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Energy Security: Potential for EU-GCC Cooperation • • • • • 11 should be rapidly deployed. Where industry does not respond, the legal and regulatory framework should be readjusted and the level of incentives should be raised. In the absence of a credible CO2 price path, forcing utilities into a capture ready option will raise the costs of the standard plants but will not incentivize CCTS investment. The strong focus on the implementation of CCTS in the power sector observed in the past should be extended to industry, which can be highly vulnerable to an abandonment of coal. Due to a larger number of small emissions sources, this poses higher challenges to network development. Early planning of transport routes is of paramount importance should large-scale CCTS deployment ever become reality. At least in this phase, the state will be needed as a major provider in the development of transportation infrastructure, including planning and siting. Construction and operation can be tendered to the private sector, or carried out by stateowned network firms. Routing pipelines along existing networks can lower costs and public rejection. Thus, synergies with other energy network infrastructure (gas, electricity) should be considered. Future regulation should specify the allocation and financing principles as well as access for third parties. Sufficient incentives for the private sector to manage the network development are unlikely, given the political, regulatory, technical, and economic uncertainties. If Europe fails to fill its role as CCTS pioneer, new strategies for the global roll-out of CCTS are needed. The inclusion of CCTS under the Clean Development Mechanism could help to bring the technology to the markets. However, this would also imply the outsourcing of potential risks associated with the technology. 5. nuclear In order to fulfill climate policy goals, nuclear energy may have to play a relevant role in worldwide and EU long-term energy balances. However, according to IEA and EC energy scenarios, the EU nuclear share is expected to halve between now and 2030. As nuclear is presently providing two thirds of all low carbon electricity in the EU, this will create an even larger strain on fulfilling CO2 targets. In fact, the so often announced nuclear renaissance is having a difficult birth: With 148 aging reactors in operation in 15 member states, there are presently just four reactors under construction in the EU (one in Finland, one in France, two in Bulgaria ). Reasons for the stalling renaissance of nuclear energy are: i- social acceptability (political opposition) for a technology which is perceived as dangerous and for which the permanent waste disposal issue has still not been solved; ii- lack of human capacity (Europe’s industrial capacity of building nuclear power plants is said to be limited to maximum four per year; other regions seem to have the same problem of aging workforce) which is expected to worsen over the next years as specialists retire; iii- strongly increasing investment cost for nuclear power due to, among others, improved safety and environmental standards (contrary to the general energy capital cost index which has fallen by 20-30 percent since its peak in 2008, nuclear costs do not seem to have fallen over the last years); iv- technical problems with the new third generation designs of all major manufacturers resulting in huge cost-overruns for the first realizations of the new designs; v- the difficulty to finance hugely capital intensive plants in a market environment and in particular after the financial crises; vi- the increasing uncertainty on construction costs raise some doubts on the ability of nuclear power to foster a decrease in prices. In this context, government action is essential to: • promote public debates on nuclear safety, energy security of supply and climate change issues • guiding investor assurances in licensing procedures • promote human capital building • explore regional centers for high-level waste disposal • clear the position of decommissioning funds • create a level playing field for low carbon technologies via an effective EU-wide emission trading system and/or carbon tax.
As member states retain sovereignty over energy mixes, local political/public consent and support is vital. The same high safety standards as for nuclear reactors must be applied to all elements of the associated infrastructure: conversion, enrichment, fuel fabrication, spent fuel storage and reprocessing. Accumulated knowledge and experience, both upstream and downstream, are reflected in existing safety rules. They must be strictly applied in any country using nuclear energy. The EU should put all its geopolitical weight to make sure these rules are respected everywhere and to promote non-proliferation. In fact, a major nuclear accident anywhere in the world will have dramatic consequences also on European nuclear development. 6. Renewable energy sources (Res) In order to decrease import dependency and promote decarbonisation of the European energy system, the increased use of RES should be supported in the electricity, heat and transport sector by means of renewable support policies. Therefore, general recommendations are: A high share of renewable energies in the mid- to long-term cannot be reached without strong increases in all three sectors: renewable electricity (RES-E), heat (RES-H) and biofuels. The current policy framework in the individual member states does include an extensive set of supporting mechanisms for RES-E and, to some extent, for biofuels, but the current limited and dispersed support for RES- H needs to be addressed in the future. Concerning biofuels, efforts should be directed to develop second generation biofuels. The general approach should be to keep a level playing field among different technologies, so that most efficient solutions can emerge from market forces, rather than being selected by policy makers. The present technological uncertainty suggests the need to maintain some public support to a wide range of technologies, at least until the relative merits of different solutions emerge on the basis of solid experience. Consequently, any future policy framework should consider providing technology- SECURE Project: Draft Policy Recommendations specific support to the various RES options. However, this policy should entail periodic reviews of the incentive schemes, in the light of a possible future phasing out. Efforts to support RES are needed in all member states. The uneven distribution of RES potentials and costs emphasizes the need for intensified cooperation between member states, where suitable accompanying flexibility mechanisms can assist the achievement of national RES targets in an efficient and effective manner. RES policies should be supported by a strong energy efficiency policy. Modelling results indicate that in the absence of strong energy efficiency policies, energy demand is higher and more RES is required in order to achieve the targeted share of 20 percent by 2020. Consequently, more expensive renewable energy technologies have to be utilized and the average yearly policy costs are expected to increase largely. To face the challenges resulting from an increased share of fluctuating wind electricity, several potential remedies may be applied: • Forecasting tools and imbalances management should be improved. Wind power prediction tools enable energy suppliers to forecast the variations of the power outputs which are typical for wind power plants. The implementation of forecasting tools may increase the maximum amount of wind power that can be accommodated in the network. • Trading at the intra-day market platform would imply a correction of all the imbalances whereas the imbalance payments only apply for the net system imbalances (that, in case of low wind penetration, could be only 50 percent of the total imbalances). • Storage systems such as pumped-storage • hydropower plants, hydro reservoirs, compressed air storage, flywheels or batteries may be used to contribute to managing the integration of fluctuating generation. However, some of the mentioned technological options are not yet competitive in economic terms. Smart grids providing intelligent services in addition to its initial purpose of delivering 11
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Gulf Research Center Foundation
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Contents Introduction 5 I. The Euro
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Energy Security: Potential for EU-G
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Page 68 and 69: Energy Security: Potential for EU-G
Page 73 and 74: SESSION IV: LNG and Gas Supplies to
Page 75 and 76: had a drastically different vision
Page 77 and 78: now, China has preferred the LNG op
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Page 81 and 82: 70bcm/yr by 2020. Even if only a fr
Page 83 and 84: that Russia and China have started
Page 85 and 86: (Parliament) which favors the use o
Page 87 and 88: of unconventional gas, has already
Page 89 and 90: Geopolitical Issues of Europe’s F
Page 91 and 92: • • • • • • • • •
Page 93 and 94: SESSION V: Renewable Sources in EU-
Page 95 and 96: • technologies, overall technical
Page 97 and 98: Figure 2: Overview of Opportunities
Page 99 and 100: onshore (378 TWh/yr), large-scale h
Page 101 and 102: world. Hence, renewable energy supp
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Page 105 and 106: Overview of RES Characteristics and
Page 107 and 108: keep the RES surcharges for the ene
Page 109 and 110: in the electricity sector, particul
Page 111: References • • • • • •
Page 124: Gulf Research Center Foundation
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