1. September 8, 2004SVSE 2004 - Praha1 SVSE Energy Conference EU Energy Policy: an industrial user’s view Peter CLAES President Ifiec Europe

2. September 8, 2004SVSE 2004 - Praha2 Energy policy : a trilemma ? Security of supply Affordable prices Industry competitiveness Environment Climate Policy

3. September 8, 2004SVSE 2004 - Praha3 Security of supply Dependency on extra-EU supply:  50% today  70% in 2030  increasing gas imports from Russia  45% of oil < Middle East ...

4. September 8, 2004SVSE 2004 - Praha4 Security of supply

5. September 8, 2004SVSE 2004 - Praha5 Security of supply Diversification of primary energy sources:  oil (price volatility)  natural gas (increasing imports from Russia)  coal (CO 2 -emissions)  nuclear energy (safety – waste)  renewables (technological potential – cost) Strategic storage Infrastructure requirements and maintenance

6. September 8, 2004SVSE 2004 - Praha6 Climate Policy “Whatever’s the problem, Kyoto is not the solution...” Kyoto is a short-term solution to a political problem. What we need is a long-term approach to an issue involving science and economics.” Prof. R. Schmalensee (MIT)

7. September 8, 2004SVSE 2004 - Praha7 Climate Policy What will the effort of the EU do to Climate Change ?  EU = 15% of worldwide CO 2 -emissions  Rest of world : 25% increase 1990-2020...  Impact on global competitiveness? Internal distortions of competition  Burden sharing agreement  subsidiarity (ET, renewables, surcharges,...)

8. September 8, 2004SVSE 2004 - Praha8 Climate Policy What can industry do to reduce GHG ?  Energy efficiency improvement  Improvement in processes (e.g. N 2 O)  No reduction of CO 2 unless through reduction of activity... What is asked from other actors (households, transportation) ?

9. September 8, 2004SVSE 2004 - Praha9 Climate Policy Impact of climate policy measures on industry  cost of energy efficiency improvement (voluntary agreements, legislation)  rising cost of electricity (renewables, nuclear, ET,...)  organisation of electricity markets (surcharges, windfall profits,...)

10. September 8, 2004SVSE 2004 - Praha10 Liberalisation of electricity market Oligopoly on the production side + further unbundling needed Dysfunctioning of wholesale markets Unefficient use of interconnectors – tariffs Lack of crossborder capacity Political interference (national interests, surcharges)

11. September 8, 2004SVSE 2004 - Praha11 Liberalisation of gas market No gas-to-gas competition yet... Need for gas release programme Ownership unbundling Correct conditions for acces to grid and storage Transparent and fair tariffs