COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Energy Roadmap 2050
Date: 2011-12-15
Institutions: European Commission
Subjects: bioenergy, climate change, electrical energy, energy efficiency, energy saving, energy supply, fossil fuel, gas, nuclear policy, price of energy, reduction of gas emissions, renewable energy, research and development, tradeable emission permit

EUROPEAN COMMISSION 

Brussels, 15.12.2011 
COM(2011) 885 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Energy Roadmap 2050 

{SEC(2011) 1565 final} 
{SEC(2011) 1566 final} 
{SEC(2011) 1569 final} 

 
 
 
 
  
 
1. 

INTRODUCTION 

People's  well-being,  industrial  competitiveness  and  the  overall  functioning  of  society  are 
dependent on safe, secure, sustainable and affordable energy. The energy infrastructure which 
will  power  citizens'  homes,  industry  and  services  in  2050,  as  well  as  the  buildings  which 
people will use, are being designed and built now. The pattern of energy production and use 
in 2050 is already being set. 

The EU is committed to reducing greenhouse gas emissions to 80-95% below 1990 levels by 
2050  in  the  context  of  necessary  reductions  by  developed  countries  as  a  group1.  The 
Commission  analysed  the  implications  of  this  in  its  "Roadmap  for  moving  to  a  competitive 
low-carbon  economy  in  2050".2  The  "Roadmap  to  a  Single  European  Transport  Area"3 
focussed  on  solutions  for  the  transport  sector  and  on  creating  a  Single  European  Transport 
Area.  In  this  Energy  Roadmap  2050  the  Commission  explores  the  challenges  posed  by 
delivering  the  EU's  decarbonisation  objective  while  at  the  same  time  ensuring  security  of 
energy supply and competitiveness. It responds to a request from the European Council4. 

The  EU  policies  and  measures  to  achieve  the  Energy  2020  goals5  and  the  Energy  2020 
strategy  are  ambitious.6  They  will  continue  to  deliver  beyond  2020  helping  to  reduce 
emissions by about 40% by 2050. They will however still be insufficient to achieve the EU's 
2050  decarbonisation  objective  as  only  less  than  half  of  the  decarbonisation  goal  will  be 
achieved in 2050. This gives an indication of the level of effort and  change, both structural 
and social, which will be required to make the necessary emissions reduction, while keeping a 
competitive and secure energy sector. 

Today, there is inadequate direction as to what should follow the 2020 agenda. This creates 
uncertainty  among  investors,  governments  and  citizens.  Scenarios  in  the  "Roadmap  for 
moving  to  a  competitive  low-carbon  economy  in  2050"  suggest  that  if  investments  are 
postponed, they will cost more from 2011 to 2050 and create greater disruption in the longer 
term. The task of developing post-2020 strategies is urgent. Energy investments take time to 
produce results. In this decade, a new investment cycle is taking place, as infrastructure built 
30-40 years ago needs to be replaced. Acting now can avoid costly changes in later decades 
and  reduces  lock-in  effects.  The  International  Energy  Agency  (IEA)  has  shown  the  critical 
role  of  governments  and  underlined  the  need  for  urgent  action;7  with  the  scenarios  of  the 
Energy Roadmap 2050 different possible pathways for Europe are analysed more in depth. 

Forecasting the long-term future is not possible. The scenarios in this Energy Roadmap 2050 
explore routes towards decarbonisation of the energy system. All imply major changes in, 
for  example,  carbon  prices,  technology  and  networks.  A  number  of  scenarios  to  achieve  an 
80%  reduction  in  greenhouse  gas  emissions  implying  some  85%  decline  of  energy-related 

1 
2 
3 
4 
5 

6 

7 

European Council, October 2009. 
COM(2011)112, 8 March. 
COM(2011)144, 28 March. 
Extraordinary European Council, 4 February 2011 
European  Council,  8/9  March  2007:  By  2020,  at  least  20  %  reduction  in  greenhouse  gas  emissions 
compared to 1990 (30% if international conditions are right, European Council, 10-11 December 2009); 
saving of 20 % of EU energy consumption compared to projections for 2020; 20 % share of renewable 
energies in EU energy consumption, 10% share in transport. 
See also "Energy 2020 - A strategy for competitive, sustainable and secure energy" COM(2010) 639, 
November 2010. 
IEA (2011), World Energy Outlook 2011. 

EN 

2 

   EN 

 
                                                 
CO2  emissions  including  from  transport,  have  been  examined.8  The  Commission  has  also 
analysed  Member  States'  and  stakeholders'  scenarios  and  views.9  Naturally,  given  the  long 
time  horizon,  there  is  uncertainty  associated  to  these  results,  not  least  because  they  rely  on 
assumptions which themselves are not certain.10 It is impossible to anticipate whether an oil 
peak will come, since new discoveries have occurred repeatedly; to what extent shale gas in 
Europe will prove viable, whether and when Carbon Capture & Storage (CCS) will become 
commercial, what role Member States will seek for nuclear power, how climate action across 
the globe will evolve. Social, technological and behavioural changes will also have significant 
impact on the energy system.11 

The  scenario  analysis  undertaken  is  of  an  illustrative  nature,  examining  the  impacts, 
challenges and opportunities of possible ways of modernizing the energy system. They are not 
"either-or"  options  but  focus  on  the  common  elements  which  are  emerging  and  support 
longer-term approaches to investments.  

Uncertainty is a major barrier to investment. The analysis of the projections conducted by 
the Commission, Member States and stakeholders show a number of clear trends, challenges, 
opportunities  and  structural  changes  to  design  the  policy  measures  needed  to  provide  the 
appropriate framework for investors. Based on this analysis, this Energy Roadmap identifies 
key  conclusions  on  "no  regrets"  options  in  the  European  energy  system.  This  makes  it  also 
important  to  achieve  a  European  approach,  where  all  Member  States  share  common 
understanding of the key features for a transition to a low-carbon energy system, and which 
provides the certainty and stability which are needed. 

The  Roadmap  does  not  replace  national,  regional  and  local  efforts  to  modernize  energy 
supply,  but  seeks  to  develop  a  long-term  European  technology-neutral  framework  in 
which these policies will be more effective. It argues that a European approach to the energy 
challenge will increase security and solidarity and lower costs compared to parallel national 
schemes  by  providing  a  wider  and  flexible  market  for  new  products  and  services.  For 
example, some stakeholders show potential cost savings of up to a quarter if there was a more 
European approach for efficient use of renewable energy. 

2. 

A  SECURE,  COMPETITIVE  AND  DECARBONISED  ENERGY  SYSTEM  IN  2050  IS 
POSSIBLE  

The  energy  sector  produces  the  lion's  share  of  man-made  greenhouse  gas  emissions. 
Therefore,  reducing  greenhouse  gas  emissions  by  2050  by  over  80%  will  put  particular 
pressure on energy systems. 

