CEESA
WP4: Market Development and
Public Regulation
Senior Research Specialist Poul Erik Morthorst
Risø National Laboratory for Sustainable Energy
The Technical University of Denmark
100% Renewable Scenarios
• Biomass scenario. Based on 100% RES low
demand, mostly biomass.
• Wind scenario. Based on 100% RES low demand,
mostly wind
• High demand. Based on the 2004 energy demand,
both wind and biomass.
Biomass
Wind
700
700
600
600
300
200
100
Electricity
106
PJ/year
400
500
Wind
67
Heat
117
Biomass
331
Industry
94
Transport
126
400
Electricity
106
300
Heat
117
200
Industry
94
Biomass
201
100
Transport
126
Others 66
Demand
Supply
Others 62
0
Wind
194
0
Demand
Supply
High Demand
700
600
500
PJ/year
PJ/year
500
400
Electricity
128
Heat
204
300
200
100
Wind
194
Industry
149
Biomass
368
Transport
126
Others 81
Demand
Supply
0
EU Energy Policy Framework
• Binding targets in EU:
• 20-20-20 i 2020
• 20% reduction of greenhouse gases by 2020 compared
to 1990
• this target can be raised to 30% subject to binding
international climate change agreements
• 20% of final energy consumption in the EU has to be
supplied by renewable energy
• Existing target was 12% in 2010 and non-binding – 7%
expects to be achieved
• 20% increase in energy efficiency by 2020 compared to a
reference
• 10% biofuels in transport by 2020
How are the EU targets interacting?
20%
Greenhouse
gas
reductions
by 2020
CO2-quota
Emission
Trading System
40%
Targets for
sectors not
covered by
ETS
60%
How are the EU targets interacting?
20%
Greenhouse
gas
reductions
by 2020
ETS
Renewable
Energy
Target
nonETS
How are the EU targets interacting?
20%
Greenhouse
gas
reductions
by 2020
ETS
Target
for
energy savings
Vedvarende
energi
målsætning
nonETS
How are the EU targets interacting?
20%
Greenhouse
gas
reductions
by 2020
Target
for biofuels
ETS
Target
for
energy savings
Renewable
Energy
Target
nonETS
Greenhouse gases and Renewables in EU
• European Emission Trading System (ETS)
•
•
•
•
Covers the power industry and energy intensive industries
Free allocation – Grandfathering
Auctioning after 2012 – same price all over EU
Reduction in allowances of 21% by 2020 compared to 2005
• Non-ETS sectors
• 10% reduction within EU by 2020 compared to 2005
• National targets ranging from -20% to +20%
• Renewables
• National targets – Denmark of 30% by 2020
National targets for renewables
Denmark
Lithuania
Latvia
Sweden
Finland
Estonia
United Kingdom
Spain
Slovenia
Slovak
Romania
Portugal
Poland
Netherlands
Malta
Luxembourg
Italy
Ireland
Hungary
Greece
Germany
France
Czech Republic
Cyprus
Bulgaria
Belgium
Austria
0%
10%
20%
Share 2005
30%
Target 2020
40%
50%
A Patchwork of Support Systems for Renewables in EU
“Old” EU countries
Feed-in tariffs
DK
DE
Quota obligation
FR
LU
ES
GR
“New” EU countries
AT
PT
NL
Feed-in tariffs
EE
SE
IT
LA
CZ
LT
RO HU CY
PL SK
UK
BE
SI
PL
Certificate systems
Certificate systems
UK
IE
MT
FI
FR
Tenders
BG
Quota obligation
Fiscal
incentive
SI
Tenders
CZ
Fiscal
incentive
Support for Biomass in different Member States
200
Minimum to average generation costs [€/MWh]
Average to maximum support level [€/MWh]
* system gives the option for co-firing
180
160
140
120
100
80
60
40
20
0
AT * BE * DK
FI
FR
DE GR
IE
IT * LU
NL* PT
ES
SE
UK*
Current Policy Issues
• Harmonization of national support schemes
for renewables
• The most economic efficient system, including cross
border trade
• Strong national interests in developing the renewable
industry
• Optimized national support schemes can achieve 70%
of all economic benefits
• National policies are needed for implementing
targets
Denmark vs. EU in the Future
Denmark
EU
RES-E in EU
power system
Corresponding
CO2-price
CO2-reduction
- 2020
- 2030
- 2050
30%
50%
100%
20%
35%
70%
-
30-40 €/t
> 50 €/t
75-100 €/t
Share renewables
- 2020
- 2030
- 2050
30%
50%
100%
20% (15%)
35%
70%
30%
60%
100%
Conditions within the Future EU Policy Framework
• The Emission Trading System will continue as the
core of EU Energy Policy
• Air and Sea transport will be included
• New Targets for emissions and renewables will be
set after 2020
• The power market in EU will gradually be liberalized
• One European market by 2020 coordinated by EU TSO
• Increased competitiveness for renewables will
gradually decrease the need for support
• No need by 2030 assuming a CO2-price of 50 €/t and a crude oil
price of 150 $/bbl
Wind Production/Power Consumption %
Wind power in Western Denmark
140
120
100
80
60
40
20
0
1
49 97 145 193 241 289 337 385 433 481 529 577 625 673 721
Hours in January '07
Wind Production/Power Consumption %
Wind power in Western Denmark
140
Wind Power covered
approx. 44% of Power
consumption in
January in Western
Denmark
120
100
80
60
40
20
0
1
49 97 145 193 241 289 337 385 433 481 529 577 625 673 721
Hours in January '07
Wind Production/Power Consumption %
Wind power in Western Denmark
140
120
100
80
60
40
Wind Power covered
approx. 44% of Power
consumption in
January in Western
Denmark
… and2036% on
average
