2020 RES Scenarios for Europe - Are Member States Well on Track for Achieving 2020 RES Targets?

2020 RES scenarios for Europe - are Member States well on track for achieving 2020 RES targets?

Authors: Gustav Resch, Lukas Liebmann, Marijke Welisch TU VIENNA / EEG

Vienna, June 2015

Compiled within the European Intelligent Energy Europe project KEEPONTRACK! (work package 2) www.keepontrack.eu Intelligent Energy Europe (IEE), ALTENER

2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

Contact details for this report:

Gustav Resch Vienna University of Technology, Institute of Energy systems and Electric Drives, Energy Economics Group (EEG) Gusshausstrasse 25 / 370-3 A-1040 Vienna Austria Phone: +43(0)1/58801-370354 Fax: +43(0)1/58801-370397 Email: [email protected]

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Page ii 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

Table of Contents

Page

1 Executive Summary ...... 1

2 Introduction ...... 5 2.1 The policy context - past progress and future perspectives for RES in the EU ...... 5 2.2 Objective and structure of this report ...... 6

3 Short description of methodology and key assumptions ...... 7 3.1 Model-based assessment of possible RES developments for meeting binding 2020 RES targets ...... 7 3.1.1 Constraints of the model-based policy analysis ...... 7 3.1.2 The policy assessment tool: the Green-X model ...... 7 3.1.3 Overview on assessed cases...... 7 3.1.4 Overview on key parameters ...... 8

4 Key results on 2020 RES target achievement ...... 10 4.1 RES deployment at EU-28 level ...... 10 4.2 Investments and selected costs & benefits at EU-28 level ...... 12 4.3 Cross-country comparison of RES deployment and 2020 RES target achievement ...... 13 4.4 The need for and impact of RES cooperation ...... 14

5 Detailed results on domestic RES deployment by Member State ...... 17 5.1 Austria ...... 18 5.2 Belgium ...... 19 5.3 Bulgaria ...... 20 5.4 Croatia ...... 21 5.5 Cyprus ...... 22 5.6 Czech Republic ...... 23 5.7 Denmark ...... 24 5.8 Estonia ...... 25 5.9 Finland ...... 26

Page iii 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.10 France ...... 27 5.11 Germany ...... 28 5.12 Greece ...... 29 5.13 Hungary ...... 30 5.14 Ireland ...... 31 5.15 Italy ...... 32 5.16 Latvia ...... 33 5.17 Lithuania ...... 34 5.18 Luxembourg ...... 35 5.19 Malta ...... 36 5.20 The Netherlands...... 37 5.21 Poland ...... 38 5.22 Portugal ...... 39 5.23 Romania ...... 40 5.24 Slovakia ...... 41 5.25 Slovenia ...... 42 5.26 Spain ...... 43 5.27 Sweden ...... 44 5.28 United Kingdom ...... 45

6 Conclusions and Recommendations ...... 47

7 References ...... 48

8 Annex 1 – Method of approach / Key assumptions ...... 49 8.1 The policy assessment tool: the Green-X model ...... 49 8.2 Overview on assessed cases ...... 50 8.3 Criteria for the assessment of RES support schemes ...... 51 8.4 Overview on key parameters ...... 52 8.4.1 Energy demand ...... 53 8.4.2 Conventional supply portfolio ...... 54 8.4.3 Fossil fuel and carbon prices ...... 56

Page iv 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

1 Executive Summary

Model-based assessment of 2020 RES deployment

By use of a specialised energy system model (Green-X) a quantitative analysis was conducted to assess feasible RES developments up to 2020 according to selected policy pathways (i.e. a Business- As-Usual and a Policy Recommendations case), indicating RES deployment at Member State and at EU-28 level that can be expected in the near future, as well as related impacts on costs and benefits.

Methodology and key assumptions

Similar to previous assessments the Green-X model was applied to perform a detailed quantitative assessment of the future deployment of renewable energy on country- and sector level. The core strength of this tool lies on the detailed RES resource and technology representation accompanied by a thorough energy policy description, which allows assessing various policy options with respect to resulting costs and benefits. For a detailed description we refer to www.green-x.at.

The RES policy framework is a Policy recommendations key input to this analysis where- scenario: by two scenarios were in focus BAU case: RES ◄ Meeting/Exceeding 20% RES by 2020 policies are as precondition (see Figure 1): a business-as- applied as ◄ Continuation BUT fine-tuning usual (BAU) case where the currently (increasing cost-efficiency & effectiveness) assumption was taken that RES implemented of national RES policies: improving the design (without any of RES policies but no change of the in prior policies are applied as currently adaptation) until chosen RES policy instrument type 2020, implemented (without any adap- ◄ Mitigation of non-cost barriers i.e. a business as ◄ RES cooperation comes into play in the tation) until 2020, and a policy usual (BAU) exceptional case that pure national target forecast. recommendations (PR) scenar- fulfilment appears not feasible io, indicating a pathway for ◄ Increase in energy efficiency in accordance with 2020 energy efficiency targets meeting (or even exceeding) the

2020 RES targets, that builds on Figure 1: Overview on assessed cases the policy recommendations derived within this project, see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015).

In order to ensure consistency with existing EU scenarios and projections data on future developments of demand and of energy/carbon prices are taken from PRIMES modelling – i.e. the PRIMES scenarios used is the most recent reference scenario as of 2013 (EC, 2013). Additionally, the Policy Recommendations (PR) scenario derived indicates the impact of increasing, complementary to RES, energy efficiency. For doing so, the outcomes of a detailed study evaluating the current energy efficiency policy framework in the EU (Braungardt et al., 2014) are incorporated. With respect to the potentials and cost of RES technologies we refer to the Green-X database, respectively. Table 1 shows which parameters are based on PRIMES and which have been defined for this study. Page 1 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

Table 1: Main input sources for scenario parameters

Based on PRIMES Defined for this study (Default data on) Energy demand by sector RES policy framework Primary energy prices Reference electricity prices Conventional supply portfolio and conversion effi- RES cost (Green-X database) and future learning ciencies rates

CO2 intensity of sectors RES potential (Green-X database) Biomass trade specification Technology diffusion Energy efficiency/saving potentials by sector

Results on 2020 RES deployment and target achievement

Next, a closer look is taken on key outcomes on expected future RES deployment and related costs, expenditures and benefits at the aggregated (EU-28) level.

First, Figure 2 shows the contribution of RES to meeting gross final and sector-specific energy demands in 2020 for both assessed cases. It turns out that under current RES support and related framework conditions (BAU case) at EU-28 level only a RES share of 18.4% appears feasible. Thus, improving national RES policies, for example according to the recommendations as provided within this project, appears essential for several Member States to bring them back on track. This is demonstrated by the results on the alternative policy pathway (Policy Recommendations case), where a RES share of 23.3% can be achieved by 2020. For doing so, RES in all energy sectors have to contribute more but possibly the most impressive changes can be identified for RES in the electricity sector, where 40.8% (PR case) instead of 30.5% (BAU case) are reached in 2020, and for RES in the heating and cooling sector (i.e., 23.7% (PR case) instead of 19.5% (BAU case)).

Indicators on the costs and benefits of an accelerated RES deployment in the European Union offer central information for decision makers. In this context, Figure 3 summarises the assessed costs and benefits arising from the future RES deployment in the focal period 2015 to 2020. More precisely, this graph provides for the researched cases throughout the period 2015 to 2020 the on average per year arising investment needs and the resulting costs – i.e. additional generation cost and support expenditures. Moreover, they offer an indication of the accompanying benefits in terms of supply security (avoided fossil fuels expressed in monetary terms – with impact upon a country’s trade balance) and climate protection (avoided CO2 emissions – monetarily expressed as avoided expenses for emission allowances). Other benefits – even of possibly significant magnitude - such as job creation or industrial development were not included in this assessment. Apparently, with improved policy design and mitigated non-cost barriers RES deployment and consequently also related investments increase strongly, by about 83% with respect to the latter. Moreover, a significantly improved balance between costs and benefits can be observed.

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Avoided expenses for CO2 emission allowances 45% RES-E 40.8% Avoided expenses for fossil fuel (imports) RES-H&C Support expenditures

40% ] Biofuels € Capital expenditures 100 35% RES total 30.5% 90 30% 80 25% 23.7% 23.3% 70

19.5% 60 20% 18.4% 50 90.7 15% 40

energy demand by 2020 [%] by demand energy 2.1 10% 7.9% 30 49.6 6.1% 20 1.3 30.7

Share in corresponding gross final gross in Share (sectoral) corresponding 5% 10 15.0 19.3 18.0

0% new in investments as well as of benefits and 0 Indicators on yearly average (2011 to 2020) costs 2020) costs (2011 to average yearly on Indicators Business as usual (BAU) Policy recommendations (PR) [billion EU level 2020) at 2011 to (installed RES Business as usaul (BAU) Policy recommendations (PR)

Figure 2: Sector-specific RES shares by 2020 Figure 3: Investments, selected costs & at EU-28 level according to the benefits at EU-28 level according to assessed cases (BAU vs. PR) the assessed cases (BAU vs. PR)

RES deployment and RES target achievement at the national level is discussed next. Thereby, Figure 4 provides a graphical illustration of the outcomes of our model-based assessment of 2020 RES target achievement by Member State, indicating the likeliness by Member State following an “amp approach”. Complementary to that, Figure 5 offers further insights on the expected national RES deployment under BAU conditions. This graph also shows the additional deployment at sector level that would occur according to the Policy Recommendations case. Thus, under BAU conditions ten out of the assessed 28 Member States, e.g. Bulgaria, Croatia or Italy, appear well on track. In another three Member States (i.e. Denmark, Finland and Slovakia) there are doubts whether 2020 targets can be reached with already implemented measures, while the remainder of fifteen Member States can be classified as “not well on track.” In contrast to that, if recommended policy measures for increasing RES use and energy efficiency are implemented well in time, all Member States still have the possibility to achieve their 2020 RES targets. The majority of countries would even exceed its obligation, and there are good reasons for doing so since, as discussed above, additional RES deployment contributes well to increase supply security and local employment, to name only some additional benefits. Finally, by 2020 three Member States (i.e. Luxembourg, Malta and the Nether- lands) make use of RES cooperation mechanisms as a buyer while all others act as (possible) seller.

Page 3 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

This MS is expected to achieve This MS is expected to exceed its its 2020 target 2020 target domestically and acts as a (possible) seller within in the RES There are doubts whether this cooperation mechanism in 2020 MS may achieve its 2020 target This MS is expected to achieve its This MS is not well on track to

2020 target through a combination (PR) scenario achieve its 2020 target of domestic action and RES

(BAU) scenario (BAU) cooperation, acting as a buyer for meeting the remaining gap “Business “Business as usual” “Policy recommendations” “Policy

Figure 4: Assessment of 2020 RES target achievement according to the assessed cases (BAU(left) vs. PR (right)) Note: The traffic light colours of the figure on the left hand-side show an achievement or shortfall of 2020 RES targets by MS after possible adjustments through RES cooperation. In this context, in order to reflect uncertainty appropriately a threshold of +/- 3% (of the required 2020 RES deployment) is used to distinguish between achievement, doubt or shortfall.

60% RES cooperation Biofuels RES-H&C RES-E Increased EE BAU RES target 55% Policy Recommendations case: Additional deployment compared to BAU 50% 45% 40% 35% 30% 25% by 2020 [%] by 20% 15% 10% 5% RES share in gross final energy demand demand energy final in gross share RES 0% Italy EU28 Spain Malta Latvia France Cyprus Poland Ireland Austria Greece Croatia Finland Estonia Sweden Belgium Bulgaria Slovakia Slovenia Hungary Portugal Romania Denmark Germany Lithuania Netherlands Luxembourg Czech Republic United Kingdom Figure 5: Comparison of 2020 RES targets and RES deployment according to a Business-as-usual (BAU) scenario by Member State, and additional (sector-specific) RES deployment in the Policy recommendations case

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2 Introduction

2.1 The policy context - past progress and future perspectives for RES in the EU The Re-Shaping study (see Ragwitz et al., 2012) presents in detail how the first decade of the new millennium was characterised by the successful deployment of RES across EU Member States – total RES deployment increased by more than 40%. Precisely, RES electricity generation grew by approxi- mately 40%, RES heating and cooling supply by 30% and biofuels by a factor of 27 during the period 2001 to 2010, investments in RES technologies increased to an amount of € 40 billion annually in 2009 and at the same time impressive cost reductions in RES technologies, especially photovoltaics could be observed. A combination of strong national policies and the general focus on RES created by the EU Renewable Energy Directives in the electricity and transport sectors towards 2010 can be named as the main reasons for these remarkable structural changes (2001/77/EC and 2003/30/EC). The most important developments in EU Energy Policy can be summarised as follows: The EU ETS Directive has introduced full auctioning post 2012, thus exposing fossil power generation to the full cost of carbon allowances, at least in theory. In practice, an oversupply of allowances has however led to a deterioration of prices on the carbon market. Moreover, the EU Directive on the support of energy from renewable sources (2009/28/EC), subsequently named RES Directive, comprises the establishment of binding RES targets for each Member State, based on an equal RES share increase modulated by Member State GDP. This provides a clear framework and vision for renewable technologies in the short to mid-term. The formulation of the National Renewable Energy Action Plans (NREAPs), has been another important milestone realised in the implementation of the 2020 RES Directive. The NREAPS outline the national strategies concerning support schemes, cooperation mechanisms and (non-cost) barrier mitigation, in particular with respect to grid-related and administrative issues. In addition, a detailed reporting framework for the European Commission and Member States has been drawn up to ensure that these strategies are well established and coordinated. Albeit the successful development of the RES sector over the last decade and the promising policy developments described beforehand substantial challenges still lie ahead. For the renewable energy electricity and heating & cooling sectors (RES-E and RES-H&C), the growth rate of total generation has to continue in line with the trend observed during the last five years. For meeting 2020 RES targets, compared to the period 2001 to 2010, yearly growth in RES-E needs to almost double from 3.4% (2001 to 2010) to 6.7% in the years up to 2020. There also needs to be a substantial increase in growth in the RES-H&C sector from the 2.7% per year achieved over the past decade to 3.9% per year until 2020. Therefore, the EU as a whole should continue to uphold the past level of achievement and the most successful countries could even over-achieve the 2020 targets by continuing to follow their present trend.

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2.2 Objective and structure of this report

This report presents the outcomes of a detailed model-based assessment of how well Member States are on track for achieving 2020 RES target. By use of a specialised energy system model (Green-X) a quantitative analysis was conducted to assess feasible RES developments up to 2020 according to selected policy pathways, indicating RES deployment at Member State and at EU-28 level that can be expected in the near future, as well as related impacts on costs and benefits.

As a starting point, section 3 provides a short description of the methodology and key assumptions of this analysis, introducing the model applied and the scenarios assessed. Note that details on background parameter and the overall approach taken are provided in Annex I to this report.

Key outcomes of the analysis of 2020 RES target achievement are subject of section 4. While the first part presents and discusses results on expected future RES deployment and related costs, expenditures and benefits at the aggregated (EU-28) level the subsequent subsections offers a cross- country comparison and an assessment of the need for RES cooperation.

Details on country-specific RES developments in the 2020 context are then discussed in section 5, where for each Member State a closer look is taken on domestic RES deployment at the aggregated and at sector and technology level.

This report concludes with a summary of key findings and recommendations on the way forward, see section 6.

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3 Short description of methodology and key assumptions

3.1 Model-based assessment of possible RES developments for meeting binding 2020 RES targets By use of a specialised energy system model (Green-X) a quantitative analysis was conducted to assess feasible RES developments up to 2020 according to selected policy pathways, indicating RES deployment at Member State and at EU-28 level that can be expected in the near future, as well as related impacts on costs and benefits. Subsequently we present background information and key outcomes in a brief manner.

