ENERGY STRATEGY FOR THE BASQUE COUNTRY 2020 ENERGY STRATEGY FOR THE BASQUE COUNTRY 2020 INDUSTRIA, BERRIKUNTZA, MERKATARITZA ETA TURISMO SAILA
DEPARTAMENTO DE INDUSTRIA, INNOVACIÓN, COMERCIO Y TURISMO
Energy policy, the key to Basque social and economic development | 3E-2020
ENERGY STRATEGY FOR THE BASQUE COUNTRY 2020
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Š EVE Graphic design and layout: Composiciones RALI, S.A. Printing: Gråficas Calima, S.A. Legal deposit: BI 937-2012 Ecological Paper 100%
Energy policy, the key to Basque social and economic development | 3E-2020
CONTENTS
1. Energy policy, the key to Basque social and economic development . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1. Basque energy policy: a history. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2. Coordinating energy strategy with Basque Government policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3. Scope and process of preparing the strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6 8 10 16
2. Energy context to 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1. Global energy situation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2. International trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3. Context and principal directives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4. International energy forecasts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5. Energy price scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18 19 26 35 42 50
3. Energy in the Basque Country in 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1. Initial energy situation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2. Energy infrastructures in the Basque Country. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3. Business-as-usual energy scenario. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58 59 74 77
4. Strategic analysis of the Basque energy system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1. Principal risks and strengths. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2. Energy challenges key to the future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3. Basque long-term energy vision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4. Strategic objectives 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88 89 96 97 100
5. Strategic areas and lines of operation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1. Energy consuming sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2. Energy markets and Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3. Technological and Industrial Development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
102 105 143 168
6. Energy indicators 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1. Energy saving. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2. Renewable energy sources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3. Sustainable electricity supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4. Industrial technological development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
194 195 199 202 203
7. Environmental contribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
204
8. Investment and financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
216
9. Monitoring plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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APPENDIX I. Alternative scenarios for improving the share of renewables . . . . . . . . . . . . . . . . . . . . . . . . .
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APPENDIX II. Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Energy policy, the key to Basque social and economic development | 3E-2020
INTRODUCTION
One of the commitments taken on by the new Basque Government when preparing its plans for the ninth legislature (2009-2013) was to draw up a new Energy Strategy for the Basque Country to 2020. The strategy sets out the government’s objectives and strategic lines in the area of energy policy for the period 2011-2020. Its aim is to foster a more competitive and sustainable Basque Country, galvanising economic activity in the region. The strategy also takes into account the fact that we form part of both a European market and the Spanish energy system; we operate within a regulatory framework with existing commitments to which we wish to make a determined contribution. With high energy consumption levels and very few natural resources of its own, the Basque Country wants to address current and future challenges by moving firmly towards greater supply security, competitiveness and environmental sustainability. The vision is for an efficient energy model oriented in the long term towards a low-carbon economy with a gradual reduction in fossil fuel usage (targeting “zero oil” for energy uses), with natural gas viewed as the mainstay of the transition to renewables. All this requires ongoing, long-sighted action in order to overcome current difficulties. In order to ensure that the new strategy promotes suitable economic and social development, it was also important that the targets and lines of action should not be addressed on an isolated basis. Instead, they have been integrated and coordinated with other Basque government policies, especially in areas such as industrial development, the environment and research, development and innovation. Based on the specific features of the Basque social and economic fabric, three strategic areas have been established: energy consuming sectors, energy markets and industrial and technological development. These will be the main priority areas for action by the Basque Government over the coming decade. As well as the effort required from different industries, the strategy also highlights the important role of the different public administrations in galvanising and developing the process and making energy improvements in their facilities. One of the key features of the strategy is its response to the important challenge posed in the area of technological development. It sets out a series of actions intended to drive energy-related industries, promoting research, innovation and new business. Finally, I would like to thank the leading Basque socio-economic agents for their involvement in designing the strategy. Their contributions and cross-sector views have made a major contribution to orienting strategies and designing the details of specific lines of action. Bernabé Unda Barturen Regional Minister of Industry, Innovation, Trade and Tourism BASQUE GOVERNMENT
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Energy policy, the key to Basque social and economic development
Energy policy, the key to Basque social and economic development | 3E-2020
The energy crisis of the 1970s combined with a revolution in the economic world to create one of the most difficult international periods of recent decades. By the end of the decade, oil prices had risen to $33, directly affecting energy prices throughout Europe and further aggravating the existing economic crisis. The situation was felt particularly keenly in the Basque Country, whose economy was mostly based on the industrial sector, strongly weighted towards very energy-intensive industries (iron and steel, metal processing, cement, glass, paper, etc.). Moreover, Basque industry was underexposed to external competition and suffered from a large degree of obsolescence and lack of investment in manufacturing resources. The extreme weakness of the region’s position was reflected in its limited generating capacity and the very low efficiency of energy-consuming equipment and systems. Starting from this situation, since the 1980s, the Basque Country has led the way in planning and developing energy policies, which have formed the basic pillars of industrial policy and the country’s competitiveness. Action in this area is still of key importance. The industrial sector continues to account for a significant proportion of energy consumption; the Basque energy industry has seen major technological and industrial developments and as a country it has high levels of consumption, although these are in keeping with development and prosperity rates.
In the early 1980s, limited generating capacity and low efficiency placed the Basque Country in a weak energy position.
In the intervening years, major progress has been made in planning and developing energy policies …
The importance of energy policy is all the more evident if one takes into account the current context of instability that has emerged from a global financial crisis of dimensions unseen in recent decades. This crisis, too, has been partially fed by an unstable oil market. The resource has become increasingly volatile due to the fact that it is geostrategically ill-distributed, with output largely subjected to restrictive quotas by the countries with the largest reserves, many of which have a high level of geo-political risk. This scenario, therefore, has merely served to underpin the need for the Basque Country to have a sustainable and globally competitive economic and production model that can be backed by a suitable energy policy. It is in this context that the Energy Strategy of the Basque Country 2020 (which we shall refer to from here on as the 3E2020 [Estrategia Energética de Euskadi 2020]), the contents of which are set out here, has been drawn up. However, we shall start by reviewing the historical development of Basque energy policy in order to provide a better understanding of the approaches taken within the framework of the strategy.
… which it is important to underpin with a new strategy designed to cope with the complex current situation.
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Energy policy, the key to Basque social and economic development | 3E-2020
1.1. Basque energy policy: a history From the outset, Basque energy policy was based on two essential pillars: energy efficiency and diversification of supply sources.
The decade from 1981 to 1991 was to pose an attractive and at the same time complex challenge for the Basque Country. At a political and economic level, the new Basque government had just been formed and the Statute of Autonomy had come into force the previous year. In energy terms, the region suffered from obsolescence of production equipment and infrastructures. In this context, there was a clear need for a well-defined and delimited energy policy. Since then, this strategy has been implemented by way of ten-year strategies. Although the priorities have varied over the last thirty years, the succeeding strategies have shared a common core based on energy efficiency and diversification of supply sources. The Basque energy policy of 1982 was built around three basic concepts: energy efficiency, energy diversification (through natural gas) and the harnessing of renewable energy sources. t The starting point for laying the foundations of this drive for energy efficiency came in the form of support for industry in its transition towards more efficient industrial equipment –part of a wider programme of economic restructuring– and the launch of campaigns and support programmes intended to promote rational use of energy under the auspices of the Centre for Energy and Mining Savings and Development (CADEM), created in 1981 for this purpose. Collaboration from consumers in general, especially in the industrial sector, was very positive, making it possible to implement specific energy improvement projects effectively. t The diversification strategy focused on natural gas as the principal substitute for petroleum derivatives, which at the time accounted for 62% of demand. This meant promoting the construction of gas infrastructures and introducing new technologies such as combined heat and power (or cogeneration). Another milestone came with the creation of Sociedad de Gas de Euskadi in 1983. The company emerged out of the first gas network in Vitoria-Gasteiz, and development of the Gaviota offshore gas field, between 1987 and 1992, which helped speed up expansion of the Basque gas industry. This strategy, combined with the traditional possibilities of potential hydrocarbon reserves in the Basque-Cantabrian Basin, led to the creation in 1983 of Hidrocarburos de Euskadi, whose aim was to survey and promote exploration work in this area. t Advances in the area of renewable energy in the 1980s focused on technological research and development, with studies and investment to lay the knowledge bases and determine the potential of different renewable energy sources, such as small hydro, solar, wind and biomass.
… this approach was maintained in the 1991-2000 Strategy, which committed to improving and extending the network of gas pipelines and encouraging new sources, particularly combined heat and power.
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The Basque Energy Board, Ente Vasco de la Energía (EVE), was created at an institutional level in 1982 to act as a management instrument in this essential period in Basque energy history. Its mission was to manage all the key instruments in energy policy and provide effective governance in terms of planning, control and monitoring.
Energy policy, the key to Basque social and economic development | 3E-2020
The second energy strategy, drafted in 1991, sought to renew generating facilities in order to improve business competitiveness and residential comfort levels, encourage CHP, strengthen supply security and introduce environmental targets into energy planning criteria. It was also established a clear commitment to consolidating the initiatives begun in the previous decade: t Energy efficiency continued to be increased with upgrading of equipment in the industrial and services sectors and a major expansion of CHP facilities, which were already meeting over 10% of Basque power demand. t Development of the basic gas infrastructure was completed, creating system of gas transmission pipelines and industrial and residential / commercial distribution networks that gave over 90% of the Basque population access to natural gas. t In the area of renewable energy, a Territorial Sector Plan was drawn up for planning and harnessing the wind resource, leading to construction of the first Basque wind farm. New experiments began on using landfill biogas from the main dumpsites, and actions in other areas, such as small hydro. In line with international environmental trends and increasing awareness among Basque society of the importance of sustainability, the third Basque energy strategy, covering the decade up to 2010, focused on intensifying energy efficiency, promoting renewables, committing to combined cycle technology and reducing greenhouse gas emissions. In broad terms, this has led to the following actions: t Special emphasis has been placed on initiatives related to energy saving and efficiency in all sectors, with a major role for industry, which has accounted for around 70% of the savings made in this period.
The 2001-2010 strategy focused on combined cycle technology and placed environmental issues in a central position, with tangible targets in areas such as emissions reduction‌
t Efforts have been stepped up in the area of renewable energy with the promotion of hydroelectricity, wind, solar and biomass, and with the development of biofuels and low-enthalpy geothermal energy, in keeping with European guidelines. t New infrastructures have been built and some existing ones improved in order to increase the supply security, self-sufficiency, competitiveness and quality of the Basque energy system. Landmark developments include the liquefied natural gas import terminal and regasification plant in Bilbao Port, as well as new CHP and combined cycle gas facilities.
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Energy policy, the key to Basque social and economic development | 3E-2020
… In addition to savings and efficiency, the new 3E2020 energy strategy concentrates on renewable energy sources and reduced dependency on oil.
The new 3E2020 Energy Strategy, drawn up by the Basque Government over the last year, is intended to maintain the pace of development in the energy field in the Basque Country experienced over the last thirty years. The central core of the strategy comprises a final boost to savings and efficiency policies and the development of new technologies that will enable us to move towards less dependency on oil and greater use of low carbon energy sources. A policy of this kind can help minimise risks and capitalise on the opportunities arising from the current international uncertainty. At the same time, it can serve as a driving force for technological and industrial development of the local manufacturing industry, making the Basque Country an international reference point in the field of energy, particularly renewables. Given the importance of energy planning for the country’s competitiveness, it must be in line with other regional, state and international public policies; it is also essential to coordinate actions in this area by all government departments with a stake in the energy industry and other institutions in the Basque public administration.
1.2. Coordinating energy strategy with Basque Government policy The Energy Strategy of the Basque Country 2020 (3E2020) is one of the Basque Government’s acquired commitments and was included in the programme of government for the ninth Legislature (2009-2013). In order for the new Basque energy strategy to 2020 to contribute to regional development through economic growth based on competitiveness and the creation of new business opportunities, it is equally important that the aims and lines of action are not addressed in isolation, but instead are integrated and coordinated with other Basque government policies, especially those related to industrial development, the environment and R&D. The following are some of the Basque Government’s key commitments: t The commitment to preparing the new Energy Strategy for the Basque Country 2020 was set out in election platform on which the PSE successfully stood in the regional elections of 2009, under the section “Programme of Action, third theme priority: towards a new energy strategy for the Basque Country”. The new strategy will establish the priorities, targets, lines of work and financial resources for the period 2010-2020. It will do so by promoting dynamic and fully coordinated action among the different key departments of government in the areas of energy, industry, transport, agriculture, economy and the environment. The programme also promised coordinated participation by the Basque Government, the territorial (provincial) governments, city councils of the three provincial capitals and other municipal authorities, as well as business and social organisations.
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Energy policy, the key to Basque social and economic development | 3E-2020
t At the Inaugural Session of the 2009-2013 Basque Parliament on 5 May 2009, the Lehendakari reaffirmed the commitments made in the election platform, He said the Basque government would pay particular attention to consolidating and developing the Basque energy sector to assure supply in terms of diversification, quality and cost and at the same time encourage energy saving and efficiency; to contributing to developing the strategic renewable energy industry, which could become a world leader; and bringing in specific policies to meet European 20-20-20 targets.
One of the undertakings made by the Basque first minister upon his investiture was to publish the new Basque Energy Strategy 3E2020.
t At the World Future Energy Summit (17 January 2011) in a paper delivered at one of the panels, the Lehendakari explained that the Basque energy commitment was based on the Energy Strategy for the Basque Country 2020 whose aim is to “ensure sustainable availability of sufficient energy in terms of quantity, quality and time”. Energy efficiency was of key importance in achieving this aim, he said. “Only those societies that are capable of inculcating in their companies, their governments and their citizens the rational and efficient use of energy will be able to be competitive and sustainable at all levels”. In a “balance of two years in government”, delivered in Vitoria-Gasteiz (3 May 2011), he spoke of the design of the Energy Strategy for the Basque Country 2020, which seeks to ensure availability of sufficient energy in terms of quantity, quality and time at a competitive cost and in environmentally sustainable conditions, in line with our determined commitment to make the Basque Country a leader in renewable energy sources. t The issue has been dealt with in several speeches to the Basque Parliament Following his designation, the Basque Minister of Industry, Innovation, Trade and Tourism told the Industry, Innovation, Trade and Tourism Committee on 22 June 2009, that his department would assess to what extent the strategic targets set out in the 3E-2010 had been met. He also said that he would begin the process of preparing the new Strategy for the Basque Country, the 3E-2020. He has presented the initiative at a number of forums. The Basque Government’s Department of Industry, Innovation, Trade and Tourism also wants the programmes and investment in R&D to attract and galvanise energy-related business sectors. Technological development, inter-company co-operation and the creation of new business opportunities all need to be encouraged to make the Basque Country a technological and industrial reference point in the area of renewable energy.
The regional Minister for Industry, Innovation, Trade and Tourism has outlined the orientation of Basque energy policy to 2020 at a number of events …
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Energy policy, the key to Basque social and economic development | 3E-2020
The energy strategy is framed within the directives of the Business Competitiveness Plan 2010-2013 ‌
Among the plans most closely inter-related with design of the strategy are: t The Business Competitiveness Plan 2010-2013, an important focus for alignment with energy policies given that one of the three strategic axes in the plan involves integrating sustainability into economic activity. This strategic axis is developed in two major lines of action: incorporating sustainability-related requirements and turning them into advantages and achieving growth through efficient use of resources; and promoting saving, energy efficiency and renewable energy production. The first of these lines is partially related to the energy strategy while all of the planned actions in the second one directly affect it. The plan also consists of six lines horizontal to the three strategic axes (shown in green in the figure below). From an energy perspective, the most important of these relates to the consolidation of energy infrastructures, which will guarantee supply in competitive conditions, with special emphasis on all matters related to natural gas and the development and improvement of power grids.
Strategic action axes Open economy
Innovating, enterprising and technologically advanced economy
A sustainable economy
Lines of action
Strengthen modernisation and innovating and creative capacity companies Support business and institutions in acting from a global perspective
Consolidate key R&D+I networks and infrastructures
Incorporate the demands of sustainability turning them into advantages
Project image of a region attractive for investment, talent and tourism
Promote greater value-added production through research and technology
Promote saving, energy efficiency and renewable energy production
Innovating public procurement Contribute to the competitiveness of the Basque Country through management excellence
Promote financing adapted to companies’ needs
Actions for leading competitiveness
Promote co-operation
Develop an active business land policy
Consolidate the energy infrastructures that will ensure supply in competitive conditions
Figure 1.1. Strategic axes and lines of action contained in the Business Competitiveness Plan. Horizontal lines are shown in green Source: BCP 2010-2013.
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Energy policy, the key to Basque social and economic development | 3E-2020
t Energy strategy must be framed within the country’s directives and commitments set as out in the Science, Technology and Innovation Plan (STIP). The STIP 2010 marked out one line of present support comprising initiatives in support of all industries in which the Basque Country has a leading presence, and a second line of support for building the future, based on new knowledge-intensive industries, with a strong R&D culture; in this area, efforts will focus on encouraging strategic research, for which the plan proposes to use the figure of the CIC, or cooperative research centre. These areas of diversification and commitment for the future include energy, as well as bioscience, nano-science and smart transport electronics. A major initiative in this area has been the creation of the CIC energiGune, a research centre specialising in areas related to alternative energy sources and energy storage technologies. Energy is also one of the focus areas of the STIP 2015, currently under preparation, together with aging, transport and mobility, the digital world, advanced manufacture, bioscience and nanoscience. As the STIP 2015 itself states, the priority areas of development established for energy are the same as those set out in the EnergiBasque strategy.
SUPPORT THE PRESENT NEW MANUFACTURING SYSTEMS
SERVICES
ECOINNOVATION
BUILD THE FUTURE
BIOSCIENCE
NANOSCIENCE
ALTERNATIVE ENERGY
ELECTRONICS FOR INTELLIGENT TRANSPORT
LANGUAGE INDUSTRIES
SOCIAL INNOVATION
ENVIRONMENTAL HUMANITIES INDUSTRY SOCIAL AND BIODIVERSITY LAND METEOROLOGY ECONOMIC SCIENCE INTELLIGENT ENVIRONMENTS
HIGH-PERFORMANCE i-TOURGUNE MANUFACTURING NEW MATERIALS
… and the approaches contained in the STIP 2015 …
BIOBASQUE
merkaGUNE FOOD SAFETY
NANOBASQUE
energiGUNE
amiGUNE
ENVIROBASQUE SOCIAL RESEARCH METEOROLOGY AND CLIMATOLOGY
BUSINESS TRANSFORMATION
ICT
Figure 1.2. STIP 2010 document
t This energy strategy has been developed in inter-relation with the initiative “EcoEuskadi 2020”, a cross-cutting Basque Government strategy designed to advance towards a new model of sustainable progress that will enable balanced development of the country with lower consumption of resources. It is therefore the instrument on which the strategic objectives framed by the sectoral plans are established from the perspective of sustainability. Specifically, the strategic energy targets include “Minimising energy dependency on fossil-based energy types and offsetting emissions of greenhouse gases and the effects of climate change”. There are two principal lines of action: improvement in energy efficiency and reduction in energy consumption, and encouragement of generation and use of renewable energy (also two of the strategic objectives contained in the 3E2020 energy strategy). The contribution to the environmental sustainability of the energy strategy is most directly reflected in its contribution to reducing greenhouse gas emissions.
The commitments established in the 3E2020 are in line with the EcoEuskadi 2020 sustainability strategy, and are essential to meeting greenhouse gas emission reduction targets.
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Energy policy, the key to Basque social and economic development | 3E-2020
Participative process on Challenges
Participative process on Proposals
2030 scenarios
Diagonosis of situation
Preparatory work
Sustainability challenges Methodological structuring
May 2010
Strategic framework, targets and lines of action Keys to sustainability in the ACBC SUSTAINABLE DEVELOPMENT STRATEGY EcoEuskadi 2020
Sustainable development indicators
October 2010
February 2011
June 2011
Figure 1.3. Process of preparing the Sustainable Development Strategy, EcoEuskadi 2020
There has also been coordination between all departments of government with energy-related interests and with other Basque public institutions.
t The strategy’s interaction is not restricted to these plans; it also has an interdepartmental impact on other areas of government action, encompassing significant related plans and actions, such as the Environmental Framework Programme 20112015 and the Basque Plan for Combatting Climate Change 2020 from an environmental perspective, the Sustainable Mobility Master Plan 2020 in relation to transport, the Housing and Urban Regeneration Master Plan 2010-2013 in the area of housing, the Basque Airport Plan, the Multimodal Freight Transport Strategy Plan for the Autonomous Community of the Basque Country, the plan for Electric Vehicle Deployment in the Basque Country and the Basque Wave Power Strategy, centring on the bimep experimentation platform. Other elements interrelated to design of the energy policy involve legislative developments and initiatives, such as the Sustainable Mobility Act, the Rail Industry Act, the Basque Ports Act, the Climate Change Mitigation and Adaptation Act, the amended Basque Cultural Heritage Act, and the bill on amendment of the General Basque Environmental Protection Act.
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Energy policy, the key to Basque social and economic development | 3E-2020
Finally, mention should be made of a number of initiatives by the Spanish government which have also served as a framework of reference for the Basque Government in preparing this strategy. These include: t The Strategy for a Sustainable Economy, approved by the government in November 2009, sets out an ambitious and demanding programme of reforms, prioritising increased investment in research, development and innovation and promoting activities related to clean energy and energy saving. The strategy includes a varied rage of legislative, regulatory and administrative initiatives, including the Sustainable Economy Act. This is one of the most important pieces in the strategy since, from a crosscutting perspective with a structural scope, it addresses many of the changes required, with legislative backing, to incentivise and accelerate development of a more competitive and more innovating economy. Chapter III of the act contains a series of reforms which, from the position of environmental sustainability, affect the central areas of the economic model: sustainability of the energy model, emission reduction, transport and sustainable mobility. t Likewise, the Energy Efficiency and Renewable Energy Bill of 28 April, 2011 states that challenge currently facing Spanish energy policy requires continued decisive action to promote a model of sustainable development and commit to introduction of more efficient technologies in all production processes. That action, which is in line with European energy policy, must be structured around three basic axes: supply guarantee, economic competitiveness and respect for the environment, seeking enhanced awareness among the general public in a regulatory framework in which promotion of energy saving, improvements in energy efficiency and a boost to renewable energy sources are seen as strategic and cross-cutting. The bill is therefore in line with the European strategy of sustainable development and the creation of an energy model that will help create a low-emission economy. The act also complements the Sustainable Economy Act in the demarcation of competences and mechanisms of cooperation and coordination between administrations in the areas of promotion of energy efficiency and the development of renewable energy sources within the framework of the sectorial energy conference, as an organ for coordination between the central government and the autonomous communities in the preparation, development and application of state energy planning. Taking this framework into account, an attempt has been made in preparing the strategy to include the points of view of all relevant social and economic agents, with particularly active coordination between all government departments involved, given the relevant role some of them play in some of the energy-related lines of action.
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Energy policy, the key to Basque social and economic development | 3E-2020
1.3. Scope and process of preparing the strategy The energy strategy is produced to a tenyear timescale, with an interim review after five years.
This document sets out strategy for the next ten years. This is considered a suitable timeframe for proper strategic planning in the energy field, given the time required for some of the actions to reach maturity and the levels of investment required, which require long-sighted action lines. Nonetheless, in view of the constantly changing circumstances of the area, the strategy will be reviewed after five years. Although the 3E2020 is primarily prepared by the Department of Industry, Innovation, Trade and Tourism, a mechanism of inter-institutional and inter-departmental coordination and co-operation is of fundamental importance in meeting its targets and commitments. Energy policy is related to strategic lines linked to areas such as climate change, environmental protection, optimisation of consumption in transport, housing and industry, in which the knowledge and involvement of the bodies specifically responsible for those areas are essential. The strategy has been drawn up in consonance with the principal international and Spanish trends and guidelines. It is important to note that the Basque Country forms part of Spanish state electricity and gas systems, which in turn form part of the EU framework defined by European energy policy. This means that on occasions, the Basque Government’s room for manoeuvre is limited in regulatory and legislative terms, and is restricted to exercising a certain degree of influence. In order to create a solid strategy that is in keeping with the real local economic, energy and technological situation, the Basque Government has undertaken a process of deliberation, in which, starting from a preliminary analysis, it has sought to channel the participation of all of Basque society, through the country’s main economic and social agents. This process has involved the following actions: t During the period from 2008 to 2010, a number of studies, analyses and debates were organised in different areas (economic, energy-related, political, environmental, sectorial and technological) and at all levels (international, European, state and regional). These resulted in a strategic vision and a series of conclusions and premises that were used to shape an initial notion of the approaches to be followed in energy-related matters over the next ten years. t Once these initial approaches had been drawn up, they were reviewed by the country’s principal economic and social agents. The purpose was to discuss and debate the bases and approaches of the future 3E2020, with the ultimate aim of achieving a reasonable degree of consensus between them all.
The process of preparing the strategy has been participative, with submissions taken from the country’s most representative economic and social agents at a variety of forums established to this end.
16
t The results have been very satisfactory, involving over 200 organisations, jointly representing practically all the main economic and social agents in the country. The working tables were attended by around 50% of the organisations convened. At these forums the general lines of the strategy were presented and discussed and opinions, remarks and suggestions were taken from participants. Subsequent submissions were made via online mechanisms provided for the purpose, in order to enrich the contents of the strategy to as great an extent as possible.
Energy policy, the key to Basque social and economic development | 3E-2020
t With regard to inter-departmental coordination in the process of preparing the Basque Energy Strategy, in November 2010 a meeting was held to present the draft 3E2020 to different departments of the Basque Government and public companies. These included the Department of Industry, Innovation, Trade and Tourism, the Department of the Environment, Territorial Planning, Agriculture and Fishing, the Department of the Economy and Finance, the Department of Housing, Public Works and Transport, the Department of Education, Universities and Research, the Department of Health and Consumer Affairs, the Department of the Presidency and External Action and VISESA, SPRI, Ihobe and Basquetour. t Coordination with the Department of the Environment, Territorial Planning, Agriculture and Fishing on the strategy’s contribution to preparing the ACBC’s greenhouse gas emission reduction targets to 2020 has been of particular importance. The result is a 10-year strategy committed to improvement and sustainability of the Basque energy system and to the technological and economic development of the Basque country, as a source of long-term value creation for society. The rest of this document is structured as follows: t Chapter 2 offers an overview of the wider context insofar as it may affect Basque energy development. It includes an analysis of social, economic, environmental, technological and energy-related trends and the regulatory framework at state, European and international level. t Chapter 3 sets out the current situation of energy production and consumption in the Basque Country in order to assess the starting point, comprising both the current situation as of 2010 and the Business-as-Usual scenario to 2020. t Chapter 4 explains how the strategy for long-term Basque energy policy will be deployed, firstly evaluating the risks, opportunities and strengths identified in the analyses covered in the previous sections and going on to establish the strategic vision and targets to 2020. t Chapter 5 sets out a list of the initiatives and actions forming the strategy to 2020. These are grouped into three areas: energy consuming sectors; energy markets and supply; and technological and industrial development. t Chapter 6 describes the energy scenario to be achieved through implementation of the planned initiatives and actions, explaining the strategic targets that have been established. t Chapter 7 summarises the environmental impact of the strategy, highlighting the improvement in indicators of emissions of greenhouse gases and other pollutants and the main environmental impacts resulting from the energy system. t Chapter 8 sets out the investment planned for meeting the targets, together with the public contributions needed to mobilise these investments. It also gives key figures of the socio-economic impact of the strategy. t Chapter 9 contains a monitoring plan and sets out the contents of follow-up reports needed to monitor progress of the strategy and establish corrective measures where necessary. t Two appendices to the strategy include an economic report on the government’s contributions for the Energy Strategy and an analysis of alternative scenarios for improving the share of renewables to 2020.
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Energy context to 2020
Energy context to 2020 | 3E-2020
2.1. Global energy situation Energy consumption in recent decades has been characterised by intense growth. This trend has been especially acute over the last decade due to the growing industrialisation of developing countries and to the major economic growth of emerging countries, especially China and India. A short analysis of the current energy scenario and its development over recent years will suffice to provide a solid basis on which to base both the energy trends discussed below and the scenarios used in the Basque strategy.
Global production and consumption Energy demand, measured in terms of final consumption, has gone from approximately 7000 mtoe in 2001 to 8428 mtoe in 2008, an average annual growth of 2.3%. This compares to a figure of 1.7% for the last four decades since 1971. The sectors contributing most to total consumption are the residential, services and construction sectors with a combined share of 36%, compared to industry and transport (28% and 27% respectively). This distribution contrasts with sectorial consumption in the Basque Country, which is dominated by industry (45%) followed by transport (33%) and residential and services (20%). The predominant fuel types used are: coal in industry, oil in transport and gas in the residential, services and construction sector. The latter group also has the highest consumption of renewables and geothermal energy.123
Over the last decade final energy consumption has grown faster, with the highest levels of consumption in the residential, services and construction sectors.
Global energy production and consumption Coal
Oil
Gas
Nuclear
Waste and renewable fuels
Total production
3,314.2
4,059.2
2,591.1
712.2
1,224.8
365.9
12,267.4
Intermediary consumption (refining, power generation, etc.)
-2,491.1
-3,967.02
-1,277.6
-712.2
-154.5
1,353.5
-3,838.9
Total End Consumption
823.1
3,502.2
1,313.4
–
1,070.3
1,719.5
8,428.4
Industry
645.8
331.9
460.2
–
190.8
716.3
2,345.1
3.4
2,149.8
77.4
–
45.4
23.2
2,299.4
136.4
453.1
633.4
–
834.0
979.9
3,036.9
37.4
567.3
142.3
–
Production and consumption
Transport Others
3
Non-energy uses
–
Others1
–
Total
747.0
Table 2.1. Balance of global energy production and consumption in Mtoe. 2008 figures Source: IEA, Key World Energy Statistics 2010.
1 2
3
Includes hydro, geothermal, wind, solar, etc. Mostly crude oil, and the figure for final consumption therefore represents petroleum derivatives and products. Includes residential, services and construction.
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Energy context to 2020 | 3E-2020
By 2010, following the global economic crisis, China had become the world’s leading energy consumer, although it continues to have low per capita consumption.
International Energy Agency (IEA) figures show that by the end of the last decade, China had overtaken the USA as the world’s largest energy user, a milestone in economic history. Between them, these two countries now consume around one third of the total energy consumed on the planet. This change was not unexpected, given that China’s consumption has doubled since 2000, whereas in the US –as in other advanced countries– it has fallen, due to the economic crisis from which China has emerged in a strengthened position. Nonetheless, while the USA accounts for just 4.5% of the global population, China represents 20% and has an economy which is approximately half the size of America’s. This exemplifies the major differences in per capita energy consumption that exist between OECD countries and emerging powers, which are inevitably linked to relative and absolute economic differences between the two blocs. While American energy consumption per capita stands at nearly 8 toe per year, placing it in ninth position in the World Bank’s ranking, the figure for China is barely 1.5 toe and the country comes 65th in the list. In some other countries, such as Iceland and Middle Eastern countries such as Bahrain and Qatar, per capita consumption is as high as 15 toe.
0-1.5 1.5-3.0 3.0-4.5 4.5-6.0 > 6.0
Figure 2.1. Global map of energy consumption per capita in toe in 2009 Source: BP, Statistical Review of World Energy.
In 2009, global energy consumption fell by for the first time since 1982. mostly due to declining figures in OECD Countries.
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At a global level, the economic recession led to a 1.1% fall in the world’s primary energy consumption in 2009, the first such fall since 1982. The bulk of this decline was concentrated in OECD countries, where average energy consumption fell by 5%, i.e., more than the fall in GDP. This was the largest drop ever recorded and brought levels down to 1998 levels. The reduction in the USA came to 4.5% and in Europe 5%. However, energy consumption in developing countries followed a different pattern: consumption in the Middle East and Asia-Pacific regions did not fall in absolute terms, and in China it rose by 8.7%.
Energy context to 2020 | 3E-2020
Fossil Fuels and energy sources: consumption, production and reserves While growth in demand for oil has slowed over the last decade, natural gas and coal consumption has grown. In the case of the natural gas, this is the result of the technological opportunities the fuel offers in terms of improved efficiency. In the case of coal, it is due to the discovery of vast new reserves, combined with very high demand in emerging countries which are basing their industrial expansion on the same consumption models used by the west a century ago. Oil continues to be the most widely used energy source, with a 33% share of total production in 2008; however, the gap is narrowing, with coal now accounting for 24.5%. Renewable energy sources as a whole have also seen a high rate of growth –around 8-10% per year over the last decade, but they continue to account for only a very small share– around 3%.
Although petroleum continues to be the predominant source of consumption, its relative importance has decreased…
Oil production has grown less than natural gas and coal 1973
2008
1973
1.9%
2.9%
1.7%
24.5%
33.2%
2008 3,1%
13.2%
9,8%
27.0%
12,7% 13.2% 17,2%
10.6% 46.1%
0.9% 16.0%
Total: 6,115 mtoe
9.4%
10.0% 21.1%
5.8%
Total: 12,267 mtoe
48.1%
14.4%
Total: 4,676 mtoe
41,6%
15,6%
Total: 8,428 mtoe
Coal
Waste and renewable fuels
Nuclear (production graph) Electricity (consumption graph)
Gas
Oil
Others
Figure 2.2. Total global production of primary energy Source: IEA, Key World Energy Statistics 2010.
Figure 2.3. Total global end energy consumption Source: IEA, Key World Energy Statistics 2010.
China has become the world’s largest coal producer and consumer, with a growth in production and consumption of over 100% over the last decade, largely due to high demand from power generation. The fact that China and other emerging countries such as India, where consumption has grown by 80% in the last decade, have based much of their steep economic growth on coal consumption has forged a strong link between these economies and use of this fuel. This is reflected in coal production figures for the last decade, where annual global growth rates have been the highest of the last 50 years.
… with important growth in consumption of coal –largely fuelled by countries such as China and India, which have based their economic growth on this fuel–…
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Energy context to 2020 | 3E-2020
The US has the largest reserves, with 29% of the total. However, this does not mean that it is the largest consumer; in recent years coal consumption in OECD Countries has fallen due to increased environmental sensitivity about global warming. China, which has the world’s third-largest coal reserves, is by far the largest consumer. Indeed, in recent years it has had to resort to importing coal to meet its growing demand, which in 2009 represented 47% of global coal consumption. It is followed by India, also an importer, which accounts for 7.5% of total world consumption. By 2009, the global reserves-to-production4 (R/P) ratio, had grown to 119 years. This means that at current production rates, if current reserves remained unchanged, there would be enough coal to last 119 Years. … and natural gas, because of the advantages it offers in terms of improved efficiency, the success of LNG and new unconventional production methods.
Oil reserves are highly concentrated and output is mostly controlled along cartel-type lines.
There has been a sharp increase in natural gas consumption especially over the last two years. The success of the trade in liquefied natural gas (LNG) and new unconventional gas production methods have increased the competitiveness of the fuel. The global R/P ratio for natural gas stood at 63 years in 2009; however this figure may increase over coming years depending on the capacity of different countries to develop unconventional natural gas. In recent years, the discovery of large natural shale gas reserves in the USA has led to a degree of overcapacity which has allowed the market in other parts of the world to relax. More significantly, it has placed America ahead of Russia as the world’s leading gas producer, although Russia continues to have the world’s largest gas reserves with a 23.7% share of the total. Independently of the fall in demand experienced since 2009, the oil market has been characterised in recent years by a deceleration in consumption and high price volatility. OPEC countries control around 75% of the world’s crude oil reserves and nearly 50% of production. Following the tensions of 2008, non-OPEC countries have made a particular effort to intensify extraction and production, causing OPEC countries to tighten their policy on adjusting production to keep prices favourable. By region, the Middle East accounts for 57% of total current reserves, followed by Latin America with 15%. The R/P ratio for oil in 2009 was 45.7 Years.
CO2 emissions Needless to say, given the strong growth in energy consumption, carbon dioxide emissions have also increased notably over recent decades. The volume of CO2 emitted into the atmosphere has almost doubled over the last fifty years. Given consumption patterns and levels of industrialisation, it is also unsurprising that the majority of these emissions can be attributed to wealthy countries as opposed to developing ones. Around 65% of CO2 emissions during this period are estimated to have come from OECD Countries.
4
22
R/P = Total Reserves / Production.
Energy context to 2020 | 3E-2020
CO2 emissions over the last year were 30% higher than 1992, when the United Nations Framework Convention on Climate Change (UNFCCC) was signed in Rio de Janeiro. This is a long way from the 5% reduction on 1990 figures targeted by the Kyoto protocol for the period 2008-2012. As a result, atmospheric concentrations of carbon dioxide equivalent (carbon dioxide and other greenhouse gases) now stand at 430 parts per million (ppm) according to the latest records, contrasting with a level of 280 ppm before the start of the industrial revolution 160 years ago.
Over the last century CO2 emissions have increased steadily despite initiatives to halt the growth…
The pace of growth in CO2 emissions increased over the last decade 35 30 25 20 15 10 5 0
2009 = 30,830 Mt CO2
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
1964
1962
1960
2009 = 3,230 Mt CO2
Emissions from fossil fuels and cement production Emissions from land and forest use and alteration
Figure 2.4. CO2 emissions in million tonnes Note: The lighter area shows emissions resulting from what the UNFCCC Secretariat refers to as land use, land-use change and forestry (LULUCF). This concept refers to emissions caused by human action in related to land use and forestry. Source: Nature Geoscience – Globalcarbonproject.org, IEA, authors.
By country, China overtook the USA as the country with the highest level of emissions in 2006. Together, the two countries now account for around 40% of global CO2 equivalent emissions into the atmosphere. In per capita terms, however, there is a major difference between the two. According to the latest IEA figures, whereas China had an emission rate of 4.9 tonnes per inhabitant in 2008, the US figure was 18.4. In the same year, America fell one place to become the third largest carbon emitter per capita in the OECD, after Luxembourg and Australia. Globally, the list of emissions per capita continued to be headed, as it has over the last decade, by Qatar, with 42.07 million tonnes, followed by the United Arab Emirates, with 32.8, and Bahrain, with 29.1.
… and by last year stood 30% above 1990 levels, due to increased consumption in countries that make intensive use of fossil-fuels, …
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Energy context to 2020 | 3E-2020
By fuel, coal contributes most to global CO2 emissions 1973
2009 14.4%
19.9%
0.1% 36.8%
0.4%
34.9%
50.6%
42.9%
Total 1973: 16,990 Mt CO2 Gas
Others
Total 2009: 30,830 Mt CO2 Coal
Oil
Figure 2.5. Total volume of CO2 emissions by fuel type Note: the category “Others” includes emissions caused by industrial and municipal waste. Source: IEA, Key World Energy Statistics 2010.
… particularly coal, the most pollutant of all fuels and therefore the cause of most emissions.
At the same time, trends in carbon dioxide emissions are directly related to trends in fossil fuel consumption. Coal use has grown to a greater extent over the last decade than oil. Given that coal releases approximately 32% more CO2 than oil and between 80% and 90% more than natural gas, this also explains the continuous increase in emission rates. In just 35 years, China has gone from accounting for 5.7% of global emissions to 22.3% 1973 14.4%
2009
1.7%1.0% 3.8%
8.3% 0.9% 5.1%
3.5%
22.3%
5.7% 3.0% 2.7% 1.9%
43.0% 65.8%
10.3% 3.6% 3.0%
Total 1973: 16,990 Mtm CO2
Total 2009: 30,830 Mtm CO2
Middle East
OECD
Latin America
China
Bunkers
Africa
Asia (not incl. China)
Former USSR
Europe (non OECD)
Figure 2.6. Total volume of CO2 emissions by region Note: “Bunkers” includes emissions caused by aviation and maritime consumption. These categories tend to be listed separately because they are not included in Kyoto Protocol reduction targets. Source: IEA, Key World Energy Statistics 2010,
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Energy context to 2020 | 3E-2020
In conclusion, the present global energy model needs to be profoundly revised. Price rises in fossil fuels, essentially among the two largest pollutants, coal and oil, combined with the current unsustainable volume of GHG emissions and a lack of stability in those countries in which most reserves are located, should necessarily lead national governments, starting with the most advanced economies, to begin a responsible debate on the foundations of their energy models. This process should result in a solid and clearcut raft of policies enabling creation of a new model that will considerably reduce the role of fossil fuels and increase renewables. It must also instil among all social partners a permanent culture of energy saving, efficiency and rational use.
The current energy model is not sustainable in the medium to long term.
Any approach designed to advance towards a new model must take into account a series of social, economic and technological trends in our setting.
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Energy context to 2020 | 3E-2020
2.2. International trends In order to understand the direction energy policy needs to take in this new decade and orient it in consequence, it is extremely important to analyse the main economic and energy axes around which the world revolves today. The result will be a series of key trends and factors which, together with the specificities of the energy context, will enable us to identify the principal risks and opportunities that need to be taken into account in order to maximise the contribution of the new strategy to developing a sustainable economy in the Basque Country.
Social and demographic trends After sharp population growth in the last 50 years, demographic trends have now reached a turning point, with more moderate growth predicted from now to around 2050, followed by stagnation…
… as a result of a number of social changes in lifestyle and family structure.
26
UN figures suggest that the sharp increase in world population of recent decades is now beginning to slow down. During 2011, the world’s population will hit seven billion, an increase of one billion in little over ten years. The spurt in growth began with a mid-twentieth century baby boom throughout the western world, together with relatively high growth rates in developing countries. In recent decades, this trend has been further accompanied by rapid population growth in emerging countries. As a result, the world’s population has risen by four billion in just 50 years, from a figure of just 3 billion in 1960. One important reason for this trend has been a change in living standards, bringing an increase in quality of life as a result of economic growth. With greater purchasing power, people are spending more time on leisure activities and individual pleasures; young people are leaving education later and postponing leaving home, and consequently putting off having children until they are older. The result has been a considerable fall in fertility rates (in regions such as the European Union, the figure now stands below 2.1, the minimum required to maintain a constant population) and an increase in life expectancy – now 67 years globally and 78 in OECD countries. In OECD countries, these trends have had other effects, such as a greater individual culture of consumerism, greater demand for personalised services and a change in traditional social moulds, characterised by a greater variety of family structures, leading to changes in household size and make-up and more scattered consumption points.
Energy context to 2020 | 3E-2020
By 2050, global population will reach 9 billion.
Figure 2.7. Historical population rise and future estimations
The principal consequence of these trends has been a gradual ageing of the population in advanced countries. By 2050, a third of the population of these countries will be past retirement age, with approximately 10% aged over 80. The result will be a smaller workforce and a reduction in production and GDP growth. In addition, the migratory balance in emerging economies will tend to be reversed at the expense of wealthier countries.
Source: United Nations, The Economist.
Nonetheless, there is no doubt that the world population will continue growing, albeit at a different pace. Population aging –a trend in which developing countries are only a few decades behind advanced ones– will lead to a further reduction in growth. The United Nations estimates that it will take around 15 years for the world population to rise by a further billion, with the eight billion mark being reached somewhere around 2025. According to the same calculations, by 2050 population growth will be practically flat, and from that point on, from a peak of nine billion, population figures will stabilise or may even start to decline. It is important to stress that these trends present different energy challenges for emerging, advanced and developing countries: t Large population masses in emerging countries will create higher overall energy consumption rates. The challenge in this case will be to ensure sustainable growth; greater consumption will increase the likelihood of tension on markets for commodities, including fossil fuels. It will also negatively impact the environment, especially if these economies follow the same growth models as those used by wealthier countries over the last 50 years, as seems likely.
Greater consumption in emerging countries, greater pressure for efficiency and productivity in advanced countries and greater challenges for underdeveloped countries to access energy.
t In advanced countries, with high per capita consumption rates and an older population, the challenge will be to increase productivity, especially taking into account the progressive dispersion in consumption points. It will therefore be especially important to implement policies to promote improved efficiency and create suitable investment environments that favour innovation and promote technologies for the future, where the energy industry can play an important role. t Finally, in order to ensure that developing countries are not definitively left behind and to minimise existing inequalities, the challenge will be to improve these nations’ access to energy, for example, through wider availability of energy self-consumption points.
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Energy context to 2020 | 3E-2020
Economic trends The change in the global economic balance between advanced and emerging countries has sped up with the economic crisis…
Defining a general trend or pattern likely to be followed by the economy of coming years is a complex task, given the scale of the economic crisis sparked by the American sub-prime mortgage collapse and the way it has unravelled across the globe. Events such as the sovereign debt crisis and financial restructuring that followed the collapse of Lehman Brothers in 2008 have cast a shadow across the economic panorama. Nonetheless, one trend has been marginally more evident than all others since the beginning of the noughties and has been further strengthened by the financial crisis: a shift in the centre of gravity of the global economy. Barely ten years ago, the so-called wealthy countries dominated the global economy, nominally accounting for two thirds of total world GDP. This share has now fallen to approximately half, and in another ten years’ time it may drop to 40%. The strong performance of emerging economies and most developing countries in the recent years of the crisis –due in most cases to market globalisation and suitable policymaking– has been especially important. While the recession has impacted most advanced economies, adding dramatically to an existing decline in average growth rates, emerging and developing countries have continued This deceleration of the world’s most advanced to grow strongly – by neareconomies is in stark contrast to the high growth rate of emerging economies ly 8% in the case of Asia. In 2007, the total GDP in pur10 chasing power parity (PPP)5 of G7 countries (USA, Japan, Asia 8 Germany, France, the United Kingdom, Italy and Can6 ada) was 60% higher than the combined GDP of the Latin America “E7” group (Brazil, Russia, 4 India, China, Indonesia, Mexico and Turkey). By the 2 Advanced economies end of 2010 it is estimated that this differential may 0 have fallen to 35%. 1980 85 90 95 2000 05 10 15 Figure 2.8. Comparison between trends in growth of advanced economies and emerging countries in Asia and Latin America Source: IMF, WEO Oct 2010.
5
28
Unlike nominal GDP, GDP at in PPP (or “real GDP”) is adjusted to the purchasing power of a given country or region, making it more useful when making a comparative analysis of different economies.
Energy context to 2020 | 3E-2020
Given that they started from a considerably lower position and that countries such as China and India still have a very large emerging middle class, the potential for growth is large. By 2020, the leading emerging economies may have overtaken the traditional axis of G7 countries in PPP, growing to be twice as large by 2050. The G7 has seen annual average growth of 2.1% in the period 1998-2008; according to calculations by a group of experts from the University of Harvard, with current demographic and productivity trends, that figure could drop to around 1.45% for the next ten years.
… with the result that economies of the E7 countries may overtake the G7 in size around the end of the decade, growing to double the size by 2050, …
Although this radical shift in the world economic order would appear to be inevitable, the rate at which it takes place will depend on trends in a number of key areas: t The competitiveness of advanced countries and their position vis-à-vis emerging economies will depend on the extent to which can achieve models of sustainable growth, with a suitable balance between long term deficit control and short-term growth and spending policies and also on the extent to which emerging countries can reorient their policies towards a greater global balance –for example, by allowing currencies to float more freely (as in the case of China). t Another aspect that will determine the relative performance of advanced economies is the pace at which reasonable levels of investment and spending recover from what is proving to be a long and costly phase of deleverage following the financial crisis.
… this trend may be faster or slower depending on the capability of advanced countries to implement fiscally responsible growth policies and labour flexibility, and strike the right balance between savings and credit.
t Moreover, the continued global mismatch caused by the difference between the trade surplus and deficit of some emerging and advanced economies not only harms the overall competitiveness of the latter, which with some exceptions –such as Germany– tend to have stronger domestic demand and weaker exports; it also works against the interests of the world economy as a whole. t Finally, if the demographic aspect –which as we have seen is one of the most characteristic differences between developed and emerging countries– is accompanied by slow recovery on the employment market, (with 17 million more people now unemployed as a result of the crisis) the barriers to growth will be greater and the economic trends described here will occur all the quicker. Given that the greatest unemployment has occurred in advanced countries, the governments of these countries can play a particularly important role in ensuring dynamic and highly skilled labour markets.
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Energy context to 2020 | 3E-2020
The employment market has been affected more in advanced economies Advanced Economies
Emerging and Developing Economies
9
9
8
8
7
7
6
6
5 2000
5 05
10
15
2000
05
10
15
Figure 2.9. Unemployment: trends and prospects Source: IMF, WEO Oct 2010.
Generally speaking, the more governments of advanced countries implement reforms and policies to tackle present and future adversities, many arising from these factors, the more solid will be the foundations for recovery in the medium term and it will be possible to avoid a long-term phase of economic stagnation and a loss of competitiveness with respect to emerging powers. The main challenges any energy policy needs to address are increasing exporting potential; improving efficiency to cope with market pressure, and contributing to the country’s productivity.
In any case, an effective energy strategy can also contribute to minimising the economic impact of the change in the world economic order, in effectively addressing a series of challenges: t Exports from advanced countries can benefit from the energy sector’s contribution to generating valuable knowledge to sell services and new technologies abroad, especially taking into account the growing interconnection between advanced economies and developing markets and the latters’ potential energy demand. t The challenge of energy efficiency is becoming all the more important with the rapid rise of emerging economies and the greater energy consumption involved; the strong pressure brought to bear on natural resource markets and the environment affects the costs of companies from net importers of these resources, and thus also their competitiveness. Moreover, the investment and cost decisions taken by governments will influence the energy mix, in turn impacting business competitiveness by affecting the energy bill. t Finally, energy can also be used to achieve higher productivity, in that it offers important opportunities in terms of development of technological innovation and the provision of highly-skilled jobs thanks to the generation of high value knowledge.