If,  as  seems  likely,  global  energy  markets  become  more  interdependent,  the  EU  energy 
situation  will  be  directly  influenced  by  the  situation  of  its  neighbours  and  by  global  energy 

8 
9 

10 

11 

The model used for this purpose is the PRIMES energy system model. 
See annex "Selected Stakeholders' Scenarios", including scenarios of the International Energy Agency, 
Greenpeace/EREC, the European Climate Foundation and Eurelectric. Further studies and reports have 
been closely analysed, such as e.g. the independent report of the Ad hoc Advisory Group on the Energy 
Roadmap 2050. 
These uncertainties include among others the pace of economic growth, the extent of global efforts to 
mitigate climate change, geopolitical developments, the level of world energy prices, the dynamics of 
markets,  the  development  of  future  technologies,  the  availability  of  natural  resources,  social  changes 
and public perception. 
European societies might need to rethink the way energy is consumed, e.g. by changing urban planning 
and consumption patterns. See Roadmap to a Resource Efficient Europe (COM(2011) 571). 

EN 

3 

   EN 

 
                                                 
trends. The results of the scenarios depend notably on finalising a global climate deal, which 
would also lead to lower global fossil fuel demand and prices. 

Overview of scenarios12  

Current trend scenarios 

•  Reference  scenario.  The  Reference  scenario  includes  current  trends  and  long-term 
projections  on  economic  development  (gross  domestic  product  (GDP)  growth  1.7%  pa). 
The scenario includes policies adopted by March 2010, including the 2020 targets for RES 
share and GHG reductions as well as the Emissions Trading Scheme (ETS) Directive. For 
the analysis, several sensitivities with lower and higher GDP growth rates and lower and 
higher energy import prices were analysed. 

•  Current  Policy  Initiatives  (CPI).  This  scenario  updates  measures  adopted,  e.g.  after  the 
Fukushima events following the natural disasters in Japan, and being proposed as in the 
Energy 2020 strategy; the scenario also includes proposed actions concerning the "Energy 
Efficiency Plan" and the new "Energy Taxation Directive". 

Decarbonisation scenarios (see graph 1) 

•  High  Energy  Efficiency.  Political  commitment  to  very  high  energy  savings;  it  includes 
e.g.  more  stringent  minimum  requirements  for  appliances  and  new  buildings;  high 
renovation  rates  of  existing  buildings;  establishment  of  energy  savings  obligations  on 
energy utilities. This leads to a decrease in energy demand of 41% by 2050 as compared 
to the peaks in 2005-2006.  

•  Diversified  supply  technologies.  No  technology  is  preferred;  all  energy  sources  can 
compete on a market basis with no specific support measures. Decarbonisation is driven 
by  carbon  pricing  assuming  public  acceptance  of  both  nuclear  and  Carbon  Capture  & 
Storage (CCS). 

•  High  Renewable  energy  sources  (RES).  Strong  support  measures  for  RES  leading  to  a 
very high share of RES in gross final energy consumption (75% in 2050) and a share of 
RES in electricity consumption reaching 97%. 

•  Delayed CCS. Similar to Diversified supply technologies scenario but assuming that CCS 
is  delayed,  leading  to  higher  shares  for  nuclear  energy  with  decarbonisation  driven  by 
carbon prices rather than technology push. 

•  Low  nuclear.  Similar  to  Diversified  supply  technologies  scenario  but  assuming  that  no 
new  nuclear  (besides  reactors  currently  under  construction)  is  being  built  resulting  in  a 
higher penetration of CCS (around 32% in power generation). 

12 

For details on the scenarios see Impact Assessment. 

EN 

4 

   EN 

 
                                                 
Graph 1: EU Decarbonisation scenarios - 2030 and 2050 range of fuel shares in 
primary energy consumption compared with 2005 outcome (in %)

75%

2030

75%

2050

50%

25%

0%

50%

25%

0%

RES

Gas

Nuclear Oil

Solid fuels

RES

Gas

Nuclear Oil

Solid fuels

2005

Ten structural changes for energy system transformation 

In  combination,  the  scenarios  make  it  possible  to  extract  some  conclusions  which  can  help 
shape decarbonisation strategies today which will deliver their full effects by 2020, 2030 and 
beyond. 

(1) Decarbonisation is possible – and can be less costly than current policies in the long-run 

The scenarios show that decarbonisation of the energy system is possible. Moreover, the costs 
of  transforming  the  energy  system  do  not  differ  substantially  from  the  Current  Policy 
Initiatives (CPI) scenario. The total energy system cost (including fuel, electricity and capital 
costs,  investment  in  equipment,  energy  efficient  products  etc)  could  represent  slightly  less 
than the 14.6% percent of European GDP in 2050 in the case of CPI compared to the level of 
10,5% in 2005. This reflects a significant shift of the role energy plays in society. Exposure to 
fossil fuel price volatility would drop in decarbonisation scenarios as import dependency falls 
to 35-45% in 2050, compared to 58% under current policies.  

(2) Higher capital expenditure and lower fuel costs  

All  decarbonisation  scenarios  show  a  transition  from  today's  system,  with  high  fuel  and 
operational  costs,  to  an  energy  system  based  on  higher  capital  expenditure  and  lower  fuel 
costs. This is also due to the fact that large shares of current energy supply capacities come to 
an end of their useful life. In all decarbonisation scenarios, the EU bill for fossil fuel imports 
in 2050 would be substantially lower than today. The analysis also shows that cumulative grid 
investment  costs  alone  could  be  1.5  to  2.2  trillion  Euros  between  2011  and  2050,  with  the 
higher range reflecting greater investment in support of renewable energy. 

The average  capital costs of the energy system will increase significantly - investments in 
power  plants  and  grids,  in  industrial  energy  equipment,  heating  and  cooling  systems 
(including district heating and cooling), smart meters, insulation material, more efficient and 

EN 

5 

   EN 

 
 
low  carbon  vehicles,  devices  for  exploiting  local  renewable  energy  sources  (solar  heat  and 
photovoltaic),  durable  energy  consuming  goods  etc.  This  has  a  widespread  impact  on  the 
economy and jobs in manufacturing, services, construction, transport and agricultural sectors. 
It would create major opportunities for European industry and service providers to satisfy this 
increasing  demand  and  stresses  the  importance  of  research  and  innovation  to  develop  more 
cost-competitive technologies. 

(3) Electricity plays an increasing role 

All  scenarios  show  electricity  will  have  to  play  a  much  greater  role  than  now  (almost 
doubling its share in final energy demand to 36-39% in 2050) and will have to contribute to 
the decarbonisation of transport and heating/cooling (see graph 2). Electricity could provide 
around  65%  of  energy  demand  by  passenger  cars  and  light  duty  vehicles,  as  shown  in  all 
decarbonisation  scenarios.  Final  electricity  demand  increases  even  in  the  High  energy 
efficiency scenario. To achieve this, the power generation system would have to undergo 
structural change and achieve a significant level of decarbonisation already in 2030 (57-65% 
in  2030  and  96-99%  in  2050).  This  highlights  the  importance  of  starting  the  transition  now 
and providing the signals necessary to minimise investments in carbon intensive assets in the 
next two decades.  