Note that the Annex to this report provides a detailed description of the methodology and the assumptions taken for this analysis of possible RES developments in the near future (up to 2020). In contrast to that, below only a concise summary of relevant background information is provided.

3.1.1 Constraints of the model-based policy analysis

► Time horizon: 2010 to 2020 – Results are derived on an annual base ► Geographical coverage: all Member States of the European Union ► Technology coverage: covering all RES technologies for power and heating and cooling generation as well biofuel production. The (conventional) reference energy system is based on EC modelling (PRIMES) ► Energy demand: Default demand forecasts are taken from “EU energy, transport and GHG emissions trends to 2050: Reference Scenario 2013” (EC, 2013), assumptions on complementary energy efficiency potentials are taken from a recent related EU study led by Fraunhofer ISI (Braungardt et al., 2014) ► RES imports to the EU: generally limited to biofuels and forestry biomass meeting the sustainability criteria

3.1.2 The policy assessment tool: the Green-X model The Green-X model was applied to perform a detailed quantitative assessment of the future deployment of renewable energy on country- and sector level. The core strength of this tool lies on the detailed RES resource and technology representation accompanied by a thorough energy policy description, which allows assessing various policy options with respect to resulting costs and benefits. A short characterization of the model is given in the Annex to this main report, whilst for a detailed description we refer to www.green-x.at.

3.1.3 Overview on assessed cases The RES policy framework is a key input to this analysis whereby two scenarios were in focus (see Figure 6): a business-as-usual (BAU) case where the assumption was taken that RES policies are applied as currently implemented (without any adaptation) until 2020, and a policy recommendations (PR) scenario, indicating a pathway for meeting (or even exceeding) the 2020 RES targets, that

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builds on the policy recommendations derived within this project, see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015). Note that in the PR case RES cooperation is an important element for overall RES target achievement for certain Member States. It comes however only into play in exceptional cases when national target achievement appears not feasible even with high financial incentives.1

Generally, data on currently implemented RES policies in the assessed Member States as considered in the BAU case has been collected until end of March 2015. Thus, any policy changes that have been taken afterwards could not be considered in this model-based assessment.

Policy recommendations scenario: BAU case: RES ◄ Meeting/Exceeding 20% RES by 2020 policies are as precondition applied as ◄ Continuation BUT fine-tuning currently (increasing cost-efficiency & effectiveness) implemented of national RES policies: improving the design (without any of RES policies but no change of the in prior adaptation) until chosen RES policy instrument type 2020, ◄ Mitigation of non-cost barriers i.e. a business as ◄ RES cooperation comes into play in the usual (BAU) exceptional case that pure national target forecast. fulfilment appears not feasible ◄ Increase in energy efficiency in accordance with 2020 energy efficiency targets

Figure 6: Overview on assessed cases

3.1.4 Overview on key parameters In order to ensure maximum consistency with existing EU scenarios and projections various input parameters of the renewable scenarios conducted with Green-X are derived from PRIMES modelling. More precisely, the PRIMES scenario used is the PRIMES reference scenario as of 2013 (EC, 2013). The main data source for RES-specific parameter is the Green-X database – this concerns for example information on the status quo of RES deployment, future RES potentials and related costs as well as other country-specific parameter concerning non-economic barriers that limit an accelerated uptake of RES. As discussed above (see overview on assessed cases) the policy framework for RES is specifically defined for this assessment and for consistency future energy demand developments are aligned to the reference projection and/or the assessment of energy efficiency options, respectively. Table 2 shows which parameters are based on PRIMES, on the Green-X database and which have been defined for this assessment.

1 As threshold with respect to financial RES support across Member States a high value is used – i.e. differences in country-specific support per MWh RES are limited to a maximum of 30 €/MWhRES. Consequently, if support in a country with temporarily limited RES potentials and / or an ambitious RES target exceeds the upper boundary, the remaining gap to its RES target would be covered in line with the flexibility re- gime as defined in the RES Directive through (virtual) imports from other countries that achieve a surplus in RES deployment. The needed support costs for the (virtual) exports are taken over by the importing country. No additional transaction costs are considered.

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Table 2: Main input sources for scenario parameters

Based on PRIMES Based on Green-X database Defined for this assessment Primary energy prices RES cost (investment, fuel, O&M) RES policy framework Conventional supply portfolio RES potential Reference electricity prices and conversion efficiencies

CO2 intensity of sectors Biomass trade specification Modified data on energy demand by sector, impacted by energy efficiency* Default data on energy demand Technology diffusion / Non-economic by sector barriers Learning rates Note: *Default demand data is taken from PRIMES (reference case) and serves as basis for the alternative (modified) demand projections, incorporating the impact of energy efficiency. Demand data for the alternative energy efficiency scenario reflects the changes in energy consumption pattern in accordance with a detailed related EU study, done on behalf of DG ENER, led by Fraunhofer ISI (Braungardt et al., 2014) – see Annex 1.

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4 Key results on 2020 RES target achievement

This section is dedicated to take a closer look on key outcomes of the model-based assessment of 2020 RES target achievement. While the first subsections present and discuss results on expected future RES deployment and related costs, expenditures and benefits at the aggregated (EU-28) level the subsequent part offers a cross-country comparison.

4.1 RES deployment at EU-28 level First, Figure 7 illustrates RES developments up to 2020 at EU-28 level in relative terms (i.e. RES share in gross final energy demand) according to the assessed cases (BAU and Policy Recommenda- tions (PR)). It turns out that under current RES support and related framework conditions (BAU case) at EU-28 level only a RES share of 18.4% appears feasible. Thus, improving national RES policies, for example according to the recommendations as provided within this project, appears essential for several Member States to bring them back on track. This is demonstrated by the results on the alternative policy pathway (Policy Recommendations case), where a RES share of 21.0% can be achieved by 2020.

25% Historic and expected future 23.3% RES developments & 2020 RES target 20% 20% 18.4% fulfillment

15% BAU 15.0% [%] PR 10%

Historic 5% deployment 2020 RES target RES share in gross final energy demand demand energy final gross in share RES 0% 2010 2012 2014 2016 2018 2020

Figure 7: RES developments up to 2020 at EU-28 level in relative terms (i.e. RES share in gross final energy demand) according to assessed cases (BAU and PR)

Complementary to above, Figure 8 and Figure 9 provide details on RES deployment at sector level, indicating current (2012) and future (2020) RES generation by sector at EU-28 level in absolute terms (i.e. TWh electricity, heat or transport fuels produced) (Figure 8) as well as sector-specific RES deployment in relative terms (i.e. RES share in corresponding sector-specific and in aggregated gross final energy demand) (Figure 9). As applicable from these graphs, RES in all energy sectors have to contribute more to achieve or even over-succeed the given 2020 RES target as illustrated by

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the PR case. Possibly the most impressive changes can be identified for RES in the electricity sector, where 37.2% (PR case) instead of 30.9% (BAU case) are reached in 2020, and for biofuels in transport (i.e., 7.9% (PR case) instead of 5.5% (BAU case)).

Breakdown of 45% RES-E Biofuels for transport 40.8% RES generation RES-H&C RES-heating & cooling 40% RES-electricity by sector Biofuels 35% RES total 3,500 30.5% 30% 3,000 291.0 23.3% 25% 23.7% 2,500 238.6 19.5% 20% 18.4% 2,000 141.0 1362.5 1226.6 1,500 15% 1026.6 energy demand by 2020 [%] by demand energy 1,000 10% 7.9% 6.1% 1036.9 1262.5 500 823.8 final gross in Share (sectoral) corresponding 5% 0 0% Energy production from [TWh/a] RES from production Energy 2013 2020 (BAU) 2020 (PR) Business as usual (BAU) Policy recommendations (PR)

Figure 8: Breakdown of RES generation by Figure 9: Sector-specific RES shares by 2020 sector at EU-28 level in 2012 and at EU-28 level according to the 2020 according to assessed cases assessed cases (BAU vs. PR) (BAU and PR)

Biogas 2013 2020 (BAU) 2020 (PR) Biomass* 3% 6% 5% Geothermal 2% 6% Large hydro 8%

(of generation) (of Small hydro 13% 12% 25% 12% 30% PV 29%

Etechnology CSP

- 25% Tidal & wave 10% 31% 37% 11%

RES Wind onshore 15% 6% 5% 4%

Breakdwon by Wind offshore 2013 2020 (BAU) 2020 (PR)

8% 3% 3% 2% 3% 3% 4% 1% 11% 12% 1% (of generation) (of Biogas 1% Biomass* Geothermal H&C technology - Solar thermal 86% 82% 80%

RES Heat pumps

Breakdwon by Figure 10: Breakdown of RES generation by technology and by sector (electricity (up) and heating & cooling (down) at EU-28 level in 2012 and 2020 according to assessed cases (BAU and PR)

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Technology details are shown in Figure 10, providing a breakdown of RES generation by technology for the electricity sector (upper graphs) and for heating and cooling (lower graphs) according to both assessed cases. A broad portfolio of RES technologies has to contribute to assure RES target achievement, in particular for RES-E the deployment of different technology options appears well balanced in the 2020 context. In the sector of heating and cooling the dominance of biomass (incl. biowaste) will remain although its relative share in overall sector-specific RES generation is expected to decline in forthcoming years.

4.2 Investments and selected costs & benefits at EU-28 level Indictors on the costs and benefits of an accelerated RES deployment in the European Union offer central information for decision makers. In this context, Figure 11 summarises the assessed costs and benefits arising from the future RES deployment in the focal period 2011 to 2020. More precisely, this graph provides for the researched cases throughout the period 2011 to 2020 the on average per year arising investment needs and the resulting costs – i.e. additional generation cost and support expenditures. Moreover, they offer an indication of the accompanying benefits in terms of supply security (avoided fossil fuels expressed in monetary terms – with impact upon a country’s trade balance) and climate protection (avoided CO2 emissions – monetarily expressed as avoided expenses for emission allowances). Other benefits – even of possibly significant magnitude - such as job creation or industrial development were not included in this assessment. Apparently, with improved policy design and mitigated non-cost barriers RES deployment and consequently also related investments increase strongly, by about 35% with respect to the latter. Moreover, a significantly improved balance between costs and benefits can be observed.

Avoided expenses for CO2 emission allowances Avoided expenses for fossil fuel (imports) Support expenditures ]

€ Capital expenditures 100 90 80 70 60 50 90.7 40 30 2.1 49.6 20 1.3 30.7 10 15.0 19.3 18.0

and benefits of as well as investments in new new in investments as well as of benefits and 0 Indicators on yearly average (2011 to 2020) costs 2020) costs (2011 to average yearly on Indicators RES (installed 2011 to 2020) at EU level [billion EU level 2020) at 2011 to (installed RES Business as usaul (BAU) Policy recommendations (PR)

Figure 11: Investments, selected costs & benefits at EU-28 level according to the assessed cases (BAU vs. PR)

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4.3 Cross-country comparison of RES deployment and 2020 RES target achievement

This MS is expected to achieve This MS is expected to exceed its its 2020 target 2020 target domestically and acts as There are doubts whether this a (possible) seller within in the RES MS may achieve its 2020 target cooperation mechanism in 2020 This MS is expected to achieve its This MS is not well on track to

2020 target through a combination (PR) scenario achieve its 2020 target of domestic action and RES

(BAU) scenario (BAU) cooperation, acting as a buyer for meeting the remaining gap “Business “Business as usual” “Policy recommendations” “Policy

Figure 12: Assessment of 2020 RES target achievement according to the assessed cases (BAU(left) vs. PR (right)) Note: The traffic light colours of the figure on the left hand-side show an achievement or shortfall of 2020 RES targets by MS after possible adjustments through RES cooperation. In this context, in order to reflect uncertainty appropriately a threshold of +/- 3% (of the required 2020 RES deployment) is used to distinguish between achievement, doubt or shortfall.

RES deployment and RES target achievement at the national level is discussed next. Thereby, Figure 12 provides a graphical illustration of the outcomes of our model-based assessment of 2020 RES target achievement by Member State, indicating the likeliness by Member State following an “traffic light approach”2. Complementary to that, Figure 13 offers further insights on the expected national RES deployment under BAU conditions. This graph also shows the additional deployment at sector level that would occur according to the Policy Recommendations case. Thus, under BAU conditions nine out of the assessed 28 Member States, e.g. Austria, Denmark or Italy, appear well on track. In another four Member States (i.e. Germany, Finland, Ireland and Slovakia) there are doubts whether 2020 targets can be reached with already implemented measures, while the remainder of fourteen Member States can be classified as “not well on track.” In contrast to that, if recommended policy

2 Following the traffic light approach a green colour is used to show that a MS is expected to achieve its 2020 target while an orange colour indicates that there are doubts whether this MS may achieve its given RES target. Finally, red highlights that a MS is not well on track with respect to target achievement. In this context, in order to reflect uncertainty appropriately a threshold of +/- 3% (of the required 2020 RES deployment) is used to distinguish between achievement, doubt or shortfall.

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measures are implemented well in time, all Member States still have the possibility to achieve their 2020 RES targets. The majority of countries would even exceed its obligation, and there are good reasons for doing so since, as discussed above, additional RES deployment contributes well to increase supply security and local employment, to name only some additional benefits. Finally, by 2020 five Member States (i.e. France, Luxembourg, Malta, the Netherlands and the UK) make use of RES cooperation mechanisms as a buyer while all others act as (possible) seller.

60% RES cooperation Biofuels RES-H&C RES-E Increased EE BAU RES target 55% Policy Recommendations case: Additional deployment compared to BAU 50% 45% 40% 35% 30% 25% by 2020 [%] by 20% 15% 10% 5% RES share in gross final energy demand demand energy final in gross share RES 0% Italy EU28 Spain Malta Latvia France Cyprus Poland Ireland Austria Greece Croatia Finland Estonia Sweden Belgium Bulgaria Slovakia Slovenia Hungary Portugal Romania Denmark Germany Lithuania Netherlands Luxembourg Czech Republic United Kingdom Figure 13: Comparison of 2020 RES targets and RES deployment according to a Business-as-usual (BAU) scenario by Member State, and additional (sector-specific) RES deployment in the Policy recommendations case

4.4 The need for and impact of RES cooperation Further details on the need for and impact of RES cooperation are provided below. Generally, RES cooperation between Member States (incl. also Third countries) comes into play if a country falls short in achieving its given RES target purely domestically. In order to provide to Member States sufficient flexibility, the RES Directive has defined rules for cross-country cooperation, allowing to (virtually) import surpluses in RES generation from other Member States.

A simplified approach has been taken in this model-based assessment to incorporate the feasibility and impact of RES cooperation into the outcomes related to country-specific RES target achievement:

• If a Member State over-complies with its given target the surplus in RES generation represents a possible export volume, in other words the supply related to RES cooperation. • If a Member State falls short in achieving its given target, the deficit in RES generation de- fines the required import volume, in other words the demand for RES cooperation. • The feasibility of country-specific imports and exports is then defined at European level: Summing up country-specific import and export volumes, we can clarify on the match between supply (export volumes) and demand (import volumes) for RES cooperation: o If demand and supply perfectly match (i.e. import and export volumes are of similar magnitude), feasibility equals possibility or requirements, respectively, meaning Page 14 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

that all countries that have a surplus can sell that in full magnitude to other Mem- ber States that fall short etc. o If demand exceeds supply, meaning that required imports are larger in magnitude than possible exports, potential sellers can sell their full surplus in RES generation while buying countries may end up with a deficit. In our assessment this character- ises the situation occurring under BAU conditions. o If possible supply exceeds required demand, buying countries can cover their whole demand for RES imports while potential sellers have the opportunity to sell only parts of their surplus in RES generation. This describes the situation that can be expected if RES deployment follows the PR case.

Below Table 3 lists the resulting country-specific RES shares by 2020 for both assessed cases (BAU vs. PR) with and without RES cooperation. Complementary to that, Figure 14 provides an illustration of the feasible (virtual) exchange of RES volumes between Member States by 2020, indicating for the case of a seller (exporting country) the feasible surplus in RES generation that can be sold to buying countries while in the case of a buyer (importing country) feasible import volumes can be identified.

