Energy Supply in the European Union Daniel Erni and Stefan HorlacherHelsinki, 5th October 2005.

Energy Supply

in the

European Union

Daniel Erni and Stefan Horlacher Helsinki, 5th October 2005

Introduction

EU Energy Policy

Energy Sources

Oil

Natural Gas

Solid Fuels

Nuclear Energy

Renewable Energy Sources

Supply Security

Reduction of DependenceSaving energy

Alternative Sources

Energy Supply in the EUA presentation by Daniel Erni and Stefan Horlacher

Helsinki, October 5, 2005

Introduction

• 1951: European Coal and Steel Community (ECSC)

• Belgium, West Germany, France, Italy, Luxembourg, Netherlands

• First step of European integration

• 1957: European Atomic Energy Community (Euratom)

• ECSC-countries

• Article 1 of the treaty: «It shall be the task of the Community

to contribute to the raising of the standard of living in the

Member States and to the development of relations with the

other countries by creating the conditions necessary for the

speedy establishment and growth of nuclear industries.»

Introduction

EU Energy Policy

Energy Sources

Oil

Natural Gas

Solid Fuels

Nuclear Energy


Supply Security


Alternative Sources



EU Energy Policy

• No common European responsibility except from ECSC and Euratom

• Impacts of other policies on energy sector

• Obstacles for a common energy policy:

• Different availability of energy sources

• The use of nuclear energy

• The degree of federal control over energy supply

• Crucial importance Green Paper

Introduction

EU Energy Policy

Energy Sources

Oil

Natural Gas

Solid Fuels

Nuclear Energy


Supply Security


Alternative Sources



Energy sources

EU primary energy balance (1998)

Source: European Commission, 2002.

Introduction

EU Energy Policy

Energy Sources

Oil

Natural Gas

Solid Fuels

Nuclear Energy


Supply Security


Alternative Sources



Energy Sources: Oil

• Reserves

• Europe (incl. Norway): < 2% of the world‘s oil reserves

• Production

• Demand can‘t be covered by production in the Northern Sea

• Cost-intensive production

• Demand

• Rise in the last decades

• Transportation sector: ~100% dependence on oil

• Trend to replacement by alternative fuels

• Imports

• 80% of oil demand imported; share is expected to grow

• Weak position, high dependence

• Main suppliers: OPEC countries, Russia, Norway

Introduction

EU Energy Policy

Energy Sources

Oil

Natural Gas

Solid Fuels

Nuclear Energy


Supply Security


Alternative Sources



Energy Sources: Oil


Origin of oil imports in the EU

Introduction

EU Energy Policy

Energy Sources

Oil

Natural Gas

Solid Fuels

Nuclear Energy


Supply Security


Alternative Sources



Energy Sources: Natural Gas

• Compared to coal/oil: High effectiveness, environment-friendly

• Reserves

• EU or close to it: 80% of the world‘s oil reserves

• Production

• Rising world wide, declining in the EU dependence rises

• Prices are expected to increase (transportation costs)

• Demand

• Imports

• Main suppliers: Russia, Norway, Algeria

• Further suppliers have to be found Higher prices

Own diagram – Data source: European Commission (undated).

Introduction

EU Energy Policy

Energy Sources

Oil

Natural Gas

Solid Fuels

Nuclear Energy


Supply Security


Alternative Sources



Energy Sources: Solid Fuels

• Reserves

• Huge reserves important for supply security

Source: Euracoal, 2005.

Introduction

EU Energy Policy

Energy Sources

Oil

Natural Gas

Solid Fuels

Nuclear Energy


Supply Security


Alternative Sources



Energy Sources: Solid Fuels

• Production

• Rising world wide, declining in the EU

• Low productivity in Europe (mining in big depths)

• Price level above world market price

• Regain of attractivenews by new environment-friendly technologies

• Demand

• Demand decreasing

• Replacement by other energy sources in households

• Steel industry dropped its demand

• Medium term: Increase in demand possible after 2010

• Imports

• Imported coal is cheaper

• Main exporters to the EU: Australia, Canada, USA

Introduction

EU Energy Policy

Energy Sources

Oil

Natural Gas

Solid Fuels

Nuclear Energy


Supply Security


Alternative Sources



Energy Sources: Nuclear Energy

• Production

• 1/3 of electricity consumption produced by nuclear energy

• France: 75% of electricity produced by nuclear energy

• Important for many new Member States

• Finland is planning to build a new nuclear power station

Source: Microsoft Corporation, 2005.

