The Future of Energy Union. European integration, Italian ...

Cagliari, 27th May 2016 Eloy Alvarez Pelegry Director of the Energy Chair Orkestra-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 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

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

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


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ENERGY UNION


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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 of action

Road Map

Indicators

“APPROACHES” TO THE ENERGY UNION

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MOTIVATIONS AND DIMENSIONS

MAIN MOTIVATIONS

Energy: secure, sustainable, competitive, affordable

European firms: creditworthy and innovative

European labour force: qualified

Prices: reflecting needs and objetives on the long run

Citizens: empowerment

From fossil fuels to renewables and from centralized to descentralized generation

FIVE DIMENSIONS

Energy security, solidarity, reliability

Internal Energy Market (IEM)

Energy efficiency and moderation of demand

Research, innovation and competitieness

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LINES OF ACTION 1. Compliance with legislation 2. Diversification on gas supply 3. Intergovermental agreements to comply with EU Legistation 4. Energy infrastructures 5. Internal Energy Market 6. Development of the Third Energy Package 7. Regional approaches. Key for market integration 8. Greater transaparency in energy costs and prices 9. Energy savings: 27% from 2015 to 2030 10. Energy savings and improvements in buildings 11. Energy efficiency and descarbonization in transport systems 12. Reduction in GHG emissions 13. 27% renewables in 2030 at european level 14. R&D in energy for technological leadership 15. External diplomacy and policy. A single voice in Climate&Energy


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Infrastructure. 10% interconnection. PCI - -

• Electricity

‒ Market design. Renewables integration

‒ SoS

-

-

Retail markets - -

Gas. SoS, LNG Strategy - -

• Regulation. Revision of ACER functioning - -

• Renewables. 2030, auto consumption, bioenergy, energy

waste

- -

• Climate action. Revision of ETS, LULUCF - -

• 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 and RES

-

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

Macroeconomic

importance of energy

sector

Valued added of energy sector

Employment in energy sector

Energy security,

solidarity and trust

Net import dependency

Aggregate country-specific Supplier Concentration Index

N-1 rule for gas infrastructure

A fully integrated

internal energy market

Electricity interconnection capacity

Market concentration index for power generation

Market concentration index for wholesale gas supply

Wholesale electricity prices

Wholesale gas prices

Annual switching rates on electricity retail markets

Annual switching rates on gas retail markets

Energy poverty index

Energy efficiency and

moderation of demand

Primary energy consumption

Primary intensity of the economy

Final energy intensity in industry

Final energy consumption per m2 in residential sector, climate

corrected

Average CO2 emissions from new passengers cars

Decarbonisation Gap between non-Emissions Trading System greenhouse gas emissions

projections and target in 2020

Gap between latest proxy inventory of greenhouse gas emissions in the

non-Emissions Trading System sector and targets

Share of renewable energy in percentage of gross final energy

consumption

Greenhouse gas intensity of the economy

Research, innovation

and competitiveness

Share of energy and environment in total public civil R&D spending

Low-carbon technology patents application per million inhabitants

Real unit energy costs

ROAD MAP INDICATORS

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MAIN ISSUES. A SUMMARY Internal Energy Market (I.E.M): (interconnections, electricity

and gas markets) Decarbonization (GHG) Energy efficiency and renewable Energy Energy security, solidarity and trust Research and innovation Competitiveness


InterconnectionsElectricity and Gas Market

I.E.M Interconnections Electricity and Gas Market


Decarbonization

Competitiveness

Research and

Innovation

Energy efficency

MAIN ISSUES. A SUMMARY

Security Solidarity Trust


ENERGY UNION. MAIN ISSUES. A SUMMARY, AND A PERSONAL APPROACH

Competitiveness

GHG Energy Effiency Renewables Buildings Transport

Research & Innovation

Solidarity Regional Cooperation

IEM

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REGIONS


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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)

Progressive enlargment of elegible areas

INTERREG I and V elegible áreas. A comparison

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INTERREG EVOLUTION

Support programme for cross-border cooperation dates back to mid-1980s 1987: the Association of European Border Regions is founded Five phases. The last one from 2014 to 2020 is part of the EU´2020 strategy

Involve local and regional stakeholders in eliminating barriers to the free

move of goods, people, capital and services Diminish the influence of national borders: peripheral regions 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


INTERREG EVOLUTION The three strands of Interreg*

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

*Beginning with Interreg II

Some concepts are very applicable to energy in the XXI Century

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ENERGY. PROXIMITY AND CONTIGUITY. ELECTRICITY INTERCONNECTIONS AND GAS PIPELINES