8% + export 6% 4%

share in gross in gross share 2% - 0% -2% -4% final energy demand] energy final -6% - import -8% Feasible (virtual) exchange of of RES exchange (virtual) Feasible volumes by 2020 [% [% 2020 by volumes Italy Spain Malta Latvia France Cyprus Poland Ireland Austria Greece Finland Estonia Sweden Belgium Bulgaria Slovakia Slovenia Hungary Portugal Romania Denmark Germany Lithuania Netherlands Luxembourg Czech Republic United Kingdom Figure 14: Feasible (virtual) exchange of RES volumes between Member States (i.e. RES cooperation) by 2020 according to the assessed cases (BAU vs. PR)

Page 15 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

Table 3: RES share in gross final energy demand by 2020 at Member State level for both assessed cases (BAU vs. PR) with and without RES cooperation

RES share RES share RES share RES share RES share in without with without with gross final energy cooperation cooperation cooperation cooperation demand by 2020 RES target (BAU) (BAU) (PR) (PR) Austria 34% 36.9% 34.0% 41.3% 41.1% Belgium 13% 11.98% 12.3% 14.4% 14.3% Bulgaria 16% 21.4% 16.0% 24.0% 23.8% Croatia 20% 23.0% 20.0% 27.9% 27.7% Cyprus 13% 13.5% 13.0% 14.9% 14.9% Czech Republic 13% 12.2% 12.5% 16.3% 16.2% Denmark 30% 30.4% 30.0% 38.2% 37.9% Estonia 25% 31.0% 25.0% 36.8% 36.4% Finland 38% 39.0% 38.0% 46.3% 46.0% France 23% 18.6% 20.1% 24.2% 24.2% Germany 18% 17.3% 17.5% 21.7% 21.6% Greece 18% 13.7% 15.1% 20.8% 20.8% Hungary 13% 12.2% 12.5% 15.6% 15.5% Ireland 16% 16.5% 16.0% 22.9% 22.7% Italy 17% 20.8% 17.0% 23.1% 23.0% Latvia 40% 34.6% 36.5% 45.8% 45.7% Lithuania 23% 26.6% 23.0% 30.1% 29.9% Luxembourg 11% 7.3% 8.5% 9.9% 11.0% Malta 10% 2.9% 5.3% 9.1% 10.0% Netherlands 14% 7.1% 9.4% 11.9% 14.0% Poland 15% 13.7% 14.1% 16.6% 16.5% Portugal 31% 27.7% 28.8% 37.5% 37.4% Romania 24% 25.8% 24.0% 27.7% 27.6% Slovakia 14% 13.9% 14.0% 16.8% 16.7% Slovenia 25% 22.7% 23.5% 29.9% 29.7% Spain 20% 14.7% 16.5% 23.6% 23.5% Sweden 49% 54.3% 49.0% 57.4% 57.1% United Kingdom 15% 8.9% 11.0% 15.2% 15.2% EU28 20% 18.4% 18.4% 23.3% 23.3%

Page 16 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5 Detailed results on domestic RES deployment by Member State

This section provides details on country-specific RES developments in the 2020 context. Thus, on the following pages for each Member State a closer look is taken on domestic RES deployment at the aggregated and at sector and technology level.

To start with, a cross country comparison or rather deviations of last year’s modelling results to this year’s results are presented for the BAU case. Figure 15 shows the changes in expected 2020 RES shares under business-as-usual conditions (i.e. BAU scenario), expressed in percentage points, when comparing this and last year’s (see Resch et al., 2014) modelling results at country level. It can be seen, that for some Member States the outlook for 2020 with currently implemented policies changed to the better whereas for some other MS to the worse. The most pronounced positive ex- amples are Italy, Poland, Finland and the United Kingdom. To the opposite, the situation worsened for example for Greece, Spain and Germany. Reasons for these changes are multifaceted – hints on that can be found in subsequent sections, discussing results and underlying drivers and barriers country by country.

4% 3% 2% 1% 0% -1% -2% -3% Deviations of overall RES shares in shares RES overall of Deviations percentage points compared to BAU BAU to compared points percentage Italy results of scenario report published in published report scenario of results 2014 with in the Keep on Track project Track on 2014 with in the Keep EU28 Spain Malta Latvia France Cyprus Poland Ireland Austria Greece Croatia Finland Estonia Sweden Belgium Bulgaria Slovakia Slovenia Hungary Portugal Romania Denmark Germany Lithuania Netherlands Luxembourg Czech Republic United Kingdom Figure 15: Changes in percentage points of this and last year’s modelling resluts on the overall RES share in 2020 according to a BAU scenario.

Page 17 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.1 Austria Figure 16 shows that since 2010 Austria constantly increased its RES share resulting in a 32.6% RES share in 2013. Looking at the future deployment trajectories of Austria it can be expected that Austria will reach and exceed its 2020 RES target of 34% if currently implemented policy measures and framework conditions are kept in place. This also means that under baseline conditions Austria will have the possibility to export RES deployment surpluses (cf. Figure 17). The sectoral breakdown of RES generation shows that the biggest increase can be expected to happen in the electricity sector, followed by the heating & cooling sector. The assessed PR scenario indicates that an even higher RES deployment is achievable if policy recommendations (see EU Track- ing Roadmap 2015 (Keep-on-Track!, 2015) for details) are implemented in time. The assessed policy recommendations, like a tax on conventional heating oil or clear incentives for the use of solar thermal energy, would mostly aim at the RES H&C sector, as can also be seen in Figure 18.

45% Historic and expected future RES cooperation 41.3% 40% RES developments & Possible (virtual) RES exports 32.6% 36.9% 2020 RES target Feasible (virtual) RES exports 35% 34% fulfillment Required (virtual) RES imports 30% 25 BAU 25% 20 [%] 20% PR 15 15%

Historic [TWh/a] 10 10% deployment 5% 2020 RES target 5 RES share in gross final energy demand demand energy final gross in share RES 0%

Energy production from RES by 2020 0 2010 2012 2014 2016 2018 2020 BAU PR Figure 16: RES developments up to 2020 in Austria in relative terms Figure 17: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Austria according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* 6% RES generation Geothermal 1% 2% 2% RES-heating & cooling 1% 4% 4% by sector Large hydro 9% 9% RES-electricity 11% 13% (of generation) (of Small hydro 8% 140 PV 13% 12% 11%

Etechnology CSP 120 6.9 7.9 - Tidal & wave 71% 62% 61%

RES Wind onshore 100 5.7

Breakdwon by Wind offshore 59.4 61.4 80 53.8 2013 2020 (BAU) 2020 (PR) 3% 3% 60 4% 3% 4% 5% 4% 2% 1% 1% 1% 1% 40

(of generation) (of Biogas 56.8 57.6 20 48.2 Biomass* Geothermal H&C technology 0 - Solar thermal 91% 87% 90% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 18: Breakdown of RES generation by Figure 19: Breakdown of RES generation by technology and by sector sector in Austria in 2012 and (electricity (up) and heating & cooling (down) in Austria in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR) (BAU and PR)

Page 18 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.2 Belgium Even though Belgium did show a constant increase in its RES share in the 4 years from 2010 to 2013, the trajec- tory in Figure 20 indicates that under baseline conditions Belgium will not manage to reach its 2020 RES share target of 13%. This would lead to a required virtual RES import of more than 4 TWh per year (cf. Figure 21). Figure 22 shows a sectoral breakdown of the RES generation for the BAU and the PR scenario. According to the assessed PR scenario Belgium has an additional RES potential in the RES H&C sector of more than 3.3 TWh per year, which could be raised if certain policy measures, like a support system for RES-H&C with specific regulations for biogas and district heating or additional incentives for the use of solar thermal energy, would be implemented (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015) for details). If all potentials across all sectors would be raised Belgium would have the chance to overachieve its 2020 RES share target by more than 1 percentage point.

16% Historic and expected future RES cooperation RES developments & 14% 14.4% Possible (virtual) RES exports 13% 2020 RES target Feasible (virtual) RES exports 12% 12.0% fulfillment Required (virtual) RES imports 6 10% BAU 4 8% [%] 7.9% PR 2 6% 0 Historic [TWh/a] 4% deployment -2 2% 2020 RES target -4 RES share in gross final energy demand demand energy final gross in share RES 0%

Energy production from RES by 2020 -6 2010 2012 2014 2016 2018 2020 BAU PR Figure 20: RES developments up to 2020 in Belgium in relative terms Figure 21: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Belgium according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* RES generation 5% 5% RES-heating & cooling Geothermal 7% by sector Large hydro RES-electricity 18% 11% (of generation) (of Small hydro 16% 21% 60 PV 26% 18% 34% 1% Etechnology CSP 33%

7.9 - 50 Tidal & wave 31% 1% 5.9 18% 1% 28% RES Wind onshore 22% 1% 1% 40 Breakdwon by Wind offshore 2% 25.5 21.2 2013 2020 (BAU) 2020 (PR) 30 3.8 1% 2% 4% 5% 4% 6% 17.2 20 8%

(of generation) (of Biogas 0% 10 22.4 23.3 Biomass* 11.9 Geothermal H&C technology 0 - Solar thermal 91% 88% 80% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 22: Breakdown of RES generation by Figure 23: Breakdown of RES generation by technology and by sector sector in Belgium in 2012 and (electricity (up) and heating & cooling (down) in Belgium in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR) (BAU and PR)

Page 19 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.3 Bulgaria In Figure 24 it can be seen that Bulgaria already reached its 2020 RES share target of 16% in 2012 and further increased its overall RES share to 19% in 2013. This indicates that even in a business-as-usual scenario Bulgaria has the potential to become a virtual RES generation exporter, which is also emphasized in Figure 25. Never- theless, Bulgaria has the potential to strengthen this position by further improving its regulatory framework and implementing electricity markets (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015)). The results of the PR scenario show that those measures could lead to an additional RES generation of more than 3 TWh per year compared to the business-as-usual scenario (cf. Figure 26).

30% Historic and expected future RES cooperation RES developments & Possible (virtual) RES exports 25% 24.8% 2020 RES target Feasible (virtual) RES exports 22.2% fulfillment 19.0% Required (virtual) RES imports 20% 12 BAU 16% 10 15% [%] PR 8

10% 6 Historic [TWh/a] deployment 4 5% 2020 RES target 2 RES share in gross final energy demand demand energy final gross in share RES 0%

Energy production from RES by 2020 0 2010 2012 2014 2016 2018 2020 BAU PR Figure 24: RES developments up to 2020 in Bulgaria in relative terms Figure 25: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Bulgaria according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* 3% 1% 2% 5% RES-heating & cooling RES generation Geothermal 1% by sector Large hydro RES-electricity 18% 15% (of generation) (of Small hydro 18% 30 PV 2.1 24% E technology CSP 20% 19% - 53% 48% 41% 25 3.6 Tidal & wave 11% RES Wind onshore 12% 8% 20 1.2 Breakdwon by Wind offshore 17.7 2013 2020 (BAU) 2020 (PR) 15 15.2 13.3 2% 5% 12% 3% 10 3% 3%

(of generation) (of Biogas 4% 4% 5 9.5 Biomass* 6.9 7.7 Geothermal H&C technology 0 - Solar thermal 90% 80% 81% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 26: Breakdown of RES generation by Figure 27: Breakdown of RES generation by technology and by sector sector in Bulgaria in 2012 and (electricity (up) and heating & cooling (down) in Bulgaria in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR) (BAU and PR)

Page 20 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.4 Croatia For Croatia it can be expected that its 2020 RES target can be achieved under baseline conditions, i.e. if currently implemented RES policy measures are kept in place and framework conditions do not become worse in forthcoming years. The results of the scenario work clearly show that Croatia has the potential to act as a seller in a European market on RES cooperation – even under baseline conditions this appears likely (see Figure 25). Moreover, the alternative PR scenario clearly demonstrates that much more than needed appears feasible in the 2020 context. This requires that policy recommendations like the lift of the 52 MW cap on PV and 400 MW cap on wind technologies (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015)) are implemented in time. Moreover, a comprehensive and reliable strategy for the development of the RES-H&C sector which coor- dinates the newly introduced national support scheme with existing regional and municipal initiatives shall be put in place.

30% Historic and expected future RES cooperation 27.9% RES developments & Possible (virtual) RES exports 25% 2020 RES target Feasible (virtual) RES exports 23.0% fulfillment Required (virtual) RES imports 20% 20% 6 BAU 18.0% 5 15% [%] PR 4

10% 3 Historic [TWh/a] deployment 2 5% 2020 RES target 1 RES share in gross final energy demand demand energy final gross in share RES 0%

Energy production from RES by 2020 0 2010 2012 2014 2016 2018 2020 BAU PR Figure 28: RES developments up to 2020 in Bulgaria in relative terms Figure 29: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Bulgaria according to cases (BAU and PR) assessed cases (BAU and PR)

Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Breakdown of 2% Biomass* 2% 1% 2% RES generation Geothermal 1% 1% 1% RES-heating & cooling 1% 7% by sector Large hydro 4% RES-electricity 3% 11% 11% (of generation) (of Small hydro 9% 30 PV 4%

Etechnology CSP 25 - Tidal & wave 90% 78% 71%

RES Wind onshore

Breakdwon by Wind offshore 20 1.8 2.0 2013 2020 (BAU) 2020 (PR) 15 0.4 8.5 8% 8.2 2%0% 4% 4% 10 1% 5.3 2% 2%

(of generation) (of Biogas Biomass* 5 8.7 9.6 6.9 Geothermal H&C technology 0 - Solar thermal 96% 86% 86% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 30: Breakdown of RES generation by Figure 31: Breakdown of RES generation by technology and by sector sector in Bulgaria in 2012 and (electricity (up) and heating & cooling (down) in Bulgaria in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR) (BAU and PR)

Page 21 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.5 Cyprus Modelling outcomes show that Cyprus will achieve its 2020 RES target under baseline conditions. Uncertainty however remains in this respect since the overall surplus is comparatively small, i.e. a surplus of 0.5% percentage points is expected by 2020 in the BAU case, and the RES share of 2013 suggest an ambitious volume of additional RES deployment is necessary until 2020. By doing so and mitigating concerns as indicated in the policy recommendations derived for Cyprus (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015)), Cyprus will become a candidate for exporting RES surpluses that are not needed for own target fulfilment (cf. Figure 33). This requires a reliable legal framework and support scheme for RES-E technologies. This has not always been the case in the past as the support scheme for the period 2009 to 2013 was issued on a yearly basis and considerably hindering the efficient design of new RES-E investment. An even more optimistic picture is drawn by the PR scenario where an extension of the support for biofuels in transport and improvements related to incentives for RES in heating & cooling are assumed, see Figure 34.

