The Future of Energy Union. European integration, Italian ... · European integration, Italian opportunities and Regions contribution ... Electricity interconnection capacity

Cagliari, 27th May 2016Eloy Alvarez PelegryDirector of the Energy ChairOrkestra-Basque Institute of Competitiveness

Member of the Royal Academy of Engineering

The Future of Energy Union.

European integration, Italian opportunities and Regions contribution

"Towards the Energy Union. The Contribution of the Regions”

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INDEX

q ENERGY UNION§ “Approaches” to the Energy Union§ Motivations and Dimensions§ Lines of Action§ Road map and indicators§ Main Issues. A Summary and a personal approach

q REGIONS§ An approach of Interreg § Energy. Proximity and Contiguity. Electricity Interconnections and gas pipes § Energy. From Contiguity to Interaction. The case of LNG§ Competitiveness and regional specialization strategies (RIS 3)§ The case of the Basque Country 3E-2025§ Territorial competitiveness and Energy competitiveness§ Main posible topics of regional cooperation related to energy

q THE ROLE OF REGIONS IN ENERGY IN THE CONTEXT OF THE ENERGY UNION. A REFLECTION AND SOME SUGGESTIONS

§ Main issues and topics§ Road Map § A proposal to start a dialogue

"Towards the Energy Union. TheContribution of the Regions”

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q ENERGY UNION


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q ENERGY UNION§ “Approaches” to the Energy Union§ Motivations and Dimensions§ Lines of Action§ Road map and indicators§ Main Issues. A Summary and a personal

approach


Motivations


Dimensions

Lines ofaction Road Map

Indicators

§ “APPROACHES” TO THE ENERGY UNION

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MOTIVATIONS AND DIMENSIONSMAIN MOTIVATIONS

Energy: secure, sustainable,competitive, affordable

European firms: creditworthy andinnovative

European labour force: qualified

Prices: reflecting needs andobjetives on the long run

Citizens: empowerment

From fossil fuels to renewablesand from centralized todescentralized generation

FIVE DIMENSIONS

ü Energy security, solidarity,reliability

ü Internal Energy Market (IEM)

ü Energy efficiency and moderationof demand

ü Research, innovation andcompetitieness

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§ LINES OF ACTION

1. Compliance with legislation2. Diversification on gas supply3. Intergovermental agreements to comply with EU Legistation 4. Energy infrastructures5. Internal Energy Market6. Development of the Third Energy Package7. Regional approaches. Key for market integration 8. Greater transaparency in energy costs and prices9. Energy savings: 27% from 2015 to 203010. Energy savings and improvements in buildings11. Energy efficiency and descarbonization in transport systems12. Reduction in GHG emissions13. 27% renewables in 2030 at european level14. R&D in energy for technological leadership15. External diplomacy and policy. A single voice in Climate&Energy


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§ Infrastructure. 10% interconnection. PCI - (1) -• Electricity‒ Market design. Renewables integration‒ SoS

- -

§ Retail markets - -

§ Gas. SoS, LNG Strategy (1) - -• Regulation. Revision of ACER functioning - -

• Renewables. 2030, auto consumption, bioenergy, energywaste

- -

• Climate action. Revision of ETS, LULUCF - (2) -• Transport • Energy efficiency. Buildings, products, finance - -

• Heating and cooling - -

• External policy on climate and energy ‒ Diplomacy, interchange of information on

intergovernmental agreements. (Ukraine,Turkmenistan, Azerbaijan)

‒ Reinforce of Euro Mediterranean cooperation in EE andRES

-

§ Industrial competitiveness‒ Strategic European plan on energy technologies ‒ Strategic Agenda on R&D in transport‒ Energy cost and prices‒ Commercial policy for exports of technologies

- -

§ Transversal measures‒ Revision of subsidies‒ European strategy report (Euromed road map, energy

storage, southern gas corridor)

