Reducing emissions in the power sectorDidier Sire

Executive Vice President Strategy at GDF SUEZ Energy Europe

April 25th, 2013

GHG emissions are decreasing thanks to the crisis … not to a strong and effective climate policy

The current market conditions are very unfavorable for CO2 emission reduction– CO2 prices have collapsed– Existing low-carbon emitting CCGT not competitive with coal plants – No appropriate price signal for low carbon investments– Huge concerns on EU-ETS future since April 16th

The situation of gas is very critical while it should play a key role for environmental policy and security of supply Gas plants are pushed away of the merit order Ongoing process of “Mothballing / Decommissioning” of non profitable gas plants

Current situation

2 / April 25th, 2013

As a result

To reach the objective of decarbonisation in the power sector by giving a clear CO2 price signal leading to promote gas

technologies investments US situation illustrates how switching from coal to gas can rapidly and economically contribute to GHG emissions reduction.

It means that:– Measures have to be taken in order to keep existing thermal assets with lower

emissions in the merit order – Appropriate price and political signals must be sent to investors to allow them to

invest in gas

In the long term, the energy mix must be balanced with:– RES supported by coordinated, coherent and fair support schemes aiming at a

progressive integration into the market of mature technologies. – Gas developed in a well designed and coordinated CRM at European level in order to

guarantee the security of the European power system

Challenge

3 / April 25th, 2013

What Europe can bring

An improved & coordinated European framework • Providing long term visibility for investors

• Coordinating CRM systems

• Avoiding “renationalisation” of energy policies

A reshaped European climate policy• New proposal to enforce a stronger carbon price signal must be

urgently studied by policy makers

A new market design • The EOM is not sustainable for the system and investors are not

confident enough to invest4 / April 25th, 2013