Cluster 1: Medium term (2020) focusing on EU

2.1.1 Post-2010 target setting in the EU

Two different targets have been analysed for the 2020 share of RES in primary energy con-sumption. The level of these targets is based on a Commission Communication (European Commission, 2004), and discussions at the Renewables Conferences in 2004 in Berlin and Bonn, where a target of 20% of gross inland consumption in 2020 was proposed. The Commis-sion intends to gather more information on the impacts of this target before deciding on long term target setting, a decision probably to be taken in 2007.

The CASCADE MINTS project aims at contributing to this impact assessment by analyzing the feasibility and consequences of the 20% target for 2020 (‘High Target’). It will be compared to

‘Low target’ of a 12% share of renewables in primary energy consumption; this corresponds to the target set in the White Paper ‘Energy for the Future’ (1997) where it was set for 2010, see Table 2.1. The choice of this lower value is motivated from the fact that the targets should be well apart to allow for a meaningful comparison.

The High Target is partly supported by the FORRES 2020 project (Ragwitz et al, 2004) which concludes that 18.6% renewables in primary energy supply in 2020 is feasible under the ‘policy’

scenario, see Table 2.2. It should be noted that this ‘policy scenario’ also includes energy effi-ciency measures, implying that the high renewables share is possible due to a lower demand projection than the baseline. Cascade Mints Part 2 will attempt to achieve the target relative to the baseline projection.

Table 2.1 Projections underlying the 2010 target in the White Paper (EU, 1997)

Table 2.2 Key results FORRES 2020: Analysis of renewable energy’s evolution up to 2020 (Ragwitz, 2004) as presented at the Renewables conference in Bonn, June 2, 2004

2.1.2 Subtargets electricity sector

Some models can provide a least-cost distribution of the overall target over the electricity, heat and transport sector. Other models need to set an intermediate target for renewable electricity consumption. Therefore two reference values are adopted. Note that these are auxiliary values, for those models that do not impose a generic target.

• The FORRES 2020 study reports a share of 32.1% RES-E in gross electricity consumption in the Policy scenario. Therefore, in line with the 20% overall target a subtarget of 33% is proposed. This is the High RES-E subtarget.

• For the Low RES-E subtarget, the 22% target for RES-E is maintained, which was set for 2010 in the RES-E Directive, analogous to the fact that the 2010 White Paper for 2020 is used as well.

EU targets are defined as a share of gross electricity consumption. This is equal to domestic electricity generation plus net electricity imports. It does not correspond to final demand for electricity. All models apply these targets to the regions that most closely resemble the EU-25.

If Norway is included, a correction should be made for the contribution of hydropower.

2.1.3 Definitions

It is important to define clearly how the contribution of renewables (and nuclear) to primary en-ergy production is accounted for. There are two conventions:

• The Eurostat convention based on the direct equivalent methodology, where the direct out-put from nuclear, solar, wind and hydro is taken (conversion factor = 1).

• The substitution principle where substitution equivalents (e.g., efficiency factors for electric-ity generation) are used.

As detailed in the box below, IEA uses the direct accounting method, except for geothermal electricity, and nuclear, so it is a mixed approach. Eurostat uses a direct accounting method for all non-fossils. Cascade Mints uses the substitution principle, except for the current report, where the Eurostat convention has been adopted in order to be in line with policy discussions.

Different ways of accounting for non fossil fuels in primary energy production

• Eurostat: Production of primary energy comprises energy extracted from natural sources: coal, lignite, crude oil and natural gas. Renewables energy (hydro-, biomass, geothermal, wind and solar energy) as well as nuclear energy are also considered pri-mary energy sources. Nuclear heat is accounted for as the heat released during the fis-sion of uranium in a nuclear reactor.

• IEA: Total Primary Energy Supply is calculated using the physical energy content methodology. The quantity of geothermal energy entering electricity generation is in-ferred from the electricity production at geothermal plants assuming an average ther-mal efficiency of 10 percent. For solar, wind, tide and wave energy, the quantities en-tering electricity generation are equal to the electrical energy generated. Hydro shows the energy content of the electricity produced in hydro power plants. Hydro output ex-cludes output from pumped storage plants. Nuclear shows the primary heat equivalent of the electricity produced by a nuclear power plant with an average thermal efficiency of 33 percent.

• Cascade Mints: Renewable energy sources (hydro, wind, solar, geothermal) are con-verted to primary use while using a conversion factor of 3 for electricity generated (corresponding to average efficiency of 33%) and 1.1 for heat generated by these fuels (corresponding to an efficiency of 91%). For nuclear energy distinction is made be-tween imported fissile material and domestically reprocessed material from spent fuel (e.g. MOX) (both expressed in equivalent PJ). Again conversion factor 3 for electricity production and conversion factor 1.1 for heat. For hydrogen production from non fossil fuels, with the exception of electricity, use a conversion rate of 2 (equivalent to 50%) and add this amount to the corresponding source in the primary energy production ta-ble.

The targets as proposed for the Cascade Mints case studies are defined according to the Eurostat convention, see Table 2.1 and Table 2.2. The 18.6% (according to Eurostat convention) renew-ables in primary energy supply in 2020 in FORRES 2020 is 23% according to the substitution principle. In the Annexes to the White Paper, the share of 11.5% (Eurostat convention) is re-ported to be 14.6% according to the substitution principle.

Although the reference in policy discussions is the Eurostat convention, the Commission also acknowledges that the use of the substitution approach would have several advantages. It would give a more balanced reflection of the contribution of different forms of renewable energy, re-flect the objectives of renewable energy policy in terms of substitutions for the use of fossil fu-els and thus reducing CO2emissions and improving security of supply and allow a clearer com-parison between the effects of renewable energy and energy efficiency measures.