Study Project TRANS-CSP Trans-Mediterranean Interconnection

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TRANS-CSP TRANS-CSP Study Project TRANS-CSP Trans-Mediterranean Interconnection for Concentrating Solar Power (WP03 Policies and Finance) Project for the Research & Development Programme of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) IFEED NREA

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NREA. Study Project TRANS-CSP Trans-Mediterranean Interconnection for Concentrating Solar Power (WP03 Policies and Finance) Project for the Research & Development Programme of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU). - PowerPoint PPT Presentation

Transcript of Study Project TRANS-CSP Trans-Mediterranean Interconnection

Page 1: Study Project  TRANS-CSP Trans-Mediterranean Interconnection

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Study Project TRANS-CSP

Trans-Mediterranean Interconnection for Concentrating Solar Power (WP03 Policies and Finance)

Project for the Research & Development Programme of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU)

IFEED

NREA

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WP03 Policies and Finance

Scope:

Assess the strength and weekness of present energy policy and draft a strategy for sustainability.

Result:

Present subsidies and R&D policies are contradictory to sustainability and must be corrected. Trans-national renewable energy policies are insufficient. A EUMENA free trade area for renewables should be established.

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Subsidies [billion €/y] Coal/Lignite Oil/Gas Nuclear Renewables Total on-budget 6,4 0,2 1,0 0,6 8,2 off-budget 6,6 8,5 1,2 4,7 21,0 external costs * 36,0 16,0 2,7 2,3 57,0 Total EU 15 49,0 24,7 4,9 7,6 86,2

Energy Subsidies in the European Union in 2001 (EEA 2004)

* average of minimum and maximum value calculated from EU-Programme ExternE

8 different renewable sources receive 8 % of energy subsidy (1 % each)

Present subsidy policies act against diversification

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Public Energy R&D in the OECD (IEA 2006)

8 different renewable sources receive 8 % of R&D Funding (1 % each)

Present R&D policies act against diversification

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What Kyoto-Instruments offer: rather volatile CO2 prices, low at the moment and probably increasing in the future

What Renewables Need: reliable initial support that can be gradually reduced

Carbon trade prices of the last 12 months in Euro/ton

Source: EXAA CO2-certificates

Carbon trading helps market introduction only to a limited extent

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European Support Instruments (REN 2005): lots of approaches but no best practice standards, and no trans-national renewable energy policies

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Adequate Political and Legal Framework Required

Diversification of the energy portfolio is a key to energy security.

The cost-stabilising effect of renewables must be valued adequately.

R&D for the cost reduction of renewables must be extended.

Feed in tariffs are very effective instruments for market introduction.

A EUMENA free trade zone for renewables should be established.

Evaluation and negotiation of HVDC interconnections must start soon.

Subsidisation of all energy technologies should be limited to a reasonable time span and subsequently reduced to zero.

European support for MENA for the market introduction of renewables can attenuate the growing pressure on fossil fuel resources that would otherwise origin from the economic growth of this region, thus helping indirectly to secure fossil fuel supply in Europe.

As a long term perspective, EUMENA should become a Community for Energy, Water and Climate Security.

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Public and Private Investment by Renewable Electricity Feed-In Laws Low private investment risk through long term power purchase agreement granted by law

Low equity interest rates required by private investors due to low investment risk

Least cost market introduction of renewables through low equity interest rates of private investors

Diversity of supply through individually adapted feed-in tariffs for each technology

Stimulation of private investment and R&D for cost reduction through retrogressive feed-in tariffs

Feed-in laws provide public investment over limited time span to stimulate private investment for the market introduction of renewables

The initial tariff addition is covered by the consumers who benefit from future cost stability. Due to initially low renewable shares, the effect on consumer prices is very low.

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Comparing Strategies for Electricity in EuropeElectricity Mix dominated by Renewable

Energy with Fossil Fuel Backup

Diversified supply and renewable resources

Domestic sources dominate the electricity mix

Low vulnerability of decentralised generation

Low hazardous waste, recyclable materials

Low risk of contamination or major accidents

Requires public investment over limited time

Low environmental impact

Trend to lower cost and low price volatility

Power on demand by a well balanced mix

Based on proven and demonstrated technologies

Electricity Mix dominated by Fossil Fuels and Nuclear Power

Supply based on few and limited resources

Energy imports dominate the electricity mix

High vulnerability of large generation units

Unsolved disposal of nuclear waste and CO2

Risks of nuclear proliferation and accidents

Requires long-term continuous subsidisation

Climate change and pollution

Trend to higher cost and high price volatility

Power on demand by ideally stored energy

Still requires major technical breakthroughs: Safe fission and breeder technology. Commercial fusion reactor. Carbon capture and sequestration.