Energy Efficiency in the Power sector

1
Energy Efficiency in the Power sector

• Mariangiola Fabbri
• WWF EPO - Climate and energy unit
• Ad Hoc Group on Energy Efficiency, 27th March 2006

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Electric Power Sector

• Electric power industry emits 1/3 of total CO2
  emissions in EU25 (37 of CO2 emissions globally
  )
• Most rapidly growing source of CO2 emissions
• few power companies are moving away from fossil
  fuels
• WWF Ranking Power (2004) 72 large power
  companies (65 electricity in OECD Russia, 2/3
  of the companies less than 1/10, 90 ranked less
  than 3)
• only 20 of European power companies used more
  than 2 RES
• need to change investment patterns in order to
  stay below 2 degrees and avoid disastrous climate
  change

3
Strategy elements for power generation

• Target 2020 Policies and measures to reduce
• GHG emissions in the EU (WWF, 2005)
• 2000-2020 Energy demand for final use will
  increase btw 0.8 and 1.4/y
• current electricity generation from fossil fuels
  will wipe out emissions reductions
• more efficient and less carbon intensive system
  needed
• increased power generation by RES strong support
  for CHP decentralised generation
• investments to improve efficiency in grid system

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Strategy elements for power generation (2)

• 17 electricity saving vs. BAU
• Increasing power generation by RES (share up to
  38)
• Increasing support for CHP (share from 14 to
  23.5)
• Improved efficiency of new-built fossil power
  plants (switch to gas-fired CCGT with high
  electric efficiency, preference to BAT, RD)
• fuel switch to low-carbon fuels gt more CCGT,
  decrease of hard coal and lignite-fired power
  plants
• retrofitting existing old power plants

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CHP

• Considerable fuel savings and reduction in CO2
  emissions, reduced distribution losses higher
  efficiency
• support efficient cogeneration plant (fixed
  tariffs for electricity, bonus system or feed-in
  tariffs, quotas or subsidy schemes, clear
  regulation on conditions for purchasing CHP
  electricity by grid companies)
• privileged access to the market
• avoided losses to be accounted for comparison to
  centralised production
• level playing field, no discrimination (i.e. high
  connection charges)

6
Transmission distribution

• Losses up to 10 of electricity produced
• Cost-effective measures to reduce losses not
  taken up
• Remove disincentives to energy efficiency
  activities
• Allow distribution company to recover costs for
  investments made on energy end-use side (Energy
  end-use efficiency and energy services directive)
• costs to be recovered via energy prices, tariffs
  of regulated part of business or general taxation
• central authorities or regulators could grant
  incentives for operators performing above minimum
  performance levels for energy generation

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Transmission distribution (2)

• Minimum energy performance standards for
  distribution transformers (saving potential gt 20
  TWh/a in EU)
• Increase investments to reduce grid losses
• Introduce energy efficiency obligation on
  distribution system operators
• Benefits of cost recovery increased system
  reliability , cost-reduction, reduced demand and
  reduced emissions
• Internalise external environmental costs of
  energy use

8
Energy End-use Efficiency and Energy Services
Directive

• Structural change of EU energy market needed to
  shift from offering energy to energy services
• directive potential cornerstone in transformation
  of the electricity market
• unsatisfactory text, but opportunity to develop
  energy efficiency plans at national level
• suppliers should be obliged to carry out energy
  efficiency activities (from pure end-use energy
  suppliers to ESCOs offering energy efficient
  solutions to customers) - Incentives?
• Energy efficiency programmes for transmission and
  distribution

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Conclusion

• Energy efficiency in power sector could improve
  significantly
• RES and Cogeneration
• Decentralisation
• Investment in efficiency of the grid
• EEES directive to improve energy efficiency in
  supply, transmission and distribution(specific
  energy efficiency programmes and activities)

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• THANK YOU FOR YOUR ATTENTION
• www.panda.org/epo
• Mfabbri_at_wwfepo.org