Final Report Summary - CESSA (Coordinating energy security of supply actions)
CESSA, the European forum on energy security in supply activities, was a project funded by the Sixth Framework Program (FP6) of the European Commission. It assembled a variety of European research teams and stakeholders (energy companies, energy regulators, energy ministries, etc.) to find a consensus on the short and long term security of supply in natural gas, nuclear power and hydrogen involving researcher and energy stakeholders.
The project's objectives were:
- to analyse the economic mechanisms related to the financing and investments in the energy field (new power generation capacities, energy networks);
- to assess the policy governance aspects at the EU-level and beyond, including regional markets versus a European market, including legislative aspects among countries of energy production, transit and destination and Identification of the economics and policy issues related to gas, nuclear and hydrogen for Europe;
- to identify barriers and prospects for the hydrogen economy especially in relation to gas and nuclear developments;
- comparison of results with national and international studies;
- consensus, through workshops among researchers and stakeholders, on the main economic and policy conclusions;
- recommendations on the measures to be taken at the EU-level.
There are two major drivers for renewed interest in nuclear power in many countries of the European Union: the need for secure electricity supplies and the need to reduce greenhouse gas emissions. During the course of the CESSA project the scope of ambition for new nuclear power plant construction in Europe has broadened. In 2007, the most ambitious nuclear new build plans for Europe would not have done more than replace existing nuclear energy capacity. However, in early 2008 several countries (such as the United Kingdom, Italy and Romania) are considering measures that raise the possibility of a long-term net growth in European nuclear energy capacity, now made more attractive by the large increase in fossil fuel prices.
Several EU countries (including Ireland and Austria) remain resolutely opposed to nuclear power. The growth of the EU from 12 states to 27 has reduced the proportion of member countries with an anti-nuclear stance. Concerns for global climate change have led to the European Emissions Trading Scheme and other policy measures that act in favour of nuclear new build by internalising a key externality and rendering nuclear power more cost competitive. It is unlikely that Europe will be able to 'speak with one voice' on matters of energy policy. This is especially true of electricity generation mix and nuclear power. CESSA noted the relative lack of European Commission research support for next generation nuclear energy systems. CESSA notes that generation III nuclear power systems have only modest research needs and existing European Commission efforts appear sufficient. It is important, however, for Europe to consider its role in the longer term future of nuclear energy generation.
Hydrogen can be produced from fossil fuels, by water electrolysis or possibly from nuclear power. Presently, the dominant technology is natural gas steam reforming. Water electrolysis is a well-known, commercially available technology for very pure hydrogen production. It would have the additional advantage of allowing decentralised operation, therefore easing the infrastructure building effort as compared to production from fossil fuels, biomass or nuclear energy. However, significant reductions in the costs of electrolysis equipment and improvements in efficiency would be required in order for electrolysis to become commercially viable. Nuclear energy could provide an electricity source for hydrogen production, if general concerns about security, environmental impact and cost are met in the wider arena of electricity generation by nuclear plants. There are also proposals for direct hydrogen production by high-temperature water thermolysis, although commercial systems are still to be built. Even if some hydrogen technologies have been well-known for a long time, it is widely felt that a significant effort in R&D is still needed, and that plans for deployment in the near future are premature. Therefore, an increased R&D effort is advised, especially when it is taken into account that most hydrogen technologies could play a significant role in the future energy system even if this one were not to be based on hydrogen.
CESSA can report the following summarised conclusions:
1. Short-term and long-term disequilibria in security of supply are different phenomena.
2. Solidarity between EU Member States to cope with energy disruptions is necessary and even more so in the absence of satisfactory market liberalisation and market design.
3. Information provision and sharing improve energy security for all.
4. Open access pan-European networks are the backbone of EU security of supply.
5. Public policies that are not specifically devoted to security of supply may be at least as critical in improving security of supply as ad hoc policies directed specifically at such objectives.