- -

§ Nuclear energy- -

(1) Depends on the location of the region (2) Action can be taken at regional level for decreasing of GHG

§ Infrastructure. 10% interconnection. PCI - -

• Electricity‒ Market design. Renewables integration‒ SoS

- -


§ Gas. SoS, LNG Strategy - -

• Regulation. Revision of ACER functioning - -


- -

• Climate action. Revision of ETS, LULUCF - -

• Transport

• Energy efficiency. Buildings, products, finance - -





-


- -



- -



Macroeconomicimportance of energysector

Valued added of energy sectorEmployment in energy sector

Energy security,solidarity and trust

Net import dependencyAggregate country-specific Supplier Concentration IndexN-1 rule for gas infrastructure

A fully integratedinternal energy market

Electricity interconnection capacityMarket concentration index for power generationMarket concentration index for wholesale gas supplyWholesale electricity pricesWholesale gas pricesAnnual switching rates on electricity retail marketsAnnual switching rates on gas retail marketsEnergy poverty index

Energy efficiency andmoderation of demand

Primary energy consumptionPrimary intensity of the economyFinal energy intensity in industryFinal energy consumption per m2 in residential sector, climatecorrectedAverage CO2 emissions from new passengers cars

Decarbonisation Gap between non-Emissions Trading System greenhouse gas emissionsprojections and target in 2020Gap between latest proxy inventory of greenhouse gas emissions in thenon-Emissions Trading System sector and targetsShare of renewable energy in percentage of gross final energyconsumptionGreenhouse gas intensity of the economy

Research, innovationand competitiveness

Share of energy and environment in total public civil R&D spendingLow-carbon technology patents application per million inhabitantsReal unit energy costs

ROAD MAP INDICATORS

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§ MAIN ISSUES. A SUMMARY

ü Internal Energy Market (I.E.M): (interconnections,electricity and gas markets)

ü Decarbonization (GHG)ü Energy efficiency and renewable Energyü Energy security, solidarity and trustü Research and innovationü Competitiveness


I.E.MInterconnectionsElectricity and GasMarket


Decarbonization

Competitiveness

Researchand

Innovation

Energyefficency

§ MAIN ISSUES. A SUMMARY

SecuritySolidarityTrust


§ ENERGY UNION. MAIN ISSUES. A SUMMARY, AND A PERSONALAPPROACH

Competitiveness

GHGEnergy EffiencyRenewablesBuildingsTransport

Research & Innovation

SolidarityRegional Cooperation

IEM

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q REGIONS


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q REGIONS

§ Interreg evolution§ Energy. Proximity and Contiguity. Electricity Interconnections and

gas pipes § Energy. From Contiguity to Interaction. The case of LNG§ Competitiveness and regional specialization strategies (RIS 3)§ The case of the Basque Country 3E-2025§ Territorial competitiveness and Energy competitiveness§ Main posible topics of regional cooperation related to energy


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§ INTERREG EVOLUTION

Source: European Union (2015)

v Progressive enlargment of elegible areas

INTERREG I and V elegible áreas. A comparison

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ü Support programme for cross-border cooperation dates back to mid-1980s

ü 1987: the Association of European Border Regions is foundedü Five phases. The last one from 2014 to 2020 is part of the EU´2020

strategy

ü Involve local and regional stakeholders in eliminating barriers to thefree move of goods, people, capital and services

ü Diminish the influence of national borders: peripheral regionsü Strengthen economic, social and territorial cohesion

§ Objectives

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§ From proximity to network§ From contiguity to interaction§ Continuous increase in the importance of

regions



The three strands of Interreg*

Source: INTERACT. The Community Initiative INTERREG:LRDP LTD. Expost Evaluations

*Beginning with Interreg II

v Some concepts are very applicable to energy in the XXICentury

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§ ENERGY. PROXIMITY AND CONTIGUITY. ELECTRICITY INTERCONNECTIONS ANDGAS PIPELINES

