Maarten van Rossum Statistics Netherlands May 2008 Luxemburg Monetary aspects of renewable energy production Which renewable energy production activities should be included in the EGSS statistic? Maarten van Rossum Statistics Netherlands May 2008 Luxemburg

Contents Introduction Definition of renewable energy Used concepts Used methodologies Results Ongoing discussions

Introduction Question: Why is renewable energy production included in the EGSS statistic? The definition of the EGSS states that cleaner technologies, products and services which reduce environmental risk and minimise pollution and resource use should be included. Answer: The production of renewable energy prevents resource use because renewable energy is a substitute for fossil fuels.

Definition used for renewable energy When calculating physical renewable energy a few choices have to be made, such as which sources should be accounted for and how the different energy forms should be summed up. In the Netherlands, these choices have been made in consultation with branch organisations, knowledge institutions and the ministry of Economic affairs and are registered in the Protocol Monitoring Renewable Energy (Senternovem, 2006).

Definition used for renewable energy The Energy Protocol is used in calculating the official physical renewable energy statistics (Duurzame energie in Nederland 2006, CBS 2007). The monetary statistic on renewable energy follows the same methodology as the official physical renewable energy statistic. In other words, what counts for the official physical renewable energy statistic, the Energy Protocol, is also leading in constructing monetary statistics on renewable energy.

Definition used for renewable energy The definition of IEA is in line with the definition of the Dutch Energy Protocol with respect to production of renewable energy. The definition of IEA is not in line with the definition of the Dutch Energy Protocol with respect to prevented fossil fuel use due to renewable energy use. The focus of the EGSS statistic is on renewable energy production. This makes it possible to compare EGSS statistics on a international level.

Actual: social critic on some forms of renewable energy debate on bio fuels, debate on biomass some argue that these ‘renewables’ are not sustianable Strong debate can possibly result in adjustment of the definition of renewable energy by the IEA National definition on renewable energy will follow the adjustment of the IEA Physical information on renewable energy is adjusted to new definition Monetary EGSS information is based upon physical information Conclusion: Energy experts (IEA) should define definition of renewable energy. Framework developed suits possible changes in defintion of renewable energy

Used concepts Net production (Transaction) Production of renewable energy, gross approach Source: derivative of statistic on renewable energy, CBS Input for: -EGSS, primary, secondary and ancillary activities of industries Net production (Transaction) Source: official statistic on physical renewable energy, CBS -National Accounts -EGSS, primary and secondary activities of industries Ancillary activities (No transaction) -EGSS, ancillary activities of industries

Used concepts

Used methodologies Transforming physical tables into monetary tables Steps that need to be taken: Gather all possible information on physical renewable energy production Allocating physical energy production to NACE classes Verify if production is sold to third parties (net production) or used for own consumption purposes (ancillary production) Transforming physical tables into monetary tables

Transforming physical tables into monetary tables Winj=Pi * Qinj Where: Winj : monetary value of renewable product i by technology j of NACE class n Pi: basic price of renewable product i Qinj: physical production of product i by technology j of NACE class n The missing part, price information at product level is explained in this section.

Transforming monetary tables into monetary tables Production will be calculated at basic prices and not at market prices. This decision is based upon the fact that if production is measured at basic prices, taxes, subsidies, transport- and trade margins are excluded. This exclusion makes it possible to analyse if the production of renewable energy can compete with non renewable energy production. Support of government should not be included because otherwise no proper analyse can be done on the question if the renewable energy sector is competitive without government support.

Price information

Value of renewable energy production

Production of renewable energy by NACE class

Production of renewable energy as an ancillary activity

Ongoing discussions and problems Should bio fuels be included or not? How to detect more detail information on prices? How to deal with heat pumps, heat-cold storage systems and solar heat? Should incineration of ‘grey’ waste be included or not? Other issues?

Thank you for your attention For questions, suggestions and remarks, please contact us: MRSM@cbs.nl