Presentation Meeting 2 Lund

Energy efficiency as a strategictool to meet energy, climate andeconomic challenges in the BalticSea RegionProfessor Peter LundAalto Universitypeter.lund@aalto.fiBSPC Green Growth and Energy Efficiency2 March 2012Peter Lund 2012Facts and trends in global energyand climate scenary• Fossil fuels >80% of energy, Oil >95% of transport fuels• Coal and Oil stands for 80% of all CO emissions2• CO down 60% by 2050, >80% in industry countries2• 50% of world population lives in cities (70% by 2040)• 65% of energy is consumed in cities (80% by 2040)UNPeEtPe,r 2L0u1n0d 2012European energy and climate policyroadmap toward 2050Power Sector Residential & Tertiary100 Industry TransportNon-CO2 agriculture Non-CO2 other sectors90• By 2020:) 80%0 70 – ”20-20-20 directives” in01= 60 energy efficiency,0 currentpolicy9509 renewables and emissions1( 40sn • Roadmap 2050 (Dec 2011)o 30iss 20ime 102O 0%C1990 2005 2030 2050Peter Lund 2012Example of costs with 2 tCO /capita2(EU) emission targetsPeter Lund 2012Less is More– focus on energy efficiency• Efficiency may stand for 50% of the emission reductions• Energy efficiency has often negative costsSource:Vattenfall, McKinseyPeter Lund 2012How to capitalize on the energyefficiency opportunities?PresentEnergyenergy Policiesefficiencysituation /MeasuresgoalsEuropean Energy Review (March 2012):1 Establish binding targets, they’re more flexible than binding measures2.Make sure utilities become energy savers instead of energy sellers3 Establish energy efficiency standards for products and equipment4 Set binding targets for retrofits of existing buildings5 Put financing mechanisms in placePeter Lund 2012How to reach the 20% energyefficiency target in EU?• EU energy efficiency potential 20% by 2020 (390 Mtoe/yr)• Commission proposal: remaining gap of 75.5 Mtoe• Energy Efficiency Obligations (Article 6 of the Directive)• Public sector obligations (Articles 4 and 5)• Measures prompting changes in Energy use behaviour (Articles 7 and 8)• Efficiency in energy supply (Articles 11 and 12)ParliamentCouncilCoalitionPeter Lund 2012Seeing societal challengesas a whole(Green Economy)KnowledgeandinnovationsEconomyand jobsEnergyandclimatePeter Lund 2012Europe 2020 strategy: a social,smarter and greener economy• Focus on innovation, knowledge “By moving towards amore sustainablesociety, and better resources use economy, we will unleasha surge of innovation andinvestment in clean• Combining energy, climate,technologies andproducts. New sectors willinnovations and industryprovide 'green collar' jobscompetitiveness into one policy and become sources ofsustainable growth forthe future," said Barroso.Doubling the use ofrenewable energy to 20 %by 2020 could generate€90bn of additionalinvestment, and 700,000new jobs.Peter Lund 2012 Source: European Commission, 2011Energy in the Baltic Sea Region(BSR) context• BSR is a major energy user in Europe– energy consumption 20% of EU energy,electricity 30%– imports 45% of its energy, high dependency onoil&gas (excl. Russia and Norway)• BSR is a major energy producer for Europe– Russia and Norway supplies 45% of EU oil and70% of EU natural gas90 million people– Russia and Poland supplies 25% of EU coal• Strong in renewable energy andcogeneration– 40-45% of EU’s renewable energy– RES share in energy >20% (2.5x EUavg), inelectricity 23% (1.7x EUavg)Peter Lund 2012Energy efficiency trends inthe BSR (energy intensity)• Energy intensity (toe/M€) is on average higher in BSR than in EU-27koe/$05pPeter Lund 2012Innovation trends(R&D intensity)• R&D is on average higher in the BSR than in EU-27GDP share of R&D expenditurein certain countriesRef: OECDPeter Lund 2012How to measure energy efficiency?- a macroeconomic view• Energy demand is considered as a wholePer capita Primary energy demand (toe)energy use =Capita (cap)Energy Country’s primary energy demand (toe)intensity =GNP($)Peter Lund 2012How to measure energy efficiency?- a microeconomic view• Energy demand is split into major sectors• Energy demand in each sector influenced by 3factors: Economic Activity, Structure, Intensity A: Economic activity; sector A ; A= sum of all subsectorsi S: Structure of activities; one sector S =A /A; sum of all =100%i i I: Energy intensity (=Energy/Activity); defined for each sector Ii Total energy use =”Activity Structure Intensity” E = A SUM { S I }; i=subsectori iPeter Lund 2012How to interpret increasing energydemand in terms of energy efficiency(demonstration of the microeconomic view)?Primary energy200”Energy use grows by 50 %”150100tTime1Peter Lund 2012Total energy use grows 50%Economic activity grows 100%Energy intensity improves 50%Primary energyActivity200Total energy use150100IntensitytTime1Peter Lund 2012Lahti City– clean tech cluster• Municipality owned utility• 2.5 TWh/yr, $220 million• 80% fossil fuels, 20% bioenergy• Waste-to-energy schemes• Strong clean tech clusterPeter Lund 2012Picture: Lahti CityLahti Green City Plan• Goal: 15-25% less energy by 2015;by 2025 halving CO emissions2• How: RES, eco-efficient urbanstructures; public transport• Economy : supporting local energyand clean tech cluster; technologydevelopment and piloting• Examples: Waste-to-energy services– 96% of urban waste recycled– advanced gasification technology(CFB, multi-fuel160 MW, $240 mn)– 90% of city connected to DH• Clean tech jobs: national clustercoordination (+500 new jobs)Photos: Lahti City, Päijät-Hämeen JäteHuolto LtdPeter Lund 2012Concluding remarks(Green Energy including EnergyEfficiency as a Strategic Tool)Local/GlobalLocal/GlobalKnowledge andMarketsTechnologyLeadershipand PolicyPartnership and Incentives andNetworking SupportPeter Lund 2012