Graph 2: Share of electricity in current trend and decarbonisation scenarios
(in % of final energy demand)

40%

35%

30%

25%

20%

15%

Range regarding 
decarbonisation 
scenarios

Range for current 
trends scenarios

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

(4) Electricity prices rise until 2030 and then decline 

Most scenarios suggest that electricity prices will rise to 2030, but fall thereafter. The largest 
share  of  these  increases  is  already  happening  in  the  reference  scenario,  and  is  linked  to  the 
replacement in the next 20 years of old, already fully written-off generation capacity. In the 
High  Renewables  scenario,  which  implies  a  97%  share  for  renewable  sources  in  electricity 
consumption, the modelled electricity prices continue to rise but at a decelerated rate - due to 
high capital costs and assumptions about high needs for balancing capacity, storage and grid 
investments  in  this  "near  100%  RES  power"  scenario.  For  example,  RES  power  generation 

EN 

6 

   EN 

 
 
capacity in 2050 would be more than twice as high as today's total power generation capacity 
from  all  sources.  However,  substantial  RES  penetration  does  not  necessarily  mean  high 
electricity  prices.  The  High  Energy  Efficiency  scenario  and  also  the  Diversified  Supply 
Technology  scenario  have  the  lowest  electricity  prices  and  provide  60-65%  of  electricity 
consumption from RES, up from only 20% at present. In this context, it has to be noted that 
price  in  some  Member  States  are  currently  artificially  low  due  to  price  regulations  and 
subsidies.  

(5) Household expenditure will increase 

In all scenarios, including current trends, expenditure on energy and energy-related products 
(including  for  transport)  is  likely  to  become  a  more  important  element  in  household 
expenditure, rising to around 16% in 2030, and decreasing thereafter to above 15% in 205013. 
This trend would also be significant for small and medium-sized enterprises (SMEs). In the 
long  term,  the  rise  in  investment  costs  for  efficient  appliances,  vehicles  and  insulation 
becomes less important than the reduction of expenditure on electricity and fuels. The costs 
include fuel costs as well as capital costs such as costs of purchasing more efficient vehicles, 
appliances  and  refurbishments  of  housing.  However,  if  regulation,  standards  or  innovative 
mechanisms are used to accelerate the introduction of energy efficient products and services, 
this would reduce costs. 

(6) Energy savings throughout the system are crucial  

Very  significant  energy  savings  (see  graph  3)  would  need  to  be  achieved  in  all 
decarbonisation scenarios. Primary energy demand drops in a range of 16% to 20% by 2030 
and 32% to 41% by 2050 as compared to peaks in 2005-2006. Achieving significant energy 
savings  will  require  a  stronger  decoupling  of  economic  growth  and  energy  consumption  as 
well as strengthened measures in all Member States and in all economic sectors. 

(7) Renewables rise substantially  

The share of renewable energy (RES) rises substantially in all scenarios, achieving at least 
55% in gross final energy consumption in 2050, up 45 percentage points from today's level at 
around  10%.  The  share  of  RES  in  electricity  consumption  reaches  64%  in  a  High  Energy 
Efficiency  scenario  and  97%  in  a  High  Renewables  Scenario  that  includes  significant 
electricity storage to accommodate varying RES supply even at times of low demand.  

13 

Energy system costs today and 2050 are not directly comparable. While the renovation costs enter fully 
into  the  cost  accounting,  increasing  house values relate  to assets  and  capital  stock  considerations  that 
are not part of the energy analysis. As vehicle costs covered cannot distinguish between energy-related 
and other costs, they are upper estimates. 

EN 

7 

   EN 

 
                                                 
Graph 3: Gross energy consumption - range in current trend (REF/CPI) and 
decarbonisation scenarios (in Mtoe)

2000

1900

1800

1700

1600

1500

1400

1300

1200

1100

1000

Reference/CPI: effects of 
additional policies and 
updated assumptions

Decarbonisation cases: 
effects from different 
policy focus / technology 
availability

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

(8) Carbon capture and storage has to play a pivotal role in system transformation 

Carbon Capture and Storage (CCS), if commercialised, will have to contribute significantly 
in most scenarios with a particularly strong role of up to 32% in power generation in the case 
of constrained nuclear production and shares between 19 to 24% in other scenarios with the 
exception of the High RES scenario.  

(9) Nuclear energy provides an important contribution 

Nuclear  energy  will  be  needed  to  provide  a  significant  contribution  in  the  energy 
transformation process in those Member States where it is pursued. It remains a key source of 
low carbon electricity generation. The highest penetration of nuclear comes in Delayed CCS 
and  Diversified  supply  technologies  scenarios  (18  and  15%  in  primary  energy  respectively) 
which show the lowest total energy costs. 

(10) Decentralisation and centralised systems increasingly interact 

Decentralisation of the power system and heat generation increases due to more renewable 
generation.  However,  as  the  scenarios  show,  centralized  large-scale  systems  such  as  e.g. 
nuclear  and  gas  power  plants  and  decentralised  systems  will  increasingly  have  to  work 
together.  In  the  new  energy  system,  a  new  configuration  of  decentralised  and  centralised 
large-scale  systems  needs  to  emerge  and  will  depend  on  each  other,  for  example,  if  local 
resources are not sufficient or are varying in time. 

Link to global climate action 

The  scenario  results  for  decarbonisation  scenarios  all  assume  that  global  climate  action  is 
taken.  First,  it  is  important  to  note  that  the  EU's  energy  system  needs  high  levels  of 
investment  even  in  the  absence  of  ambitious  decarbonisation  efforts.  Second,  scenarios 
indicate  that  modernizing  the  energy  system  will  bring  high  levels  of  investment  into  the 

EN 

8 

   EN 

 
 
European  economy.  Third,  decarbonisation  can  be  an  advantage  for  Europe  as  an  early 
mover in the growing global market for energy-related goods and services. Fourth, it helps in 
reducing  its  import  dependency  and  exposure  to  the  volatility  of  fossil  fuel  prices.  Fifth,  it 
brings significant air pollution and health co-benefits. 

However, in implementing the Roadmap, the EU will need to consider progress, and concrete 
action,  in  other  countries.  Its  policy  should  not  develop  in  isolation  but  take  account  of 
international  developments,  for  example  relating  to  carbon  leakage  and  adverse  effects  on 
competitiveness.  A  potential  trade-off  between  climate  change  policies  and  competitiveness 
continues  to  be  a  risk  for  some  sectors  especially  in  a  perspective  of  full  decarbonisation  if 
Europe  was  to  act  alone.  Europe  cannot  alone  achieve  global  decarbonisation.  The  overall 
cost of investment depends strongly on the policy, regulatory and socio-economic framework 
and  the  economic  situation  globally.  As  Europe  has  a  strong  industrial  base  and  needs  to 
strengthen  it,  the  energy  system  transition  should  avoid  industry  distortions  and  losses 
especially  since  energy  remains  an  important  cost  factor  for  industry.14  Safeguards  against 
carbon leakage will have to be kept under close review in relation to efforts by third countries. 
As Europe pursues the path towards greater decarbonisation, there will be a growing need for 
closer 
regions  and  building  energy 
interconnection  and  complementarities.  The  opportunities  for  trade  and  cooperation  will 
require a level-playing field beyond the European borders. 

integration  with  neighbouring  countries  and 

3. 

MOVING FROM 2020 TO 2050 – CHALLENGES AND OPPORTUNITIES  

3.1. 