in
0
1 49 97 145 193 241 289 337 385 433 481 529 577 625 673 721
Denmark
Hours in January '07
Impact on Spot Price
600
Denmark-west price
140
System price
wind production
120
100
DKK/MWh
400
80
300
60
200
40
100
0
20
0
111
10
313
2
12
615
5
4
14
818
7
17
16
920
19
21
23
22
26
25
24
28
27
30
29
32
31
35
34
33
37
36
39
38
41
40
43
42
46
45
44
48
47
50
49
52
51
55
54
53
57
56
59
58
61
60
63
62
66
65
64
68
67
70
69
72
71
75
74
73
77
76
79
78
81
80
84
83
82
86
85
88
87
90
89
92
91
95
94
93
101
100
97
96
104
103
102
99
98
106
105
108
107
110
109
112
111
115
114
113
117
116
119
118
121
120
124
123
122
126
125
128
127
130
129
133
132
131
135
134
137
136
139
138
141
140
144
143
142
146
145
148
147
150
149
153
152
151
155
154
157
156
159
158
161
160
164
163
162
166
165
168
167
170
169
173
172
171
175
174
177
176
179
178
182
181
180
184
183
186
185
188
187
190
189
193
192
191
195
194
197
196
199
198
202
201
200
204
203
206
205
208
207
211
210
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213
212
215
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231
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280
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284
283
286
285
288
287
291
290
289
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295
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297
296
300
299
298
302
301
304
303
306
305
309
308
307
311
310
313
312
315
314
317
316
320
319
318
322
321
324
323
326
325
329
328
327
331
330
333
332
335
334
337
336
340
339
338
342
341
344
343
346
345
349
348
347
351
350
353
352
355
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358
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359
362
361
364
363
366
365
369
368
367
371
370
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372
375
374
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380
379
382
381
384
383
386
385
389
388
387
391
390
393
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395
394
398
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396
400
399
402
401
404
403
407
406
405
409
408
411
410
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412
415
414
418
417
416
420
419
422
421
424
423
427
426
425
429
428
431
430
433
432
435
434
438
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436
440
439
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447
446
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449
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451
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456
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458
457
460
459
462
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464
463
467
466
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469
468
471
470
473
472
476
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478
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480
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482
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484
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487
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510
513
512
516
515
514
518
517
520
519
522
521
525
524
523
527
526
529
528
531
530
533
532
536
535
534
538
537
540
539
542
541
545
544
543
547
546
549
548
551
550
554
553
552
556
555
558
557
560
559
562
561
565
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567
566
569
568
571
570
574
573
572
576
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578
577
580
579
583
582
581
585
584
587
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594
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592
596
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598
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600
599
603
602
601
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604
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609
608
611
610
614
613
612
616
615
618
617
620
619
623
622
621
625
624
627
626
629
628
632
631
630
634
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636
635
638
637
640
639
643
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649
648
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654
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658
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660
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663
662
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665
664
667
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669
668
672
671
670
674
673
676
675
678
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681
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683
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685
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692
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710
714
713
716
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718
717
721
720
719
723
722
725
724
727
726
730
729
728
732
731
734
733
736
735
738
737
741
740
739
743
742
744
Hours in January '07
WindProduction/Power
Consumption %
500