Source: GIIGNL, GLE (2015) Source: ENTSOE (2016)

Gas infrastructures in Europe Electrity infrastructures in Europe

v Energy interconnections are the phisical base for the Internal Market Enlargementv Cooperation between contiguous regions are key for a progressive development of

energy markets based on electricity grids pipelines

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§ ENERGY. FROM CONTIGUITY TO INTERACTION. THE CASE OF LNG

Source: GIIGNL, GLE (2015)

v Since the 70´s LNG and its developments maybe a clear exampleof the change from proximity to network and from contiguity tointeraction

Existing and planned LNG terminals inEurope

Comparison of two European regasificationplants

BBG (Bilbao, Spain) PANIGAGLIA (Fezzano, Italy)

3 LNG storage tanks 2 LNG storage tanks

Storage capacity: 450,000 m3 Storage capacity: 100,000 m3

Send out rate: 800,000Nm3/h -

Jetty capacity: vessels of270,000m3 storage capacity

Jetty capacity: LNG carriers from25,000 m3 up to 65,000/70,000 m3

Truck tank loading station todeliver LNG to satellite plants byroad and the necessary facilitiesfor LNG carrier load +connections to pipelines

Connection to national gaspipeline network

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REGIONAL SPECIALIZATIONSTRATEGIES (RIS3)

Integrated agendas for the Economictransformation

- Support of the policy and investmentsto the priorities and needs of the territory-Take advantage of the strengths,competitiveness advantages andexcellence-Support technological innovation, basedon practice; to stimulate privateinvestmentFoster innovation and experimentationincluding all the agentes

§ COMPETITIVENESS AND REGIONAL SPECIALIZATION STRATEGIES(RIS3)

COMPETITIVENESS

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§ THE CASE OF THE BASQUE COUNTRY 3E-2025

ü Relevant role of the Basque Government developing continous Energystrategies since 80´s

ü Energy policies coordinated with other territorial policiesü As a consequence: transformation of the Basque energy sectorü Preparing the new Energy strategy: 3E-2025

ü Long term: 2050 (subject to approval by the Parliament)‒ Zero oil consumption in 2050‒ GHG reduction

‒ 2030 40% vs. 2005‒ 2050 80% vs. 2005

‒ By the end of the XXIst century no fossil fuels, only renewables


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§ THE CASE OF THE BASQUE COUNTRY 3E-2025

ü Main Objectives

‒ Promotion of the competitiveness of the Basque network of science andtechnology related to energy with the RIS3 strategies

‒ 2,790 M€ to be invested in 10 years (mainly energy effiency and renewables)‒ Exemplifying measures in the Basque Public Administration of energy

consumption in its facilities (25% in 10 years), 40% of renewables in publicbuldings


2025 Objectives (%) (Save as indicated)Base Years Primary

Energy (PE)(*)

RenewableFinal Energy

Cogeneration GHH

2008 - - - -2013 - 7,5 - -2015 - - 20 -2025 - + 16 31 - 1,6 Mton/yr

(*) In 2025 the same PE as in 2015

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§ The CASE OF BASQUE COUNTRY 3e-2025


Basque Energy Agency(EVE)

Energy Agency PuntoEnergia Provincia di Sassari

Energy strategydevelopment

Energy strategydevelopment

Gas -Renewables RenewablesEnergy efficiency Energy efficiency in supplyQuality of the electricsystem and security ofsupply

Ensure grid stability andenergy security

Reduce oil dependency intransport

Decrease reliance on oilproducts

Technological and industrialdevelopment

Creation of the RES Clusterv The Basque Energy Agency- Ente Vasco de Energía (EVE) was

founded in 1982v EVE has a key role in the development of the Basque Energy

strategy and support and implement energy policies

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§ Territorial competitiveness and energy competitiveness

ü Analysis of the industrial and energy transformation of the BasqueCountry in the context of a decarbonised and competitive economy