16% Historic and expected future RES cooperation 14.9% RES developments & 14% Possible (virtual) RES exports 13.5% 2020 RES target Feasible (virtual) RES exports 13% 12% fulfillment Required (virtual) RES imports 0.40 10% BAU 0.35 8% [%] 0.30 8.1% PR 6% 0.25 0.20 Historic [TWh/a] 4% deployment 0.15 2% 2020 RES target 0.10

RES share in gross final energy demand demand energy final gross in share RES 0.05 0%

Energy production from RES by 2020 0.00 2010 2012 2014 2016 2018 2020 BAU PR Figure 32: RES developments up to 2020 in Cyprus in relative terms Figure 33: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Cyprus according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* RES generation 4% 1% 6% RES-heating & cooling Geothermal 4% 1% 17% RES-electricity by sector Large hydro 7% (of generation) (of Small hydro 11% 3.5 PV

Etechnology CSP 17% - 3.0 Tidal & wave 66% 0.2 91% 75%

RES Wind onshore 2.5 0.4

Breakdwon by Wind offshore 1.3 2.0 2013 2020 (BAU) 2020 (PR) 1.4 2% 1.5 0% 3% 0.2 7% 1.0 18% 17%

(of generation) (of Biogas 9% 0.9 1.5 Biomass* 0.5 0.9 Geothermal H&C technology - 0.3 Solar thermal 80% 0.0 84% 80% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 34: Breakdown of RES generation by Figure 35: Breakdown of RES generation by technology and by sector sector in Cyprus in 2012 and 2020 (electricity (up) and heating & cooling (down) in Cyprus in according to assessed cases (BAU 2012 and 2020 according to assessed cases (BAU and PR) and PR)

Page 22 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.6 Czech Republic The Czech Republic is expected to fail in achieving its 2020 RES target under baseline conditions, despite a strong uptake of RES deployment in previous years. This is caused by an unpredictable and unstable support for renewables in the various sectors. The EU Tracking Roadmap 2015 (Keep-on-Track!, 2015) indicates, that the situation changed for the worse by the end of 2013. The guaranteed support for electricity generated in form of feed-in tariffs or premium tariffs was de facto abolished. If policy recommendations like the mitigation of revenue risks under the given RES-E support scheme, the sharpening and extension of support for RES-H&C and biofuels in transport (see for details EU Tracking Roadmap 2015 (Keep-on-Track!, 2015)) are implemented, a sufficiently strong uptake of RES appears feasible. Thus, in the PR scenario the Czech Republic turns from an importer (BAU case) to an exporter country related to European RES cooperation (cf. Figure 37). Major contri- butions for achieving this are e.g. biomass potentials in the RES-H&C sector (see Figure 38 and Figure 39).

18% Historic and expected future RES cooperation 16% 16.3% RES developments & Possible (virtual) RES exports 2020 RES target Feasible (virtual) RES exports 14% fulfillment 13% Required (virtual) RES imports 12% 12.2% 12 12.4% BAU 10% 10

[%] 8 8% PR 6 6% 4 Historic [TWh/a] 4% deployment 2 0 2% 2020 RES target RES share in gross final energy demand demand energy final gross in share RES -2 0%

Energy production from RES by 2020 -4 2010 2012 2014 2016 2018 2020 BAU PR Figure 36: RES developments up to 2020 in the Czech Republic in relative Figure 37: RES cooperation by 2020 terms (i.e. RES share in gross final energy demand) according to in the Czech Republic assessed cases (BAU and PR) according to assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* RES generation RES-heating & cooling Geothermal 5% 12% 16% RES-electricity by sector Large hydro 26% 7% (of generation) (of Small hydro 26% 60 PV 23% 23% 20%

Etechnology CSP

- 37% 50 Tidal & wave 8% 20% 8% 19% 9% 4.7 RES Wind onshore 18% 17% 6% 40 Breakdwon by Wind offshore 5.1 3.2 2013 2020 (BAU) 2020 (PR) 30 27.0 1% 4% 3% 2% 4% 3% 7% 20 24.4 25.9

(of generation) (of Biogas 10 Biomass* 16.1 Geothermal 8.8 9.4 H&C technology 0 - Solar thermal 88% 95% 93% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 38: Breakdown of RES generation by Figure 39: Breakdown of RES generation by technology and by sector sector in the Czech Republic in (electricity (up) and heating & cooling (down) in the Czech 2012 and 2020 according to Republic in 2012 and 2020 according to assessed cases (BAU assessed cases (BAU and PR) and PR)

Page 23 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.7 Denmark The modelled BAU case for Denmark implies uncertainties as to whether Denmark will reach its 2020 RES target domestically, given the RES deployment by 2020 is just 0.4 percentage points above the given target (30%). To the contrary, the PR case puts Denmark in a favourable position regarding possible (virtual) RES exports (see Figure 41). An increase to 38.2% appears feasible thanks to additional RES deployment mainly in heating & cooling and in transport (see Figure 42). This indicates that overall RES target achievement is beyond question if currently implemented RES policy measures are kept in place and framework conditions such as the taxation policy are refined in the forthcoming years (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015) for further details). As shown in Figure 41 the possible export volumes for Denmark increase drastically from BAU to PR while feasibility for doing so decreases since several MSs with shortages under baseline conditions are expected to achieve their given targets domestically if policy recommendations are implemented (PR case).

45% Historic and expected future RES cooperation 40% RES developments & Possible (virtual) RES exports 38.2% 2020 RES target Feasible (virtual) RES exports 35% fulfillment Required (virtual) RES imports 27.2% 30.4% 30% 30% 16.0 BAU 25% 14.0

[%] 12.0 20% PR 10.0 15% 8.0 Historic [TWh/a] 10% deployment 6.0 4.0 5% 2020 RES target RES share in gross final energy demand demand energy final gross in share RES 2.0 0%

Energy production from RES by 2020 0.0 2010 2012 2014 2016 2018 2020 BAU PR Figure 40: RES developments up to 2020 in Denmark in relative terms Figure 41: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Denmark according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* RES generation 3% 2% RES-heating & cooling Geothermal 3% by sector Large hydro RES-electricity 19% (of generation) (of Small hydro 23% 23% 24% 23% 70 PV 25%

Etechnology CSP 60 4.2 - 6% Tidal & wave 3% 4% 0.3 46% 46% 50%

RES Wind onshore 50 2.6 Breakdwon by Wind offshore 40 39.9 2013 2020 (BAU) 2020 (PR) 37.6 30.5 30 1% 5% 4% 4% 2% 1% 0% 20 1% 12% 2% 13%

(of generation) (of Biogas Biomass* 10 19.3 15.6 16.4 Geothermal H&C technology 0 - Solar thermal 92% 82% 81% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 42: Breakdown of RES generation Figure 43: Breakdown of RES generation by technology and by sector by sector in Denmark in 2012 (electricity (up) and heating & cooling (down) in Denmark in and 2020 according to 2012 and 2020 according to assessed cases (BAU and PR) assessed cases (BAU and PR)

Page 24 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.8 Estonia As applicable from Figure 44 Estonia already achieved its 2020 RES target of 25% in the years 20211 to 2013. But the RES share stagnated marginally above the target share. To the opposite, a significant surplus appears feasible: a RES share of 31% can be expected under baseline conditions. RES deployment may increase further up to 36.8% if policy recommendations as the inclusion of micro-producers as sellers of grid-based heat are implemented (see Figure 46). Additionally, the access to the district heating distribution network may be revised, to allow the connection of the most cost effective producers, as consumers are very price sensitive (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015) for details). Under both assessed cases Estonia is a candidate for exporting surpluses in RES deployment that are not needed for own target fulfilment, see Figure 45. This may be very profitable for Estonia, given the demand for (virtual) RES exports exists as it is the case in the modelled BAU scenario.

40% Historic and expected future RES cooperation 36.8% RES developments & 35% Possible (virtual) RES exports 2020 RES target Feasible (virtual) RES exports 31.0% 30% fulfillment Required (virtual) RES imports

25% 25% 5.0 25.6% BAU 4.5 20% 4.0 [%] PR 3.5 15% 3.0 2.5 Historic [TWh/a] 10% 2.0 deployment 1.5 5% 2020 RES target 1.0 RES share in gross final energy demand demand energy final gross in share RES 0.5 0%

Energy production from RES by 2020 0.0 2010 2012 2014 2016 2018 2020 BAU PR Figure 44: RES developments up to 2020 in Estonia in relative terms Figure 45: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Estonia according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* RES generation 2% 3% RES-heating & cooling Geothermal 2% RES-electricity by sector Large hydro (of generation) (of Small hydro 16 36% 29% PV 46% 60% 63%

Etechnology CSP

14 - 0.7 Tidal & wave 52% 1% 12 0.4 RES Wind onshore 0% 2%

Breakdwon by Wind offshore 10 0.0 2013 2020 (BAU) 2020 (PR) 8 10.7 10.0 1% 1% 6 8.2

4 generation) (of Biogas Biomass* 2 Geothermal 2.3 H&C technology 2.0 - 0 1.2 Solar thermal 94% 99% 99% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 46: Breakdown of RES generation by Figure 47: Breakdown of RES generation by technology and by sector sector in Estonia in 2012 and (electricity (up) and heating & cooling (down) in Estonia in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR) (BAU and PR)

Page 25 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.9 Finland The modelling results for Finland as shown in Figure 48 indicate that it is on track for its 2020 target in both cases. The potential for additional RES deployment in the H&C sector is apparent (see Figure 50), as the PR case shows that a respectable overachievement is conceivable. The policy recommendations derived within this project like the improvement of the attractiveness for small-scale RES-H&C (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015) for details) may guide this reform process. Apparently, Finland has the potential to act as an exporter for (virtual) RES exports by 2020, cf. Figure 49. This is the consequence of an accelerated take- off of RES within all energy sectors as demonstrated by the PR case.

50% Historic and expected future RES cooperation 45% 46.3% RES developments & Possible (virtual) RES exports 2020 RES target 40% 39.0% Feasible (virtual) RES exports 38% fulfillment Required (virtual) RES imports 35% 36.8% 30 30% BAU 25 25% [%] PR 20% 20 15 15% Historic [TWh/a] 10% deployment 10 2020 RES target 5% 5 RES share in gross final energy demand demand energy final gross in share RES 0%

Energy production from RES by 2020 0 2010 2012 2014 2016 2018 2020 BAU PR Figure 48: RES developments up to 2020 in Finland in relative terms Figure 49: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Finland according to cases (BAU and PR) assessed cases (BAU and PR)

Biogas 2013 2% 2020 (BAU) 2020 (PR) Biofuels for transport Breakdown of 4% Biomass* 1% 3% 5% 2% 6% 1% RES generation Geothermal 1% 2% RES-heating & cooling 5% RES-electricity by sector Large hydro (of generation) (of Small hydro 160 PV 44% 45% 43%

E technology CSP

140 - 4.2 Tidal & wave 48% 46% 42%

120 2.9 RES Wind onshore

2.6 Breakdwon by Wind offshore 100 2013 2020 (BAU) 2020 (PR) 80 100.6 91.2 80.8 60 5% 10% 10%

40 generation) (of Biogas Biomass* 20 31.0 Geothermal 27.0 28.3 H&C technology 0 - Solar thermal 95% 90% 90% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 50: Breakdown of RES generation by Figure 51: Breakdown of RES generation by technology and by sector sector in Finland in 2012 and (electricity (up) and heating & cooling (down) in Finland in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR) (BAU and PR)

Page 26 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.10 France France shows severe deficits regarding its 2020 RES target achievement, which may be mitigated if policy recommendations as derived within this project (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015)) are implemented. The deficit of 4.4 percentage points in 2020 may then be converted to a surplus of 1.2 percentage points compared to the RES target of 23% in 2020, as can be seen in Figure 52. Necessary reforms to reach the additional RES deployment as shown by the PR case regard all energy sectors: Legal and regulatory uncertainty caused by frequent reforms in the legal framework has to be avoided. Additionally, investments in the RES-H&C sector have to be encouraged trough incentives for small installations. As can be seen in Figure 54, more than 30 TWh of supplementary generation by RES technologies are possible in the heating and cooling sector comparing the PR case to the BAU case in 2020. A more ambitious framework and effective support scheme for RES technologies in France can lead not only to a fulfilment of the 2020 target, but to possible (virtual) RES exports in 2020 (see Figure 53).

30% Historic and expected future RES cooperation RES developments & Possible (virtual) RES exports 25% 24.2% 2020 RES target Feasible (virtual) RES exports 23% fulfillment Required (virtual) RES imports 20% 40 18.6% BAU 20 15% [%] 0 14.2% PR -20 10% Historic [TWh/a] -40 deployment 5% -60 2020 RES target

RES share in gross final energy demand demand energy final gross in share RES -80 0%

Energy production from RES by 2020 -100 2010 2012 2014 2016 2018 2020 BAU PR Figure 52: RES developments up to 2020 in France in relative terms Figure 53: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in France according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* 4% RES generation 2% 5% 2% RES-heating & cooling Geothermal 2% 4% by sector Large hydro RES-electricity 5% 9% (of generation) (of Small hydro 17% 29% 400 43.7 PV 28%

Etechnology CSP 8% 350 - Tidal & wave 48% 39% 33.2 64% 9% 11%

300 RES Wind onshore 7% 6%

Breakdwon by Wind offshore 208.5 250 31.3 177.2 2013 2020 (BAU) 2020 (PR) 200 1% 150 144.4 13% 1% 1% 1% 18% 17% 100 generation) (of Biogas 1% 4% 159.4 Biomass* 1% 130.0 1% 50 87.5 Geothermal H&C technology - Solar thermal 0 84% 79% 77% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 54: Breakdown of RES generation by Figure 55: Breakdown of RES generation by technology and by sector sector in France in 2012 and (electricity (up) and heating & cooling (down) in France in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR) (BAU and PR)

Page 27 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.11 Germany For Germany it cannot be expected that the given 2020 RES target (18%) will be achieved under baseline conditions, i.e. if currently implemented RES policy measures are kept in place. A deficit of 0.7 percentage points, corresponding to 16.7 TWh in absolute terms, occurs in the BAU case in 2020, cf. Figure 56 and Figure 57. With additional dedicated action as demonstrated by the PR case the deficit related to RES target achievement can however be significantly reduced. Policy recommendations like an improvement of the functionality of the RES- H&C market or an increase of the reliability of the general RES-E strategy (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015)) would boost RES deployment within all three energy sectors to an overall RES share of 21.7%. As a result, Germany may act as an exporting country (see Figure 57), and the surplus of about 86 TWh can be sold in the EU market for RES cooperation.

25% Historic and expected future RES cooperation 21.7% RES developments & Possible (virtual) RES exports 2020 RES target 20% Feasible (virtual) RES exports 18% fulfillment Required (virtual) RES imports 17.3% 100 15% BAU 80

[%] 12.4% PR 60 10% 40

Historic [TWh/a] 20 deployment 5% 0 2020 RES target

RES share in gross final energy demand demand energy final gross in share RES -20 0%

Energy production from RES by 2020 -40 2010 2012 2014 2016 2018 2020 BAU PR Figure 56: RES developments up to 2020 in Germany in relative terms Figure 57: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Germany according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* 3% RES-heating & cooling RES generation Geothermal 1% by sector Large hydro 19% RES-electricity 15% 9% 13% 7% (of generation) (of Small hydro 6% 600 PV 34% 37% 12% 11% 34%

Etechnology CSP 500 - Tidal & wave 8% 3% 49.3 28%

RES Wind onshore 21% 10% 22% 3% 4% 400 32.8 Breakdwon by Wind offshore 197.9 2013 2020 (BAU) 2020 (PR) 300 30.9 176.4 9% 8% 5% 6% 7% 200 139.3 11% 4% 8% 11% 1% (of generation) (of Biogas 251.9 100 207.9 Biomass* 152.2 Geothermal H&C technology 0 - Solar thermal 77% 76% 76% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 58: Breakdown of RES generation by Figure 59: Breakdown of RES generation by technology and by sector sector in Germany in 2012 and (electricity (up) and heating & cooling (down) in Germany in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR)

Page 28 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.12 Greece The modelled BAU case for Greece shows a declining RES share from 15.0% in 2013 to 13.7% in 2020. Thus, the target of 18% in 2020 will be failed considerably by 4.3 percentage points or 9.9 TWh (see Figure 60 and Figure 61). This can be seen as a result of currently unpredictable and unstable support for renewables in the various sectors, partly triggered by retroactive measures that have been taken for RES-E. A generally limited access to finance, RES target achievement is getting out of reach in the BAU case. However, some PV projects have recently (throughout 2013 and 2014) started operation or remain in their pipeline of realisation. If policy recommendations like the implementation of a suitable strategy for RES-H&C and for biofuels in transport (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015)) are implemented well in time, a sufficiently strong uptake of RES however, appears feasible. Greece would then turn from an importer (BAU case) to an exporter country concerning RES cooperation. Key options for doing so are biofuels in transport and RES in the electricity sector (see Figure 62).

