Ex Expe peri rience ence sh shar arin ing g on on br broa - - PowerPoint PPT Presentation

Ex Expe peri rience ence sh shar arin ing g on

• n br

broa

• ade

der r is issu sues es de deal alin ing g wi with th EU EU ET ETS S an and d

• v
• ver

erla lappin pping g po poli licie cies

Michael chael Mei Alsto stom m China ina

Alstom tom Therm rmal al Power er Alstom tom Trans nsport port Alstom tom Grid Grid Alstom tom Renew ewable able Power er

Alstom = low-carbon infrastructure

EU 2020 Climate and Energy framework

• EU ETS: 45% of EU emissions: reduce 21% 2005-20
• Renewables:

long list …. Instrum strumen en t / Policy licy Covers vers whic ich sector ctors Target rget Status atus in 2020 20 ? EU ETS Directive Power and industry: 45%

• f EU

emissions Reduce emissions by 21% by 2020 compared to 2005

BINDING

Renewable s Directive Power and transport Renewables to be 20% of energy consumption by 2020

BINDING

Energy Efficienc y Directive Whole economy Up to Member States to deploy (transposition

• n going)

Improve by 20% by 2020

• vs. business as usual

NOT BINDING

…. and there are other policies

• Green

eenhou house se Gas Gas « Effort

• rt-Sha

Sharing ing »

• 10% target to reducing for the other 55%
• f emissions by 2020 on 2005 levels
• broken down by 27 binding national targets
• Fuel

el Quality: lity: 6% target for reducing GHG emissions from fuels by 2020 on 2010 levels

• Vehicle

hicle CO2 2 Standards andards

• cars: 130g/km by 2015 and 95g/km by 2020
• vans: 175g/km by 2017 and 147g/km by 2020.
• Eco

Eco-Lab Labelling elling rules les

• Eco

Eco-Des Design ign standards ndards: for energy related products

• Energ

ergy y Taxes xes: minimum rates for energy taxes in heating electricty and motor fuel

Overall CO2 progress “good”

• 1990-2011:

EU GDP up 48%, emissions down 18.5%

• Close to 20%

target for 2020

3,000,000 3,500,000 4,000,000 4,500,000 5,000,000 5,500,000 6,000,000 1990 1995 2000 2005 2010 2015 2020

Actual GHG emissions 20% target path 30% target path CO2 x,000 tonnes

State of play: ETS

Good

• d
• will

ll deliv liver er 21% emiss issions ions reduc ductio tions ns in secto ctors rs cover vered ed Not t so so good

• d
• price

ice not t drivi iving ng inves vestments tments

• low

w auction tion reven venues ues

5 10 15 20 25 30 35 févr 2007 juil 2007 déc 2007 mai 2008

• ct 2008

mars 2009 août 2009 janv 2010 juin 2010 nov 2010 avr 2011 sept 2011 févr 2012 Price in Euro Dec-12 EUAs Dec-12 CERs

Progress on EU ETS ?

Good

• d
• good
• d progr
• gress

ess towar wards ds targets gets (see ee next xt slide ide)

• impor

portan tant contribution tribution to emiss ission ion reduc ductio tions ns

• techn

chnolo

• logy

y costs sts down, wn, espec pecial ially ly in PV and

• nsho

shore re wind nd Not t so so good

• d
• high

gh cost st of suppo pport rt schemes emes not polit litica ically lly susta staina inable ble

• €23bn

3bn pa in Germa rmany; ny; €10bn 0bn pa in Italy aly

• State of play: Renewable energy

Progress on Renewables ?

Progress on Renewables ….

State of play: Energy Efficiency

Good

• d
• vehic

hicle le CO2 stand andards ards will ll be met

• new

w effic iciency iency standa ndards rds and d labelling belling for light ghting ing and d appli plianc ances

• recen

cent t adopt

• ption

ion of Energ ergy y Effic ficiency iency Direc rective tive (Octo ctober ber 2012) 12) Not t so good

• d
• EU unlikely

likely to meet et 20% energy ergy effici iciency ency targe rget t for r 2020

• more

re finan nance ce neede eded, d, especially ecially for r the e

• Progress on Energy

Efficiency ?

Interaction of ETS with Renewables and Energy Efficiency

• CO2

2 price ce not not high gh enough

• ugh to drive

investments in either

• Renew

newabl ables es have relied more on national support schemes: feed feed-in in tarif riffs fs and green/white certificates

• Energ

ergy effic ficien iency improvements have relied on regulation ulation, e.g. on cars and appliances

• ETS

S cap failed to take full account of progress in renewables deployment and energy efficiency: − this has contributed to current surplus

Presentation title - 01/01/2007 - P 10

What’s actually happening out there …..

5 10 15 20 25 30 35 janv.-05 janv.-06 janv.-07 janv.-08 janv.-09 janv.-10 janv.-11 janv.-12 janv.-13

ECX EUA Dec Ahead ECX CER Dec Ahead

Phase e 1 Phase 2

Increa creased ed intere terest in in renewa newable les and d gas gas Increa creased ed interes terest in in CCS CCS Fuel el swit itchi hing from

• m gas

gas to to coal al

1 2 3

EU CO2 price now well below international norm

5 10 15 20 25 30 RGGI Australia (with linkage) EU Shenzhen South Africa California Quebec Alberta EU (Phase 2 prices) Australia (pre-EU linkage) British Colombia

$/tonne

A weak ETS may encourage additional taxes at Member State level

Carbon

• n price

price floor floor in addition ition to the ETS

• In place since April 2013 -

£4.94/tonne CO2

• Combined ETS and Price Floor value

will be £30/tonne CO2 in 2020 and £70/tonne in 2030 Tax Tax on

• n coal

coal consump mpti tion Tax ax on

• n emissions

sions

• 150 USD/tonne CO2
• Does not cover electricity

generation

• Industry pay half of it
• €12.95 per 1000 kg of coal
• Concerns electricity production

since 2012

Too

• earl

rly y to say y if dou

• ubl

ble taxati xation n

• n emitte

itters s wor

• rks

ks

ETS S is the e most t cost t effic ficient ient and nd envir vironm

• nmentally

entally efficient icient tool

• l

… and investments insufficient

2013 2013- 2020 2020

$140 40 billi llion

• n

Clean ean energy ergy invest vestmen ents s $bn bn

Source: Bloomberg New Energy Finance, UNEP, SEFI

58. 6 64.4 45. 1 2010 201 1 201 2

Lessons learned from EU policies

• ETS needs scarcity of allowances to give price

signal for investments

• This will reduce dependence on renewables

support schemes

• ETS need to be co-ordinated with other

policies.

• ETS cap needs to factor in expected progress

in renewables and EE

• ETS cap should be flexible enough to respond

to variations in demand

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