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It should be noted, too, that as a result of these economic trends, the energy sector worldwide is also enjoying greater representation. The emergence of large middle classes in emerging countries, low labour costs and production offshoring towards these countries are reorganising and shifting the balance in many industries. Globalisation will play a very important role in the industry, where the major efforts of recent years in terms of energy efficiency and cost reduction will need to be maintained if it is not to be left behind in terms of competitiveness. A renewed commitment to quality and innovation will also be required in the most advanced countries. The automobile industry has seen strong recovery, mainly thanks to subsidies from European and US governments, with China now the main market. However, the medium-term trend will be for continued overcapacity in the sector in relation to demand, as well as the development of electric vehicle technology. There will also be significant growth in transport, characterised by greater local and international mobility and a rise in high-speed rail. Road transport will retain its pole position despite reduced growth. The construction industry will face greater demands in terms of quality and sustainability, in both new buildings and rehabilitation work. Finally, tourism, health services and agriculture are forecast to play an especially important role. There will be a sharp rise in tourism due to a large new sector of the population having access to leisure time in countries such as China and India. Together with trade, this will also have an impact on the transport sector. Health services will be notably affected by population aging and higher living standards, while the importance of agriculture will lie not so much in volume, which will be smaller, as in its overall impact: future innovations in crop technologies should help ease tension in the commodities and food markets.
The change in the economic order also affects the global sectoral make-up, due to the shift in demand and the emergence of new markets.
Sectoral aspects and the energy implications suggest that the energy sector will also be affected by the new currents of change. Increased demand for all forms of energy (resources, fossil fuels, technologies, services, etc.), growth in energy-intensive sectors such as industry and transport, and upward pressure on prices associated with more traditional forms of energy, show the need to adapt energy policies so satisfy demand using mechanisms that focus more on efficient energy generation and make greater use of low-carbon technologies.
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Environmental Trends New more realistic analyses suggest a 3-3.5°C rise in global temperatures as compared to preindustrial levels, in contrast to the 2°C target set at Copenhagen.
In analysing the future for the environment, it needs to be remembered that there is no empirical certainty as to what is going to happen – and particularly where the most significant changes are likely to take place. Nonetheless, there appears to be a reasonable degree of consensus among the international community as to one trend, which we may take as a reference point; even allowing for greater efforts to reduce carbon emissions, the average temperature of the earth at the end of this century is likely to be at least 3°C higher than it was at the start of the Industrial Revolution. If atmospheric CO2 levels stabilised at current levels, 50% higher than at the start of the Industrial Revolution, the temperature of the planet would have risen half a degree, but the reality is that there has been practically no change in the trend since the end of the twentieth century. The IEA has defined a more realistic scenario of “new policies” 45 Forecast Current policies scenario 35 “New policies” scenario 25
“Two-degree” scenario
15 2008
15
20
25
30
35
Figure 2.10. Global CO2 emissions scenarios in million tonnes
The non-binding consensus document produced by the 2009 Copenhagen summit sets a target of holding temperature levels at the end of the century to 2°C above preindustrial levels but this seems difficult to achieve in practice. A more realistic analysis is contained in the latest World Energy Outlook report (2010) from the International Energy Agency (IEA), which speaks of a “New Policies Scenario” with global warming of between 3 and 3.5° C in 2100.
Source: IEA, The Economist.
The greater the deviation from the international 2°C target, the worse the consequences. An 6° rise is considered to mark the point of no return.
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The consequences of these changes may be varied and complex, depending on the real gravity of the increase in global temperature. In general, the principal risks include more frequent heat waves and the fact that ecosystems will face different climate patterns to those in which they have evolved, with the resulting danger for resident species. The effects of the temperature rise will be much more obvious in places where the climate is already considered extreme. For example, rain will be heavier in humid climate zones and will be in short supply in drier areas, increasing the risk of floods and prolonged drought, respectively. The forecast thawing of mountain glaciers and some areas of the Arctic in summer will cause a gradual increase in sea levels. Nonetheless, the experts have identified a 6° C threshold as being the point of no return, after which the changes would be structural and irreversible, drastically affecting current forms of human behaviour.
Energy context to 2020 | 3E-2020
The difference between tackling global warming of 2-3° and is a decisive one. It is clear that, although a level of warming has been accepted to which it will be necessary to adapt, increased mitigation measures will also be necessary. This combination of adaptation and mitigation will be a key feature of national environmental policies in coming years; from an energy perspective this will entail a series of demands that can be classified into two basic groups: t On the demand side, the need to instil general and continued habits of energy saving and sustainable consumption. t On the supply side, the importance of using more clean energy generation. Greater use of renewable energy sources and a commitment to cleaner conventional energy, such as natural gas, will be essential in reducing CO2 emissions.
This necessitates adaptation and mitigation policies that must translate into greater effort in energy savings and sustainable consumption, with a larger contribution from clean energy sources.
Technological trends Technology has an essential role to play in increasing efficiency and reducing CO2 emissions. Current investment in energy technology is geared towards meeting these targets, and derives out of both political action in the field of environmental conservation and an overarching need to reduce company costs and increase competitiveness. As a result, improvements in the energy efficiency rate of OECD countries have again begun to gather pace, after many years of relatively moderate progress; nonetheless, these advances still represent a small portion of the long road left to be travelled. In the main energy consuming sectors, the technological potential to achieve more efficient energy use and a low-carbon future can be summarised as follows: t The electricity industry is beginning to see large-scale moves towards a break with the current dependency on fossil fuels. Major developments include increased use of renewable energy sources, especially wind and solar (the costs of the latter are now beginning to come down), in which there has been unprecedented investment, and carbon capture and storage (CCS) technologies. t There is great potential for achieving these objectives in the area of distribution grids given the incipient development of smart grids. The new grids will allow distributed generation and microgeneration (including from renewable energy sources) to be integrated with demand, giving better control of peak loads and distribution of energy efficiency programmes. Moreover, demand management will actively contribute to a heightened awareness among users by cutting household electricity bills.
Technology will form the keystone of future advances in energy efficiency and emission reduction, ‌
‌ with much of the potential concentrated in renewable energy sources, smart grids, heat systems and vehicle hybridization and electrification.
t Industry is the sector where the twin goals of reducing emissions and increasing efficiency most urgently require major contributions. Successful use of CCS in high energy-consuming industries, such as iron, steel, cement, chemicals, petrochemicals, pulp and paper, will be decisive. It will also be important to promote the development of new technologies such as fusion reduction for manufacturing iron and steel, membrane separation for waste treatment and gasification of black liquor as a biofuel for producing electricity and heat (source: IEA, Energy Technology Perspectives 2010).
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t In advanced countries, practically all the potential for energy and CO2 savings in buildings centres on developing technologies for existing properties. Technologies now under development that can be applied in this industry are related to water heating and space heating, including high-efficiency heat pumps, combined with the use of low enthalpy geothermal energy, solar heating systems and CHP systems with hydrogen fuel cells. t Growth in energy consumption in the transport sector is forecast to be very high. Achieving major reductions in carbon emissions in this sector will depend on implementing efficient consumption technologies in engines, an increase in the proportion of low-carbon-emitting fuels, and a modification in the structure of the vehicles. Nonetheless, reducing emissions in absolute terms will be very complex, given the huge growth potential of the industry in emerging countries. The technologies that will mark the path to success will be related to improvements in internal combustion engines, hybridization of vehicles and the use of plug-in hybrids (hybrids that can be plugged into the mains to charge their batteries), electric vehicles, vehicles using biofuels, vehicles using compressed natural gas and fuel-cell powered vehicles. Commercialisation of these technologies will depend on public/ private R&D initaitives.
Many of these technologies currently involve higher costs than those related to existing forms of energy consumption. Technological lessons learnt through R&D will be vital for reducing these costs and developing appropriate markets. In this regard, the role of governments in developing technology policies that take these conditioning factors into account will be decisive in laying the foundations for a structure that attracts the interest of investors and industry. This effort will need to take full advantage of the favourable framework created by the new directives and international and state policies listed below.
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2.3. Context and principal directives The last fifteen years have been particularly intense in terms of energy and environmental policy. Concern with economic growth, stability in energy markets and, above all, global warming have formed the keystone of policymaking at all levels: international, European, national and regional.
International directives and policies While legislative powers in the area of energy essentially reside with national governments, stimulated in the case of European Union member states through EC directives, there have also been global agreements and route maps intended to lay the foundations for what is considered good practice in energy regulation and management. Clearly, the Kyoto protocol, with its political and geostrategic implications, stands head and shoulders above the rest. It was devised to combat global warming by reducing emissions of the gases that cause the greenhouse effect, essentially carbon dioxide or CO2, by a minimum of roughly 5% between 2008 and 2012, as compared to 1990 levels. This goal was translated into binding individual targets for each of the 36 industrialised countries that initially signed up, calculated on the basis of each country’s economic characteristics. Under the auspices of the United Nations, within the framework of the 1992 UN Framework Convention on Climate Change 1992, the protocol was initially adopted on 11 December 1997, and was finally ratified and entered into force on 16 February 2005, not without a long preliminary period of intense negotiation. The 191 countries that have now ratified the agreement reflect a level of consensus as to the need to tackle the problem of global warming. Nonetheless, most countries do not have binding targets because they are not industrialised powers. This led the USA, the world’s second largest CO2 emitter after China and first at the time the protocol was ratified, to back out of the protocol in 2001 considering that it was unfair for no restrictions to be placed on some of the largest GHG emitters, because they were classed as developing countries.
At an international level, political initiative has been dominated by the development of the Kyoto protocol, …
… but because it affects only 36 countries – not including emerging economies– and was not ratified by the USA, it has had only limited results, …
The results in terms of emission reductions from the 36 countries with commitments have been uneven. Although the commitments are binding, no effective sanctioning mechanisms have been established in the event of a breach. As a result, in contrast to the good performance by eastern countries, including Russia, one of the world’s largest carbon emitters, success has been more varied among the countries of Western Europe. Canada, which has the world’s highest per capita rate of emissions after the United States, has also failed to achieve satisfactory results. In all, it seems unviable for the global 5% reduction target to be met within the 2008-2012 timeframe.
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A change in American administration at the end of 2008 also brought a change in awareness on the importance of keeping in step with the majority of the world’s countries in the fight against global warming. However, Congress is highly unlikely to ratify the protocol before 2014, and the energy and environmental legislation initially proposed by the White House, which includes a CO2 emissions trading scheme similar to the European model, has also reached an impasse due to a lack of support in Congress. In recent years China, which is estimated to be responsible for around 22% of total global pollutant emissions, has begun to show more concern about the problem, which endangers its long-term economic and social growth, and the country has been obliged to implemented tighter policies. In 2007 it passed the first National Action Plan on Climate Change, making it the first developing country to publish a national energy and environment strategy. It is also the world’s largest producer of renewable energy. … and a new post2012 scenario remains to be drawn up at the next two summits in South Africa (2011) and Qatar or South Korea (2012).
Other international initiatives, including the WFER, centre on aspects related to: infrastructures, LNG, renewables, smart grids, demand management, and progressive liberalisation of the industry.
Work is currently underway to extend the Kyoto Protocol past the 2012 timeframe and create a mechanism that will allow developing countries, essentially emerging powers, to commit to targets as well. With this aim, the thirteenth climate summit was held in Bali in December 2007. The summit produced the “Bali Road Map”, a two-year process intended to lay the foundations for a post-2012 regime, which was to have been endorsed at the Fifteenth Climate Change Conference in Copenhagen in December 2009. However, the Copenhagen summit failed to make effective headway in terms of binding commitments, due to the volume of interests at stake and the difficulty of reaching overall agreement, and it was decided to put off the task of designing the post 2012-framework to the next three conferences: Cancun in December 2010, South Africa in 2011 and Qatar or South Korea in 2012. Although there is as yet no consensus on stricter emissions targets and a new agreement incorporating the USA and China, the Cancun conference did manage to make progress in some important areas: transfer of 100 billion dollars to developing countries, creation of a Green Climate Fund to be managed by the World Bank, transfer of technology, and agreements on compensation for controlling deforestation. The important task of reaching a compromise deal on redefinition of the central core of the protocol has been left to the two next summits. In parallel with international political action on global warming, which is intrinsically associated with energy policy, over the last decade a number of coordinated international initiatives have been launched that seek to devise guidelines on how to use energy policies properly to contribute to sustainable growth and encourage investment in the sector. These include the World Forum on Energy Regulation (WFER), which, at its three-yearly meetings, has contributed to establishing the principal strategic priorities that governments should take into consideration in designing their respective energy policies. At its fourth meeting, held in Athens in October 2009, the WFER focused on four key elements: t Advancing reliability and security of supply by means of policies that incentivise investment in infrastructures based on a low-carbon system, greater cross-border cooperation to achieve more open markets and greater use of liquefied natural gas (LNG) in international gas trade. t Reinforcing environmental commitments through a greater share of renewable power generation, significant advances in demand management, creation of a favourable framework for investment, development of smart meters and grids, and strong commitment to energy efficiency.
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t Giving greater importance to consumers, both private and industrial, offering greater protection, information, transparency and communication tools that allow greater customer participation; and supporting measures to heighten awareness and encourage behaviour that leads to changes in certain consumption habits. t Orienting the role of political energy-related actions towards incentivising investment in R&D, developing the LNG market, and progressively extending industry liberalisation, especially in developing countries.
European directives and policies The European Union has played an active role in terms of energy initiatives, as its leadership in the initial stages of the Kyoto Protocol, the creation of a CO2 emission trading scheme and the fostering of free gas and electricity markets show. Nonetheless, until the end of the last decade it had no common energy policy.
In December 2008, the EU passed the first common energy policy, the “20-20-20 plan”, …
At a meeting in Hampton Court, England on 27 October 2005, the European Council decided to implement a bringing energy policy. The principles of the new policy were outlined in the Green Paper “A European Strategy for Sustainable, Competitive and Secure Energy” published by the European Commission on 8 March 2006. These principles centre on the way of continuing to achieve a low-carbon economy, a competitive energy market and a more secure supply. Following two years of conversations, communiques and negotiations, in December 2008, the European Parliament approved the legislative package that would shape European energy policy for the next decade, dubbed the “20-20-20 plan”, because of its three basic targets: a 20% reduction in greenhouse gas emissions, a 20% reduction in primary energy consumption and 20% share of renewable energy in final consumption.
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… with a commitment to cut GHG emissions by 20% of 1990 levels by 2020, using mechanisms such as the ETS and specific commitments in specific sectors and technologies, …
… a 20% reduction in consumption by 2020 through savings and efficiency policies,…
t In order to achieve the binding target of a 20% reduction in greenhouse gas (GHG) emissions compared to 1990 levels (60%-80% for 2050) it is planned to continue developing the community greenhouse gas emission trading scheme (the market in CO2 emission rights) through to 2020. The scheme, launched in 2005, currently affects over 10,000 industrial and energy facilities. The new development allows for a gradual reduction in the quantity of emission rights issued and the introduction of emission auctions for distributing these rights as and from 2013. It will be rolled out gradually in the case of factories. Initially, in 2013 80% of rights will be free of charge, with the figure steadily falling to 30% in 2020. In all, companies operating under the European emissions trading scheme will have to reduce emissions by 21% between 2005 and 2020. Binding national targets have also been set for each member state for reducing emissions from sources not included in the ETS, which represent around 60% of the total: road and sea transport, buildings, services, agriculture and small factories. Especially significant is the goal of reducing CO2 emissions from automobiles, which are limited to 120 g/km in 2012 and 95 g/km in 2020 for new vehicles. Finally, another important legislative initiative in the area of emissions reduction is the directive promoting geological storage of carbon dioxide, to be primarily financed by private revenue from emissions trading. t The target of reducing global primary energy consumption by 20% in 2020 compared to the baseline trend, by means of active energy saving policies applied since the reference year, 2005 will essential prioritise energy efficiency. This will also have a significant impact on cutting GHG emissions and will thus contribute to achieving the first target. EU information suggests that current savings and efficiency measures are not on track to meet the target, basically due to the potential of certain sectors. As a result, on 4 February 2011 the European Council invited the Commission to design of an ad-hoc energy efficiency plan as an integral part of overall European energy strategy. The plan, which was launched in an official communication from the European Commission to the European Parliament, is known as the Energy Efficiency Plan 2011 and together with the measures now underway, is intended to ensure that the target figures are reached by 2020, as well as leading to other collateral benefits, such as: – – – –
Annual savings in homes of up to €1.000. Improved industrial competitiveness of European business. Creation of up to 2 million jobs. Reduction in annual GHG emissions by 740 million tonnes.
The areas of consumption prioritised for action are, by order of importance: buildings (homes, offices, shops and other buildings), which account for 40% of final energy consumption, transport, with a share of final consumption of 32%, and industry, which accounts for 20% of the total and where the principal effort is in the area of industrial equipment, the introduction of energy audits and management systems, and the electricity and heat generation industry.
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Las áreas de consumo prioritarias de actuación son, por este orden, los edificios (hogares, oficinas, tiendas y otros edificios), que dan cuenta de un 40% sobre el consumo final de energía, el transporte, con una cuota de consumo final del 32%, y la industria, que supone un 20% del Energy context to 2020 | 3E-2020 total y donde el esfuerzo principal recaerá sobre el equipamiento industrial, la introducción de auditorías y sistemas de gestión energética, y el sector de generación eléctrica y térmica.
… y una cuota de energías En lo que se refiere a las , para lograr la meta común en 2020 de renovables delarea of renewable energy, in order to achieve the common target of obtaining t In the obtener el 20% del consumo energético total procedente de fuentes renovables, se han 20% sobre el … and a 20% share of 20% of total energy consumption from renewable sources by 2020, mandatory naconsumo final, renewable energy in marcado objetivos nacionales deinobligado para la promoción de dichas have been established for promoting these sources electricity,cumplimiento heatsiendo tional un 10%targets de final consumption, 10% fuentes en los sectores laspecifies electricidad, la calefacción, el consumption aire acondicionado y el este consumo ing, air conditioning and transport. In transport, the targetde also that 10% of of this procedente de coming from biofuels transporte. Respecto a este último, el objetivo especifica además que un 10% del consumption must come from renewables. The 20% share translates into individualbiocombustibles in the transport sector. proceder de renovables. La cuota del 20% se traduce en objetivos ised targets for each member consumo state baseddebe on each one’s economic circumstances; to en el sector del transporte obtain this figure, an across-the-board rate of 5.5% is added to the 2005 base, plus an
individualizados para cada Estado miembro con base en las características económicas
additional quota based on estimated annual in GDP the decade.habrá Thus, the de cada uno growth de ellos; paraforobtenerla, que añadir a la base de 2005, un tanto target set for Spain coincides with the 20% average, whereas the figure is, for example, alzado de un 5,5% y una cuota adicional basada en la estimación de crecimiento medio 18% for Germany, 23% for France and 49% for Sweden.
de PIB para la década. Así, el objetivo marcado para España coincide con el 20% medio, mientras que por otro lado la cifra es por ejemplo del 18% para Alemania, 23% para As well as these three basic objectives, the European strategy also includes two other Additionally, the Francia y 49% para Suecia. important areas of activity: Adicionalmente, t The first envisages an action plan to increase supply security based, as well on the la UE también Además and de estos tres objetivos básicos, lain estrategia europea encouragement of efficiency renewables, on an improvement infrastructures contempla un plan áreas de actuación relevantes a destacar: para laand seguridad interconnection of networks, incentives for LNG supply, improvement and diverdel suministro en sification of international relations from an energy perspective, and stock manageel que destacan ment of oil and gas prodespecialmente iniciativas The Nabucco gas pipeline symbolises both a ucts. Gas dependency concretas en reduction in dependency and an advance in European currently stands at 61% of infraestructuras, integration consumption and is GNL y total gestión de stocks de due to rise, making pipecombustible,…
EU also envisages a plan for supply security featuring cuenta también con specific initiatives in infrastructures, LNG and fuel stock La primera management, …
otras dos de ellas
contempla un
basado, además de en el line construction projects fomento de la eficiencia particularly important. To y las renovables, en la this end, the European mejora de las Commission envisages a infraestructuras y la series of specific projects interconexión de redes, in the twenty-seven memla incentivación del ber states. Of these, the abastecimiento de GNL, future Nabucco pipeline, la mejora y is particularly important. It diversificación desde la Figure 2.11. Routes of European gas supply will transport non-Russian óptica energética de las pipelines, not including the Iberian peninsula gas from the Caspian Sea relaciones through Turkey. internacionales, y la Source: The Economist. gestión de los stocks de productos petrolíferos y gasistas. La dependencia actual de gas t The second are of activity is contained the European Strategic Technol- ascenso hace que los proyectos de del 61%insobre el consumo totalEnergy y su previsible … and a technological ogy plan (SET-Plan), published by the European Commission in November 2007 which is intended to achieve better use and an overall increase in R&D resources in order to speed up the development and implementation of low-carbon technologies. Amongst the technological challenges it identifies for 2020 are the effective implementation of second-generation biofuels, CO2 capture and storage, increased capacity of wind turbines, development of large scale solar power, a single, smart European power grid, improvement in all energy consuming equipment and continued competitiveness of the nuclear fission.
plan, the SET, which focuses on R&D in areas such as biofuels, wind, solar and distribution networks, among others.
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One of the key features of the European vision to 2050 is the decarbonisation of electricity and the end of oil dependency .
Finally, in the longer term, the EU will follow the patterns established by international consensus to 2050, with the result that community energy policy will be even more tightly marked by environmental targets. Key visions for Europe in 2050 include decarbonisation of power production; an end to oil dependency in transport –including a leading role for the EU in introducing active policies to promote a transition towards electrical and hydrogen-powered cars– the promotion of low energy consuming buildings, and mass introduction of smart grids to adapt electricity distribution networks to decentralised production.
Spanish directives and policies Spanish strategy to 2020, framed within European directives, centres on a savings and efficiency plan and a new RE plan (the REP), targetting a 20.8% share for renewables by 2020, …
The energy mix defined under Spanish energy strategy for 2020 is inevitably framed within the directives of European energy policy. Spanish strategy will revolve around the following axes: climate change, energy saving and efficiency, renewable energy, diversification of primary energy procurement sources and development of interconnection infrastructures. t Over recent years, Spain has set out its savings and efficiency policy in the E4 plan, which managed to make up the ground lost with respect to other EU member states over the previous decade. Between 2004, when the plan came into force, and the end of 2009, energy intensity fell by a total of 13%. Nonetheless, there it still has a long way to go to match the EU average, with 12.2% less intensity, and meet the European targets for 2020. The Energy Saving and Efficiency Plan 2011-2020 sets out the strategy and establishes the priorities, objectives and financing for actions over the period. t Development of renewable energy sources in recent years has helped increase their share in meeting final consumption to 13.2%, backed by the Renewable Energy Plan (REP) designed for the period 2005-2010. The new Renewable Energy plan (REP 20112020), sees renewables accounting for 20.8% of final energy consumption by 2020. In addition, it also envisages that 38.1% of electricity consumption and 11.3% of consumption in transport will be renewable, essentially through 35,000 MW of onshore wind, 750 MW offshore wind, and 12,050 MW solar. This will contribute to continued reduction in CO2 emissions, a trend begun in 2008, in order to meet Kyoto targets.
… as well as a new Infrastructures and Transport Plan outlining the development of new gas and electricity interconnection and distribution infrastructures.
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t The new Gas and Electricity Industries Plan is due to be completed in 2011, and any investment in infrastructures and development of international interconnections will depend on the consumption and demand forecasts it contains. Independently, the government continues to prioritise investment to make the system more secure, encourage competence, allow more efficient management of points of demand and favour integration of renewable energy sources. Especially important will be the development of smart grids to allow demand to play a more active role in operation of the system. These targets are set out in the broader Infrastructures and Transport Strategy Plan, which establishes a contribution to emission reduction of 30 million tonnes of CO2.
Energy context to 2020 | 3E-2020
Some of the above measures, especially those set out in the E4 Plan and the PANER, derive from a strategy approved by the Government in November 2007 on the advice of the Ministry for the Environment. This Spanish Climate Change and Clean Energy Strategy 2007-2012–2020, contains two axes with a total of fifteen areas of activity. t Firstly, there are eleven areas of activity related to Climate Change: institutional cooperation, flexibility mechanisms, cooperation and developing countries, emissions trading (which includes transposition of the European ETS, subsequently materialised in the Emissions Trading Act), CO2 sumps, capture and storage, non-ETS sectors, adaptation to climate change, dissemination and awareness, research, development and technological innovation and, finally, a series of horizontal measures.
In addition, the Spanish government also has a specific climate change strategy encompassing both socio-political and energy-related actions.
t Secondly, under the heading of Clean Energy, there are four areas of activity: energy efficiency (to be developed by the E4 and successive strategies), renewable energy (to be developed by the PANER as the successor to the REP), demand management, research, development and innovation in low-carbon technologies. For non-ETS sectors (i.e. those not covered by the European Emissions Trading Scheme), a decision by the European Parliament and of the Council of 23 April, 2009 establishes that Spain must cut greenhouse gas emissions by 10% in 2020 with respect to 2005 figures. The guideline draft energy plan prepared under the provisions of the Sustainable Economy Act (Act 2/2011), establishes the new scenarios for Spanish energy trends to 2020, the resulting energy balances and an analysis of demand coverage based on existing supply and the forecast incorporation of new infrastructures. This draft estimates that, at a central stage, non-ETS emissions will be cut by 15.7% with respect to 2005.
Spain’s target is to reduce GHG emissions from nonETS sectors by 15.7% between 2005-2020 – significantly more than the 10% commitment established by the EU.
These plans and initiatives are expected to usher in an important effort by the Spanish government in complying with the main Kyoto targets and thus lay the foundations for environmental performance more in keeping with the current situation, given that at this moment in time, based on forecasts for the end of 2012, Spain’s emissions are expected to be more than 34% greater than in 1990, 19 points above the Kyoto target (+15%).
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2.4. International energy forecasts An accurate analysis of global energy trends need to work with alternative scenarios based on greater or lesser levels of political action in energy and environmental fields.
Against the context just described we now move on to outline the framework of reference for analysing the global energy scenario and how it is likely to develop. Given the uncertainty characterising this area, especially with regard to economic trends, the key features that will shape the global energy industry over coming years must also be uncertain. In order to analyse the impact they may have on the development of regional energy policy in an area such as the Basque Country, it is important to examine different alternative scenarios of demand, production, prices and other economic and energy-related variables, This provides the necessary facts to build a strategy that will suit the real situation and take into account all conditioning factors. To help in providing these facts, needed to design government policies, the IEA has traditionally developed different scenarios of energy trends. In its latest report, World Energy Outlook (WEO) 2010 it presents three such scenarios to 2035: Current Policies Scenario, 450 Scenario and New Policies Scenario. The three differ in terms of the political premises assumed as to future measures to be applied in the energy field.
IEA energy scenarios The first scenario, the Current Policies Scenario, involves no change with regard to current policies, i.e. it sets out the main energy trends over coming years if no additional measures are implemented. This is the old Reference Scenario, and is intended to act as a basis for assessing the impact of applying the new energy and environmental policies included in the other two scenarios Secondly, there is the 450 Scenario, initially developed in 2008. It owes its name to the target of limiting greenhouse gas concentrations in the atmosphere to 450 parts per million of CO2 equivalent, corresponding to a global temperature increase of. This scenario, therefore, envisages maximum compliance with the roadmap established under the Copenhagen agreement of December 2009; it assumes that despite the non-binding nature of the agreement, policies will be applied that are consistent with achieving all its commitments. Finally, in the latest WEO report, the IEA has introduced a new scenario: the New Policies Scenario. Given the degree of disillusionment felt throughout the energy world when the Copenhagen summit failed to approve binding agreements on restricting global warming to for the new century, a new scenario had to be drawn up, not as extreme as 450 but with more active policies than the Current Policies Scenario. Although the summit failed to achieve substantial and verifiable advances, throughout 2010 governments accepted political commitments, and it is hoped that these will have an impact on energy consumption and carbon emissions over coming years. Although many of these measures have to date not been firmly settled, what this new scenario seeks to reflect and quantify is their potential on energy markets. Unlike the 450 Scenario, however, the NPS allows for a certain caution due to the still scanty precision of many of these policies and the prevailing economic uncertainty. The scenario uses the starting premises and an interpretation of political commitments with some care, in order to reflect this uncertainty in its projections.
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The table below summarises the main assumptions on political commitments made in each of the two scenarios envisaging additional policies to those currently in place. Political considerations of the scenarios Geographical area
New Policies Scenario
450 Scenario
USA
15% share of renewable energy sources in power generation. Promotion of domestic supply, including gas and biofuels. No specific targets on emission reduction
17% reduction in GHG emissions compared to 2005 levels (with access to international offset credits).
Japan
Implementation of the Basic Energy Plan including the requirement to raise emission-free generating capacity from 34% to 70% and halve emissions in the residential sector.
25% reduction in GHG emissions compared with 1990 levels (with access to international offset credits).
25% reduction in GHG emissions as compared to 1990 levels (including the ETS scheme).
30% reduction in GHG emissions compared with 1990 levels (with access to international offset credits).
15% reduction in GHG emissions as compared to 1990 levels.
25% reduction in GHG emissions as compared to 1990 levels.
40% reduction in CO2 intensity compared to 2005 levels (lower area of target range).
45% reduction in CO2 intensity compared to 2005 levels (lower area of target range); 15% share of nuclear energy and renewables in primary demand.
20% reduction in CO2 intensity compared to 2005 levels
25% reduction in CO2 intensity compared to 2005 levels
36% reduction in GHG emissions compared to levels previously considered usual by the Government.
39% reduction in GHG emissions compared to levels previously considered usual by the Government.
OECD
European Union Non OECD Russia
China
India
Brazil
Table 2.2. Main political premises by scenario and region. Timescale 2020 Source: IEA, WEO 2010.
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Energy context to 2020 | 3E-2020
Aggregate primary energy demand The commitments and plans announced by governments to date, if implemented, are expected to have a real impact on energy demand and on the resulting carbon emissions. This impact will vary depending on the intensity and involvement with which the measures are undertaken. The report seeks to reflect this difference through variations in the projections for the three scenarios. According to the New Policies Scenario (NPS), global primary energy demand will increase 36% between 2008 and 2035, i.e. from nearly 12,300 Mtoe to 16,750 Mtoe, an annual increase of 1.2%. Naturally, this growth is less than that envisaged in the Current Policies Scenario (CPS), which projects a complete absence of new political commitments, and anticipates annual growth in demand of 1.4% over the same period, i.e. total growth of 47% to around 18,050 mtoe. In contrast, in the 450 Scenario, global demand also rises but, because policies are more restrictive, the growth rate is much lower at around 0.7% per year, giving an increase of 22% on current levels to 14,920 Mtoe. The table below gives more detailed figures for global primary energy demand. Global energy demand scenarios 2020
2030
2035
CPS
450
NPS
CPS
450
NPS
CPS
450
NPS
14,896
14,127
14,556
16,941
14,584
16,014
18,040
14,920
16,748
Coal
4,307
3,743
3,966
4,932
2,714
3,984
5,281
2,496
3,934
Oil
4,443
4,175
4,346
4,826
3,975
4,550
5,026
3,816
4,662
Gas
3,166
2,960
3,132
3,722
3,106
3,550
4,039
2,985
3,748
Nuclear
915
1,003
968
1,040
1,495
1,178
1,081
1,676
1,273
Hydro
364
383
376
416
483
450
439
519
476
1,461
1,539
1,501
1,621
2,022
1,780
1,715
2,316
1,957
239
325
268
384
789
521
468
1,112
699
Power generation
5,930
5,552
5,723
7,087
5,843
6,564
7,747
6,138
6,980
Other transformations
1,513
1,418
1,480
1,678
1,395
1,573
1,758
1,371
1,613
Total end consumption
10,224
9,779
10,059
11,544
10,257
11,045
12,239
10,460
11,550
Primary Energy Demand
Biomass and waste Other renewables
Table 2.3. Aggregate demand in Mtoe; total demand, total end consumption, and consumption by sectors. Figures given by energy source Source: IEA, WEO 2010.
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Energy context to 2020 | 3E-2020
Global energy demand will grow in the three scenarios, although at different rates
In 2035, fossil fuels will be the predominant energy source in all three scenarios.
19 80 19 85 19 90 20 00 20 05 20 10 20 15 20 20 20 25 20 30 20 35
Fossil fuels will continue to be the predominant energy source in 2035 in all three 20,000 scenarios, although the rela18,000 tive share in meeting pri16,000 mary energy demand will 14,000 vary by scenario: from 62% 12,000 in the 450 Scenario to 79% 10,000 8,000 in the CPS, as compared to 6,000 74% in the NPS and 81% in 4,000 2008. These differences de2,000 pend on the extent of the 0 commitment to take political action to address probCurrent Policies Scenario 450 Scenario lems such as climate change New Policies Scenario and security of supply. Hence the fact that the Figure 2.12. Trends in energy demand in Mtoe share of renewable energy sources and nuclear energy is highest in the 450 Scenario and lowest in the CPS, just as growth in global demand is also smaller in the former than in the NPS and the CPS, in that order. In terms of individual fuels, the least growth is in oil, followed by coal and then natural gas The 450 Scenario, which allows for the most restrictive policies, even envisages a yearly decline of 0.2% in oil consumption and 1% in coal. Given favourable expectations on gas markets arising out of new discoveries of unconventional gas and the lower quantity of emissions generated and the speed with which low-carbon technologies can be deployed, growth is projected to be highest in gas consumption. In the area of renewable energy sources (hydro, wind, solar, geothermal, biomass and marine), general forecasts are for demand to grow considerably, to as much as twice the current rate in the NPS scenario. Given that this is the most realistic scenario, this gives a rough idea of the likely trend in the industry over coming years. In general, it is important to bear in mind that the overall success of these energy types will depend to a large extent on the intensity with which policies favouring energy efficiency and environmental-sustainability are implemented; if the current trend is maintained, as the CPS shows, growth would be very much lower.
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Energy context to 2020 | 3E-2020
Most future growth in demand will come from emerging countries, especially China and India, …
… a situation which should be utilised to accelerate the adoption of clean and efficient technologies.
Finally, the three scenarios coincide in suggesting that non OECD countries will account for over 90% of the projected increase in global primary energy demand for the period 2008-2035, a clear reflection of current economic and social trends in these countries. Moreover, around 35% of this increase is due to the burgeoning role of Chinese society; in all three scenarios, the country represents around 22% of the energy demand mix in 2035. India also plays an important part, with consumption more than doubling in all three scenarios over the period. Outside Asia, Middle Eastern demand will grow the most, by approximately 2% per year. In contrast, aggregate energy demand in OECD Countries will increase very slowly; if the 450 Scenario proves accurate, it may even decrease. Nonetheless, in 2035, the United States will continue to be the world’s second largest energy consumer after China and a long way ahead of third-placed India. Energy consumption in emerging countries has accelerated greatly in recent years, and this trend will continue over coming years. The case of China is particularly striking: in 2000, it had half the consumption of the United States; by 2009 it had overtaken the US to become the world’s largest energy consumer. Prospects for additional growth in China, and by extension among the other emerging powers, continue to be strong, given that the per capita consumption rate is low, and that the country has a very large population. Its need to import fossil fuels to satisfy its growing domestic demand will have an increasing impact on international markets. Given the size of the Chinese domestic market, its push to increase the contribution of new low-carbon energy technologies could play an important role in reducing costs, since it could benefit from faster technological learning rates and economies of scale.
Fossil fuels: output and reserves All three scenarios envisage a rise in oil output (crude, unconventional and natural gas liquids), throughout much of this decade, only starting to decline towards the end of the decade in the 450 Scenario. In the CPS, production increases although the growth slows in the second half of the period; in the NPS, growth and therefore total oil production in 2035 are lower, due to reduced demand and lower prices than in the CPS. The most realistic estimates suggest that growth in production from OPEC countries will parallel greater exploitation of unconventional oil reserves.
46
To analyse trends in oil production accurately, two important aspects need to be taken into account: the role of OPEC countries and the role of unconventional oil. t For 2035, the estimated share of total production from OPEC countries is highest in the 450 Scenario, at somewhat over 53%. This is due to a disincentive to new investment resulting from greater regulatory constraints and a scenario of lower prices in non-OPEC countries. In the NPS, production from non-OPEC countries peaks at around 48 mmbod before 2015 and then begins to fall slowly to 46 mmbod in 2035, whereas production from OPEC countries grows throughout the period, from 41% of the total in 2009 to 52% in 2035. Finally, the CPS envisages growth in production from both groups to satisfy the growing demand, with the result that OPEC’s share in the production mix remains essentially unchanged.
Energy context to 2020 | 3E-2020
t Unconventional oil is expected to play an increasingly important role in global supply towards 2035 in all three scenarios, with the bulk of this growth concentrated in the oil-bearing sands of Canada and Venezuela’s extra-heavy crude. The proportion of this type of oil in the petroleum mix will rise from 2.8% in 2009 to between 9 and 10.5% depending on the scenario, and its production will account for approximately 50% of the growth in total oil production to 2035 in the three scenarios. The world’s unconventional oil reserves are thought to be vast and probably several times larger than conventional ones. The rate at which they are exploited will depend on economic and environmental factors, including the cost of offsetting the environmental impact and the initial capital investment required, which are both very high at present. These factors will also have a major influence on future oil prices. Forecasts for natural gas production in 2035 vary from 3.6 to 4.9 trillion cubic metres in the three scenarios, depending on demand expectations in each case. This will be greater or lesser depending on political action on limiting emissions and use of fossil fuels. One important factor to be taken into account in terms of trends in natural gas production is the greater role foreseen for unconventional sources, especially Canada and, above all the USA. Indeed, given the success of recent years, the governments of the two countries plan to intensify investment in exploration of non-conventional shale gas over coming decades, which will mean that the bulk of American output will come from this source. Investment in this field is more intense the more restrictive and intense the political action in the scenario in question; in other words, investment is highest in the 450 Scenario and lowest in the CPS.
The natural gas market is likely to see a greater share of unconventional sources in global output.
Finally, with regard to coal, the NPS envisages upward trends in consumption from emerging countries, giving more intensive coal production than in the 450 Scenario. The case of China is particularly important; to meet its growing electricity demand it is forecast that it will increase production by an average of 1.1% per year to 2,825 Mt in 2035, i.e., approximately half of world coal production and 35% up on 2008. Given that practically all growth in coal demand comes from non OECD countries and considering that coal is a resource that tends to be consumed in the country of origin, the greater part of growth in production will also come from these countries.
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Energy context to 2020 | 3E-2020
Other variables to be taken into account: energy intensity, investment and CO2 emissions As well as a fall in energy intensity related to economic structure, there will also be an impact from investment to meet commitments on reducing CO2 emissions.
Global energy intensity has fallen consistently over recent decades due to factors such as an improvement in energy efficiency and structural changes in the global economy. The result has been that the manufacturing sector has gradually moved away from the most energy intensive industries. The political premises used in the scenarios that include new measures have a significant impact on energy intensity, and assume reductions in a range of between 35% and 40%. With regard to the investment required to meet the established targets, the NPS calculates an accumulated amount over the period 2010-2035 of 57 trillion dollars, equivalent to nearly 2.4% of estimated global GDP for 2035. These investments include capital expenditure and investment in efficiency and technology by companies and consumers (e.g. in new vehicles and domestic appliances). The NPS therefore represents additional investment of 4.5 trillion dollars compared to the CPS, while 450 Scenario envisages an additional 18 trillion dollars. The investment is much greater in the latter case, due to stricter commitments on carbon emissions and energy efficiency (reduction of emissions to 450 ppm CO2eq, which means reducing global warming to).
CPS
NPS + $ 4.5 tn
450 + $ 13.5 tn
$ 57 tn accum. $ 70.5 tn accum.
Figure 2.13. Investment in energy infrastructures and technology for the period 2010-2035 Source: authors, IEA (WEO 2010).
Finally, the forecasts for reducing CO2 emissions vary substantially depending on whether the policies to be implemented are those envisaged in the 450 Scenario (which includes the Copenhagen roadmap) or in the NPS or CPS. As already mentioned with regard to environmental trends in the previous section, the Copenhagen summit failed in its attempt to obtain political commitments to achieve compliance with the global warming roadmap. Instead, it spawned a series of non-binding commitments which, although they are a considerable improvement on the current trend (CPS), go only half-way, setting a path which would stabilise gas concentrations at around 650 ppm CO2eq with a long-term temperature increase of. If, as in the NPS, it is assumed that these commitments will be met and that the corresponding measures will be implemented, as appeared to be beginning to happen in 2010, the global increase in CO2 emissions will not be halted, although the rate of growth will be slowed. Under the NPS, there will be a total growth in emissions of 21% between 2008 and 2035, from 29,300 to 35,400 million tonnes, meaning an average annual growth of 0.7%. These figures contrast with the 1.4% growth rate in the CPS, which would lead to highly dangerous CO2 levels.
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Energy context to 2020 | 3E-2020
At the same time, the target can only be achieved through vigorous implementation of the premises of the Copenhagen roadmap during the period to 2020 and, from then on, through much greater efforts in different areas such as, for example, the removal of subsidies on fossil fuels agreed by the G-20. All of this is included in the premises on which the 450 Scenario has been developed, under which emissions would fall significantly faster than in the NPS over the period 2011-2035, to 22,000 million tonnes of CO2. The table below shows a breakdown of trends in carbon emissions. CO2 emissions 2008
2020
2035
CPS
450
NPS
CPS
450
NPS
Total CO2
29.3
35.4
31.9
33.7
42.6
21.7
35.4
Coal
12.6
16.4
14.2
15.1
19.7
5.8
14.4
Oil
10.8
11.9
11.1
11.6
13.8
9.9
12.6
5.9
7.2
6.7
7.1
9.1
6.0
8.4
Natural Gas
Table 2.4. Projections of carbon emissions in billion tonnes Source: IEA, WEO 2010.
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Energy context to 2020 | 3E-2020
2.5. Energy price scenarios Following a period of stability in the 1990s, prices were extremely volatile over the last decade, as a result of the economic crisis‌
The financial crisis that began at the end of 2007 unleashed a period of extreme volatility on markets for energy products which has still not entirely abated. Prices of natural gas, coal and oil remained almost unchanged throughout the 1990s in a position of relative parity, with oil slightly ahead of the others. By the end of the decade a slight upward trend began to be seen, as the reforms sparked by the Asian crisis led to an increase in global demand, and the trend gathered pace at the beginning of the next decade. From there on, the trend, although continuing to be upward, was less even, with oil leading the pack, and breaking away from other fuels. Before the cycle of expansion of the last decade, prices had remained largely unchanged 120 100 80 60 40 20
Barrel of Brent
European imported gas
USA gas
European coal (NWE Marker)
USA coal (Central Appalachia)
Japanese imported coal
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
0
Figure 2.14. Trends in Fossil Fuel Prices. $ per barrel of oil equivalent (BOE) Note: the figures for European and Japanese coal and European gas are the annual averages. Barrel prices for Brent crude are market spot prices while for American gas and coal they are end-of-year prices. Import prices include costs associated with insurance and special tariffs. Source: BP (Statistical Review of World Energy), Platts, authors.
The current situation in the energy markets is one of great volatility and greater elasticity of demand‌
In addition, fuel demand has been more elastic in a context of high energy prices to an extent not seen before. This is due to a combination of factors, including an increase in energy efficiency, progressive, but still slow, use of alternative generation sources, and the process of structural change towards an economy oriented more towards less energy-intensive sectors. From the perspective of final consumption and the end price to the user, it should be noted that the price of the barrel of crude is a basic benchmark for fuel prices, not only because of its direct effect on the price of petroleum derivatives. Natural gas prices have traditionally been linked to oil prices. While there may be some delinking in coming years, natural gas has an ever greater influence on electricity prices, since it accounts for an increasing share of power generation.
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Energy context to 2020 | 3E-2020
Based on different sources, including the International Energy Agency and the US Department of Energy (DOE) a series of scenarios for oil and natural gas prices have been drawn up, as summarised in the table below. Three scenarios have been constructed to 2020, all giving an upward trend. They have therefore been dubbed the “moderately high prices”, “high prices” and “very high prices” scenarios. The table also includes an estimate of the price of electricity. The price of electricity has been estimated using the methodology set out below in this section. Energy price scenarios in 2020 for the 3E2020 Strategy Reference 2009
Scenario 1 Moderately high prices
Scenario 2 High prices
Scenario 3 Very high prices
Unit
Crude oil
60
DOE BAU scenario 108
DOE high price scenario 185
DOE high price scenario 185
2008$/ barrel
EU natural gas
12
DOE BAU scenario 18
DOE BAU scenario 19
DOE high price scenario 32
2008€/ Mwah
Electricity
37
Own estimation 54
Own estimation 55
Own estimation 65
2008€/ Mwah
Table 2.6. Prices scenarios considered in the 3E2020 Strategy Source: Authors, DOE AEO 2010.
Oil and petroleum products The events of the end of the last decade were particularly important, where a dramatic rise in 2008 was followed by a collapse by up to 60% in the case of oil prices. There are few historical precedents for such a dramatic change. In less than a year, the barrel of Brent crude went from $65-70 to $120 and then down to $45-50. In 2010, following OPEC efforts to cut output, the price stood at around $78 a barrel.
… particularly in the case of oil, where the market is strongly influenced by geopolitical factors and financial tension, …
The only precedent for the 2008 peak can be found in the oil crisis of the late 1970s 120 100 80 60 40 20
In $ of year
2005
1997
1989
1981
1973
1965
1957
1949
1941
1933
1925
1917
1909
1901
1893
1885
1877
1869
1861
0
Adjusted for inflation
Figure 2.15. Historical trends in oil prices. Comparison adjusted for inflation. $ per barrel Source: BP (Statistical Review of World Energy).
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Energy context to 2020 | 3E-2020
This price volatility can be explained by the contraction in demand in the OECD due to the crisis and subsequent recovery, together with continued growth in consumption in emerging countries. The general increase envisaged is justified by forecasts of increased demand and growing production difficulties, given that new reserves are ever less accessible and more technically complex, (e.g. unconventional oil sources). Moreover, the fact that production has begun to decline in many countries, including the USA, Norway, Mexico and Venezuela is a further contributor to the upward pressure on prices. Currently, the only country with idle production capacity is Saudi Arabia. Despite these trends, it is important to bear in mind that oil prices are expected to remain volatile throughout the next years due to a very uncertain panorama. Serious incidents like those of the first quarter of 2011, with a wave of revolts in the Middle East and a tsunami in Japan triggering a nuclear crisis, should serve to remind us of the great global instability characterising the crude oil market. It is the volatility in the price of crude oil that determines the fluctuations in fuel costs, since wholesalers buy their stock on international crude markets. The price of automotive gas oil, to quote the most representative example, has varied during 2009-2010 between â‚Ź0.83 and â‚Ź1.1 a litre, peaking in July 2008 at an average of â‚Ź1.31 per litre. In addition to the raw material and the cost of processing, taxes also represent a very large part of the end cost of fuel, accounting for around 50-55%. As well as being a strong source of tax revenue in most countries, they are also a valuable energy planning instrument, given that the way they are distributed allows consumption of some products to be incentivised over others. In Spain, there are currently three tax rates included in the end price of liquid hydrocarbons: special taxes (excise duty)6, retail sales tax and VAT. According to analyses of the different factors involved in the end price of this fuel, in a scenario of moderately high prices with crude oil prices standing at around $90-100 per barrel, the cost of diesel could stabilise at around â‚Ź1.35 per litre, i.e., a level similar to that reached in 2008. At the same time, in a scenario of higher prices with crude at $185 a barrel, diesel and petrol could rise to over â‚Ź1.70 a litre.
6
52
List of taxes: t 4QFDJBM UBYFT FYDJTF EVUZ DVSSFOUMZ TUBOET BU Č˝ N3 for diesel for non professional use and â‚Ź400.69/ m3 for 95 octane petrol t 3FUBJM 4BMF 5BY "QQMJFT POMZ UP DFSUBJO IZESPDBSCPOT $POTJTUT PG B TUBUF USBODIF PG Č˝ N3 and a regional (autonomic) tranche with a maximum limit of â‚Ź24/m3 which is not applied in the Basque Country.
Energy context to 2020 | 3E-2020
Natural gas At the end of the last decade, natural gas prices on the American market stood at particularly low levels, some way behind imported gas in Europe, due mainly to the differential between production and demand and to the “revolution” in shale gas or unconventional natural gas. As a result, in the last two years, the LNG trade has been rerouted towards other regions, especially Europe, in turn leading to an easing of natural gas prices on European markets. Whereas at the beginning of the decade, the price of gas in the United States stood slightly above the European, the difference widened until the middle of the decade, before being reversed from 2006 on. By 2009, American gas stood at $3.9 per MBtu as compared to an average of $8.5 MBtu for European imports, equivalent to around $45 per barrel of oil equivalent. In other words, natural gas is considerably cheaper than oil for the same amount of energy provided. Given that there is no transparent market for natural gas in Spain, it is difficult to determine the exact prices at which the fuel is traded. As a reference, it is useful to take the average European rate and individual prices on different markets such as the British NBP, the Belgian Zeebrugge, the American Henry Hub, and the Spanish “CMP” rate shown in the graph below. In general, gas costs for industrial consumers in Spain can be seen to be lower than the European Union average, whereas for domestic consumers they are higher. In 2010, American gas prices and those on other gas and oil markets were uncoupled. 60 50
€/MWh
40 30 20 10 0 0 -1 dic 0 t-1 oc 10 oag 0 -1 jun 0 r-1 ab 0 -1 feb 9 -0 dic 9 t-0 oc 09 oag 9 -0 jun 09 arm 09 een 8 v-0 no 08 pse 8 -0
jul
NBP
Zeebrugge
TTF
Brent
CMP
Henry Hub
Figure 2.16. Gas prices since the 2008 peak in oil prices Source: CNE, Informe mensual de supervisión del mercado mayorista del gas 2010.
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Energy context to 2020 | 3E-2020
Uncoupling of natural gas and oil prices, as a result of the discovery of new unconventional gas reserves and growth in the LNG trade.