25% Historic and expected future RES cooperation RES developments & Possible (virtual) RES exports 20.8% 2020 RES target 20% Feasible (virtual) RES exports fulfillment 18% Required (virtual) RES imports 8 15% BAU 6 15.0% 13.7% 4 [%] PR 2 10% 0 -2 Historic [TWh/a] -4 deployment 5% -6 2020 RES target -8 RES share in gross final energy demand demand energy final gross in share RES -10 0%

Energy production from RES by 2020 -12 2010 2012 2014 2016 2018 2020 BAU PR Figure 60: RES developments up to 2020 in Greece in relative terms Figure 61: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Greece according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* RES generation 3% 3% 3% 3% RES-heating & cooling Geothermal 2% RES-electricity by sector Large hydro (of generation) (of Small hydro 23% 32% 34% 45 PV 34% 31% 26%

Etechnology CSP

40 - 5.2 Tidal & wave 35 41% RES Wind onshore 29% 24% 3% 3% 3% 30 Breakdwon by Wind offshore 1.4 16.5 2020 (BAU) 2020 (PR) 25 15.1 2013 20 14.9 1% 1% 10% 1% 15 10% 6% 15% 10 generation) (of Biogas 15.9 18.2 Biomass* 25% 33% 12.5 5 Geothermal H&C technology 1% - Solar thermal 63% 59% 0 73% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) 1% 1% Breakdwon by Figure 62: Breakdown of RES generation by Figure 63: Breakdown of RES generation by technology and by sector sector in Greece in 2012 and (electricity (up) and heating & cooling (down) in Greece in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR) (BAU and PR) Page 29 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.13 Hungary Under baseline conditions Hungary will fail to reach its RES target of 13% in 2020 by 0.8 percentage points or 1.7 TWh related to this model-based analysis (cf. Figure 64). However, it should be understood as a warning signal to improve the RES policy framework in Hungary in the forthcoming years. The policy recommendations derived within this project like the simplification of the application procedures for RES-E support or the implementation of clearly defined rules for grid access (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015) for details) show the way forward in this respect. Thus, the PR scenario, reflecting the expected consequences of doing so, clearly shows that Hungary has the opportunity to get back on track and may even achieve a comparatively high surplus (about 4.4 TWh or 2.6 percentage points) by 2020, cf. Figure 64 and Figure 65. Thus, the PR case indicates an accelerated uptake of RES within all energy sectors where the expansion of RES-E and RES- H&C appears most impressive, cf. Figure 66.

18% Historic and expected future RES cooperation RES developments & 16% 15.6% Possible (virtual) RES exports 2020 RES target Feasible (virtual) RES exports 14% fulfillment 13% Required (virtual) RES imports 12% 12.2% 5.0 BAU 10% 4.0 9.8% [%] 8% PR 3.0 2.0 6% Historic [TWh/a] 1.0 4% deployment 0.0 2% 2020 RES target

RES share in gross final energy demand demand energy final gross in share RES -1.0 0%

Energy production from RES by 2020 -2.0 2010 2012 2014 2016 2018 2020 BAU PR Figure 64: RES developments up to 2020 in Hungary in relative terms Figure 65: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Hungary according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* RES generation RES-heating & cooling Geothermal 10% by sector Large hydro RES-electricity 10% 4% 16% 14% (of generation) (of Small hydro 1% 22% 30 PV 25% 1% 2% 2% 8% Etechnology CSP 7% - Tidal & wave 25 3.2 56% 55% 12% 45%

RES Wind onshore 3% 4.8 6% 20 Breakdwon by Wind offshore 1.7 2013 2020 (BAU) 2020 (PR) 15 16.7 1% 15.2 1% 16% 10 13.4 10% 18%

(of generation) (of Biogas 5 Biomass* 6.4 Geothermal H&C technology 2.8 4.3 - 0 Solar thermal 88% 82% 83% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 66: Breakdown of RES generation by Figure 67: Breakdown of RES generation by technology and by sector sector in Hungary in 2012 and (electricity (up) and heating & cooling (down) in Hungary in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR) (BAU and PR)

Page 30 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.14 Ireland Ireland is expected to achieve its 2020 RES target if currently implemented RES policy measures are kept in place and framework conditions may not change to the worse in forthcoming years (see Figure 68). However, uncertainty remains in this respect since the overall surplus is comparatively small, i.e. a surplus of 0.5 percentage points is indicated according to the BAU case by 2020 and because compared to the status quo strong RES deployment will still be necessary in the coming period of time. The needed actions for grid connection of new RES projects should be shortened, and ideally, a one-stop-shop should be created which handles all relevant procedures. Additionally, the establishment of a reliable RES-H&C strategy is an example for policy recommendations as derived within this project (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015)) that aim to speed up RES deployment and, consequently, safeguard RES target achievement. By doing so, the potential for possible and also for feasible exports in a European market for RES cooperation would increase significantly, cf. Figure 69.

25% Historic and expected future RES cooperation 22.9% RES developments & Possible (virtual) RES exports 2020 RES target 20% Feasible (virtual) RES exports fulfillment Required (virtual) RES imports 16.5% 16% 10.0 15% BAU 9.0 8.0 [%] PR 7.0 10% 6.0 5.0 Historic [TWh/a] 4.0 7.8% deployment 5% 3.0 2020 RES target 2.0 RES share in gross final energy demand demand energy final gross in share RES 1.0 0%

Energy production from RES by 2020 0.0 2010 2012 2014 2016 2018 2020 BAU PR Figure 68: RES developments up to 2020 in Ireland in relative terms Figure 69: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Ireland according to cases (BAU and PR) assessed cases (BAU and PR)

Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Breakdown of Biomass* 1% 2% 5% 1% 4% RES generation 4% 4% 5% RES-heating & cooling Geothermal 3% 5% 1% 1% Large hydro 2% 1% RES-electricity by sector 15% 2% (of generation) (of Small hydro 35 PV 11%

Etechnology CSP 30 - Tidal & wave 4.0 78% 83% 72%

RES Wind onshore 25

Breakdwon by Wind offshore 3.6 20 9.8 2013 2020 (BAU) 2020 (PR) 8.7 15 2% 1% 13% 3% 10 4%

0.8 generation) (of Biogas 3.0 15.4 31% 5 12.0 Biomass* 39% Geothermal 5.8 H&C technology - Solar thermal 67% 60% 0 80% Energy production from [TWh/a] RES from production Energy RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 70: Breakdown of RES generation by Figure 71: Breakdown of RES generation by technology and by sector sector in Ireland in 2012 and (electricity (up) and heating & cooling (down) in Ireland in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR) (BAU and PR) Page 31 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.15 Italy Italy is expected to fulfil its targeted RES share of 17% in 2020 with few additional effort needed. This is caused by an impressive progress in RES deployment throughout previous years. Thus, Italy is expected to achieve its 2020 RES target even under baseline conditions, i.e. if currently implemented RES policy measures are kept in place and framework conditions may not change to the worse in forthcoming years. A surplus of 3.8 percentage points corresponding to 56.6 TWh/a can be expected in the BAU case. Consequently, Italy is a candidate for exporting surpluses in RES deployment that are not needed for own target fulfilment to other Member States being short in domestic RES deployment (see Figure 73). A closer look at the sector level indicates significant progress in forthcoming years for RES in the electricity sector but also RES in heating & cooling and in transport show a continuous and steady growth. Apparently, this progress is more impressive in the PR case, aiming to reflect the consequences of implementing targeted RES policy recommendations as derived within this project.

25% Historic and expected future RES cooperation 23.1% RES developments & Possible (virtual) RES exports 20.8% 2020 RES target 20% Feasible (virtual) RES exports 16.7% fulfillment Required (virtual) RES imports 17% 90 15% BAU 80 70 [%] PR 10% 60 50

Historic [TWh/a] 40 5% deployment 30 2020 RES target 20

RES share in gross final energy demand demand energy final gross in share RES 10 0%

Energy production from RES by 2020 0 2010 2012 2014 2016 2018 2020 BAU PR Figure 72: RES developments up to 2020 in Italy in relative terms Figure 73: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Italy according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* RES generation 5% 6% RES-heating & cooling Geothermal 7% 8% by sector Large hydro 6% 5% RES-electricity 19% 16% 9% (of generation) (of Small hydro 14% 6% 300 9% 36.8 32.0 PV CSP 21% Etechnology

- 24% 29% 250 Tidal & wave 30% 27% Wind onshore 9% 35%

14.5 RES 8% 7% Wind offshore 144.1 Breakdwon by 200 151.0 122.8 2013 2020 (BAU) 2020 (PR) 150 2% 2% 2% 100 24%

(of generation) (of Biogas 119.0 134.3 28% 27% 50 102.5 Biomass* 2% Geothermal H&C technology 1% - 3% 4% Solar thermal 64% 63% 0 71% RES Energy production from [TWh/a] RES from production Energy Heat pumps 2013 2020 (BAU) 2020 (PR) 3% 4% by Breakdwon Figure 74: Breakdown of RES generation by Figure 75: Breakdown of RES generation by technology and by sector sector in Italy in 2012 and 2020 (electricity (up) and heating & cooling (down) in Italy in 2012 according to assessed cases (BAU and 2020 according to assessed cases (BAU and PR) and PR)

Page 32 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.16 Latvia Latvia showed a strong increase of the RES share (in gross final energy demand) in previous years, as can be seen in Figure 76. However, this positive trend is partly caused by a strong decline of energy consumption. A significant uptake in RES generation in absolute terms can only be seen between the years of 2011 and 2012. Since the demand forecast used in this model-based assessment, i.e. the latest PRIMES reference scenario (EC, 2013), assumes a demand increase in forthcoming years up to 2020, the BAU scenario of future RES progress draws a pessimistic view on 2020 RES target achievement. Thus, only a 2020 RES share of 34.6% can be expected under baseline conditions, leading to a significant gap compared to the given target (40%) (cf. Figure 77). On the contrary, the PR scenario indicates that an achievement or even surplus when compared to the 2020 target appears feasible for Latvia. To do so, policy recommendations like a reliable and transparent RES policy design and implementation (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015)) need to be implemented in time (cf. Figure 78).

50% Historic and expected future RES cooperation 45% 45.8% RES developments & Possible (virtual) RES exports 2020 RES target 40% 37.1% 40% Feasible (virtual) RES exports fulfillment Required (virtual) RES imports 35% 34.6% 4.0 30% BAU 3.0 25% [%] 2.0 PR 20% 1.0 0.0 15% Historic [TWh/a] -1.0 10% deployment 2020 RES target -2.0 5% RES share in gross final energy demand demand energy final gross in share RES -3.0 0%

Energy production from RES by 2020 -4.0 2010 2012 2014 2016 2018 2020 BAU PR Figure 76: RES developments up to 2020 in Latvia in relative terms Figure 77: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Latvia according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* 5% RES generation 3% 3% RES-heating & cooling Geothermal 1% 8% 6% Large hydro 6% RES-electricity by sector 7% 4% 13% 6% (of generation) (of Small hydro 11% 25 PV

Etechnology CSP 0.8 - Tidal & wave 20 82% 79% 65%

RES Wind onshore 1.1

0.3 Breakdwon by Wind offshore 15 16.5 2013 2020 (BAU) 2020 (PR) 13.5 13.6 2% 2% 10 2%

(of generation) (of Biogas 5 Biomass* 4.9 Geothermal 3.8 4.0 H&C technology 0 - Solar thermal 98% 98% 98% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 78: Breakdown of RES generation by Figure 79: Breakdown of RES generation by technology and by sector sector in Latvia in 2012 and (electricity (up) and heating & cooling (down) in Latvia in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR) (BAU and PR) Page 33 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.17 Lithuania Lithuania already achieved its 2020 RES target in 2013. Under baseline conditions the modelling shows a surplus of 4.1 TWh or 3.3 percentage points in 2020. Consequently Lithuania may act as exporter of surpluses in RES deployment in a European market related to RES cooperation. As shown in Figure 81 the possible export volumes increase from BAU to PR while feasibility for doing so decreases since several MSs with shortages under baseline conditions will achieve their given targets domestically if policy recommendations are implemented (PR case). A closer look indicates significant progress in forthcoming years for RES deployment in the electricity and the heating & cooling sector, as can be seen Figure 82. To realise the additional deployment shown by the PR case, attractive and stable conditions for the investment in renewable technologies, as well as a removing of capacity caps in the electricity sector is needed (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015)).

35% Historic and expected future RES cooperation RES developments & 30% 30.1% Possible (virtual) RES exports 2020 RES target Feasible (virtual) RES exports 26.6% fulfillment 25% Required (virtual) RES imports 23% 4.5 23.0% BAU 20% 4.0 3.5 [%] 15% PR 3.0 2.5

10% Historic [TWh/a] 2.0 deployment 1.5 5% 2020 RES target 1.0

RES share in gross final energy demand demand energy final gross in share RES 0.5 0%

Energy production from RES by 2020 0.0 2010 2012 2014 2016 2018 2020 BAU PR Figure 80: RES developments up to 2020 in Lithuania in relative terms Figure 81: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Lithuania according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* RES generation 6% RES-heating & cooling Geothermal 4% RES-electricity by sector Large hydro 7% (of generation) (of Small hydro 13% 13% 20% 20 PV 43% 15% 13%

Etechnology CSP

- 54% 56% 1.1 Tidal & wave 23% 1.2

RES Wind onshore 7% 15 7% 6% 5%

Breakdwon by Wind offshore 0.7 2013 2020 (BAU) 2020 (PR) 10 13.5 12.6 1% 1% 11.1

5 generation) (of Biogas Biomass* Geothermal H&C technology

2.4 2.9 - 0 1.5 Solar thermal 99% 99% 98% Energy production from [TWh/a] RES from production Energy RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 82: Breakdown of RES generation by Figure 83: Breakdown of RES generation by technology and by sector sector in Lithuania in 2012 and (electricity (up) and heating & cooling (down) in Lithuania in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR) (BAU and PR)

Page 34 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.18 Luxembourg The historical development and the modelling results show, that Luxembourg is not well on track with respect to its 2020 RES target. Under both assessed cases (BAU and PR) a deficit can be expected by 2020, cf. Figure 84. The gap in domestic RES deployment that has to be filled through proactive use of RES cooperation mechanisms is of significant magnitude under baseline conditions – i.e. a deficit of 3.7 percentage points, corresponding to about 1.8 TWh/a can be expected for 2020 in the BAU case. The assessment of barriers and the deriva- tion of policy recommendations as derived within this project (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015)) signpost our view of the necessary reforms while the PR case aims to indicate general consequences of doing so: An accelerated deployment of RES within all energy sectors (cf. Figure 86), and in particular of biofuels in transport, may bring domestic RES use in Luxembourg closer to the given target (9.9% compared to 11% by 2020) and, in turn, reduces the need for (virtual) RES imports to approx. 0.5 TWh/a, cf. Figure 85.

