins odeparure as skeched above. To a cerain degree, his isrelaed o dieren moivaions, poliical debae andpolicy radiion. The level o suppor or marke reormand he launch o echnologies vary per counry. The

    Unied Kingdom and he Neherlands appear o leave asmuch as possible o he marke, alhough hese counriesdo realise ha signican changes in he acual markerameworks could be necessary. This is clearly seen inheir preerence or a greenhouse gas emissionarge only, whereas Germany and Denmark already havese ambiious pos- naional arges or greenhousegas emissions and RES, as well as or he building andranspor secors. These las wo counries seem o haveanoher mind se and atach grea imporance o creaingopporuniies or indusry in low-carbon echnologies.

    An imporan simulus in he ransiion owards a low-carbon economy is provided by he EU agreemens on he climae and energy goals and he poliicalobjecive o reduce greenhouse gas emissions by a leas% rom levels. In addiion o he EU argesor greenhouse gas emission reducion, renewableenergy sources and energy eciency, paricularly Den-mark and Germany have sel-imposed arges or and beyond. For , hese naional arges are igherhan hose ha have been agreed a EU level (Table .).

    4 Future energy systemAvailable policy documens, sudies commissioned bygovernmens, and exper debaes all provide inormaionon curren visions in he six counries on he possible

    Table .Impression o the order o drivers underlying national plans or a decarbonisation path

    Belgium . Securiy o supply. Aordabiliy. Greenhouse gas miigaion

    Denmark . Securiy o supply. Greenhouse gas miigaion. Indusrial opporuniies. Aordabiliy

    France . Aordabiliy. Securiy o supply. Indusrial opporuniies. Greenhouse gas miigaion

    Germany . Indusrial / employmen opporuniies. Securiy o supply. Greenhouse gas miigaion. Aordabiliy. Ehical issues

    Neherlands . Aordabiliy. Indusrial opporuniies. Greenhouse gas miigaion. Securiy o supply

    Unied Kingdom . Greenhouse gas miigaion. Aordabiliy. Indusrial opporuniies. Securiy o supply

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    designs o a uure low-carbon energy sysem or .Main elemens o he echnological designs per counryare summarised in Table ..

    The roadmaps have many similariies. Reducions inenergy use and improvemens in energy eciency areimporan elemens o he naional roadmaps. Alhoughhere are also dierences in he deails, such as he role obehavioural changes, in general, he emphasis is onimprovemens o exising buildings. Oher commonlyconsidered elemens o a low-carbon energy sysem by

    are he applicaion o biomass, low-carbon powerand carbon capure and sorage (CCS) (PBL , IEA). Furhermore, he roadmaps, o a greaer or lesserdegree, all expec a remaining role or ossil uels wihouCCS (Table .).

    Expansion o renewable energy echnologies is a keyelemen in all roadmaps, alhough here are cleardierences in ambiion levels. Denmark wih a largepoenial wind and biomass capaciy has decided on% renewable energy, phasing-ou all ossil energy.Germany also has a srong ocus on he expansion o

    renewable energy echnologies. In mos oher counries,he uure share o RES is more dependen on ech-nological developmens and uure coss. In general,wind and biomass are he mos dominan energy opionsconsidered. Because here is a range o opions or

    producing low-carbon elecriciy, all road maps deal wihreplacing uel wih power, where possible (elecricpassenger vehicles, elecric hea pumps).

    A larger conribuion o wind and solar power inroducesproblems o inermitency wihin he grid. There are hreepossible soluions: more inerconnecions, more sorage,and a more exible demand suppored by smar grids.These soluions are ound in all roadmaps, bu here is nosign o a shared vision on a European inrasrucure. Noris here any clariy abou he imporance o a direc

    curren (HVDC) nework or Europe ha possibly is alsoconneced o Norhern Arica. Mos counries explicilymenion an increase in inerconneciviy, bu he exeno which is unclear. Denmark already srongly depends onconnecions wih oher Scandinavian counries. Francecurrenly expors a large quaniy o base-load elecriciy.More wind and solar power in he surrounding counrieswill lead o addiional peak producion, which will havean impac on Frances expor poenial.

    Elecriciy sorage soluions, mechanically (pumpedsorage, compressed air, ywheels) or chemically

    (hydrogen, synheic naural gas), or balancingucuaing loads o wind and solar power could lead omore (sub)naional approaches. Pumped sorage ismainly an opion in mounainous areas. Large soragepossibiliies, such as in Norway, could be par o

    Table .Overview o national targets o climate and energy policies on top o already agreed targets at EU level

    Belgium Denmark France Germany Netherlands United

    Kingdom

    Targes

    energy eciency(Flanders)

    GHG: -%

    primary energyconsumpion

    .% lower hanin

    approx.% wind inelecriciy

    GHG: -%

    primary energyconsumpion% lower hanin

    RES: %

    % RES inelecriciy

    Targes

    % coal o

    power% oil o hea

    % RES heaand elecriciy in

    GHG: -% o

    -%

    GHG: -%

    RES: %% RES inelecriciy

    GHG: -%

    (condiional)

    GHG: -%

    (-)

    Targes

    RES: % GHG: -% GHG: --%

    primary energyconsumpion% lower hanin

    RES: %

    % RES inelecriciy

    GHG: -%

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    a European soluion. Chemical sorage oers oppor-uniies or more naional or regional soluions. Especiallyhe opion o produce hydrogen and synheic naural gasis explored in Germany. Fricions beween EU-widebalancing sraegies by reinorcing he grid and naional

    and sub-naional balancing sraegies based on sorageaciliies may occur. Smar grids and demand conrol,especially in he case o elecric cars, are developmensha ake place in all counries, conribuing o shor-ermbalancing, especially during he day.

    The role o nuclear energy is widely discussed a hismomen. Many uncerainies surround he issue, bubasically here are hree opions: phasing ou, exendinghe lieime o exising plans, and/or expanding heechnology. Denmark and Germany do no considernuclear energy an opion or he uure; Germany has

    decided on an acceleraed phasing ou (up o ).Belgium has also decided o phase ou (up o )nuclear energy, alhough i is a dominan echnologyoday ( MW). In presen-day France, nuclear energyis he dominan echnology or power generaion and

    exending he lieime o exising plans is seriouslyconsidered, because his appears he cheapes opion ogenerae low-carbon power. However, over he comingyears, one o he reacors in France will be closed.Expansion o nuclear energy is only discussed in he

    Unied Kingdom and he Neherlands, bu wheher herequired unds rom privae invesmen can be generaedremains uncerain.