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

Gas infrastructures in Europe Electrity infrastructures in Europe

Energy interconnections are the phisical base for the Internal Market Enlargement 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)

Since the 70´s LNG and its developments maybe a clear example of the change from proximity to network and from contiguity to interaction

Existing and planned LNG terminals in Europe

Comparison of two European regasification plants

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 of 270,000m3 storage capacity

Jetty capacity: LNG carriers from 25,000 m3 up to 65,000/70,000 m3

Truck tank loading station to deliver LNG to satellite plants by road and the necessary facilities for LNG carrier load + connections to pipelines

Connection to national gas pipeline network

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REGIONAL SPECIALIZATION STRATEGIES (RIS3)

Integrated agendas for the Economic transformation

- Support of the policy and investments to the priorities and needs of the territory

-Take advantage of the strengths, competitiveness advantages and excellence

-Support technological innovation, based on practice; to stimulate private investment

Foster innovation and experimentation including all the agentes

Microeconomic Competitiveness

Quality of the national Business

Environment

State of Cluster Development

Sophistication of Company

Operations and Strategy

Macroeconomic Competitiveness

Social Infrastructure and Political Institutions

Macroeconomic Policies

Endowments

Source: Delgado and Ketels (2012) and own elaboration.)

COMPETITIVENESS AND REGIONAL SPECIALIZATION STRATEGIES (RIS3)

COMPETITIVENESS

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THE CASE OF THE BASQUE COUNTRY 3E-2025

Relevant role of the Basque Government developing continous Energy

strategies since 80´s Energy policies coordinated with other territorial policies As a consequence: transformation of the Basque energy sector Preparing the new Energy strategy: 3E-2025

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

Main Objectives

‒ Promotion of the competitiveness of the Basque network of science and technology 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 public buldings


2025 Objectives (%) (Save as indicated)

Base Years Primary Energy (PE)(*)

Renewable Final 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 Punto Energia Provincia di Sassari

Energy strategy development Energy strategy development

Gas -

Renewables Renewables

Energy efficiency Energy efficiency in supply

Quality of the electric system and security of supply

Ensure grid stability and energy security

Reduce oil dependency in transport

Decrease reliance on oil products

Technological and industrial development

Creation of the RES Cluster

The Basque Energy Agency- Ente Vasco de Energía (EVE) was founded in 1982

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

Analysis of the industrial and energy transformation of the Basque Country in

the context of a decarbonised and competitive economy Energy is a key issue in Economic competitiveness: as an input and as a driver

for industrial competitiveness Electricity, gas and oil infrastructures: guarantee high quality of supply From 2000, the price of oil, electricity and gas rose more or less continuously Industry accounted for between 48% in 2000 and 45% in 2012 of total energy

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

19% more than the price of the products they market (2010-2014) Greater impact on those industries that have to compete on international

markets


24

MAIN POSIBLE TOPICS OF REGIONAL COOPERATION RELATED

TO ENERGY

‒ Decarbonization o Energy Efficiency o Renewables

‒ Research&Innovation

‒ Territorial competitiveness and Energy Competitiveness


25

THE ROLE OF REGIONS


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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


27

MAIN ISSUES AND TOPICS


Main Issues Identified Topics. Preliminary List Role of regions

Decarbonization of Energy and Economy

-Energy Efficency (EE) Buildings. Heating & Cooling. Design of buildings and Urban Development -Renewables (RES). Primary and final consumption. 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

-Develop regional cooperation combining 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 - -

• Electricity

‒ Market design. Renewables integration

‒ SoS

-

-

Retail markets - -

Gas. SoS, LNG Strategy - -

• Regulation. Revision of ACER functioning - -

• Renewables. 2030, auto consumption, bioenergy, energy

waste

- -

• Climate action. Revision of ETS, LULUCF - -

• 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 and RES

-

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)

- -

ROAD MAP

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A PROPOSAL TO START A DIALOGUE


•Identify and confirm political interest

•Preliminary list of of topics in which the role of regions is greater 1

PoliticalPolitical

•Propose projects, develop achievable goals on the topics. RES and EE provide very good basis for network and interaction •Research and Innovation in Energy •Competitiveness and RIS3 to conform or configurate the proposals 2

TechnicalTechnical

• Organize a seminar to work on

proposals for the region contributions to the Energy Union

• Interreg collaboration in energy

Instrumental (Energy agencies and think

Instrumental (Energy agencies and think-tanks)

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

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

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THANK YOU!


Information about the Energy Chair of Orkestra:

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








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