12% Historic and expected future RES cooperation 11% RES developments & Possible (virtual) RES exports 10% 9.9% 2020 RES target Feasible (virtual) RES exports fulfillment Required (virtual) RES imports 8% 0.0 7.3% BAU -0.2 6% -0.4 [%] PR -0.6 -0.8 4% -1.0 Historic [TWh/a] 3.6% -1.2 deployment 2% -1.4 2020 RES target -1.6 RES share in gross final energy demand demand energy final gross in share RES -1.8 0%

Energy production from RES by 2020 -2.0 2010 2012 2014 2016 2018 2020 BAU PR Figure 84: RES developments up to 2020 in Luxembourg in relative terms Figure 85: RES cooperation by 2020 in (i.e. RES share in gross final energy demand) according to assessed Luxembourg according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* RES generation Geothermal RES-heating & cooling 16% by sector Large hydro 8% RES-electricity 16% (of generation) (of Small hydro 22% 23% 26% 12% 5 PV 11% 18%

Etechnology CSP 16% - Tidal & wave 21% 20% 4 29% 38%

RES Wind onshore 24%

Breakdwon by Wind offshore 2.2 3 1.7 2013 2020 (BAU) 2020 (PR) 2 4% 3% 3% 5% 6% 5% 9% 6% 0.6 1.4 11% (of generation) (of Biogas 1.3 1 Biomass* 0.7 Geothermal 0.7 H&C technology 0.5 - 0 0.4 Solar thermal 84% 86% 78% Energy production from [TWh/a] RES from production Energy RES Heat pumps 2013 2020 (BAU) 2020 (PR) by Breakdwon Figure 86: Breakdown of RES generation by Figure 87: Breakdown of RES generation by technology and by sector sector in Luxembourg in 2012 (electricity (up) and heating & cooling (down) in Luxembourg and 2020 according to assessed in 2012 and 2020 according to assessed cases (BAU and PR) cases (BAU and PR)

Page 35 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.19 Malta In spite of Malta’s rapid RES deployment since 2012, the modelling results are quit pessimistic regarding its target achievement in both cases. Malta is expected to fail in achieving its 2020 RES target by 7.1 percentage points or 0.4 TWh by 2020 in the BAU case. This may however change if policy recommendations like the establishment of financial incentives for several RES technologies in the electricity sector and for RES in heating and cooling (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015)) are implemented in time. As indicated by the PR scenario, Malta may then come very close to the given 2020 RES target – i.e. a RES share of 9.5% appears feasible, reducing the gap to the binding 2020 RES target of 10% significantly compared to BAU. This is the consequence of a rapid expansion of various new RES technologies in the electricity sector but also in the heating and cooling sector, see Figure 90 and Figure 91.

12% Historic and expected future RES cooperation RES developments & Possible (virtual) RES exports 10% 10% 2020 RES target Feasible (virtual) RES exports 9.5% fulfillment Required (virtual) RES imports 8% 0.00 BAU -0.05 6% [%] -0.10 PR -0.15 4% -0.20 3.8% Historic [TWh/a] 2.9% deployment -0.25 2% 2020 RES target -0.30

RES share in gross final energy demand demand energy final gross in share RES -0.35 0%

Energy production from RES by 2020 -0.40 2010 2012 2014 2016 2018 2020 BAU PR Figure 88: RES developments up to 2020 in Malta in relative terms Figure 89: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Malta according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* RES generation Geothermal 3% 7% RES-heating & cooling 16% RES-electricity by sector Large hydro 8% (of generation) (of Small hydro 38% 0.5 PV 48% 19%

Etechnology CSP - 0.01 Tidal & wave 54% 0.4 84% 23%

RES Wind onshore 0.13

Breakdwon by Wind offshore 0.3 2013 2020 (BAU) 2020 (PR) 2% 2% 0.2 5% 0.03 6% 0.01 0.30 16% (of generation) (of Biogas 25% 0.1 0.12 0.08 Biomass* Geothermal 51% 38% H&C technology 0.04 0.05 - 0.0 Solar thermal 73% 82% Energy production from [TWh/a] RES from production Energy RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 90: Breakdown of RES generation by Figure 91: Breakdown of RES generation by technology and by sector sector in Malta in 2012 and 2020 (electricity (up) and heating & cooling (down) in Malta in 2012 according to assessed cases (BAU and 2020 according to assessed cases (BAU and PR) and PR)

Page 36 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.20 The Netherlands The Netherlands are not well on track to achieve its 2020 RES target. Considering domestic RES deployment under both assessed cases (BAU and PR) a significant deficit can be expected in 2020, see Figure 92. The gap in domestic RES deployment that needs to be filled through (virtual) RES imports from other Member States or Third countries is comparatively large under baseline conditions – i.e. a deficit of 6.9 percentage points, corresponding to about 41.3 TWh RES generation, can be expected for 2020 in the BAU case. The barriers assessed and the related policy recommendations derived within this project (see EU Tracking Roadmap 2015 (Keep-on- Track!, 2015)) signpost our view of the necessary reforms while the PR case aims to indicate general consequences of doing so: A strong uptake of RES use within all energy sectors as anticipated in the PR case (see Figure 94) reduces the gap to target fulfilment significantly and, in turn, cuts the need for (virtual) RES imports by an significant amount to 11.9 TWh, cf. Figure 93.

16% Historic and expected future RES cooperation RES developments & 14% 14% Possible (virtual) RES exports 2020 RES target Feasible (virtual) RES exports 12% 11.9% fulfillment Required (virtual) RES imports 10% 0 BAU -5 8% -10 [%] 7.1% PR -15 6% -20

Historic [TWh/a] -25 4% 4.5% deployment -30 2% 2020 RES target -35

RES share in gross final energy demand demand energy final gross in share RES -40 0%

Energy production from RES by 2020 -45 2010 2012 2014 2016 2018 2020 BAU PR Figure 92: RES developments up to 2020 in the Netherlands in relative terms Figure 93: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in the Netherlands cases (BAU and PR) according to assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* RES generation 4% 4% RES-heating & cooling Geothermal 6% 8% RES-electricity by sector Large hydro 7% (of generation) (of Small hydro 21% 70 PV 36% 33%

Etechnology CSP 39% 60 11.8 - Tidal & wave 42% 52% 6%

RES Wind onshore 33% 50 4.3% 1% 3%

Breakdwon by Wind offshore 21.6 40 7.5 2013 2020 (BAU) 2020 (PR)

30 11% 8% 3.7 15.9 15% 13% 2% 20 3% 16% 20% 11.5 33.0 generation) (of Biogas Biomass* 2% 2% 10 10% 18.8 Geothermal 11.9 H&C technology - 1% 0 Solar thermal 61% 67% 69% Energy production from [TWh/a] RES from production Energy RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 94: Breakdown of RES generation by Figure 95: Breakdown of RES generation by technology and by sector sector in the Netherlands in (electricity (up) and heating & cooling (down) in the 2012 and 2020 according to Netherlands in 2012 and 2020 according to assessed cases assessed cases (BAU and PR) (BAU and PR) Page 37 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.21 Poland Poland is a Member State where the achievement of its 2020 RES target cannot be expected under baseline conditions, see Figure 96. Since the demand forecast used in this model-based assessment, i.e. the latest PRIMES reference scenario (EC, 2013), assumes a demand increase for Poland in the forthcoming years up to 2020 the BAU scenario of future RES progress draws a pessimistic view on 2020 RES target achievement, leading to a gap of 1.3 percentage points (or 27 TWh/a) compared to the given RES target in 2020. This may however change if policy recommendations like the introduction of a new RES act to fully implement the RES Directive 2009/28/EC (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015) for details) are considered in actual RES policy making. The lack of this implementation has so far been the largest barrier for efficient RES deployment. As demonstrated by the PR scenario, Poland may well achieve its 2020 target, caused by a strong development of various new RES technologies for heating and cooling but also in the electricity sector, cf. Figure 98 and Figure 99.

18% Historic and expected future RES cooperation 16.6% 16% RES developments & Possible (virtual) RES exports 15% 2020 RES target Feasible (virtual) RES exports 14% 13.7% fulfillment Required (virtual) RES imports 12% 15 11.3% BAU 10% 10 [%] 8% PR 5

6% 0 Historic [TWh/a] 4% deployment -5 2020 RES target 2% -10 RES share in gross final energy demand demand energy final gross in share RES 0%

Energy production from RES by 2020 -15 2010 2012 2014 2016 2018 2020 BAU PR Figure 96: RES developments up to 2020 in Poland in relative terms Figure 97: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Poland according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* RES generation 2% 1% RES-heating & cooling Geothermal 4% RES-electricity by sector Large hydro 7% (of generation) (of Small hydro 160 PV 36% 47% 44% 29%

Etechnology CSP 52% 140 - Tidal & wave 46% 13.9 4% 4%

RES Wind onshore 120 12.7 7% 7% 3% 4% 3% Breakdwon by Wind offshore 100 2020 (BAU) 2020 (PR) 8.7 2013 80 71.6 84.2 2% 1% 2% 3% 60 2% 1% 61.2

40 generation) (of Biogas Biomass* 20 40.6 37.4 Geothermal H&C technology

17.1 - 0 Solar thermal 98% 95% 92% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 98: Breakdown of RES generation by Figure 99: Breakdown of RES generation by technology and by sector sector in Poland in 2012 and (electricity (up) and heating & cooling (down) in Poland in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR) (BAU and PR) Page 38 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.22 Portugal Portugal is expected to fail in achieving its 2020 RES target under baseline conditions – i.e. if no new RES policy measures are established in addition to the existing ones and if framework conditions may not change in forthcoming years. As a consequence of regulatory instability due to the revision of the RES-E support schemes and the non-existence of RES-E and RES H&C strategies or binding targets for 2030, RES target achievement is getting out reach in the BAU case (i.e. 27.7% compared to 31%, cf. Figure 100). Thus, according to the BAU scenario only a moderate RES expansion is expected within all energy sectors in forthcoming years. If policy recommendations like a certification program for the H&C sector (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015)) are implemented well in time, a sufficiently strong uptake of RES appears feasible. Figure 101 shows that in the PR scenario Portugal would then turn from an importer (BAU case) to an exporter country concerning RES cooperation. Key RES technologies for this can be found within all energy sectors (see Figure 102 and Figure 103).

40% Historic and expected future RES cooperation 37.5% RES developments & 35% Possible (virtual) RES exports 2020 RES target Feasible (virtual) RES exports 31% 30% fulfillment Required (virtual) RES imports 27.7% 25% 15 25.7% BAU 20% 10 [%] PR 15% 5

Historic [TWh/a] 10% 0 deployment 5% 2020 RES target -5 RES share in gross final energy demand demand energy final gross in share RES 0%

Energy production from RES by 2020 -10 2010 2012 2014 2016 2018 2020 BAU PR Figure 100: RES developments up to 2020 in Portugal in relative terms Figure 101: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Portugal according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* RES generation 1% RES-heating & cooling Geothermal 1% by sector Large hydro RES-electricity 11% 14% (of generation) (of Small hydro 11% 80 PV 43% 43% 44%

Etechnology CSP

70 - Tidal & wave 39% 38% 31% 5.5 0% 60 RES Wind onshore 2% 4.3 3% 4% 0% 4% 4% Breakdwon by Wind offshore 2% 50 3.0 28.6 2013 2020 (BAU) 2020 (PR) 40 27.1 22.3 1% 4% 7% 11% 30 1%

20 generation) (of Biogas 32.7 26.1 27.1 Biomass* 10 Geothermal H&C technology - 0 Solar thermal 96% 92% 87% Energy production from [TWh/a] RES from production Energy RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 102: Breakdown of RES generation by Figure 103: Breakdown of RES generation by technology and by sector sector in Portugal in 2012 and (electricity (up) and heating & cooling (down) in Portugal in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR) (BAU and PR)

Page 39 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.23 Romania Romania is on track to achieve its 2020 RES target. RES deployment by 2020 in the BAU case is estimated at 1.8 percentage points above the given target (24%). According to the PR case a further increase to 28% is feasible thanks to an increase of RES deployment in heating & cooling – despite reduced efforts for RES-E (compared to BAU). This indicates that overall RES target achievement is beyond question. Nevertheless, recent changes in the RES-E sector have created uncertainty among investors – predictability of the support system should be restored. Overall Romania could act as exporter of surpluses in RES deployment in a European market related to RES cooperation. As shown in Figure 105 the possible export volumes increase from BAU to PR while feasibility for doing so decreases since several MSs with shortages under baseline conditions are expected to achieve their given targets domestically if policy recommendations are implemented (PR case).

30% Historic and expected future RES cooperation 28.0% RES developments & Possible (virtual) RES exports 25% 25.8% 2020 RES target 24% Feasible (virtual) RES exports 23.9% fulfillment Required (virtual) RES imports 20% 14 BAU 12 15% [%] PR 10 8 10% Historic [TWh/a] 6 deployment 5% 4 2020 RES target

RES share in gross final energy demand demand energy final gross in share RES 2 0%

Energy production from RES by 2020 0 2010 2012 2014 2016 2018 2020 BAU PR Figure 104: RES developments up to 2020 in Romania in relative terms Figure 105: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Romania according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* 1% 4% 3% 3% RES-heating & cooling RES generation Geothermal 1% by sector Large hydro RES-electricity 19% (of generation) (of Small hydro 21% 25% 2% 90 PV 5%

5.3 Etechnology CSP 6% 80 5.1 - 5% Tidal & wave 63% 70 70% 68%

RES Wind onshore 2.1 60 Breakdwon by Wind offshore 50 50.2 54.1 2013 2020 (BAU) 2020 (PR) 41.3 40 3% 3% 1% 2% 2% 30 1%

20 generation) (of Biogas 27.5 Biomass* 10 21.4 24.6 Geothermal H&C technology 0 - Solar thermal 99% 94% 93% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 106: Breakdown of RES generation by Figure 107: Breakdown of RES generation by technology and by sector sector in Romania in 2012 and (electricity (up) and heating & cooling (down) in Romania in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR) (BAU and PR)

Page 40 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.24 Slovakia Figure 108 demonstrates that Slovakia is well on track to achieve its 2020 RES target of 14%. If currently implemented RES policy measures are kept in place and framework conditions may not change to the worse in forthcoming years (BAU case) a small surplus appears feasible: a RES share of 13.9% can be expected under baseline conditions. RES deployment may increase further to 16.8% if policy recommendations like the implementation of a reliable RES-E strategy and clear rules for grid connection (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015) for details) are realised well in time. In the BAU scenario Slovakia would need to (virtually) import a small amount of RES for its target fulfilment, whereas if policy recommendations were followed, it would be able to export a share of roughly 3.5 TWh/a, as can be seen in Figure 104.

18% Historic and expected future RES cooperation 16.8% 16% RES developments & Possible (virtual) RES exports 14% 2020 RES target Feasible (virtual) RES exports 14% 13.9% fulfillment Required (virtual) RES imports 12% 4.0 BAU 10% 3.5 9.8% 3.0 [%] 8% PR 2.5 6% 2.0 Historic [TWh/a] 1.5 4% deployment 1.0 2% 2020 RES target 0.5 RES share in gross final energy demand demand energy final gross in share RES 0.0 0%

Energy production from RES by 2020 -0.5 2010 2012 2014 2016 2018 2020 BAU PR Figure 108: RES developments up to 2020 in Slovakia in relative terms Figure 109: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Slovakia according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* RES generation 3% 4% RES-heating & cooling Geothermal 4% Large hydro 3% RES-electricity by sector 9% 14% (of generation) (of Small hydro 10% 12% 11% 20% 22% 25 PV 10%

Etechnology CSP - 2.1 Tidal & wave 20 1.8 71% 57% 50%

RES Wind onshore

Breakdwon by Wind offshore 15 11.2 10.3 2013 2020 (BAU) 2020 (PR) 1.2 10 1% 2% 1% 2% 5.6 1% 2% 8% 9%

(of generation) (of Biogas 5 8.2 9.2 Biomass* 6.0 Geothermal H&C technology - 0 Solar thermal 96% 89% 87% Energy production from [TWh/a] RES from production Energy RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 110: Breakdown of RES generation by Figure 111: Breakdown of RES generation by technology and by sector sector in Slovakia in 2012 and (electricity (up) and heating & cooling (down) in Slovakia in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR) (BAU and PR)

Page 41 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.25 Slovenia The support scheme for RES-E in Slovenia was changed to a tendering system in 2014, which so far was not applied due to missing funds. As a consequence of unpredictable and unstable support for renewables in the various sectors, RES target achievement is getting out reach in the BAU case (i.e. 22.7% compared to 25%, see Figure 112). If policy recommendations like the mitigation of barriers in the administrative processes from the integration of RES-E technologies and a long-term RES-H&C strategy (see EU Tracking Roadmap 2015 (Keep-on- Track!, 2015)) are implemented well in time, however, a sufficiently strong uptake of RES appears feasible. Thus, as shown in Figure 113 in the PR scenario Slovenia would then turn from an importer (BAU case) to an exporter country concerning RES cooperation. Key areas in this respect are RES in the electricity sector and heating & cooling sector (see Figure 114).

