Belgium’s Energy Challenges Towards 2030

1. Belgium’s Energy Challenges Towards 2030 Commission ENERGY 2030Final Report William D’haeseleer, Chair

2. Energy Commission 2030 CE2030 established by Royal Decree of December 06, 2005 published in MB/BS of December 19, 2005 Duration of activities 18 months; Final report submitted on June 19, 2007

3. Objectives «To provide the scientific and economic analyses necessary to evaluate Belgium’s options with regard to the energy policy up to 2030» …so as to assure an energy system that - guarantees security of supply - is environmentally friendly - at affordable cost for society

4. Objectives «To provide the scientific and economic analyses necessary to evaluate Belgium’s options with regard to the energy policy up to 2030» …so as to assure an energy system that simultaneously - guarantees security of supply - is environmentally friendly - at affordable cost for society

5. Summary of Approach • State of affairs in Belgium • Scenario analysis • Belgian domestic situation • European context • Broader issues • Conclusions & Recommendations

6. Practical Implementation (Part 3) Review process through Review Panels

7. Review Process External Review Panels • Federal-Regional Consultation Cell (CONCERE/ENOVER) • Central Council for the Economy (CCE/CRB) • National Bank (NB/BN) & Ass Belgian Banks • Regulators (CREG, VREG, CWaPE, IGBE/BIM) • Fed Council Sust Develop (FRDO/CFDD) • Academy Council for Applied Science (BACAS) • DG TREN European Commission • International Energy Agency (IEA)

8. Practical Implementation (Part 3) Review process through Review Panels About ~ 50% of preliminary report rewritten; more supporting documents and explanatory boxes. Available at http://www.ce2030.be Final report

9. Important Remark Study focuses on longer term: 2030 Global legal tendency taken into account (EU directives etc) No detailed analysis of current legal & regulatory intricacies But perceived shortcomings pointed out

10. Baseline Scenario Same baseline as - DG TREN of European Commission - Climate study (Min Tobback) – but till 2030

12. Baseline Scenario Same baseline as - DG TREN - Climate study (Min Tobback) – but till 2030 • Current measures implemented •No-post Kyoto imposed • Nuclear phase out implemented

13. Baseline Scenario Fuel prices

14. Baseline Scenario – soaring variant

15. Baseline Scenario – GDP evolution

16. Baseline Scenario -- Results

17. Baseline Scenario – FED Intensity

18. Baseline Scenario -- Results

19. Baseline Scenario -- Results

20. Baseline Scenario – soaring variant

21. Baseline Scenario Soaring Variant Results

22. Baseline - Conclusion The Baseline scenario is NOT SUSTAINABLE ! Must consider other scenarios…

24. GHG Effect • The Earth’s surface temperature increases (IPCC)

25. GHG Effect Sarmiento and Gruber ,2002

26. GHG Effect

27. Alternative Scenarios Two philosophies: • 15% and 30% domestic reduction of energy-relatedCO2 in 2030 wrt 1990 (within Belgium w/o emission trading) • European-wide reduction limit of 30% GHG in 2030 wrt 1990, with perfect emission trading scheme for all sectors

28. Domestic Alternative Scenarios Eight scenarios • 15% and 30% domestic reduction of energy-relatedCO2 in 2030 wrt 1990 •Each time with nuclear phase out on-off • Each time with CCS and without

29. Domestic Alternative Scenarios Results

30. Domestic Alternative Scenarios Results

31. Domestic Alternative Scenarios Results Domestic CO2reduction scenarios transparant, but unrealistic 30% domestic energy-related CO2 reduction is effectively IMPOSSIBLE Realistic domestic Belgian CO2 reductions are ~ …15%...

32. Domestic Alternative ScenariosResults

33. Domestic Alternative Scenarios Results

36. European Alternative Scenarios Two extra scenarios: • European-wide reduction limit of 30% GHG in 2030 wrt 1990, with perfect emission trading scheme for all sectors •Belgian nuclear phase out on-off • No CCS assumed

37. European Alternative ScenariosResults EU wide cost of Carbon Value (price of emission allowances): - Without nuclear in Belgium ~ 200 €/ton - With nuclear in Belgium ~ 190 €/ton

38. European Alternative ScenariosResults

39. European Alternative ScenariosResults Limited reduction of CO2 in case of nuclear phase out means that marginal abatement cost is then much higher than in neighboring countries. With nuclear allowed, a cheap CO2 reduction method is available in Belgium.

40. European Alternative ScenariosResults Consider same GHG commitment in Belgium as in EU; i.e. 30% reduction in 2030 wrt 1990 • Not all to be reduced domestically, • But responsible for reduction abroad  via emission allowance purchase

41. European Alternative ScenariosResults Cost for Belgium ~ 15 – 20 G€, or about 6-8% of GDP2000; 4-5% of GDP2030

43. Beyond the ScenariosReflections Extension of networks: - for HV if off shore ~ 3800 MW ~ 700 M€ - for distribution grid adaptation ~ 2 G€ over 10 yr Subsidies required for renewable expansion: - current 846 MW wind offshore planned ~ 6 G€ - next 3000 MW wind offshore ~ 21 G€ - 2000 MW wind onshore ~ 7 G€ - 1000 MW photovoltaic (PV) ~ 7.2 G€ - 1500 MW Biomass ~ 9.6 G€  50 G€ over 20 years, (or 1/5 GDP2000 or 1/10 GDP2030)

44. Beyond the ScenariosReflections Security of supply Import dependency on scale ~ 1-2 yr: Up to 88-90% without nuclear in energy terms Up to 95-97% in instantaneous power terms

45. Beyond the Scenarios

46. Beyond the Scenarios

47. Beyond the ScenariosReflections on Gas Dependence

48. Beyond the ScenariosReflections on Gas Dependence Gas Demand for Electricity Generation

49. Beyond the ScenariosReflections

50. Ukraine 01.01.06 Reliable; Security of SupplyGas