    All counries expec a srong decrease in he role o oiland coal, bu he expecaions regarding gas vary. TheUnied Kingdom and he Neherlands coninue o invesin gas inrasrucure and expec a long-erm role or gasdue o CCS and an increasing share o biogas. France,Germany and Belgium expec naural gas o provideexibiliy in he elecric sysem. Denmark preers agradual phase-ou, bu also invess in biogas ha is being

    ed ino local hea neworks.

    Biomass is a relaively exible, easily deployablerenewable energy source (RES). The six counries relyheavily on is use, which is also visible in heir renewable

    Table .Some technical elements mentioned in national long-term visions

    Low-carbon generation o

    electricity

    Biomass Fossil energy Carbon capture and

    storage or reuse

    Belgium Phasing ou nuclear energ yup o ; ambiions oexpand RES and o improveexibiliy

    Imporan conribuiono mee arges

    More gas in powergeneraion

    Poenially imporanor he use o coal inseel indusry and owergeneraion

    Denmark High ambiions or windpower, no nuclear energy;increase in inerconnecions

    Imporan or CHP,aircra and heavy duyvehicles; more impors

    The general objecive isphasing ou

    Combinaion wih biomassis an opion

    France Nuclear energy is andremains dominan;hydropower remains

    imporan; more wind andsolar energy; uncerainyabou expor (more peakdemand)

    Imporan conribuionespecially or ranspor

    More gas or peakelecriciy

    A secondary opion,maybe necessary, relaedo seel indusry

    Germany Focus on RES (mainly wind,also solar, maybe impors),phasing ou nuclear energyup o ; developmen osorage

    Biogas will play animporan role, also orexibiliy

    Addiional o RES, inecessary; decreasingconribuion o gas

    Addiional o RESelecriciy in combinaionwih coal; imporanor energy-inensiveindusries; some COexpors; carbon- reuse isan opion

    Neherlands Nuclear energy is an opion,maybe o bridge he gapowards a compleelysusainable sysem on a

    European scale aer

    Increase impor osusainable biomass;prioriy or air rac,ships, rucks, small

    indusries and exisingbuildings

    Gas will coninue o playan imporan role in helong erm; oil expeced osay; uncerainy abou

    he role o coal

    Essenial, especially orindusry; combinaion wihbiomass; expor o COmay be necessary

    UniedKingdom

    Increasing share o nuclearand wind energy; moreinerconnecion

    A susainable shareo % is possible;combinaion wih CCS

    Gas will coninue oeaure srongly inhe energy mix; moreimpors

    Considered o play aundamenal role

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    energy plans or . The Neherlands explicilymenions susainabiliy issues ha resric is globalpoenial and possible impors in he uure. There is alsoawareness ha, because o he resriced supply obiomass, is applicaion should be prioriised o be usedin areas or which low-carbon alernaives are lacking,such as uels or aircra and heavy-duy rucking (alsoexplicily menioned in Denmark), plasics and hea orsmaller indusries and exising buildings. However, clearchoices have no been made ye in he Duch roadmap.Resriced supply o susainable biomass does no appearas a major issue in mos oher roadmaps, as ye, alhoughreecions on prioriised applicaions and susainabiliy

    concerns are encounered. Some counries recognise hahe combinaion o biomass processing wih carboncapure and sorage (CCS) is echnically an imporanopion o realise negaive CO

    emissions.

    Belgium, Germany, he Neherlands and he UniedKingdom assign CCS as an essenial elemen o a uurelow-carbon energy sysem. Is main applicaionsmenioned are energy- inensive indusries (such as seelproducion) and he combinaion wih biomass. In hesecounries, CCS migh also allow coal- and gas-red powerplans o play an imporan role in heir uure low-

    carbon energy sysems. Business cases or CCS, however,are dicul o make and implemen. There is much publicresisance agains geological sorage o CO

    below land.

    Sorage below sea seems hereore he preerred opion.Sorage capaciy in empy gas and oil elds is limied.The capaciies in aquiers could be sucien or an energyransiion, bu are less cerain. Germany, Belgium and heNeherlands menion he general possibiliy oexpor CO

    .

    In several places, he roadmaps menion he imporanceo cross border ransmission o elecriciy. Belgiumdepends very much on impor and expor o elecriciy.

    The exen o power exchanges in norh-wes Europe in auure wih a load o more variable RES power has no yebeen elaboraed and how his should become a realiy isno made concree; or insance, wheher AC echnologieswould suce, or i evenually a European DC inra-srucure would be needed. In he conex o CCS, heranspor o CO

    beween counries may come ino he

    picure. In he roadmaps, however, his is no menioned.Furhermore, gas inrasrucure and exchange beweencounries as a echnology o creae larger exibiliy in heenergy sysem also are no elaboraed in he roadmaps.The need o impor biomass is an issue only menioned in

    he Duch roadmap.

    The Unied Kingdom and he Neherlands poin o heuure share o all non-CO

    greenhouse gases, while he

    German policy only deals wih uorinaed (indusrial)

    greenhouse gases. Many opions exis or reducing heemission o hese gases rom indusrial sources, bu oreduce emissions rom land use and catle is much moredicul. I, by , greenhouse gases would be reducedby %, abou a quarer o he remaining emissions areesimaed o originae rom agriculural sources.

    5 The European dimension

    The inuence o European Union legislaion in he eldso climae change and energy on naional policies canhardly be overesimaed. The EU has compeences in he

    areas o climae change and energy policy, alhough heyvary subsanially. Exising European reaies provide alegal oundaion or EU Regulaion on combaing climaechange (Aricle () TFEU). The EU has used his powero promulgae greenhouse gas emission reducionsmeasures. The European Union Emissions Trading Sysem(EU ETS) and he Renewable Energy Direcive (RED) arehe mos sriking examples. In he area o energy policy,EU compeences are resriced. Aricle () o he Treayon he Funcioning o he European Union grans MemberSaes he righ o make heir own sovereign decisionsabou which energy resources and echnologies o use.