35% Historic and expected future RES cooperation RES developments & Possible (virtual) RES exports 30% 29.9% 2020 RES target Feasible (virtual) RES exports fulfillment 25% 25% Required (virtual) RES imports 22.7% 3.5 BAU 20% 3.0 21.5% 2.5 [%] PR 2.0 15% 1.5 1.0

10% Historic [TWh/a] 0.5 deployment 0.0 -0.5 5% 2020 RES target -1.0 RES share in gross final energy demand demand energy final gross in share RES -1.5 0%

Energy production from RES by 2020 -2.0 2010 2012 2014 2016 2018 2020 BAU PR Figure 112: RES developments up to 2020 in Slovenia in relative terms Figure 113: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Slovenia according to cases (BAU and PR) assessed cases (BAU and PR)

2020 (BAU) 2020 (PR) Breakdown of Biogas 2013 2% Biofuels for transport Biomass* 5% RES generation 4% 3% 3% 0% 4% 2% RES-heating & cooling Geothermal 3% Large hydro RES-electricity by sector 2% 8% (of generation) (of Small hydro 11% 11% 13% 2% 13% 10% 20 PV

Etechnology CSP 1.9 - Tidal & wave 77% 67% 60% 15 RES Wind onshore 1.7

Breakdwon by Wind offshore 0.7 8.4 2013 2020 (BAU) 2020 (PR) 10 6.6 3% 1% 4% 1% 2% 1% 1% 7.0 0% 2% 6% 3% 3%

5 generation) (of Biogas 6.8 7.8 Biomass* 4.8 Geothermal H&C technology 0 - Solar thermal 90% 92% 91% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 114: Breakdown of RES generation by Figure 115: Breakdown of RES generation by technology and by sector sector in Slovenia in 2012 and (electricity (up) and heating & cooling (down) in Slovenia in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR) (BAU and PR)

Page 42 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.26 Spain In terms of stagnating RES deployment in previous years Spain is expected to fail in achieving its 2020 RES target under baseline conditions. Currently, support for renewables is unpredictable and unstable in the various sectors, partly triggered by retroactive measures that have been taken for RES-E, and a generally limited access to finance. In consequence, RES target achievement is moving out of reach in the BAU case (i.e. 14.7% under current circumstances). Following policy recommendations as a revised electricity planning (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015)) a sufficiently strong uptake of RES could nevertheless be feasible. Thus, as shown in Figure 117 in the PR scenario Spain would then turn from an importer (BAU case) to an exporter country in terms of RES cooperation. Key options for doing so are RES in the electricity sector and biofuels in transport sector (see Figure 118).

25% Historic and expected future RES cooperation 23.6% RES developments & Possible (virtual) RES exports 2020 RES target 20% 20% Feasible (virtual) RES exports fulfillment Required (virtual) RES imports 15.4% 60 15% 14.7% BAU 40

[%] PR 20 10% 0

Historic [TWh/a] -20 deployment 5% -40 2020 RES target

RES share in gross final energy demand demand energy final gross in share RES -60 0%

Energy production from RES by 2020 -80 2010 2012 2014 2016 2018 2020 BAU PR Figure 116: RES developments up to 2020 in Spain in relative terms Figure 117: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Spain according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* 4% RES generation 1% 2% RES-heating & cooling Geothermal 1% 4% RES-electricity by sector Large hydro 7% (of generation) (of Small hydro 250 PV 27% 30% 20%

E technology CSP 50% 51% - 51% 30.0 Tidal & wave 15% 2% 200 3%

RES Wind onshore 8% 5% 4% 7% 5% 3% 64.2 Breakdwon by Wind offshore 150 0.0 13.1 2013 1% 2020 (BAU) 2020 (PR) 50.6 56.1 2% 6% 9% 1% 1% 100 1% 17% 0% 136.5

(of generation) (of Biogas 50 99.6 91.9 Biomass* Geothermal H&C technology - Solar thermal 0 79% 93% 89% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 118: Breakdown of RES generation by Figure 119: Breakdown of RES generation by technology and by sector sector in Spain in 2012 and 2020 (electricity (up) and heating & cooling (down) in Spain in 2012 according to assessed cases (BAU and 2020 according to assessed cases (BAU and PR) and PR)

Page 43 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.27 Sweden As seen in Figure 120, Sweden has already achieved its 2020 RES target of 49% by a tremendous growth from 2010 on. If currently implemented RES policy measures are kept in place and framework conditions may not worsen in forthcoming years (BAU case) a significant surplus appears feasible: a RES share of about 54% can be expected under baseline conditions. The small differences between both cases show, that the early success could lead to a stagnation and that a new more ambitious target (70% or higher) should be envisaged (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015) for details). Under both assessed cases Sweden is a candidate for exporting surpluses in RES deployment that are not needed for own target fulfilment, see Figure 121. De- spite an increase of the surplus in RES deployment as indicated by the possible exports, feasible (virtual) RES export volumes are higher under baseline conditions due to a shortage in RES deployment at EU level (and, in turn, an increased demand).

70% Historic and expected future RES cooperation RES developments & 60% Possible (virtual) RES exports 52.1% 57.4% 2020 RES target Feasible (virtual) RES exports 54.3% fulfillment Required (virtual) RES imports 50% 49% 35 BAU 40% 30

[%] 25 30% PR 20

20% Historic [TWh/a] 15 deployment 10 10% 2020 RES target

RES share in gross final energy demand demand energy final gross in share RES 5 0%

Energy production from RES by 2020 0 2010 2012 2014 2016 2018 2020 BAU PR Figure 120: RES developments up to 2020 in Sweden in relative terms Figure 121: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in Sweden according to cases (BAU and PR) assessed cases (BAU and PR)

Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Breakdown of Biomass* 1% 1% 1% RES-heating & cooling RES generation Geothermal 1% by sector Large hydro 5% 5% RES-electricity 15% 13% 12% 12% (of generation) (of 9% 13% Small hydro 5% 250 PV

Etechnology CSP 11.0 6.1 - 7.3 Tidal & wave 200 72% 66% 69%

RES Wind onshore

Breakdwon by Wind offshore 150 116.7 120.7 111.3 2013 2020 (BAU) 2020 (PR)

100 13%

14% 13%

(of generation) (of Biogas 50 89.0 98.1 93.1 Biomass* Geothermal H&C technology 0 - Solar thermal 86% 85% 86% Energy production from [TWh/a] RES from production Energy

RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 122: Breakdown of RES generation by Figure 123: Breakdown of RES generation by technology and by sector sector in Sweden in 2012 and (electricity (up) and heating & cooling (down) in Sweden in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR) (BAU and PR)

Page 44 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

5.28 United Kingdom3 2020 RES target achievement is not likely for the UK under baseline conditions. Likewise, the targets may not be fulfilled in the policy recommendation case but the target is missed by drastically lesser margin. Thus, the UK is a candidate for importing surplus RES deployment of other MS that are not needed for own target fulfilment (Figure 124). The energy produced from RES has to nearly double up to 2020 to fulfil the UK target when compared to the baseline case.

16% 15.2% Historic and expected future RES cooperation RES developments & 14% 15% Possible (virtual) RES exports 2020 RES target Feasible (virtual) RES exports 12% fulfillment Required (virtual) RES imports 20 10% BAU 8.9% 0 8% [%] 5.1% PR -20 6% -40 Historic [TWh/a] 4% deployment -60 2% 2020 RES target -80 RES share in gross final energy demand demand energy final gross in share RES 0%

Energy production from RES by 2020 -100 2010 2012 2014 2016 2018 2020 BAU PR Figure 124: RES developments up to 2020 in the UK in relative terms Figure 125: RES cooperation by 2020 (i.e. RES share in gross final energy demand) according to assessed in the UK according to cases (BAU and PR) assessed cases (BAU and PR)

Breakdown of Biogas 2013 2020 (BAU) 2020 (PR) Biofuels for transport Biomass* RES generation 6% RES-heating & cooling Geothermal 11% Large hydro RES-electricity by sector 10% (of generation) (of Small hydro 23% 22% 15% 3% 240 PV 19% 40% 24% 0%

E technology CSP - Tidal & wave 6% 6% 200 38.8 29% 35% 1%

RES Wind onshore 8% 27% 3% 4% 160 Breakdwon by Wind offshore 2% 3% 3% 52.7 2013 2020 (BAU) 2020 (PR) 120 39.0 8% 5% 6% 5% 30.2 12% 8% 80 12.3 9% 18% 18.1 124.1 generation) (of Biogas Biomass* 40 69.0 12% 52.0 Geothermal H&C technology - Solar thermal 65% 0 77% 75% Energy production from [TWh/a] RES from production Energy RES Heat pumps 2013 2020 (BAU) 2020 (PR) Breakdwon by Figure 126: Breakdown of RES generation by Figure 127: Breakdown of RES generation by technology and by sector sector in the UK in 2012 and (electricity (up) and heating & cooling (down) in the UK in 2020 according to assessed cases 2012 and 2020 according to assessed cases (BAU and PR)

3 The results of the model-based RES policy assessment provide a very pessimistic view on UK’s ability to achieve 2020 RES targets domestically, in particular if the BAU case is considered. Two issues appear of relevance in this respect: Firstly, the detailed design of the proposed new CfD scheme has not been applicable when conducting this analysis (and partly there is still unclearness nowadays). Thus, in the BAU case, reflecting only currently implemented (and not planned or intended possible future schemes) the assumption had to be taken that no dedicated support would be applicable for new RES-E installations in the UK beyond 2020. Secondly, the recent uptake of offshore wind power has been underestimated in both scenarios since last year’s statistics drew a less optimistic picture than latest data as published after completion of the modelling work.

Page 45 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

A closer look to Figure 126 indicates that energy produced from RES has to increase in each sector. This requires that policy recommendations like a clear strategy for the RES-E sector are implemented in time. Issues with the Contracts for Difference (CfD) policy and a transition from Renewable Obligations have to be resolved (see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015)).

Page 46 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

6 Conclusions and Recommendations

Key conclusions from the model-based assessment of 2020 RES target achievement are:

• The Green-X model was used to assess the feasibility of the achievement of the 2020 RES targets for selected policy pathways (Business-As-Usual (BAU case) vs. Policy Recommenda- tions (PR case)) • Under current RES support frameworks and related parameters (BAU case), only a RES share of 17.9% appears feasible at EU-28 level. Nine out of the assessed 28 Member States, e.g. Austria, Denmark or Italy, appear well on track. In another four Member States (i.e. Germa- ny, Finland, Ireland and Slovakia) there are doubts whether 2020 targets can be reached with already implemented measures, while the remainder of fourteen Member States can be classified as “not well on track.” • Improving national RES policies, e.g. according to the recommendations provided within this project, appears essential for several Member States to bring them back on track. If correc- tive measures are taken and implemented well in time, all Member States still have the possibility to achieve their 2020 RES targets. The majority of countries would even exceed its obligation, and there are good reasons for doing so since, as discussed above, additional RES deployment contributes well to increase supply security and local employment, to name only some additional benefits. Finally, by 2020 five Member States (i.e. France, Luxembourg, Malta, the Netherlands and the UK) make use of RES cooperation mechanisms as a buyer while all others act as (possible) seller. Thus, this could increase RES deployment to up to 21.0% at EU-28 level.

The Keep on Track! consortium recommends to: • Adopt an ambitious binding renewable energy target for 2030, including binding national targets, alongside energy efficiency and greenhouse gas emissions targets. • Ensure a predictable and stable legislative framework for RES at the national level and in particular to avoid any retroactive changes to existing support schemes. • Increase the focus on the RES-H&C and RES-T sectors, which are strongly dependent on the existence of a supportive and comprehensive framework. • Revise the guidelines on State aid for environmental protection and energy 2014-2020 to make sure they are consistent with the RES Directive and support the achievement of its objectives. • Re-establish a clear supportive framework for RES-T at European level in order to remove the current policy vacuum. • Retain the focus on the removal of administrative barriers.

Page 47 2020 RES scenarios for Europe –are Member States well on track for achieving 2020 RES targets?

7 References

Braungardt, S., Eichhammer, W., Elsland, R., Fleiter, T., Klobasa, M., Krail, M., Pfluger, Ben, Reu- ter, M., Schlomann, B., Sensfuss, F., Tariq, S., Kranzl, L., Dovidio, S., Gentili, P., 2014. Study evaluating the current energy efficiency policy framework in the EU and providing orientation on policy options for realising the cost-effective energy-efficiency/saving potential until 2020 and beyond, http://ec.europa.eu/energy/efficiency/studies/doc/2014_report_2020- 2030_eu_policy_framework.pdf, ac-cessed on 27 October 2014. DIRECTIVE 2003/30/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 8 May 2003 on the promotion of the use of biofuels or other renewable fuels for transport DIRECTIVE 2009/28/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently re- pealing Directives 2001/77/EC and 2003/30/EC European Commission (2013): EU energy, transport and GHG emissions trends to 2050: Reference Scenario 2013. DG Energy, DG Climate Action and DG Mobility and Transport, December 2013. Keep-on-Track! (2015): EU Tracking Roadmap 2015. A report compiled by the whole project consortium within the Intelligent Energy Europe project Keep-on-Track!, coordinated by Eufores and Eclareon. Brussels, Belgium, 2015. Accessible at www.keepontrack.eu. Resch G., L. Liebmann, A. Ortner, C. Panzer (2014): 2020 RES scenarios for Europe - are Member States well on track for achieving 2020 RES targets?. A report compiled within the Intelligent Energy Europe project Keep-on-Track!, coordinated by Eufores and Eclareon. TU Vienna, Energy Economics Group, Vienna, Austria, 2014. Accessible at www.keepontrack.eu.

Page 48 2030 RES targets for Europe - a brief pre-assessment of feasibility and impacts

8 Annex 1 – Method of approach / Key assumptions

The method of approach and related key assumptions for the modelling work undertaken within this study will be discussed in detail subsequently.

Constraints of the model-based policy analysis

► Time horizon: 2010 to 2020 – Results are derived on an annual base ► Geographical coverage: all Member States of the European Union ► Technology coverage: covering all RES technologies for power and heating and cooling generation as well biofuel production. The (conventional) reference energy system is based on EC modelling (PRIMES) ► Energy demand: demand forecasts are taken form “EU energy, transport and GHG emissions trends to 2050: Reference Scenario 2013” (EC, 2013) ► RES imports to the EU: generally limited to biofuels and forestry biomass meeting the sustainability criteria

8.1 The policy assessment tool: the Green-X model As in previous projects such as FORRES 2020, OPTRES or PROGRESS the Green-X model was applied to perform a detailed quantitative assessment of the future deployment of renewable energy on country-, sector- as well as technology level. The core strength of this tool lies on the detailed RES resource and technology representation accompanied by a thorough energy policy description, which allows assessing various policy options with respect to resulting costs and benefits. A short characterization of the model is given below, whilst for a detailed description we refer to www.green-x.at.