The traditional link between natural gas and oil prices was based on index clauses in long term supply contracts or indirectly through competition between gas and oil products as alternatives for power generation and end use markets. Recently, however, and most particularly in 2010, a trend has begun to emerge of gas prices uncoupling from oil prices, due largely to abundant unconventional gas production in North America. As mentioned, the result has been a fall in prices on American markets, greater availability of LNG supplies in Europe at lower prices, and some provisional changes in the terms of long-term contracts in Europe making individual gas markets more important when it comes to determining the price. Unconventional gas discoveries in the USA and the development of global natural gas liquefaction capacity have also led to increased supply, improved capacity to respond to demand fluctuations and greater globalisation of the natural gas market –which is more regional than crude– which has a clearly stabilising effect. Given all of these factors, combined with the development of new shale gas exploration technologies in different parts of the world, there are sufficient reasons to envisage a (at least partial) break in the correlation between gas and oil prices, making it likely that the two will become uncoupled. As a result, the three IEA scenarios predict that ratio of gas prices in North America to oil prices will increase slightly over the period to 2035 following the sudden decoupling of 2010, although the price will continue to remain considerably below the historical average. Turning to the price scenarios for the Basque Country used in this strategy, Scenario 2 (High Prices) envisages decoupling due to new efforts and investment in extraction technologies for unconventional resources, whereas Scenario 3 (Very High Prices) removes this decoupling based on lower production of these resources due to higher costs. Given that, as well as the cost of procurement, the gas consumer also pays access transit charges, the marketing margin, meter rental and taxes, the price per Mwah consumed by a private user in 2020 could stand at €65 per Mwah in Scenario 1 (Moderately high prices) and €84 per Mwah in Scenario 3 (Very High Prices). For an industrial consumer, the range would be between €27 and €45 per Mwah.
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Energy context to 2020 | 3E-2020
Coal The Asian coal market has distanced itself significantly from the European and American markets since the end of 2008. Renewed importation by China over the last two years, despite its vast domestic reserves, has affected the trend in Asian import prices, which are now approximately $40 higher than in America and Europe. Some of the essential variables to be taken into account in an analysis of coal price trends include the abundance of reserves in countries such as China and the USA, especially in the former, and the competition with natural gas, mainly due to the use of both energy types in power generation.
Abundant coal reserves, combined with forecast increased production in emerging countries will keep price increases moderate.
On the basis that these two factors contributed to keeping coal prices low in 2009 and 2010, the average import price in OECD countries is expected to remain at around $97/t until 2015, and rise to $107/t by 2035 as a result of higher demand until 2020 and higher natural gas prices. Annual growth is less than for gas and oil, partly due to the fact that production costs are expected remain low and demand is expected to flatline from 2020.
Electricity Electricity costs depend on a series of key factors, determining the volume and type of energy supply to be provided to meet demand. These include the total generating capacity needed to ensure supply at a suitable coverage rate, the penetration of renewable energy sources, the continuity of existing nuclear power stations, and the coverage of the “thermal gap”, i.e., the energy not covered by renewables, the special framework and nuclear power, using thermal coal and combined cycle power stations. Thus, the future price to be paid for electricity will be determined by generating costs and the level of investment associated with all of these technologies. Although the installed capacity of renewable energy is forecast to increase over coming years, thermal power stations will continue to be necessary due to the low availability renewables can offer to satisfy peak demand. In addition, renewable power generation is not manageable; their low availability and the volatility of the local resource requires installation of back-up capacity to ensure supply. On the Spanish market, the price users pay for electricity consists of the cost of the energy on the wholesale market, the access transit costs (which include the costs of the networks and other costs such as the premiums on the special framework), the marketing margin, compensation for the permanent costs of the system, meter rental and taxes. The table below includes the scenarios for electricity prices estimated for the wholesale market to 2020 and 2030. The cost of CO2 emissions used in all cases is €25/ tonne, in line with the International Energy Agency’s forecast.
55
Energy context to 2020 | 3E-2020
Electricity price scenarios on the wholesale power market Scenario
2020
2030
Scenario 1 Moderately High Prices
53.5
63.8
Scenario 2 High Prices
54.3
64.5
Scenario 3 Very High Prices
64.6
74.5
Table 2.7. Price Scenarios of the Electricity Pool for 2020 and 2030. Figures in 2008 euro/Mwah Source: EVE.
For high voltage consumers, the total cost in 2020 would be between €76 and €96 2008€/Mwah, (not including VAT) in Scenario 1, Moderately High Prices. They would therefore be similar to prices for 2008, when the average price of the pool was €65 / Mwah. In Scenario 3, Very High Prices, the cost of electricity would increase by around €10 /Mwah.
56
Energy context to 2020 | 3E-2020
57
3
Energy in the Basque Country in 2010
Energy in the Basque Country in 2010 | 3E-2020
3.1. Initial energy situation Energy demand and trends by energy type Between 2000 and 2008, gross domestic energy consumption in the Basque Country experienced 2% yearly growth. This was followed by a sharp drop in 2009 caused by the economic crisis. As a result, annual growth fell from 2% to 0.9% in the period 20002009. Final energy consumption recovered partially in 2010 to stand at 5,504 ktoe with gross domestic consumption coming to 7,333 ktoe, a similar level to 2004.7 In 2010, final energy consumption in the Basque Country recovered part of the ground lost in 20097 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 2000
2001
2002
2003
2004
2005
Gross domestic consumption
2006
2007
2008
2009
2010
Final consumption
Figure 3.1. Energy demand in the Basque Country 2000-2010 in ktoe
Natural gas accounts for the largest percentage of primary energy sources, with gross consumption of 2,909 ktoe. It has overtaken petroleum derivatives which now stand in second place at 2,053 ktoe, followed by electricity at 1,464 ktoe, renewables at 461 ktoe and coal, which with a demand of 182 ktoe, comes last in the mix, having been overtaken by renewables in the period 2000-2010 (see graphs in Figures 3.2 and 3.4).
7
Trends in energy consumption over recent years have been marked by a drop in oil, coal and electricity imports in favour of natural gas and renewable energy.
Gross domestic consumption is calculated as total primary energy consumption divided by total demand. Final consumption, on the other hand, is energy consumed divided by the number of users at the end consumption point.
59
Energy in the Basque Country in 2010 | 3E-2020
From a sectorial perspective, in 2010 power generation was the principal natural gas consumer. The industrial sector continues to be the largest energy consumer with consumption of 2,309 ktoe, replicating previous trends. Electricity also plays an important part in industry, with renewables coming quite a long way behind (although this is nonetheless the sector that absorbs most renewable demand, at 203 ktoe). In the tertiary sector, most demand is for electricity, in both the residential, commercial and administrative sub-sectors. Transport is the largest consumer of petroleum derivatives with consumption of 1,646 ktoe out of a total of 2,053 ktoe. Finally, consumption continues to fall in the primary sector which in 2010 accounted for just 1% of energy demand (see graphs in Figures 3.3 and 3.5).8 9 Natural gas, the energy in most demand
The industrial sector, the largest energy consumer 2,500
3,500 3,000
2,000
2,500 2,000
1,500
1,500
1,000
1,000 500
500 0
Coal
Oil
Natural Gas
Renewables
Industry
Transport
Primary
Power generation
Electricity
Tertiary
Figure 3.2. Distribution of sectoral gross consumption by energy types in ktoe. 20108
0
Industry
Transport
Tertiary
Coal
Oil
Renewables
Electricity
Primary
Power generation
Natural gas
Figure 3.3. Distribution of gross energy consumption in ktoe by sectors. 20109
The sectoral structure of energy consumption in the Basque Country differs greatly from the global, European and even Spanish situations, given the strong showing of the industrial sector and the lesser importance of residential buildings and services; elsewhere in Europe these sectors account for 40% of final energy consumption, but in the Basque Country they represent just 20%. Transport accounts for 33% of consumption, in line with the European average.
8 9
60
Does not include refining. Does not include refining.
Energy in the Basque Country in 2010 | 3E-2020
Oil, principal source of end consumption‌
‌ because of its monopoly in the transport sector 1%
39% 27% 2%
38%
10%
Power generation; 26%
6% 3%
7% 42%
Primary; 1%
25%
Total 2010: 7,333 ktoe
Total 2010: 5,504 ktoe
Coal and coal products
Derived energy
Electricity
Natural gas
Oil products
Renewables
Figure 3.4. Distribution of gross and final energy consumption in ktoe by energy types, 2010
Tertiary; 15%
Industry; 33%
Transport; 25%
Figure 3.5. Energy demand mix by sectors, 2010
Due to expansion of the Spanish and Basque economies in the period from 2002 to 2007, the industrial and transport sectors experienced strong growth in terms of final energy consumption. This trend was halted from 2008 with the onset of the crisis and subsequent recession, following a dramatic reduction in industrial production and a rapid rise in energy prices which particularly affected transport. At the end of the decade, however, industrial activity recovered to some extent with a small rise in energy consumption in Basque industry. For the moment, however, consumption seems unlikely to grow at pre-crisis rates, largely due to the weakness of economic recovery but also to greater awareness on energy saving and efficiency.
Reduced growth of consumption in industry, traditionally a very energy-intensive sector, is due to the efforts carried out in the area of energy saving and efficiency.
The decline in industry contributed to keeping the total consumption figure unchanged 3,000 2,500 2,000 1,500 1,000 500 0 2000
2002 Industry Services
2004
2006 Transport Primary
2008
2010
Residential
Figure 3.6. Final energy consumption by sectors in ktoe
61
Energy in the Basque Country in 2010 | 3E-2020
Taking overall consumption for the period 2000-2010, the largest growth was in the services sector (35%), followed by transport (15%, the residential sector (9%) and industry (2%) (see graph in Figure 3.7). The primary sector was the only sector to experience a fall in consumption, though it is difficult to give a precise figure due to the poor quality of the information available. Except for the primary sector, consumption is growing in all areas, particularly in the services sector 34.5%
40% 15.0%
20%
8.7%
2.0% 0% -20% -40%
-42.3%
-60% Industry
Transport
Primary
Services
Residential
Figure 3.7. Percentage variation in final energy consumption by sector 2000-2010
Having analysed the current situation of energy and electrical production and consumption, and before going on to look at the development and current position of energy infrastructures, we need to look in some detail at the use made of renewable energy sources and fossil fuels in the Basque Country. This will allow us to determine precisely what progress has been made in the gradual replacement of certain fossil fuels and what steps would now be advisable to move towards the structure of consumption and energy production required in the Basque Country, taking into account all relevant aspects and circumstances.
Petroleum derivatives As it gradually moves towards a gradual dissociation from oil, the Basque Country will have to focus its efforts on transport following its success in the tertiary sector and power generation.
62
Total demand for petroleum derivatives in the Basque Country, excluding the refining sector, came to 2.05 million tonnes in 2010, a 10% reduction for the period from 2000 and 2010. Unsurprisingly, the sector with the highest consumption was transport, accounting for 80% of the total. It was followed by industry, at 8%, the tertiary sector, including residential (6%), primary (3%) and power generation (2%). The increase in consumption of petroleum derivatives in the transport sector shown in the graph in Figure 3.8 has been offset by a reduction in other sectors, especially in power generation and the tertiary sector, leading to an overall decrease in the demand for petroleum products. Much of this reduction is due to the commitment to replacing them with natural gas, as a result of which petroleum derivatives have lost their prime position in the Basque energy basket, going from 50% in 2000 to 39% in 2010.
Energy in the Basque Country in 2010 | 3E-2020
Reduced consumption in the tertiary and electrical sectors contributed to a drop in oil demand. 3,000 2,500 2,000 1,500 1,000 500 0 2000
2002 Industry
2004 Transport
2006 Primary
Tertiary
2008
2010
Power generation
Figure 3.8. Demand for petroleum products by sectors in the Basque Country in ktoe (not incl. refining)10
These figures can be further broken down by type of product. Firstly, the consumption of motor diesel and aviation fuel saw constant growth in the transport sector to 2008. Petrol consumption had begun to fall slightly prior to that date as a result of growth in the share of diesel vehicles on the road, but from that year on there was a change in the trend in road transport consumption, falling 12% to 2010 as a result of the economic situation and high fuel prices.10 In 2010, Class A Diesel accounted for 65% of the total consumed, as opposed to 11% for petrol, after several years in which the ratio of motor diesel to petrol consumption had increased due to growing sales of diesel-powered automobiles. Petrol consumption has fallen by 40% since 2000, with Class A Diesel rising by 28%. At the same time, the use of aviation fuel and petroleum coke for industry increased by 36% and 14%, respectively, while the use of fuel oil fell, and is now concentrated in a small number of industrial facilities.
10
The increase in consumption of petroleum derivatives in industry from 2008 is due to a change in criterion for accounting petroleum coke.
63
Energy in the Basque Country in 2010 | 3E-2020
Class A Diesel now accounts for over half of the demand for petroleum derivatives 200
Kerosene 3% Petrol 11%
150
LPG 3%
100
Petcoke 7%
50
2000
2002
2004
2006
2008
2010
LPG
Petrol
Kerosene Class B & C Diesel Petcoke
Class A Diesel Fuel Oil
Fuel Oil 2% Class B & C Diesel 9%
0
Figure 3.9. Demand for petroleum product types in the Basque Country 2000-2010 (base 2000=100)
Natural gas is now the most widely-used energy source in industry and power generation, thanks to a clear commitment combined cycles.
Class A Diesel 65%
Figure 3.10. Structure of the demand for petroleum products in 2010
Natural Gas There has been a 115% growth in gas consumption in the Basque Country in the last ten years, to 38,500 GWh in 2010. The growth is largely due to consumption in new combined cycles, which account for 43% of the total, and to continued replacement of petroleum derivatives by natural gas in the industrial and tertiary sectors. Growth in natural gas consumption is largely due to its incorporation into thermoelectric power generation 50,000 40,000 30,000 20,000 10,000 0
2000
2002 Thermoelectric power generation
2004 CHP
2006
2008 Industry
Figure 3.11. Demand for natural gas by sectors in GWh
64
2010 Tertiary
Energy in the Basque Country in 2010 | 3E-2020
In the context of the new Basque Energy Strategy, it is particularly important to the rise in natural gas, which has become the most-used energy source in the region in overall terms at the expense of the oil. This is due to the replacement of coal-burning thermoelectric power generation, and a high level of replacement in industrial and residential / commercial consumption. Production from the Gaviota field made the Autonomous Community of the Basque Country (ACBC) self-sufficient in natural gas production between 1987 and 1992, when consumption was considerably lower than now. Since the field was exhausted, gas is imported over pipelines and by ship in the form of LNG. High levels of natural gas consumption over the last decade have been based on imports 50,000 40,000 30,000 20,000 10,000 0 1980
1985
1990
1995
2000
Gross domestic consumption
2005
2010
Primary production
Figure 3.12. Basque natural gas production and consumption in GWh
Coal and derivatives Basque consumption of coal and coal products is now essentially linked to production in the industrial sector and in power generation. Consumption rose from 533 ktoe in 2000 to 175 ktoe in 2010, of which, Pasaia thermal power station accounted for 67%. By industry, the largest users are iron and steel and foundry. Coal consumption has fallen in both thermoelectric power generation and industry.
The gradual abandonment of coal is due to its replacement by gas in power generation (combined cycles) and industry (CHP).
600 400 200 0
2000
2002
2004 Industry
2006
2008
2010
Thermal power stations
Figure 3.13. Demand for coal by sectors in ktoe
65
Energy in the Basque Country in 2010 | 3E-2020
Electrical balance While consumption in industry is now below the 2000 level, growth in the tertiary sector has remained steady.
In 2010, electricity demand stood at 18,520 GWh, 9.5% lower than in 2008, giving an accumulated increase of 10% since 2000 (1% per year). Electricity accounts for 27% of final energy consumption in the Basque Country. More than the half of the power demanded is used in industry, (approximately 61%), and the steel industry in particular is a very heavy user. According to figures for energy consumption in the sector, industrial electricity consumption fell markedly from the fourth quarter of 2008 and did not begin to recover until 2010. It has yet to return to 2000 levels. Unlike industry, electricity consumption in the services sector has seen a steady increase over the last ten years, with an average growth rate of 3.8% per year. The same is also true of residential consumption, where the rate was 1.9%. A sharp contraction in the steel business led to a fall in industrial consumption 7,000 6,000 5,000 4,000 3,000 2,000 1,000 2000
2002
2004
2006
Iron & Steel
Other industry
Residential
Rest of sectors
2008
2010
0
Services
Figure 3.14. Final power consumption mix by sectors 2000-2010 in GWh
The move to gas over the last decade has contributed to reducing the share of both coal and imports in power generation.
In terms of power generation, the commissioning of nearly 2000 MW capacity in combined cycle plants between 2003-2005, together with a larger share for CHP and renewables, brought electrical self-sufficiency up to over 80% in 2009. This figure subsequently fell in 2010 and now stands at approximately 55%, with a total of 8,176 GWh imported and 18,633 GWh generated. This is a clear net improvement, given that in 2000, imports accounted for 73% of total power generation. Output from combined cycles was variable having been influenced by market conditions. In general, after steep growth between 2003 and 2005, the figure remained largely unchanged through to 2009, when it fell by 38%, generating the increase in imports. Production at the two conventional single-cycle thermal power stations in Santurtzi and Pasaia, built in the early 1970s, has gradually been cut back. Santurtzi has now been closed altogether and dismantled, while Pasaia has been operating at a third of its capacity in recent years.
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Energy in the Basque Country in 2010 | 3E-2020
Combined cycles are the primary source of electrical self-sufficiency 20,000 15,000 10,000 5,000
2000
2002
2004
2006
2008
Renewables
CHP
Conventional thermal
Combined cycles
0 2010
Imports
Figure 3.15. Structure of power supply in the Basque Country, in GWh
In the area of distribution and transmission, in analysing the current situation it is important to note the quality of the supply and the rate of losses incurred in the grid. Transmission and distribution losses in the Spanish power system are equivalent to 8.2% of net demand. To offset these losses, an additional 8.2% needs to be generated over and above the amount actually consumed. Given that this additional production has major economic and environmental costs, it is important that this figure be improved upon.
The quality of the Basque power supply went from being above the Spanish level to matching it at the end of the decade.
The TIEPI (tiempo de interrupci贸n equivalente de la potencia instalada or installed capacity downtime equivalent time) is an indicator used to measure supply quality. It calculates the average time that users have been without a power supply over the year. It takes into account failures in supply due to both the transmission and distribution networks. Between 2000 and 2008, the average TIEPI for the ACBC was below 2 hours, except in 2009 when for meteorological reasons (particularly the impact of Cyclone Klaus at the end of January) it rose to 3.9 Hours. In general, the trend has not been positive in recent years; even ignoring 2009, the TIEPI for the ACBC is now the same as for the rest of Spain, having for years remained well below it. There has been a continued increase in power cuts in recent years 5 4 3 2 1 0 2000
2002
2004 ACBC
2006
2008
2010
Spain
Figure 3.16. TIEPI in hours. 2000-2010 Source: authors.
67
Energy in the Basque Country in 2010 | 3E-2020
Renewable energy sources Given the large volume of renewable energy used for non-electric purposes, it may be helpful to distinguish what proportion of total consumption of renewables goes to generating power and what proportion is used for non-electrical end consumption. Of the total 479 ktoe of renewable energy in 2010, 19% (approximately 96 ktoe) was used to produce 1,148 GWh of Electricity. The remaining 81% was used directly at the point of production. Among this portion, biofuels, first used in the last decade, are particularly important, especially biomass. Most renewable consumption in 2010 was for thermal use and as biofuels Renewable electricity consumption 19% Non-electric renewable consumption (thermal and biofuel uses) 81%
Figure 3.17. Distribution as a percentage of renewable energy consumption in electrical and non-electrical uses. 2010
Power demand met by renewables tripled over the last decade ‌
68
Power production from renewable sources increased from 2% of power demand in 2000 to 6.2% in 2010. Of renewables, hydroelectric contributes most, followed by wind and thermoelectric. The increase over recent years has come mainly from commissioning of wind power, where output has gone from 52 GWh in 2000 to 350 GWh in 2010. Hydroelectric production, which varies from year to year depending on the climate, accounted for 423 GWh in 2010. Power generation from biomass was mainly in CHP systems for the paper industry and energy harnessing of municipal waste and landfill biogas. Power production from biomass in 2010 came to 334 GWh, a minor amount given the total contribution of biomass to renewable energy consumption in the Basque Country.
Energy in the Basque Country in 2010 | 3E-2020
The energy type contributing most to the increase in the renewable share of power generation is wind power 1,400
12%
1,200
10%
1,000
8%
800
6%
600
4%
400
2%
200 0 2000
Photovoltaic 1.9%
2002
2004
2006
2008
0% 2010
Wind 32%
Hydro 37%
Renewable thermoelectric 29%
Renewable power generation % of power demand
Figure 3.18. Power production from renewables and contribution of renewables to power demand in GWh. 2010
Figure 3.19. Mix of power production from renewables. 2010
At the end of 2010, total installed capacity of renewable power generation came to 421 MW, contrasting with the target figure of 1,000 MW set out in the 3E-2010 Strategy. This underperformance was caused mainly by the fact that wind, solar thermal and biomass power all developed less than expected. The main reasons were as follows:
‌ although its relative importance is still modest and further promotion is required.
t 1PUFOUJBM XJOE QSPKFDUT JO UIF #BTRVF $PVOUSZ BSF TVĂľFSJOH EFMBZT JO QSPDFTTJOH formalities. This is because the current Territorial Sector Plan on Wind power has been at a practical standstill since 2005, due to institutional disagreements, and the need to draw up a new TSP in order to find a way out of the impasse. t *O UIF BSFB PG TPMBS UIFSNBM QPXFS UIF EFMBZ JO BQQSPWJOH UIF UFDIOJDBM CVJMEJOH DPEF and the subsequent crisis in the building industry have negatively affected compliance with the targets. t *O SFMBUJPO UP CJPNBTT UIF VTF PG CJPGVFMT IBT OPU EFWFMPQFE BT IPQFE BU UIF CFHJOning of the decade. It has also been impossible to commission the planned power production plants using agricultural and forestry waste, due to their limited economic viability and the absence of a strategic framework that would guarantee a secure supply of renewable biomass. This situation is in contrast to that of photovoltaic energy, where development has been higher than expected, and hydroelectric energy, where the targets have very nearly been met. Over the last decade, renewable energy has seen accumulated growth of approximately 80%, from 264 ktoe in 2000, representing nearly 4% of total demand, to 479 ktoe in 2010, 6.7% of Basque energy demand.
69
Energy in the Basque Country in 2010 | 3E-2020
The most important renewables in the Basque Country are biomass in the paper industry, biofuels, hydroelectric power and in recent years, wind.
In the mix of demand for renewables, biomass is especially important, accounting for 64% of the total. It is used to generate electricity and above all for final consumption for thermal uses. This is one of the peculiar characteristics of the ACBC; there are few other countries or regions in which over half of renewable energy consumption takes place directly at the point of production through processing of biomass, ahead of consumption of electricity produced by renewables such as wind or solar energy. In second place come biofuels, which represent 21% of final renewable consumption, followed by hydro power, which contributes 7.6% and wind at 6.5%. Finally, in last place comes solar power, including thermal and photovoltaic, which accounts for just 1% of the total renewable share. The main source of the growing share of renewables in total demand is biomass 800
8%
700
7%
600
6%
500
5%
400
4%
300
3%
200
2%
100
1%
0 0% 1998 2000 2002 2004 2006 2008 2010
Biomass 63.9%
Solar 1.0% Wind 6.5%
Biofuels 21.0% Hydro 7.6%
Harnessing of renewables % of total demand
Figure 3.20. Harnessing of renewable energy (ktoe), and share in total demand (%)
70
Figure 3.21. Renewable energy demand mix. 2010
Energy in the Basque Country in 2010 | 3E-2020
Solar photovoltaic power is the only renewable where growth has been ahead of target Solar thermal facilities in ACBC
Photovoltaic facilities in ACBC 160,000
20,000
Accumulated kWp
140,000
2010 target
120,000
Accumulated m2
15,000 10,000 5,000
Accumulated surface area
100,000
2010 target
80,000 60,000 40,000 20,000
2009
2010 2010
2008
2009
2007
2006
2005
2004
Wind power in ACBC 700 Accumulated MW
600 Biomass
2010 target
Accumulated MW
500
2010 target
400 300 200 100
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
0 2000
Annual toe
Biomass energy in ACBC 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0
2003
2000
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
2002
0
0
2001
Accumulated kWp
25,000
Small hydro facilities in ACBC 64,000 60,000 58,000 56,000
Accumulated kW
54,000
2010
2009
2006
2005
2004
2003
2002
2001
2000
50,000
2008
2010 target
52,000
2007
Accumulated kW
62,000
Figure 3.22. Growth in different renewables compared with Basque Energy Strategy 2010 targets
Energy efficiency Major progress has been made in energy efficiency, taking into account the achievements of the most energy-intensive sectors. Over the last decade, energy intensity in the ACBC, i.e. final energy consumption per unit of GDP fell by 10%, with good performance in all sectors except services, where intensity increased. In industry, there has been a disimprovement in energy intensity in recent years as a result of the energy crisis.
Industry has played a major role in the improvement in energy efficiency.
71
Energy in the Basque Country in 2010 | 3E-2020
Final energy intensity in the Basque Country improved by 10% 110
100
90
80 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Figure 3.23. Final Basque energy intensity (100=base 2000)
Major efforts have been made in recent years to improve energy efficiency in industry, a key sector for the economy but one with high energy intensity. Since the oil crises of the 1970s and 1980s, Basque industry (especially in the most energy-intensive industrial subsectors) has been making a continuous effort in terms of investment and improvement in energy efficiency in equipment and production processes, in many cases incorporating best practice. The result is that industry is now energy-efficient and competitive. In terms of energy saving, the Energy Strategy 3E2010 set a target of saving 975,000 toe per year through new measures implemented in the period from 2001 to 2010, including both energy efficiency measures and the incorporation of new CHP facilities in all industries. In the end, savings stood at around 930,000 toe per year at the end of 2010, 95% of the initial target. These figures break down as follows: t 0G UPUBM TBWJOHT UPF DBNF GSPN TFDUPSBM TBWJOHT QSPHSBNNFT BOE toe from the CHP programme. t 5IF BWFSBHF MFWFM PG BOOVBM TBWJOHT GPS UIF QFSJPE XBT PG #BTRVF FOFSHZ EFmand. t *O UFSNT PG NFFUJOH UIF UBSHFUT TFU QFSGPSNBODF XBT WFSZ HPPE JO JOEVTUSZ FYDFMMFOU in the tertiary sector and below target in the transport sector. The industrial sector continues to be the main contributor with 70% of the total savings achieved. t #Z UIF FOE PG UIFSF XBT .8 PG $)1 JOTUBMMFE JO UIF #BTRVF $PVOUSZ BIFBE of the target of 514 MW established in the last strategy. The improvement in energy intensity and the increase in savings have translated into greater energy efficiency, which has proved very beneficial for Basque manufacturing given the importance this factor has in competitiveness. Given the complex present and future situation, increasing efforts need to be made to make energy efficiency a basic pillar of economic growth. The strategy contained in this document is intended to contribute actively to meeting this challenge.
72
Energy in the Basque Country in 2010 | 3E-2020
The table below shows a summary of the variables discussed here, as compared to the initial targets for 2010.11121314 Balance of the 3E2010 Energy Strategy Base 2000
2010 Situation
3E2010 targets
Final energy consumption (Mtoe)
5.0
5.4
5.5
98%
Gross domestic consumption (Mtoe)
6.7
7.1
8.3
86%
16,850
18,630
19,700
95%
Energy saving vs. 2000 (toe per year)
–
930,086
975,000
95%
Level of energy saving vs. 2000 (%)
–
14.3%
15%
95%
Improvement in energy intensity vs. 2000 (%)
–
10.0%
16%
63%
10%
12.9%
14%
92%
264,000
479,500
978,000
49%
Energy share of renewables in primary energy (%)
4%
6.7%
12%
56%
Power supply from renewables (%)
2%
6.2%
15%
41%
1.5
3.3
4.7
70%
21%
42%
52%
81%
27%
56%
114%
49%
0
1,984
2,880
69%
525
902
1,460
62%
4,077
4,900
83%
Area /Indicators
Power demand (GWh)
Compliance with target
Energy Efficiency
Power supply with CHP (%)11 Use of Renewable Energy Use of renewable resources (toe per year)
12
Use of cleaner conventional energy Consumption of natural gas (bcm) Share of natural gas in meeting demand (%) Power generating plant Rate of power self-generation Combined cycle power stations (MW) CHP and renewable facilities (MW) Economic Impact (€m) Investment in energy efficiency and renewables
–
982
1,710
57%
Investment in infrastructures and exploration
–
3,095
3,190
97%
Public contribution
–
10.3%
8.6%
120%
24%
5.8%13
14%
148%14
Environmental contribution Basque GHG emission rate vs. 1990
Table 3.1. Basque Energy Strategy – Targets and level of compliance to 2010
11 12 13 14
Includes renewable CHP. For 2010, includes renewable CHP. Official figure on total GHG emissions 2009 for the ACBC. The reduction in GHG emissions was 48% above target.
73
Energy in the Basque Country in 2010 | 3E-2020
3.2. Energy infrastructures in the Basque Country
The Autonomous Community of the Basque Country (ACBC) has an extensive gas supply network and is among the regions of Spain making most use of the fuel.
Natural gas infrastructures More than three quarters of Basque municipalities have natural gas mains.
Legend Gas storage 72 bar 160 bar Gasified municipalities
Figure 3.24. Natural gas infrastructures in the Basque Country
Following the Basque Government’s commitment to gas over recent decades, the region now has an extensive natural gas mains coverage. The figure below shows ACBC municipalities with a channelled gas distribution network, either of natural gas or liquefied petroleum gas (LPG). In Gipuzkoa, 60% of all municipalities have natural gas mains, and the figure rises to 92% if propane networks are taken into account. In Bizkaia, these figures are 61% and 77% respectively. In à lava, 94% of the total population live in municipalities with mains gas.
The ACBC is among the regions of Spain with the highest natural gas usage. At the end of 2009, there were 486,450 natural gas customers in the region, with a ratio of 22.4 supplies per 100 inhabitants, and 49% of all principal residences had natural gas fitted. By territories, Ă lava has 75,323 consumption points, Gipuzkoa 183,965 and Bizkaia 227,162. Natural gas is supplied in two ways in the ACBC: t "DSPTT UIF &OBHĂˆT HBT QJQFMJOF XIJDI FOUFST GSPN UIF TPVUI GSPN -B 3JPKB BOE JT TVQplied by various sources over the Iberian gas network. t 'SPN UIF #BIĂ“B EF #J[LBJB (BT ##( SFHBTJmDBUJPO QMBOU PQFOFE JO #JMCBP 1PSU JO in the municipal area of Zierbena. The plant has a docking terminal for methane carriers through which LNG is imported from different origins. There are two storage tanks with a unit capacity of 150,000 m3, and the plant has regasification capacity of 800,000 Nm3/h. The former Gaviota gas field is now used as underground storage, VOEFS UIF NBOBHFNFOU PG &OBHĂˆT In addition, the natural gas transport network has been further reinforced in recent years with the addition of the new Bergara-Irun-France and Lemoa-Haro pipelines. The main projects planned under the Gas and Electricity Industries Plan for the coming years include enlargement of the BBG plant and the La Gaviota store, connection between Bilbao and Treto in Cantabria, and twinning of the Bermeo-Lemoa line.
74
Energy in the Basque Country in 2010 | 3E-2020
Infrastructures of petroleum derivatives The Basque Country’s import, storage, refining and distribution infrastructures for oil and petroleum derivatives ensure suitable levels of supply source diversity and market competitiveness. The most important infrastructures are located around Bilbao Port, given its extensive mooring capacity for large tankers. These facilities include the Petronor refinery and the various tanks for storing crude oil and derivatives.
Oil production in the region consists of a large refinery, at which upgrading work is due to be completed in 2011.
Wholesale Basque storage capacity for petroleum products stands at over 2.8 million tonnes, of which 2.1 million tonnes corresponds to the refinery and remainder to the Esergui, TEPSA and CLH facilities at Bilbao Port and in Rivabellosa. The Petronor refinery in Muskiz has processing capacity of 12 million tonnes of crude per year and its principal products in recent years have been diesel, fuel oil and petrol. The facility is currently undergoing a major strategic upgrading, with the Fuel Oil Reduction Unit project, which will bring major changes in many aspects, reinforcing the refinery’s business and its market. The project, which will be completed in 2011 with a capacity of 2 million tonnes per year, consists of a delayed coking unit. By charging residual heavy products from the vacuum unit, it will produce coke and increase production of other products of high added value (diesel, LPGs, petrol, naphtha). The project marks a profound change in the current production arrangement, with construction of new units and major alterations to existing facilities.
Electricity infrastructures Finally, with regard to electricity, total Basque installed power generation capacity at the end of 2010 came to 3,100 MW, of which 1,984 MW came from combined cycles, 214 MW from conventional power stations (Pasaia), 535 MW from CHP facilities and 422 MW from renewables. Although the 3E2010 Strategy’s targets of 2,880 MW from combined cycle plants, and a further 1,000 MW from renewable energy have not been met, the target for CHP has. 'PMMPXJOH DPNNJTTJPOJOH PG UIF #BIÓB EF #J[LBJB &MFDUSJDJEBE DPNCJOFE DZDMF JO ;JFSCFOB JO (SPVQ *7 JO 4BOUVSU[J JO BOE UIF #J[LBJB &OFSHÓB QMBOU JO "NPSFCJFUB Etxano in 2005, installed capacity in combined cycle plants stands at 1,984 MW. The single-cycle thermal power stations at Santurtzi and Pasaia, which came on line in the early 1970s, have gradually reduced production. Santurtzi has now been closed down and dismantled and the Pasaia coal-fired station has been operating at one third of capacity in recent years.
With the commissioning of a variety of Combined cycle, CHP and renewable energy projects under the last ten-year strategy, conventional power stations now play only a residual role in power generation.
75
Energy in the Basque Country in 2010 | 3E-2020
Electrical production capacity 2000-2010 Type of installation
Combined-cycle power stations
2000
0 MW
1,984 MW
1,132 MW
214 MW
Renewable energy
190 MW
424 MW
CHP15
318 MW
535 MW
Total
1,640 MW
3,100 MW
Conventional power stations
Table 3.2. Electrical production capacity in the Basque Country
15
15
76
2010
55 MW of renewable CHP is also included under renewable energy.
Energy in the Basque Country in 2010 | 3E-2020
3.3. Business-as-usual energy scenario Having analysed the principal international trends, a parallel analysis needs to be made to identify trends specific to the Basque economy that may in some way influence the design of energy policy. These should include social, economic, sectorial, technological and energy-related prospects and premises.
Demographic and social perspectives The Basque Country is no exception to the social trends discussed previously in an international context. Its population size was also affected by the baby boom of the 1950s and 1960s and more recently by the trend towards increased aging. Population trends in the last two decades have been influenced by the baby boom generations joining the labour market, parenthood and the housing and consumer markets, and also by a growth in the migratory balance. The latest trend is for THE Basque population to remain steady at around two million, influenced by a fall in birth rates in recent years and progressive population aging. This will lead to a reduction in the size of the workforce (people of working age between 16 and 64), a fall in the number of households with the highest spending (though not in the absolute number of households), and an increase in groups with greatest risk of dependency. Greater population aging will start to have an impact from 2020 ‌
2008
16.8
64.5
2020 Eustat
18.2
59.3
22.5
2019 INE
18.2
58.6
23.2
‌ with a corresponding fall in absolute population figures
18.6
Population (000)
CAAGR 2001 %
2008
2,157.2
0.5
2020 Eustat
2,232.2
0.34
2019 - INE
2,067.9
-0.42
Year
0%
20%
40%
Pop. aged < 20
60%
80%
100%
Pop. aged 20-64
Following a period of demographic growth in the Basque Country, future trends point to a period of stagnation, a greater number of households and a different housing configuration.
Pop. aged 65+
Figure 3.25. Perspectives for Basque population by age segment and in absolute terms Source: INE, Eustat, authors.
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The demographic variables seen essentially over the last decade (fall in birth rates, longer life expectancy) and also the social changes (greater autonomy of elderly people) has had a decisive influence on the increase in the number of households and the change in their structure in a scenario of population stability and growth in the number of households: t 5IFSF BSF DVSSFOUMZ IPVTFIPMET JO UIF #BTRVF $PVOUSZ BO JODSFBTF PG since 1991. t 0OF PVU PG FWFSZ mWF IPVTFIPMET JT POF QFSTPO PS OVDMFBS XJUIPVU DIJMESFO (20.9%). The proportion of nuclear families with children has fallen to 38% of the total. As a result, there has been a reduction in average household size from 3.32 in 1991 to 2.64 at present. Evolution of the population, together with the recent trend in household make-up suggest that household size will continue to shrink by a further 10% by 2020. t )PVTJOH DPOmHVSBUJPO JT BMTP BĂľFDUFE CZ UIF TUSVDUVSBM DIBSBDUFSJTUJDT PG IPVTFIPMET a greater number of households will be made up of elderly people, with a significant proportion of one-person households and single-parent families without children, and a smaller number of hitherto traditional households. t 5IF FTUJNBUJPO GPS OFU IPVTFIPME DSFBUJPO TVHHFTUT UIBU GSPN UIF QBDF XJMM slacken; in other words, growth will be slower. Number of Basque households Number of households
2002-2005
2006-2010
2011-2015
2016-2020
Net growth
70,038
49,744
45,667
26,900
Average ann. growth
17,510
9,950
9,135
5,380
Table 3.3. Outlook for growth of Basque households
Future economic prospects suggest moderate but steady growth, which will depend on the level of recovery of domestic consumption and the labour market.
Economic premises Between 1980 and 2008 the Basque economy saw a period of expansion in which wealth generation doubled. The period was characterised by the consolidation of the welfare state, the international presence of production backed by exports and greater domestic consumption founded on improvement in household income. This pattern is based on the following features: t "U UIF FOE PG UIF MBTU EFDBEF EPNFTUJD DPOTVNQUJPO UIF MBSHFTU DPOUSJCVUPS UP (%1 accounting for 61%. The remainder was made up of investment by public and private economic agents. Greater consumption was built on incorporation into the consumer market of very large generations with a different consumption pattern and more service-acquiring habits, growing in parallel with personal income.
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t 'SPN UIF QPJOU PG WJFX PG UIF MBCPVS NBSLFU PWFS UIF MBTU ZFBST BO FNQMPZNFOU base has been consolidated of around 700,000. In the period from 2007 to 2008 it hit a historical maximum of over one million. Employment rates have been decisive, generating the private income (salaries) and public revenue (taxes) necessary to fund a rise in consumption and domestic demand. Looking forward, an economic period of not very pronounced but reasonably steady growth can be predicted for the Basque Country. Officially an accumulative growth rate has been used of 2.2% for the five-year period 2011-2015, and 2.8% for 2016-2020. Although these figures are above the Spanish average, they are certainly lower than during the recent expansion of the period from 2000 to 2008. The scenario supporting this trend contains the following variables: t 5IF GPSFDBTU GPS FNQMPZNFOU JT DPOTFSWBUJWF XJUI BO FTUJNBUFE SBOHF PG UP 1,125,000 people in work. t 5IF OVNCFS PG IPVTFIPMET XJMM HSPX JO BCTPMVUF UFSNT BMUIPVHI BU B TMPXFS QBDF Households will be smaller in size, their members will be older and the number of children will fall. The challenges considered most relevant for international positioning of the Basque economy involve its business links with more mature economies which, a priori, will grow at a slower pace, and the intensification of trading relations with emerging powers. The Basque economy will experience V-shaped recovery but with lower growth rates 6% 4.8%
5% 4% 3% 2%
3.3%
2.8% 2.2%
1.9%
1.4%
1% 0%
1991-1995
1996-2000
2001-2005 Historical
2006-2010
2011-2015
2016-2020
Hypothesis
Figure 3.26. Development and 2011-2012 forecast for average annual growth in Basque GDP
Situation and sectorial trends The economic structure of the Basque Country has also evolved as a result of economic growth. In 2008 the services sector generated two thirds of GDP (62%), whereas the share of industry fell to 28% and transport increased to 5%. The building industry also rose to account for 9% of GDP in response to the property boom that began at the start of the decade, while the economic contribution of the primary sector fell to just 1%. From an analysis of both the current situation and the development experienced in each of the sectors we can see a series of sectorial trends from an energy perspective for coming years. The key features of these trends are set out below.
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Tertiary sector The tertiary sector has seen the largest growth thanks to the emergence of new demand niches as a result of economic expansion, …
Growth of the tertiary sector is generally in response to the needs of a more dynamic economy than 25 years ago. Demand for financial services and professional business services has grown considerably, and branches of business most closely linked to people have had a stabilising influence, such as commerce, catering and people services such as education and health, the latter with a large public provision and much more anti-cyclical in nature. The main features characterising the development of the sector are as follows: t 'SPN UIF QPJOU PG WJFX PG DPNNFSDF UIF NBJO DIBOHFT BõFDUJOH EFNBOE IBWF CFFO accompanied by a more diversified services offering, in which traditional specialist trade specialising in food has lost ground to other specialities, shopping centres and malls. This change has arisen out of an altered perception of consumption, which has gone from being a need to being seen as a leisure activity. t "U UIF TBNF UJNF BT BMSFBEZ EJTDVTTFE IPVTFIPME DPOTVNQUJPO IBT SJTFO MFBEJOH UP a change in consumption patterns, with increased spending on telecommunications services and healthcare and a smaller share on food. t 5IF DIBOHF JO UIF HFOFSBM DPOTVNQUJPO QBUUFSO BMTP BõFDUT UIF IPTQJUBMJUZ JOEVTUSZ where the traditional bar has lost ground to restaurants and hotels, resulting in a larger and more professionalised average offering. t *O UIF BSFB PG FEVDBUJPO UIFSF IBT CFFO BO BQQSFDJBCMF EFDMJOF JO UIF OVNCFS PG pupils in compulsory schooling (primary and secondary), which has also impacted the university area. In general, the region has a complete educational map and no major changes are expected, apart from filling out the existing offering and improving the pupil/ teacher ratio.
This is the sector with the greatest potential for improvement in savings and efficiency, especially in terms of buildings…
From an energy perspective, consumption in the Basque tertiary sector, specifically in housing and buildings, accounts for 19% of final energy consumption, with the residential area accounting for 60% of this figure, compared to 40% for services. However, the trend over the last decade in both sectors has been uneven, with moderate growth among domestic customers, as opposed to very sharp growth in the services sector. This is a sector in which electricity accounts for nearly half of consumption and natural gas for over 30%. Gasification of the sector has been very intense, with petroleum derivatives now accounting for just 12%. In terms of controlling energy consumption, the main problem in addressing the challenge of energy improvement in the sector is its fragmentation and the cost of the measures involved. Nonetheless, an important quantity of equipment and energy systems have been replaced by more efficient ones in the last five years. This has essentially been achieved through grants for investment, allowing above-target energy savings and more rational energy use. At present the share of renewables in final consumption in the sector is generally speaking very low - around 5% in housing (mostly from timber waste) and practically nil in the services sector.
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There is major potential for reducing consumption in buildings and housing. Going forward, the greatest potential lies with energy rehabilitation, including upgrading of energy systems and energy consuming equipment to make them more efficient. The pace at which appropriate measures are introduced will be conditional on government demands on the sector. From a more technical perspective, most of the energy technologies to be applied are already available on the market, although there is still much room for improvement. As new markets grow and develop the, the cost of adopting these technologies will be reduced. The most relevant trends are: t C limate control. There will be a larger number of low-consumption buildings, with advanced insulation and enclosure systems. t D omestic hot water. Micro-CHP, condensation boilers and very high efficiency heat pumps will gradually be incorporated. t E nergy-consuming equipment. The advance in low consumption household equipment market will continue, as is already happening for example with domestic appliances. t L ighting. Low consumption lighting, using metal halides, LEDs, etc., will become the norm, largely due to a ban on the sale of incandescent bulbs, as well as other measures. t D emand management. In the medium term, the sector will see more appropriate technologies for incorporating effective demand management systems, enabling reorientation of the seasonal nature of consumption and optimisation of the energy bill. The rate at which these trends take place will depend on the extent to which consumers begin to become more aware of their consumption figures; the creation of mechanisms that allow markets for new technologies to develop more quickly and the development of appropriate financing strategies for the sector.
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Transport sector Road transport continues to predominate over other forms. The largest number of journeys are territorial and intra-municipal.
Transport is the other sector where there has been a major growth in supply. This includes passenger and goods transport by road, rail, sea and air. Although its contribution to GDP is not particularly important, it does have a major share in the energy demand mix. Business has increased in all four of these means of transport, although employment has only grown in road transport and services associated with transport. Road transport is the most flexible of modes in terms of quantity, point-to-point connectivity and delivery time (in contrast to the rigidity imposed by the inter-regional nature of other modes) and has benefitted from the economic and industrial dynamism of the last decade. More specific aspects of the development of the sector relating to freight and passenger transport include: t PG UPUBM GSFJHIU USBOTQPSU JT CZ SPBE XJUI DPOUJOVFE HSPXUI GPMMPXFE CZ GPS sea transport (a historical maximum for this mode), and 3% for rail. t $PNNVUJOH BOE FWFSZEBZ QFSTPOBM NPCJMJUZ JT FTTFOUJBMMZ UFSSJUPSJBM BOE JOUSB NVOJDipal. 41% of all journeys are made on foot and 39% by automobile, while public transport has entered a period of stagnation, though it still plays an important role in the main cities, with the good performance of Bilbao Metro being an example. From an energy perspective, there have been major advances in automobiles over the last decade in terms of technology and fuels, as well as in market performance, with a progressive increase in the use of diesel among private cars and a 15% improvement in engine energy efficiency. In recent years hybrid vehicles have started to appear on the market; in addition, biofuels, electricity, liquefied petroleum gas and compressed natural gas are now being used. Promotion of alternative fuels has begun with the incorporation of biodiesel and bioethanol in service stations, enabling a gradual increase in usage rates. An energy labelling system for vehicles and tyres has now been introduced.
The greatest growth will be in intercity road transport, especially by automobile, and it is therefore this sub-sector that poses the greatest energy challenges,â&#x20AC;Ś
The most relevant trends with regard to the two main branches, passenger and freight transport, in the Basque Country, are as follows: t Passenger transport â&#x20AC;&#x201C; Growth in the number of journeys. â&#x20AC;&#x201C; Slight improvement in public transport, especially in Gipuzkoa and Bizkaia. â&#x20AC;&#x201C; Primacy of the automobile in intercity transport. â&#x20AC;&#x201C; Growth in the use of light rail and metro in urban contexts and rail for intercity travel, with a decline in the number of travellers using long distance rail. â&#x20AC;&#x201C; Recovery, after the crisis, of the growth in air traffic.
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t Freight transport – The modal imbalance remains, with 4 out of every 5 tonnes transported by road. – Increase in domestic freight traffic as compared to international and national (Spanish) flows. – Good performance, following historical record figures, of sea transport. – Slight increase in rail transport contrasting with a downward trend in air transport. In addition, technological advances will include: t P etrol engine. An improvement of 20% is expected in energy efficiency over the next decade through application of proven technologies (hybrid systems, start&stop, smaller engines offering greater turbo-compression, engines operating in 2T and 4T to obtain a flatter torque curve with smaller engine capacity, direct injection, optimised operation of the alternator, electric steering, etc.).
… mainly in the field of alternative fuels and hybrid vehicles.
t D iesel engine. Less potential improvement than petrol engines, although there are already technologies that can be applied to reduce consumption by approximately 10% (advanced injection systems, optimisation of the EGR, two-stage turbo-compressors, hybrid systems, start&stop, electric steering, etc.). t E lectric vehicle. Spain and the EU in general has committed to introducing chargeable electric vehicles. This strategy will allow accumulation of surpluses from nuclear or wind-powered electricity facilities, and optimisation in the operation of combined cycles. Various brands are now marketing electric vehicles. The main problem lies in the volume and weight of the batteries. It is planned to replace the current NiMH batteries with Li-ion, which has a larger energy capacity per unit of weight; the next generation of batteries is currently at research phase. New home-charging facilities will require much larger contracted capacities than at present, requiring new regulations on installations and tariffs. t I ntelligent Transport Services (ITSs). Gradual incorporation in private vehicles (traffic information, digital audio broadcasts, traffic news channel, etc.), public transport (passenger information services, automatic vehicle location, etc.), commercial vehicles (fleet monitoring, goods management, digital tachograph, etc.) and infrastructures (traffic management centres, electronic message boards, incident management, tunnel management, etc.). This type of system optimises both routes and times, achieving important reductions in energy consumption. t B iofuel in petrol and diesel. Modifications to standards EN590 and EN228, establishing diesel and petrol specifications respectively, raise the permitted level of biofuel from 5% to 10% in fuels; this will help meet the target of 10% renewables in transport. t L iquefied petroleum gas and compressed natural gas. A certain degree of penetration of these two fuels in transport is anticipated as an alternative to petroleum derivatives. Their first potential customers are likely to be urban public service fleets (taxis, driving schools, distributors, etc.). t H ydrogen. Although investment is being made in research both in the US and in the EU into the development of hydrogen as a vector energy for transport, its future application is questionable and in any case, it is not expected to be in place before 2030.
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Industrial sector The industrial sector in the Basque Country is characterised by high energy consumption and by having a number of plants subject to the European emissions trading scheme.
Industry is the sector with the highest energy consumption in the Basque Country, with a share of around 45% of final consumption, in clear contrast to other regions and countries. In addition, the Basque industrial sector includes a number of highly energyintensive industries, such as iron and steel, foundry, cement, paper, glass and chemicals, which together account for around 72% of industrial energy consumption. Gasification of the sector has been completed satisfactorily, and natural gas now accounts for around 40% of industrial consumption. Diesel, petcoke and fuel oil now represent only 7%. Industrial facilities with the highest energy consumption and most carbon emissions are subject to the European Emissions Trading Scheme. This affects seventy facilities in the Basque Country. In 2008, these companies emitted a total of 10.3 million tonnes of CO2, of which 6.4 came from the different industrial sectors and CHP, and the rest from production in thermoelectric power stations. In order to contribute to meeting the EU target of reducing emissions by 20% by 2020, emission allowances issued throughout Europe will be gradually reduced under Directive 2009/29/EC. As well as reducing the total allowances issued, the amount of allowances assigned free of charge will be cut to 30% in 2020. By 2027 no allowances will be issued free and instead they will all be auctioned. In addition, from 2013, the ETS will be extended to sectors such as metal production and processing, plaster production, chemical subsectors and aviation.