Transforming the energy system 

(a) Energy saving and managing demand: a responsibility for all  

The  prime  focus  should  remain  on  energy  efficiency.  Improving  energy  efficiency  is  a 
priority in all decarbonisation scenarios. Current initiatives need to be implemented swiftly to 
achieve  change.  Implementing  them  in  the  wider  context  of  overall  resource  efficiency  will 
bring cost- efficient results even faster. 

Higher energy efficiency in new and existing buildings is key. Nearly zero energy buildings 
should become the norm. Buildings – including homes - could produce more energy than they 
use.  Products  and  appliances  will  have  to  fulfil  highest  energy  efficiency  standards.  In 
transport,  efficient  vehicles  and  incentives  for  behavioural  change  are  required.  Consumers 
will  gain  with  more  controllable  and  predictable  energy  bills.  With  smart  meters  and  smart 
technologies  such  as  home  automation,  consumers  will  get  more  influence  on  their  own 
consumption  patterns.  Significant  efficiency  can  be  achieved  with  action  on  energy  use 
related resources such as recycling, lean manufacturing and prolonging product time life.15 

Investments by households and companies will have to play a major role in the energy system 
transformation. Greater access to capital for consumers and innovative business models 
are crucial. This also requires incentives to change behaviour, such as taxes, grants or on-site 
advice by experts, including the monetary incentives provided by energy prices reflecting the 
external costs. In general, energy efficiency has to be included in a wide range of economic 

14 

15 

For example, it is estimated that electricity prices in Europe is 21% more expensive than in the United 
States or 197% more expensive than in China. 
For  example,  more  than  5000  Petajoules  of  energy  could  be  saved  in  the  EU  (more  then  three  year 
consumption of energy in Finland (SEC (2011) 1067). 

EN 

9 

   EN 

 
                                                 
activities from, for example, IT systems development  to standards  for consumer appliances. 
The role of local organisations and cities will be much greater in the energy systems of the 
future.  

An  analysis  of  more  ambitious  energy  efficiency  measures  and  cost-optimal  policy  is 
required. Energy efficiency has to follow its economic potential. This includes questions on to 
what  extent  urban  and  spatial  planning  can  contribute  to  saving  energy  in  the  medium  and 
long term; how to find the cost-optimal policy choice between insulating buildings to use less 
heating  and  cooling  and  systematically  using  the  waste  heat  of  electricity  generation  in 
combined  heat  and  power  (CHP)  plants.  A  stable  framework  is  likely  to  require  further 
actions to save energy, especially with a view to 2030.  

(b) Switching to renewable energy sources  

The  analysis  of  all  scenarios  shows  that  the  biggest  share  of  energy  supply  technologies  in 
2050 comes from renewables. Thus, the second major pre-requisite for a more sustainable 
and secure energy system is a higher share of renewable energy beyond 2020. In 2030, all 
the decarbonisation scenarios suggest growing shares of renewables of around 30% in gross 
final energy consumption. The challenge for Europe is to enable market actors to drive down 
the costs of renewable energy through improved research, industrialisation of the supply chain 
and  more  efficient  policies  and  support  schemes.  This  could  require  greater  convergence  in 
support schemes and greater responsibilities for system costs among producers, in addition to 
Transmission System Operators (TSO).  

Renewables  will  move  to  the  centre  of  the  energy  mix  in  Europe,  from  technology 
development to mass production and deployment, from small-scale to larger-scale, integrating 
local  and  more  remote  sources,  from  subsidised  to  competitive.  This  changing  nature  of 
renewables requires changes in policy parallel to their further development. 

Incentives in the future, with increasing shares of renewables, have to become more efficient, 
create  economies  of  scale,  lead  to  more  market  integration  and  as  a  consequence  to  a 
more  European  approach.  This  has  to  build  on  using  the  full  potential  of  the  existing 
legislation16,  on  the  common  principles  of  cooperation  among  Member  States  and  with 
neighbouring countries, and possible further measures.  

Many renewable technologies need further development to bring down costs. There is a need 
to invest in new renewable technologies, such as ocean energy and concentrated solar power 
and 2nd and 3rd generation biofuels. There is also a need to improve existing ones, such as by 
increasing the size of offshore wind turbines and blades to capture more wind and to improve 
photovoltaic  panels  to  harvest  more  solar  power.  Storage  technologies  remain  critical. 
Storage is currently often more expensive than additional transmission capacity, gas backup 
generation capacity, while conventional storage based on hydro is limited. Greater efficiencies 
in  their  use  and  competitive  costs  require  improved  infrastructure  for  integration  across 
Europe. With sufficient interconnection capacity and a smarter grid, managing the variations 
of wind and solar power in some local areas can be provided also from renewables elsewhere 
in Europe. This could diminish the need for storage, backup capacity and baseload supply. 

16 

Directive 2009/28/EC on the promotion of the use of energy from renewable sources. 

EN 

10 

   EN 

 
                                                 
In the near future, wind energy from the Northern Seas and the Atlantic sea basin can supply 
substantial quantities of electricity with declining costs. By 2050 wind power provides more 
electricity than any other technology in the High Renewables scenario. In the medium term, 
the contribution of ocean energy can provide an important contribution to electricity supply. 
Similarly,  wind  and  solar  power  from  the  Mediterranean  countries  could  deliver  substantial 
quantities  of  electricity.  The  opportunity  to  import  electricity  produced  from  renewable 
sources  from  neighbouring  regions  is  already  complemented  by  strategies  to  use  the 
comparative  advantage  of  Member  States  e.g.  such  as  in  Greece  where  large  scale  solar 
projects  are  being  developed.  The  EU  will  continue  encouraging  and  facilitating  the 
development of renewable and low-emission sources of energy in the Southern Mediterranean 
and  interconnections  with  European  distribution  networks.  Further  interconnection  with 
Norway and Switzerland will also continue to be critical. Similarly, the EU will look at the 
potential  of  renewable  sources  provided  by  countries  like  Russia  and  Ukraine  (notably 
biomass). 

Renewable heating and cooling are vital to decarbonisation. A shift in energy consumption 
towards low carbon and locally produced energy sources (including heat pumps and storage 
heaters)  and  renewable  energy  (e.g.  solar  heating,  geothermal,  biogas,  biomass),  including 
through district heating systems, is needed.  

Decarbonisation will require a large quantity of biomass for heat, electricity and transport. In 
transport,  a  mix  of  several  alternative  fuels  will  be  needed  to  replace  oil,  with  specific 
requirements  of  the  different  modes.  Biofuels  will  probably  be  a  main  option  for  aviation, 
long-distance  road  transport,  and  rail  where  it  can  not  be  electrified.  Work  to  ensure 
sustainability  (e.g.  on  indirect  land  use  change)  is  ongoing.  The  market  uptake  of  new  bio 
energy which reduces demand for land necessary for food production and which increases the 
net  greenhouse  gas  savings  (e.g.  biofuels  based  on  waste,  algae,  forest  residues),  should 
continue to be promoted.  

As  technologies  mature,  costs  will  decrease  and  financial  support  can  be  reduced.  Trade 
among Member States and imports from outside the EU could reduce costs in the medium to 
long-run.  The  existing  targets  for  renewable  energy  appear  to  be  useful  for  giving 
predictability to investors while encouraging a European approach and market integration of 
renewables. 