6. Markets are central to providing security of supply.
7. Security of supply is enhanced when markets are wider.
8. Public policies that facilitate market enlargement and competition improve security of supply.
9. Good competition policy enforcement helps security of supply.
10. Bad public policies, including security of supply policies, can severely damage long-term security of supply.
The project's objectives were:
- to analyse the economic mechanisms related to the financing and investments in the energy field (new power generation capacities, energy networks);
- to assess the policy governance aspects at the EU-level and beyond, including regional markets versus a European market, including legislative aspects among countries of energy production, transit and destination and Identification of the economics and policy issues related to gas, nuclear and hydrogen for Europe;
- to identify barriers and prospects for the hydrogen economy especially in relation to gas and nuclear developments;
- comparison of results with national and international studies;
- consensus, through workshops among researchers and stakeholders, on the main economic and policy conclusions;
- recommendations on the measures to be taken at the EU-level.
There are two major drivers for renewed interest in nuclear power in many countries of the European Union: the need for secure electricity supplies and the need to reduce greenhouse gas emissions. During the course of the CESSA project the scope of ambition for new nuclear power plant construction in Europe has broadened. In 2007, the most ambitious nuclear new build plans for Europe would not have done more than replace existing nuclear energy capacity. However, in early 2008 several countries (such as the United Kingdom, Italy and Romania) are considering measures that raise the possibility of a long-term net growth in European nuclear energy capacity, now made more attractive by the large increase in fossil fuel prices.
Several EU countries (including Ireland and Austria) remain resolutely opposed to nuclear power. The growth of the EU from 12 states to 27 has reduced the proportion of member countries with an anti-nuclear stance. Concerns for global climate change have led to the European Emissions Trading Scheme and other policy measures that act in favour of nuclear new build by internalising a key externality and rendering nuclear power more cost competitive. It is unlikely that Europe will be able to 'speak with one voice' on matters of energy policy. This is especially true of electricity generation mix and nuclear power. CESSA noted the relative lack of European Commission research support for next generation nuclear energy systems. CESSA notes that generation III nuclear power systems have only modest research needs and existing European Commission efforts appear sufficient. It is important, however, for Europe to consider its role in the longer term future of nuclear energy generation.
Hydrogen can be produced from fossil fuels, by water electrolysis or possibly from nuclear power. Presently, the dominant technology is natural gas steam reforming. Water electrolysis is a well-known, commercially available technology for very pure hydrogen production. It would have the additional advantage of allowing decentralised operation, therefore easing the infrastructure building effort as compared to production from fossil fuels, biomass or nuclear energy. However, significant reductions in the costs of electrolysis equipment and improvements in efficiency would be required in order for electrolysis to become commercially viable. Nuclear energy could provide an electricity source for hydrogen production, if general concerns about security, environmental impact and cost are met in the wider arena of electricity generation by nuclear plants. There are also proposals for direct hydrogen production by high-temperature water thermolysis, although commercial systems are still to be built. Even if some hydrogen technologies have been well-known for a long time, it is widely felt that a significant effort in R&D is still needed, and that plans for deployment in the near future are premature. Therefore, an increased R&D effort is advised, especially when it is taken into account that most hydrogen technologies could play a significant role in the future energy system even if this one were not to be based on hydrogen.
CESSA can report the following summarised conclusions:
1. Short-term and long-term disequilibria in security of supply are different phenomena.
2. Solidarity between EU Member States to cope with energy disruptions is necessary and even more so in the absence of satisfactory market liberalisation and market design.
3. Information provision and sharing improve energy security for all.
4. Open access pan-European networks are the backbone of EU security of supply.
5. Public policies that are not specifically devoted to security of supply may be at least as critical in improving security of supply as ad hoc policies directed specifically at such objectives.
6. Markets are central to providing security of supply.
7. Security of supply is enhanced when markets are wider.
8. Public policies that facilitate market enlargement and competition improve security of supply.
9. Good competition policy enforcement helps security of supply.
10. Bad public policies, including security of supply policies, can severely damage long-term security of supply.