Trends in the industrial sector will depend on the degree of adaptation to development of the ETS and increases in energy prices.
The European Emissions Trading Scheme is likely to generate additional incentives for investing in energy efficiency and use of renewable energy sources, in that it will bring additional costs for companies that fail to do so. At the same time, the EU establishes that industries with a risk of carbon leakage can receive the allowances free of charge. Many of the companies with highest energy consumption in the Basque Country would form part of this group under Decision 2010/2/EU, including manufacturers of paper and paperboard, refined petroleum products, glass, machinery, steel tubes, fertiliser and tyres. At the same time, the anticipated rise in energy prices will lead directly to an increase in the companiesâ&#x20AC;&#x2122; costs by making the energy they use in production and transport more expensive. This will provide an incentive for investment in improved energy efficiency or a search for alternatives in order to reduce production costs, and it is therefore predicted that companies will choose to substitute energy for investment, i.e. capital. Nonetheless, the level of the resulting costs is quite likely to be higher than that before the price rise, leading to an increase in the price of end products in order to maintain the corresponding profit margins.
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Energy and technological premises In order to map out a business-as-usual energy trend for the ACBC, as well as taking into account the forecast trends in the different variables of sectorial activity that impact consumption, it is also necessary to take into account a series of premises related to energy, technology and regulation. These also contribute to setting the framework of reference for designing energy policy: t 5IF energy premises taken into consideration mainly include sector-by-sector energy evolution based on business scenarios at current levels of efficiency and consumption structures. This means that no additional saving measures are included apart from those already undertaken in the different sectors. In addition, certain sectoral energy measures established at a EU Level are included as being attainable within the trend, such as achieving a 10% share of renewables in energy consumption in road transport.
A business-as-usual energy scenario has been designed for the ACBC that includes only the result of consolidating past actions and new regulatory requirements, with no additional measuresâ&#x20AC;Ś
t "U B technological level, certain technological and market measures are considered to be consolidated, such as the non-replacement of new domestic appliances with other less efficient Class A ones, or the process of banning the sale of incandescent light bulbs as required by European directives. t 'SPN B regulatory point of view, the scenario takes into account the requirement to comply with existing and forecast legislation, but does not envisage additional measures included in possible future regulations that may be introduced, nor additional technological energy saving and renewable-use measures. An example of the regulatory premises assumed includes compliance with the technical building code, which requires a considerable increase in the insulation levels of envelopes and enclosures, supplying part of the energy consumed in newly-built or rehabilitated buildings and housing from renewable resources, etc. Finally, one of the key areas to be taken into account includes all the variables related to thermoelectric power generation, which will determine natural gas demand in the Basque Country depending on energy needs. The operation of natural gas combined cycles, which compete at a Spanish level on the daily generation market, depends on what is known as the â&#x20AC;&#x153;forecast heat gapâ&#x20AC;?, which is essentially based on two parameters: power demand and generation under special framework facilities (renewables and CHP) at any given time.
Trends in energy consumption The timeframe for the business-as-usual scenario used for analysing possible long term trends in Basque energy demand is to 2030. The main conclusions for 2020 with regard to the reference year of 2010 are as follows: t #BTRVF FOFSHZ EFNBOE XJMM HSPX CZ JO ZFBST UBLJOH JOUP BDDPVOU UIF FĂľFDUT of the current economic crisis, an average annual rate of 1.8%. t #BTRVF FMFDUSJDJUZ EFNBOE XJUI BO BWFSBHF BOOVBM HSPXUI PG XJMM JODSFBTF CZ 17%. The power supply mix is assumed to be made up of 51% from thermal power stations, 17% from CHP and renewables, and the remaining 32% from imports.
â&#x20AC;Ś and whose main assumptions include a 15% growth in energy demand over the next 10 years and a 9% share of renewables in final consumption.
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t /BUVSBM HBT SFRVJSFNFOUT XJMM JODSFBTF CZ PWFS UIF QFSJPE XJUI HSPXUI JO BMM TFDtors, due to a great extent to the recovery of consumption, replacement and other sectoral growth. t 5IF DBQBDJUZ PG SFOFXBCMF SFTPVSDFT XJMM JODSFBTF CZ BSPVOE UPF B HSPXUI of 18% over 10 years. This means that the share of renewables in final consumption will increase to 9%. t 'JOBM DPOTVNQUJPO JO BMM TFDUPST XJMM SJTF CZ XJUI SFTQFDU UP #Z TFDUPS UIF greatest increase following economic recovery will be in industry and the transport sector. The greatest increase in consumption will be in industry following economic recovery.
ktoe
7,000
10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0
5,000 4,000 3,000 2,000 1,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2015 2020 2025 2030
0
Industry
Transport
Services
Residential
Primary
Figure 3.27. Business-as-usual scenario for consumption by sectors 2000-2030
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2015 2020 2025 2030
ktoe
6,000
86
Demand for oil will remain constant while demand for coal will decline
Electricity
Renewables
Oil der.
Coal
E. derivadas
Figure 3.28. Business-as-usual scenario for energy demand 2000-2030
Energy in the Basque Country in 2010 | 3E-2020
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Strategic analysis of the Basque energy system
Strategic analysis of the Basque energy system | 3E-2020
Based on the above analyses, we can map a series of representative variables that characterise the Basque energy situation at this time. We can then consider the main risks to be taken into account and the strengths to be used as a starting point for Basque energy policy over the next ten years and on which to build the new strategic objectives. These objectives are set out in a framework comprising the different areas, lines, initiatives and actions presented below, which together shape the new 3E 2020 Energy Strategy. The various risks and favourable aspects discussed below are grouped into different categories. A distinction is made between external and internal factors, in the form of a numbered list with a short explanation of the relevance of each one.
4.1. Principal risks and strengths 4.1.1. Identification and evaluation of risks All the factors that are considered to pose a risk, threat, or weakness from an energy perspective and which could translate into competitive disadvantages for the energy future of the Basque country are listed below, grouped by categories. End sectors 1. High representation of industry, the most energy-intensive sector, in the economy compared to other countries. The industrial sector has made satisfactory progress in reducing energy intensity. However, compared to other countries and regions, the sector accounts for a lionâ&#x20AC;&#x2122;s share of the economy despite the fact that the balance has been somewhat redressed in favour of the services sector. Continued efforts are therefore needed to improve energy saving and efficiency, in view of this sectorâ&#x20AC;&#x2122;s high rates of energy consumption. From now on, achieving results will require greater efforts and costs. 2. Large presence in the Basque economy of industrial subsectors with the greatest risk of carbon leakage. Many of the companies with the highest energy consumption in the Basque country are industries considered to have the greatest risk of carbon leakage (manufacture of paper and paperboard, petroleum products, glass, machinery, steel tubes, fertiliser, tyres and others.). This means that they are more likely to relocate production to other countries with fewer restrictions on emissions. In all, 70 Basque facilities are subject to the European Emissions Trading Scheme, and under plans for the scheme they will be required to adapt and make an increasing commitment to emission reduction targets.
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3. Progressive stagnation of public transport. Trends point to a stagnation in the use of public transport, excluding urban transport. This poses a risk for the control of emissions from transport and difficulty in holding the sectorâ&#x20AC;&#x2122;s consumption rates to moderate growth. Supply security 4. High general energy dependency on fossil fuels. In 2010, fossil fuels directly represented 83% of Basque energy demand, which means that the ACBC is mostly dependent on energy resources that are not local and come, in many cases, from politically unstable countries. Moreover, they are traded on markets that are subject to high rates of volatility and instability in prices. 5. Increasing difficulty worldwide in extracting fossil fuels. The rate at which energy resources can be extracted, especially oil, may be limited in coming years. Fossil resources are ever more difficult to locate, given the high level of production of the last century, and new deposits are located in increasingly complicated areas to exploit, requiring more sophisticated, and therefore more expensive, technologies. This situation poses the risk of a downward pressure on global supply of the resources. 6. Forecast growth in oil production from OPEC countries in coming years. The fact that the worldâ&#x20AC;&#x2122;s largest oil reserves are in the Middle East, combined with the ever-greater difficulty of finding new deposits represents a risk to market stability and to supply security. 7. High dependency on oil in the transport sector. With 93% of the total energy consumed by the transport sector in 2010 coming from petroleum products, this is clearly the least diversified sector in terms of energy sources, making it dependent on the most expensive of all fossil fuels. Given the growing importance of the sector at local and global level, together with its major contribution to total CO2 emissions, this aspect entails a significant risk that needs to be taken into account in Basque energy policy. Any long-term strategic vision will have to reflect ways of ameliorating this issue.
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Energy sources and supply markets 8. Anticipated price rises in energy raw materials. The scarcity of energy resources and high consumption levels among emerging powers are pushing energy prices upward in the short, medium and long term, increasing market uncertainty and instability. 93% of the forecast increase in global primary energy demand for the period 2008-2035 will come from non-OECD countries and in the future the price of oil will not fall below $100 (based on the IEAâ&#x20AC;&#x2122;s New Policies Scenario estimates). The general consensus is therefore that there is a real risk of high prices. In the case of Basque energy policy, all the scenarios under consideration assume that prices will be high, to differing degrees. 9. Predominance of fossil fuels as an energy source to 2035. Despite the technological progress that will undoubtedly be seen in the area of renewable energy sources and their ever greater contribution to global energy production, the consensus is that in 2035, fossil fuels will continue to be the predominant energy source, and even more so in 2020. The Basque economy, with no local fossils resources, needs to take these factors into consideration when determining its future energy priorities. 10. Non-existence of an organised gas market. The creation of an organised market that would allow a secondary gas market to be formed would be helpful in giving Basque companies an opportunity to access this fuel under the best market conditions and would improve their competitiveness. This situation does not currently exist and the risk posed by its absence is that it creates a significant shadow price for the business world. 11. Possible reduction in the quality of the power supply if sufficient investments are not made. If adequate investments are not made in the power transmission and distribution system, there could be a degradation in the quality of Basque power supply. Indeed, the TIEPI indicator has worsened in recent years, and in 2009 exceeded the Spanish average for the first time. Quality management and improvement of power transmission and distribution is always an important aspect to be considered for maintaining service quality and reducing losses.
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12. Low use of renewable energy sources in the tertiary sector. In the tertiary sector, renewable energy sources accounted for just 5% of residential usage in 2010, and was almost non-existent in the services sector. These are disappointing figures. The low rate of upgrading of buildings and their facilities means that if measures are not taken, growth in the share of renewable energy in this sector will continue will continue to be slow over coming decades. Environment 13. Difficulty to date in meeting carbon emissions targets. Until the economic crisis pushed greenhouse gas emissions down, neither the Basque Country nor Spain were meeting their targets on reducing CO2 emissions. This shows that there is a long way still to go in reducing CO2 emissions, requiring greater efforts that combine savings, efficiency and the use of renewable energy. Economy and finances 14. Smaller potential for grants to the energy sector due to the poor condition of public finances. Compounding the problems with private credit and investment, public finances at state and regional level are also in short supply, subject to tight market control following collapse of the sovereign debt of several European countries. This is having a negative effect, reducing the potential for public aid to the industry. 15. Insufficient recovery of credit and investment. The recovery of credit and investment, or at least the return to circulation of credit and the flow of capital, still a long way from pre-crisis levels, is proving to be slow and costly. If matters continue, it may prove very harmful for the industry, in that it could put a brake on potential investment on the most efficient production systems and consumption resources and on the production of renewable energy. Social and consumer structure 16. Greater dispersal of points of consumption and lager number of dwellings with different consumption patterns. With more dispersed points of consumption, changes in the configuration of the structure of housing and a greater number of dwellings in absolute terms, a process of deliberation is needed to identify the best model and culture for responsible consumption to be disseminated, given that the change in traditional household and social structures also leads to changes in forms of consumption making them more difficult to control.
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4.1.2. Strengths The following is a list of all the factors which are considered to be positive for the region, positioning it favourably with respect to the energy outlook for the next ten years. The factors are grouped into the following categories: supply security, energy sources and supply markets, end sectors, savings and efficiency, and technology and R&D. Savings and efficiency 17. Strong performance in Basque energy consumption, with moderate annual growth rates. Basque energy consumption has performed well, with energy intensity cut by 12%. Results in this area have been very good with positive performance across the board, except in residential consumption, the only sector in which energy intensity increased. Moreover, the last decade has seen energy savings of 930,086 toe per year, a 95% compliance rate. Consumption in the Basque Country has increased but at a more moderate rate than in the IEAâ&#x20AC;&#x2122;s New Policies Scenario for global consumption. These figures show that the ACBC is favourably positioned with regard to the challenge of continued savings and efficiency. 18. Greater growth perspectives for sectors with the greatest energy saving potential: services, transport and residential, in that order. The fact that the sectors with the greatest potential for savings are those with the greatest prospects for economic growth and therefore energy consumption, suggest that there are strong opportunities for increasing energy saving and efficiency in the Basque Country. End sectors 19. Leading presence and consolidation of the automotive industry. The strong presence of the automotive industry in the Basque Country means that the business world is well placed to capitalise on the changes that are going to take place in the industry in the medium and long term, for example with the progressive appearance of electric vehicles. Supply security 20. Extensive Basque gas system, with high degree of supply security. The Basque gas system is extensive and characterised by its supply security. It includes one of the six regasification plants in Spain as well as storage capacity and it reaches most of the population and the principal industrial areas.
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21. Possible competitive advantage if production of unconventional gas proves viable. Like many OECD countries, Basque authorities intend to analyse the viability of obtaining local unconventional gas resources. Regions that mange to locate commercially exploitable resources will be in a situation of clear competitive advantage in terms of their gas supply and energy bill. 22. Mature power system with guarantees of high-quality secure supply. The Gas and Electricity Industries Plan identifies the new power transmission lines needed to improve security of the system and connect new power production and supply to growing consumption points. The Penagos-Güeñes 400 kV line, currently under construction, which will connect to Cantabria, together with the planned connection with Navarra (Itxaso-Muruarte) and internal reinforcement of the Basque grid with the Güeñes-Itxaso line and in the Vitoria-Gasteiz area, and other more minor 220 kV undertakings will ensure a more mature transmission system before 2015 with capacity to ensure supply from different origins and interconnect new output and a larger number of consumption points in the future. However, the capacity of crossborder interconnections with European grids remains very limited at present. Energy sources and supply markets 23. Development of new unconventional gas sources on international markets. The effects of developing unconventional gas, which include an easing in the price of European LNG supplies, have considerably benefitted economies with large-scale use of this fuel, as is the case of the Basque Country. The decoupling of gas and oil prices makes it a very competitive energy source and places the Basque Country in a more favourable energy position than countries or regions with a greater dependency on other fuels, evidence of the appropriateness of the Basque Government’s commitment to gas over the last three decades. 24. Relatively low share of oil in Basque demand. The reduced weight of oil in Basque of primary energy consumption, overtaken by natural gas from 2005 on, and a forecast continuance of this trend over coming years, shows that the strategy followed by the Basque Country in recent years of replacing oil with gas was appropriate and suggests that it is possible to gradually decouple from oil and advance towards a future based on renewables in which gas will play the role of a transition energy over coming decades.
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25. Large refining and storage capacity through Basque oil infrastructures. Although the Basque Country is reducing its oil dependency, it nonetheless has a complete petroleum infrastructure, with large refining and storage capacity. Recent large-scale investment has prepared it for the challenges predicted in the industry. These investments will enable the infrastructures to maintain their share and capacity of supply to Spanish market in the long term. 26. Low use of coal as an energy source and continued downward trend. Basque coal usage has fallen in recent years thanks to lower usage in power generation, where it has been replaced by natural gas combined cycles. The price of CO2 and the European Emissions Trading Scheme represent an incentive to continue cutting coal consumption in electricity generation and industry in general. Technology and R&D 27. Important technological culture in the Basque business world. The strong technological culture infusing the Basque business world, with a number of world leaders and innovative projects for increasing energy efficiency of the system, such as those being promoted by the Department of Industry, Innovation, Trade and Tourism, represents a basic lever for facing the energy challenges of coming years. 28. Strong public and private tradition in R&D initiatives. R&D culture is also quite deeply-rooted in the Basque Country, in both the private and the public area. This factor will be essential in contributing to the development of technologies at a lower cost (and this more marketable).
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4.2. Energy challenges key to the future Based on our assessment of the ACBC’s starting situation with regard to the new energy strategy, outlined in terms of the risks and strengths involved, we can list a series of Energy challenges. t 5P JODSFBTF FõPSUT BOE JNQFUVT JO NBUUFST of energy efficiency: – In industry, to maintain competitiveness in the face of greater competition from emerging economies. – In the tertiary sector and transport, given the great potential for savings – To constantly develop a culture of efficient energy use in the private area, from a business and private perspective, in which demand management will play an important role. – To promote productivity in companies as an additional means of improving efficiency. t /FFE UP CBTF UIF FOFSHZ NPEFM PO B HSFBUFS QSFTFODF PG less pollutant, more efficient and less costly energy, for example a suitable combination of natural gas and renewable energy moving towards developing the latter over the former. The energy types that should be penalised are those with the most unstable markets and the ones responsible for the highest carbon emissions, such as oil and coal. t 5P EFWFMPQ QSPKFDUT UP BTTFTT UIF WJBCJMJUZ PG UFDIOJRVFT GPS FYUSBDUJOH unconventional gas that could be applied in the Basque Country. t 5P DBQJUBMJTF PO UIF potential for international development in the energy industry, given the growing demand for energy services and technologies from emerging countries. t /FFE UP QSPNPUF energy rehabilitation of buildings and housing as part of a comprehensive policy on sustainability. t 1SJPSJUJTF QSPHSFTT JO UIF transport sector towards gradual dissociation from oil. t $POUSJCVUF UP JOUFSOBUJPOBM UBSHFUT on reducing carbon emissions. All of these have been taken into account in defining the vision and strategic objectives.
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4.3. Basque long-term energy vision The energy model of any area, territory or region must be committed to the management of three important energy-related aspects: security, competitiveness and sustainability. The first two aspects arise out of the problems characterising fossil fuel markets, essentially oil. The progressive exhaustion of reserves, the greater difficulties involved in exploration and extraction, and the upward pressure on prices due to high consumption by emerging countries all make it necessary for advanced economies, such as the Basque Country, to work towards replacing these energy types with other renewable sources and to reduce energy intensity through savings and efficiency. In the area of renewable energy sources, there are short and medium term difficulties for mass introduction in the Basque Country. These include the limited local potential, specific local obstacles to installation, the as yet insufficient technological development and the still uncompetitive costs of some of the technologies and applications available on the market. Until renewables form the cornerstone of the future Basque energy model, other forms of energy will have to be used that assure energy supply, under conditions of continuity, competitiveness in energy costs, reduced geo-political risk and minimisation of environmental impact. The commitment to natural gas as a transition energy must therefore be backed by a reinforcement of supply infrastructures and external interconnection, so that greater integration with Spanish, European and international networks allow consolidation of the sector, which is of key importance for reducing oil dependency, improving business competitiveness, and guaranteeing local power generation over the next 15-20 years. In the medium and long term, the electricity system will also play a leading role as a vector towards greater security and competitiveness, given its role in channelling the energy harnessed from renewable sources –local and imported– towards Basque end consumers. Moreover, the Basque business sector has traditionally played a leading role in industrial power equipment markets and therefore has a great potential for future industrial development. The main challenges in the field of sustainability will arise out of the need to reduce greenhouse gas emissions. The means of addressing this issue are similar to those for ensuring competitiveness and security; they involve a responsible reduction in fossil fuel consumption; greater use of renewable energy sources, and a more rational and efficient use of energy. The ACBC’s decision to take firm steps towards maximising supply security, energy competitiveness and environmental sustainability shape the vision of an ambitious long-term energy model that will require timely and continued action if it is to overcome and minimise the impact of today’s global difficulties.
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4.3.1. Basque energy model Under these premises, the Basque energy model is based on the following strategic principles and actions: t 5P EFWFMPQ BO FOFSHZ TZTUFN PSJFOUFE UPXBSET BDIJFWJOH B low carbon economy based on support for strategies of minimum oil dependency. t 5P FOTVSF FOFSHZ supply guarantee for the different sectors through diversification of energy sources and their respective origins. t 5P QSPNPUF B sustainable building strategy based on general energy saving and efficiency, by supporting policies and measures in industrial buildings, services buildings, and the residential sector, in the twin areas of new construction and rehabilitation. t 5P BDIJFWF NBYJNVN EFQMPZNFOU PG renewable energy sources that are compatible with environmental conservation: wind power, different forms of solar power, miscellaneous marine energy, biomass energy, and low and medium-enthalpy geothermal energy. t 5P DPOTPMJEBUF natural gas as a transition energy between the energy model based on fossil fuels, and the model for the future, based on renewable energy. t 5P QSPNPUF TUSBUFHJFT PG FMFDUSJDJUZ demand management that also act help spearhead the development of smart grids. t 5P QSPNPUF sustainable mobility with special support for the development of rail and electric vehicles, as well as other alternatives to petroleum derivatives such as biofuels, compressed natural gas, hydrogen, etc. t 5P VTF UIF FOFSHZ JOEVTUSZ BT B TUSBUFHJD WFDUPS GPS R&D policies, and a motor for development of the industrial sector in the areas of manufacture and supply of components, equipment and energy services in general, and renewable energy sources in particular, making the Basque country an international reference point in energy matters. t 5P EFWFMPQ R&D+i in different forms of energy storage (thermal, electrochemical, etc.), as a central technology and a reinforcer of other energy technologies, and support to the CIC energiGune research centre in matters related to these fields.
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LONG-TERM VISION OF THE BASQUE ENERGY SYSTEM t Low-GHG energy system, based on: – Zero consumption of oil for energy uses by 2050 – Zero consumption of fossil fuels by 2100 t R educed consumption of fossil fuels, with special emphasis on the most vulnerable sectors and those most open to competition, with the aim of achieving, by 2030: – A 40% improvement in Basque energy intensity – A 30% share of renewables in final consumption – A 40% use of alternative energy sources in road transport t "O FTTFOUJBM SPMF GPS energy saving and efficiency with a view to reducing the economic impact of the energy system in high energy price scenarios. t *NQPSUBODF PG UIF FMFDUSJDBM TZTUFN GPS active integration of demand. t Strategic positioning of the industrial sector with regard to energy technologies for the future.
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4.4. Strategic objectives 2020 The following are the strategic objectives of Basque energy policy for the period 20112020: Objectives of the Basque Energy Strategy 3E 2020 1. By 2020 levels of primary energy consumption should be no higher than in 2008, the historical maximum to date. This is to be achieved through intensified energy efficiency actions in all energy-consuming sectors. This will require saving 1,050,000 toe per annum by 2020 and improving final energy intensity by 22% in 10 years. 2. Final oil consumption in 2020 to be 9% lower than 2010, by encouraging a dissociation from oil in the transport sector, use of electric vehicles, with 37,100 units on the market and 15% consumption of alternative energy sources in road transport. 3. Increase the use of renewable energy sources by 87% to 905,000 toe in 2020, to give renewables a 14% share of final consumption. 4. Increase the participation of CHP and renewables in power generation from 18% in 2010 to 38% in 2020. 5. Promote 8 priority areas of research, technological and industrial development in the energy field and increase the turnover of companies in the energy industry by 25%. 6. Contribute to limiting climate change through a 2.5 Mt reduction in CO2 emissions by way of the measures contained in the energy policy. 7. Mobilise investments of â&#x201A;Ź10.71 billion over 10 years, through a committed and exemplary institutional policy that contributes 16.5% in public aid and investments.
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5
Strategic areas and lines of operation
Strategic areas and lines of operation | 3E-2020
The Energy strategy for the Basque Country 2020 consists of a series of lines of action divided up into three major areas: Energy consuming sectors, energy markets and supply and industrial technological development, which seek to advance along the road towards greater energy efficiency and supply security taken by the Basque Country since it first developed its own energy policy. t 5IF Energy-Consuming Sectors area includes actions intended to change energy demand, either by reducing consumption levels, using alternative sources of supply, or using demand management to optimise the energy system. t 5IF Energy Markets and Supply area takes in actions intended to improve the energy offer in terms of supply security and quality, cost competitiveness and sustainability. t 5IJSEMZ DPNFT UIF MBTU HSFBU BSFB PG BDUJPO technological and industrial development. This includes new opportunities for Basque industry to innovate in the latest energy technologies, in a context of increasingly global markets. This commitment also involves a new separate priority action area within traditional Basque energy policy, representing an additional contribution to sustainable energy development. At the same time, within the lines thus defined a series of priority initiatives have been identified, which are in turn made up of a collection of specific actions oriented towards meeting the strategic targets. Thus, the hierarchical structure of the strategy as a whole is as follows:
Strategic vision
Strategic targets
Strategic areas Lines of action
Initiatives
Actions
Figure 5.1. Energy Strategy for the Basque Country 2020, hierarchical structure
Having discussed the vision and strategic objectives in the two previous sections, we shall now examine the contents defined for the areas, lines, initiatives and actions that make up the strategy as a whole. The lines of action for each of the separate areas of the strategy are as follows: Energy Consuming Sectors, Energy Markets and Supply and Technological and Industrial Development.
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Areas Energy consuming sectors
Lines C.1 Improve competitiveness and sustainability of Basque industry C.2 Reduce energy dependency on oil in the transport sector C.3 Reduce energy consumption and increase the use of renewables in buildings and the home C.4 Promote a more energy-efficient and sustainable Basque public administration C.5 Promote efficiency and energy use of waste in the primary sector
Energy markets and supply
Technological and Industrial development
M.1 Promote new renewable power generating facilities M.2 Consolidate the supply system and competitiveness of natural gas M.3 Ensure supply and improve quality of the electrical system
T.1 Consolidate Basque business-generating firms in energy areas T.2 Develop business activity in new emerging areas T.3 Generate new market opportunities with 3e2020 energy investment
Figure 5.2. Structure of the areas and lines contained in the 3E 2020 Strategy
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5.1. Energy consuming sectors
C.1 Improve competitiveness and sustainability of Basque industry Energy consuming sectors
C.2 Reduce energy dependency on oil in the transport sector C.3 Reduce energy consumption and increase the use of renewables in buildings and the home C.4 Promote a more energy-efficient and sustainable Basque public administration C.5 Promote efficiency and energy use of waste in the primary sector
5.1.1. Initiatives in Energy Consuming Sectors
C.1 IMPROVE COMPETITIVENESS AND SUSTAINABILITY OF BASQUE INDUSTRY Expansion in developed countries up to the 2008 crisis resulted in an increase in investment in industrial equipment, construction and private consumption. This proved very positive for production and exports from Basque industry, which responded by opening up more to external markets. However, the increasing importance of emerging countries has made it necessary to improve competitiveness in order to maintain a presence on these markets. One clear way of fulfilling this objective is through energy saving. In a green paper published in 2006, entitled “European Strategy for Sustainable, Competitive and Secure Energy”, the European Commission estimated the potential for energy saving in Europe in the industrial sector at around 25%. Several community directives have been developed to improve energy efficiency in industry (labelling, CHP, efficient products and equipment, energy services, etc.), which need to be adopted by the member states to design plans of action to achieve the targets set. In addition to applying existing regulations and any others that may be necessary in the future, these targets –which are related to combatting climate change, security of energy supply and business competitiveness— will make it necessary to develop and apply new and advanced energy technologies. Over the last 25 years, Basque industry has been making continuous efforts to improve energy efficiency in its production equipment and processes, in many cases incorporating best practice, and given its importance in terms of consumption, it continues to be a key sector when it comes to applying new savings and efficiency measures. With the technologies currently available on the market, the potential for energy saving in industry may lie in the range of 5-23% of consumption, depending on the specific subsector. Achieving greater energy savings will therefore require the incorporation of new more efficient equipment, replacement with new fuels, technological changes in production processes and structural changes in the sector.
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Forging is the industrial subsector with the greatest potential for energy saving 40% 35% 30% 25% 20% 15% 10% 5% 0%
Iron & Steel Cement
Glass
Paper
Thermal
Robber Electric
Foundry
Non ferr. metal
Forging
Total
Figure 5.3. Technical energy saving potential in large energy-consuming Basque industrial sectors Source: authors.
In the case of incorporation of new equipment, 40% of the current energy-consuming equipment (boilers, furnaces, etc.) in the regionâ&#x20AC;&#x2122;s largest companies is over 15 years old. In the case of fuels, introduction of natural gas in areas covered by the gas network would take consumption away from other less efficient fuels, such as petroleum products. Two reasons for launching this line are as follows: t 5IF FOFSHZ CJMM IBT B TUSPOH JOnVFODF PO UIF DPNQFUJUJWFOFTT PG #BTRVF CVTJOFTT BOE UIJT IBT CFFO OFHBUJWFMZ affected by energy costs for industry that have increased by 17% in real terms over the last decade. t -FHBM DPOTUSBJOUT oBNPOH XIJDI UIF NPTU JNQPSUBOU JT UIF QBSUJDJQBUJPO PG MBSHF DPOTVNQUJPO JOEVTUSJBM GBDJMJUJFT in the European Emissions Trading Schemeâ&#x20AC;&#x201C; are an important spur for continuing to apply energy efficiency measures, in that the total quantity of allowances available will start to be gradually reduced.
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C.1 IMPROVE COMPETITIVENESS AND SUSTAINABILITY OF BASQUE INDUSTRY Targets
To reduce energy consumption and the energy bill, and increase the sectorโ s competitiveness by incorporating new energy efficiency technologies, alternative energy sources and demand management
2010 Situation
t *OEVTUSJBM DPOTVNQUJPO t 4IBSF JO mOBM DPOTVNQUJPO t 4BWJOHT NFBTVSFT t $)1 JOTUBMMFE
.UPF UPF 1& ZFBS .8
t *NQSPWF FOFSHZ NPOJUPSJOH BOE NBOBHFNFOU BOE JODPSQPSBUF OFX technologies that allow levels of efficiency to be increased Where should the emphasis be placed in the future?
t 1SPNPUF FรถDJFOU VQHSBEJOH PG $)1 GBDJMJUJFT t *ODSFBTF IJHI BOE MPX UFNQFSBUVSF GBDJMJUJFT GPS IBSOFTTJOH SFOFXBCMF FOFSHZ sources t & ODPVSBHF QBSUJDJQBUJPO CZ #BTRVF DPNQBOJFT JO FMFDUSJDJUZ EFNBOE management programmes to optimise their energy bill
INITIATIVES
t */*5*"5*7& $ &ODPVSBHFNFOU PG JOEVTUSJBM FOFSHZ TBWJOH BOE EFNBOE management t */*5*"5*7& $ 4UJNVMVT GPS VTF PG NPSF TVTUBJOBCMF FOFSHZ UZQFT JO JOEVTUSZ t */*5*"5*7& $ 4VQQPSU GPS VQHSBEJOH BOE JODPSQPSBUJPO PG OFX $)1 GBDJMJUJFT TARGETS 2010
357,000 2,500
Percentage reduction in consumption vs. BAU scenario (%)
13%
Industrial energy consumption vs. 2010 (%)
-3.1%
BODY RESPONSIBLE
EC saving
2,000
Electricity Renewables
1,500
Natural gas 1,000
Coal
500
8%
10%
2020
2018
2016
2014
2012
2010
2008
0 2000
16%
Oil pr.
2006
630
2004
464
Increase in use of renewables in industry (%) Share of renewables in industrial energy consumption (%)
ktoe 3,000
Reduction in industrial energy consumption vs. BAU (toe/yr)
Installed CHP capacity in industry (MW) (incl. Energy)
2020
Industrial energy consumption to 2020
2002
INDICATORS
Figure 5.4. Scenario of energy consumption in ktoe in industry. 2011-2020
t 4VC %FQBSUNFOU PG *OEVTUSZ BOE &OFSHZ &7&
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C.2 REDUCE ENERGY DEPENDENCY ON OIL IN THE TRANSPORT SECTOR In recent years, the transport sector has become the second largest energy consumer in the Basque Country after industry. The level is similar to that of the EU-27 and around 10 percentage points below the Spanish average. Over the last decade, a number of measures have been taken with regard to this sector: t 5IFSF IBT CFFO B WFSZ TJHOJmDBOU NPEFSOJTBUJPO PG UIF nFFU PG WFIJDMFT MFBEJOH UP B SFEVDUJPO JO FOFSHZ DPOTVNQtion and emissions per kilometre travelled, although fleet numbers have increased in absolute terms. t 5SBOTQPSU JOGSBTUSVDUVSFT IBWF CFFO JNQSPWFE CSJOHJOH HSFBUFS VTF PG QSJWBUF WFIJDMFT CVU BMTP B HSFBUFS CPPTU UP public transport, with large-scale investment in rail infrastructures and modernisation of buses. In general terms, the variety of factors involved highlights the difficulty of quantifying the implications of these initiatives for trends in consumption figures. It is therefore necessary to have a specific line that will specifically seek to reduce oil consumption and thus dependency on oil. As already discussed, 93% of energy consumption in the transport sector comes from petroleum derivatives. In addition, the sector accounts for around 80% of oil consumption in the Basque Country. The desired aim of reducing oil dependency and moving towards a progressive dissociation from oil therefore inevitably requires action in the transport sector. The main political initiatives at an international level, essentially by way of EU directives, lay out guidelines for the measures to be applied and the targets they impose are ever more restrictive: t 5IF $PNNJTTJPO QSPQPTFT JNQPTJOH PO BVUPNPCJMF NBOVGBDUVSFST B DBSCPO FNJTTJPO MJNJU GPS OFX DBST SFHJTUFSFE in the European Union, in order to reach a targeted average of 130 g of CO2/km in 2012. It is also studying the possibility of reducing this limit to 95 g/km by 2020. t 0OF PG UIF NPTU SFMFWBOU SFHVMBUJPOT GPS USBOTQPSU JT UIF EJSFDUJWF BQQSPWFE JO %FDFNCFS XIJDI TFU B UBSHFU of 10% of renewables in transport by 2020. t 0UIFS HVJEFMJOFT JO UIF BSFB PG USBOTQPSU JODMVEF UIF FOWJSPONFOUBM SFRVJTJUFT PO OFX WFIJDMFT &630 JO EURO 6 in 2015), the requirement to provide information on consumption and emissions of new vehicles, the directives on the promotion of clean and efficient vehicles, fiscal exemptions for biofuels, commitments and obligations on use of biofuels, and European and Spanish directives related to mobility. The international initiative on emissions regulation and clean energy consumption in the transport sector reinforce the need for the energy policy to seek to act in one of the sectors with the greatest potential for energy saving. In the transport sector, the Basque governmentâ&#x20AC;&#x2122;s 2009 strategic commitment to speed up introduction of the electric vehicle in the region will be continued and reinforced. In line with European Commission directives, the Basque Government has launched an ambitious initiative to introduce electric vehicles as a more rational mobility solution GPS UIF OFYU EFDBEF 5IF CPEZ JNQMFNFOUJOH UIFTF QSPKFDUT BOE BDUJPOT XJMM CF UIF &OUF 7BTDP EF MB &OFSHĂ&#x201C;B &7&
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C.2 REDUCE ENERGY DEPENDENCY ON OIL IN THE TRANSPORT SECTOR Targets
To reduce diesel and petrol consumption intensity in the transport sector, promoting structural change in the fleet and its use by encouraging alternative vehicles and energy sources, greater use of public transport and more energysustainable mobility
2010 Situation
t 5SBOTQPSU DPOTVNQUJPO t 4IBSF JO mOBM DPOTVNQUJPO t #JPGVFMT t 4IBSF PG CJPGVFMT t 4FSWJDF TUBUJPOT XJUI CJPGVFMT
Where should the emphasis be placed in the future?
.UPF UPF
t 3FEVDJOH EFQFOEFODZ PO PJM JO UIF TFDUPS t *NQSPWJOH UIF VTF PG QVCMJD USBOTQPSU BOE TVTUBJOBCMF NPCJMJUZ t "DDFMFSBUJOH UIF VTF PG FรถDJFOU WFIJDMFT BOE BMUFSOBUJWF FOFSHZ TPVSDFT t */*5*"5*7& $ 1SPHSBNNFT PG TVTUBJOBCMF NPCJMJUZ BOE FODPVSBHFNFOU PG efficient transport habits in all energy-consuming sectors (general public, professionals, companies and institutions)
INITIATIVES
t */*5*"5*7& $ &ODPVSBHF VTF PG FรถDJFOU WFIJDMFT BOE BMUFSOBUJWF FOFSHZ sources t */*5*"5*7& $ 4QFFE VQ JOUSPEVDUJPO PG FMFDUSJD WFIJDMFT BOE PUIFS alternative non-conventional drives TARGETS 2010
Reduction in energy consumption in road transport (toe/year)
2,000
Share of electric private cars and commercial vehicles registered (%)
BODY RESPONSIBLE
10%
2020
2018
2016
0
Oil pr.
2014
500
Natural gas
2012
16%
Renewables
2010
1,000
2008
15%
Electricity
2006
6%
EC saving 1,500
2004
10%
2002
Reduction in consumption of petroleum derivatives in road transport vs. 2010 (%)
ktoe 2,500
198,000
Share of energy saving in road transport (%) Share of alternative energy sources in road transport (%)
2020
Consumption in the transport sector to 2020
2000
INDICATORS
Figure 5.5. Scenario of energy consumption in ktoe in the transport sector. 2011-2020
t 4VC %FQBSUNFOU PG *OEVTUSZ BOE &OFSHZ &7&
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C.3 REDUCE ENERGY CONSUMPTION AND INCREASE THE USE OF RENEWABLES IN BUILDINGS AND THE HOME As already discussed, over the last decade the services sector has seen a marked increase in energy consumption globally and locally. Energy consumption in Basque buildings continues to rise due to an ever larger pool of housing and non-residential buildings and to an increase in comfort levels, with greater use of energy-consuming equipment. At present, each Basque household consumes on average around 0.8 tonnes of oil equivalent, costing about â&#x201A;Ź360 per capita. Energy consumption in housing represents 60% of consumption in buildings, characterised by a predominance of use in heating, which accounts for nearly half the total. The rest is made up of domestic hot water, domestic appliances, cooking and lighting, in that order. Non-residential buildings require energy for climate control, lighting and driving force. The principal form of electricity used in all types of non-residential buildings is electricity (accounting for two thirds of the total). Total consumption of fuels in the sector as a whole remains stable, although there is a noticeable shift in consumption from petroleum derivatives to natural gas. Electricity and natural gas are the energy sources with the largest growth in the sector. 600 500 400 300 200 100 0 2000
2002
2004
2006
Electricity
Natural gas
Renewables
Others
2008
2010
Oil pr.
Figure 5.6. Energy consumption in ktoe in buildings in the ACBC
Directive 2002/91/EC on energy efficiency in buildings is the essential basis for legislation in this field. It was amended in June 2010, and seeks to maximise the sectorâ&#x20AC;&#x2122;s potential for energy saving. At a state (Spanish) level, it has been developed through the Technical Building Code (TBC) in the chapter on energy aspects (HE-1), which together with the 2007 regulations on heat installations in buildings, (RITE) establishes the minimum requirements for efficiency in buildings, and through a legislation on certification of energy efficiency in buildings regulated by Royal Decree 47/2007. This has all led to greater requirements on insulation levels of new buildings and a greater use of renewable energy sources. It is necessary to step up supervision of the energy quality of new Basque housing. This will require a new decree on energy certification for buildings, as well as a series of additional regulations. The launch of this line seeks not only to fall into line with European and Spanish buildings regulations, but to go beyond the minimum requirements established in the TBC. The energy rating system awards a higher grade to buildings with better energy efficiency rates. In some towns, municipal bylaws on energy efficiency revise TBC values upwards, establishing more demanding requirements to prevent construction of buildings of less than Grade C.
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C.3 REDUCE ENERGY CONSUMPTION AND INCREASE THE USE OF RENEWABLES IN BUILDINGS AND THE HOME Target
To promote energy rehabilitation of buildings and housing with high efficiency systems and equipment, with the government playing an important role as a planning agent within the scope of its powers and as an example-setter
2010 Situation
t 5FSUJBSZ TFDUPS DPOTVNQUJPO t 4IBSF JO mOBM DPOTVNQUJPO t 4BWJOHT NFBTVSFT t $)1 JOTUBMMFE t 4IBSF PG SFOFXBCMFT
.UPF UPF 1& ZS .8
t &OFSHZ SFIBCJMJUBUJPO PG PME BQBSUNFOU CMPDLT XJUI MPX FOFSHZ RVBMJUZ Where should the emphasis be placed in the future?
t &YBNQMF TFUUJOH CZ UIF BENJOJTUSBUJPO UISPVHI FOFSHZ VQHSBEJOH PG JUT buildings, installations and consumption equipment t 1SPNPUJPO PG UIF HBMWBOJTJOH SPMF PG UIF FOFSHZ TFSWJDF DPNQBOJFT &4$0T
t 3BJTJOH QVCMJD BXBSFOFTT JNQSPWJOH DPOTVNQUJPO IBCJUT BOE QSPNPUJOH purchase of efficient equipment
INITIATIVES
INDICATORS
t */*5*"5*7& $ 1SPNPUJPO PG FOFSHZ JNQSPWFNFOU JO FYJTUJOH CVJMEJOHT BOE housing t */*5*"5*7& $ 5SBJOJOH BXBSFOFTT SBJTJOH BOE QSPNPUJPO PG FรถDJFODZ BOE demand management TARGETS 2010
Reduction of energy consumption in the tertiary sector vs. BAU scenario (toe/Year)
2020 117,000
ktoe 1,400 1,200 1,000
Share in reduction of energy consumption in the tertiary sector vs. BAU scenario (%)
10%
Increase in consumption in the tertiary sector vs. 2010 (%)
<2%
Use of renewables in buildings (toe)
Consumption in the tertiary sector to 2020
EC saving Electricity
800
Renewables
600
32,000
58,000
Natural gas
400
Oil pr.
200
Share of renewables (%)
BODY RESPONSIBLE
3%
5.2%
2020
2018
2016
2014
2012
2010
2008
2006
2004
2002
2000
0
Figure 5.7. Scenario of energy consumption in ktoe in the transport sector. 2011-2020
t 4VC %FQBSUNFOU PG *OEVTUSZ BOE &OFSHZ &7&
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C.4 PROMOTE A MORE ENERGY-EFFICIENT AND SUSTAINABLE BASQUE PUBLIC ADMINISTRATION The 3E 2020 Strategy must include actions to encourage energy efficiency and promote renewable energy in the area of the services, buildings and facilities run by Basque public authorities. These may not be particularly important in absolute terms, but play a role in setting an example to other energy consuming sectors; creating a market for new products in the Basque country and applying new ideas that show the other energy-consuming sectors the road to follow. Directive 2010/31/EU of May 2010 on energy efficiency in buildings defines nearly zero-energy buildings. Article 9 establishes that from 31 December 2018 all new buildings occupied and owned by public authorities should be nearly zero-energy buildings. Moreover, a European Commission proposal for a directive on energy efficiency of June 201116 requires renovation from 2014 of 3% per year of the floor area of public authorities to ensure that they meet the requirements applying to rehabilitated buildings. Likewise, public authorities must purchase only products, services and buildings with high energy efficiency standards. For this purpose they shall have to establish and launch an energy efficiency plan and introduce an energy management system. Energy services are an instrument for one way of helping meet targets, since they allow energy consumption to be optimised by rewarding contractors with the savings obtained in their energy bill. Energy service companies must be galvanisers of investment in the public sector. At the same time, the Sustainable Economy Act (Act 2/2011), passed in March 2011, establishes that all public authorities in the exercise of their respective powers, must incorporate the principles of energy saving and efficiency and use of renewable energy sources among the general principles of their action and in their procurement procedures. For bodies dependent on the state government, programmes must be established to achieve the targets of 20% savings by 2016 with respect to the business-as-usual no-measures scenario. Municipal authorities must also be involved in adopting measures both in their own facilities and in other areas of the municipality such as transport and buildings in the residential and services sector, within their area of powers. Eleven Basque towns and cities, accounting for 43% of the total population of the ACBC, have now signed up to the European Commissionâ&#x20AC;&#x2122;s Covenant of Mayors initiative, whose aim is to save 20% in energy consumption by 2020. The covenant is a suitable framework in which to continue working This line of action is therefore aimed at all Basque public authorities which will have to establish measures geared towards reducing consumption in their own facilities and services and also involve the public in meeting the targets of this strategy.
16
COM (2011) 370 final Proposal for a Directive on energy efficiency and repealing Directives 2004/8/EC and 2006/32/EC.
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C.4 PROMOTE A MORE ENERGY-EFFICIENT AND SUSTAINABLE BASQUE PUBLIC ADMINISTRATION Target
2010 Situation
To achieve involvement by all Basque public authorities in meeting the targets of the Energy Strategy t 1VCMJD BVUIPSJUJFT EP OPU IBWF BOZ PCMJHBUJPOT JO BEEJUJPO UP UIF NJOJNVN requirements of the Technical Building Code t PG UIF #BTRVF QPQVMBUJPO JO NVOJDJQBMJUJFT TJHOFE VQ UP UIF $PWFOBOU PG Mayors t "DDFMFSBUJOH JNQMFNFOUBUJPO PG FOFSHZ NBOBHFNFOU TZTUFNT CZ QVCMJD authorities
Where should the emphasis be placed in the future?
t "DDFMFSBUJOH VQHSBEJOH PG CVJMEJOHT JO UIF #BTRVF QVCMJD BENJOJTUSBUJPO BOE implementation of nearly zero-energy buildings. t 1SPNPUJPO PG VTF PG QVCMJD USBOTQPSU BOE VTF PG BMUFSOBUJWF FOFSHZ TPVSDFT JO the transport fleet t */*5*"5*7& $ i/FBS [FSPw FOFSHZ DPOTVNQUJPO JO #BTRVF QVCMJD CVJMEJOHT t */*5*"5*7& $ 1SPNPUJPO PG VMUSB MPX FOFSHZ DPOTVNQUJPO QVCMJD IPVTJOH
INITIATIVES
t */*5*"5*7& $ $PNNJUNFOU CZ #BTRVF DJUJFT UP FรถDJFODZ SFOFXBCMFT BOE intelligent energy t */*5*"5*7& $ *OWFTUNFOU JO USBOTQPSU BOE TVTUBJOBCMF NPCJMJUZ PG UIF QVCMJD sector
INDICATORS
TARGETS 2010
2020
Floor area of rehabilitated public buildings
21%
Savings vs. BAU trend in Basque public authorities
20%
BODY RESPONSIBLE
t #BTRVF 1VCMJD "ENJOJTUSBUJPO 5FSSJUPSJBM (PWFSONFOUT .VOJDJQBMJUJFT 4VC Department of Industry and Energy / EVE
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C.5 PROMOTE EFFICIENCY AND ENERGY USE OF WASTE IN THE PRIMARY SECTOR Fuel costs in the primary sector account for a significant portion of total exploitation costs, in fishing, agriculture and forestry. Energy consumption in this sector takes the form mostly of conventional fuels, and particularly diesel, which is needed to drive the machinery which is in turn responsible for the level of productivity. Given the increase in the price of diesel in recent years combined with an upward trend which seems unlikely to be reversed, there is a need to improve energy efficiency in this sector. Another important aspect from an energy perspective arising out of the primary sector is the large-scale use of forestry and arable waste for energy purposes, which this line of action seeks to promote. At present, neither forestry nor arable waste is being harnessed for energy on a large scale. The potential detected for using this waste for power generation is estimated at 50 MW, which constitutes the main object of this line of action. There is a reasonable amount of forestry and arable waste which can be used for energy purposes and which could generate collateral development opportunities for the primary sector: t 5IF GPSFTUSZ JOEVTUSZ IBT OFBSMZ IFDUBSFT PG MBOE JO XIJDI UIF BWBJMBCMF SFTPVSDF WBSJFT BOOVBMMZ EFQFOEing on meteorological and market factors. In general terms, it can be estimated that around 370,000 tonnes a year is produced in pruning and thinning per year, of which approximately half could be collected and used in the form of pellets. There are at present two pellet factories in the Basque Country using forestry waste as a raw material, with output of around 30,000 tonnes per year, while the number of biomass boilers using this type of fuel in buildings is growing gradually. t 8PPEZ BOE IFSCBDFPVT BHSJDVMUVSBM XBTUF JO UIF #BTRVF $PVOUSZ JT NBJOMZ DPODFOUSBUFE JO ÂŤMBWB 5IF NPTU JNportant quantity of woody waste is generated in vine pruning where it is estimated that 19,000 tonnes per year could be made available for energy harnessing. In the area of herbaceous waste, around 180,000 tonnes per year of straw and stubble are produced, but the variety of destinations and uses makes it difficult to determine reliably what quantity could be made available for energy harnessing. t %JTQPTJOH PG DBUUMF BOE QJH TMVSSZ JT B QSPCMFN JO BSFBT XJUI B IJHI DPODFOUSBUJPO PG MJWFTUPDL GBSNT *O PUIFS SFHJPOT this problem has been resolved through re-use for energy purposes. Anaerobic digestion allows energy recovery, but the high water content means that production of biogas â&#x20AC;&#x201C;and thus energyâ&#x20AC;&#x201C; is limited. Given the high cost of energy harnessing, therefore, this is not considered as a potential energy source.
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C.5 PROMOTE EFFICIENCY AND ENERGY USE OF WASTE IN THE PRIMARY SECTOR Target
Encourage energy efficiency and maximum use of the different types of biomass waste, preferably for thermal use or as alternative for power generation.