Short characterisation of the Green-X model

The model Green-X has been developed by the Energy Economics Group (EEG) at the Vienna University of Technology under the EU research project “Green-X–Deriving optimal promotion strategies for increasing the share of RES-E in a dynamic European electricity market" (Contract No. ENG2-CT-2002-00607). Initially focussed on the electricity sector, this modelling tool, and its database on renewable energy (RES) potentials and costs, has been extended to incorporate renewable energy technologies within all energy sectors. Green-X covers the EU-28, and can be extended to other countries, such as Turkey, Croatia and Norway. It allows the investigation of the future deployment of RES as well as the accompanying cost (including capital expenditures, additional generation cost of RES compared to conventional options, consumer expenditures due to applied supporting policies) and benefits (for instance, avoidance of fossil fuels and corresponding carbon emission savings). Results are calculated at both a country- and technology-level on a yearly basis. The time- horizon allows for in-depth assessments up to 2030. The Green-X model develops nationally specific dynamic cost-resource curves for all key RES technologies, including for renewable electricity, biogas, biomass, biowaste, wind on- and offshore, hydropower large- and small-scale, solar thermal electricity, photovoltaic, tidal stream and wave power, geothermal electricity; for renewable heat, biomass, sub-divided into log wood, wood chips, pellets, grid-connected heat, geothermal grid-connected heat, heat pumps and solar thermal heat; and, for renewable transport fuels, first generation biofuels (biodiesel and bioethanol), second generation biofuels Page 49 2030 RES targets for Europe - a brief pre-assessment of feasibility and impacts

(lignocellulosic bioethanol, biomass to liquid), as well as the impact of biofuel imports. Besides the formal description of RES potentials and costs, Green-X provides a detailed representation of dynamic aspects such as technological learning and technology diffusion. Through its in-depth energy policy representation, the Green-X model allows an assessment of the impact of applying (combinations of) different energy policy instruments (for instance, quota obligations based on trada- ble green certificates / guarantees of origin, (premium) feed-in tariffs, tax incentives, investment incentives, impact of emission trading on reference energy prices) at both country or European level in a dynamic framework. Sensitivity investigations on key input parameters such as non-economic barriers (influencing the technology diffusion), conventional energy prices, energy demand developments or technological progress (technological learning) typically complement a policy assessment. Within the Green-X model, the allocation of biomass feedstock to feasible technologies and sectors is fully internalised into the overall calculation procedure. For each feedstock category, technology options (and their corresponding demands) are ranked based on the feasible revenue streams as available to a possible investor under the conditioned, scenario-specific energy policy framework that may change on a yearly basis. Recently, a module for intra-European trade of biomass feedstock has been added to Green-X that operates on the same principle as outlined above but at a European rather than at a purely national level. Thus, associated transport costs and GHG emissions reflect the outcomes of a detailed logistic model. Consequently, competition on biomass supply and demand arising within a country from the conditioned support incentives for heat and electricity as well as between countries can be reflected. In other words, the supporting framework at MS level may have a significant impact on the resulting biomass allocation and use as well as associated trade. Moreover, Green-X was recently extended to allow an endogenous modelling of sustainability regulations for the energetic use of biomass. This comprises specifically the application of GHG constraints that exclude technology/feedstock combinations not complying with conditioned thresholds. The model allows flexibility in applying such limitations, that is to say, the user can select which technology clusters and feedstock categories are affected by the regulation both at national and EU level, and, additionally, applied parameters may change over time.

8.2 Overview on assessed cases

Policy recommendations BAU case: RES scenario: policies are ◄Meeting/Exceeding 20% RES by 2020 applied as as precondition currently ◄Continuation BUT fine-tuning implemented (increasing cost-efficiency & effectiveness) (without any of national RES policies: improving the design adaptation) until of RES policies but no change of the in prior 2020, chosen RES policy instrument type i.e. a business as ◄Mitigation of non-cost barriers usual (BAU) ◄RES cooperation comes into play in the forecast. exceptional case that pure national target fulfilment appears not feasible (even with high financial incentives)

Figure 128: Overview on assessed cases

The RES policy framework is a key input to this analysis whereby two scenarios were in focus (see Figure 128): a business-as-usual (BAU) case where the assumption was taken that RES policies are applied as currently implemented (without any adaptation) until 2020, and a policy recommenda-

Page 50 2030 RES targets for Europe - a brief pre-assessment of feasibility and impacts

tions (PR) scenario, indicating a pathway for meeting (or even exceeding) the 2020 RES targets, that builds on the policy recommendations derived within this project, see EU Tracking Roadmap 2015 (Keep-on-Track!, 2015).

Note that in the PR case RES cooperation is an important element for overall RES target achievement for certain Member States. It comes however only into play in exceptional cases when national target achievement appears not feasible even with high financial incentives.4

8.3 Criteria for the assessment of RES support schemes

price, costs [€/MWh]

pMC MC

Market clearing Producer surplus (PS) price = price for certificate

Generation Costs (GC) quantity [GWh/year]

Quota Q Support expenditures (transfer costs for consumer/ society) = PS + GC – pC * Q = ( pMC – pC ) * Q

pC ... market price for p MC ... marginal price for MC ... marginal (conventional) RES-E (due to generation costs electricity quota obligation)

Figure 129: Basic definitions of the cost elements (illustrated for a RES trading system)

Support instruments have to be effective in order to increase the penetration of RES and efficient with respect to minimising the resulting public costs – i.e. the transfer cost for consumer (society), subsequently named support expenditures – over time. The criteria used for evaluating the various policy instruments are based on two conditions:

• Minimise generation costs

4 As threshold with respect to financial RES support across Member States a high value is used – i.e. differences in country-specific support per MWh RES are limited to a maximum of 30 €/MWhRES. Consequently, if support in a country with temporarily limited RES potentials and / or an ambitious RES target exceeds the upper boundary, the remaining gap to its RES target would be covered in line with the flexibility re- gime as defined in the RES Directive through (virtual) imports from other countries that achieve a surplus in RES deployment.

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This objective is fulfilled if total RES-E generation costs (GC) are minimised. In other words, the system should provide incentives for investors to select technologies, scales and sites such that generation costs are minimised.

• Reduce producer profits to an adequate level Once such cost-efficient systems have been identified, the next step is to evaluate various implementation options with the aim of minimising the transfer costs for consumer / society.5 This means that feed-in tariffs, investment incentives or RES trading systems should be designed in such a way that public transfer payments are also minimised. This implies lowering generation costs as well as producer surplus (PS)6.

In some cases it may not be possible to reach both objectives simultaneously – minimise generation costs and producer surplus – so that compromises have to be made. For a better illustration of the cost definitions used, the various cost elements are illustrated in Figure 129.

8.4 Overview on key parameters

Table 4: Main input sources for scenario parameters

In order to ensure maximum consistency with existing EU scenarios and projections various input parameters of the renewable scenarios conducted with Green-X are derived from PRIMES modelling.

5 Support expenditures - i.e. the transfer costs for consumers (society) – due to RES support are defined as the financial transfer payments from the consumer to the RES producer compared to the reference case of consumers purchasing conventional electricity on the power market. This means that these costs do not consider any indirect costs or externalities (environmental benefits, change of employment, etc.). Within this report support expenditures (due to RES support) are either expressed in absolute terms (e.g. billion €), related to the stimulated RES generation, or put in relation to the total electricity / energy consumption. In the latter case, the premium costs refer to each MWh of electricity / energy consumed.

6 The producer surplus is defined as the profit of green electricity generators. If, for example, a green producer receives a feed-in tariff of 60 € for each MWh of electricity sold and generation costs are 40 €/MWh, the resulting profit would be 20 € for each MWh. The sum of the profits of all green generators equals the producer surplus.

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More precisely, the PRIMES scenario used is the PRIMES reference scenario as of 2013 (EC, 2013). The main data source for RES-specific parameter is the Green-X database – this concerns for example information on the status quo of RES deployment, future RES potentials and related costs as well as other country-specific parameter concerning non-economic barriers that limit an accelerated uptake of RES. As discussed above (see overview on assessed cases) the policy framework for RES is specifically defined for this assessment and for consistency future energy demand developments are aligned to the reference projection and/or the assessment of energy efficiency options, respectively. Table 2 shows which parameters are based on PRIMES, on the Green-X database and which have been defined for this assessment.

8.4.1 Energy demand Default demand data is taken from PRIMES (reference case) and serves also as basis for the alternative (modified) demand projections, incorporating the impact of energy efficiency. The analysis underlying the assessment of energy efficiency policy options, potentials and related impacts is based on detailed modelling of the final energy demand in the different demand sectors. The Low Policy Initiative scenario as used in this assessment for that purpose has been conducted in the frame of a study evaluating the current energy efficiency policy framework in the EU and providing orientation on policy options for realising the cost-effective energy-efficiency/saving potential until 2020 and beyond, conducted on behalf of DG ENER by a consortium led by Fraunhofer ISI (Braungardt et al., 2014).

Thus, Figure 130 depicts the projected energy demand development at EU 28 level according to the PRIMES reference scenario and the alternative demand case (developed until 2020) with regard to gross final energy demand (right) as well as gross electricity demand (left).

16,000 5,000

14,000 4,500 4,000 12,000 PRIMES reference case 3,500 10,000 3,000 8,000 2,500 Alternative energy 6,000 efficiency case 2,000 1,500

Gross demand final Gross energy 4,000 Gross [TWh] demand electricity Gross (with aviation reduction) [TWh] reduction) (with aviation 1,000 2,000 500 0 0 2010 2015 2020 2025 2030 2035 2040 2045 2050 2010 2015 2020 2025 2030 2035 2040 2045 2050 Figure 130: Comparison of projected energy demand developments at European (EU-28) level – gross electricity demand (left) and gross final energy demand (right). (Source: PRIMES scenarios, own assessment based on Braungardt et al., 2014)

A comparison to alternative PRIMES demand projections at EU 28 levels shows the following trends: The PRIMES reference case as of 2013 (EC, 2013) draws a modified picture of future demand pat- terns compared to previous baseline and reference cases. The impacts of the global financial crisis Page 53 2030 RES targets for Europe - a brief pre-assessment of feasibility and impacts

are reflected, leading to a reduction of overall gross final energy demand in the short term, and moderate growth in later years towards 2020. Beyond 2020, according to the PRIMES reference case (where the achievement of climate and RES targets for 2020 is assumed) gross final energy demand is expected to stagnate and then moderately decrease.

For the electricity sector, demand growth is generally more pronounced. The distinct PRIMES cases follow a similar pattern and differences between them are moderate – i.e. all cases expect electricity consumption to rise strongly in later years because of cross-sectoral substitutions: electricity is expected to make a stronger contribution to meeting the demand for heat in the future, and similar substitution effects are assumed for the transport sector as well.

Complementary to above, a closer look at the Member State level is taken next. Thus, Figure 131 provides a comparison of actual 2012 data and projected 2020 gross final energy demand by Member State. As applicable from this graph, for several countries (e.g. France, Germany, UK, Netherlands or Spain) projected gross final energy demand by 2020 is, in accordance with the overall trend at aggregated (EU) level, below current (2012) levels. For other Member States like Cyprus, Czech Republic, Greece or Poland PRIMES scenarios show a comparatively strong increase in demand compared to today. This has important implication on country-specific RES target achievement as discussed in section 5.

2,500 2012 (actual data (Eurostat)) 2020 (PRIMES reference case) 2,000

1,500

1,000 Gross demand final Gross energy

(with aviation reduction) [TWh] reduction) (with aviation 500

0 FI SI IT IE LT PL ES SE EE SK LV CZ FR PT CY BE LU NL AT DE DK UK GR BG RO HU MT

Figure 131: Comparison of actual 2012 and projected 2020 gross final energy demand by Member State. (Source: Eurostat and PRIMES scenarios)

8.4.2 Conventional supply portfolio The conventional supply portfolio, i.e. the share of the different conventional conversion technologies in each sector, is based on PRIMES forecasts on a country-specific basis. These projections of the portfolio of conventional technologies particularly influence the calculations done within this study on the avoidance of fossil fuels and related CO2 emissions. As it is beyond the scope of this study to analyse in detail which conventional power plants would actually be replaced, for instance, by a wind farm installed in the year 2023 in a certain country (i.e. either a less efficient existing coal-fired plant or possibly a new highly-efficient combined cycle gas turbine), the following assumptions are made:

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• Bearing in mind that fossil energy represents the marginal generation option that determines the prices on energy markets, it was decided to stick to the sector-specific conventional supply portfolio projections on a country level provided by PRIMES. Sector- as well as country-specific conversion efficiencies derived on a yearly basis are used to calculate the amount of avoided primary energy based on the renewable generation figures obtained. Assuming that the fuel mix is un- affected, avoidance can be expressed in units of coal or gas replaced.

• A similar approach is chosen with regard to the avoidance of CO2 emissions, where the basis is

the fossil-based conventional supply portfolio and its average country- and sector-specific CO2 intensities that may change over time. In the following, the derived data on aggregated conventional conversion efficiencies and the CO2 intensities characterising the conventional reference system (excl. nuclear energy) are presented.

Figure 132 shows the dynamic development of the average conversion efficiencies as projected by PRIMES for conventional electricity generation as well as for grid-connected heat production. Con- version efficiencies are shown for the PRIMES reference scenario (EC, 2013). Error bars indicate the range of country-specific average efficiencies among EU Member States. For the transport sector, where efficiencies are not explicitly expressed in PRIMES’ results, the average efficiency of the re- finery process used to derive fossil diesel and gasoline was assumed to be 95%.

100% 90%

[%] 80% Electricity - PRIMES 70% Average efficiency reference case 60% at EU level 50% 40% Bandwith of efficiencies 30% due to differing country- specific circumstances Heat (grid) - 20% PRIMES reference case of of production energy conventional 10% Ranges of of Ranges efficiencies average conversion 0% 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Figure 132: Country-specific average conversion efficiencies of conventional (fossil-based) electricity and grid-connected heat production in the EU28

Source: PRIMES scenarios (EC, 2013)

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1.4 1.3 Electricity - PRIMES 1.2 reference case 1.1 1.0

0.9 Average intensity Heat (grid) - PRIMES 0.8 at EU level reference case 0.7 Bandwith of intensities due to differing country- 0.6 specific circumstances 0.5 Heat (non-grid) - PRIMES 0.4 reference case 0.3 0.2

energy production [t [t production energy CO2/MWhoutput] 0.1 Transport - PRIMES reference case 0.0 Ranges of of Ranges average CO2of intensities conventional 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Figure 133: Country-specific average sectoral CO2 intensities of the conventional (fossil-based) energy system in the EU28.

Source: PRIMES scenarios (EC, 2013)

The corresponding data on country- and sector-specific CO2 intensities of the conventional energy conversion system according to the PRIMES reference scenario are shown in Figure 133. Error bars again illustrate the variation across countries.

8.4.3 Fossil fuel and carbon prices

60 Coal /MWh] € 50

40 Oil

30 Gas 20 Fossil energy prices [ prices energy Fossil 10

2010 2015 2020 2025 2030 2035 2040 2045 2050 Figure 134: Primary energy price assumptions in €/MWh

Source: based on PRIMES scenarios (EC, 2013)

The country- and sector-specific reference energy prices used in this analysis are based on the primary energy price assumptions applied in the latest PRIMES reference scenario that has also served as basis for the Impact Assessment accompanying the Communication from the European Commis- sion “A policy framework for climate and energy in the period from 2020 to 2030” (COM(2014) 15 final). As shown in Figure 134 generally only one price trend is considered – i.e. a default case of

Page 56 2030 RES targets for Europe - a brief pre-assessment of feasibility and impacts

moderate energy prices that reflects the price trends of the PRIMES reference case. Compared to the energy prices as observed in 2011, all the price assumptions appear comparatively low, even for the later years up to 2050.

100 90 80 70 ETS post 2020)) post ETS - ]

2 60 PRIMES reference 50 case /t CO € [ 40 30 20 10 Carbon prices (ETS (& Non Carbon (ETS prices 0

2010 2015 2020 2025 2030 2035 2040 2045 2050

Figure 135: CO2 price assumptions in €2010/ton

Source: PRIMES scenarios (EC, 2013)

The CO2 price in the scenarios presented in this report is also based on recent PRIMES modelling, see Figure 135. Actual market prices for EU Allowances have fluctuated between 6 and 30 €/t since 2005 but remained on a low level with averages around 7 €/t in the first quarter of 2012. In the model, it is assumed that CO2 prices are directly passed through to electricity prices as well as to prices for grid-connected heat supply.

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