1. Andrea Ricci – 7 April 2006 NEEDS New Energy Externalities Developments for Sustainability SIXTH FRAMEWORK PROGRAMME [6.1] [ Sustainable Energy Systems] Policy Advisory Group First meeting – Rome, 7 April 2006

2. Andrea Ricci – 7 April 2006 NEEDS: an Integrated Project of FP6  Duration: 48 months, starting September 2004  66 partners (15% are SMEs), representing Universities, Research Institutions, Industry and NGOs from 27 Countries (19 EU members, 3 MED, 5 ‘Other’)  Leading partners:  ISIS (IT) - Coordinator  DLR (DE)  IER Stuttgart (DE)  OME (FR)  Uni Prague (CZ)  CNR-IMAA (IT)  PSI (CH)  ECO (NO)  1118 person.months

3. Andrea Ricci – 7 April 2006 Overall objective To evaluate the full costs and benefits (i.e. direct + external) of energy policies and of future energy systems, both at the level of individual countries and for the enlarged EU as a whole

4. Andrea Ricci – 7 April 2006 Policy relevance of external cost accounting Supply side policies (infrastructure, other products and services) –Extended accounting framework for CBA –Comparison between alternative investment options (differential values) Demand side policies (regulation, pricing and taxation) –Mitigation/abatement –Internalisation (absolute values)

5. Andrea Ricci – 7 April 2006 Examples of input to EU policies Directive on non-hazardous waste incineration Large Combustion Plant Directive EU strategy to combat acidification National Air Quality Strategy Emission Ceilings Directive Infrastructure charging (Eurovignette) Etc.

6. Andrea Ricci – 7 April 2006 Objectives and main focus  Life Cycle Assessment (LCA) of energy technologies analysis of new energy technologies options for which the current LCA knowledge is insufficient  Monetary valuation of externalities associated to energy production, transport, conversion and use, targeting major innovation in terms of: methods impacts so far insufficiently addressed the availability and reliability of quantitative evidence  Development of a consistent and robust analytical platform allowing to integrate the full range of information and data on LCA and external costs into a Pan-European modelling framework

7. Andrea Ricci – 7 April 2006 Objectives and main focus (2)  Acceptability and stakeholders perspective To identify the terms and conditions for an effective formulation and implementation of long term strategies based on the internalisation of external costs To examine the robustness of the research results under various stakeholder perspectives  Transferability and generalisation to develop a simple way of calculating, transferring and present the uncertainty of default values for average/aggregate external costs  Integration To develop a structured “protocol” to facilitate the widespread use of the integrated analysis framework

8. Andrea Ricci – 7 April 2006

9. LCA: main targeted innovation Key challenge: to provide sound life cycle inventory data (as a basis for external cost assessment) for technologies in the far future (2030 – 2050) advanced fossil fuels hydrogen technologies fuel cells offshore wind photovoltaic concentrating solar thermal power plant biomass advanced nuclear wave energy background processes Focus on electricity generation technologies:

10. Andrea Ricci – 7 April 2006 NEEDS Stream 1 b  Improvement of atmospheric modelling at hemispheric, European, local scale  Soil and water pathways (food, toxic substances) Valuation of external costs: main targeted innovation  Exposure-response-relationships for human health  Assessment of biodiversity changes  Assessment of climate change  Valuation of mortality and morbidity

11. Andrea Ricci – 7 April 2006  To develop an energy-environmental model, technology oriented and based on economic equilibrium, which allows for both a worldwide perspective and a disaggregation for Europe and within the Member States and Accession Countries  To incorporate the results from LCA and ExternE (the most important emissions, materials and damage functions), including them in their long term development  To compare scenarios that simulate various policy approaches (setting thresholds for CO2 emission, renewables penetration, etc.) using the key base data received form the other streams to calculate equilibrium quantities and prices. Modelling: main targeted innovation

12. Andrea Ricci – 7 April 2006 Ultimate objective: broadening the basis for decision support beyond the assessment of external costs. through Experimenting complementary approaches allowing direct involvement of stakeholders Testing the acceptability of results based on external cost assessment by stakeholders Acceptability and stakeholders perspective: main targeted innovation

13. Andrea Ricci – 7 April 2006 To explore to what extent the stakeholders accept the assessed external costs. To address and evaluate sustainability of candidate technologies (and/or technology mixes) under economic, environmental and social criteria. To investigate the sensitivity of results of sustainability assessment to specific patterns in stakeholder preferences. To examine possible differences in the ranking of options established by employing alternative approaches to the evaluation. To identify most robust technological options and prioritised developments for the promising but less robust ones. Acceptability and stakeholders perspective: specific objectives

14. Andrea Ricci – 7 April 2006  Establishment of sustainability criteria and indicators survey social criteria (underdeveloped)  Quantification of indicators  Establishment of technology roadmap MCDA approach Evaluations and analysis integration  Stakeholder perspectives acceptability of monetary valuation and role in policy making process surveys Acceptability and stakeholders perspective: approach

15. Andrea Ricci – 7 April 2006 Integration into policy and decision making  Long term perspective Future technologies

16. Andrea Ricci – 7 April 2006 Integration into policy and decision making  Long term perspective Future technologies Dynamic LCA (time- and scenario-dependent)

17. Andrea Ricci – 7 April 2006 €/kWh LCA of individual technologiesExternal costs per unit emission Time dependency Scenario dependency

18. Andrea Ricci – 7 April 2006 Stakeholders involvement in NEEDS From the 1° Annual Review of NEEDS: “The Consortium should: Identify key users of the project products and engage with them Define scenarios and a precise policy case, based on preoccupations of the policy community […] […] organise engagement and reflection with the policy community in the European institutions and in Members States”

19. Andrea Ricci – 7 April 2006 Stakeholders involvement in NEEDS  Community of users Energy demand (Industry, Households) Energy supply (Producers, Distributors) NGOs/Associations (National, European) Decision makers (European, national, regional) Researchers/consultants Authorities Energy & Environmental Agencies

20. Andrea Ricci – 7 April 2006 Stakeholders involvement in NEEDS  The NEEDS “fora”  The Policy Advisory Group  The NEEDS policy workshops  Stakeholders surveys (Stream 2b: acceptability and stakeholders perspective)  Other dissemination, communication and liaison instruments Website Newsletters Direct communication

21. Andrea Ricci – 7 April 2006 Calendar of main events  First FORUM (Brussels, 2005)- Setting the scene  First Policy Workshop (Rome, April 2006): discussion and validation of scenarios  Second Policy Workshop (Ljubljana, December 2006/January 2007): feedback from the stakeholders surveys on acceptability and impacts of internalisation  Second FORUM (Krakow, June 2007): security of energy supply  Third FORUM (Cairo, November 2007): energy externalities in the Mediterranean Countries  Third Policy Workshop (Zurich t.b.c., March 2008)  Fourth FORUM (Brussels, june 2008): Final NEEDS conference