2010 Situation
t $POTVNQUJPO JO QSJNBSZ TFDUPS t 4IBSF JO mOBM DPOTVNQUJPO
Where should the emphasis be placed in the future?
INITIATIVES
UPF
t *NQSPWFNFOU JO UIF TFDUPS T FOFSHZ FรถDJFODZ t )BSOFTTJOH PG CJPNBTT GPSFTU BHSJDVMUVSBM NVOJDJQBM TPMJE XBTUF GPS IFBU BOE power t */*5*"5*7& $ .FBTVSFT GPS FODPVSBHJOH FOFSHZ FรถDJFODZ JO UIF QSJNBSZ sector. Note: actions for fostering the use of biomass waste are set out in Initiative M.1.2.
BODY RESPONSIBLE
t 4VC %FQBSUNFOU PG *OEVTUSZ BOE &OFSHZ &7&
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ENERGY CONSUMING SECTORS ACTION LINES AND INITIATIVES LINES
INITIATIVES INITIATIVE C.1.1.- Encouragement of industrial energy saving and demand management
C.1 IMPROVE COMPETITIVENESS AND SUSTAINABILITY OF BASQUE INDUSTRY
BODY RESPONSIBLE Sub-Department of Industry and Energy
BODY RESPONSIBLE: Sub-Department of Industry and Energy / EVE INITIATIVE C.1.2.- Stimulus for use of more sustainable energy types in industry BODY RESPONSIBLE: Sub-Department of Industry and Energy / EVE INITIATIVE C.1.3.- Support for upgrading and incorporation of new CHP facilities in industry BODY RESPONSIBLE: Sub-Department of Industry and Energy / EVE INITIATIVE C.2.1.- Programmes of sustainable mobility and encouragement of efficient transport habits in all energy-consuming sectors (general public, professionals, and business)
C.2 REDUCE ENERGY DEPENDENCY ON OIL IN THE TRANSPORT SECTOR
BODY RESPONSIBLE: Sub-Department of Industry and Energy / EVE
BODY RESPONSIBLE Sub-Department of Industry and Energy
BODY RESPONSIBLE: Sub-Department of Industry and Energy / EVE
INITIATIVE C.2.2.- Encourage use of efficient vehicles and alternative energy sources
INITIATIVE C.2.3.- Speed up introduction of electric vehicles and other alternative non-conventional drives BODY RESPONSIBLE: Sub-Department of Industry and Energy / EVE
C.3 REDUCE ENERGY CONSUMPTION AND INCREASE THE USE OF RENEWABLES IN BUILDINGS AND THE HOME
BODY RESPONSIBLE Sub-Department of Industry and Energy
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INITIATIVE C.3.1.- Policy of promoting energy improvements in existing buildings and housing BODY RESPONSIBLE: Sub-Department of Industry and Energy / EVE INITIATIVE C.3.2.- Training, awareness-raising and promotion of efficiency and demand management BODY RESPONSIBLE: Sub-Department of Industry and Energy / EVE
Strategic areas and lines of operation | 3E-2020
INITIATIVE C.4.1.- “Near zero” energy consumption in Basque public buildings BODY RESPONSIBLE: Basque Admin. C.4 PROMOTE A MORE ENERGYEFFICIENT AND SUSTAINABLE BASQUE PUBLIC ADMINISTRATION
BODY RESPONSIBLE Sub-Department of Industry and Energy
INITIATIVE C.4.2.- Promotion of ultra-low energy consumption public housing BODY RESPONSIBLE: Basque Admin. INITIATIVE C.4.3.- Commitment by Basque municipalities to efficiency, renewables and intelligent energy BODY RESPONSIBLE: Municipalities INITIATIVE C.4.4.- Investment in transport and sustainable mobility of the public sector BODY RESPONSIBLE: Basque Admin.
C.5 EFFICIENCY AND WASTE IN THE PRIMARY SECTOR BODY RESPONSIBLE Sub-Department of Industry and Energy
INITIATIVE C.5.1.- Measures for encouraging energy efficiency in the primary sector BODY RESPONSIBLE: Sub-Department of Industry and Energy / EVE
Table 5.1. Energy consuming sectors. Action lines and initiatives
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5.1.2. Actions in energy-consuming sectors ACTION LINE C1: IMPROVE COMPETITIVENESS AND SUSTAINABILITY OF BASQUE INDUSTRY
INITIATIVE C.1.1. Encouragement of industrial energy saving and demand management
Targets t 3FEVDF FOFSHZ DPOTVNQUJPO BOE FOFSHZ CJMM PG DPNQBOJFT t *NQSPWF FĂśDJFODZ MFWFMT JO JOEVTUSJBM QSPDFTTFT BOE JODSFBTF TFDUPSJBM DPNQFUJUJWFOFTT t 3FEVDF FOWJSPONFOUBM FNJTTJPOT PG $02 energy-sourced pollutants. Actions Actions
Body responsible
Collaborators
C.1.1.1. Implementation of management systems and energy certification in Industry
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.1.1.2. Grant lines for energy audits in industry
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.1.1.3. Voluntary agreements on reducing energy consumption in companies
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.1.1.4. Pilot projects for sectorial application of new saving and efficiency measures
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.1.1.5. Lines of investment aid in energy efficiency for equipment and processes
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.1.1.6. Initiatives on power demand management services in companies
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.1.1.7. Aid programmes for monitoring energy consumption in facilities, processes and equipment
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
TGs
â&#x20AC;&#x201C;
C.1.1.8. Tax incentives for investment in SMEs
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C.1.1.1. Management systems and energy certification The energy management system (EMS) is based on Standard UNE 216301. This is a set of requirements allowing an organisation to develop a system for continuous improvement in energy performance. In other words, it is a methodology for forecasting and monitoring energy consumption whose purpose is to obtain the best possible energy performance without impacting performance. Energy efficiency certification for companies is a more minor standard than the standard on the energy management system, whose main aim is to encourage greater energy awareness among SMEs. The company will receive official accreditation (similar to the building certificate) after setting up an energy committee, training the energy manager and performing a satisfactory diagnosis of the company. The figure of the energy manager (the person responsible for design and implementation of energy programmes and projects in a firm) already exists in many large energy-consuming industries, but much less so among SMEs. Moreover, the growing importance of energy as a strategic factor of competitiveness makes it necessary to reinforce these managersâ&#x20AC;&#x2122; role and functions. C.1.1.2. Industrial energy audits Energy audits are a necessary first step in detecting new opportunities for improving consumption figures and reducing energy costs in companies. Recent increases in the energy bill, a forecast continuation in this trend and the constant appearance on the market of new advanced energy technologies are key reasons for implementing programmes for carrying out comprehensive energy studies in companies. C.1.1.3. Voluntary consumption reduction agreements In order to create an energy efficiency culture, another line of action involves establishing voluntary agreements between the government and companies in a given industry. Under such agreements, each company will have to set a target for reducing energy consumption. The signatories to these agreements would enjoy some type of incentive if they meet the targets. C.1.1.4. Pilot projects of sectorial application Studies and analyses also need to continue on incorporating existing advanced technologies into industry and assessing the potential of emerging technologies. This will require identifying and promoting innovative energy projects whose application can be extended to the industry or industries as a whole. C.1.1.5. Energy efficiency for equipment and processes Technological solutions for improving energy efficiency currently exist on the market that will need to be taken into account. On the one hand, there are technologies that are specific to each industry, involving fusion, preheating and charge improvement, improvements to furnaces, more efficient boilers, etc. There are also a series of crosscutting improvement technologies which should be considered, such as variable frequency drives, efficient compressors, cooling, lighting, and control systems, etc. C.1.1.6. Electrical demand management in companies Existing purchase management systems on wholesale markets through retailers differentiate prices by consumption period. In the case of the electrical market, this is determined on an hourly basis. This means that prices are higher at times of greatest demand, and lower in off-peak hours, opening up new possibilities for cutting the energy bill for companies that adapt or manage their operating conditions in an attempt to optimise costs. A company can evaluate the best operating profiles of its different sections and equipment by determining precisely the installationâ&#x20AC;&#x2122;s consumption at any given time.
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C.1.1.7. Monitoring of consumption figures In order to monitor savings and demand management measures, a suitable level of consumption monitoring and management systems are required. Companies with greater flexibility (based on supply contracts) will in the future be able to participate more actively in the supply of complementary services in the electrical system. C.1.1.8. Tax incentives in SMEs In addition, tax deductions on investment in equipment and advanced energy technologies, introduced through the Basque Clean Technologies List, constitutes a complementary tool, greatly incentivising companies to move towards more rational use of energy. These deductions should be geared towards incentivising available technologies which, while more efficient, pose problems because of their limited level of profitability or low level of commercial implementation. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t %FQBSUNFOU PG &DPOPNZ BOE 'JOBODF 5BY DPPSEJOBUJPO t 5FSSJUPSJBM (PWFSONFOUT
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INITIATIVE C.1.2. Stimulus for use of more sustainable energy types in industry
Targets t *ODSFBTF UIF TIBSF PG NPSF TVTUBJOBCMF FOFSHZ UZQFT JO JOEVTUSJBM DPOTVNQUJPO t 3FEVDF FOWJSPONFOUBM FNJTTJPOT PG $02 energy-sourced pollutants. Actions Actions
Body responsible
Collaborators
C.1.2.1. Promotion of good practice and pilot projects in the use of renewables in industry
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.1.2.2. Increase use of biomass waste (timber, sawdust, bark)
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.1.2.3. Grant lines for investment in thermal use of renewable energy
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.1.2.1. Good practice in renewables There is still only a limited knowledge in the industrial sector of the possibilities of applying renewable energy in industrial processes, especially among SMEs. It is therefore necessary to raise awareness in the industry on this issue by showing them best market practice, costs, etc. As in the field of energy saving, investment in renewable energy technologies, where commercial implementation is still limited and there are profitability difficulties, must enjoy fiscal backing in SMEs by way of tax deductions, until they reach more widespread levels of application and an acceptable degree of profitability. C.1.2.2. Harnessing of waste biomass Most of the biomass currently used for energy purposes in the Basque Country is industrial waste biomass. This includes by-products of sawmills, carpentersâ&#x20AC;&#x2122; workshops and furniture factories, bark and black liquors in the paper industry and small quantities of waste from the food industry. The waste is frequently used in the same industrial facilities in which it is produced. In several plants in the paper industry electricity and steam are generated from this waste in CHP facilities. The use of waste biomass in industry as a replacement for conventional fuels is possibly the most efficient way of harnessing it, in both energy and economic terms. The energy policy must therefore give backing to industrial initiatives intended to achieve a higher level of harnessing of biomass waste. However, the potential in this area is not very great, given that the most efficient plants have already been installed, and current levels of use are therefore not estimated to increase significantly. Nonetheless, with a view to maintaining existing levels of usage of this type of waste, it will be necessary to implement programmes of support for upgrading boilers in SMEs.
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C.1.2.3. Thermal use of renewable energy Some industrial subsectors in the Basque Country have low temperature heat requirements, either for DHW and heating systems, or in production processes, although only to a limited degree. One line of action should consist of supporting the installation of complementary systems/equipment for thermal harnessing of renewable energy (solar thermal, geo-exchange, biomass) with a view to maximising the use of renewables in industry, reducing its energy dependency, reducing the energy bill and reducing carbon emissions. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t 5FSSJUPSJBM (PWFSONFOUT
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INITIATIVE C.1.3. Support for upgrading and incorporation of new CHP facilities
Targets t *NQSPWF DPNQSFIFOTJWF FĂśDJFODZ MFWFMT JO JOEVTUSJBM QSPDFTTFT BOE SFEVDF UIF FOFSHZ CJMM Actions Actions
Body responsible
Collaborators
C.1.3.1. Promotion and studies for introducing new industrial CHP facilities
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.1.3.2. Grant lines for audits and studies for upgrading of CHP in industry
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.1.3.3. Tax incentives for investment in cogeneration in SMEs
TGs
EVE
C.1.3.1. New industrial CHP facilities 94% of the capacity currently installed in CHP in the Basque Country is in the industrial sector, which has a longstanding culture of using this type of system, especially in the paper, chemical, tyre and food industries. However, there is still potential for new CHP projects in these industries, and this will require conducting studies into the technical and economic viability of new facilities, especially for small CHP in SMEs. This line of action will be promoted by providing economic support for this type of study. C.1.3.2. Upgrading of CHP in industry An important aspect to be taken into account is the age of current CHP facilities. At present, at least 33% of plants are over 10 years old, during which time there have been major technological improvements and changes in usersâ&#x20AC;&#x2122; production processes that have changed the way heat is harnessed as well as legislative changes, etc., with the result that the old plant designs are often no longer ideally sized. The plants therefore need to be adapted to the new technical and economic criteria contained in the new legislation. C.1.3.3. Incentives to CHP in SMEs Very high efficiency CHP, which requires greater investment to maximise the energy levels harnessed will be eligible for tax deductions as clean technologies, and will be considered within tax aid programmes for industrial SMEs. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy.
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ACTION LINE C2: REDUCE ENERGY DEPENDENCY ON OIL IN THE TRANSPORT SECTOR
INITIATIVE C.2.1. Programmes of sustainable mobility and encouragement of efficient transport habits
Targets t 1SPNPUF UIF VTF PG FOFSHZ DSJUFSJB JO UIF EFTJHO PG OFX USBOTQPSU JOGSBTUSVDUVSFT t *ODSFBTF IBCJUT PG TVTUBJOBCMF NPCJMJUZ BOE JO QBSUJDVMBS DPOUJOVF FODPVSBHJOH UIF VTF PG QVCMJD USBOTQPSU t *OUSPEVDF BMUFSOBUJWF NFBTVSFT GPS JNQSPWJOH GSFJHIU USBOTQPSU Actions Actions
Body responsible
Collaborators
C.2.1.1. Regulations on planning transport infrastructures with energy sustainability criteria
DHPWT
TGs
C.2.1.2. Introduction of mobility plans for large companies
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.2.1.3. Promotion of efficient vehicle driving
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.2.1.4. Plans for diversification of road freight transport
DHPWT
TGs
C.2.1.5. Programmes of audits for optimising fleets and routes
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.2.1.1. Transport infrastructure planning Plans for infrastructures transport must be prepared using energy sustainability criteria. Given the complexity of the area, any action intended to affect mobility must have the determined support of the public institutions with powers in the area of transport depending on the geographical area of reference. Investment led by an institution, and especially investment related to infrastructures (roads, rail networks, industrial estates, technology parks, shopping centres, leisure facilities, etc.) mostly impacts on journey times and consequently on energy consumption. In addition, any decision of this kind must include a study of the impact on mobility and the resulting energy consumption, and this aspect must therefore be regulated. C.2.1.2. Mobility plans for large companies Although on a voluntary basis, many work centres already have mobility plans intended to reduce energy consumption, increase the land area available and reduce â&#x20AC;&#x153;in itinereâ&#x20AC;? accident rates. As has already been implemented in some other countries, implementation of a mobility plan in companies or work centres with a large number of workers fosters energy saving in transport.
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C.2.1.3. Efficient driving Efficient driving is a way of improving energy use in transport. It requires training the public and can be promoted through subsidisation of the technology. Efficient driving leads to a reduction in costs, energy consumption and pollutant emissions and must continue to form a specific line of action. Promotion of efficient driving, oriented towards drivers of cars and professional drivers of industrial vehicles (trucks and buses), has important benefits such as a reduction in fuel consumption and pollutant emissions of between 10% and 15% without increasing travelling time. Once the promotion phase is completed with training schemes for business and the public, the teaching and assimilation must be incorporated into the formal driver training processes, license renewal and compulsory vehicles checks. C.2.1.4. Freight transport by road Another area where more work is still needed is in realising the large potential for savings through diversification in modes of freight transport, which is currently concentrated in road transport. The high density of road freight transport, due partly to international traffic driving through the Basque Country, has a direct impact on increases in energy consumption in the transport sector. C.2.1.5. Optimisation of fleets and routes It is necessary to continue promoting actions geared towards rerouting part of the freight transport currently carried by road, towards rail or sea transport, encouraging greater use of existing port and rail infrastructures and encouraging audit programmes in transport companies that would allow them to improve energy management of fleets and routes. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t %FQBSUNFOU PG )PVTJOH 1VCMJD 8PSLT BOE 5SBOTQPSU t %FQBSUNFOU PG UIF &OWJSPONFOU -BOE 1MBOOJOH "HSJDVMUVSF BOE 'JTIJOH t %FQBSUNFOU PG &DPOPNZ BOE 'JOBODF t 5FSSJUPSJBM (PWFSONFOUT
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INITIATIVE C.2.2. Encourage use of efficient vehicles and alternative energy sources
Targets t 3FEVDF DPOTVNQUJPO PG QFUSPMFVN QSPEVDUT JO QBTTFOHFS BOE HPPET USBOTQPSU t 3FEVDF FOWJSPONFOUBM FNJTTJPOT PG $02 and other energy-sourced pollutants. Actions Actions
Body responsible
Collaborators
C.2.2.1. Promotion of lower-fuel-consuming vehicles
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.2.2.2. Grant lines for reorienting upgrading of the automobile fleet towards alternative vehicles and more sustainable energy types
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.2.2.3. Promotion of charging networks for alternative vehicles
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
Basque Admin
â&#x20AC;&#x201C;
C.2.2.4. Tax instruments in vehicles
C.2.2.1. Lower-fuel-consuming vehicles Around 60,000 private and commercial vehicles are registered each year in the Basque Country. One of the principal strategic actions to reduce dependency on oil would be oriented towards promoting efficient vehicles and alternative energy sources (electrical, hybrid, biofuels, compressed natural gas and hydrogen). C.2.2.2. Alternative vehicles With regard to the incorporation of electric vehicles, it should be noted that the process of switching the automobile fleet from one type of fuel to another is a very lengthy one; in addition to technological barriers and difficulties with social acceptance, it also involves replacing a good with a long useful service life, around 15-16 years. The period from 2010 to 2020 should therefore be considered as the initial stage of breaking into the market, with major impact expected around ten years later, with an important increase in registration of this type of new vehicles. C.2.2.3. Fuelling networks for alternative vehicles In order to increase the pool of vehicles using alternative energy sources it will be necessary to incorporate alternative public networks for fuelling this type of vehicle, and it will therefore be necessary to promote compressed natural gas (CNG) systems and others. C.2.2.4. Tax instruments in vehicles Policies for promoting alternative high energy efficiency vehicles with a reduced environmental impact but a higher cost must be accompanied by a fiscal policy designed to achieve the targets set. Suitable fiscal instruments for promoting these strategies including registration and driving, which should be taxed more or less depending on the type of vehicle acquired and used, as well as other instruments, such as tax deductions, etc.
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Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t #BTRVF (PWFSONFOU t 5FSSJUPSJBM (PWFSONFOUT t .VOJDJQBM BVUIPSJUJFT
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INITIATIVE C.2.3. Speed up introduction of electric vehicles and other alternative non-conventional drives
Targets t 1SPNPUF JOUSPEVDUJPO PG FMFDUSJD WFIJDMFT &7T JO UIF #BTRVF $PVOUSZ BT B NFBOT PG JNQSPWJOH FOFSHZ FĂśDJFODZ in transport. t 3FEVDF FOWJSPONFOUBM FNJTTJPOT PG $02 and energy-sourced pollutants. Actions Actions
Body responsible
Collaborators
C.2.3.1. Development of an infrastructure of charging stations covering the entire region thus guaranteeing electric vehicle mobility within the ACBC
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.2.3.2. Creation of a critical mass of vehicles in circulation, in order to bring forward the market take-off point
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.2.3.3. Adaptation of the legal framework, proposing regulatory changes that would facilitate rapid incorporation of electric vehicles
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.2.3.1. Development of an infrastructure of charging stations In order to introduce electric vehicles in the Basque Country, the government has prioritised the need to establish a charging network that will guarantee future users electric vehicle mobility at least throughout the ACBC. This is one of the key priority actions for success of the policy. On 29 October 2009, the presidents of EVE and REPSOL, in the company of the Lehendakari, signed a protocol of intent to collaborate on the introduction of an electric vehicle charging network in the Autonomous Community of the Basque Country. As a result of this agreement, on 13 OcUPCFS *#*- (FTUPS EF $BSHB EF 7FIĂ&#x201C;DVMP &MĂ?DUSJDP 4 " XBT TFU VQ JO XIJDI &7& BOE 3&140- FBDI IBWF B holding. Its mission is to develop an electric vehicle-charging infrastructure and to market charging services (electricity and added value services) in associated and public areas. IBILâ&#x20AC;&#x2122;s goal is to make the Basque Country a leader in number of charging stations and a technological benchmark on the Spanish market for EV charging technologies. The network began to be rolled out in 2011 (with installation of 125 charging stations) and the strategy plan targets installation of between 7,000 and 13,000 points by 2020 and up to 70,000 by 2030. C.2.3.2. Critical mass of electric vehicles in circulation Electric vehicles are now beginning to be a reality. However, their market penetration will be very slow for the first few years for a variety of reasons. Firstly, because as goods, vehicles have a long useful life (around 15 years) and upgrading of the automobile fleet is therefore very slow. Secondly, planned production by the major manufacturers over the coming years will be very limited, creating problems in meeting the demand currently being generated among a large number of administrations, essentially in the United States and the EU. And, thirdly, because the first electric vehicles on the market will be very expensive and will only meet certain needs.
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For these reasons, it is essential that the energy strategy should intervene to ensure deployment of a critical mass of electric vehicles that will allow the market to reach a take-off point as soon as possible. To achieve this, a series of actions will be undertaken with two essential aims: to reduce the additional cost currently involved in the option of using an electric vehicle as opposed to a conventional one and to make this new mobility solution more accessible to the public. This will entail actions such as subsidy schemes, pilot projects with public and private fleets and the promotion of car-sharing firms with electric vehicles, which will give added visibility to electric vehicles and allow the general public to use them at an affordable cost. To date, because of the small range of models and low numbers of electric vehicles in circulation, it has not been possible to carry out intensive studies to identify potential users for incentivising and orienting electric vehicles. In coming years, however, a large number of automobile manufacturers will be marketing significant quantities of vehicles, covering different segments. A broad campaign will therefore be undertaken of contact and support to companies and public institutions whose fleets could incorporate electric vehicles, either because of their mobility patterns or because of their positive effect in terms of image and social responsibility. In parallel, agreements must be reached with the main manufacturers to deliver vehicles to dealers and customers in the ACBC. C.2.3.3. Adaptation of legal framework A framework should be created that will help make electric vehicles more viable in terms of certification, maintenance, technical inspection, guarantees, security and marketing of electricity as part of energy services and contribute to overcoming the regulatory, legal and standardisation barriers that might hinder development of EVs. An analysis will be made of the legal changes required, essentially in the establishment of charging stations, private and public, with proposals for legislative changes to facilitate rapid incorporation, as well as proposals for adapting electricity tariffs. Collaboration will also be provided in creating new municipal bylaws (or modifying existing ones) in order to favour the use of electric vehicles. It is particularly important to monitor any progress made by the various existing or newly-created standardisation committees working in this area within the relevant standardisation organisations (ISO, IEC, etc.) Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t #BTRVF QVCMJD BVUIPSJUJFT JO HFOFSBM
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ACTION LINE C3: REDUCE ENERGY CONSUMPTION AND INCREASE THE USE OF RENEWABLES IN BUILDINGS AND THE HOME
INITIATIVE C.3.1. Promotion of energy improvement in existing buildings and housing
Targets t 3FEVDF FOFSHZ DPOTVNQUJPO JO HFOFSBM BOE DPOTVNQUJPO PG GPTTJM GVFMT JO QBSUJDVMBS JO CVJMEJOHT BOE IPVTJOH t 1SPNPUF UIF FĂśDJFOU SFIBCJMJUBUJPO PG CVJMEJOHT BOE IPVTJOH QSPNPUF UIF JOUFHSBUJPO PG SFOFXBCMF FOFSHZ sources in the tertiary sector and increase the number of high-energy-quality buildings in the Basque Country. t 3FQMBDF FOFSHZ VTJOH GBDJMJUJFT XJUI OFX IJHI FĂśDJFODZ POFT t 3FEVDF UIF JOEVTUSZ T FOFSHZ CJMM Actions Actions
Body responsible
Collaborators
C.3.1.1. Grants for performing energy audits and diagnostics in buildings
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.3.1.2. Programmes for rehabilitation of the thermal envelope in buildings
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.3.1.3. Programme for upgrading of high efficiency energyconsuming equipment
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.3.1.4. Programmes for encouraging studies and investment in small high efficiency CHP
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.3.1.5. Grants for implementation of renewable facilities for thermal use (solar, biomass, geothermal)
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.3.1.6. Plan for smart meters in housing and buildings
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.3.1.7. Promotion of energy certification for existing buildings and housing
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
TGs
â&#x20AC;&#x201C;
C.3.1.8. Tax incentives for investment in clean technologies in SMEs
C.3.1.1. Energy audits and diagnostics in buildings The current regulation on construction of buildings, the TBC of 2006, establishes higher standards on facilities and insulation than in the past. However, there is room for improvement in terms of achieving higher levels of savings, efficiency and use of renewable energy sources in new construction and also in existing and rehabilitated buildings. Around three quarters of existing dwellings in the Basque Country have deficient insulation in their thermal envelope. It is estimated that 70% of homes would benefit from action in facades, floors or ceilings, with the potential for action in windows in 50% of cases.
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C.3.1.2. Rehabilitation of the thermal envelope The policy on energy rehabilitation of housing will be implemented in coordination with other departments of the Basque Government and other public authorities, which have or are developing strategies on housing rehabilitation. It is especially important to complement the Strategy on Housing Rehabilitation developed by the Basque Governmentâ&#x20AC;&#x2122;s Department of Housing, Public Works and Transport. C.3.1.3. Upgrading of high efficiency energy-consuming equipment In existing housing the efficiency of domestic hot water (DHW) and heating systems can be improved using condensation boilers, heat pumps or simply by lagging the accumulator tanks, measures which are economically profitable in the short term, especially when the boiler has to be replaced by reason of age. Centralised systems with meters in each dwelling are in general more efficient than individual heating and DHW systems, and also offer the possibility of incorporating CHP systems that improve the overall efficiency of the system. In both the residential and the services sector there is great demand for new electrical equipment and domestic appliances, with the result that there is a constant increase in consumption in this area. Although the energy efficiency of electrical appliances has increased considerably in recent years, it is calculated that consumption figures can still economically be reduced by 25% on average. The technical potential would allow for an even greater reduction, of between 30% and 60%. However, in many cases, the improvement in energy efficiency has been offset or even superseded by higher consumption due to an increase in the number, size, performance and hours of use of the apparatuses. In this area, energy labelling has shown its potential to change the market by popularising the sale of Class A domestic appliances thanks to the scrappage plans introduced. As technological developments bring lower-consumption apparatuses to the market, new awareness campaigns will be necessary to promote their purchase. At the same time, labelling, which is now widespread in larger domestic appliances, is not as common among other smaller appliances, and policies are therefore needed that will facilitate the entry onto the market of products with lower consumption. With regard to lighting systems, energy consumption will be reduced with the upcoming removal from the market of incandescent bulbs and the definitive implementation of low consumption bulbs. Technological developments in LED lighting systems will in the future lead to additional reductions which will have to be promoted when a sufficient supply exists at a reasonable cost. C.3.1.4. Small high-efficiency CHP installations Micro-CHP in the residential sector, using combustion engines or fuel cells, is an emerging technology with the potential to offer savings in primary energy and to contribute to distributed power generation. However, CHP systems have a high cost and their profitability is greater in larger facilities. At the current phase of technological development, these technologies need economic support to reduce their payback time and ensure that they are gradually introduced onto the market. C.3.1.5. Renewable installations for thermal use New buildings must include a certain amount of solar power for use in the domestic hot water system under current legislation. For example, in the Basque Country, smaller facilities need to have a minimum solar power contribution of 30% of annual requirements. Larger buildings in the services sector also have to use photovoltaic energy to produce electricity. However, it is possible to go further in harnessing renewable energy sources in buildings in which it is not required by legislation, using more solar thermal and photovoltaic, geothermal or biomass energy. The heat pump system, which uses geothermal energy as a cold or hot source for use in climate control is a technology that can now be considered mature and which provides major energy savings compared to other conventional systems; its use should therefore be encouraged. Given that it requires greater initial investment than other conventional systems, introduction of this type of installation will require economic support from the government.
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The potential for renewable power generation in buildings is through solar photovoltaic technology rather than wind power. The former is in common use in many buildings; the installations are normally connected to the grid and the power system pays for the electricity they provide. It is necessary to encourage photovoltaic generation installed as part of the building, i.e., in roofs, since it optimises the use of the area and brings generation closer to the consumer. Technological developments in this field are leading to major advances in the implementation of this technology. Wind power technology is, however, less adaptable to the urban environment since the wind regime in built-up areas is far from being ideal for application. It is very important that the administration inspects and checks correct installation and operation of the renewable equipment required under current legislation as otherwise there is a risk that the equipment installed may fall into disuse. C.3.1.6. Smart meters The installation of new electricity consumption meters with remote management, compulsory in all buildings before 2018, will provide much more detailed information on the way in which energy is consumed in buildings. This will be a great opportunity for introducing saving measures. These new meters, together with the introduction of ICT in the home will make it possible to reduce energy consumption and cut costs by moving consumption towards times of day when electricity costs less. C.3.1.7. Certification of existing buildings Improvements in energy efficiency in existing buildings must be gradually extended; the energy certification system in buildings is one of the instruments needed for measuring energy quality. As well as constituting a valuable instrument for monitoring improvements in buildings, the system can give the market a further boost in evaluating buildings and housing. C.3.1.8. Tax incentives for clean technologies in SMEs in the services sector Given the important presence of SMEs in the Basque services sector and their greater economic needs when it comes to undertaking measures not related to their business, the administration will support these companies through tax deductions and incentives in adopting clean and efficient technologies as speedily as possible. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t %FQBSUNFOU PG )PVTJOH 1VCMJD 8PSLT BOE 5SBOTQPSU
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INITIATIVE C.3.2. Training, awareness-raising and promotion of efficiency and demand management
Targets t *ODSFBTF UIF MFWFM PG LOPXMFEHF BOE BXBSFOFTT PO FOFSHZ NBUUFST BNPOH UIF #BTRVF QPQVMBUJPO t 4ZTUFNJTF UIF JODPSQPSBUJPO PG FOFSHZ NBOBHFST JOUP TJHOJmDBOU FOFSHZ DPOTVNQUJPO QPJOUT t %FWFMPQ FOFSHZ QMBOOJOH SFHVMBUJPOT GPS UIF TFDUPS Actions Actions
Body responsible
Collaborators
C.3.2.1. Information and awareness campaigns on the management, rational use and cost of energy
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.3.2.2. Promote the holding of training courses for energy managers for services companies
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.3.2.3. Development of regulations on energy in buildings and housing
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.3.2.4. Enactment of land use planning regulations, sectoral plans and infrastructures plans with sustainability energy criteria
DELPAF/MUNICIPAL AUTHORITIES
DIITT/EVE
C.3.2.5. Observe, evaluate and enhance awareness on future scarcity and high oil prices and their consequences
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.3.2.1. Information and awareness Raising awareness among users of buildings on the need to restrict energy consumption is as important as ensuring that the building has an efficient design and equipment. In previously constructed buildings, it is the first and most effective measure for reducing consumption. As well as information and awareness-raising campaigns in different media, it is necessary to promote greater knowledge through school and professional training on energy saving and efficiency. Being awareness of oneâ&#x20AC;&#x2122;s own consumption patterns is an important factor in helping reduce consumption. It is therefore important to use the opportunity offered by installation of smart electricity meters in all homes over coming years, to give the public access to the data from these meters. C.3.2.2. Training courses for energy managers One factor that will ensure faster and more effective energy re-adaptation of buildings and facilities is to promote the figure of the energy manager, in both private services companies and in the administration and public companies, and very especially in the municipal area.
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C.3.2.3. Development of energy regulations The TBC requires that certain standards be applied to rehabilitation of buildings of over 1,000 sq. m. in which more than 25% of all enclosures are replaced. There is a trend in various parts of the EU to apply the new standards to all rehabilitated buildings (not only those that meet these conditions) and to establish new stricter efficiency requirements (such as zero energy consumption) with shorter deadlines than those imposed under the directive. Improvements will also be promoted in older buildings through awareness and grants where applicable, even if no comprehensive rehabilitation is carried out, so that owners can improve their conditions of comfort and reduce energy consumption. Barriers to progress in achieving greater energy efficiency in buildings include long return times on investment in efficiency, lack of awareness and the fact that housing developers do not gain the direct advantages of cutting energy spending, and consequently tend to limit themselves to abiding with the letter of the law. The most effective way of achieving higher levels of energy efficiency is therefore to promote more restrictive standards in building regulations, and encourage voluntary actions to introduce measures that go beyond the compulsory requirements. C.3.2.4. Land use planning regulations At the same time, the public authorities must be aware of the importance that the urban and infrastructures model has on energy consumption in both buildings and transport. In order to help reduce consumption, intensive land occupation should be encouraged, with a concentration of people and services and more compact buildings. A coordinated policy of land use planning will be required that favours energy sustainability with an intersectorial vision. C.3.2.5. Observe, evaluate and enhance awareness on future scarcity and high oil prices and their consequences Analyses of future scenarios of the crude oil market envisage a risk of tension due to the incapacity of oil-producing countries to satisfy potential demand, leading prices to rise to levels that would be sufficient to restrict demand. The risk is smaller in the case of natural gas, and it is therefore necessary to publicise the threat facing oil consumption. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t %FQBSUNFOU PG )PVTJOH 1VCMJD 8PSLT BOE 5SBOTQPSU t %FQBSUNFOU PG UIF &OWJSPONFOU -BOE 1MBOOJOH "HSJDVMUVSF BOE 'JTIJOH
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ACTION LINE C4: PROMOTE A MORE ENERGYď&#x161;şEFFICIENT AND SUSTAINABLE BASQUE PUBLIC ADMINISTRATION
INITIATIVE C.4.1. â&#x20AC;&#x153;Near zeroâ&#x20AC;? energy consumption in Basque public buildings
Targets t &TUBCMJTI FOFSHZ JNQSPWFNFOU QSPHSBNNFT JO HPWFSONFOU CVJMEJOHT UP JODSFBTF FĂśDJFODZ MFWFMT SFEVDJOH DPOsumption of fossil fuels to a minimum, so that they can reduce their energy bill and set an example to the private sector. t $SFBUF NBSLFUT GPS OFX QSPEVDUT BOE TFSWJDFT UIBU XJMM TQFFE VQ UIF EFWFMPQNFOU PG OFX CVTJOFTTFT BOE UFDInologies. t 1SPNPUF JNQSPWFNFOU JO UIF FOFSHZ HSBEF PG QVCMJD CVJMEJOHT Actions Actions
Body responsible
Collaborators
C.4.1.1. Plans for reducing energy consumption in Basque Government buildings
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.4.1.2. Plans for energy management of the Basque public authorities (e.g. by means of energy service companies)
ADMIN
EVE
C.4.1.3. Promotion of green purchasing in the administration as an instrument for reducing energy consumption
ADMIN
EVE
C.4.1.4. Use of smart meters in the Basque public administration
ADMIN
EVE
ADMIN/ESCOs
EVE
C.4.1.5. Investment in efficient equipment, including public lighting, and systems for harnessing renewable energy sources in the Basque public administration
C.4.1.1. Efficiency plans for Basque Government buildings Buildings run by the public authorities account for an important proportion of energy consumption in the tertiary sector. In addition, public authorities must lead the rest of society in implementing measures to reduce energy consumption and make greater use of renewables in their municipal buildings, establishing models and criteria to be followed in other areas of society. Application of more demanding standards to public buildings, the purchase of equipment for monitoring consumption, more efficient equipment and awareness raising to achieve greater levels of savings are therefore ways of driving forward this type of action amongst society at large. C.4.1.2. Energy management in the Basque public administration The Basque Government is going to establish and implement a plan to reduce energy consumption in its buildings and facilities. One of the possible mechanisms involved is an improvement in energy management and investment through energy service companies. A specific plan will identify the units of action (buildings or groups of buildings), the necessary audits will be carried out and tenders will be requested to establish the technical and economic conditions under which successful ESCOs will provide their services.
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C.4.1.3. Green public procurement of energy equipment Basque public authorities should mainstream application of the criteria for purchasing and procuring products and systems that involve energy consumption, taking into account for example energy efficiency, consumption monitoring systems and reduced dependency on fossil fuels. Examples of some of the products to which these criteria would be most directly applicable might include: heating and air-conditioning units, DHW production apparatuses, insulation and enclosures, lighting systems, office computing equipment (computers, printers, lamps), vehicles, etc. C.4.1.4. Plan for meters in public buildings Improvement in energy cost management in Basque government buildings must be based, among other aspects, on a detailed knowledge of the consumption patterns and profiles of each energy-consuming unit, installation or system. But in addition, the new measurement and control systems must be fitted with systems that allow proactive action to be taken interactively on the energy supply, to change consumption figures and reduce costs. Smart meters are useful tools for determining consumption patterns and acting on them. Ahead of compulsory installation, this type of system is going to be rationally encouraged in most buildings run by the Basque public authorities. C.4.1.5. Investment in energy efficiency and renewables in public buildings Basque public authorities must set an example by committing to making energy improvements in their facilities, in terms of energy efficiency and greater use of renewables, based on criteria of economic rationality and prioritising energy investment according to its effectiveness. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t #BTRVF (PWFSONFOU t %FQBSUNFOU PG )PVTJOH 1VCMJD 8PSLT BOE 5SBOTQPSU t 0UIFS 1VCMJD "ENJO
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INITIATIVE C.4.2. Promotion of ultra-low energy consumption public housing
Targets t %FWFMPQ B QVCMJD TVQQMZ PG IJHI FOFSHZ HSBEF IPVTJOH t 3FEVDF UIF FOFSHZ CJMM PG OFX QVCMJDMZ QSPNPUFE IPVTJOH t &YBNQMF TFUUJOH BDUJPOT CZ #BTRVF QVCMJD BVUIPSJUJFT Actions Actions
Body responsible
Collaborators
C.4.2.1. Design of new public housing developments with centralised systems (e.g. District Heating)
DHPWT
DIITT/EVE
C.4.2.2. Construction of publicly-developed housing with high energy grade criteria
DHPWT
DIITT/EVE
C.4.2.1. Inclusion of centralised designs in new public developments The energy comfort of many Basque homes has been improved over the last two decades with the installation of new centralised individual heating and domestic hot water systems, replacing the numerous divided systems that existed previously. As an improvement strategy with a view to the future, the installation of centralised systems with individual control and low consumption equipment will be promoted in new developments. Among the most important initiatives to be introduced given their high level of efficiency and energy cost reduction are low-temperature geoexchange systems and high-efficiency cogeneration for simultaneous production of heat and power, which incorporate district heating as an alternative for distribution to homes. In designing housing developments, special attention will be given to the possibilities of incorporating renewable facilities, availability of public transport systems, fuelling networks for alternative vehicles, etc. C.4.2.2. High energy-grade public housing Basque public authorities in general must promote the construction of public housing with the highest energy standards, above the mandatory criteria, in order to generate a pool of high energy grade dwellings, whether they are to be for sale or for rental, serving as a driving element and a model for private developers. Body responsible for the initiative Department of Housing, Public Works and Transport / Municipal authorities. Other departments or administrations involved t %FQBSUNFOU PG *OEVTUSZ *OOPWBUJPO 5SBEF BOE 5PVSJTN o 4VC %FQBSUNFOU PG *OEVTUSZ BOE &OFSHZ t 0UIFS 1VCMJD "ENJO
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INITIATIVE C.4.3. Commitment by Basque cities to efficiency, renewables and intelligent energy
Targets t &TUBCMJTI FOFSHZ JNQSPWFNFOU QSPHSBNNFT JO QVCMJD CVJMEJOHT UP JODSFBTF FĂśDJFODZ MFWFMT SFEVDJOH DPTUT BDUJOH as an example to the private sector and creating a market for new products and services. t 1SPNPUF JNQSPWFNFOU JO UIF FOFSHZ HSBEF PG QVCMJD CVJMEJOHT Actions Actions
Body responsible
Collaborators
C.4.3.1. Promotion of improvements in municipal energy management
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.4.3.2. Voluntary commitments by local authorities (Covenant of Mayors)
MUNICIPAL AUTHORITIES
DIITT/EVE/EUDEL
C.4.3.3. Development of new models of energy excellence (â&#x20AC;&#x153;Intelligent Communitiesâ&#x20AC;? programme)
MUNICIPAL AUTHORITIES
DIITT/EVE/EUDEL
C.4.3.4. Encouragement of energy audits by municipal authorities
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE/EUDEL
C.4.3.1. Municipal Energy Management The energy bill and the environmental impact of energy consumption are becoming increasingly important issues for Basque municipalities. Large and medium-sized towns should have specific energy management plans for their facilities, as a way of reducing their energy bill and energy dependency. The figure of the local energy manager needs to be promoted in this type of municipality to coordinate planning and development actions in energy matters. C.4.3.2. Commitments by Local Authorities (Covenant of Mayors). The most committed municipalities must take the level of action one stage further, getting involved in aspects of their municipal area that go beyond their own facilities (including housing, shops, transport, the general public), through voluntary agreements by local corporations to establish commitments by the town in keeping with European 20-20-20 targets. These commitments will therefore involve actions in buildings run by the municipal authorities and also the establishment of measures and regulations to encourage energy savings and efficiency among all consumers in the town. One of these mechanisms involved is the European Covenant of Mayors initiative. C.4.3.3. Encouragement of new energy models in cities (â&#x20AC;&#x153;Intelligent Communitiesâ&#x20AC;? initiative) The Basque cities with the greatest commitment in energy matters that are considering more ambitious targets and are serving as a reference point at a European level, should join Networks of Communities of Excellence in Sustainable Energy. These communities are known for their innovating initiatives, perform excellent energy management, are at the forefront of energy and environmental commitments and are capable of creating new markets. Some European initiatives are already developing advanced public-private energy collaboration models, involving private companies, institutions, social partners, economic partners, etc., in other words, creating a major network of agents who promote the development of pilot projects, new projects of interest, etc.
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C.4.3.4. Energy audits in municipalities Basque municipal authorities that do not establish energy action plans, especially smaller ones, should at least perform energy audits of their facilities, to help them detect opportunities for cutting consumption, and establish annual programmes for investing in improvements. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t .VOJDJQBM BVUIPSJUJFT
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INITIATIVE C.4.4. Investment in transport and sustainable mobility of the public sector
Targets t 3FEVDF DPOTVNQUJPO PG QFUSPMFVN QSPEVDUT JO QBTTFOHFS BOE HPPET USBOTQPSU t 3FEVDF FOWJSPONFOUBM FNJTTJPOT PG $02 and other energy-sourced pollutants. Actions Acciones
Responsable
Colaboradores
Basque Admin.
â&#x20AC;&#x201C;
MUNICIPAL AUTHORITIES
â&#x20AC;&#x201C;
C.4.4.3. Plans for sustainable upgrading of the transport fleet of Basque public authorities
Basque Admin.
â&#x20AC;&#x201C;
C.4.4.4. Promotion and sustainable upgrading of public transport fleets
Basque Admin.
â&#x20AC;&#x201C;
C.4.4.1. Plan for promoting public transport usage in substitution of private transport C.4.4.2. Measures of urban mobility (urban transport planning, vehicle prioritisation, park-and-ride car parks, etc.)
C.4.4.1. Promotion of public transport usage It seem logical to presume that if the trend towards increased consumption of conventional fuels in the transport sector is to be reversed over coming years, a series of coordinated actions must be taken by the Basque government, territorial administrations and local authorities geared towards reducing the use of private vehicles and promoting the use of public and non-motorised transport. Some of the measures under consideration include favouring more efficient means of transport, installing park-and-ride car parks to dissuade the use of private vehicles and incentivise public transport, and promoting combined fare schemes to optimise passenger usage and mobility. If energy efficiency levels are to be improved, it will be necessary to develop, improve and promote the use of public transport infrastructures, especially in areas of greatest potential, such as long distance, suburban, metropolitan or light electric rail transport. C.4.4.2. Urban Mobility At an urban level, progress needs to be made in developing measures to restrict private transport and encourage sustainable public transport. Pedestrianisation of urban centres, accompanied by effective public transport and deterrent car parks, has proven to be a highly effective measure for reducing urban traffic. Special lanes for public transport or for cars with more than one occupant also reduce the number of vehicles entering the urban centre. Other areas of activity include: limiting public car parking in urban centres while at the same time facilitating access to alternative systems, prioritising the use of certain high energy class efficient vehicles, urban congestion charges, etc. At an urban level the possibility of promoting bicycle use through installation of bike parks and creation of cycle lanes should be considered in all cases.
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C.4.4.3. Upgrading of the Basque public vehicle fleet The fleets run by Basque public authorities form a significant number of vehicles providing public services. They belong to local corporations, territorial governments, the Basque government and public-sector companies. As part of the Basque governmentâ&#x20AC;&#x2122;s responsible consumption policy, it is considered essential to develop a coordinated line of action, which through programmed upgrading of the fleet, will allow improvements in current levels of energy efficiency and consumption. The instrument to be used for this purpose is the preparation and development of an energy plan for rational use of the fleet, which will allow improvements in efficient upgrading of the fleet, its more rational use and better maintenance of the fleet run by Basque public authorities. By setting an example, it will also serve as a strategy for galvanising the sector in general. C.4.4.4. Upgrading of public transport fleets Public transport companies, as well as providing a service under the best conditions (availability of connections, journey times, costs for users, comfort of transport, availability of information, etc.), must continue to improve energy efficiency in service design, incorporating the most advanced technologies to reduce and optimise energy consumption, promote the use of alternative fuels, etc. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t #BTRVF (PWFSONFOU t -PDBM BVUIPSJUJFT
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ACTION LINE C5: PROMOTE EFFICIENCY AND ENERGY USE OF WASTE IN THE PRIMARY SECTOR
INITIATIVE C.5.1. Measures for encouraging energy efficiency in the primary sector
Targets t *NQSPWF FOFSHZ JOUFOTJUZ JO UIF TFDUPS t 3FEVDF DPOTVNQUJPO PG QFUSPMFVN EFSJWBUJWFT JO UIF TFDUPS Actions17 Actions
Body responsible
Collaborators
C.5.1.1. Training campaign on efficient energy usage in the primary sector
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.5.1.2. Subsidies for energy audits and actions for improving energy efficiency in the agricultural sector
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
C.5.1.3. Subsidies for energy efficiency measures in the fishing industry
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
In order to minimise energy consumption in the primary sector, those involved in the industry need to know what technologies and equipment they can use to reduce consumption. This calls for training campaigns on efficient energy use in the sector as a whole. The possibilities for saving include upgrading of machinery and obsolete vehicles through the purchase of high energy-efficiency tractors, improvement in irrigation systems and engine optimisation. This entails support through public aid for both energy audits and improvement in energy efficiency in the equipment used in the agricultural sector. The same approach should be taken in actions in the fishing industry, with a drive to optimise propellers and painting of vessels. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t %FQBSUNFOU PG UIF &OWJSPONFOU -BOE 1MBOOJOH "HSJDVMUVSF BOE 'JTIJOH
17
Note: actions for fostering the use of biomass waste are set out in Initiative M.1.2.
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5.2. Energy markets and Supply
Energy markets and
M.1 Promote new renewable power generating facilities M.2 Consolidate the supply system and competitiveness of natural gas
Supply M.3 Improve the quality of the electrical system and security of supply
5.2.1. Initiatives on Markets
M.1 PROMOTE NEW RENEWABLE POWER GENERATING FACILITIES Naturally, Basque energy strategy must have a specific line of action involving increasing the use of renewable energy sources, in line with the European targets set out in the 20-20-20 Plan. While it is true that the ACBC does not have binding legal obligations to meet European targets, it does have to contribute to complying with the Spanish transposition of the directive. Moreover, it is essential to have renewable energy sources in order to achieve the future scenario set out in the long-term strategic vision. This line of action seeks to focus efforts in areas of the renewable power mix with the greatest growth potential (as is the case with wind power) and thus obtain a more balanced mix, in keeping with that available at Spanish and European level. While it is true that the power generation mix contains a larger percentage of renewable energy in 2010 than at the beginning of the decade â&#x20AC;&#x201C;80% more over the periodâ&#x20AC;&#x201C; the political targets are ever more challenging at both state and community level, and the work must continue. There follows an itemised list of the different energy sources with potential for development included in the 3E2020 Strategy: t 8JOE FOFSHZ %FWFMPQJOH XJOE QPXFS JT BO FTTFOUJBM JOHSFEJFOU GPS JODSFBTJOH UIF QBSUJDJQBUJPO PG SFOFXBCMFT JO the Basque Country, in line with European targets. Although there is a large industry related to wind power, with around 100 Basque companies operating in the field (manufacturers of wind turbines and components, service companies, technology centres, etc.), the Basque Country has installed capacity of just 154 MW, placing it behind other autonomous communities. The wind energy industry has been identified as being key to development, given the new opportunities that will continue to arise: offshore wind, up-powering of existing wind farms, smaller turbines in urban environments, development of new markets, etc. t #JPNBTT 5IFSF BSF WBSJPVT GBDJMJUJFT JO UIF #BTRVF $PVOUSZ GPS IBSOFTTJOH CJPNBTT XBTUF GPS QPXFS HFOFSBUJPO "T well as the industrial CHP plants using forestry waste, these are mostly installations that recover landfill biogas at dumpsites or use combustion of municipal solid waste for energy recovery. They have a total installed capacity is 25 MW. Nonetheless, it is important to bear in mind that there is not very much room for manoeuvre in the area of biomass, and that biomass is the largest contributor in absolute terms to the Basque renewable energy mix, though it is mostly used for non-electric purposes.