(c) Gas plays a key role in the transition  

Gas will be critical for the transformation of the energy system. Substitution of coal (and 
oil)  with  gas  in  the  short  to  medium  term  could  help  to  reduce  emissions  with  existing 
technologies  until  at  least  2030  or  2035.  Although  gas  demand  in  the  residential  sector,  for 
example, might drop by a quarter until 2030 due to several energy efficiency measures in the 
housing  sector17,  it  will  stay  high  in  other  sectors  such  as  the  power  sector  over  a  longer 
period.  In  the  Diversified  Supply  Technologies  scenario  for  example,  gas-fired  power 
generation accounts for roughly 800 TWh in 2050, slightly higher than current levels. With 
evolving technologies, gas might play an increasing role in the future. 

17 

On  the  other  hand,  gas  heating  may  be  more  energy  efficient  than  electric  heating  or  other  forms  of 
fossil fuel heating, implying that gas may have growth potential in the heating sector in some Member 
States.  

EN 

11 

   EN 

 
                                                 
The gas market needs more integration, more liquidity, more diversity of supply sources and 
more storage capacity, for gas to maintain its competitive advantages as a fuel for electricity 
generation.  Long  term  gas  supply  contracts  may  continue  to  be  necessary  to  underwrite 
investments  in  gas  production  and  transmission  infrastructures.  Greater  flexibility  in  price 
formula,  moving  away  from  pure  oil-indexation,  will  be  needed  if  gas  is  to  remain  a 
competitive fuel for electricity generation. 

Global  gas  markets  are  changing,  notably  through  the  development  of  shale  gas  in  North 
America.  With  liquefied  natural  gas  (LNG),  markets  have become  increasingly global since 
transport has become more independent from pipelines. Shale gas and other unconventional 
gas  sources  have  become  potential  important  new  sources  of  supply  in  or  around  Europe. 
Together  with  internal  market  integration,  these  developments  could  relax  concerns  on  gas 
import  dependency.  However,  due  to  the  early  stage  of  exploration  it  is  unclear  when 
unconventional resources might become significant. As conventional gas production declines, 
Europe  will  have  to  rely  on  significant  gas  imports  in  addition  to  domestic  natural  gas 
production and potential indigenous shale gas exploitation. 

The  scenarios  are  rather  conservative  with  respect  to  the  role  of  gas.  The  economic 
advantages  of  gas  today  provide  reasonable  certainty  of  returns  to  investors,  as  well  as  low 
risks and therefore incentives to invest in gas-fired power stations. Gas-fired power stations 
have  lower  upfront  investment  costs,  are  rather  quickly  built  and  relatively  flexible  in  use. 
Investors can also hedge against risks of price developments, with gas fired generation often 
setting  the  wholesale  market  price  for  electricity.  However,  operational  costs  in  the  future 
may be higher than for carbon free options and gas fired power stations might run for fewer 
hours. 

If Carbon Capture and Storage (CCS) is available and applied at large scale, gas may become 
a  low-carbon  technology,  but  without  CCS,  the  long  term  role  of  gas  may  be  limited  to  a 
flexible back-up and balancing capacity where renewable energy supplies are variable. For all 
fossil  fuels,  Carbon  Capture  and  Storage  will  have  to  be  applied  from  around  2030 
onwards  in  the  power  sector  in  order  to  reach  the  decarbonisation  targets.  CCS  is  also  an 
important option for decarbonisation of several heavy industries and combined with biomass 
could  deliver  "carbon  negative"  values.  The  future  of  CCS  crucially  depends  on  public 
acceptance  and  adequate  carbon  prices;  it  needs  to  be  sufficiently  demonstrated  on  a  large 
scale and investment in the technology ensured in this decade, and then deployed from 2020, 
in order to be feasible for widespread use by 2030. 

(d) Transforming other fossil fuels 

Coal  in  the  EU  adds  to  a  diversified  energy  portfolio  and  contributes  to  security  of  supply. 
With the development of CCS and other emerging clean technologies, coal could continue to 
play an important role in a sustainable and secure supply in the future. 

Oil  is  likely  to  remain  in  the  energy  mix  even  in  2050and  will  mainly  fuel  parts  of  long 
distance passenger and freight transport. The challenge for the oil sector is to adapt to changes 
in oil demand resulting from the switch to renewable and alternative fuels and uncertainties 
surrounding  future  supplies  and  prices.  Maintaining  a  foothold  in  the  global  oil  market  and 
keeping  a  European  presence  in  domestic  refining  –  though  one  that  is  able  to  adapt 
capacity  levels  to  the  economic  realities  of  a  mature  market  –  is  important  to  the  EU 
economy, to sectors that depend on refined products as feedstocks such as the petrochemical 
industry, and for security of supply. 

EN 

12 

   EN 

 
(e) Nuclear energy as an important contributor 

Nuclear  energy  is  a  decarbonisation  option  providing  today  most  of  the  low-carbon 
electricity  consumed  in  the  EU.  Some  Member  States  consider  the  risks  related  to  nuclear 
energy as unacceptable. Since the accident in Fukushima, public policy on nuclear energy has 
changed  in  some  Member  States  while  others  continue  to  see  nuclear  energy  as  a  secure, 
reliable and affordable source of low-carbon electricity generation.  

Safety costs18 and the costs for decommissioning existing plants and disposing of waste are 
likely to increase. New nuclear technologies could help to address waste and safety concerns. 

The  scenario  analysis  shows  that  nuclear  energy  contributes  to  lower  system  costs  and 
electricity prices. As a large scale low-carbon option, nuclear energy will remain in the EU 
power  generation  mix.  The  Commission  will  continue  to  further  the  nuclear  safety  and 
security  framework,  helping  to  set  a  level  playing  field  for  investments  in  Member  States 
willing  to  keep  the  nuclear  option  in  their  energy  mix.  The  highest  safety  and  security 
standards  need  to  be  further  ensured  in  the  EU  and  globally,  which  can  only  happen  if 
competence and technology leadership is maintained within the EU. Furthermore, on a 2050 
perspective, it will become clearer which role fusion power will be able to play. 

(f) Smart technology, storage and alternative fuels  

Whichever  pathway  is  considered,  the  scenarios  show  that  fuel  mixes  could  change 
significantly over time. Much depends on the acceleration of technological development. It is 
uncertain which technological options might develop, at what pace, with what consequences 
and  trade-offs.  But  new  technologies  bring  new  options  in  the  future.  Technology  is  an 
essential  part  of  the  solution  to  the  decarbonisation  challenge.  Technological  progress  can 
yield  significant  cost  reductions  and  economic  benefits.  Establishing  energy  markets  fit  for 
purpose  will  require  new  grid  technologies.  Support  should  be  given  to  research  and 
demonstration at industrial scale. 

