Transcript No Slide Title

European Commission
Security of Electricity
Supply in the EU
IEA/NEA Workshop on Security of
Energy Supply for Electricity
Generation, Paris 24 May 2005
Stefan Gewaltig
European Commission
Directorate General for Energy and
Transport
Directorate-General for Energy and Transport
Information and communication
The concept of SoS
Three issues are important:
Access to primary energy
sources
Investment in generation and
networks
Safe operation of networks
Directorate-General for Energy and Transport
Information and communication
2
Context
Demand for energy is growing ….
Demand for energy will grow in the EU
by 0,9% per year over the next 25
years; electricity by 1,5%
Demand will grow much stronger in the
rest of the world
The Union currently imports some 50%
of its energy requirements, a figure that
will rise to 70% if nothing is done
Directorate-General for Energy and Transport
Information and communication
3
Context
The market is opening ….
All consumers will have the right to choose
supplier by July 2007
Incumbent companies need to be challenged,
especially through cross-border competition
Cross-border flows will be increasing and
becoming more complex to manage
The balance between electricity supply and
demand will now be determined by market
mechanisms
Directorate-General for Energy and Transport
Information and communication
4
Context
Supply-demand is becoming tighter….
Existing overcapacities have been
reduced
Other production is reaching the end of
its economic lifetime.
Reinforced emission standards will
require substantial investment in future
>> Wholesale electricity prices are
beginning to increase.
Directorate-General for Energy and Transport
Information and communication
5
Context
Future investment needs
EURELECTRIC estimate the need for
new investment until 2030 in EU-15 at
around 520 GW, of which around one
half will be replacement investment
520 GW is the capacity of around 650
gas-fired power plants
IEA estimates are even higher (607
GW or 760 plants)
Directorate-General for Energy and Transport
Information and communication
6
Objectives
But new investment is occurring
Italy, various CCGT projects (8300MW)
Spain\Portugal, various CCGT projects
(11 400MW)
France
Gonfreville (260MW)
Dunkerke (788MW)
Germany
Duisburg-Hamborn (255MW)
Goldisthal (1065MW)
Duisburg-Wannheim (240MW)
Munich (417MW)
Niehl (400MW)
Sandreuth (180MW)
Ludwigshaven (400MW)
Directorate-General for Energy and Transport
Nordic Market
Horns rev wind (160MW)
Nysted wind (165MW)
Olkiluoto (1600MW)
UK\Ireland
Huntstown (343)
Ballylumford (600MW)
Baglan Bay (525MW)
Immingham (760MW)
Spalding (860MW)
Coolkeeragh (400MW)
Various wind projects (up to 120MW)
Belgium\Netherlands
Rijnmond (795MW)
Zandvliet (385MW)
Antwerp (120MW)
Information and communication
7
Objectives
Reduce import dependency
Reduce electricity consumption,
demand side management
Develop indigenous fuels – renewable
energy sources
Maintain all technology options
Secure access to existing and new
external energy sources
Directorate-General for Energy and Transport
Information and communication
8
Objectives
An efficient continuous electricity supply
Avoiding blackouts and other
interruptions
Make competition really work
Delivering a market that responds to
price signals and delivers supplydemand balance
Directorate-General for Energy and Transport
Information and communication
9
Objectives
Avoiding blackouts
Directorate-General for Energy and Transport
Information and communication
10
Objectives
Avoiding blackouts – secure network operation
Respect technical limits on congested lines
Adequate and professional exchange of
information between network operators
Rapid response to unexpected incidents
Extension and reinforcement of the existing
network
Directorate-General for Energy and Transport
Information and communication
11
Objectives
Maintain supply and demand balance
Market signals should produce a sufficient
response
Despite the work undertaken since the start
of the market opening, Member States do not
have set out overall policy with defined
standards on the issue
The risk is that the market will be distorted as
a result of crisis measures
Directorate-General for Energy and Transport
Information and communication
12
Solutions
Reduce import dependency (1)
• Demand side management
>Draft directive on energy services
>Energy labelling
>Green paper on energy efficiency
• Develop renewables
>Directive on electricity from renewable
energy sources
> Report on support schemes for
renewable electricity
Directorate-General for Energy and Transport
Information and communication
13
Solutions
Reduce import dependency (2)
Secure and further develop
access to primary energy sources
Dialogue with external suppliers
Promotion of new infrastructure
(TEN-Energy programme)
Development of LNG
Directorate-General for Energy and Transport
Information and communication
14
TEN-Energy gas projects
Directorate-General for Energy and Transport
Information and communication
15
TEN-Energy electricity projects
Directorate-General for Energy and Transport
Information and communication
16
Solutions
Security of Supply in existing EU legislation
Electricity Directive:
• Member States to monitor
supply/demand balance on a regular
basis; possibility for state to tender new
capacity
• Possibility of public service
obligations related to security of supply
• The nature of primary energy source
as a condition for authorisation of new
generation
Directorate-General for Energy and Transport
Information and communication
17
Solutions
Security of Supply in existing EU legislation
Gas directive and electricity regulation:
Exemptions from third party access for
new gas and electricity infrastructure,
including LNG terminals.
Directive on Security of Gas supply:
-Member States to define policies for
securing gas supply
-Co-ordination of policies at EU level,
including with respect to emergency
measures
Directorate-General for Energy and Transport
Information and communication
18
Solutions
Draft Directive on security of electricity supply
Objective
Establish a framework within which
Member States shall define
transparent and non-discriminatory
policies on security of electricity supply,
compatible with the requirements of a
competitive internal market for
electricity .
Directorate-General for Energy and Transport
Information and communication
19
Solutions
Directive on SoS: Secure network operation
TSOs to set rules on network security
Member States to ensure compliance
with rules (legally binding)
TSOs and DSOs to set and meet quality
of supply and network security
performance standards
Directorate-General for Energy and Transport
Information and communication
20
Solutions
Directive on SoS: Market Design
Member States to take measures to
maintain demand/supply balance
MS to ensure wholesale market which
provides appropriate price signals
MS to publish market design
>> reliable regulatory framework
Directorate-General for Energy and Transport
Information and communication
21
Solutions
Directive on SoS: Regulated network investment
Member States to provide regulatory
framework providing investment signals
for the development of networks
Co-ordination between TSOs and
regulators about financing of projects
Potential “step in” rights for regulators
Directorate-General for Energy and Transport
Information and communication
22
Conclusions
Security of supply in electricity requires
special attention, in view of growing
demand and the new liberalised
environment
Demand side management,
development of indigenous resources
and extended supply sources are
necessary to secure availability of
primary energy sources
Continued investment in generation and
networks requires a stable regulatory
framework, conducive to new
investment
Directorate-General for Energy and Transport
Information and communication
23