1. Energy European Energy Policy

2. Energy Why energy policy matters for Europe EU pays 2.5% of its annual GDP to import energy: € 270 bn for oil € 40 bn for gas Several Member States rely on a single supplier for gas EU = 20% of world energy use & largest global energy importer But EU will increasingly compete for energy sources Energy represents 80% of EU GHG emissions Investment challenge around € 1 trillion by 2020 (mostly private sector) Energy costs are an important and increasing part of households' and businesses' expenses

3. Energy India and China accounting for 50% of growth: the EU will increasingly compete for energy resources Global demand is on the rise – effects on energy security and climate change Growth in primary energy demand (in Mtoe), IEA 2011 Source: IEA, World Energy Outlook 2011

4. Energy The security of supply challenge > 75 % 50 - 75 % 25 – 50 % < 25% 0% % of missing gas supply – 300 mcm/d for 14 days 6-20 January 2009 Source: European Commission The January 2009 gas crisis showed the lack of physical interconnections and the poor functioning of the EU internal market, with several Member States facing severe energy shortages for several days.

5. Energy 5 Efficient pathway (GHG emissions) in “Low-carbon economy Roadmap” (March, 2011): -40% in 2030 -60% in 2040 The climate change challenge Reduction of GHG emissions by 80-95% by 2050

6. Energy The investment challenge Total investment needs in the electricity and gas sector between 2010-20: over € 1 trillion Power generation: ~ € 500 bnTransmission and distribution: ~ € 600 bn Distribution: ~ € 400 bn Transmission: ~ € 200 bn Renewables: ~ € 310-370 bn Investments of over € 1 trillion will be needed by 2020 to replace obsolete power plants, to modernise and adapt infrastructure to the latest technologies and to cater for demand for low carbon energy.

7. Energy Where are we today? (1) Reduce greenhouse gas levels by 20% Increase share of renewables to 20% 100% Reduce energy consumption by 20% -10% Current trend to 2020 -20% 20% Current trend to 2020

8. Energy Where are we today? (2) Energy markets remain highly concentrated: need to encourage new entrants and independent suppliers need to encourage consumer switching Only 3% of EU electricity traded across borders Several regions still disconnected from the rest of the EU Investment challenge is huge and uncertainty amongst investors very high while the current investment cycle should be the one which transforms Europe's energy system

9. Energy. Implementation of the Energy Efficiency Directive Energy efficiency obligation schemes Exemplary role for public sector (buildings) Smart metering and billing. Pursuing eco-design and energy labelling measures. Reinforced financing schemes and programmes 1 - Achieving an energy-efficient Europe

10. Energy 2 - Building a truly pan-European integrated energy market. Communication on the Internal Market for Energy (October) » Take stock on the way to completing the IEM by 2014 and encourage MS to step up efforts » In depth analysis of energy markets and country-by country assessment. Communication on Renewable Energy Strategy (June) » Accelerate development and look beyond 2020 » Consider market design and infrastructure. Progress towards adoption of Regulation and funding framework for energy infrastructure post-2013 (CEF)

11. Energy Infrastructure priorities for 2020-2030 Baltic Energy Market Interconnection Plan Electricity & Gas North-South Gas Corridor in Western Europe North-South Gas Interconnections & Oil Supply South Western Electricity Interconnections Central / South Eastern Electricity Connections Southern Gas Corridor North Seas Offshore Grid Gas Electricity Electricity and Gas Oil and Gas Smart Grids for Electricity in the EU

12. Energy 3 - Achieving the highest level of safety and security. Proposals to improve the regulatory framework for nuclear safety (late 2012/early 2013) » Conclusion of stress test process » Revision of Nuclear Safety Directive » Proposal on nuclear liability and insurance. Interinstitutional discussions on proposal on offshore oil and gas safety

13. Energy 4 - Extending European leadership in energy technology and innovation. Launch of a Smart Cities and Communities Initiative (Communication in July) » Engage business & regional/local public authorities in technological demonstration and testing programmes. Communication on Carbon Capture and Storage (late 2012) » Analyse main reasons for delays and encourage Member States to step up efforts » Explore options for accelerating CCS demonstration. New Communication on Energy technologies & market deployment of energy innovation (1st quarter 2013)

14. Energy 5 - Strengthening the external dimension. Implementation of actions from the Communication on international energy relations and security of supply, including: » Continuation of progressive integration of Southern and Eastern neighbours in EU energy market and cooperation with key suppliers » Discussions about proposed information exchange mechanism on agreements with third countries » further diversify sources and routes (e.g. Southern Corridor )

15. Energy The Energy Roadmap 2050 as a basis for developing a long-term policy framework Supported by scenario analyses. EU objective for 2050 – GHG emissions down to 80-95% below 1990 levels. Looks forward to elaboration of a low-carbon 2050 strategy – a framework for longer-term action in energy and related sectors. Give more certainty to governments and investors. Explore routes towards a low-carbon energy system by 2050 which improve competitiveness and security of supply. Basis for developing the 2030 policy framework and concrete milestones with MS, EP and stakeholders European CouncilAim of the Roadmap

16. Energy Energy savings throughout the system are crucial Primary energy consumption until (in Mtoe) Range for current trends scenarios Range regarding decarbonisation scenarios

17. Energy Range for current trends scenarios Range regarding decarbonisatio n scenarios Electricity plays an increasing role Share of electricity in various scenarios (in % of final energy demand)

18. Energy 0% 25% 50% 75% RESGasNuclearOilSolid fuels 0% 25% 50% 75% RESGasNuclear Oil Solid fuels 20302050 Renewables move centre stage – but all fuels can contribute in the long-run Decarbonisation scenarios - fuel ranges (primary energy consumption in %) 2005

19. Energy Decarbonisation is possible and can be less costly than current policies in the long-run Source: European Commission |  In all decarbonisation scenarios, total costs are similar to current policies (CPI scenario)  Capital expenditure increases steadily over time, throughout the system  Fuel costs drop in long-run  Investment expenditure goes into the EU economy rather than to non-EU for energy imports 0 5 10 15 20 Average energy system costs (p.a. 2011 to 2050 as % of GDP) 2005 Range of scenarios, CPI most expensive

20. Energy The paths to take – towards “no regrets” actions Priorities emerging from Roadmap  Need energy efficiency gains throughout  Need to invest in more electricity interconnections and storage  Renewables – need to aim at least half of gross final energy consumption in 2050, at least 60% in electricity  Need modernised intelligent infrastructure, with active role for consumers and demand-side flexibility  Need an efficient internal market, with more electricity and, at least in the transition, gas

21. Energy Thank you for your attention!