ü Energy is a key issue in Economic competitiveness: as an input and as adriver for industrial competitiveness

ü Electricity, gas and oil infrastructures: guarantee high quality of supplyü From 2000, the price of oil, electricity and gas rose more or less

continuouslyü Industry accounted for between 48% in 2000 and 45% in 2012 of total

energy consumption (Basque Country)ü For Spanish energy intensive industries, the price of energy has

increased by 19% more than the price of the products they market(2010-2014)

ü Greater impact on those industries that have to compete oninternational markets


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§ MAIN POSIBLE TOPICS OF REGIONAL COOPERATIONRELATED TO ENERGY

‒ Decarbonization

o Energy Efficiencyo Renewables

‒ Research&Innovation

‒ Territorial competitiveness and EnergyCompetitiveness


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q THE ROLE OFREGIONS


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q THE ROLE OF REGIONS IN ENERGY IN THECONTEXT OF THE ENERGY UNION. AREFLECTION AND SOME SUGGESTIONS

§ Main issues and topics§ Road Map § A proposal to start a dialogue


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§ MAIN ISSUES AND TOPICS


Main Issues Identified Topics. Preliminary List Role of regions

Decarbonization of Energy andEconomy

-Energy Efficency (EE)Buildings. Heating & Cooling. Design of buildings and Urban Development-Renewables (RES). Primary and finalconsumption. Wind, solar, marine,bioenergy, (energy waste)Decentralized generation. Smart grids-Transport. Mobility

Research and Innovation -Research&innovation proyects-Starts Ups in energy

Competitiveness of Regions -Monitoring of energy prices

Energy Security, Solidarity &Trust at European Level

-D ev e lo p r eg io na l c o o pe r at io ncombining interactions and networking

Internal Energy Market-Energy infrastructure-LNG Strategy-Electricity & Gas Market

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ENERGY UNION. ROAD MAP AND MEASURES. POTENTIAL INTEREST. ROLE OF REGIONS (A PROPOSAL FOR DISCUSSION)

High Medium * Low§ Infrastructure. 10% interconnection. PCI - (1) -• Electricity‒ Market design. Renewables integration‒ SoS

- -


§ Gas. SoS, LNG Strategy (1) - -• Regulation. Revision of ACER functioning - -


- -

• Climate action. Revision of ETS, LULUCF - (2) -• Transport • Energy efficiency. Buildings, products, finance - -





-


- -



- -



ENERGY UNION. ROAD MAP AND MEASURES. POTENTIAL INTEREST. ROLE OF REGIONS (A PROPOSAL FOR DISCUSSION)

High Medium * Low§ Infrastructure. 10% interconnection. PCI - -

• Electricity‒ Market design. Renewables integration‒ SoS

- -


§ Gas. SoS, LNG Strategy - -

• Regulation. Revision of ACER functioning - -


- -

• Climate action. Revision of ETS, LULUCF - -

• Transport

• Energy efficiency. Buildings, products, finance - -





-


- -



- -



§ ROAD MAP

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§ A PROPOSAL TO START A DIALOGUE


1 Based on the Energy Union Road Map and Measuares. Potencial Interest/Role of Regions. A proposal for Discussión. (Seepage 28) 2 Main Issues and Topics. (See page 27)

v Indentify interest (and potencial financing) for a workshop in Bilbao

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THANK YOU!


Ø Information about the Energy Chair of Orkestra:http://www.orkestra.deusto.es/es/acerca-orkestra/catedra-energia

Ø Information about the Energy publications of Orkestra:http://www.orkestra.deusto.es/es/investigacion/publicaciones

http://www.orkestra.deusto.es/es/acerca-orkestra/catedra-energia

http://www.orkestra.deusto.es/es/investigacion/publicaciones



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The Future of Energy Union. European integration, Italian ... · European integration, Italian opportunities and Regions contribution ... Electricity interconnection capacity