SECURE Project - Security of Energy Considering its Uncertainty, Risk and Economic implications

WP 5.8 The Demand Dimension of energy security

Objectives

One way to reduce the dependence from external energy sources, or the exposure to energy prices volatility and increase, is simply to reduce the demand for energy. Energy savings may thus be considered a policy priority when concerns for energy security are particularly strong. Thus, in order to fully understand how energy security affects the European society and how demand-side policies can be geared a detailed knowledge of energy intensities in the Europe member countries’ sectors and of their potential for efficiency improvement is crucial. The WP aims at analysing energy efficiency issues within the European context, thus providing a detailed reference framework on energy use by sector and by source in Europe. This will allow to evaluate the areas endowed with the greatest energy-saving potential and to single out the most promising policy options in terms of improvement of the energy efficiency of the European economic system. This WP will also analyse the short term aspects of the demand dimension, i.e. fuel switching capabilities of consumers (power generation sector, industrial sector, etc.).

Participants: FEEM, OME, RAMBOLL, CESI RICERCA/ERSE/RSE S.p.A.

Description of work 

The analysis will take into account, in co-ordination with WP3 and WP4, the structural factors specified in the quantitative scenarios, such as economic and population growth, the industrial organisation of the country, climate, etc. In this way the WP will be able to characterise not only the current situation of energy efficiency across Europe, but also its possible evolution path in the next decades.

More importantly, the analysis will also allow the identification of the key demand-side levers that can contribute to the reduction of insecurity of supply, by pinpointing which sub-sectors and categories of end-use are most exposed to security of supply concerns (for instance, because they rely heavily upon imported fuels) and which ones could be regarded as the most promising areas of intervention for the promotion of security of supply (for instance because demand-side polices and/or fuel switch can be easily implemented in the near future).

Also for each sector short and medium-term fuel switching options with a significant impact on customers will be characterized. This will guarantee that all the strategies to cope with shortages are considered.

The analysis can be easily extended to carbon intensities. Knowledge of CO2 emission reduction potential of each sub-sector and category of end-use is very useful in order to understand the interactions of EU CO2 emission targets with energy consumption patterns and therefore with security of supply issues related to energy demand.

The analysis will include details on the sectors and sources in accordance with the information drawn from national energy balances, and from European energy efficiency databases such as MURE-ODYSEE and NMC.

Given the specificities of each use of energy demand the analysis will be subdivided in sector-specific tasks, as follows:

Task 5.8.1: Industrial Demand for primary energy 

Lead: FEEM; RAMBOLL, OME

Task 5.8.2: Residential Demand for primary energy

Lead: FEEM; OME, RAMBOLL

Task 5.8.3 Residential Demand for district heating

Lead: FEEM; CESI RICERCA/ERSE/RSE S.p.A.

Task 5.8.4: Energy demand for Transport

Lead: FEEM

In each tasks, the analysis will first identify and compute the relevant energy efficiency indicators, tracing back their evolution trough time, for each EU country. Then it will identify the key determinants of energy efficiencies in each sector by means of an econometric panel analysis. The results will then be made available to WP 6 in order to derive policy recommendations.

Task 5.8. 5: Electricity Demand Response

Lead: CESI RICERCA/ERSE/RSE S.p.A.; FEEM

The Electricity task aims to cover the impact of Demand Response (the methods to change the consumption patterns of customers in order to improve the performance of the system) on Security of Supply. The objective is to characterize the whole process of investments and operations in the Electricity Sector ranging from long-term issues like energy efficiency to the direct/real time control of load and Distributed Generation.

The analysis will be centred on the advantages brought by Demand Response. More specifically, this task will look at:

  • Reduction of investments in generation and transmission;
  • Peak shaving and consequent improvement of market efficiency;
  • Increase in reliability due to flexible resources, which allow operators to meet contingencies;
  • Improvements in the liquidity of balance and ancillary services markets;

This task will also include the contributions of Distributed Generation; the topic is very closely related with Demand Response as the control strategies for the two are quite similar. The approach will follow what FEEM is developing in the ongoing FP6 project Eu Deep (www.eudeep.com).

The work will have a multi-disciplinary approach addressing institutional, regulatory, economic and technical issues. There will be strong links with WP5-6 with the analysis of the role of TSOs , who have a major interest in Demand Response, and the stakeholders consultation as Demand Response has a natural and fundamental interaction with many classes of customers.

Workpackage 5.8 is carried out under the co-ordination of FEEM


 
Seventh Framework Programme

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