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t 1IPUPWPMUBJD "SPVOE UIF XPSME TPMBS QPXFS JT VOEFS JOUFOTF EFWFMPQNFOU XJUI JOTUBMMFE DBQBDJUZ EPVCMJOH every two years. In the Basque Country, despite climatological limitations, continuous support from government and the favourable conditions of the Spanish regulatory policy led in 2008 to a significant increase in new installations. However, this subsequently came to a halt as a result of changes to the legislation. Installed capacity in the Basque Country stands at around 20 MW with over 2,000 installations. Now that the latest legislative changes have been ironed out and the post-boom consequences and public perception appear to have calmed, there may be great potential for development which should be harnessed on a reasonable scale. t 4NBMM IZESP 5ISPVHIPVU UIF T BOE T UIFSF XBT B NBKPS FĂľPSU JO UIF #BTRVF $PVOUSZ UP SFDPWFS GPSNFS hydroelectric facilities and build new installations. There are currently 100 installations of an individual size of less than 10 MW in operation, with a total installed capacity of 58 MW. t .BSJOF FOFSHZ 0G UIF WBSJPVT UZQFT PG NBSJOF FOFSHZ XBWF UJEF DVSSFOU UIFSNBM BOE TBMJOF HSBEJFOU UIF POMZ one that is forecast to have a certain harnessable potential in the medium term, given its current level of technological development and Basque geographical characteristics, is wave energy. In addition, given the capacities of the shipbuilding industry and the presence of Basque manufacturers of related equipment, this sector is considered to be of strategic importance for the Basque Country, with a promising future. However, it is an emerging industry and still technologically immature, with a long way still to go before it can achieve technological reliability and compete on the market against other more mature technologies already in existence. It is forecast that it may reach commercial maturity in the next decade. For several years, work has been ongoing in this area, arising out of several technological initiatives, some of which are now seeking to reach pre-commercial development phase. The technical harnessable capacity in the Basque Country with present technology is 1,200-1,600 GWh per year, i.e. 6%-8% of Basque electricity consumption. The theoretical capacity, taking into account limiting factors and choosing six specific areas of installation, is 12,000 GWh/Year. There is at present just one wave energy plant in the Basque Country, with a capacity of 300 kW. t (FPUIFSNBM 4UVEJFT DBSSJFE PVU JO UIF #BTRVF $PVOUSZ PO HFPUIFSNBM FOFSHZ JOEJDBUF UIBU UIF FOFSHZ QPUFOUJBM is restricted to low temperature facilities. In various parts of the world, technological development projects are being put in place that harness the resource at medium-temperatures and can generate electricity using special thermodynamic cycles. There is, therefore, a field of technological development that requires further analysis and promotion.
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M.1 PROMOTE NEW RENEWABLE POWER GENERATING FACILITIES Targets
Achieve a more sustainable pool of Basque power generating facilities and contribute to achieving European and Spanish renewable energy targets
2010 Situation
t 3FOFXBCMF FMFDUSJDBM DBQBDJUZ JODM $)1 t 3FOFXBCMF QPXFS HFOFSBUJPO t 1BSUJDJQBUJPO JO FMFDUSJDJUZ TVQQMZ
Where should the emphasis be placed in the future?
.8 (8I
t *O UIF TIPSU UP NFEJVN UFSN GBDJMJUBUF JNQMFNFOUBUJPO PG NBUVSF UFDIOPMPHJFT with the greatest technical and economic potential, such as onshore wind power and biomass plants, and solar photovoltaic t *O UIF NFEJVN UP MPOH UFSN QSPNPUF UIF EFWFMPQNFOU PG OFX UFDIOPMPHJDBM renewable power generation options, especially marine energy, in terms of both wave energy and off-shore wind t */*5*"5*7& . 'BDJMJUBUF UIF JODPSQPSBUJPO PG XJOE QPXFS XJUIJO B GSBNFXPSL of institutional consensus and with criteria of sustainability t */*5*"5*7& . 1SPNPUF UIF DPNNJTTJPOJOH PG OFX CJPNBTT QMBOUT GPS power generation
INITIATIVES
t */*5*"5*7& . 1SPNPUF UIF EFWFMPQNFOU BOE JOTUBMMBUJPO PG QJMPU XBWF energy generation plants t */*5*"5*7& . 4VQQPSU HSBEVBM JODPSQPSBUJPO PG OFX MPX DBQBDJUZ renewable facilities (photovoltaic, small hydro, small wind) and identify new potential (geothermal)
INDICATORS
TARGETS 1,600
2010
2020
Renewable electrical capacity (MW)
424
1,350
Renewable power generation (GWh)
1,070
3,490
1,000
6%
16%
800
Offshore wind
600
Onshore wind
400
Biomass
Share in electricity supply (%)
1,400 Geothermal
1,200
Wave energy Solar
Hydro
200 0
2005
2008
2010
2015
2020
Figure 5.8. Scenario of renewable electricity installed capacity in MW. 2011-2020 BODY RESPONSIBLE
t 4VC %FQBSUNFOU PG *OEVTUSZ BOE &OFSHZ &7&
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M.2 CONSOLIDATE THE SUPPLY SYSTEM AND COMPETITIVENESS OF NATURAL GAS Various factors have vindicated the strategic commitment to gas taken under Basque energy policy since the first company was set up in 1983 to promote and develop this fuel: t #FUUFS QSJDF QFSGPSNBODF UIBO PUIFS GVFMT JODMVEJOH UIF SFDFOU USFOE PG EFDPVQMJOH GSPN PJM QSJDFT UIBOLT UP UIF discovery of unconventional natural gas (shale gas) reserves, mainly in the USA. t (SFBUFS EJWFSTJmDBUJPO JO JNQPSUFE TVQQMJFT UIBOLT UP UIF -/( USBEF UISPVHI UIF ##( JNQPSU UFSNJOBM XIJDI provides added security of supply. t /BUVSBM HBT JT UIF DMFBOFTU PG UIF UISFF MBSHF GPTTJM GVFMT XJUI IBMG UIF BUNPTQIFSJD DBSCPO FNJTTJPOT PG DPBM BOE approximately one third less than oil. As already discussed, natural gas is the energy with the highest demand in the Basque Country, accounting for 42% of total energy demand, having overtaken petroleum derivatives in 2005. This has been possible thanks to policies implemented in the Basque Country to replace other more expensive and pollutant fuels, which has given gas a large share in all sectors of consumption. The Basque Country currently enjoys a reasonably secure and competitive gas supply considering its external dependency for fossil fuels. The ACBC therefore needs to concentrate on consolidating its achievements (with action to extend storage, regasification and transport capacity) making natural gas the principal transition energy towards a scenario in which other more integrated, sustainable and competitive energies play a larger role. This goal must be achieved through the medium of electricity, which will in the future be the main energy used in industrial consumption and in the residential and services sector.
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M.2 CONSOLIDATE THE SUPPLY SYSTEM AND COMPETITIVENESS OF NATURAL GAS Targets
Reinforce the natural gas procurement system, and promote greater use of natural gas to replace oil products in all sectors of consumption
2010 Situation
t /BUVSBM HBT EFNBOE t 4IBSF PG OBUVSBM HBT JO UIF FOFSHZ NJY t (SPXUI PWFS MBTU ZFBST
Where should the emphasis be placed in the future?
INITIATIVES
INDICATORS
t *O UIF TIPSU UFSN JNQSPWF TFDVSJUZ PG TVQQMZ CZ FYUFOEJOH JOGSBTUSVDUVSFT BOE increase the competitiveness of the natural gas supply t *O UIF NFEJVN BOE MPOH UFSN DPOUJOVF GBWPVSJOH JOJUJBUJWFT UP SFQMBDF PJM products with natural gas in all sectors and develop strategies for oil and gas exploration in the Cantabrian Basin t */*5*"5*7& . *ODSFBTF TFDVSJUZ PG TVQQMZ BOE DPNQFUJUJWFOFTT PG UIF HBT system TARGETS 2010
2020
38,500
50,200
Share of natural gas in meeting total energy demand (%)
42%
49%
Share of oil products in total demand (%)
39%
<36%
Natural gas demand (GWh)
Investment in the period (â&#x201A;Źm) Public contribution over the period (â&#x201A;Źm)
(8I
Natural gas 49%
Renewables 12% Imp. Electr. 2%
1,335 71
Oil prod. 36%
Coal 1%
Figure 5.9. Primary energy consumption mix in the Basque Country to 2020 BODY RESPONSIBLE
t 4VC %FQBSUNFOU PG *OEVTUSZ BOE &OFSHZ &7&
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M.3 IMPROVE THE QUALITY OF THE ELECTRICAL SYSTEM AND SECURITY OF SUPPLY Electricity currently constitutes a basic energy vector for society in general, with major growth forecast worldwide, given its significant advantages over others: t &ĂśDJFODZ BOE NJOJNJTBUJPO PG FOWJSPONFOUBM JNQBDU BU UIF QPJOU PG DPOTVNQUJPO t %JWFSTJUZ PG BQQMJDBUJPOT GPS FYBNQMF UIFSNBM NFDIBOJDBM MJHIUJOH FUD BOE TPVSDFT HFOFSBUJPO GVFMMFE CZ GPTTJM fuels and renewable energy). t -BSHF FYUFOTJPO JO HFOFSBM UFSNT PG USBOTNJTTJPO BOE EJTUSJCVUJPO OFUXPSLT t .FBOT PG FĂśDJFOUMZ UBLJOH GVUVSF SFOFXBCMF QSPEVDUJPO UP UIF FOE DPOTVNFS Another significant factor is that power distribution and transmission are facing a panorama ripe with opportunities arising from the use of information technology, both for the development of smart grids and demand management programs and for improving service quality and reducing grid losses. The figures for electricity consumption in the Basque Country over the last decade show a 3% growth in annual consumption in the period 2000-2007, followed, as we have already seen, by a contraction caused by the economic crisis which continued into 2008 and 2009. The most relevant area of modernisation in the industry in the last decade, has been in the field of generation, with the incorporation of natural-gas fired combined cycles. From the point of view of distribution, following a long period in which the Basque transmission network saw very few changes, in recent years a series of grid-connection projects have begun, the purpose of which is to improve the security of the system, connect power production from new generation, and supply growing consumption. All of these plans are promoted at a state level through Gas and Electricity Industry Plans, in which the Autonomous Communities also participate. One aspect of distribution that needs to be improved is service quality. The TIEPI indicator (tiempo de interrupciĂłn del suministro elĂŠctrico or power supply downtime) in the Basque Country has worsened in recent years. The main obstacle to power distribution firms undertaking this type of investment and upgrading in their networks lies in the technological risk and the fact that the payment established by the corresponding decrees for these companies (which is included in electricity prices through the component known as â&#x20AC;&#x153;transit chargesâ&#x20AC;?), does not take into account the additional cost of this equipment and systems over and above â&#x20AC;&#x153;conventionalâ&#x20AC;? distribution infrastructures. As a result, potential improvements in supply quality, better user information and even lower electricity consumption do not translate into economic advantages for distribution companies that would allow them to offset the higher risk and the investment costs. More progress therefore needs to be made, with a real commitment to overcoming the hurdles and reducing the risks, in order to demonstrate the potential of these technologies in real and specific applications. It is therefore necessary to identify the causes and work to reverse this trend in the grid, restoring service quality to its position among the best in the state, by addressing weakness in the network. Another goal must be to monitor and reduce losses in the distribution system through modernisation, as well as to capitalise on the possibilities of demand management to optimise grid use. It is therefore necessary to harness the technological potential offered by the industry to integrate and interconnect networks and also for demand management and increase in service quality.
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Current legislation on the replacement of electricity meters at European level (EU Directive 2009/72/EC:, RD 1110/07) and at Spanish level (the 2007 Ministerial Order) establishes that all meters must be fitted with the possibility of time-of-use rates and remote management before 31 December 2018. Complying with this regulation will be a first step towards creating a smart power grid. However this Strategy considers that this change offers an opportunity to introduce a much more ambitious project to that required under the legislation, covering not only the installation of smart electricity meters but the creation of a comprehensive smart grid that would also include substations, transformer centres, integration of distributed generation and electric vehicles, etc.
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M.3 ENSURE SUPPLY AND IMPROVE QUALITY OF THE ELECTRICAL SYSTEM
Targets
Strengthening of the Basque power system, allowing integration of new distributed, competitive and sustainable territorial generation, and the incorporation of smart grids and systems, that will improve security and quality, optimising energy costs. and keeping 2020 consumption to below the figures for 2007 and 2008
2010 Situation
t 1PXFS EFNBOE t &MFDUSJDJUZ *NQPSUT
(8I
t )BWJOH B IJHI RVBMJUZ #BTRVF QPXFS HSJE UIBU BMMPXT TVQQMZ OFFET UP CF NFU and incorporate distributed power generating facilities, renewables and CHP
Where should the emphasis be placed in the future?
t 4NBSU HSJE TZTUFNT BOE UFDIOPMPHJFT XJMM NBLF JU QPTTJCMF UP PQUJNJTF EFNBOE management and the electricity bill of energy consuming sectors, improve maintenance and reduce losses t 4NBSU HSJET XJMM BMMPX GVMM EFWFMPQNFOU PG FMFDUSJD WFIJDMFT BOE UIFJS CBMBODFE and efficient integration into the system t 4VQQPSU IJHI FรถDJFODZ DPNQFUJUJWF QPXFS HFOFSBUJPO JODPSQPSBUJOH UIF CFTU technologies available for effective emission reduction. Particularly, in areas with the greatest territorial demand/supply deficit t */*5*"5*7& . 4VQFSWJTJPO PG USBOTNJTTJPO BOE EJTUSJCVUJPO HSJET
INITIATIVES
t */*5*"5*7& . 1SPNPUJPO PG TNBSU HSJET BOE EFNBOE NBOBHFNFOU t */*5*"5*7& . $PNQFUJUJWFOFTT PG #BTRVF QPXFS HFOFSBUJOH GBDJMJUJFT
INDICATORS Power demand (GWh) Average annual growth over the decade (%)
TARGETS 2010
2020
18,630 < 20,055 โ
< 0.8%
Imports (%)
44%
7%
Contribution of CHP to power supply (%)
12%
22%
Contribution of renewable to power supply (%)
6%
16%
Natural gas combined cycle 55%
CHP 22%
Renewables 16% Imported 7%
Figure 5.10. Power generating mix in the Basque Country to 2020 BODY RESPONSIBLE
150
t 4VC %FQBSUNFOU PG *OEVTUSZ BOE &OFSHZ &7&
Strategic areas and lines of operation | 3E-2020
ENERGY MARKETS AND SUPPLY ACTION LINES AND INITIATIVES LINES
INITIATIVES INITIATIVE M.1.1.- Facilitate the incorporation of wind power within a framework of institutional consensus and with criteria of sustainability BODY RESPONSIBLE: Sub-Department of Industry and Energy / EVE
M.1 PROMOTE NEW RENEWABLE POWER GENERATING FACILITIES
BODY RESPONSIBLE Sub-Department of Industry and Energy
INITIATIVE M.1.2.- Promote the commissioning of new biomass plants for power generation BODY RESPONSIBLE: Sub-Department of Industry and Energy / EVE INITIATIVE M.1.3.- Promote the development and installation of pilot wave energy generation plants BODY RESPONSIBLE: Sub-Department of Industry and Energy / EVE INITIATIVE M.1.4.- Support gradual incorporation of new low-capacity renewable facilities (photovoltaic, small hydro, small wind) and identify new potential (geothermal) BODY RESPONSIBLE: Sub-Department of Industry and Energy / EVE
M.2 CONSOLIDATE THE SUPPLY SYSTEM AND COMPETITIVENESS OF NATURAL GAS
BODY RESPONSIBLE Sub-Department of Industry and Energy
INITIATIVE M.2.1.- Increase security of supply and competitiveness of the gas system
BODY RESPONSIBLE: Sub-Department of Industry and Energy / EVE
INITIATIVE M.3.1.- Supervision of transmission and distribution grids M.3 IMPROVE THE QUALITY OF THE ELECTRICAL SYSTEM AND SECURITY OF SUPPLY
BODY RESPONSIBLE Sub-Department of Industry and Energy
BODY RESPONSIBLE: Sub-Department of Industry and Energy INITIATIVE M.3.2.- Promotion of smart grids and demand management BODY RESPONSIBLE: Sub-Department of Industry and Energy / EVE INITIATIVE M.3.3.- Competitiveness of Basque power generating facilities BODY RESPONSIBLE: Sub-Department of Industry and Energy
Table 5.2. Energy markets and supply. Action lines and initiatives
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5.2.2. Actions in Markets ACTION LINE M1: PROMOTE NEW RENEWABLE POWER GENERATING FACILITIES
INITIATIVE M.1.1. Facilitate the incorporation of wind power within a framework of institutional consensus and with criteria of sustainability
Targets t 3FBDI BO JOTUJUVUJPOBM DPOTFOTVT PO UIF EFWFMPQNFOU PG XJOE QPXFS JO UIF #BTRVF $PVOUSZ t 1SPNPUF XJOE HFOFSBUJPO CZ DSFBUJOH OFX XJOE GBSNT BOE HSPVQFE PS JTPMBUFE UVSCJOFT t $POUSJCVUF UP SFEVDJOH DBSCPO FNJTTJPOT BOE &VSPQFBO UBSHFUT PO SFOFXBCMF FOFSHZ QSPEVDUJPO Actions Actions
Body responsible
Collaborators
M.1.1.1. Promotion of institutional, political and social consensus that will enable suitable development of wind power in the Basque Country
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.1.1.2. Promotion of wind turbine projects in collaboration with local authorities
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.1.1.3. Development of an offshore wind farm
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.1.1.1. Encouragement of a consensus on wind power The 3E2010 Energy Strategy for the Basque Country to 2010 set a target of 624 MW of wind power, yet the capacity actually installed in 2010 stood at just 154 MW. Political, social, and institutional consensus is therefore required to establish the environmental criteria to be used in assessing the environmental impact of new wind farms. These agreements and the criteria established should be set out in a new territorial sector plan (TSP) on wind power, to replace the existing one. M.1.1.2. Promotion of projects for grouped or isolated wind turbines The installation of grouped or isolated wind turbines is an important area of action The shortage of available land in Basque territory, which limits large-scale development of wind farms seen in other regions, makes it necessary to try to harness wind in smaller installations. This requires the greatest possible involvement of local authorities and/ or other public institutions.
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M.1.1.3. Development of an offshore wind farm In the longer term, offshore wind power may offer potential for complementary energy provided that current hurdles â&#x20AC;&#x201C;mainly related to the nature of the Basque coastlineâ&#x20AC;&#x201C; can be overcome. Basque companies have the capacity UP TQFBSIFBE OFX EFWFMPQNFOUT JO UIJT mFME IFODF UIF JNQPSUBODF PG QSPWJEJOH TVQQPSU UP CVTJOFTT 3 % J BOE PG having an experimentation zone on the Basque coast similar to the current project for wave energy. Several possible areas for developing offshore wind have been identified with floating foundations on sea beds of between 45 and 80 m. However, given the current state of development of the technology, the resource is as yet not technically and economically viable, and for this reason only a pilot installation is planned before 2020. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t %FQBSUNFOU PG UIF &OWJSPONFOU -BOE 1MBOOJOH "HSJDVMUVSF BOE 'JTIJOH t #BTRVF QVCMJD BVUIPSJUJFT
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INITIATIVE M.1.2. Promote the commissioning of new biomass plants for power generation
Targets t 1SPNPUF SBUJPOBM VTF PG CJPNBTT XBTUF GPS QPXFS HFOFSBUJPO t &ODPVSBHF QSJWBUF TFDUPS JOWFTUNFOU JO UIF JOEVTUSZ Actions Actions
Body responsible
Collaborators
M.1.2.1. Master Plan to regulate biomass for power generation
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE/DMAPTAP/TGs
M.1.2.2. Support for investment initiatives in new power generating plants
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.1.2.1. Master Plan to regulate biomass for power generation The Basque Governmentâ&#x20AC;&#x2122;s Department of Industry, Innovation, Trade and Tourism and Department of the Environment, Land Use Planning, Agriculture and Fishing in coordination with the territorial governments will have to coordinate efforts to draw up an inventory of biomass resources and establish a master plan for power generation planning and harnessing that is efficient in energy and economic terms. M.1.2.2. Investment in new power generating plants The most realistic possibilities for use today in power generation at a local level involve plants using two separate but complementary alternatives, which must be supported and promoted: conversion of the resource into biogas for subsequent use in motors, and direct combustion in a boiler to produce heat. Support will be given to business initiatives that establish technically and economically viable projects for a greater use of biomass in power generation. This support centres on grants to management and processing, and also investment through credit lines, risk-capital and minority public business participation, depending on the type of project. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t %FQBSUNFOU PG UIF &OWJSPONFOU -BOE 1MBOOJOH "HSJDVMUVSF BOE 'JTIJOH
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INITIATIVE M.1.3. Promote the development and installation of pilot wave energy generation plants
Targets t 1SPNPUF UIF JNQMFNFOUBUJPO PG QSPKFDUT UP EFNPOTUSBUF EJĂľFSFOU UFDIOPMPHJFT GPS IBSOFTTJOH NBSJOF FOFSHZ t *EFOUJGZ MPDBUJPOT PG JOUFSFTU GPS IBSOFTTJOH XBWF FOFSHZ PO UIF #BTRVF DPBTU t 1SPNPUF UIF mSTU DPNNFSDJBM HSJE DPOOFDUFE NBSJOF FOFSHZ QSPEVDUJPO GBDJMJUJFT Actions Actions
Body responsible
Collaborators
M.1.3.1. Commissioning of an offshore platform for researching marine energy technologies
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.1.3.2. Attract and develop investment in the research platform from wave energy collector developers/ technologists
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.1.3.3. Encourage adaptation of legislative and administrative regulations and industry premiums
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.1.3.4. Analyse and set up a â&#x20AC;&#x153;pilot zoneâ&#x20AC;? for starting commercial development of wave energy
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.1.3.5. Promote investment for introducing the first commercial WECs for harnessing wave energy
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.1.3.1. Marine technology research platform Development of the wave energy industry offers a great opportunity for Basque technology and industry. Action strategies therefore need to be implemented that are geared towards creating a suitable breeding ground in the Basque Country for global technology leaders in the industry to set up here. In order to provide the right conditions, infrastructures need to be created that will facilitate the development of equipment for harnessing wave energy from test phase through to commercial phase. M.1.3.2. Investment by developers/technologists in WECs It is necessary to design programmes of support to businesses (developers, technologists, etc.) wishing to install energy generating devices on the research platform developed for this purpose. M.1.3.3. Regulatory, administrative and premium-related framework for the industry In order successfully to develop wave energy as a viable long-term commercial alternative, a suitable regulatory framework is required. Moreover, in order to effectively boost this technology it will be necessary to overcome hurdles related to the sectors affected (fishing and shipping, essentially) and the administration will have to facilitate the legal formalities for the facilities, given that the current procedure is long and complex.
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M.1.3.4. â&#x20AC;&#x153;Pilot Zonesâ&#x20AC;? to begin commercial development IN order to ensure that marine energy can start to take off commercially over the next decade, in the light of the results from the bimep experimental platform, it will be necessary to analyse in detail potential locations on the Basque coast that might be used for the first stages of commercial development. M.1.3.5. Installation of the first commercial WECs The first commercial installations will require additional aid since they will essentially be prototypes and will have IJHI NBJOUFOBODF DPTUT *U JT BMTP JNQPSUBOU UP QSPNPUF QSPHSBNNFT PG BJE UP 3 % J JO UIJT mFME BOE QSPNPUF training for specialist staff to speed up commercial viability and marketing of this technology. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t .JOJTUSZ PG &DPOPNJD %FWFMPQNFOU t .JOJTUSZ PG *OEVTUSZ 5PVSJTN BOE 5SBEF
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INITIATIVE M.1.4. Support gradual incorporation of new low-capacity renewable facilities
Targets t *ODSFBTF SFOFXBCMF QPXFS GBDJMJUJFT BOE HFOFSBUJPO DBQBDJUZ VTJOH DSJUFSJB PG FDPOPNJD BOE FOWJSPONFOUBM TVTUBJOability. t "DIJFWF HSFBUFS JOUFHSBUJPO PG UIJT UZQF PG GBDJMJUZ JO CVJMEJOHT BOE IPNFT FODPVSBHJOH TFMG DPOTVNQUJPO t 'PTUFS EJTUSJCVUFE QPXFS HFOFSBUJPO BOE TFMG DPOTVNQUJPO CZ QSPNPUJOH UIF JODPSQPSBUJPO PG IJHIMZ EJTQFSTFE small facilities. t *EFOUJGZ QPTTJCJMJUJFT GPS IBSOFTTJOH HFPUIFSNBM FOFSHZ GPS QPXFS HFOFSBUJPO BOE BT BQQMJDBCMF QSPNPUF UIF creation of demonstration projects. t 1SPNPUF HSFBUFS LOPXMFEHF PG TNBMM QPXFS HFOFSBUJPO UFDIOPMPHJFT VTJOH SFOFXBCMF FOFSHZ BOE QVCMJDJTF UIFJS applications, especially among less traditional sectors. t 1SPNPUJPO CZ UIF WBSJPVT UJFST PG HPWFSONFOU PG DSFBUJPO PG TNBMM JOTUBMMBUJPOT VTJOH SFOFXBCMFT Actions Actions
Body responsible
Collaborators
M.1.4.1. Promotion of power-generating facilities using renewables in homes, buildings and industrial facilities
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.1.4.2. Non-refundable grants for small facilities (photovoltaic, wind turbines, etc.)
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
DIITT/MUNICIPAL AUTHORITIES
EVE
ADMIN
EVE
M.1.4.5. New studies of technologies and potential for harnessing renewables for power generation
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.1.4.6. Analyse and as appropriate promote the development of new pilot power generation projects using renewables
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
TGs
â&#x20AC;&#x201C;
M.1.4.3. Simplify administrative procedures in the Basque Government and municipal authorities to encourage installation of new facilities M.1.4.4. Public investment in renewable energy facilities
M.1.4.7. Tax incentives for investment in renewable power generation
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M.1.4.1. Promotion of power generating facilities (photovoltaic installations, small wind turbines, small hydro) An additional effort is required by all institutions to encourage mass harnessing of renewable energy sources, and their integration into buildings and installations. The main market for solar photovoltaic power in the Basque Country is at an urban level, in applications in new building, the use of industrial roofing and widespread use in publiclydeveloped buildings. There is little additional potential for small hydro technology, but there are some old installations which are not in use, which should be restored. Another technology which is still at an early level of implementation is that of small wind turbines, which should continue to be promoted. M.1.4.2. Aid to small power generating facilities using renewable energy To date, power generating facilities using renewables have largely been developed through a mechanism whereby investment was recovered through premiums on the sale of electricity. This promotion mechanism requires a process of control in implementation and a progressive reduction in the premiums as real generating costs fall closer to those of conventional generation in order to prevent distorting the market. In the future, with parity in grid costs, the different types of renewable facilities must be integrated more into the consumption points, allowing levels of self-consumption to be increased. The criterion is to provide economic support for such installations, which are at a disadvantage in terms of return on investment compared to other climate zones in Spain, in order to allow them to offset the restrictions on development. As part of the policy on promoting small renewable facilities, continued support must be given to the installation of small photovoltaic facilities and wind turbines (<100 kW) for domestic and local use. As a result of technological development, there will come a point when reductions in investment costs and the forecast increase in electricity purchase rates will mean that this type of support will no longer be necessary, or may be significantly reduced, depending on the type of resource and the technology. M.1.4.3. Simplify administrative procedures Basque public authorities will facilitate development of this type of installation based on private initiative. It is considered necessary to speed up the administrative formalities for this type of installation, by updating legislation and simplifying existing procedures. M.1.4.4. Public investment in renewable energy facilities In addition, the Basque public authorities will promote the commissioning of singular renewables projects for power generation in their public buildings. M.1.4.5. New studies of technologies and potential Electricity is currently (and will probably continue to be) the most important means of channelling power production to consumers for flexible mass use in a broad range of energy-consuming equipment. For this reason, the role of renewables in power generation provides an excellent opportunity for long-term development. A large number of technological initiatives related to renewable sources are emerging in the industry, and support needs to be given to studies on the large-scale future possibilities of new applications and energy harnessing. In the specific case of deep geothermal, studies will also be made of the potential for developing this type of project, using for this purpose the deep wells drilled in natural gas exploration work.
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M.1.4.6. Development of new pilot power generation projects using renewables Although the existing potential of the resource has been analysed, the possibilities of action in the field of power generation in certain areas (e.g. through geothermal energy) calls for a more detailed review of existing potential and of the future market opportunities that may arise in relation to advanced technologies for harnessing it to generate electricity. Should additional resources be located that are suited to technologies now under development, the possibility of developing a demonstration project to test the energy and technological/industrial potential for development will be analysed. M.1.4.7. Tax incentives for investment in renewable power generation Until such time as renewable energy sources catch up with market levels, there will have to be tax support schemes for companies investing in new technologies for renewable-based power generation that will help advance their use in the industry. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t %FQBSUNFOU PG UIF &OWJSPONFOU -BOE 1MBOOJOH "HSJDVMUVSF BOE 'JTIJOH t .VOJDJQBM BVUIPSJUJFT t 5FSSJUPSJBM (PWFSONFOUT
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ACTION LINE M2: CONSOLIDATE THE SUPPLY SYSTEM AND COMPETITIVENESS OF NATURAL GAS
INITIATIVE M.2.1. Increase security of supply and competitiveness of the gas system
Targets t $POTPMJEBUF UIF TFDVSJUZ PG UIF #BTRVF OBUVSBM HBT TVQQMZ TZTUFN CZ JNQSPWJOH QSPDVSFNFOU JOGSBTUSVDUVSFT t *EFOUJGZ BOE XIFSF BQQMJDBCMF FYQMPJU IZESPDBSCPO EFQPTJUT JO UIF #BTRVF $BOUBCSJBO CBTJO UP BMMPX QPUFOUJBM local resources to be tapped. t *NQSPWF UIF DPNQFUJUJWFOFTT PG UIF QSJDF PG OBUVSBM HBT TVQQMZ UP DPNQBOJFT BOE IPNFT Actions Actions
Body responsible
Collaborators
M.2.1.1. Support for the enlargement of the natural gas storage and transport infrastructures
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.2.1.2. Promotion of exploration and production from natural reserves gas in the Cantabrian Basin
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
SHESA
M.2.1.3. Support the creation of a structured gas market with active participation by the ACBC
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.2.1.4. Coordinate contingency plans for natural gas scarcities
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.2.1.1. Natural gas storage and transport infrastructures The Basque Country currently has an extensive network of natural gas import, storage, transport and distribution infrastructures. Given that in the medium to long term, natural gas will continue to be a key energy in the Basque Country in the transition towards a sustainable energy system, it is important to reinforce security of supply under suitable price and time conditions. It is therefore planned to reinforce the northern axis of the transport network, as well as reinforcing infrastructures by extending the La Gaviota underground store and the liquefied natural gas (LNG) import terminal at the port in Zierbena. The Spanish energy infrastructures plan, currently under review for 20122020, covers the actions required to complete the development of gas transport and storage network. M.2.1.2. Exploration and production from natural gas reserves in the Cantabrian Basin With regard to oil and gas exploration, the work conducted to date in the ACBC has been oriented towards conventional reserves. The technological improvements leading to the development of so-called â&#x20AC;&#x153;unconventionalâ&#x20AC;? reserves, which began in the 1980s, have sparked renewed expectancy in the Basque Country. Indeed, four of the five exploration licenses currently underway are trying to determine the viability of using similar techniques to those applied in conventional reserves. Unlike conventional reserves, unconventional gas does not migrate; it remains trapped in its own source rock, which has a low level of porosity and permeability. As a result, extracting the gas necessitates stimulating the formation to create artificial permeability, thus allowing the gas to escape.
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The target for 2011â&#x20AC;&#x201C;2020 is for exploration to be carried out into both conventional hydrocarbons and unconventional gas. In the first case activity is expected to be measured and to be preceded by geological, geochemical and geophysical studies. In the case of unconventional reserves, the results of the exploratory work, which will involve drilling wells and applying stimulation techniques, will be decisive for future developments. Should the results prove favourable, it could represent a turning point for gas production in the Basque Country. M.2.1.3. Regulated gas market The maturity of Basque gas infrastructures; the availability of strategic storage; the inter-relation with the Spanish state gas market; the interconnection with the European market across the French border and the geostrategic situation of the Basque Country combine to place it in a good position to become a reference centre for gas markets and related services in SW Europe. M.2.1.4. Contingency plans for natural gas scarcities Given the strategic nature of natural gas, good coordination is required by Spanish system agents in drawing up contingency plans, with particular emphasis on possible periods of prolonged shortage in the natural gas supply. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t .JOJTUSZ PG *OEVTUSZ 5PVSJTN BOE 5SBEF t .JOJTUSZ PG UIF &OWJSPONFOU BOE 3VSBM BOE .BSJOF "ĂľBJST
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ACTION LINE M3: ENSURE SUPPLY AND IMPROVE QUALITY OF THE ELECTRICAL SYSTEM
INITIATIVE M.3.1. Supervision of transmission and distribution grids
Targets t 3FEVDF UIF GVUVSF OFFET PG OFX QPXFS USBOTNJTTJPO BOE EJTUSJCVUJPO OFUXPSLT t .BJOUBJO PS JNQSPWF TFSWJDF RVBMJUZ MFWFMT JO UIF TVQQMZ PG FMFDUSJDJUZ JO EJĂľFSFOU [POFT t 3FEVDUJPO PG UIF FOWJSPONFOUBM JNQBDU PG UIF QPXFS USBOTNJTTJPO BOE EJTUSJCVUJPO TZTUFN BT B XIPMF Actions Actions
Body responsible
Collaborators
M.3.1.1. Continuously supervise the situation of the Basque power transmission and distribution system and any actions carried out
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.3.1.2. Promote improvements in the quality of the Basque power supply
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
â&#x20AC;&#x201C;
M.3.1.3. Encourage measures to promote distributed generation through grants policies
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.3.1.1. Supervision and improvement of the power transmission system One of the basic targets with regard to the power grid is to have a power transmission and distribution system that can meet future supply and demand requirements at an appropriate level of supply quality. However, in order to reduce the need to extend the grid, it is first necessary to optimise demand. This can be achieved through various different types of action. The first involves savings programmes targeted at reducing electricity consumption in all sectors. Secondly, there are measures related to power demand management, i.e., to changing the consumption curve by shifting it towards times of least demand in order to optimise distribution and cut the consumerâ&#x20AC;&#x2122;s electricity bill. These changes in consumption periods help flatten the demand load curve, relieving the demand on the grid at peak times and increasing use at off-peak times. The last means of optimising demand involves the availability of auxiliary systems such as those related to storage technologies, which allow flexible management of power demand by reducing network needs and optimising costs. However, this type of technology is not yet mature enough to be introduced on a large scale in the commercial operation of the grid, and requires greater technological development. It is therefore recommended that pilot and demonstration projects be promoted in this field.
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Transmission grid improvement plans are updated at Spanish state level through the State Infrastructures Plan in coordination with the System Operator and the autonomous communities. It is the job of the System Operator to analyse the situation of the grid continuously and make proposals for any alternations needed to maintain suitable levels of security of supply and continuity. The process for planning the transmission and distribution networks involves analysing future scenarios and the networksâ&#x20AC;&#x2122; capacity to absorb growth in power supply and demand, by determining where reinforcement is required. This process is performed by the network operators. They are currently considering projects in the 400 kV transmission network to connect with Cantabria (now under construction) and Navarra, as well as internal reinforcement of the Basque network with the GĂźeĂąes-Itxaso line and the area of Vitoria-Gasteiz. These projects, together with other more minor 220 kV actions, will ensure that before 2015 a mature transmission system is in place with sufficient capacity to ensure supply from different sources and to interconnect new production and any higher future consumption. In the longer term, the HV DC interconnection with the French grid would allow an increase in crossborder exchanges and integration with European markets. M.3.1.2. Supervision and improvement of the distribution network and quality of supply The service quality of the Basque power grid has deteriorated in recent years. Current quality rates must be improved on to return to optimal levels. This requires a continuous effort on the part of distribution firms in the maintenance, replacement and extension of transformer centres or lines; if it were considered necessary, it would be possible to enact specific legislation on service quality in the Basque Country to promote this change. It is also necessary to analyse and where applicable promote possible improvements to the existing distribution network in order to reduce the impact on the rural and urban environment. This could include specific actions to remove and replace installations, change routes and bury or consolidate lines. M.3.1.3. Favour measures to encourage distributed generation Promoting small renewables and CHP means advancing a model oriented towards more decentralised power production. Bringing production closer to consumption holds out certain advantages, such as a reduction in losses in power networks, encouragement of self-consumption and better balance of power demand and generation. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t .JOJTUSZ PG *OEVTUSZ 5PVSJTN BOE 5SBEF
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INITIATIVE M.3.2. Promotion of smart grids and demand management
Targets t *NQSPWF UIF RVBMJUZ PG QPXFS TVQQMZ UP DVTUPNFST BUUFOUJPO UP JODJEFOUT DVTUPNFS JOGPSNBUJPO NPSF FĂśDJFOU management of consumption figures and the electricity bill. t .PWF UPXBSET JOUFHSBUJOH SFOFXBCMFT EJTUSJCVUFE HFOFSBUJPO BOE FMFDUSJD WFIJDMFT t "DUJWFMZ QSPNPUF PQFSBUJPO PG UIF OFUXPSL SFEVDJOH MPTTFT BOE JNQSPWJOH QMBOOJOH Actions Actions
Body responsible
Collaborators
M.3.2.1. Speed up introduction of smart meters in consumption points
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.3.2.2. Modernise power infrastructures with the introduction of advanced technologies (â&#x20AC;&#x153;Smart Communitiesâ&#x20AC;?)
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.3.2.2. Adaptation of payment framework
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.3.2.1. Accelerated installation of smart meters in consumption points The legislation also requires replacement of meters so that before the end of 2018 they have full remote management capacity. The results of different pilot projects carried out at a European level, some of which have been developed in the Basque Country, indicate that the simple fact of knowing and continuously monitoring the consumption of installations and equipment raises consumersâ&#x20AC;&#x2122; interest in improving the way they manage demand, thus reducing consumption and optimising their energy bill. This is calculated to achieve savings of 10% through so-called â&#x20AC;&#x153;soft measuresâ&#x20AC;?, i.e. measures related to consumption behaviour and rational use, without the need to introduce measures that require major investment in equipment. The meters will have to be complemented with customer information systems offering complete consumption information, so that customers can monitor their consumption patterns and optimise them using simple, user-friendly systems. Among other actions, the project agreed in February 2011 between Iberdrola and EVE will involve installing smart meters in all consumption points in Bilbao and Portugalete over the coming years. This is the first example of the public-private collaboration system to be introduced to speed up the incorporation of these devices. M.3.2.2. Modernisation of electricity infrastructures As already discussed, smart grids are a technological development of power distribution system combining traditional installations with modern monitoring, information and telecommunications technologies. As well as the consumption points, smart grid transformer centres include equipment to provide grid managers with a range of additional of services, from basic remote management to comprehensive automation, with various intermediary levels of supervision Substations too will have greater information and capacity for controlling distributed generation, automated incident response, active demand management and predictability.
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Backing will also be provided for pilot projects encouraging optimisation of infrastructures and competitiveness and improvement in their management; for example by promoting projects to demonstrate power storage technologies and others. All projects will be developed through public-private partnerships, enabling the development of smart communities that will stand as international reference points for innovation in energy-related areas. M.3.2.3. Adaptation of payment framework As already discussed, the main obstacle to power distribution firms undertaking this type of investment and upgrading their networks lies in the fact that the payment established under the relevant decrees for these companies (which is incorporated into electricity prices via the â&#x20AC;&#x153;transit chargesâ&#x20AC;? component), does not take into account the additional cost of these units and systems over and above â&#x20AC;&#x153;conventionalâ&#x20AC;? distribution infrastructures. As a result, potential improvements in supply quality, better user information and even lower electricity consumption do not translate into economic advantages for distribution companies that would allow them to offset the higher risk and the investment costs. The proposed demonstration projects encourage shared-risk mechanisms for financing pioneering initiatives in these areas, but will not be sufficient to achieve mass deployment to enable large-scale meeting of the targets. Proposals will therefore be made for reviewing and adapting the legal and payment framework defined by the state administration, in order to send out an appropriate signal to the distribution firms so that they take on the investment in upgrading the networks set out in the previous sections. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t .JOJTUSZ PG *OEVTUSZ 5PVSJTN BOE 5SBEF
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INITIATIVE M.3.3. Competitiveness of Basque power generating facilities
Targets t *NQSPWF UFSSJUPSJBM CBMBODF BOE TVQQMZ TFSWJDF RVBMJUZ XJUI SFHBSE UP QPXFS EFNBOE t $POUSJCVUF UP SFEVDJOH TQFDJmD $02 emissions from power generating facilities. Actions Actions
Body responsible
Collaborators
M.3.3.1. Promote maximum competitive utilisation of Basque thermoelectric power generating facilities
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.3.3.2. Support competitive ultra-high-efficiency thermoelectric power generation, reducing GHG emissions
DIITT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
M.3.3.1. Competitive use of thermoelectric generating facilities The Basque Country has a set of power generating facilities modernised in the 2000s, including three natural gas combined cycle plants. These combined cycles compete on the Spanish power generating market, where in the future there will be a gradual increase in renewables, leaving an ever less room for fossil fuels. Output from Basque combined cycles over coming years will therefore depend on the Spanish power generation market and trends in demand, which fell sharply in 2009 with the onset of the financial crisis. The measures introduced to favour consumption of domestic coal, which came into force at the beginning of 2011, will reduce output from Basque combined cycle power stations and the Pasaia coal-burning station, to 2014. In this context, the authorities must continue to work to ensure that competitive Basque power stations are not left out of the system for reasons unconnected to the market, and can tender under the same conditions as other ordinary framework facilities. M.3.3.2. High efficiency thermoelectric power generation At the same time, because of its geographical location, the Basque Country, with a consolidated power market, an adequate past and future transmission network, and net power import requirements, is an ideal location for introducing new generating capacity. Although it is private initiative that develops new thermoelectric power generation projects, the government plans, within the current regulatory framework, to provide support to developers interested in developing thermoelectric power generation projects. Such projects should be based on the premises of using the best technologies available, being competitive, and minimising greenhouse gas emissions, atmospheric pollutants, and in general any local environmental impact. There is a significant imbalance throughout the territory of Gipuzkoa, especially in the eastern part, and also in the territory of Alava; both areas are large electricity importers, generating only a small proportion of their requirements and initiatives in these areas are therefore considered to be a priority.
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Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t .JOJTUSZ PG *OEVTUSZ 5PVSJTN BOE 5SBEF
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5.3. Technological and Industrial Development 5.3.1. Initiatives in Technology This area of “Technological and Industrial Development” (known as “EnergiBasque”, by analogy with the DIITT’s strategic sectoral initiatives, BioBasque and NanoBasque) seeks to make use of the major energy and environmental challenges as an opportunity for growth in Basque business sectors, through technological development, interbusiness co-operation and identification of new business opportunities. The Basque Country has a solid initial base for the purpose, given that the Basque energy industry is comprised of around 350 companies with a high degree of energy specialisation. Overall turnover comes to over €44 billion (2008 figures), with nearly €15.5 billion sourced locally, providing over 24,000 jobs. Companies in the Basque energy industry spend €190m per year on R&D, of which 58% is spent in the Basque Country. This is much higher than the 35% of their turnover which comes from the Basque Country and reflects the concentration in the region of activities of greatest added value. Indeed, R&D in energy directly employs nearly 2,000 people in the Basque Country. By energy area, renewable energy sources are gaining ground and now represent 35% of total employment in the industry, close to the figure for power transmission and distribution companies. The remainder is made up of oil (15%), natural gas (10%) and other Energies (5%). This is backed by an experienced and skilled scientific and technological network in the field of energy, with R&D spending of over €20 million, employing 330 people. The network comprises the technology corporations Tecnalia and IK4, the CIC energiGune (focusing on basic research into energy storage), the universities of the Basque Country (UPV-EHU), Deusto, Mondragon and Tecnum, as well as ten R&D units in the leading business groups.
Science & technology agents 7
Companies 356
Company R&D units 10
Overall energy … in the Basque Country turnover €44,206M €15,469M 35%
Overall R&D spending in energy €324M
… in the Basque Country
Overall jobs in energy
Overall R&D jobs in energy 2,948
… in the Basque Country
… in the Basque Country 68,625
24,378 36%
€188M 58%
1,905 65%
Figure 5.11. Key figures in the Basque energy industry Source: Energy Cluster, 2008 figures.
EnergiBasque’s commitment involves using energy policies as a magnet for innovative projects. It therefore constitutes a new and differentiated priority area of action within the 3E2020 Strategy, and represents an additional contribution to sustainable energy development. Globally, the energy industry is in a state of flux, and its development is closely tied to three key factors: t 5IF OFFE UP NJOJNJTF UIF FOWJSPONFOUBM JNQBDU PG FOFSHZ HFOFSBUJPO BOE DPOTVNQUJPO CZ JODSFBTJOH UIF Föciency of processes and cutting harmful emissions.
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t 5IF OFFE UP BTTVSF TVQQMZ BOE SFEVDF FOFSHZ EFQFOEFODZ TFFLJOH BT GBS BT QPTTJCMF UP QSFWFOU UIF FOFSHZ TVQply being controlled by a small group of countries, some in geo-politically precarious situations. t 5IF OFFE UP HVBSBOUFF TVTUBJOBCMF FDPOPNJD EFWFMPQNFOU JO XIJDI GPTTJM GVFM QSJDFT XJMM OPU IBWF B DSJUJDBM JNQBDU on the development of the countries’ economies. The importance and extent of these challenges calls for a change that goes beyond business-as-usual solutions. A technological revolution is needed that will provide a sustainable solution for the planet’s growing energy requirements and enable it to develop towards a low-carbon energy system. To achieve this, a variety of alternatives are being developed, which are at different degrees of maturity. These range from generation using renewables and energy efficiency to more long-term technologies such as carbon capture, transport and storage and nuclear fusion.
Description
Areas with greatest need of development
Technologies oriented to the reduction of energy use, forefficient electricity transport and distribution and those related with smart grids and energy storage
Energy efficiency Smart grids Storage
Generation
New power generation technologies with smaller carbon emissions, mostly renewable energy, and also more efficient technologies for powergeneration using fossil fuels or nuclear energy
Renewable energies Hydrocarbons Nuclear
End use fuel switching
Technologies aiding the switch of powergeneration from fossil fuels, and others introducing new energy models in transport, such as biofuels or electric vehicle
Electromobility
The development of carbon capture, transport and storage is a good alternative for improving the environmental sustainability of fossil fuel power plants
Carbon sequestration
Energy efficiency
Carbon capture and storage (CCS) CCS: Carbon Capture and Storage
Figure 5.12. Classification of low-carbon technologies Source: IEA.
Although low-carbon technologies first began to be mooted more than a decade ago, only recently has there been a coordinated and ambitious move towards developing and introducing them. In Europe, the clearest example is the European Union mandate setting a triple target for 2020: 20% reduction in greenhouse gas emissions, 20% increase in the share of renewable energy sources and 20% improvement in energy efficiency. The technological side to this plan has been developed under the European SET (Strategic Energy Technology) Plan, with a budget of over €65 billion for this decade. The involvement of the public administration will unquestionably be crucial for the success of this revolution. Implementation of consistent public support policies, which take into account and adapt to the different levels of maturity of these technologies will speed up their development and adoption. It is precisely this role that this line of action seeks to play in the area of the Basque Country.
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Given the current moment of change in the industry and its major presence in the Basque Country, it has been decided to draw up a specific strategy on technological and industrial development within the Basque Energy Strategy 3E2020. The strategy seeks to consolidate a competitive network of science-technology companies and agents within the energy industry, which will contribute to the sustainability of the Basque economy and develop as a source of wealth, employment and quality of life for the Basque country over coming decades. This mission is backed by an ambitious vision: “To turn the Basque Country into an international knowledge pole and a reference for industrial development in the energy industry”, structured around the three overall objectives developed in each of the lines of action. The following figure shows the eight energy areas selected as initiatives in each of the lines (T.1, T.2 and T.3) described below. The common framework of these energy areas is principally electricity and industrial equipment, with storage as a facilitator technology. In any case, although the priority areas form the core of the strategy, in the overall approach, continued support will be given to developing projects of excellence in areas not selected.
Consolidate Basque businessgenerating firms
New market opportunities
Activity in emerging areas Smart Grids
T&D
Wind
Transport Electrification Storage
Solar thermoelectric
SUMPTION CON
Waves
ERATION GEN
Offshore
PRIMARY ENERGY Non conventional gas exploration
Figure 5.13. Strategic areas of EnergiBasque
Technological and Industrial
T.1 Consolidate Basque business-generating firms in energy areas T.2 Desarrollar actividad empresarial en nuevos ámbitos emergentes
development T.3 Develop business activity in new emerging areas
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Energy service Management
Strategic areas and lines of operation | 3E-2020
T.1 CONSOLIDATE BASQUE BUSINESS-GENERATING FIRMS IN ENERGY AREAS The Basque energy industry includes companies that are competing globally in their respective fields and even some that are world leaders or major references for certain products and markets. This first line of action is oriented towards providing support for companies that consolidate their international competitive position, while at the same time seeking to ensure that their decision-making and development centres remain located in the Basque Country, and reinforcing their role as business-driving customers of Basque companies operating in their value chains, orienting that magnet effect towards products and services of greatest added value. The priority areas of action are: t 4NBSU HSJET 5IF SPMF PG UIF BENJOJTUSBUJPO JT UP TVQQPSU #BTRVF DPNQBOJFT JO EFWFMPQJOH B DPNQSFIFOTJWF JOUFSnationally-targeted, offer with the necessary functions and costs to be competitive. t 8JOE FOFSHZ *U JT QMBOOFE UP TVQQPSU MFBEJOH DPNQBOJFT JO EFWFMPQJOH B DPNQFUJUJWF PĂľFS BEBQUFE UP JODSFBTFE capacity of wind turbines and development of the offshore segment, creating a magnet effect throughout the rest of the value chain. t 4PMBS UIFSNPFMFDUSJD 5IF TUSBUFHZ TFFLT UP QMBDF #BTRVF DPNQBOJFT BU UIF UFDIOPMPHJDBM GPSFGSPOU PG UIFJS SFTQFDtive market segments, with a particular emphasis on central receiver and thermal storage technology.
