Francesco Gracceva

Security of Energy Supply: Comparing Scenarios from a European Perspective

This paper compares different results from a set of energy scenarios produced by international energy experts, in order to analyze projections on increasing European external energy dependence and vulnerability. Comparison among different scenarios constitutes the basis of a critical review of existing energy security policies, suggesting alternative or complementary future actions. According to the analysis, the main risks and negative impacts in the long term could be the increasing risk of collusion among exporters due to growing dependence of industrialized countries and insufficient diversification; and a risk of demand/supply imbalance, with consequent instability for exporting regions due to insufficient demand, and lack of infrastructures due to insufficient supply. Cooperation with exporting countries enhancing investments in production capacity, and with developing countries in order to reinforce negotiation capacity of energy importing countries seem to be the most effective policies at international level.

Market-Based Options for Security of Energy Supply

Energy market liberalization and international economic interdependence have affected governments’ ability to react to security of supply challenges. On the other side, whereas in the past security of supply was largely seen as a national responsibility, the frame of reference has increasingly become the EU in which liberation increases security of supply mainly by increasing the number of markets participants and improving the flexibility of energy systems. In this logic, security of supply becomes a risk management strategy with a strong inclination towards cost effectiveness, involving both the supply and the demand side. Security of supply has two major components that interrelate: cost and risk. This paper focus the attention on costs in the attempt to develop a market compatible approach geared towards security of supply.

Social Costs of Energy Disruptions

The costs of energy supply disruptions for industrialised economies go well beyond the economic measures of national accounts. According to different kinds of risks, physical shortages or price shocks, there are several categories of negative effects. Oil disruptions have both a direct and an indirect impact, (at global and local levels) and have a short- and a medium-term horizon. The economic effects of electricity shortages are also direct and indirect, but the temporal lag is shorter than for oil disruptions. In this paper, we summarise the different ways an economy is affected by an oil shock or a power black-out. Oil crises in the past produced high inflation rates, trade and payments imbalances, high unemployment, and weak business and consumer confidence. The social costs of electricity shortages have immediate negative results, and relatively small, indirect effects – depending on the extension of the disruption, the duration, the availability of advance warning and information. A specific assessment of the social costs of an electricity shortage remains a research task for the future.

Soft-Linking Exercises Between TIMES, Power System Models and Housing Stock Models

Soft-linking TIMES models with carefully selected complementary models can provide useful additional insights into the results from the TIMES model and can usefully scrutinize specific TIMES results in greater detail with another model. This multi-model approach can take advantage of the individual strengths of different modelling approaches. This chapter collates methodologies and results from a number of soft-linking exercises with TIMES. Two specific examples are given; firstly the soft-linking of TIMES to a power system model to investigate the TIMES results and provide additional insights into power system flexibility, reliability and market issues. The second example comprises the soft-linking of a TIMES model to a power system and a housing stock model to explore the impacts of increased electrification of residential heating on the power system and associated emissions from the residential sector. These examples show how a multi-model approach and soft-linking can provide a strong complementary analysis to TIMES modelling exercises and generate insights into results that otherwise would be difficult to achieve with a single model approach.

Oil Security Short- and Long-Term Policies

Increasing oil security represents one of the most important policy actions, especially within IEA countries. Short and long term mechanisms could help such goal. On the short term side, revision of IEA emergency response oil stock system has been discussed. The attention is mainly focused on three issues: the high costs of stock management for private industries, the possible use of strategic reserves to smooth price when no high supply disruption has taken, the extension of IEA emergency system to non-OECD countries. The main actions specifically proposed by the European Commission are: an harmonisation of national storage systems, with the institution of public and private agency, a wider co-ordinated use of security stocks, and an increase in the physical amount of oil stocks. Long term measures for enhancing oil supply security can be seen on the demand-side and the supply-side. Main demand-side policies could be the following: energy saving and efficiency, investments in research and technology, and reduction of oil price inelasticity especially for transport sector. Main supply-side policies can be summarized into co-operation and institutional promotion for supply diversification of suppliers/routes. Main factors that could affect described policies could be the liberalization of international trade even in the energy sector and the increasing role of oil demand from developing countries.

Fossil fuel sustainability from two different points of view

Abstract In this quantitative assessment of fossil fuel sustainability, 13 long‐term energy scenarios are reviewed and the characteristics of sustainable consumption patterns are identified. First, economic sustainability is analysed by considering the physical availability of fossil fuels and by investigating OECD energy supply security. Second, environmental sustainability is discussed by analysing fossil fuel consumption in scenarios leading to a stabilization of atmospheric CO2 concentrations by 2100 and also in scenarios leading to a near‐term reduction of OECD CO2 emissions. From an economic point of view there is nothing to induce policymakers to take action to reduce fossil fuel consumption. The only possible reason for abandoning the current fossil‐intensive consumption path would be by adopting a “precautionary”; approach in fixing a “safe”; level of greenhouse gas concentration (e.g. 450 ppm). Although we lack the necessary conditions for a medium‐term radical change of the energy system, in or...

Il protocollo di Kyoto e il commercio di emissioni nell'Unione Europea

The Kyoto Protocol and the European Emissions Trading Scheme - At the beginning of 2005 the European Emissions Trading Scheme came into force for the 25 European Union members. The main objective of the scheme is to reduce the costs of abating greenhouse gas emissions as indicated in the Kyoto Protocol for the industrialized economies. The European Union is the first signatory of the Protocol to implement a fully market-based mechanism at the international level with the Emissions Trading Scheme. In this paper some general considerations on the European Emissions Trading Scheme are presented, with close attention to its implementation in Italy.