On  the  European  level,  the  EU  should  contribute  directly  to  scientific  projects  and  research 
and  demonstration  programmes,  building  on  the  Strategic  Energy  Technology  Plan  (SET 
Plan)  and  the  next  Multiannual  Financial  Framework,  and  in  particular  Horizon  2020,  to 
invest  in  partnerships  with  industry  and  Member  States  to  demonstrate  and  deploy  new, 
highly efficient energy technologies on a large scale. A reinforced SET Plan could lead to cost 
optimal European research clusters in times of tight budgets in Member States. The benefits 
of  cooperation  are  significant,  going  beyond  financial  support  and  building  on  better 
coordination in Europe.  

An increasingly important feature of the required technology shifts is the use of information 
and  communication  technologies  (ICT)  in  energy  and  transport  and  for  smart  urban 
applications.  This  is  leading  to  the  convergence  of  industrial  value  chains  for  smart  urban 
infrastructure  and  applications  which  need  to  be  encouraged  to  secure  industrial  leadership. 
The digital infrastructure that will make the grid smart will also require support at EU level by 
standardisation and research and development in ICT.  

Another area of special importance is the shift towards alternative fuels, including electric 
vehicles.  This  needs  to  be  supported  at  European  level  by  regulatory  developments, 

18 

Including those resulting from the need to increase the resilience to natural and man-made disasters. 

EN 

13 

   EN 

 
                                                 
standardisation,  infrastructure  policy  and  further  research  and  demonstration  efforts, 
particularly  on  batteries,  fuel  cells  and  hydrogen,  which  together  with  smart  grids  can 
multiply  the  benefits  of  electro-mobility  both  for  decarbonisation  of  transport  and 
development  of  renewable  energy.  The  other  main  options  of  alternative  fuels  are  biofuels, 
synthetic fuels, methane and LPG (Liquefied Petroleum Gas). 

3.2. 

Rethinking energy markets 

(a) New ways to manage electricity  

There are national constraints when choosing national energy mix. Our joint responsibility is 
to  ensure  that  national  decisions  are  mutually  supportive  and  avoid  negative  spillovers.  The 
cross-border  impact  on  the  internal  market  deserves  renewed  attention.  These  create  new 
challenges to power markets in the transition to a low-carbon system providing a high level of 
energy security and affordable electricity supplies. More than ever should the full scale of the 
internal market be used. It is the best response to the challenge of decarbonisation. 

One  challenge  is  the  need  for  flexible  resources  in  the  power  system  (e.g.  flexible 
generation,  storage,  demand  management)  as  the  contribution  of  intermittent  renewable 
generation increases. The second is the impact on wholesale market prices of this generation. 
Electricity from wind and solar has low or zero marginal costs and as their penetration in the 
system  increases,  in  the  wholesale  market  spot  prices  could  decrease  and  remain  low  for 
longer time periods.19 This reduces the revenues for all generators, including those needed to 
ensure sufficient capacity to meet demand when wind or solar are not available. Unless prices 
are relatively high at such times, these plants might not be economically viable. This leads to 
concerns  about  price  volatility  and  for  investors,  about  their  ability  to  recover  capital  and 
fixed operating costs.  

Ensuring  that  market  arrangements  offer  cost-effective  solutions  to  these  challenges  will 
become increasingly important. Access to markets needs to be assured for flexible supplies 
of all types, demand management and storage as well as generation, and that flexibility needs 
to be rewarded in the market. All types of capacity (variable, baseload, flexible) must expect a 
reasonable return on investment. It is however important to ensure that policy developments 
in Member States do not create new barriers to electricity - or gas - market integration20. 
Whether it concerns energy mix, market arrangements, long term contracts, support for low-
carbon  generation,  carbon  floor  prices  etc,  the  impacts  on  the  internal  market,  on  which  all 
increasingly  depend,  need  to  be  considered.  Now  more  than  ever,  coordination  is  required. 
Energy policy developments need to take full account of how each national electricity system 
is affected by decisions in neighbouring countries. Working together will keep cost down and 
ensure security of supply. 

Building on the 3rd internal energy market package, the Commission, assisted by the Agency 
for the Cooperation of Energy Regulators (ACER), will continue to ensure that the regulatory 
framework  stimulates  market 
that  enough  capacity  and  flexibility  are 
incentivized, and that the market arrangements are ready for the challenges decarbonisation 

integration, 

19 

20 

This situation is not addressed in the scenarios: in the modelling the pricing mechanism is designed so 
that investors are fully remunerated (full cost recovery via electricity prices) leading to an increase in 
electricity prices in the long-run.  
Full market integration by 2014, as decided by the European Council on February 4th, 2011, supported 
by infrastructure developments and technical work on Framework Guidelines and Network Codes 

EN 

14 

   EN 

 
                                                 
will  bring.  The  Commission  is  examining  the  effectiveness  of  different  market  models  for 
remuneration  of  capacity  and  flexibility  and  how  they  interact  with  increasingly  integrated 
wholesale and balancing markets.  

(b) Integrating local resources and centralised systems  

New, flexible infrastructure development is a "no regrets" option and could accommodate 
various pathways. 

With  electricity  trade  and  renewables'  penetration  growing  under  almost  any  scenario  up  to 
2050,  and  particularly  in  the  High  Renewables  scenario,  adequate  infrastructure  at 
distribution, interconnection and long-distance transmission becomes a matter of urgency. By 
2020 interconnection capacity needs to expand at least in line with current development plans. 
An  overall  increase  of  interconnection  capacity  by  40%  up  to  2020  will  be  needed,  with 
further  integration  after  this  point.  For  the  successful  further  integration  after  2020,  the  EU 
needs to fully eliminate energy islands in the EU by 2015; in addition, networks have to be 
expanded  and  come  over  time  to  synchronised  links  between  continental  Europe  and  the 
Baltic region. 

The implementation of existing policies in the internal energy market and new policies, such 
as  the  Energy  Infrastructure  Regulation21,  can  contribute  to  allow  the  EU  to  meet  this 
challenge.  The  European  10-year  planning  of  infrastructure  needs  by  the  ENTSOs22  and 
ACER  already  provides  a  longer  term  vision  for  the  investors  and  lead  to  stronger  regional 
cooperation. The extension of current planning methods to a fully integrated network planning 
for  transmission  (onshore  and  offshore),  distribution,  storage  and  electricity  highways  for  a 
potentially longer timeframe will be needed. CO2 infrastructure, that does not currently exist, 
will be required and planning should be started soon.  

To  accommodate  renewable  production  locally,  the  distribution  grid  needs  to  become 
smarter to deal with variable generation from many distributed sources such as, in particular, 
solar photovoltaic, but also increased demand response. With more decentralised generation, 
smart grids, new network users (e.g. electric vehicles) and demand response, there is a greater 
need  for  a  more  integrated  view  on  transmission,  distribution  and  storage.  To  exploit 
renewable  electricity  from  the  North  Sea  and  the  Mediterranean,  significant  additional 
infrastructure, notably subsea, will be needed. In the framework of the North Seas Countries' 
Offshore  Grid  Initiative,  ENTSO-E  is  already  conducting  grid  studies  for  North  Western 
Europe  with  a  2030  horizon.  This  should  feed  into  ENTSO-E's  work  for  a  modular 
development plan of a Pan-European Electricity Highways System up to 2050.  