    Neverheless, he EU compeence o regulae he inernalmarke (Aricle TFEU) also aecs energy markes.Consequenly, despie naional sovereigny over heenergy mix, a Europeanisaion rend in he energy secoris visible.

    There have been clear seps owards more Europeangovernance in recen years, especially in he elecriciysecor. This is apparen in areas such as he EU ETS, griddevelopmen and energy marke regulaion (Table .).Toal elecriciy producion in he EU is subjec o joinemission rading and in he long run his could make hehigher emiting power saions in he EU unproable and

    squeeze hem ou o he marke under he condiionha carbon prices indeed inuence invesmen decisions.European nework operaors (associaed in ENTSO) inelecriciy and gas have he obligaion o come up wihEuropean Ten Year Nework Developmen Plans (TYNDP).Moreover, hrough he esablishmen o he EuropeanAgency or Cooperaion o Energy Regulaors (ACER),coordinaion beween naional nework operaors iscovered by European policy. These Europeanisaionrends consrain he reach o naional energy policies.

    In , he European Commission published hree

    roadmaps o shape he poliical debae abou a ransiionowards a low-carbon economy by . The low-carboneconomy roadmap (EC, a) provides he broaderpicure. For wo secors o paricular ineres in heenergy ransiion, he Commission published separae

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    roadmaps: he Transpor Whie paper (EC, b) and heEnergy Roadmap (EC, c). Recenly, he Commissionrevealed a renewable energy sraegy (EC, ),addressing he inegraion o renewable energy in heEuropean energy marke, while reecing on heappropriae regulaory ramework or renewable energypos-.

    Roadmaps and sraegies provide he conex andencourage poliical debae on he ransiion owards alow-carbon economy, bu hemselves are no legislaiveproposals. The debaes may poin o areas whereenhanced European coordinaion is desirable in heineres o EU Member Saes ransiions owards a low-carbon economy. Such conclusions may provide amandae or he European Commission o elaboraespecic policy proposals. This is o paricular ineres insensiive areas, such as energy policy, in which heEuropean Treay gives he Commission only limiedpowers.

    6 Main instruments

    Aim o his secion is o explore main dierences andcommon approaches and he possible need or closercooperaion. This will be done by exploring, in a sylisedway, wha is undersood o be he core o he naionalpolicy insrumens, looking a: Alignmentbetweenlong-termpolicytargetsandthe

    policy measures chosen o achieve hese arges.Sabiliy o policy arges, underpinned by aconsisen se o policy measures, is oen perceived

    as a crucial condiion or invesmen in cleanechnology.

    Thewayinwhichcountriescouldlearnfromeach

    oher in using eecive measures, and he need orcollaboraion o eecively achieve a low-carbon

    economy given ineracions beween counriesagains he background o he common marke,ransnaional gas and elecriciy grids and oherEuropeanisaion rends (Secion ).

    Annex gives an overview o he policy measures haaim o suppor energy ransiion implemened in he sixcounries.

    Stability and alignmentOver he pas several years, Denmark and he UniedKingdom have achieved a relaively sable approach.Almos all Danish poliical paries srive or a ullyrenewable and highly energy-ecien economy by, and he Unied Kingdom has broad backing ora low-carbon economy in which legally binding carbonconsrains lead he way orward. Boh counries alignhese objecives wih a policy approach ha combinesa long-erm orienaion wih specic acions o be akenoday. In he Unied Kingdom, he main emphasis is onlegally binding carbon budges up o years ahead;

    in Denmark i is on a combinaion o ecien disricheaing neworks, invesmen in biomass and windenergy, smar grids and inerconnecion o deal wihinermitency problems. Boh counries ry o nda soluion or he necessiy o nance high uproninvesmen in a clean energy sysem: he Unied Kingdomby issuing bonds or energy companies o implemen(and nance) eciency measures, a new GreenInvesmen Bank ollowing he German example, anda undamenal power marke reorm. Denmark does soby looking a a combinaion o green axes and eciencybonds or energy companies.

    In he recen pas, Germany had a combinaion o sableand unsable policy approaches. Is approach owardsRES has been consisen, backed by srong policyinsrumens and in many respecs has been successul.

    Table .Current EU policy signicant or the transition towards a low-carbon economy

    Climate change policy Energy policy

    Targets:

    GHG emission reducion arges or

    Ambiion o reduce greenhouse gas emission by a leas %o % by compared o

    Targets:

    Renewable energy

    Energy eciency

    Inernal energy marke

    Main instruments:

    EU Emissions Trading Sysem Eor sharing decision CCS direcive CO sandards or cars

    Main instruments:

    Renewable energy direcive Energy marke regulaion Energy eciency direcive Ecodesign direcive

    Energy perormance o buildings direcive

    European grid developmen plans Energy inrasrucure package

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    Roadmaps and energy research, development and demonstration

    Energy research, developmen and demonsraion (RD&D) has wo aims, namely o oser new energyapplicaions and o srenghen he compeiiveness and opporuniies o naional indusries. Naional roadmapsmainly consider he rs RD&D aim alhough in realiy he wo aims are always combined i only becausea srong indusrial expor posiion canno be achieved wihou a home marke.The ollowing ve elds in RD&D expendiures may conribue o he developmen o clean echnologies: energyeciency;

    carboncaptureandstorage(CCS);

    renewableenergy;

    nuclearenergy;

    aclusterofnetworkapplications,storagesystems,hydrogenandfuelcells.

    Table . shows RD&D invesmens in he six counries over he mos recen years or which gures are available(, excep or France , and Belgium only). Because in some cases gures changeconsiderably rom year o year, probably due o adminisraive reasons, hree-year averages have been calculaed.