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T.1 CONSOLIDATE BASQUE BUSINESS-GENERATING FIRMS IN ENERGY AREAS Consolidate Basque business-generating companies as technological references in their respective fields of energy, generating a magnet effect throughout the value chain, centring on high value added products.
Targets
2010 Situation
Where should the emphasis be placed in the future?
t 1FSDFOUBHF TQFOEJOH PO 3 % "$#$ 505"-
t 5VSOPWFS JO UIF #BTRVF $PVOUSZ JO 5 BSFBT
Ƚ CO
t +PCT JO UIF #BTRVF $PVOUSZ JO 5 BSFBT
t 4NBSU HSJET t 8JOE FOFSHZ t 4PMBS UIFSNPFMFDUSJD QPXFS t */*5*"5*7& 5 5P TVQQPSU B DPNQSFIFOTJWF BOE JOUFSOBUJPOBMMZ SFDPHOJTFE offer of smart grids
INITIATIVES
t */*5*"5*7& 5 5P TVQQPSU B DPNQFUJUJWF PõFS GSPN MFBEFST JO UIF highcapacity and offshore wind energy industry t */*5*"5*7& 5 5P QSPNPUF UFDIOPMPHJDBM MFBEFSTIJQ PG DPNQBOJFT JO solar thermoelectric power INDICATORS
TARGETS 2010
2015
Percentage of R&D performed by companies in the Basque Country/Total
58%
60%
Turnover in the Basque Country, companies in T.1 areas
3,050
4,000
Jobs in the Basque Country, companies in T.1 areas
12,800
15,000
BODY RESPONSIBLE
172
t 4VC %FQBSUNFOU PG *OOPWBUJPO BOE 5FDIOPMPHZ
Strategic areas and lines of operation | 3E-2020
T.2 DEVELOP BUSINESS IN NEW EMERGING AREAS The development capacity of new technologies and services must be oriented towards areas where there is sufficient technological base in the network of scientific and technological agents; synergy is promoted with other business technological and related areas; and there are major possibilities for market development. Actions in this area of emerging products will prioritise: t 1PXFS TUPSBHF 5IF BJN JT UP HFOFSBUF IJHI MFWFM TDJFOUJmD BOE UFDIOPMPHJDBM DBQBDJUJFT BOE LOPXMFEHF UIBU FOable companies to incorporate these technologies into applications with large growth potential such as the integration of renewables, power grid management and transport electrification. t 8BWF FOFSHZ )FSF UIF BJN JT UP DPOTPMJEBUF B TDJFOUJmD BOE UFDIOPMPHJDBM PĂľFSJOH BOE B WBMVF DIBJO XJUI B TVQQMZ of equipment, components and specific services for marine energy that can benefit from the magnet effect of a one-off experimentation infrastructure currently underway in the Basque Country.
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T.2 TO DEVELOP BUSINESS ACTIVITY IN NEW EMERGING AREAS Develop business activities in new emerging energy areas, in which both industry and the science-technology agents now have a solid technological base acting as a launch pad.
Targets
2010 Situation Where should the emphasis be placed in the future?
t 5VSOPWFS PG 5 DPNQBOJFT
Č˝ CO
t +PCT JO 5 DPNQBOJFT
QFPQMF
t &OFSHZ TUPSBHF t 8BWF FOFSHZ t */*5*"5*7& 5 5P HFOFSBUF DBQBDJUJFT BOE LOPXMFEHF JO power storage
INITIATIVES
t */*5*"5*7& 5 5P DPOTPMJEBUF B TDJFOUJmD UFDIOPMPHJDBM TVQQMZ BOE WBMVF chain in wave energy INDICATORS
TARGETS 2010
2015
Turnover in the Basque Country in T.2 areas (â&#x201A;Źm)
60
200
Employment in the Basque Country in T.2 areas (jobs)
200
500
New TBCs in T.2 areas
â&#x20AC;&#x201C;
5
Foreign investment in T.2 areas (â&#x201A;Źm)
â&#x20AC;&#x201C;
25
PCT patents registered in T.2 areas
â&#x20AC;&#x201C;
3
No. of researchers in T.2 areas (persons)
â&#x20AC;&#x201C;
100
International scientific publications in T.2 (Num)
â&#x20AC;&#x201C;
20
BODY RESPONSIBLE
174
t 4VC %FQBSUNFOU PG *OOPWBUJPO BOE 5FDIOPMPHZ
Strategic areas and lines of operation | 3E-2020
T.3 GENERATE NEW MARKET OPPORTUNITIES WITH 3E2020 ENERGY INVESTMENT This third line includes technological areas directly related to initiatives and actions raised in the previous areas of the 3E2020 for energy purposes, but whose development can generate technological and/or market opportunities for Basque companies, producing synergies of interest. The new opportunities will centre on the following areas: t &MFDUSJmDBUJPO PG USBOTQPSU *U JT B QSJPSJUZ PCKFDUJWF GPS UIF #BTRVF $PVOUSZ UP EFWFMPQ B EJĂľFSFOUJBM PĂľFS PG DIBSHing infrastructure and support services for electric vehicles, taking advantage of synergies with smart grids and storage technologies. t .BOBHFNFOU PG FOFSHZ TFSWJDFT MJOLFE UP UIF mFME PG FĂśDJFODZ 'PS UIJT QVSQPTF JU JT OFDFTTBSZ UP QSPNPUF TUSVDtured, demanding and sophisticated demand for energy services in buildings, that will drive the development of an innovating business offering based on ICT, smart technologies and value added services. t &YQMPSBUJPO PG OPO DPOWFOUJPOBM HBT 5IF DPNNJUNFOU JT UP EFWFMPQ B TVQQMZ PG MPDBM QSPEVDUT BOE TFSWJDFT UIBU will make it possible to capitalise on the resulting investment in the event of viable gas reserves being found in the Basque Country.
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T.3 GENERATE NEW MARKET OPPORTUNITIES WITH THE ENERGY INVESTMENT INCLUDED IN THE 3E-2020 Based on the investment promoted in the 3E2020, generate new energy opportunities and markets that can be harnessed by the Basque business world.
Targets
t 4USBUFHZ GPS JOUSPEVDUJPO PG FMFDUSJD WFIJDMFT JO UIF #BTRVF $PVOUSZ 2010 Situation
t #BTRVF (PWFSONFOU T &4& 1MBO t 1SPKFDU GPS EFWFMPQNFOU PG FYQMPSBUPSZ XFMMT JO UIF (SBO &OBSB MJDFOTF
Where should the emphasis be placed in the future?
t &MFDUSJmDBUJPO PG USBOTQPSU t .BOBHFNFOU PG FOFSHZ TFSWJDFT t &YQMPSBUJPO PG OPO DPOWFOUJPOBM HBT t */*5*"5*7& 5 5P EFWFMPQ B EJõFSFOUJBM SBOHF PG &7 charging and service support infrastructures t */*5*"5*7& 5 5P EFWFMPQ FYBDUJOH BOE TPQIJTUJDBUFE EFNBOE GPS energy services in buildings
INITIATIVES
t */*5*"5*7& 5 5P GPTUFS B SBOHF PG QSPEVDUT BOE TFSWJDFT JO UIF BSFB PG nonconventional gas exploration INDICATORS
TARGETS 2010
2015
New TBCs in T.3 areas
â&#x20AC;&#x201C;
10
Foreign investment in T.3 areas (â&#x201A;¬m)
â&#x20AC;&#x201C;
30
No. of EV charging stations in the Basque Country
â&#x20AC;&#x201C;
8,000
No. of public buildings with efficient energy management (by means of ESCOs)
â&#x20AC;&#x201C;
30
No. of non-conventional gas exploration wells drilled in the Basque Country
â&#x20AC;&#x201C;
5
BODY RESPONSIBLE
176
t 4VC %FQBSUNFOU PG *OEVTUSZ BOE &OFSHZ
Strategic areas and lines of operation | 3E-2020
TECHNOLOGICAL AND INDUSTRIAL DEVELOPMENT ACTION LINES AND INITIATIVES LINES
INITIATIVES INITIATIVE T.1.1.- To support a comprehensive and internationallyrecognised offer of smart grids
T.1 CONSOLIDATE BASQUE BUSINESS-GENERATING FIRMS IN ENERGY AREAS
BODY RESPONSIBLE Sub-Department of Innovation and Technology
BODY RESPONSIBLE: Sub-Department of Innovation and Technology COLLABORATORS: Sub-Department of Industry and Energy / EVE / SPRI INITIATIVE T.1.2.- To support a competitive offer from leaders in the highcapacity and offshore wind energy industry BODY RESPONSIBLE: Sub-Department of Innovation and Technology COLLABORATORS: Sub-Department of Industry and Energy / EVE / SPRI INITIATIVE T.1.3.- To promote technological leadership of companies in solar thermoelectric power BODY RESPONSIBLE: Sub-Department of Innovation and Technology COLLABORATORS: Sub-Department of Industry and Energy / EVE / SPRI INITIATIVE T.2.1.- To generate capacities and knowledge in power storage
T.2 DEVELOP BUSINESS IN NEW EMERGING AREAS
BODY RESPONSIBLE Sub-Department of Innovation and Technology
BODY RESPONSIBLE: Sub-Department of Innovation and Technology COLLABORATORS: Sub-Department of Industry and Energy / EVE / SPRI INITIATIVE T.2.2.- To consolidate a scientific technological supply and value chain in wave energy BODY RESPONSIBLE: Sub-Department of Industry and Energy COLLABORATORS: Sub-Department of Innovation and Technology / EVE / SPRI INITIATIVE T.3.1.- To develop a differential range of EV charging and service support infrastructures
T.3 GENERATE NEW MARKET OPPORTUNITIES WITH 3E2020 ENERGY INVESTMENT
BODY RESPONSIBLE Sub-Department of Industry and Energy
BODY RESPONSIBLE: Sub-Department of Industry and Energy COLLABORATORS: Sub-Department of Innovation and Technology / EVE / SPRI INITIATIVE T.3.2.- To develop exacting and sophisticated demand for energy services in buildings BODY RESPONSIBLE: Sub-Department of Industry and Energy COLLABORATORS: Sub-Department of Innovation and Technology / EVE INITIATIVE T.3.3.- To foster a range of products and services in the area of non-conventional gas exploration BODY RESPONSIBLE: Sub-Department of Industry and Energy COLLABORATORS: Sub-Department of Innovation and Technology / EVE / SPRI
Table 5.3. Technological and Industrial Development. Action lines and initiatives
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5.3.2. Actions in Technology ACTION LINE T1: CONSOLIDATE BASQUE BUSINESS-GENERATING FIRMS IN ENERGY AREAS
INITIATIVE T.1.1. To support a comprehensive and internationally-recognised offer of smart grids
Targets t 4VQQPSU UIF EFWFMPQNFOU PG B DPNQFUJUJWF BOE JOUFHSBUFE TVQQMZ JO TFHNFOUT PG UIF WBMVF DIBJO JO XIJDI #BTRVF companies are vying for a position of international leadership, mainly in low voltage protection and measuring equipment and in transformer centres. t &ODPVSBHF SFTFBSDI BOE EFWFMPQNFOU JO LFZ UFDIOPMPHJFT GPS UIF GVUVSF PG UIJT BSFB TVDI BT QPXFS FMFDUSPOJDT and modelling of smart grids. Actions Actions
Body responsible
Collaborators
T.1.1.1. INGRID grid research centre
DIICT - Sub-Department of Innovation and Technology
SPRI
T.1.1.2. Projects for introduction of smart grids
DIICT – Sub-Department of Industry and Energy
EVE
T.1.1.3. Galvanisation: Collaboration between companies and development of legislation
DIICT – Sub-Department of Industry and Energy
EVE
T.1.1.1. Knowledge generation, INGRID grid research centre The barriers to development of smart grids are related more to high levels of investment and the problem of innovating such an inter-related system as the power grid than to research into new technologies, and therefore this axis of action is less relevant than others. Nonetheless, there are technological areas that require closer attention, such as power electronics, sensor systems and advanced conductors, among others. It is therefore proposed to support the R&D supply in developing key technologies for adapting the portfolio of products and services of Basque companies to smart grids, and specifically to collaborate in promoting the work of Tecnalia’s INGRID centre for smart grid research. The Tecnalia INGRID smart grid research centre will involve investment of around €20 million and is due to come into operation from 2015.
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T.1.1.2. Projects for introduction of smart grids The Basque Country has a singular industrial potential for developing these technologies, with powerful high-tech companies competing on global stage. However, in addition to the technological and logistical challenges these new power grids pose, the chief obstacle to rapid implementation is to introduce the necessary changes in legislation and regulations, in order to ensure that these technologies have sufficient financing to make the investments they require. Until this ideal scenario exists, it is proposed to make a real commitment to demonstrating the potential of these technologies through specific applications, demonstration projects and pilot schemes. The goal is to provide investment, operation and management of the assets that make power grids â&#x20AC;&#x153;smartâ&#x20AC;? and energy-efficient. This will use public-private collaboration arrangements that will contribute to reducing the risk and uncertainty involved in this investment until such time as there is a suitable regulatory framework in place with necessary price and payment signals. The principal efforts will therefore need to focus on support to the value chain in encouraging R&D activity oriented towards developing a specific comprehensive offering of smart grids (smart meters, concentrators, transformer centres, etc.) and in introducing these solutions through active participation in demonstration projects. T.1.1.3. Galvanisation: Collaboration between companies and development of legislation Despite the fact that large number of companies are now moving to this area, there is still not the necessary coordination to optimise the combined result. Actions therefore need to be taken to facilitate knowledge exchange, collaboration between companies and, ultimately, the development of comprehensive offerings, with the additional aim of promoting the image of the Basque Country as a pole of competence in smart grids. It is also necessary to strengthen and structure Basque presence on standardisation bodies and forums related to smart grids, in order to obtain first-hand knowledge of their activities, influence the results and, where applicable, orient local certification capacities accordingly. This presence on forums must consequently give the Basque Country the capacity to propose new regulatory measures in the field and bring influence to bear at the corresponding levels (Spanish government, EC, etc.) in establishing appropriate regulatory frameworks. Generating opinions, criteria and proposals in this field (and in other areas of energy that will be discussed in other initiatives) requires the creation of an energy think-tank grounded on the capacities and lead position of organisations such as EVE and Orkestraâ&#x20AC;&#x2122;s professorship in energy. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t 4VC %FQBSUNFOU PG *OOPWBUJPO BOE 5FDIOPMPHZ t &OUF 7BTDP EF &OFSHĂ&#x201C;B o &7& t 4PDJFUZ GPS *OEVTUSJBM %FWFMPQNFOU BOE 3FTUSVDUVSJOH o 413* t .JOJTUSZ PG *OEVTUSZ 5PVSJTN BOE 5SBEF t &VSPQFBO $PNNJTTJPO
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Strategic areas and lines of operation | 3E-2020
INITIATIVE T.1.2. To support a competitive offer from leaders in the highcapacity and offshore wind energy industry
Targets t 4VQQPSU UIF EFWFMPQNFOU PG B UFDIOPMPHJDBMMZ TUBUF PG UIF BSU PĂľFS JO TFHNFOUT PG UIF WBMVF DIBJO JO XIJDI #BTRVF companies have a good starting position, related to wind turbine components and equipment and wind farm systems and services in general. t 1SPNPUF BEBQUBUJPO PG UIF DVSSFOU QPSUGPMJP PG QSPEVDUT BOE TFSWJDFT UP MBSHFS XJOE UVSCJOFT BOE EFWFMPQNFOU PG the offshore segment. Actions Actions
Body responsible
Collaborators
T.1.2.1. Knowledge generation in off-shore technologies
DIICT - Sub-Department of Innovation and Technology
EVE â&#x20AC;&#x201C; SPRI
T.1.2.2. Development of Strategic Industrial Research Projects
DIICT - Sub-Department of Innovation and Technology
EVE â&#x20AC;&#x201C; SPRI
T.1.2.3. Internationalisation of supply
DIICT - Sub-Department of Innovation and Technology
SPRI
T.1.2.1. Knowledge generation in off-shore technologies Although wind energy is one of the most mature renewables from a technological and commercial point of view, it still requires a technological drive that will ultimately enable it to match its generation costs to those of other conventional sources. Inter alia, this will mean the development of higher-capacity, more efficient and more profitable wind turbines. Likewise, the outlook for growth in offshore wind due to its energy-generating potential (in terms of both efficiency and available resource) means that R&D resources will have to be devoted to adapting current equipment and systems to the characteristics of the new segment. In particular, this will include aspects such as foundation, mooring, berth and flotation systems; larger-capacity wind turbines; ad-hoc power take-off systems; and installation, operation and maintenance services. For this reason, determined support will be given in the field of knowledge generation to science/technology agents, to help them develop key technologies for adapting the portfolio of products and services of Basque companies to the offshore market (e.g. corrosion-proofing and power electronics). T.1.2.2. Development of Strategic Industrial Research Projects In keeping with indications on knowledge generation, support will also be given to companies in Strategic Industrial Research Programmes in developing equipment for higher-capacity wind turbines or adaptation to the offshore segment. Encouragement will be given to R&D activities oriented towards developing a specific offshore wind offer (products and services) and participation in demonstration projects with a view to acquiring expertise in this segment. Consideration is being given to the possibility of commissioning a demonstration offshore wind farm in the Basque Country.
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Strategic areas and lines of operation | 3E-2020
T.1.2.3. Internationalisation of supply On the wind market it is of fundamental importance to target the industryâ&#x20AC;&#x2122;s offer towards areas of particular growth such as China, the USA, the UK and India. Specific support will therefore be given to internationalisation activities. It is also important to establish meeting points and networking between agents in the system and other organisations not located in the Basque Country, as well as collaboration agreements (energy cluster, technology centres, etc.) with leading agents or regions in the area of offshore wind power (Scotland, England, Norway, etc.). In this regard the Basque Energy Clusterâ&#x20AC;&#x2122;s work of promoting, galvanising and coordinating activities will be of particular importance. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t 4VC %FQBSUNFOU PG *OOPWBUJPO BOE 5FDIOPMPHZ t &OUF 7BTDP EF &OFSHĂ&#x201C;B o &7& t 4PDJFUZ GPS *OEVTUSJBM %FWFMPQNFOU BOE 3FTUSVDUVSJOH o 413* t .JOJTUSZ PG *OEVTUSZ 5PVSJTN BOE 5SBEF t &VSPQFBO $PNNJTTJPO
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Strategic areas and lines of operation | 3E-2020
INITIATIVE T.1.3. To promote technological leadership of companies in solar thermoelectric power
Targets t $POTPMJEBUF UIF #BTRVF $PVOUSZ T QPTJUJPO BT B LFZ SFHJPO JO UIF EFWFMPQNFOU PG DFOUSBM SFDFJWFS UFDIOPMPHZ providing support to activities oriented towards lowering generating costs by reducing the cost of investment, operation and maintenance, optimising control systems and reducing the cost of components. t 4VQQPSU UIF EFWFMPQNFOU PG OFX BVYJMJBSZ TPMVUJPOT TVDI BT TUPSBHF USBOTGFS PS IZCSJEJ[BUJPO TZTUFNT UIBU BMMPX overall efficiency of the plants to be increased. t 4VQQPSU UIF EFWFMPQNFOU PG B DPNQFUJUJWF WBMVF DIBJO IBSOFTTJOH FYJTUJOH TUSFOHUIT JO DFSUBJO NBSLFU OJDIFT BOE developing increasingly efficient and lower-cost alternatives. Actions Actions
Body responsible
Collaborators
T.1.3.1. Promotion of basic oriented research among R&D agents
DIICT - Sub-Department of Innovation and Technology
EVE - SPRI
T.1.3.2. Strategic industrial research projects
DIICT - Sub-Department of Innovation and Technology
SPRI
T.1.3.3. Galvanisation of the industry
DIICT - Sub-Department of Innovation and Technology
EVE - SPRI
T.1.3.1. Promotion of basic oriented research among R&D agents Although solar thermoelectric is expected to be the most economically profitable solar energy type in the 30-400 MWe range, it is still involved in a process of major technological development. There are several Basque companies with their own technology in this field, but it is necessary to continue providing support to work in this field, to ensure that we remain at the forefront once the technology matures and the fruit of this commitment to R&D begins to be gathered. Unlike other energy areas, in this field the technological offer appears to react reactively to the needs of the sector, and it would therefore be helpful to encourage the commitment to solar thermoelectric power by the network of technology centres and other R&D agents. This will require support in setting up a programme of basic research oriented towards thermal storage systems, led by the storage area of the CIC energiGune. Support will also be given to training researchers and technologists in areas of interest, for example, in relationship to the development of central receiver technology. T.1.3.2. Strategic industrial research projects 5IF NPNFOUVN HFOFSBUFE CZ CVTJOFTT HFOFSBUJOH DPNQBOJFT TVDI BT 5PSSFTPM 4&/&3 BOE *CFSESPMB *OHFOJFSĂ&#x201C;B should be harnessed to develop a chain of suppliers to maximise the knowledge and value generated in the Basque Country. Here, consideration should be given to initiatives that provide support to companies already involved in developing some component or service in this energy area and that also encourage the participation of agents not yet involved, especially in those links of the chain that are still not covered by the Basque Country.
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Strategic areas and lines of operation | 3E-2020
Support should therefore be given to new programmes under development in the field of central receiver technology, which will also serve to strengthen partnerships between business-generating companies and the value chain and identify new products and services not covered at present. T.1.3.3. Galvanisation of the industry Given that this is a technology that is still under development but with imminent prospects for industrial growth, it is important to carry out galvanisation activities that will consolidate the Basque Countryâ&#x20AC;&#x2122;s position as a region of reference in this area. For this purpose, it is recommended that meeting points and networking be established between agents in the system and other organisations not located in the Basque Country, and that collaboration agreements (cluster, technology centres, etc.) be fostered with agents or regions of reference in the area of solar thermoelectric power. In this area it is especially important to provide support for internationalisation activities targeting areas of particular market growth, such as the USA, North Africa and the Middle East. The Basque Energy Clusterâ&#x20AC;&#x2122;s work in driving, galvanising and coordinating activities will be particularly important, as will support from the Internationalisation Directorate of the DIITT and SPRI. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t 4VC %FQBSUNFOU PG *OOPWBUJPO BOE 5FDIOPMPHZ t &OUF 7BTDP EF &OFSHĂ&#x201C;B o &7& t 4PDJFUZ GPS *OEVTUSJBM %FWFMPQNFOU BOE 3FTUSVDUVSJOH o 413* t .JOJTUSZ PG *OEVTUSZ 5PVSJTN BOE 5SBEF t &VSPQFBO $PNNJTTJPO
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Strategic areas and lines of operation | 3E-2020
ACTION LINE T2: TO DEVELOP BUSINESS ACTIVITY IN NEW EMERGING AREAS
INITIATIVE T.2.1. To generate capacities and knowledge in power storage
Targets t %FWFMPQ B UFDIOPMPHJDBM QPTJUJPO PG SFGFSFODF JO TUPSBHF HFOFSBUJOH OFX UFDIOPMPHJDBM DBQBDJUJFT MJUIJVN CBTFE batteries, other advanced batteries (Na, Mg, Redox), supercapacitors and consolidating existing capacities centring on lithium ion batteries and PEMFC and SOFC fuel cells, to create lower cost systems with greater battery range and efficiency rates. t *ODPSQPSBUF UIFTF UFDIOPMPHJFT JOUP TQFDJmD BQQMJDBUJPOT JO BMM OJDIFT JO XIJDI UIFTF BMUFSOBUJWFT BSF DPNQFUJUJWF in terms of cost and efficiency, in cooperation with any local agents who might be interested, mainly in areas of integration with renewable energy, power grid management or transport electrification. Actions Actions
Body responsible
Collaborators
T.2.1.1. Commitment to the CIC energiGune as a scientific infrastructure
DIICT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
T.2.1.2. Strategic industrial research and demonstration projects
DIICT - Sub-Department of Innovation and Technology
SPRI - EVE
T.2.1.1. Commitment to the CIC energiGune as a scientific infrastructure Although the world of technological storage alternatives is a very broad one, in the Basque Country capacities have been developed in certain technological niches which have placed companies and technology centres at the forefront of research into this type of technology at a European level. The critical role that will be played by energy storage in other areas (such as renewable energy, the power grid and electric vehicles) makes it advisable to continue supporting and reinforcing research and development into technologies in which the Basque Country can be well placed and have a differential advantage over other regions. One of the cornerstones of this commitment is the CIC energiGune, which aims to become a scientific infrastructure of international reference in the area of electrical and thermal energy storage technologies. To do this, the CIC energiGune will develop basic research projects in the two aforementioned areas: specifically in projects of electrochemistry for batteries and supercapacitors, materials for developing cathodes, anodes and electrolytes metal-air batteries, especially with lithium and sodium-ion, and for interfaces; and in medium and high-temperature thermal storage through phase-change and thermochemical reactions, widely applicable in thermosolar plants, as discussed above. T.2.1.2. Strategic industrial research and demonstration projects Although there is only a small number of providers operating in the area of storage in the Basque Country, the region is home to several major power electronics manufacturers, some of most important engineering firms in Spain and a group of end users in areas such as transport (light rail, buses, vans, etc.), renewable energy and equipment for the power grid. Consideration will be given to initiatives to capitalise on the presence of this varied group of agents to find applications for the knowledge generated in the most basic research projects.
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Strategic areas and lines of operation | 3E-2020
The aim of these initiatives is to develop the business structure in this field, either by creating new technology-based companies or by attracting multinationals with own technology. Among these initiatives, support will be given to new Strategic Industrial Research programmes in developing storage technologies and in their cross-cutting application in different sectors, as well as in developing demonstration projects such as, for example, the use of storage devices associated with renewable generation plants ad power grid infrastructures. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t 4VC %FQBSUNFOU PG *OOPWBUJPO BOE 5FDIOPMPHZ t &OUF 7BTDP EF &OFSHĂ&#x201C;B o &7& t 4PDJFUZ GPS *OEVTUSJBM %FWFMPQNFOU BOE 3FTUSVDUVSJOH o 413* t .JOJTUSZ PG *OEVTUSZ 5PVSJTN BOE 5SBEF t &VSPQFBO $PNNJTTJPO
185
Strategic areas and lines of operation | 3E-2020
INITIATIVE T.2.2. To consolidate a scientific technological supply and value chain in wave energy
Targets t -BVODI JOJUJBUJWFT UIBU GBWPVS UIF QPTJUJPOJOH PG UIF OFUXPSL PG 3 % J BHFOUT BOE UIF #BTRVF WBMVF DIBJO BT BO international reference, beginning by maximising the benefit generated by the existence of a globally iconic infrastructure, the bimep. t 4VQQPSU #BTRVF DPNQBOJFT JO EFWFMPQJOH B TQFDJmD PõFS GPS XBWF FOFSHZ JODMVEJOH 8&$ DPNQPOFOUT 150 systems), equipment and the auxiliary wave farm services (such as power take-off, power electronics, operation and maintenance). Actions Actions
Body responsible
Collaborators
T.2.2.1. Bimep Marine Energy Research Centre
DIICT – Sub-Department of Industry and Energy
EVE
T.2.2.2. Development of the value chain
DIICT - Sub-Department of Innovation and Technology
EVE - SPRI
T.2.2.3. International positioning and regulatory framework
DIICT – Sub-Department of Industry and Energy
EVE - SPRI
T.2.2.1. Biscay Marine Energy Platform - bimep Marine Energy Research Centre Wave energy is still at an emerging phase, requiring significant R&D to develop a cost-efficient option that can compete with other energy sources. In the case of the ACBC, the Basque Government’s commitment to developing the industry is facilitating the development of a scientific and technological offer that is beginning to have a global presence through initiatives such as the bimep and the plant at Mutriku. Full harnessing of the bimep’s potential as an infrastructure for knowledge generation is the basic pillar of the commitment to this emerging industry. The bimep will be an infrastructure for research, testing, demonstration and operation of offshore converter systems. It will attract developers and technologists wishing to install and test marine energy WECs, with the ultimate aim of building an economy and industry in the marine energy industry. Construction has already begun on the platform and it will be fully operational at the end of 2012. It provides a unique opportunity for establishing an associated research centre that will enable both researchers from different specialities and the technologists themselves to analyse the performance of the WECs, test operating conditions of all the systems in the connection infrastructures, and assess levels of environmental integration under different sea conditions (wave, wind, etc.). Using the bimep as a springboard, it will be necessary to continue devoting resources to strengthening the capacities of the R&D offer in this field, and gradually to achieve greater involvement by Basque companies in knowledge generation.
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Strategic areas and lines of operation | 3E-2020
T.2.2.2. Development of the value chain As the Catalogue of Basque Marine Energy Capacities showed, there are many companies in the Basque Country with the capacity and interest to develop products and services in the area of wave energy. However, few currently have a specific offer or previous experience in the field of wave energy. It is therefore necessary to help develop the value chain in these lines. This value chain will to a great extent be completed with the creation of new technologybased companies by attracting multinationals with their own technology in marine WECs who can enter into partnerships with local suppliers. In order to achieve this business development, as well as supporting new strategic industrial research projects in generation devices, equipment and components, it will also be necessary to give very special support to demonstration projects and tests with a view to acquiring experience in marine technologies. Innovative programmes need to be launched to support developers and technologists from anywhere in the world with a potential interest in using the bimep to demonstrate and test their devices and technologies. T.2.2.3. International positioning and regulatory framework The technological actions and actions to develop the value chain, must be backed by others that foster the relationship between Basque agents and other global players (forums, networking, organisation of key events such as ICOE 2010, collaboration agreements, etc.), which will also serve to reinforce the position of the Basque Country at an international level. Another important line of action in this technology involves continuing to petition the central government to establish a regulatory framework to incentivise the development of marine energy. This will require drawing up and defending specific proposals on the most appropriate level of payment at any given time and for each technology, simplification and speeding-up of administrative processes and site authorisations and coordination and alignment of support initiatives to the industry from the different tiers of government involved (European, central and regional). In this area the contributions of the future energy think tank (the creation and development of which has been set out in other initiatives above) will be important. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t 4VC %FQBSUNFOU PG *OOPWBUJPO BOE 5FDIOPMPHZ t &OUF 7BTDP EF &OFSHĂ&#x201C;B o &7& t 4PDJFUZ GPS *OEVTUSJBM %FWFMPQNFOU BOE 3FTUSVDUVSJOH o 413* t .JOJTUSZ PG *OEVTUSZ 5PVSJTN BOE 5SBEF t &VSPQFBO $PNNJTTJPO
187
Strategic areas and lines of operation | 3E-2020
ACTION LINE T3: GENERATE NEW MARKET OPPORTUNITIES WITH 3E2020 ENERGY INVESTMENT
INITIATIVE T.3.1. To develop a differential range of EV charging and service support infrastructures
Targets t 4VQQPSU #BTRVF DPNQBOJFT JO EFWFMPQJOH B EJõFSFOUJBM PõFS JO JOGSBTUSVDUVSF GPS FMFDUSJD WFIJDMFT JO UFSNT CPUI PG charging stations and other equipment and services associated with deployment of the infrastructure. t 4FU VQ B EFNPOTUSBUJPO DIBSHJOH JOGSBTUSVDUVSF JO UIF #BTRVF $PVOUSZ UIBU XJMM BDU BT BO JOUFSOBUJPOBM SFGFSFODF and serve as a “letter of introduction” for Basque companies offering their products and services on other markets. Actions Actions
Body responsible
Collaborators
T.3.1.1. Technological development of own supply in products and services
DIICT – Sub-Department of Industry and Energy
EVE
T.3.1.2. Local demand through deployment of charging network in the Basque Country
DIICT – Sub-Department of Industry and Energy
EVE
T.3.1.3. Regulatory standardisation and development
DIICT – Sub-Department of Industry and Energy
EVE
T.3.1.1. Technological development of own supply in products and services Although the technological barriers to the development of a charging infrastructure are not as exacting as in the case of the vehicle itself (e.g. batteries), R&D is still required, with different focuses depending on how implementation progresses; the first focus will be on slow, semi-fast and fast charging stations, followed subsequently by coordinated management and, finally, adaptation of the network to the demands of large numbers of vehicles. Given the strong presence of industrial electric equipment manufacturers, several Basque firms have begun developing their own supply of products and services. The technological development of these products and services will require backing from public institutions and scientific and technological agents. T.3.1.2. Local demand through deployment of charging network in the Basque Country The general introduction of electric vehicles requires the prior provision of an electrical support infrastructure capable of meeting their energy, capacity and communication requirements. This is one of the strategy’s axes of action for introduction of EVs in the Basque Country, as discussed in greater length above. The purpose is to make use of this investment in the charging infrastructure to incentivise Basque companies in the industry to develop their own range of products.
188
Strategic areas and lines of operation | 3E-2020
At present, the transport electrification business is still small, with companies mostly still working on prototypes or products at development phase. It is therefore recommended that actions be launched to facilitate their access and success on the final market; one of the critical initiatives involves developing a local charging infrastructure which, in the area of public procurement, will enable companies to test and improve their products and give them critical prior experience for accessing other customers. In this regard, the creation of a company whose mission is to develop an EV charging infrastructure network is of key importance in creating this local exacting and pioneering demand. The goal of making investment, operation and management of the charging assets through a publicprivate collaboration scheme, is thus complemented by the goal of contributing to reduce the risks and uncertainties of this fledgling market, in which both the legal framework and the business models throughout their value chains have yet to be consolidated. T.3.1.3. Regulatory standardisation and development The emerging nature of this market means that there is currently intense activity underway in the field of standardisation, normalisation and exchange of information at an international level. This includes such crucial aspects as definition of the figure of the charge manager, standardisation of connectors, legislation on certification and authorisation of installations, etc. Support and incentives need to be provided for the large-scale presence of Basque companies and organisations on international discussion and decision-making forums, not only to avail of the information, but also as far as possible to participate and influence the most significant measures for Basque industries and even to promote innovating regulations within the powers of the ACBC. In this area the contributions of the future energy think tank (the creation and development of which has been set out in other initiatives above) will be important. It is also important to encourage partnerships between Basque companies in order to develop a coordinated and complementary commercial offer in this emerging area, complemented by companies from other countries that will help strengthen the competitive position. Support must therefore be given to the actions of the Basque Energy Cluster, including its collaboration agreement with the Automotive Industry Cluster, facilitating collaboration between their companies, mainly in business areas involving a link between the two fields (e.g. batteries and charging stations, vehicle-infrastructure communication, etc.). Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t &OUF 7BTDP EF &OFSHĂ&#x201C;B o &7& t 4PDJFUZ GPS *OEVTUSJBM %FWFMPQNFOU BOE 3FTUSVDUVSJOH o 413* t .JOJTUSZ PG *OEVTUSZ 5PVSJTN BOE 5SBEF t &VSPQFBO $PNNJTTJPO
189
Strategic areas and lines of operation | 3E-2020
INITIATIVE T.3.2. To develop exacting and sophisticated demand for energy services in buildings
Targets t 4VQQPSU UIF DSFBUJPO BOE HSPXUI PG UIF CVTJOFTT PĂľFS PG FOFSHZ TFSWJDFT FJUIFS CBTFE PO OFX DPNQBOJFT PS PO the transformation of other existing ones, linked to the field of energy efficiency. Actions Actions
Body responsible
Collaborators
T.3.2.1. Encouragement of example-setting projects by the administration
DIICT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
T.3.2.2. Galvanisation: Legal and financial measures
DIICT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE
T.3.2.1. Encouragement of example-setting projects by the administration The market of energy service companies (ESCOs) is an emerging one in the Basque Country but it is well consolidated in other developed countries such as the USA, Germany and Northern Europe. Any actions taken must focus firstly on encouraging the creation of new companies or orienting existing ones towards this type of higher added value activity. The second focus must be on promotion and demonstration measures by the public administration that will allow companies to acquire the necessary experience to take on the private segment. This will require setting up demonstration and â&#x20AC;&#x153;example-settingâ&#x20AC;? projects for contracting energy services in government buildings, in line with the 100 ESE Plan currently being drawn up by the Basque Government T.3.2.2. Galvanisation: Legal and financial measures Galvanisation of the industry must be based on measures that promote the legal security of the ESCOs. It must also, as far as possible, include programmes that help these companies access the financing they need to undertake investment in reforming buildings and installations whose energy efficiency is to be improved through their management. In this area, it is also important to overcome any possible legal hurdles or conflicts, by setting out mechanisms for tendering and awarding contracts and for determining EPC contracts that will instil confidence amongst building proprietors and give them control capacity, while allowing the ESCOs to recover their investment and generate business with a reasonable return. Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism â&#x20AC;&#x201C; Sub-Department of Industry and Energy. Other departments or administrations involved t #BTRVF (PWFSONFOU %FQBSUNFOUT t #BTRVF QVCMJD BVUIPSJUJFT t *OTUJUVUF GPS &OFSHZ %JWFSTJmDBUJPO BOE 4BWJOH *%"&
190
Strategic areas and lines of operation | 3E-2020
INITIATIVE T.3.3. To foster a range of products and services in the area of nonconventional gas exploration
Targets t 4VQQPSU DSFBUJPO BOE HSPXUI PG UIF CVTJOFTT PĂľFS PG OPO DPOWFOUJPOBM HBT FYQMPSBUJPO CZ BEBQUJOH UIF QPSUGPMJP of companies sharing points in common with the equipment and services used in this field, such as pipes, valves, new materials, pumping equipment and computer applications, among others. Actions Actions
Body responsible
Collaborators
T.3.3.1. Investment in exploration wells
DIICT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE/SHESA
T.3.3.2. Speeding up authorisations and periods
DIICT â&#x20AC;&#x201C; Sub-Department of Industry and Energy
EVE/SHESA
T.3.3.1. Investment in exploration wells Although the Basque Country probably has unconventional gas resources, this cannot be established beyond doubt until the necessary exploration work is carried out over the coming years, through important investment that EVE plans to make in joint-ventures with private companies, in compliance with the commitments it acquired in its exploration licenses (concentrated in â&#x20AC;&#x153;Gran Enaraâ&#x20AC;?). If economically viable unconventional gas reserves are eventually found, production would involve major investment in derricks and drilling equipment as well as in other auxiliary products and services. The actions established in this axis must therefore centre on facilitating access by Basque companies to this new market, by encouraging organisations that have products and services related to the technologies needed in non-conventional gas exploration to adapt their offer accordingly. In order to securely develop the wells in which EVE currently has commitments, it will first be necessary to contract and attract leading multinationals and, where applicable, establish agreements with them for research and development of the reserves. In parallel, it will be necessary to design schemes to encourage training and R&D oriented towards developing a specific offer for unconventional gas production (including products and services), with techniques that allow this type of reserves to be profitabilised in the Basque Country. T.3.3.2. Speeding up authorisations and periods With a view to galvanising the industry, it is important to introduce initiatives that radically simplify the current regulations on processing applications and authorisations for exploration and, where applicable, exploitation of natural gas reserves. The very economic viability of these possible reserves may be at risk if current requirements and waiting periods for this type of license are not significantly reduced and sped up. This will require strong and determined submissions to the central Spanish administration, setting out the need for the proposed regulatory changes and the important advantages a move of this sort would have in energy and economic terms. This would be another of the priority areas of action for the energy think tank, whose creation and development has been proposed in previous initiatives. Specifically, one of the think tankâ&#x20AC;&#x2122;s lines of reference would be to influence opinion and create regulatory proposals in the area of natural gas, given the business culture, infrastructures and projects for the future the industry holds for the Basque Country.
191
Strategic areas and lines of operation | 3E-2020
Body responsible for the initiative Department of Industry, Innovation, Trade and Tourism – Sub-Department of Industry and Energy. Other departments or administrations involved t .JOJTUSZ PG *OEVTUSZ 5PVSJTN BOE 5SBEF t .JOJTUSZ PG UIF &OWJSPONFOU BOE 3VSBM BOE .BSJOF "õBJST
192
Strategic areas and lines of operation | 3E-2020
193
6
Energy indicators 2020
Energy indicators 2020 | 3E-2020
This chapter sets out the target energy scenario it is planned to achieve by implementing the areas, lines, initiatives and actions detailed in the previous section. This panorama is the result of achieving the strategic targets established in this document. With a view to capitalising on these targets and in relevant cases, two scenarios are presented for forecasting energy demand and supply in the Basque Country for 2020: A Business-as-Usual (BAU) scenario, on the one hand, which reflects potential trends if the various authorities fail to apply the proposed actions in the different energy-related areas, and a Target Scenario, which shows the result of introducing intensive energy policies in line with the strategic objectives set.
6.1. Energy saving Target 1 - To achieve annual savings of 1,050,000 toe in 2020 and improve final energy intensity by 22% through intensification of energy efficiency actions in all energy consuming sectors. Throughout its history, Basque energy policy has always made saving and efficiency the principal strategic plank of its energy actions, with different levels of intensity. In successive phases, actions have ranged from classic measures for recovering residual heat to policies on replacing equipment and innovation in technologies and processes. The basic approach for the decade from 2011 to 2020 is to continue prioritising efficiency as a fundamental instrument of energy strategy. The annual average savings target requires a major step-up of the savings achieved in recent decades 120,000 100,000
105,240 93,010
91,660
80,000
66,760
60,000
39,700
40,000 20,000 0
Saving 1982-1990
Saving 1991-1995
Saving 1996-2000
Saving 2001-2010
Target 2011-2020
Figure 6.1. Comparison of annual average savings of the Basque energy policy in toe/year
In this area, the 2020 target for the ACBC is to achieve primary energy savings of 1,052,400 toe from measures implemented since 2011. This level of savings is estimated at 17% above the BAU trend for 2020, calculated using EU methodology.
195
Energy indicators 2020 | 3E-2020
The 2020 target represents savings of around 17% over BAU demand based on European methodology
200 0
Energy saving
2010
2020
2018
2016
2014
2012
2010
2008
2006
2004
2002
2000
0
2020
1,000
400
2019
2,000
2018
3,000
600
2017
4,000
2016
5,000
800
2015
6,000
1,000
2014
7,000
2013
8,000
1,200
2012
9,000
2011
10,000
Energy demand
Figure 6.2. Energy demand to 2020 in ktoe and savings generated by measures introduced from 2011
Figure 6.3. Target energy savings in ktoe. 2011-2020
One parameter which needs to be significantly improved is energy intensity, measured in terms of final energy consumption per unit of GDP. Taking 2010 as a reference year, and allowing for an intensive energy policy, the 2020 target is to reduce final energy intensity by 22%. The target is achieved through additional intensive policies above current ones 100% 95% 90% 85% 80% 75% 70% 65% 60%
-12% -7%
-10%
81%
78%
Political-efficiency Pro-continuity
Efficiency policy More intensive
100% 88%
Intensity 2010
Structural Regulatory Natural replacement
Figure 6.4. Scenarios of improvement in energy intensity. 2010-2020
Meeting these targets will involve intense application of efficiency measures in all energy-consuming sectors. The criteria for defining the intensity of this type of measure depend on the technical potential of each sector, its current consumption level, its contribution to competitiveness and the effectiveness of investment and aid, among other aspects. The largest contribution to the targets would therefore be in the efficiency measures in industry (55%), the tertiary sector (18%) and transport (17%). The increase in installed CHP capacity, together with upgrading of existing facilities, can make a significant contribution. Use of these facilities would also increase the Basque electricity self-sufficiency rate by 10% to around 22% by 2020.
196
Energy indicators 2020 | 3E-2020
Energy Efficiency 2020 Energy efficiency
Unit
2010
2020
Industry
ktoe
–
580
Transport
ktoe
–
174
Buildings
ktoe
–
192
Others
ktoe
–
106
ktoe
–
1,052
Savings vs. BAU (EU method)
%
–
17%
Improvement in final intensity vs. 2010
%
–
22%
CHP electricity share
%
12%
22%
Savings in primary energy (incl. CHP)
Indicators Accumulated primary energy savings (ktoe)
Table 6.1. Energy efficiency targets and indicators to 2020
Energy and oil consumption Target 2 - Reduce final oil consumption by 9% in 2020 with respect to 2010 figures, encourage the use of electric vehicles with 37,100 units on the market and have alternative energy sources accounting for 15% of energy used in road transport. In the BAU Scenario, primary energy demand in the ACBC could rise to nearly 8.5 mtoe in 2020, i.e. 8% above the 2008 peak, after gradual recovery from the effects of the economic crisis. In the Target Scenario, demand would recover more slowly until 2015 and thereafter, in parallel with the intensive policies in savings and efficiency, it would remain steady until 2020 at a level close to 7.8 Mtoe i.e., below the 2008 level. By energy type, natural gas will continue to predominate, gaining further ground over the decade. However, growth will be small, given that the bulk of the replacement of petroleum products, except in the transport sector, has already taken place. Renewable energy will gradually play a larger role with new heat and power generating facilities constantly coming online and additional use in transport. This will help cut consumption of other fossil fuels (such as oil) and electricity imports.
197
Energy indicators 2020 | 3E-2020
Oil will continue to lose ground, with a major increase in renewables
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0
Electricity Natural gas
Renewables Oil products
Renewables 12% Oil D. 36%
Imp. Electricity 2% Coal 1%
Derived E. Coal
Figure 6.5. Demand scenarios in ktoe by energy source. 2005-2020
198
Natural gas 49%
Figure 6.6. Primary energy consumption mix in the Basque Country to 2020
Energy indicators 2020 | 3E-2020
6.2. Renewable energy sources Target 3 - Increase the use of renewable energy sources by 87% to 905,000 toe in 2020, to give renewables a 14% share of final consumption. In the target scenario for 2020, renewable energy will come to 905,000 toe, up 87% on 2010 figures. The increase will be greatest among renewables with the most technical and economic potential, essentially: t #JPNBTT BHSPGPSFTUSZ XBTUF UJNCFS XBTUF FOFSHZ SFDPWFSZ GSPN NVOJDJQBM TPMJE XBTUF PS CJPGVFMT XIJDI XJMM account for 63% of the increase. t 8JOE QPXFS XIJDI XJMM BDDPVOU GPS PG UIF JODSFBTF t 5P B MFTTFS FYUFOU UIFSF XJMM BMTP CF DPOUSJCVUJPOT GSPN HFPFYDIBOHF TPMBS UIFSNBM BOE QIPUPWPMUBJD PDFBO FOergy and small hydro. Taking these forecasts into account, biomass and wind power will continue to make a fundamental contribution to the total renewable energy used in the region in 2020 (75% and 15% of the renewable mix respectively). The largest contribution to the increase in harnessing of renewables will come from biomass and wind power 1,000 Wind 15.1%
800 600 Biomass 74.9%
400 200 0
2010 Biomass Hydro Solar
2015
2020 Wind Geothermal energy Marine energy
Figure 6.7. Harnessing of renewable energy in ktoe. 2011-2020
Hydro 4.3% Geothermal energy 1.9% Solar 2.4% Marine energy 1.4%
Figure 6.8. Renewable harnessing mix in 2020
Development of planned initiatives in the area of renewables will raise their share in meeting final energy consumption by 140% compared to the reference year of 200518, from a share of 5.7% to 14%. It should be noted that this figure would be somewhat below the European target, which in the case of the ACBC would be 17% in 2020. Current use of renewables is mostly linked to thermal usage. Over coming years, it is hoped to change this situation, with growing application in power generation and transport, leading to a 39% and 21% share of the total respectively in 2020.
18
The target figure for the share of renewables in final energy consumption for 2020 that is applied to EU member states is calculated on the basis of the 2005 situation.
