ENERGY POLICY FOR SUSTAINABLE GROWTH:

20-20-20

Economic Crossroads: From Recovery to Sustainable Growth in the Baltics and EU

24 November 2011

Reinis ĀboltiņšCentre for Public Policy PROVIDUS

WHAT DO WE MEAN?

• ENERGY POLICY– DEFINING GUIDELINES AND INDICATORS OF

WHAT WE WAN TO SEE HAPPENING AT A SET TIME IN THE FUTURE

• SUSTAINABLE GROWTH– THE BEST GROWTH WITH THE LEAST

NEGATIVE / BEST POSITIVE SOCIO-ECONOMIC AND ENVIRONMENTAL IMPACT

EUROPE 2020 TARGETS - 1

• 5 TARGETS– SET PRIORITIES

– DOES NOT MEAN NEGLECTING OTHER ISSUES

• INTERRELATED AND MUTUALLY REINFORCING– IMPROVEMENTS AND INVESTMENT IN ONE AREA

CREATES OPPORTUNITIES IN OTHER AREAS

• NO BURDEN-SHARING– COMMON GOALS THAT REQUIRE COMBINED NATIONAL

+ EU ACTION

EUROPE 2020 TARGETS - 2

1. EMPLOYMENT– ACHIEVE 75% EMPLOYMENT AMONG 20-64 YEAR-OLDS

2. RESEARCH & DEVELOPMENT– INVEST 3% OF THE EU GDP IN R&D

3. CLIMATE CHANGE AND ENERGY– CUT GHG EMISSIONS BY 20% (WITH 30% IN MIND)

– INCREASE RES SHARE TO 20%– INCREASE ENERGY EFFICIENCY BY 20%

4. EDUCATION– REDUCE DROP-OUT RATES BELOW 10%

5. REDUCTION OF POVERTY AND SOCIAL EXCLUSION– DECREASE THE NUMBER OF PERSONS AT RISK BY 20M

CONTEXT EU POLICY – 20/20/20 BY 2020 + EVERYTHING STEMMING

FROM THAT

REGIONAL APPROACH – F.EX., BEMIP

NATIONAL CHALLENGES – CO2 EMISSIONS, LACK OF INFRASTRUCTURE, TO NAME A FEW

POLICY FRAMEWORK (various strategies, influence of industry lobbies)

INFRASTRUCTURE (f.ex., obstacle to private electric transport)

GRID CAPACITY (ENTSO-E APR 2010 / 10 YEAR NETWORK DEVELOPMENT PLAN) (physical ability of transmission lines to accommodate [unstable] RES electricity)

ENVIRONMENTAL CONCERNS (coal, lignite, small hydro, wind)

MARKET CONDITIONS (low liquidity, poor interconnectivity, unequal conditions for national incumbents and other participants)

SUPPORTIVE FRAMEWORK - 1POLITICAL

(BSR EXAMPLE)

• BALTIC SEA STRATEGY ENVIRONMENTALLY SUSTAINABLE PROSPEROUS ACCESSIBLE AND ATTRACTIVE SAFE AND SECURE

ACTION PLAN 2009 – ENERGY SECURITY EFFICIENCY RENEWABLE

SUPPORTIVE FRAMEWORK - 2PRACTICAL

• CONNECTING EUROPE FACILITY- EUR 50BN for transport, energy and digital networks till 2020- EUR 9.1BN for energy

• TRANS-EUROPEAN ENERGY NETWORKS (TEN-E)- Projects of European interest

• ENERGY REGIONAL INITIATIVES (ERI)- Towards a single EU electricity market

GAS REGIONAL INITIATIVES (GRI)- A competitive gas market in Europe

BEMIP (COVERS BSR)- Connecting people

RES CAPACITY IN THE EURES in gross final energy consumption (%): current status and targets

Proportion of RES in electricity consumption varies significantly across the EU

BSR – A VERY RICH “ECOSYSTEM” IN TERMS OF ENERGY SOLUTIONS

DEFINITELY A GOOD PLACE FOR SUSTAINABLE GROWTH

Illustration: BALREPA.ORG

EXAMPLE - RES POTENTIAL IN THE BSR

• EACH COUNTRY HAS ITS SPECIFIC ADVANTAGES AND DISADVANTAGES

• RES POTENTIAL RATHER TO BE LOOKED AT FROM THE POINT OF VIEW OF • POLICY GOALS (industry + environmental policy)• PLANNING STRATEGIES (sustainability)• MARKET CONDITIONS (favourable to RES?)• AVAILABLE INFRASTRUCTURE (possibility to

accommodate RES electricity or consume RES heat)

RES CAPACITY IN THE BSRTotal generation of electricity and generation from renewable energy sources in TWh, 2010

Source: “Developing a Regional Cooperation for Renewables in the Electricity Sector. The Example of the Baltic Sea Region”, FACTWISE, January 2011

Capacities vary and so does the proportion of RES in electricity production

EXAMPLE - RES POTENTIAL IN THE BSR

• DEPENDS ON THE CONTEXT AND WHAT TARGETS THE BSR COUNTRIES HAVE SET FOR THEMSELVES

• ECONOMIC POTENTIAL OF ELECRICITY GENERATION FROM RES (TWh)

CHALLENGES

• SUSTAINABILITY = AN OVERARCHING PRINCIPLE

• FOSSIL VS RENEWABLE: A MUTUALLY EXCLUSIVE DICHOTOMY? (the answer is NO)

• DO NOT EXCLUDE, BUT RATHER INCLUDE

• STRIKE THE RIGHT BALANCE

MAY ENERGY BE

WITH YOU!