    Table .Energy RD&D. Shares in %, total amount in euros and per unit o GDP

    Belgium Denmark France Germany Netherlands United

    Kingdom

    Eciency 25% 9% 14% 15% 39% 28%

    CCS 0 1% 5% 2% 6% 9%

    Renewables 16% 45% 12% 29% 35% 34%

    Nuclear energy 47% 0 48% 34% 7% 14%

    Nework, sorage ec. 6% 28% 9% 8% 7% 9%

    Toal (million euros) 99 112 980 567 237 358

    Per o GDP, 0.30 0.56 0.64 0.27 0.44 0.21

    Source: IEA, Counry RD&D daabase; Decisio (), Monior on publically nanced energy research [Monior publiek

    genancierd energieonderzoek ], Amserdam

    Agains he background o naional roadmaps or he ransiion owards a low-carbon economy, he gures inTable .. are explained below.. Research, developmen and demonsraion relaed o nuclear energy consiue he highes expendiure in

    energy research. I is considerably higher han wha migh be expeced given he share o nuclear energy inhe energy mix and is role in he ransiion owards a low-carbon economy. This is especially he case or

    Germany. Alhough he German energy roadmap has renewable energy as is ocal poin, he expendiure onRD&D or nuclear energy in he period was higher han or renewable energy.

    . Four counries allocae a relaively high share o RD&D unds o renewable energy, namely Denmark,Germany, he Neherlands and he Unied Kingdom. In Denmark, he emphasis is on biomass and windenergy, which corresponds o he imporan role o hese resources in he Danish energy ransiion. Inhe Neherlands, he RD&D eor is direced o solar energy and biomass. In he Unied Kingdom, heemphasis is on wind energy and biomass. In Germany, he emphasis is on all hree resources, while Franceallocaes his ype o expendiure only o solar energy. Belgium spends very marginally on renewable energyresearch. Only Belgium, he Neherlands and he Unied Kingdom spend a considerable share o RD&D onenergy eciency. The ac ha, in general, research on energy eciency receives limied suppor does nocorrespond well wih he large role o eciency in all roadmaps and is relaively large share in clean energyechnology employmen.

    . Only Denmark consisenly allocaes a considerable share o is expendiure on RD&D o neworks, soragesysems, hydrogen and uel cells. However, in Germany, atenion or sorage opions is increasing rapidly.

    . Calculaed as a percenage o GDP, France and Denmark inves he mos, wih Belgium, Germany and heUnied Kingdom spending considerably less.

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    However, is main orce he combinaion o insallaiono renewable energy echnologies and indusrialproducion wihin Germany has come under pressureover recen imes, and i will be a challenge o combinecheaper impors o clean echnology componens wih asolid German role in he value chain. The same is rue orDenmark, while he oher our counries do no have hesame level o naional clean echnology producion(Secion ). The German approach o nuclear energy also a zero-carbon echnology has been veryunsable, leading o uncerainy in he power secor inGermany and surrounding counries. The GermanEnergiewende, as is he case wih all deep ransiions, is

    no easy o implemen, due o vesed ineress and allkinds o shor-erm problems (inrasrucure, aordableenergy prices, accepance o CCS, dierences beweenederal level and ederal saes, nancing o buildingsreurbishmens). However, i is buil on a srong base oechnological knowledge, ciizen paricipaion andgrassroos acivism (in paricular he ani-nuclearmovemen).

    France, Belgium and he Neherlands, by and large, aresill searching or new, sable approaches. For decades,France had a sable orienaion in which nuclear energy

    was he main conribuor o a low-carbon economy.Recenly, however, he exen o which France aims orenergy eciency or example, by means o a carbonax and he oped uel mix in he uure power secorhave become less clear. The posiion o Belgium is similar,alhough more urgen, now ha he governmen hasdecided on phasing ou nuclear power in he period and a long-erm vision and plan are sill lacking.This has led o uncerainy abou he invesmen climae.The Neherlands has he cleares dierence beween isorienaion or he medium erm () wih emphasis oncos eeciveness, and uncerainy abou he longer erm() wih a condiional emission reducion arge.

    A he same ime he counry has an ambiious approachowards energy echnology developmen by Duchcompanies in which he push acor is developed bya reorganisaion o RD&D unds, alhough he srengh ohe pull acor is unclear.

    Learning and interactionsThe resuls rom choices made or cerain insrumensmay help counries o learn rom each oher. This wouldparly depend on he ambiion levels and urherelaboraion o he policies in he six counries.Neverheless, alhough arbirarily chosen, some examples

    o relaively successul policy approaches can be given.

    Denmark. The counry has invesed in a processha has been gaining broad poliical backingsemming rom long-erm ambiion, and involving

    policy insrumens in which greening o axes playsa crucial role; disric heaing gradually has movedowards biomass wih srong regulaory and nancialincenives; and here has been ongoing invesmenin onshore wind parks wih he involvemen o localcommuniies.

    Germany. The counry has buil broad poliicalbacking or renewable energy sources (RES) andnancing o up-ron invesmens by heKrediansal r Wiederaufau.

    United Kingdom. The counry has legal cerainy inclimae policy, aiming a a leas-cos approach; i isconsidering new marke srucures in clean power

    invesmen by is Elecriciy Marke Reorm (see exbox The Missing Money).

    France. The counry has a srong governmenindusryenergy secor, a srong combinaion onuclear indusry, consrucion and RD&D.

    United Kingdom, Denmark and France. In hesecounries, here is involvemen in and unding byenergy companies in energy eciency, especially inbuildings.

    Denmark, the Netherlands and Germany. Thesecounries are atemping o use he poenial o heirsocieies (see ex box Energeic Sociey) in which

    ciizens and enerprises ake he lead in rying oachieve a clean economy by building on srong localradiions (Denmark, Germany) or by providing clariyabou which invesmens will no be subsidised, husencouraging ciizens o sar invesing hemselves,such as in solar PV, or using a botom-up approach insearching or he mos eecive way o energy-ecien reurbishmen o buildings (he Neherlands).

    7 What seems to be missing?

    Looking a he various roadmaps o he six counries,

    shows ha or cerain secors almos no measures areconsidered, even hough hese secors play an imporanrole in he ransiion owards a low-carbon economy.Below, we lis a number o issues ha sand ou, buhere are likely o be more.