To support decarbonisation in power generation and to integrate renewable energies, flexible 
gas  capacities  at  competitive  prices  are  needed.  New  gas  infrastructures  for  interconnecting 
the internal market along the North-South axis and linking Europe to new diversified supplies 
through  the  Southern  Corridor  will  be  vital  to  foster  the  creation  of  well  functioning  gas 
wholesale markets in the whole EU. 

21 

22 

Proposal for a regulation on guidelines for trans-European energy infrastructure (COM(2011) 658) and 
proposal for a regulation establishing the Connecting Europe Facility (COM(2011) 665).). 
European Network of Transmission System Operators. 

EN 

15 

   EN 

 
                                                 
3.3.  Mobilising  investors  -  a  unified  and  effective  approach  to  energy  sector 

incentives 

Between  now  and  2050,  there  must  be  wide-scale  replacement  of  infrastructure  and  capital 
goods throughout the economy including consumer goods in people's homes. These are very 
substantial  upfront  investments,  often  with  returns  over  a  long  period.  Early  Research  and 
Innovation  efforts  are  necessary.  A  unified  policy  framework  that  would  synchronise  all 
instruments from research and innovation policies to deployment policies would support such 
efforts.  

Massive investments are needed in infrastructures. The increased costs of delay, particularly 
in the later years, need to be highlighted, recognising that final investment decisions will be 
influenced  by  the  overall  economic  and  financial  climate23.  The  public  sector  might  have  a 
role  as  a  facilitator  for  investment  in  the  energy  revolution.  The  current  uncertainty  in  the 
market  increases  the  cost  of  capital  for  low-carbon  investment.  The  EU  needs  to  move 
today and start improving the conditions for financing in the energy sector. 

Carbon  pricing  can  provide  an  incentive  for  deployment  of  efficient,  low-carbon 
technologies  across  Europe.  The  ETS  is  the  central  pillar  of  European  climate  policy.  It  is 
designed to be technology neutral, cost-effective and fully compatible with the internal energy 
market.  It  will  have  to  play  an  increased  role.  The  scenarios  show  that  carbon  pricing  can 
coexist  with  instruments  designed  to  achieve  particular  energy  policy  objectives,  notably 
research  and  innovation,  promotion  of  energy  efficiency  and  development  of  renewables24. 
More  coherence  and  stability  is  however  needed  between  EU  and  national  policies  for  its 
price signal to function properly.  

A higher carbon price creates stronger incentives for investment in low-carbon technologies, 
but may increase the risk of carbon leakage. Such carbon leakage is in particular a concern for 
those industry sectors subject to global competition and global price patterns. Depending on 
efforts of third countries, a well-functioning carbon pricing system should continue to include 
mechanisms such as incentivizing cost-effective emission reductions outside Europe and free 
allowances based on benchmarks to prevent significant risks of carbon leakage.  

Investment risks need to be borne by private investors, unless there are clear reasons for not 
doing so. Some investments in the energy system have a public good character. Thus, some 
support  for  early  movers  may  be  warranted  (e.g.  electric  cars,  clean  technologies).  A  move 
towards  greater  and  more  tailored  financing  via  public  financial  institutions,  such  as  the 
European Investment Bank (EIB) or the European Bank for Reconstruction and Development 
(EBRD) and the mobilisation of the commercial banking sector in Member States could also 
help to make the transition work. 

Private  investors  will  remain  most  important  in  a  market-based  approach  to  energy  policy. 
The role of utilities could change substantially in the future, notably as regards investments. 
While in the past, many generation investments could be done by utilities alone, some argue 

23 

24 

Scenarios for the Low Carbon Economy Roadmap of March 2011 show the additional costs of delayed 
action. Also, the IEA (2011) World Energy Outlook 2011 argues that on a global level, for every $1 of 
investment  avoided  in  the  power  sector  before  2020  an  additional  $4.3  would  need  to  be  spent  after 
2020 to compensate for the increased emissions. 
The  CPI  scenario  results  in  a  carbon  value  of  some  50€  in  2050,  the  decarbonisation  scenarios 
substantially more. 

EN 

16 

   EN 

 
                                                 
that this is less likely in the future, given the scale of investment and innovation needs. New 
long  term  investors  need  to  be  brought  in.  Institutional  investors  could  become  greater 
players  in  the  financing  of  energy  investments.  Consumers  will  also  play  a  more  important 
role, which requires access to capital at reasonable cost. 

Support  (e.g.  energy  subsidies)  could  continue  to  be  necessary  beyond  2020  to  ensure  that 
the market encourages the development and deployment of new technologies and will need to 
be  phased  out  as  technologies  and  supply  chains  mature  and  market  failures  are  resolved. 
Public support schemes in Member States should be clearly targeted, predictable, limited in 
scope,  proportionate  and  include  phase-out  provisions.  Any  support  measure  has  to  be 
implemented in compliance with the internal market and the relevant EU state aid rules. The 
process of reform must continue to move rapidly to ensure more effective support schemes. In 
the  longer  run,  high  value-added  low-carbon  technologies,  in  which  Europe  has  leadership, 
will positively effect growth and employment. 

3.4 

Engaging the public is crucial 

The  social  dimension  of  the  energy  roadmap  is  important.  The  transition  will  affect 
employment and jobs, requiring education and training and a more vigorous social dialogue. 
In  order  to  efficiently  manage  change,  involvement  of  social  partners  at  all  levels  will  be 
necessary  in  line  with  just  transition  and  decent  work  principles.  Mechanisms  that  help 
workers confronted with job transitions to develop their employability are needed. 

New power stations and significantly more renewable installations will have to be built. New 
storage  facilities,  including  for  CCS,  more  pylons  and  more  transmission  lines  are  needed. 
Especially  for  infrastructure,  efficient  permitting  procedures  are  crucial  since  it  is  the 
precondition  for  changing  supply  systems  and  move  towards  decarbonisation  in  time.  The 
current trend, in which nearly every energy technology is disputed and its use or deployment 
delayed, raises serious problems for investors and puts energy system changes at risk. Energy 
cannot  be  supplied  without  technology  and  infrastructure.  In  addition,  cleaner  energy  has  a 
cost. New pricing mechanisms and incentives might be needed but measures should be taken 
to ensure pricing schemes remain transparent and understandable to final consumers. Citizens 
need to be informed and engaged in the decision-making process, while technological choices 
need to take account of the local environment.  

The  tools  to  respond  to  price  increases  by  improving  energy  efficiency  and  reducing 
consumption have to be in place, especially in the medium term, when prices are likely to rise, 
no matter which policies are followed. While greater control of and reduced energy bills may 
be  an  incentive,  access  to  capital  and  new  forms  of  energy  services  will  be  crucial. 
Vulnerable  consumers  in  particular  might  need  specific  support  to  enable  them  to  finance 
necessary  investments  to  reduce  energy  consumption.  This  task  will  increase  in  importance 
with the energy transformation being shaped in reality. A well functioning internal market and 
energy  efficiency  measures  are  particularly  important  to  consumers.  Vulnerable  consumers 
are  best  protected  from  energy  poverty  through  a  full  implementation  by  Member  States  of 
the  existing  EU  energy  legislation  and  use  of  innovative  energy  efficiency  solutions.  As 
energy poverty is one of the sources of poverty in Europe, the social aspects of energy pricing 
should be reflected in the energy policy of Member States. 