199
Energy indicators 2020 | 3E-2020
Power generation will be the industry contributing most to the increase in consumption of renewables 1,000
14%
800
10% 8%
600 400
5.7%
200 0
2005
2010
2015
2020
Electricity
Heating and cooling
Transport renewables
Share of renewables in FEC (%)
16% 14% 12% 10% 8% 6% 4% 2% 0%
Figure 6.9. Scenario of development of the share of renewables in final energy consumption in ktoe. 2005-2020
The target for power generation by renewables is to increase the pool of facilities by 925 MW from the 2010 figure to 1350 MW in 2020. This will involve incorporating 630 MW in wind energy (onshore and offshore), 115 MW in photovoltaic energy, 106 MW in biomass, 60 MW in wave energy, and 5 MW in geothermal. This would triple electricity production from renewables from a 6% contribution to power demand in 2010 to 16% in 2020. It is also important to stress the targets for renewables for heat use: 81 MW of geoexchange, 150,000 sq. m. of solar thermal panels and 294,000 toe of biomass. By the same year, renewables could account for around 160,000 toe. Wind power, the largest contributor in MW to renewable installed capacity 1,600 1,400 1,200 1,000 800 600 400 200 0
2010
2015
2020
Hydro
Wind
Solar photovoltaic
Biomass
Marine energy
Geothermal energy
Figure 6.10. Scenario of installed renewable electricity capacity in 2020
200
Energy indicators 2020 | 3E-2020
Renewables 2020
Unit
2010
2020
Biomass
ktoe
407
678
Wind
ktoe
26
137
Hydro
ktoe
36
39
Geothermal energy
ktoe
1
17
Solar
ktoe
3
22
Marine energy
ktoe
0
13
Electricity
ktoe
92
300
Heating and Cooling
ktoe
240
300
Renewables in transport
ktoe
101
160
%
8%
14%
Hydro
MW
171
181
Wind
MW
153
783
Solar photovoltaic
MW
20
135
thousand m2
20
150
Biomass
MW
79
185
Marine (Wave) Energy
MW
0
60
Geoexchange
MWg
5
81
Geothermal energy
MW
0
5
GWh
1,072
3,490
%
6%
16%
Harnessing
Final energy consumption
Share in final consumption Installed capacity
Solar thermal
Electrical production Power generation Share in electricity supply
Table 6.2. Targets and indicators in renewable energy for 2020
201
Energy indicators 2020 | 3E-2020
6.3. Sustainable electricity supply Target 4 - Increase the participation of CHP and renewables in power generation from 18% in 2010 to 38% in 2020. After a 13% fall in 18,630, Basque electricity demand began to recover in 2010, to stand at 18,630 GWh. In a businessas-usual scenario, this figure is forecast to grow by 17% over the period to 21,800 GWh in 2020. There are two targets for 2020 in the area of electricity demand and supply. On the one hand, to reduce power consumption by 8%, restricting this growth to an average annual rate of between 0.6 and 0.7%, as compared to annual growth rates of 1.4-1.6% in the BAU scenario. And to change the structure of the electricity supply by increasing the share of renewables and Combined Heat and Power (cogeneration) in the mix from 18% in 2010 to 38% in 2020. This would also cut the net balance of electricity imports from 44% to 7%. The share of direct electrical imports in the mix will continue to fall Cogeneration 22%
Natural gas combined cycles 55%
Renewables 16%
Imports 7%
Figure 6.11. Power generating mix in the Basque Country to 2020
Combined cycles (advanced thermal) will continue to grow 25,000 20,000 15,000 10,000 5,000
Imports
Advanced Thermal
Conventional Thermal
Renewables
CHP
2020
2019
2018
2017
Saving
Figure 6.12. Scenario for power supply in GWh in 2020
202
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
0
Energy indicators 2020 | 3E-2020
6.4. Industrial technological development Target 5 - Increase overall turnover (25%) and employment generated in the Basque Country (28,000 people) in companies in the energy industry, increasing spending on R&D (3% of GDP, â&#x201A;Ź300m) as a result of public support from the Basque Government and mobilisation of private funds. The technological and industrial strategy (â&#x20AC;&#x153;EnergiBasqueâ&#x20AC;?) seeks to consolidate a competitive network of sciencetechnology companies and agents within the energy industry, which will contribute to the sustainability of the Basque economy and develop as a source of wealth, employment and quality of life for the Basque country over coming decades. This mission is oriented towards achieving an ambitious vision: â&#x20AC;&#x153;To turn the Basque Country into an international knowledge pole and a reference for industrial development in the energy industryâ&#x20AC;?, structured around three overall targets and eight priority areas. EnergiBasqueâ&#x20AC;&#x2122;s targets are in line with those set out in the STIP 2015 (3% of GDP spent on R&D), in pursuit of a similar growth in spending on R&D in energy. This represents average annual growth in R&D expenditure of 10% to 2015, which is in line with the targets for technological leadership set and the need to generate and consolidate a critical mass in all strategic areas.
Objectiv TOTAL 2015 (2011-2015)
2008
2009
2010
2011
2012
2013
2014
Energy-related R&D expenditure
188
204
203
221
244
264
285
300
1,316
Funds provided by companies
138
150
149
165
180
194
208
217
964
Funds provided by the Basque Public Administration
35
38
38
40
43
46
48
52
229
Funds provided by the Spanish Public Administration
10
11
11
12
14
16
18
21
81
Funds provided by the EU
5
6
6
6
7
8
9
11
42
Overall outlay on R&D / GDP (Gross Expenditure on R&D, GERDJ
1.85% 2.01% 2.00% 2.20% 2.35% 2.55% 2.75%
3.00%
Table 6.3. Annual figures for mobilisation of R&D resources and public contributions
The major growth in R&D expenditure will be a result of: t "O JODSFBTF JO 3 % BDUJWJUZ BNPOH CVTJOFTT HFOFSBUJOH DPNQBOJFT BDDPNQBOJFE CZ B QBSBMMFM FĂľPSU GSPN UIFJS respective value chains. t 5IF DSFBUJPO BOE EFWFMPQNFOU PG MBSHF TDJFOUJmD UFDIOPMPHJDBM JOGSBTUSVDUVSFT $*$ FOFSHJ(VOF CJNFQ BOE *OHSJE and their capacity to attract companies with a high level of R&D activity. t (SPXUI JO 3 % BDUJWJUZ MJOLFE UP MBSHF EFNPOTUSBUJPO QSPKFDUT t 5IF NPCJMJTJOH FĂľPSU MJOLFE UP HSFBUFS DBQUVSF PG 4QBOJTI BOE &VSPQFBO GVOET BOE HSPXUI JO GVOET GSPN UIF #BTRVF Country. Achieving this goal will require a major drive from Basque public authorities, with an average annual growth in their share of 8% to â&#x201A;Ź52m in 2015. Summing up, the figures show that energy is one of the strategic industries in the Basque Country from an industrial perspective, and one of the mainstays for achieving the overall targets set in the STIP 2015. Compliance with the strategy will be monitored by means of a table of indicators of effort and impact (overall and by strategic target).
203
7
Environmental contribution
Environmental contribution | 3E-2020
This section sets out the principal impacts of the different actions arising from the 3E2020 Strategy. The Strategy establishes lines of action related essentially to savings in energy consumption and harnessing of renewable energy resources, as well as improvement in the security of natural gas and electricity supply. The environmental impact of the strategy is evaluated in comparison to a business-as-usual (BAU) scenario in which no actions whatsoever are taken by the Basque Government in matters of energy policy. In other words, the aim is not to assess the environmental impact of the energy system, but the net impact of energy policy actions. This analysis of environmental effects has been made from a generic perspective without taking into account territorial factors, i.e., without considering the specific locations of projects resulting from the strategy.
Natural environment The importance of the natural environment for energy strategy lies on the one hand in the fact that it determines the potential for obtaining natural energy resources (renewable and fossil) and on the other, in the fact that the environmental impact of the actions depends to a great extent on their location. The Basque Country is a very mountainous region, with a land area of 7,250 km2 and 246 kilometres of coastline. It also has a large degree of industrialisation and a high population density, above the European average in both cases. The predominant climate conditions in the northern part facing onto the Bay of Biscay are oceanic, with frequent rainfall and mild temperatures. In contrast, most of Ă lava has a Mediterranean climate with continental elements, reflected in lower average temperatures and precipitation. For a region of its size, the Basque Country has a very considerable ecological diversity. This is due essentially to the steep North-South climate gradient. This important variation in climate is determined by the principal barrier mountains. In just a few dozen kilometres, there are major differences in levels of rainfall, which also has a direct impact on the landscape, the vegetation and land use. The territory has of an extensive network of protected (listed) areas and places of interest.
Instrument of protection
Land Area (km2)
Protected areas of the Basque Country Biosphere Reserve
220.32
Wetlands of International Importance (RAMSAR)
16.85
Protected Natural Areas
Nature Parks
765.47
Protected Biotopes
73.08
SICE (Site of Community Interest) Natura 2000 Network
1,240.13
ZEPA (special birdlife protection area)
392.88
ZEC (special conservation area)
167.25
Places of interest in the Basque Country Areas of Natural Interest (Territorial Planning Directives)
297.23
Wetlands catalogue
20.67
Table 7.1. Land Area of the Autonomous Community of the Basque Country (ACBC) covered by instruments of environmental protection Note: Some areas are covered by more than one instrument of protection
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Environmental contribution | 3E-2020
One of the features of the natural environment on which the energy system has the greatest influence is air quality. The problem of air pollution in the Basque Country has been of great importance over the last century due to the spatial concentration of industries, although depending on the areas, heating or motor traffic have acquired greater relative importance. The general trend over recent decades has been for an improvement in SO2, particle and carbon monoxide level, while trends in NOx and ozone are unclear. According to the latest available data, in 2009 the limits for sulphur dioxide and nitrogen dioxide were not exceeded at any of the measuring stations. Under stable anticyclone conditions remaining unchanged over several days, high NO2 levels can be observed in areas of heavy traffic. Target values for tropospheric ozone have been exceeded at certain stations. For carbon monoxide, the values recorded are well below the limits established in the legislation. Total emissions of greenhouse gases attributable to socio-economic activities in the Basque Country in 2009 came to 22.6 million tonnes of CO2 equivalent, 10% below the rate for 2008 and up 6% on emissions in the reference year, QMBDJOH JU 1PJOUT CFMPX UIF UBSHFU FTUBCMJTIFE JO UIF DVSSFOU QMBO 5IJT SFEVDUJPO DPNFT BU B UJNF PG FDPnomic recession characterised by a fall in GDP, with the downward trend of the CO2/GDP ratio being maintained. The sectors with the greatest reduction in emissions have been industry, energy transformation and transport. Of total emissions, 83% are related to energy use. Noise is another factor of impact in the Basque Country. The concentration of urban settlements and communication routes means that some areas have high levels of noise pollution, the main cause of which is traffic. As for the water quality of rivers, 68% meet environmental targets, although the indicators for benthic fauna, phytobenthos and fish species show numerous points in which quality is moderate or even deficient. Likewise, the environmental condition of the water along Basque coasts varies by area from deficient to very good, with 61% of zones classed in the Spanish environmental categories of good or very good, and none classed as poor.
Environmental legislation Actions in the area of energy policy included within the Energy Strategy to 2020 must be framed within the European, Spanish and Basque legislative framework. In environmental matters, the different aspects of the environment that are affected by the actions, such as the air, water and natural environment, for example, have their own legislative framework in the three areas mentioned and in some cases are even covered by municipal by-laws. With regard to atmospheric emissions, it is necessary to distinguish between emissions related to climate change and more local pollutants. A European strategy exists on combatting climate change, derived from the commitment acquired by the EU upon ratification of the Kyoto Protocol, which establishes specific measures for limiting temperature increases to 2° C above preindustrial levels. The target for 2020 is to reduce greenhouse gas emissions by 20% compared to 1990 figures and even by 30% if an international in this regard is signed. In the longer term, it will be necessary to reduce European emissions by up to 60-80% by 2050.
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Environmental contribution | 3E-2020
Europe has implemented a number of instruments for achieving emission reduction. The community emission allowances system (the Emissions Trading Scheme) limits greenhouse gas emissions in large-scale facilities, but there are also other actions intended to reduce consumption of fossil fuels and emissions in sectors not included in the scheme (non-ETS sectors). Decision 406/2009 set out the reductions to be achieved by the Member States in emissions from non-ETS sectors between 2005 and 2020 in order to contribute to European policies to 2020. The establishment of various European initiatives on energy matters will contribute to the targets on emission reduction. In particular, Directive 2009/28/EC on the promotion of the use of energy from renewable sources sets a European target for 2020 of 20% of energy to come from renewable sources in final energy consumption and 10% in the transport sector. Actions have been established to reduce greenhouse gas emissions and promote energy efficiency through the Action Plan for Energy Efficiency and Strategic Energy Technology Plan (SET-PLAN), inter alia. European legislation requires the member states to prepare action plans for achieving the targets on renewables and also on energy efficiency. With regard to other emissions of pollutant gases into the atmosphere, specific legislation exists for emissions in large-scale combustion facilities, emissions from diesel and petrol vehicles, and standards on air quality. Energy-related projects launched within the framework of energy strategy must comply with current legislation in the different areas and where applicable will be subject to the environmental impact assessment procedure under the General Environmental Protection of the Basque Country Act (Act 3/1998), or, in the case of projects that affect a wider-than-regional area (for example large thermoelectric power stations or 400 kV power transmission lines), under Legislative Decree 1/2008, approving the codifying legislation of the Act on Environmental Impact Assessments for Projects. The State Gas and Electricity Infrastructures Plan includes guidelines on forecasting demand trends, the resources needed to meet that demand, the needs for new generating facilities and the development of market conditions for ensuring security of supply. The document also includes binding decisions in that it establishes a series of infrastructures where such undertakings must be made, in the area of power transmission installations and mains gas pipelines. Compulsory planning decisions affect large infrastructures on which the energy system depends and enable its structuring. The process of approving the plan includes an assessment of the environmental effects. This assessment is carried out using the procedure for strategic environmental assessment of plans and programmes. In the territorial area of the Basque Country, the General Environmental Protection of the Basque Country Act (Act 3/1998), establishes the targets and principles for protection of the natural environment to which the actions of energy strategy and the specific projects related to different aspects of the energy cycle must be adapted. Act 4/1990 constitutes the legal framework of the policy on land use planning. In the energy area, the Directives on Land Use Planning specifies that of all the various possibilities for building new energy infrastructures, those that cause the least environmental impact must be selected. The Partial Territorial Plans set out specific planning criteria for given areas. These PTPs and some Territorial Sector Plans may also include specific restrictions that must be taken into account in the design of energy infrastructures.
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Environmental contribution | 3E-2020
Wind development in the Basque Country must take place within the framework of the Territorial Sector Plan on Wind Power in the Basque Country, currently under development, which will replace the plan approved under Decree 34/2005. This TSP is being prepared taking into account the wind potential and the different figures of environmental protection in Basque territory. In 2009, the Basque Parliament passed a non-legislative motion, requesting preparation of a new TSP on Wind Power, which is currently being drafted. Its objectives are as follows: to be based on broad consensus; to regulate the Basque wind industry in its entirety; to enable progress to be made towards reducing carbon emissions, and to ensure that such progress is compatible with conservation of the natural environment and landscape of the territory.
Description of the environmental impacts of the main initiatives Energy is a key element, powering modern society. However, the use of any type of energy has an associated environmental cost that occurs not only at the point of consumption, but also in its chain of production and transport. The extraction and use of fossil fuels, the production of electricity and even the production of renewable energy all have an environmental impact. The only energy that does not pollute is therefore the energy that is not consumed. The future energy needs of the Autonomous Community of the Basque Country (ACBC) can be satisfied by way of various different alternatives. There are different criteria for establishing such alternatives, and in deciding on the best combination of criteria the social and environmental benefits must be maximised. The first alternative consists of a policy of fostering energy savings and efficiency, i.e. of consuming less energy. Generally speaking, measures related to savings and efficiency do most to reduce the environmental impact and the cost of the energy system, and are the first measures that should be adopted wherever possible. The basic alternatives for meeting primary energy demand include the different renewables, fossil fuel sources and nuclear energy. None of these can in practice satisfy all energy consumption in optimal environmental and social conditions, and it is therefore necessary to decide on the most suitable combination of the three for the Basque Country in the periods covered in this energy strategy. Impact of energy saving Energy saving constitutes a basic contribution to the sustainable development of the Basque Country, in that it enables compatibility and stimulates economic growth, environmental protection and social progress. Positive impacts of energy saving include a reduction in energy consumption and emissions of CO2 and other pollutant gases, together with an improvement in the competitiveness of the Basque economy and business. Indeed, reducing consumption means reducing energy imports, external energy dependency and thus the macroeconomic risks associated with a high dependency on petroleum derivatives. These risks affect practically all economic vectors of the Basque Country. Within the general area of reducing the environmental impact of energy by cutting energy consumption, one of the most important consequences is the reduction in greenhouse gas emissions, which leads to a reduction in the negative impacts of climate change on the economy and on human health and ecosystems. It also improves quality of life, by reducing concentrations of pollutants in the atmosphere as a result of lower consumption of the emission sources. These sources may be mobile –primarily private vehicles– or fixed –consumption in buildings, homes and companies– and their effect is felt especially in cities.
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Environmental contribution | 3E-2020
The reduction in energy costs and the incorporation of technologically more advanced equipment enables increased production and a reduction in other non-energy costs. Given the major dependency of modern economies on â&#x20AC;&#x153;inputâ&#x20AC;? energy, an improvement in energy intensity provides various completive advantages, especially those associated with the inflationist risk involved in the volatility of the oil prices which directly affect the entire value chain of products and as a result, final prices. Companies improve their competitive position by favouring the creation of quality employment and wealth, and by reducing the risks associated with delocalisation, whose importance is ever greater in economies that are dependent on increasingly globalised markets. A negative impact of some of the energy efficiency measures is the cost and environmental impact related to their use of materials that are sometimes necessary for improving efficiency. Impact of promoting CHP The main impact of CHP (or cogeneration) facilities comes from the transport and burning of fossil fuels, the use of water in cooling systems and the generation of waste. The most direct environmental effects are the contribution to the depletion of fossil fuel resources (unless they use renewable energy, as some are now doing), local air pollution (mainly nitrogen oxides) and their contribution to the greenhouse effect. However, CHP produces heat and power which would otherwise have to be obtained in some other way, normally with a greater impact. The additional energy thus harnessed replaces the energy that would have had to be generated using traditional thermal systems. The net effect is an environmentally positive impact because primary energy needs are reduced, thus avoiding consumption of non-renewable resources and emission of pollutants. Impact of the use of biomass The environmental impact of using biomass energy is a local deterioration in air quality, the effects of transforming the biomass, and a reduction in CO2 emissions by substituting the use of fossil fuels. Burning biomass changes air quality, due to the emission of combustion fumes during direct use of biomass as a fuel It is also important to note that emissions generated in the burning of biomass are generally higher than those of other fuels. Production and transformation processes of certain types of biomass emit fumes and there are other types of impact (for example in the manufacture of biofuels). The removal at a very early phase of arable biomass (straw) using a methodology that leaves barely any waste in the fields, leads to a reduction in the value of the stubble for pasture, affecting extensive livestock farming and even wildlife. Similarly, the elimination of fallen timber affects the cycle of nutrients, the formation of humus and microflora and microfauna. The use of straw and manure as a fuel can be detrimental to agricultural production and conserving soil productivity, given that these substances no longer enter the soil, leasing to a depletion of nitrogen and reduced formation of humus. Harnessing forestry biomass has a positive effect in terms of fire risk, by removing flammable material from hillsides. It is also positive in terms of the risk of forest infestations, since it reduces possible focuses in areas of accumulation of scrub and dead wood. In this regard, harnessing needs can lead to an increase in forest areas subject to planned management. Proper treatment of the livestock biomass and industrial and urban waste reduces the risk of pollution of soils and rivers, and associated foul-smelling gases that can inconvenience nearby populations, such as NH3 and H2S.
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Environmental contribution | 3E-2020
The use of biomass leads to a socio-economic dynamisation related to the development of new logistical systems; the encouragement of a local and renewable energy source; economic opportunities for sectors related to bioenergy, such as energy service companies dedicated to facility management, control or maintenance; an increase in the living standards of the rural population. It thus contributes to stabilising the population in their original environment and to activating the timber market. The energy harnessing of certain types of biomass generates waste which has a high nitrate and phosphate content and may be suitable for fertilising arable land. The quality of the byproduct and the usability of the land are aspects that need to be considering in analysing the possible impact on the ground and the risk of different effects on the underground water. Impacts associated with solar power Generally speaking, installations using solar power have a large footprint per unit of energy produced. By concentrating actions on urban and built areas, as in the case of this strategy, this effect is limited. At the same time, this type of installation allows the energy to be generated at the point of consumption, offering spatially distributed generation which does not require transmission and distribution before it is consumed. The processes of manufacturing the materials used to build collectors and solar cells has an environmental impact, deriving from emissions in the manufacture of cells and other materials. However, these processes as generally carried out outside the Basque Country and should be minimised with suitable measures of environmental protection at the point of manufacture. During the operating phase, solar power-based production systems have a slight negative environmental impact related to aesthetic inconvenience and the impact of the shadow on the flora and microclimate. In any case, this impact is very limited in the case of small facilities. Impact of geoexchange Low-enthalpy geoexchange facilities, which involve drilling shallow wells and ducts, use an underground area around the building where the energy is harnessed and therefore have little impact on land use. During the building phase of this type of installation, the principal environmental effects involve drilling and the subsequent possibility of affecting the quality of the underground water. During the operating phase, the principal environmental effects are also related to the quality of the underground water and limitations on the use of the land where the unit is installed. Impact of small hydro power In the case of small hydroelectric stations, two possible situations may arise: construction of new small hydro stations and their associated infrastructures (retention dam, run-off channels and power take-off line) or rehabilitation of disused small hydro stations. All things being equal, the impact of the former is more significant.
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Environmental contribution | 3E-2020
The effect on the water environment is one of the main impacts caused by work on small hydroelectric stations, given that they harness the water flow to generate energy and, therefore tend to be located next to rivers and other harnessable water courses. During the building phase solids and other types of suspended waste may be discharged into the rivers, with a resulting impact on water quality. This potential impact has negative effects on aquatic wildlife, and the extent of the impact depends on the ecological value of the section of river in question. During the operating phase, small hydroelectric stations, especially dams and weirs used to hold back the water to be run off towards the turbines, form a barrier that hinders migration of some aquatic species as well as having a potentially negative impact on river bank flora. These dams and weirs hold back the sediments normally carried by the river, which has a net positive effect in terms of erosion. Following energy harnessing, the water is returned to the river, at which point it may cause temporary and localised turbidity. However the dynamic of the river itself will ensure that any possible turbidity disappears naturally. Impact of wind power In general terms, installation and operation of an onshore wind farm can have a range of effects on the biotic environment, but also on the atmosphere, the water, geotic and socio-economic environment, land use planning and the landscape. It is not only the turbines themselves that cause the impact; the construction of access roads has an impact whose significance varies depending on the site. For a specific wind farm, the scale of this impact will depend on the characteristics of the host area, for example the relief, plant covering and wildlife communities, land usage, heritage elements and visibility from adjacent territory. In order to define the environmental impact of the wind system wind, it is necessary to establish the exact location of the wind farms and turbines. This falls outside the scope of this document but is included in the TSP on wind power, the authorisation process for which includes environmental assessment. Small-capacity wind facilities have some advantages over large ones, such as integration without the need to create new power infrastructures and lower transmission and distribution losses, although they are considerably more expensive per unit of energy produced because they are located in areas with fewer wind resources. Impact of wave energy Wave energy requires a technology that is still at research phase; It is considered that the chief environmental impacts that might be caused are noise, occupation of sea or coastal area, visual impact, and restrictions on fishing. In general, the mechanisms are not very visible, although on certain occasions the necessary installations may occupy part of the seascape; For example, the onshore Wells turbine system occupies a large space because of the size of the turbines.
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Environmental contribution | 3E-2020
Impact of electricity and gas transmission/transport infrastructures The purpose of this strategy is not to identify the needs for new infrastructures to ensure energy supply, although generally speaking evaluations of those needs are made. The principal projects related to energy production and transport infrastructures are set out within a state planning process by agents from the industry. The needs of the main infrastructures are established in the Gas and Electricity Industry Infrastructure Plan, which involves a process of strategic environmental assessment and the projects are subject to the environmental impact assessment (EIA) and/or Integrated Environmental Authorisation (IEA) procedures. There is therefore an administrative assurance that during these procedures any impact arising from construction and operation of the principal infrastructures of energy production, transmission and distribution will be identified and evaluated in detail, to ensure that they are socially acceptable. Nonetheless, it may be necessary, for example, to route the infrastructures through protected areas, in which case the environmental assessment of the project is particularly important under the current legislation. During the construction phase, the laying of gas pipelines and power lines involves earthworks that alter the morphology of the terrain, with possible effects on the drainage network and water quality. There may be other impacts on the air quality as a result of construction work, possible effects on priority habitats, and clearing of undergrowth and other vegetation along the route. For gas pipelines, during the operating phase, the permanent occupation of the land creates an area of easement whose dimensions vary depending on the category of the pipeline. In general terms, the environmental impact of pipelines is relatively small, since they are underground infrastructures with no significant visual impact, designed to avoid areas of major environmental significance. During the operating phase, power lines involve permanent land occupation for the legs of the pylons (around 2 m² for each leg); An area of easement is created, the size of which will vary depending on the category of the power line. They also occupy the visual landscape, essentially because of the pylons. Finally, there is a danger to birdlife arising from the risk of collision and/or electrocution against the conductor and earth cables.
Impact on CO2 emissions due to energy consumption Target 6 - Contribute to limiting climate change through a 2.5 Mt reduction in CO2 emissions through the measures contained in the energy policy. In 2010, CO2 emissions due to energy consumption were 13% lower than in 2005. In the target scenario, 2020 emissions will be 18% lower than in 2005. In the target scenario, CO2 emissions in 2020 are 2.5 million tonnes less than in the BAU scenario. This reduction is due to the application of intensive energy efficiency measures and greater use of renewables over the period 20112020.
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Environmental contribution | 3E-2020
Energy-related CO2 emissions could be reduced by 18% in 2020 with respect to 2005 120 100 18
80 60 40
100
82
20 0
Real 2005
Target 2020
Reduction
Emissions
Figure 7.1. Reduction in CO2 emissions of energy origin in 2020 (reference year 2005 = 100)
Impact on air quality In addition to the implications for the reduction in greenhouse gases, the energy strategy will also cut energy-related atmospheric pollutants that affect air quality (solid particles, sulphur dioxide, nitrogen oxides, carbon monoxide, volatile organic compounds). Policies on energy efficiency, gasification and use of renewables have led to a major reduction in recent years in emissions of this type of atmospheric pollutant in the Basque Country. Altogether, the nearly 99,000 tonnes of this type of pollutant emitted in 2010 could be reduced by 17% by 2020. The most important reductions that could be achieved are: SO2 (-45%), CO (-21%), NOx (-13%) and solid particles (-12%). Reductions in emissions will have a positive effect on air quality 20% 10% 0% -10% -20% -30% -40% -50%
Solid particles
Sulphur dioxide
Nitrogen oxides
Carbon monoxide
Volatile organic
Figure 7.2. Reduction of atmospheric pollutants of energy origin in 2020 vs. 2010
213
CHP
Biomass (thermal and power generation)
Solar (thermal and small PV)
Geothermal (exchange)
Small hydro
Onshore and offshore wind
Wave
Emissions of gases and particles
L
L
L
L
L
M
L
LEVELS of CO2
M
L
L
L
L
L
M
L
Noise
L
Water quality
L
ENVIRONMENTAL FACTORS
Atmosphere
Water environment
L
Soil
Biotic environment
Landscape
L
L
L
Drainage network
L
L
L
L
L
L
L
L L L
L
Soil quality
L
L
L
Erosion
L
L
L
Plant species
L
L
L
Animal species
L
L
M
L
L
Habitats and ecosystems
L
L
L
L
L
Forest masses
L L
L
L
M
L
Economic activity
M
L
L
L
L
L
L
M
Diversification and self-sufficiency
M
L
L
L
L
L
L
L
M
Economic value of forest space Impact on health
Ecological footprint
L L L
L
L L
Positive impacts
L
L
L
Negative impacts
L
Low
L
Low
M
Medium
M
Medium
I
Intense
I
Intense
Positive or negative impact (depending on considerations)
NA
Not applicable (Effect insignificant)
Figure 7.3. Summary of environmental impact assessment by 3E2020 Strategy line of action
214
L
L
Visual quality
Socio-economic environment
L
Flow regime
Land occupation
Infrastructures
Primary energy savings
Environmental contribution | 3E-2020
L
L
Environmental contribution | 3E-2020
215
8
Investment and financing
Investment and financing | 3E-2020
Mobilisation of investment Target 7 - Mobilise investment of €10.71 billion over 10 years, through a committed and exemplary institutional policy contributing 16.5% of the necessary investment. Meeting energy targets will require encouraging investment in energy measures in all industries and areas totalling a forecast €7.89 billion, in addition to a further €2.82 billion in R&D in technological development, giving a grand total of €10.71 billion investment. By areas, the investments will be distributed as follows: 24% in energy-consuming sectors, 33% in energy infrastructures and supply, 17% in renewable power generation and finally 26% in technological development. Investment in renewable power generation is significantly higher than in the previous decade Investment scenario by areas (€m) 12,000 26%
10,000 8,000
Technological development
6,000
Renewable power generation
4,000
Energy infrastructures
2,000 0
24%
Consumer sectors
17%
33%
Figure 8.1. Distribution of investment by areas in the period 2011-2020. Ðm
Investment in energy-consuming sectors The investment required in energy-consuming sectors is related to the energy targets established, which are based on the possibilities of energy improvement and the intensity profile of the proposed measures. The €2.53 bn of investment required includes saving and efficiency measures and renewables for self-consumption, and is divided up between industry (23%), the residential sector (24%), the services sector (15%) and transport and other sectors (38%). Investment in the tertiary and transport sectors reflects the large-scale energy savings required in these sectors
Transport and others 38%
Industry 23%
Buildings 39%
Figure 8.2. Distribution of investment in energy-consuming sectors 2011-2020
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Investment and financing | 3E-2020
Investment in renewable generation Of the â&#x201A;Ź1.81 bn investment planned in renewable power generation projects, most will go to meeting targets in wind (wind farms, turbines, etc.) (50%), waste biomass plants for power generation (20%), and photovoltaic installations (15%). Investment will also go towards wave energy demonstration projects (11%) and geothermal demonstration projects (3%). Wind energy forms the basis for growth in renewables in the Basque Country Wind 50%
Hydro 1% Geothermal 3% Solar 15%
Wave energy 11%
Biomass 20%
Figure 8.3. Distribution of investment in renewable energy for power generation in the period 2011-2020
Investments in energy infrastructures The consolidation of energy markets and the basic infrastructures in the Basque Country will require major investment by all agents in the period 2011-2020, totalling â&#x201A;Ź3.55 bn. By subsector, the largest investment will be in the electricity industry (50%), where it will be oriented towards improving the transmission grid, improving the distribution network and promoting development of smart grids Another major area of investment is natural gas (38%), where actions in gas exploration, extension and improvement of procurement installations, storage and the transport network are considered to be a priority. Investment in natural gas and the power industry continue to be a priority for the competitiveness of the energy industry
Natural gas 38%
Refining & storage 12%
Electricity 50%
Figure 8.4. Distribution of investment in energy infrastructures 2011-2020
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Investment and financing | 3E-2020
Public contribution Promotion initiatives, aid programmes and investment in energy areas and technological and industrial development by the public sector require total spending by public authorities of €1.77 bn, 16.5% of all forecast investment. Public authorities will collaborate in investment and provide aid to the industry 1,400 1,161
1,200 1,000 800
610
600 400 200 0
Promotion and aid
Public investment
Figure 8.5. Public contributions to the Basque Energy Strategy in Ðm. 2011-2020
Of the total public contribution, €23m will go on promotional expenses (studies, regulation, dissemination, awareness-raising, training, etc.). Another €1.14 billion will be spent on aid to support programmes for the different industries, particularly aid to energy-related technological and business development projects as well as major spending on aid to consuming sectors. As well as aid to technological development, a major impetus will be given to investment in different types of energy technology. In this area energy efficiency programmes, and the introduction of harnessing systems and equipment for thermal and small power generation from renewables will be particularly important. The bulk of public aid to the sector will go to technological development and R&D Industry 8%
Technological development 68%
Housing 9% Services 8% Other sectors 3% Electricity renewables 4%
Figure 8.6. Distribution of public aid by sectors. 2011-2020
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Investment and financing | 3E-2020
In order to achieve savings in fossil fuels, reduce the energy bill, and cut greenhouse gas emissions in the administration, part of the â&#x201A;Ź610m in public investment will go to promoting the upgrading and improvement in the efficiency of buildings and installations and to extending the use of renewables in the public sector. Another significant portion will go to supporting and reinforcing the development of industrial technology, by promoting demonstration projects of energy technologies with significant potential. An important proportion of public investment will go to projects in the area of renewables Research Transport centres 4% Smart 1% girds 7% Buildings 10%
Renewables facilities and demonstration 56%
Hydrocarbon exploration 22%
Figure 8.7. Distribution of investment by areas. 2011-2020
Financing from public funds Sixty per cent of public financing comes from the Basque Department of Industry, Innovation, Trade and Tourism and its public-sector company EVE, which is channelled through different aid programmes for the implementation of energy measures in energy-consuming sectors, aid for the promotion of technological-energy-related R&D projects, and also in the area of development of energy-related innovation and demonstration projects. Other Basque public authorities in general will contribute 14%, with 11% in investment projects for energy upgrading of buildings, installations and improvements in upgrading vehicles, and 3% will come in the form of tax deductions from the territorial governments through investment in clean energy-related technologies. A further 21% will be provided by the Spanish government in aid schemes essentially in energy efficiency and R&D projects. And finally, 5% of funds would be provided by the EU in aid to R&D projects. Sixty per cent of public funds will come from the DIITT EU 5% Spanish Gov. 21%
Basque Admin. 14%
DIICT/EVE 60%
Figure 8.8. Source of public contributions to energy strategy 2011-2020
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Investment and financing | 3E-2020
Economic and social impacts linked to the investment made The Basque Energy Strategy 2011-2020 is an ambitious proposal which, as well as consolidating the energy industryâ&#x20AC;&#x2122;s lead position, will make a decisive contribution to the social, economic and technological development of the Basque Country. Based on its three strategic areas, it will have a major multiplying effect on the economy in general, generating business, fostering technological progress and contributing to an improvement in the living standards of Basque society as a whole through the forecast investment for the period 2011-2020.
Social impact of freeing up the income associated with a reduction in the energy bill
Technological impact in terms of investment in R&D+i Economic impact associated with increase in activity (GDP, employment, etc.)
Impacts associated with economic use of the reduction in carbon emissions
Business impact associated with opportunity for new market niches
Figure 8.9. Nature of the socio-economic impacts analysed
Given the capacity of Basque industry to respond to the demand generated by this volume of investment, 61% of it will translate into domestic investment, i.e. sourced in the Basque Country, with a local impact, benefitting manufacturers and service companies operating as direct or indirect suppliers. This increase in demand will help Basque companies increase their output and their capacity to generate employment, leading to a series of related effects in the form of business, tax revenue, etc.19
19
A specific analysis has been made to quantify these effects. Backed by the Input-Output tables for the Basque Country 2008, energy balances in different consumption and price scenarios and an estimate of the R&D mobilised by the strategy, this analysis will allow an assessment of the various economic, social and technological impacts.
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Investment and financing | 3E-2020
Sixty-one per cent of the investment mobilised by the 3E2020 will directly impact the Basque economy
Total Investment
3E2020
Domestic Investment
61% Total effect Direct effect Production of Added Value
Employment
= +
Indirect effect
Remuneration for work and capital
Tax revenue
Figure 8.10. Impact of investment from the 3E2020 Strategy based on the ACBC’s capacity to turn it into domestic investment
This volume of activity will translate into tangible impacts in the period 2011-2020 by generating 1.6% of Basque GDP, output to a value of €27.41 bn, net revenue of €2.82 bn for the territorial revenue offices and a level of business capable of providing the equivalent of 14,150 jobs per year. These results are based in fairly equal proportions on direct and indirect effects20, with a slightly higher proportion of the latter, confirming the knock-on effect of the business generated, extending beyond the direct suppliers and the agents directly involved in carrying out the actions promoted by the strategy. In addition to these macroeconomic impacts, which are normally booked at national and regional level, the strategy will also free up revenue in energy consumption in the form of savings for companies (calculated at over €4 bn) and for households, compared to a business-as-usual scenario Ultimately, this means that the money saved in the energy bill can go to savings, investment or consumption of other goods and services. In practise, this reduction in the energy bill translates into greater levels of competitiveness for Basque companies by reducing their spending no inputs (energy). For households, it offers a better quality of life through an increase in available income. The source of this reduction in household and corporate energy bills lies both in the promotion of actions to improve energy efficiency and in a change in the energy supply offer. The combination of the two areas of action working on energy demand and supply sides will mean not only that energy prices will be more competitive but that consumption will also be reduced. This reduction in energy consumption will lead to a considerable drop in emissions which in turn will translate into tangible economic effects derived from the value of the emission allowances released for industries subject to the European Emissions Trading Scheme (EU ETS).
20
All impacts associated with implementation of the actions established in the strategy are defined as direct effects. Induced impacts are those associated with satisfying the needs involved in implementing the actions set out in the strategy and without which they could not be developed. This is what is known as the knock-on effect.
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Investment and financing | 3E-2020
In order to achieve the social impact of these environmental benefits and freed-up income, a change is required not only in awareness among all those involved but also in the technological leap forward provided by implementation of the measures included in this strategy. This technological impact will make it possible to meet the targets set in the strategy. It will also consolidate the position of the Basque economy at the forefront in industries most closely related to energy, mobilising important investment in R&D over the next ten years. The Energy Strategy 2011-2020, therefore, can be said to be a project for the future that goes beyond the field of energy, acting as a strategic national commitment under the terms set out. Its impact will extend to all sectors of Basque society in social, economic, technological and environmental terms.
223
9
Monitoring plan
Monitoring plan | 3E-2020
In order to assess development of the energy framework and the progress of the 3E2020 Strategy, a regular mechanism has to be established for monitoring and overseeing the measures included the strategy and their effects. By comparing the targets set in the Strategy with the results actually achieved, over time it will be possible to monitor progress, detecting any deviations and proposing corrective measures. The monitoring plan will be made up of the following elements: t "OOVBM QSPHSFTT SFQPSUT TVNNBSJTJOH UIF BDUJPOT VOEFSUBLFO JO UIF BSFB PG UIF TUSBUFHZ GPS UIF ZFBS BOZ DIBOHFT in the energy framework and the development of follow-up indicators related to the targets set. t *OUFSJN BTTFTTNFOU SFQPSUT XIJDI XJMM CF QVCMJTIFE FWFSZ UISFF ZFBST "T XFMM BT UIF JOGPSNBUJPO TFU PVU JO UIF progress reports, these interim reports will also assess any deviations in achievement of the targets and indicators and will propose possible corrective measures. t 5IFTF SFQPSUT XJMM CF ESBXO VQ CZ UIF &OUF 7BTDP EF MB &OFSHĂ&#x201C;B The monitoring indicators must be based on consistent high-quality information reflecting the real energy situation in the Basque Country and must provide a measurement of the actions carried out and their impact. These indicators are arranged in a scorecard for the 3E2020 Strategy, and cover the following aspects: t &OFSHZ TBWJOH t 'PTTJM GVFM DPOTVNQUJPO t 6TF PG SFOFXBCMF FOFSHZ t &OFSHZ TVQQMZ TPVSDFT t "DUJPOT PG UFDIOPMPHJDBM EFWFMPQNFOU JO TVTUBJOBCMF FOFSHZ t &OWJSPONFOUBM JNQBDU The monitoring reports will give the energy monitoring indicators included in the governmentâ&#x20AC;&#x2122;s plans and programmes with which the energy strategy is coordinated, specifically the Business Competitiveness Plan, the Science, Technology and Innovation Plan, the EcoEuskadi 2020 initiative and the Environmental Framework Programme.
225
Monitoring plan | 3E-2020
Strategic indicators2122 Type
Energy efficiency
Strategic indicators
–
1,052,000
E2. Percentage of primary energy savings vs. BAU (%)21
–
17%
E3. Improvement in final energy intensity (%)
–
22%
12%
22%
–
9%
E6. Share of oil in final energy consumption (%)
38%
34%
E7. Share of natural gas in gross domestic consumption (%).
42%
49%
–
37,100
6%
15%
484,000
905,000
E11. Installed electrical capacity in renewables (MW)
424
1,350
E12. Contribution of renewables to electricity demand (%)
6%
16%
E13. Share of renewables in final consumption (%)
8%
14%
–
8
203
30022
E16. Reduction in CO2 emissions (Mt/yr))
–
2.5
E17. Investment (€m)
–
10,710
E18. Public contribution (€m)
–
1,771
E5. Reduction in final oil consumption vs. 2010 (%)
E8. Electric vehicles on market (number) E9. Alternative energy sources in road transport (%) E10. Level of renewable energy harnessed (toe)
Renewable energy sources
Technological
Environmental Economic
E14. Number of strategic areas of technological energy development E15. Spending on energy R&D, Basque Country (€m)
Table 9.1. 3E2020. Strategic indicators and targets 2020
21 22
Indicator calculated using European methodology. Target to 2015.
226
2020
E1. Primary energy savings (toe/yr)
E4. Contribution of CHP to electricity demand (%)
Reduction in dependency on oil
2010
Monitoring plan | 3E-2020
Operating indicators by action line23 Type
Energy consuming sectors
Process Indicators
2010
2020
O1. Level of industrial energy saving vs. BAU (toe/yr)
–
580,500
O2. Level of energy saving in transport sector vs. BAU (toe/yr)
–
173,800
O3. Level of energy saving in buildings and residential vs. BAU (toe/yr)
–
191,900
513
734
258,000
294,000
19,700
150,000
5
81
153
783
O9. Biomass electrical capacity (MW) (includes CHP with biomass)
79
185
O10. Photovoltaic electrical capacity (MW)
20
135
300,000
600,000
O4. Installed capacity in CHP (MW) O5. Consumption of biomass for thermal uses (toe) O6. Solar thermal (m2) O7. Low-temperature geothermal (MWg) O8. Installed wind capacity (MW)
Energy markets
O11. LNG storage capacity (m3) O12. Power supply downtime (TIEPI) (hours)
Technology
23
2.1
1.5
O13. Energy industry turnover in Basque Country (€m/yr)
15,500
18,000
O14. Employment in energy industry and goods in the Basque Country (jobs)
24,000
28,000
Table 9.2. 3E2020. Operating indicators and targets are to 2020, except in technology which are to 2015
23
Average for last 5 Years.
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Monitoring plan | 3E-2020
Energy-related indicators contained in Competitiveness Plan 2010-2013242526 The following tables set out the annual targets for energy-related indicators established in the Basque Government’s Business Competitiveness Plan 2010-2013 (approved by the government in July, 2010).
AXIS
COMPETITIVENESS INDICATORS
Greenhouse gases (Base year 1995)
24
SUSTAINABLE ECONOMICS
CME1. Final energy intensity (2010=base index 100)25
TARGETS 2010
2011
2012
2013
–
–
–
–
100
98
96
94
Table 9.3. 3E2020. Energy-related indicators contained in the scorecard of the Business Competitiveness Plan 2010-2013
Lines
S.2- Promote Savings, energy efficiency and renewable energy production
H.6- Consolidate energy infrastructures that guarantee sufficient energy supply in competitive conditions
Process Indicators
2010
2011
2012
PE1. Energy saving compared to overall BAU scenario (toe/yr)
174,800
267,000
359,200
451,400
PE2. Level of energy saving compared to BAU scenario (tertiary sector) (toe/yr)
20,200
38,100
56,000
73,900
PE3. Level of energy saving compared to BAU scenario (transport sector) (toe/yr)
26,200
43,100
60,000
76,900
PE4. Level of energy saving compared to BAU scenario (industrial sector) (toe/yr)
128,500
186,500
244,500
302,500
PE5. Electricity supply from renewables (%)
6%
6.5%
6.8%
7.4%
PE6. Share of renewable energy in final consumption (%)
8%
8.4%
8.9%
9.4%
PE7. Share of natural gas in the Basque energy mix (%)
42%
42.1%
42.6%
43.0%
–
–
–
150,00026
2.1
1.9
1.8
1.7
PE8. Increase in natural gas storage capacity (m3) PE9. Reduce TIEPI (average power supply downtime) in the Basque Country (hours)
2013
Table 9.4. 3E2020. Energy-related process indicators contained in the Business Competitiveness Plan 2010-2013
24
25 26
The “Greenhouse gases (base year 1995)” indicator in the “Sustainable Economy” axis of the Business Competitiveness Plan 2010-2013 needs to be reformulated and established in overall terms for all sectors in the Climate Change Plan. This indicator was not given in units in the BCP 2010-2013. It has since been specified and its targets redefined. The new liquefied natural gas storage capacity will be commercially operative in 2014.
228
Monitoring plan | 3E-2020
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Appendix | 3E-2020
APPENDIX I. Alternative scenarios for improving the share of renewables EU targets on renewables and estimation of the share in the ACBC (Autonomous Community of the Basque Country) In the European Union, Directive 2009/28/EC establishes a target for 2020 of 20% of final energy consumption coming from renewable sources, in different forms of use as electricity, domestic hot water, heating, air-conditioning and transport. It also establishes that 10% of consumption in transport must come from renewables. This has led to the creation of individualised binding national targets for each member state based on each oneâ&#x20AC;&#x2122;s specific characteristics. The methodology used to set national targets in this area involves adding an across-the-board 5.5% to the base rate for 2005, plus an additional specific rate for each member state based on its estimated GDP growth for the decade. Thus, the target for Spain coincides with the 20% average, whereas elsewhere the figure is, for example, 18% for Germany, 23% for France and 49% for Sweden. Application of this methodology to the Basque Country would give an estimated share of 17%.
0% Sweden Latvia Finland Austria Portugal Denmark Estonia Slovenia Romania France Lithuania Spain EU 27 Germany Greece Italy Bulgaria Ireland Poland United Kingdom The Netherlands The Slovak Republic Belgium The Czech Republic Cyprus Hungary Luxembourg Malta Estimate, Basque Country
10%
20%
30%
40%
50%
60%
49% 42% 38% 34% 31% 30% 25% 25% 24% 23% 23% 20% 20% 18% 18% 17% 16% 16% 15% 15% 14% 14% 13% 13% 13% 13% 11% 10%
25% 20%
20%
20% 17%
15% 10% 5% 0%
EU-27 share
Spain share
Estimation ACBC
17% 2005 base
Fixed incr. (5.5%)
Incr. for GDP
Table AII.1. Compulsory 2020 targets in renewables for EU Member States, and estimation of the share for the ACBC, using European methodology
230
Appendix | 3E-2020
Analysis of renewable energy targets to 2020 The Strategy considers the three areas of application of renewable energy sources: as a thermal source in heating and cooling, in transport and for generating electricity. The main areas of activity are summarised below by type of use, showing areas where there might be room for improvements on the target figures, depending on institutional and social consensus for the proposed solutions, market trends and possible additional institutional support in achieving them. a.- Renewables for thermal use. In solar thermal, the target is for a seven-fold increase in the installed area in m2. The aim for low temperature geothermal energy is to take a qualitative step forward and promote a currently undeveloped market. Finally, in biomass, it is planned to maximise the current level of harnessing in the industrial sector, and promote consumption in the tertiary sector. The targets set are ambitious, and additional targets in this field would be more complicated to achieve. b.- Renewables for transport. The targets in this field set in the EU Renewables Directive (2009/28/EC), and the Spanish Renewable Energy Plan 2020 have been taken into account. Any strategy on transformation of this sector will involve major long-term efforts. The Basque Country has also made a major commitment to introducing electric vehicles. It seeks to promote the consumption of power generation from renewable sources, especially through night-time charging, given that in the medium-to-long term, this will be the time if day with the greatest surplus power production from renewables. c.- Renewables for power generation. In the area of small hydro, nearly all existing falls have been recovered. This area has reached saturation point and any additional potential is very limited. In biomass the target represents the maximum capacity detected. In off-shore wind, no additional targets have been set, since the technology for the deep-water conditions of the Basque Country is still at development phase. The situation is similar with wave energy which is still at a research and development phase, with technological and non- technological barriers to pre-commercial development still to be overcome. In geothermal energy for electricity generation, studies indicate that there is a lack of sufficient resources and appropriate technology to consider any major usage in this field at this time. Nonetheless, it is planned to develop a pilot project depending on the progress of the technology. The only two areas where there might be a greater potential are in onshore wind, where the technical and environmental potential is covered in the review of the Wind Power Territorial Sector Plan, and also in photovoltaic energy. Development of this area, which holds out great potential for the future, will be conditional on certain regulatory aspects on quotas and payment incentives per kWh at a state level, and on trends in the cost of the specific investment. The uncertainty involved in mass deployment of this type of harnessing is for the moment conditional on achieving grid parity; in other words, on the cost of generation matching the costs of acquiring electricity, and on a significant increase in self-consumption. Moreover, for maximum harnessing there should be no limitations related to connection and availability of the distribution grid for taking off surpluses.
231
Appendix | 3E-2020
Alternatives for improving harnessing of renewables272829 Based on the above premises, there are two alternatives to the Target Scenario set out in this strategy, depending on the level of new onshore wind capacity and new photovoltaic facilities incorporated.
Unit
Situation 2010
Scenario Target
Scenario Alternative 1
Scenario Alternative 2
Onshore wind
MW
153
580
98927
1,530
Photovoltaic
MWp
20
115
765
175
Resource
Table AII.2. Alternative scenarios for an increase in renewables 2011-2020 to improve their usage level
Implications of the alternatives considered The alternative scenarios for renewable power generation considered would improve energy indicators to 2020, giving a 20% reduction in CO2 emissions, savings of 18% and a 17% share of renewables in final consumption. However, the additional investment required would be €1.96 bn in Alternative 1 and €1.32 bn in Alternative 2, over and above the Target Scenario. Unit
Scenario Target
Scenario Alternative 1
Scenario Alternative 2
Energy saving target28
%
17.0
18.3
18.3
Share of renewables in FEC
%
13.9
17.0
17.1
Renewables in power supply
%
16.5
26.3
26.3
Reduction in CO2 from energy vs. 2005
%
18.0
20.0
20.0
M€
–
1,960
1,320
Indicators 2020
Other indicators Additional investment29
Table AII.3. Main implications of the alternative renewables scenarios
27 28 29
An additional improvement of 20% is envisaged in annual usage hours equivalent. Estimation based on European methodology. Additional investment compared to target scenario.
232
Appendix | 3E-2020
APPENDIX II. Abbreviations ACBC
Autonomous Community of the Basque Country
BAU
Business-as-Usual
boe
barrels of oil equivalent
CCS
carbon capture and storage
CPS
IEA Current Policies Scenario
DHW
Domestic Hot water
ETS
European Emissions Trading Scheme
EV
Electric Vehicle
IEA
International Energy Agency
LNG
liquefied natural gas
LPG
liquefied petroleum gas
mmbod
million barrels of oil per day
NG
natural gas
NPS
IEA New Policies Scenario
PANER
National Action Plan on Renewable Energy
PTP
Partial Territorial Plan
REP
Renewable Energy Plan
SET-PLAN European Strategic Energy Technology Plan TBC
Technical Building Code
TIEPI
installed capacity downtime equivalent time (tiempo de interrupci贸n equivalente de la potencia instalada)
TSP
Territorial Sector Plan
toe
tonnes of oil equivalent
WEO
World Energy Outlook
233