    . Carbon capure and sorage (CCS) does no receivemuch atenion. The Unied Kingdom and heNeherlands, especially, have ried o se up CCSdemonsraion plans, bu have suered a varieyo se-backs. The Unied Kingdom could no nd anineresed invesor in a rs applicaion round or a

    large demonsraion plan. The Duch Governmenreceived massive public resisance in reacion ois atemp o se up a CO

    ranspor and sorage

    demonsraion projec in a densely populaedarea, aer which he governmen decided no o

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    The Missing Money

    Low-carbon energy sysems are expeced o be characerised by relaively high xed and relaively low variablecoss. This is especially he case in he power marke. Around a hird o overall elecriciy coss will be relaedo xed invesmens (capial coss) and he oher wo hirds depend on variable coss. In a uure sysem wiha large share o renewable energy, nuclear energy or carbon capure and sorage (CCS), around wo hirds ohe coss could reec up-ron invesmens wih only one hird due o operaional coss (Boo and Van Bree,). I prices remain equal o variable coss, i will be much more dicul o cover all coss. Or, dierenly pu,companies will be relucan o inves in a zero-carbon uure as hey are uncerain abou how o recover heircoss. The same applies o back-up capaciy.

    In he acual marke, shor-erm marginal coss are a considerable share (% o %) o long-erm coss

    and hereore enough revenues are earned o warran invesmen. In a zero-carbon sysem, he siuaion isdieren. Variable coss o mos renewable energy echnologies are close o zero. However, peak prices willbe se by open-cycle gas urbine echnology wih high variable coss. Price volailiy will become higher hanodays level, bu or invesors i will be uncerain wheher heir invesmens in back-up aciliies, inended obe used or as shor a ime as possible, will be earned back. In he economic lieraure, his is called he missingmoney problem. Compeiive wholesale elecriciy markes and operaing reserves do no and perhaps cannocredibly provide adequae ne revenues o atrac invesmens in back-up generaion. This looming problem hasbeen considered careully in he Unied Kingdom (boh aspecs), and France (iniially only back-up capaciy, burecenly also more in general) and is being discussed in Germany. The UK Elecriciy Marke Reorm (July, ;Energy Bill, May ) consiss o wo key elemens and wo supporive mechanisms:

    . Feed-in Taris wih Conracs or Dierences, providing long-erm sable and predicable revenue sreams

    or low-carbon energy generaors (CCS, wind and nuclear energy). These aris provide variable paymenso hose ha generae he energy; hey receive hese paymens i he marke price is below a cerain srikeprice, and mus pay back i he marke price exceeds a cerain level;

    . A Capaciy Marke in which energy generaors are rewarded or having a cerain level o reliable capaciy (ora guaraneed reducion in capaciy), a number o years ahead. In his way, securiy o supply may be ensured

    . A Carbon Price Floor is se o preven he price o carbon rom alling below a cerain price level;. The nal elemen is an Emissions Perormance Sandard or new invesmens, obliging hem o remain

    below a cerain level o CO

    per kWh. As a consequence, no new coal-red power plans could be buil.

    The Energy Bill proposes dieren sages in which he new mechanisms gradually replace exising ones, whichhas been coined a complex web o regulaion (Keay, ). An imporan quesion is how his marke reormcould be relaed o he EU ETS, which already has se a cap on CO

    . All changes wihin he exising cap only make

    i easier or power plans locaed elsewhere in he EU o emi more. Anoher quesion reers o he possibiliy o

    inroducing hese changes in one counry only. Capaciy mechanisms may be expensive o implemen and, wihincreasing shares o inerconnecion, neighbouring counries would also bene rom he resuling adequaecapaciy, bu would no have conribued o he coss. This illusraes how dicul i has become o nd suiablesoluions in single counries wihin he European marke.

    A specic incenive sysem or renewable energy evenually would no be needed any longer, as he reorm aimsa general incenives or low-carbon power insead o specic ones or renewable energy. This s boh he UKand he Duch long-erm approach in which a CO

    reducion arge is he main policy aim, bu would mach he

    Danish and German long-erm ambiions o a lesser exen. I shows, however, ha he discussion on eecive,long-erm incenive sysems has o be pursued in ligh o he policy aims o he specic counries and heposiion renewable energy is expeced o ake in his broader conex.

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    pursue CO

    sorage on land in any orm, bu rahero concenrae on oshore CCS only. Germanyhad drawn up legislaion under which sorageor demonsraion purposes was made possible.This proposed legislaion received srong opposiionrom he ederal saes and only aer a poliicalsalemae ha lased or monhs, he Bundesag

    (Parliamen) and he Bundesra (Federal Council)reached an agreemen on i. Furhermore, allcounries have he problem ha CCS requires asubsequen sep ollowing he implemenaion odemonsraions, in a marke siuaion in which heETS carbon price probably will no be high enough ocompensae or he high addiional coss. In ocialpublicaions only he Unied Kingdom has seriouslyconsidered his problem in is Elecriciy MarkeReorm.

    . More generally, here is he quesion o wheher heelecriciy marke ramework is capable o providinghe righ incenives or invesmens in clean echnolo-

    gies and oers enough nance (see box The MissingMoney). The Unied Kingdom is convinced his is noye he case, as are many energy companies. Franceand Germany are discussing he evenual need oprovide addiional incenives or new capaciy inpower generaion. Such incenives cerainly will cosmoney and cos-bene analyses are very dependenon he assumpions made. More imporan, hequesion arises wheher i makes sense o considerhese issues in one counry only, as oher counries depending on he inerconnecion capaciy maybene rom addiional capaciy wihou having

    conribued o he coss. The European Commission(EC, ) recenly cauiously ook he iniiaive oaddress his issue, which so ar has no ye beendebaed a supranaional level.

    . Long-erm ranspor policies (nex o hose oninrasrucure) ocus on modal shis and elecricvehicles, bu he low-carbon ransiion or reighranspor receives litle atenion.

    . Non-COgreenhouse gas emissions, in general, and

    rom agriculure, in paricular, are only marginallydeal wih, alhough climae change scenarios in he

    Unied Kingdom and he Neherlands, or example,show ha a decrease in non-CO

    greenhouse gasemissions will be dicul o achieve.