EN 

17 

   EN 

 
3.5 

Driving change at the international level 

In the transition to 2050, Europe needs to secure and diversify its supply of fossil fuels while 
at  the  same  time  develop  cooperation  to  build  international  partnerships  on  a  broader 
basis.  As  Europe's  demand  develops  away  from  fossil  fuels,  and  energy  producers  develop 
more  diversified  economies,  integrated  strategies  with  current  suppliers  need  to  address 
benefits of cooperation in other areas such as renewable energies, energy efficiency and other 
low-carbon  technologies.  The  EU  should  use  this  opportunity  to  strengthen  its  cooperation 
with its international partners, in line with the new agenda set in September 201125. It will be 
important to manage the transition in close partnership with the EU's energy partners, notably 
our  neighbours,  such  as  Norway,  the  Russian  Federation,  Ukraine,  Azerbaijan  and 
Turkmenistan, the Maghreb and the Gulf countries while gradually establishing new energy 
and  industrial  partnerships.  This  is  for  instance  the  purpose  of  the  EU-Russia  2050  Energy 
Roadmap. Energy is also an important contributor to development policy due to its multiplier 
impact on developing countries' economies; continued work for universal access to energy is 
needed worldwide.26 

The EU needs to expand and diversify links between the European network and neighbouring 
countries with a particular focus on North Africa (with a view to best harness the solar energy 
potential of the Sahara). 

The  EU  also  needs  to  address  the  import  of  carbon-intensive  energy,  notably  electricity. 
Enhanced  cooperation  towards  creating  a  level  playing  field  concerning  market  and  carbon 
regulation  is  needed,  especially  for  the  power  sector,  while  trade  increases  and  the  issue  of 
carbon leakage comes to the fore. 

4. 

THE WAY FORWARD 

The  Energy  Roadmap  2050  shows  that  decarbonisation  is  feasible.  Whichever  scenario  is 
chosen, a number of "no regret" options emerge which can bring down emissions effectively 
and in an economically viable way.  

Transforming the European energy system is imperative for reasons of climate, security and 
the economy. Decisions being taken today are already shaping the energy system of 2050. To 
make the necessary transformation of the energy system in time, the EU needs much greater 
political ambition and a greater sense of urgency. The Commission will discuss with other EU 
institutions, Member States and stakeholders on the basis of this Roadmap. The Commission 
will update it regularly, reassessing what is necessary in the light of progress and changes 
and  envisages  an  iterative  process  between  Member  States,  through  their  national  policies, 
and  the  EU,  resulting  in  timely  action  to  achieve  an  energy  system  transformation  which 
delivers  decarbonisation,  greater  security  of  supply  and  increased  competitiveness  for  the 
benefit of all. 

The overall system costs of transforming the energy system are similar in all scenarios. 
A common EU approach can help keep costs down. 

25 
26 

Communication on security of energy supply and international cooperation (COM(2011) 539). 
"Increasing  the  Impact  of  EU  Development  Policy:  an  Agenda  for  Change"  (COM(2011)637,  13 
October). 

EN 

18 

   EN 

 
                                                 
Energy  prices  are  rising  world-wide.  The  Roadmap  demonstrates  that  while  prices  will  rise 
until  2030  or  so,  new  energy  systems  can  lead  to  lower  prices  after  that.  Distortions  to  the 
internal energy market, including through artificially low regulated prices, should be avoided, 
since they would send wrong signals to markets and removing incentives for energy savings 
and  other  low-carbon  investments  –  this  would  hold  back  the  transformations  which  will 
ultimately bring  prices  down in the long-run.  Society  needs  to  be  prepared  for  and  adapt  to 
higher  energy  prices  in  the  coming  years.  Vulnerable  customers  and  energy-intensive 
industries  may  need  support  in  a  transitional  period.  The  clear  message  is  that investments 
will pay off, in  terms  of growth, employment, greater energy security and lower fuel costs. 
The  transformation  creates  a  new  landscape  for  European  industry  and  can  increase 
competitiveness. 

To achieve this new energy system, ten conditions must be met:  

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

The  immediate  priority  is  to  implement  fully  the  EU's  Energy  2020  strategy.  All 
existing  legislation  needs  to  be  applied,  and  the  proposals  currently  in  discussion, 
notably  on  energy  efficiency,  infrastructure,  safety  and  international  cooperation, 
need to be adopted swiftly. The path towards a new energy system also has a social 
dimension;  the  Commission  will  continue  to  encourage  social  dialogue  and  social 
partners' involvement to help a fair transition and an efficient management of change. 

The  energy  system  and  society  as  a  whole  need  to  be  dramatically  more  energy 
efficient.  The  co-benefits  of  achieving  energy  efficiency  in  a  wider  resource 
efficiency agenda should contribute to meeting the goals in a faster and cost-efficient 
manner. 

Particular  attention  should  continue  to  be  given  to  the  development  of  renewable 
energy. Their rate of development, impact in the market and rapidly growing share 
in energy demand call for a modernisation of the policy framework. The EU's 20% 
renewable energy target has so far proven an efficient driver in development of the 
renewable energy in the EU and timely consideration should be given to options for 
2030 milestones. 

Higher  public  and  private  investments  in  R&D  and  technological  innovation  are 
crucial in speeding-up the commercialisation of all low-carbon solutions. 

The EU is committed to a fully integrated market by 2014. In addition to technical 
measures  already  identified,  there  are  regulatory  and  structural  shortcomings 
which  need  to  be  addressed.  Well-designed  market  structure  instruments  and  new 
ways  of  cooperation  are  required  for  the  internal  energy  market  to  deliver  its  full 
potential as new investments are coming into the energy market and the energy mix 
is changing. 

Energy prices need to better reflect costs, notably of the new investments needed 
throughout  the  energy  system.  The  earlier  prices  reflect  costs,  the  easier  the 
transformation will be in the long run. Special attention should be paid for the most 
vulnerable groups,  for  which  coping with the energy system transformation  will be 
challenging. Specific measures should be defined at national and local levels to avoid 
energy poverty. 

EN 

19 

   EN 

 
(7) 

(8) 

(9) 

A new sense of urgency and collective responsibility must be brought to bear on the 
development  of  new  energy  infrastructure  and  storage  capacities  across  Europe 
and with neighbours. 

There  will  be  no  compromise  on  safety  and  security  for  either  traditional  or  new 
energy  sources.  The  EU  must  continue  to  strengthen  the  safety  and  security 
framework and lead international efforts in this field. 

A  broader  and  more  coordinated  EU  approach  to  international  energy  relations 
must become the norm, including redoubling work to strengthen international climate 
action. 

(10)  Member States and investors need concrete milestones. The Low carbon economy 
roadmap has already indicated greenhouse gas emission milestones. The next step is 
to define the 2030 policy framework, reasonably foreseeable and the focus of most 
current investors.  

On  this  basis,  the  Commission  will  continue  to  bring  forward  initiatives,  starting  with 
comprehensive  proposals  on  the  internal  market,  renewable  energy  and  nuclear  safety  next 
year. 

EN 

20 

   EN