Reducing emissions in the power sector
Didier Sire
Executive Vice President Strategy at GDF SUEZ Energy Europe
April 25th, 2013
Current situation
GHG emissions are decreasing thanks to the crisis … not to a
strong and effective climate policy
The current market conditions are very unfavorable for CO2 emission
reduction
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CO2 prices have collapsed
Existing low-carbon emitting CCGT not competitive with coal plants
No appropriate price signal for low carbon investments
Huge concerns on EU-ETS future since April 16th
As a result
The situation of gas is very critical while it should play a key role
for environmental policy and security of supply
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Gas plants are pushed away of the merit order
Ongoing process of “Mothballing / Decommissioning” of non
profitable gas plants
2 / April 25th, 2013
Challenge
To reach the objective of decarbonisation in the power
sector by giving a clear CO2 price signal leading to promote
gas technologies investments
US situation illustrates how switching from coal to gas can rapidly
and economically contribute to GHG emissions reduction.
It means that:
– Measures have to be taken in order to keep existing thermal assets with
lower emissions in the merit order
– Appropriate price and political signals must be sent to investors to allow
them to invest in gas
In the long term, the energy mix must be balanced with:
– RES supported by coordinated, coherent and fair support schemes aiming
at a progressive integration into the market of mature technologies.
– Gas developed in a well designed and coordinated CRM at European level
in order to guarantee the security of the European power system
3 / April 25th, 2013
What Europe can bring
An improved & coordinated European framework
• Providing long term visibility for investors
• Coordinating CRM systems
• Avoiding “renationalisation” of energy policies
A reshaped European climate policy
• New proposal to enforce a stronger carbon price signal must be
urgently studied by policy makers
A new market design
• The EOM is not sustainable for the system and investors are not
confident enough to invest
4 / April 25th, 2013