    8 Reasons for cooperation

    In designing a low-carbon economy, counries are acedwih choices ha also depend on hose made by ohercounries (Figure .). Because he choices made mayhave exernal eecs, here is a need or alignmen,in paricular, on he ollowing issues. For all heseissues, a wide variey o choices are possible, wih very

    dieren consequences or echnical sysem inegraion,marke design and European coordinaion. This doesno necessarily mean ha counries are orced o makesimilar choices, bu some orm o coordinaion andinormaion sharing appears necessary. Counries canalso bene rom experiences resuling rom choicesmade in oher counries and may organise some orm ocollecive learning.

    . The increasing load on he grid wih inermitensolar and wind power requires balancing soluionso secure a sable European energy supply. This is a

    pressing issue. In addiion o shor-erm balancing bydemand-side managemen, here are basically woechnical soluions. Firs, srenghening he Europeanpower grid inrasrucure would enable long-disance

    Energetic Society

    Recenly, a new approach owards susainabiliy emerged, boh in poliical science and in acual policy-making.This has been coined by Hajer () in The energeic sociey. The essence o his sudy is ha socieies areanyhing bu passive. Modern socieies consis o auonomous ciizens and innovaive companies ha wano ac and change. Also many local auhoriies and public organisaions are willing o ake acion. The role ogovernmens is o esablish he condiions under which markes can work and ciizens can ac. This impliesa clear posiioning (wha do we wan o achieve), corresponding inrasrucure, regulaion, nancial insrumenssuch as environmenal axes, and monioring and eedback o observe wheher sociey is on rack o achieveis goals. I his is done clearly and predicably, hen socieies are in a posiion o make he ransiion owardsa clean economy. This heoreical concep appears new, bu could already be observed rom he early s incounries such as Denmark and Germany. Denmark has a srong radiion o local iniiaives. A recen example

    is ha people who live nex o wind urbines have been given he legal righ o become co-owners o heseurbines. In Germany, local iniiaives also play a srong role (ciies, local energy companies, ciizens cooperaivesocieies) and abou % o invesmens in renewable energy sources come rom privae paries.

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    exchange beween areas wih surpluses and hosewih decis. A second soluion consiss o seting upregional aciliies o sore power surpluses. Soragecan be mechanically (pumped sorage, compressedair, ywheels) or chemically (hydrogen, synheic

    naural gas). Chemical uels can be sored wihin hegas inrasrucure, in sorage anks or gas elds. Thevarious sorage soluions have dieren echnicalcharacerisics (capaci y, e ciency, sorage ime)and conribue in various ways o balancing variablepower rom renewable energy sources (RES).The rs soluion requires European-wideinvesmens in inrasrucure and close cooperaionbeween grid operaors. The second soluion could bearranged on a naional scale and implies a vision onsysem inegraion o RES power, possibly eveninvolving he power and gas grids. Counries ha op

    or sorage soluions would be less inclined o invesin improvemens o cross-border links wihin hepower grid inrasrucure, while hose ha op orbalancing over a European power grid would, in ac,largely depend on such invesmens. The quesion is

    wheher counries would have complee reedom ochoice in his mater.An addiional complicaing acor is when counrieshave a large capaciy o relaively inexible powergeneraion (nuclear or coal-red power plans). This

    ype o power supply delivers a high level o base loadelecriciy in he sysem a he expense o exibiliy.For counries ha choose o increase he share o RESpower, exibiliy is needed o cope wih he problemo inermitency. Counries ha have high levels obase load elecriciy are ineresed in a possibleexchange and rade o his inexible base loadelecriciy.

    . In urhering RES deploymen, varying rade-osexis beween he choices made by he individualcounries. I is well-known ha inernaionalcompanies end o inves in echnologies specically

    in hose counries where he relaionship beweenpro and risk is he mos avourable. However, heseare no necessarily he counries where, echnicallyspeaking, he priceperormance raio o a ech-nology would be he mos avourable. From a

    Figure .

    Issues and choices in the national climate and energy roadmaps

    1

    European electricity grid for transnational balancingBalancing variable solar

    and wind power supplyRegional solutions, such as chemical or mechanical storage

    2

    Harmonisation of support instuments at EU levelDeployment of

    renewable energyNational instruments linked to interest of domestic industries

    3

    Transnational infrastructure for large undersea aquifer storage

    Development carboncapture and storage

    National infrastructure mostly with storage under land

    4

    European system with charging points for EV-s/PHEV-sLow-carbon energy for

    road transportFilling stations for hydrocarbons, gas and hydrogen

    5

    Criteria for direct impacts; relatively high resource availabilityRegulating sustainability

    of biomassCriteria for direct and indirect impacts; relatively low resource availability

    6No signicant role; no long-term investments in infrastructureRole of natural gas in

    future fuel mixGas as signicant destination fuel in combination with biogas

    Issues Choices

    pbl.nl

    Source: PBL

    Issues for which very different choices are possible, with their consequences for technical system integration, market design and European coordination.

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    European perspecive, his may lead o echnicallyand economically subopimal soluions. Wih his inmind, he choices made by he counries are diculo undersand: he Unied Kingdom has decided ochange he incenive sysem (away rom quoaobligaion); conrasingly, he Neherlands considerswheher quoa obligaions migh be an improvemen,in relaion o is exising eed-in premium; andGermany is gradually combining is acclaimed eed-inari wih a eed-in premium. Evenually, he choicewill be beween oping or an economically opimalinroducion o renewable energy echnologies (RET)rom a European perspecive, or ollowing a more

    naional sance in which domesic benes, such asjob creaion and securiy o supply, coun heavily, aswell. The quesion o RET incenives may be par o amore general discussion on elecriciy marke reormha has led o cerain conclusions in he UniedKingdom. A naional marke reorm could besubopimal rom boh a naional and a Europeanpoin o view. A higher eeciveness could beobained i a more join approach could be ollowed.

    . I counries would choose o apply carbon capureand sorage echnology o miigae greenhouse gasemissions, hey would have he choice o sore ha

    CO below land or under he seabed. Sorage belowland is mosly a naional soluion, while under heseabed oen requires inernaional collaboraion,wih he larges European sorage poenial inNorwegian aquiers under he seabed. Sorage belowland oen encouners srong resisance rominhabians o hose areas and local and regionalauhoriies. Sorage undersea oen requires closeinernaional cooperaion.