Introduction

EU Energy Policy

Energy Sources

Oil

Natural Gas

Solid Fuels

Nuclear Energy


Supply Security


Alternative Sources



Energy Sources: Nuclear Energy

• Reserves

• Uranium reserves spread all over the world

• Long term production assured (extensive amounts of secondary sources)

• Demand

• EU demand is stable at 20.000 tons p.a.

• Future demand depends on development of renewable energy sources

• Imports

• In the short run: limited quantities in the EU

• In the long run: more imports required

• Largest suppliers: Russia, Niger, Australia, Canada

• Some Member States have taken the political decision to replace

nuclear energy by alternative energy sources

• Reasons: storing of nuclear waste & possible accidents (cf. Chernobyl)

• But: alternative fuels are not easily available & cause higher pollution emissions

Introduction

EU Energy Policy

Energy Sources

Oil

Natural Gas

Solid Fuels

Nuclear Energy


Supply Security


Alternative Sources



Energy Sources: Renewable Energy Sources (RES)

• Major sectors: wind, solar thermal, hydro and biomass

• Advantages:

• Naturally available or quickly replacable

• No imports needed

• Less damaging to the environment

• Unequal and insufficent use in the EU

• EU Commission: 12% (instead of 6%) of energy demand covered by RES in 2010

• Early stadium of development Incentives/Support required

Introduction

EU Energy Policy

Energy Sources

Oil

Natural Gas

Solid Fuels

Nuclear Energy


Supply Security


Alternative Sources



Energy Sources: Renewable Energy Sources (RES)

• Hydropower

• 90% of total production out of RES

• 14% of electricity demand covered by hydropower

• Potential almost tapped

• Wind

• Fast growing technology

• Potential: covering 30% of electricity demand

• Problems: stable production, efficient saving, „visual landscape pollution“

• Solar Thermal

• Often used in heating building and water

• Problems: high investment costs and seasonal fluctuations

• Biomass

• Agriculture as the main source

• Potential: covering 20% of current energy demand

Introduction

EU Energy Policy

Energy Sources

Oil

Natural Gas

Solid Fuels

Nuclear Energy


Supply Security


Alternative Sources



Supply Security

• Several risks: political crises, technical incidents supply interruptions

• Impacts on economy, society and living standard (cf. oil crises in 1970ies)

• Means to lower the risk of an energy shortage:

• Economically: mechanisms of pricing and tax law decrease demand

• Technically: use of other energy sources to close the supply gap

• Politically: campaigns for energy saving or use of existing reserves

• Reserves

• Reserves for > 1 year recommended in the nuclear sector (Euratom)

• Harder competition and common market leads to a reduction of reserves

• Risk Reduction

• Dependence on a single sector has decreased (oil: 60% to 40%)

• Growing transport sector: high dependence on oil, intensive

research on

new technologies

• New networks and decentralised production

• Diversify energy sources and suppliers

Introduction

EU Energy Policy

Energy Sources

Oil

Natural Gas

Solid Fuels

Nuclear Energy


Supply Security

Reduction of Dependence

Saving energy

Alternative Sources



Reduction of Dependence

Energy balance of the EU-30


Introduction

EU Energy Policy

Energy Sources

Oil

Natural Gas

Solid Fuels

Nuclear Energy


Supply Security


Alternative Sources



Reduction of Dependence: Saving energy

• Lower consumption smaller dependence on imports

• Global energy efficiency: just 25%

• European Commission: improve energy efficiency by 1% p.a. till 2010

• > 40% of energy consumption is used in buildings

reduction by 22% till 2010 possible

• Lighting: 30 – 50% could be saved by energy saving bulbs

• Better balance of means of transport shift from road to rail

Introduction

EU Energy Policy

Energy Sources

Oil

Natural Gas

Solid Fuels

Nuclear Energy


Supply Security


Alternative Sources



Reduction of Dependence: Saving energy


Introduction

EU Energy Policy

Energy Sources

Oil

Natural Gas

Solid Fuels

Nuclear Energy


Supply Security


Alternative Sources



Reduction of Dependence: Alternative Sources

• RES are safe, clean, affordable, not threatened by interruptions or depletion

• Aim of EU Commission: double the share of RES from 6% to 12% till 2010

• Problems: technical and practical obstacles, high costs

• Subventions or taxes on externalities of conventional energy sources required

• With suitable investments (R&D, marketing), RES can contribute to

solve

many economical and ecological problems!

Thanks for your

attention!

Any questions?

Daniel Erni and Stefan Horlacher Helsinki, 5th October 2005

Energy Supply in the European Union Daniel Erni and Stefan HorlacherHelsinki, 5th October 2005.

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Transcript of Energy Supply in the European Union Daniel Erni and Stefan HorlacherHelsinki, 5th October 2005.