    . Passenger vehicles in a low-carbon economy may bepowered by elecriciy (elecric vehicles (EVs) orplug-in hybrid elecric vehicles (PHEVs)), or by RESgeneraed chemical uels (hydrogen, synheic naural

    gas). The associaed inrasrucures and invesmensare very dieren. From he perspecive o iner-European mobiliy and cos-eecive inrasrucureinvesmens, counries should make coordinaeddecisions on his subjec.

    . Land-use changes relaed o he culivaion obio-energy crops may have signican direc orindirec impacs on greenhouse gas emissions,landscape values, biodiversiy and waer qualiy.The degree o regulaion o he susainabiliy obiomass, in general, and relaed land-use changes, inparicular, may have a srong impac on he amoun

    o available biomass on he marke. Crieria haexclude all indirec eecs (especially indirecland-use change (ILUC) emissions) signicanly reducehe poenial availabiliy o bio-energy crops, wih asubsequen impac on long-erm energy sraegies.

    Counries may have very dieren visions, bu as heyare operaing wihin a single marke, here is a needor uniorm susainabiliy crieria.

    . A nal issue is he envisaged role o gas in he uureuel mix. The views in his dier considerablybeween counries. Denmark aims a graduallyphasing ou naural gas, decreasing gas consumpionand replacing he remaining par wih biogas. TheUnied Kingdom and he Neherlands aim or gas obe no only a ransiional, bu also a desinaionuel, albei no only in he orm o naural gas bualso by increasing shares o biogas. These counriesdo no oresee a % biogas share, however, and

    hey are uncerain abou he available amoun osusainable biomass in any orm. These dierenvisions could go hand in hand. I is no necessary orhe counries o have a shared vision, bu only wherenaional neworks are involved. Transmission sysemoperaors or gas which are increasingly o aransnaional naure have o know he exen owhich invesmens in inernaional neworks remainnecessary.

    9 Conclusions

    The issues on cooperaion menioned in he previoussecion were all recognised by expers rom naionalgovernmens and businesses during wo workingconerences, organised mid-, on he roadmapso norh-wesern European counries. However, noall issues were given he same prioriy. Regarding hephases o he ransiion owards a low-carbon economy,in paricular, balancing variable RES power (Issue ),urhering sysems or RES deploymen (Issue ), and herole o gas in he uure energy mix (Issue ) were seenas having he mos prioriy. These issues were suggesedas being good saring poins or discussing urher

    ransnaional cooperaion. Issues and were alsoaddressed in a recen communicaion by he EuropeanCommission on renewable energy (EC, ).

    Expers have poined o he ac ha hese issues are noseparae. Finding soluions o he inermitency problemcaused by he increasing load o variable RES power in hegrid (Issue ) could also be linked o he discussion on herole o gas in he uure energy mix (Issue ). The discus-sion on incenive sysems or renewable energy ech-nologies (Issue ) is par o a broader discussion on hedevelopmen o he inernal power marke wihin he

    conex o he ransiion owards a low-carbon sociey.The discussion on decarbonisaion o he ranspor secor(Issue ) is also linked o Issue , on he susainablepoenial supply o bio-energy.

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    The economic, poliical and energy sysem inerconnec-ions beween norh-wesern and oher Europeancounries, which are he idenied reasons or collabora-ion, ask or consideraion o he European dimension inhe developmen o naional low-carbon ransiion plans.This is urher enhanced by Europeanisaion rends inenergy marke developmen, energy regulaion, andinrasrucure developmen. By reinorcing cooperaionhrough he alignmen o choices, coordinaion, andinormaion, and by bes-pracices sharing, he counriescould make a large sep owards developing cos-eecive low-carbon ransiion plans. Regional plaorms,such as or he counries around he Norh Sea, may

    suppor hese orms o cooperaion.

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    Reerences |

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    The United KingdomBowen A and Rydge J. (). Climae-Change Policy in

    he Unied Kingdom. OECD Economics DeparmenWorking Paper No. .

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    Annex

    Belgium Denmark France Germany Netherlands United

    Kingdom

    Area (, km) 30.5 43.1 544.0 357.1 41.5 243.1Populaion (million) 10.95 5.56 65.08 81.75 16.66 62.44

    GDP (euros/capia) 32,600 42,500 29,800 30,300 35,400 27,400

    GHG inensiy(b) (g CO eq per GDP in purchasing power sandard)

    437 376 317 413 373 352

    Energy inensiy (oe/, euros GDP) 213 104 167 150 182 115

    Gross inland energy consumpion (% ne impors)CoalOilNaural gas

    81.69599

    98-55.2-91.7

    91.797.7

    100.9

    74.195.287.9

    124.597.1

    -61.2

    77.88.6

    31.6

    Ne elecriciy impors (GWh) -1,835 334 -25,934 -12,273 4,891 2,861

    Share RES in gross nal e nergy con sumpion (%) 4.6 19.9 12.3 9.8 4.1 2.9

    Share RES in gross elec rici y consump ion (%) 6.1 27.4 13.5 16.2 9.2 6.7

    Elecriciy prices households (Nov. , incl. ax,consumpion kWh/year, in euros/ kWh) 22.2 30.8 14.8 27.8 22.0 16.8

    Elecriciy prices indusry (Nov. , incl. ax,consumpion GWh/year, in euros/ kWh)

    11.8 10.9 7.6 13.4 11.8 11.5

    Noe:

    (a) Main source: EUROSTAT daabase

    (b) Daa on greenhouse gas (GHG) inensiy rom EEA (

    (c) Elecriciy prices: Europes Energy Poral, htp://www.energy.eu/

    Annex 1. Basic statistics describing the countries various points of departure

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    Annex |

    Annex 3. Contribution by the clean energy technology sector to nationaleconomies

    Belgium Denmark France Germany Netherlands United

    Kingdom

    Onshore wind energy poenial(a)(MWh/capia)

    40.22 135.68 81.28 49.11 32.16 71.10

    Oshore wind energy echnicalpoenial (b) (MWh/capia)

    23.15 490.51 30.30 20.92 144.8 77.30

    Annual global irradiaion (c)(kWh/m)

    1,0971,107

    1,1091,164

    1,157

    1,798

    1,1171,242

    1,0861,124 1,0181,240

    Land use in agriculure (ha/capia)(d) 0.15 0.50 0.46 0.23 0.12 0.26

    Woodland cover (ha/capia)(d) 0.28 0.77 0.85 0.44 0.23 0.39

    Hydropower (MWh/capia) (e) 0.03 0.00 0.95 0.25 0.01 0.06

    Noe:

    (a) EEA, . Daa were used rom EEAs Table . (represening he generaion poenial or wind energy on land in he oal o all cos

    classes by ) and aken rom he mos recen Eurosa daa (), in his annex expressed per capia.

    (b) EEA, . Daa were used rom EEAs Figure . (represening he unresriced echnical poenial or oshore wind energy by ,

    based on average wind speed), and aken rom he mos recen Eurosa daa (), in his annex expressed per capia.

    (c) JRC phoovolaic geographical inormaion sysem (htp://re.jrc.ec.europa.eu/pvgis/).

    (d) Eurosa, . Daa on agriculure and woodland

    (e) EurObservER geographic inormaion sysem (htp://www.eurobserv-er.org/)

    Annex 2. Potential domestic renewable energy resources

    Belgium Denmark France Germany Netherlands United

    Kingdom

    Clean echnology added value(million euros)

    1,385 6,280 2,942 22,649 1,197 1,593

    Clean echnology added value asshare o GDP (percenages)

    0.42 3.02 0.16 0.93 0.21 0.08

    Noe:

    Inormaion provide by WWF and colleced by Roland Berger Sraegic Consulans or he WWF projec Clean Economy, Living Plane.

    Sudy resuls, including background and mehodology, published by Van der Slo and Van den Berg ().

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    Belgium Denmark France Germany Netherlands United

    Kingdom

    Climate change considered to be the single most serious problem acing the world as a whole (percentage)(a)

    24 31 20 25 18 18

    Availability o energy considered to be the single most serious problem acing the world as a whole (percentage)(a)

    8 4 4 11 7 8

    What do you think are the two most important issues acing the EU at this moment? (percentage)(b)

    Answer: climae change 7 12 4 7 5 5

    Answer: energy supply 7 6 9 12 4 5

    In your opinion, who within the EU is responsible or tackling climate change? (%; multiple answers possible)(a)

    Naional governmens 42 52 52 50 25 38European Union 54 45 49 48 28 22

    Business and indusry 47 39 41 57 25 16

    You personally 34 38 29 36 20 20

    Fighting climate change and using energy more efciently can boost the economy and jobs in the EU (%)(a)

    Toal Agree 86 88 83 79 71 71

    Toal Disagree 11 9 10 14 22 18

    Don know 3 3 7 7 7 11

    Do you think that in people will be using renewable energy sources, suc h as wind and solar power, more than they do

    now? Yes, denitely (%)(a)

    56 82 42 74 70 54

    Do you think that in cars will still be using petrol or diesel or will cars be uelled in a more efcient way? (%)(a)

    A more ecien way 86 78 77 73 81 74

    Perol or diesel 12 18 15 14 14 18

    Don know 2 4 8 13 5 8

    Noe:

    (a) Special Eurobaromeer , Climae Change . (b) Eurobaromeer . Spring .

    Annex 4. Public opinion on climate and energy issues

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    Annex |

    Annex 5. Overview of main policy instruments as indicated by the six countries,to be used to support the transition towards a low-carbon economy

    Electricity Buildings Industry Transport

    Belgium F: minimum priced greencericaes

    L/S: cericaes (regional) orRES and combined hea andpower generaion (CHP)

    F: ax reducioninsulaion measures

    V: benchmarking orvolunary agreemenswih large indusry andaudis or small indusry

    F: ax reducion or low-emission vehicles

    Denmark F: subsidy programmes or RESandbiomass CHP

    F: grid arisL/S: eciency obligaion orenergy companies

    F: subsidy programmesor hea

    F: securiy o supply ax

    on space heaingF: suppor programmesor large-scale heapumps

    F: energy and CO ax

    V: energy savingsagreemens

    F: uel eciencydeermines regisraionax or new cars

    F: subsidy or cleandemon-sraion projecs

    France F: eed-in ari

    F: ax exempions and axcredis or solar boilers andsolar PV

    L/S: hea eciencysandards or newbuildings

    L/S: biouel use inranspor .% by

    Germany F: eed-in ari

    F: suppor schemes orinvesmens in oshore windparks

    F: RD&D programmes orrenewable energy, smar gridand sorage

    L/S: legally binding shares orrenewable energy

    L/S: simplicaion o spaialplanning or renewable energy

    L/S: gradual closing o nuclearplans up o

    F: suppor schemes andax deducions orenergy-ecienrenovaions

    L/S: % o % energyeciency in renovaion

    o exising buildingsL/S: low-energy buildingobligaion

    F: subsidies or energy-inensive indusries

    V: promoiono coninuousimprovemens oeciency sandards

    (op-runnerprogramme)

    V: million elecricvehicles by

    Netherlands F: eed-in premium orrenewableenergy

    V: sree-by-sreeapproach (localiniiaives)

    V: agreemens wihindusry on energyeciency

    V: green deals

    L/S: biouel use inranspor % by

    F: elecric vehicles

    United Kingdom F: radable cericaes orlarge-scale

    renewable energyL/S: naional carbon price oor

    L/S: conracs or dierences:long- erm conracs providingsable revenue or wind andnuclear energy, and CCS

    L/S: Emissions PerormanceSandard or new power plans

    F: climae change levy

    F: house insulaion

    simulus programme orlow-income households

    F: green invesmenbank

    L/S: zero-carbon newhouses by

    L/S: whie cericaes

    F: condiional energy axor indusry

    F: naional carbon priceoor ()

    F: renewable heaincenive

    F: Local SusainableTranspor Fund

    o improve cyclinginrasrucure

    F: nancial insrumen; L/S: legal insrumen (incl. sandards); V: volunary (aciliaing and communicaive) insrumens

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