International Developments in the Field of Unconventional Gas and Oil Extraction: Update 2017

The last few years have witnessed a wealth of studies, reports and assessments being published in many EU member states, by national and international organisations and in the research community on economic, environmental and human health related aspects of unconventional oil and gas exploration and production. Many R&D initiatives are also underway. This report attempts to provide a survey of several of such studies and initiatives, with a focus on the years 2015, 2016 and early 2017. Principally, reports and studies from public bodies and scientific institutes were covered. Additionally, several papers published in peer-reviewed journals were included. A review of the quality of the studies covered, the accuracy of their claims and their possible limitations was not carried out. This report is therefore only meant to provide a compilation of their summaries, without any endorsement of the findings reported in any of the studies and assessments covered in the report.JRC.C.3-Energy Security, Distribution and Market

The socio-economic impacts of the closure of the Groningen gas field

During the year 2019 the DG Joint Research Centre offered scientific support to the Cities of Northern Netherlands in their transition towards the closure of the Groningen gas field. This study reports on the assessment of the regional socio-economic impacts deriving from the closure of the gas field planned by 2022. This analysis served as a framework for evaluating the impacts and as an information tool for the local authorities on how to plan the steps towards a successful transition and a new socio-economic development. Although the energy sector is not new to experiences such as the closure of big extracting facilities, the analysis of the impacts on the regional economy, employment and the energy sector remains a challenging task. The scientific literature does not provide with a tested universal approach to the study of these impacts. SWAP analysis, input-output models are the most common methodologies. To assess the regional socio-economic impacts of the closure of the gas field in Groningen we adopted at step-wise approach starting from the analysis of the decision of the Dutch government announced in 2018 and followed up in September 2019. We then study the natural gas value chain from the point of view of the business activities in the territory and the jobs at risk. Finally we analyse the opportunities set out in the energy development plans in place or announced by the local authorities. To complement the assessment of future possible developments in the region, we also took into account in the analysis other energy production potentials from clean sources and the opportunities of gas infrastructure reuse. The result of our work was presented at the final conference held in Leeuwarden in December 2019. The work helped the local authorities of the Northern Netherlands in defining a road map for the industrial and economic transition required to adapt to a situation in which no natural gas will be extracted.JRC.C.3-Energy Security, Distribution and Market

Assessment of underlying capacity mechanism studies for Greece

The increased electricity production from variable sources in the EU combined with the overall decline in demand in recent years, have raised concerns about the security of electricity supply, in general, and in particular about generation adequacy and flexibility, prompting some Member States to consider new public interventions, the so-called capacity remuneration mechanisms. This work presents a review of the underlying capacity mechanism studies for Greece based on European best practices to highlight the latest developments and current trends.JRC.C.3-Energy Security, Distribution and Market

Techno-economic assessment of the conditions for the development of a potential unconventional gas and oil industry: Review of experiences outside Europe and analysis of the European potential

The aim of this report is to provide a review of the key factors that have influenced the development of the unconventional hydrocarbon industry in selected countries outside the EU. The study extends the analysis to investigate the potential unconventional hydrocarbon industry development in Europe.JRC.C.3-Energy Security, Distribution and Market

ETRI 2014 - Energy Technology Reference Indicator projections for 2010-2050

The Strategic Energy Technology Plan (SET-Plan) is the technology pillar of the EU's energy and climate policy. This report contains assessments of energy technology reference indicators (ETRI) and it is aimed at providing independent and up-to-date cost and performance characteristics of the present and future European energy technology portfolio. It complements the Technology Map of SETIS by making. The ETRIreport provides: • techno-economic data projections for the modelling community and policy makers, e.g. capital and operating costs, thermal efficiencies and technical lifetimes; • greenhouse gas emissions, and water consumptions; The ETRI report covers the time frame 2010 to 2050. This first version of the report focuses on electricity generation technologies, but it also includes data for the electrical transmission grids, energy storage systems, and heat pumps.JRC.F.6-Energy Technology Policy Outloo

Investment analysis of unconventional hydrocarbon resources under uncertainty

Investment models for decision making on unconventional hydrocarbon resource development in Europe must be based on realistic estimates of well productivity, gas price projections and reliable data on costs of the project. In this analysis we assess the economic feasibility of three different investments projects in coal bed methane production located in two European regions, the Cheshire and the Midland Valley in the United Kingdom and the Lorraine in France. We combine the traditional framework of the investment analysis – and compute the NPV, IRR and break even point – with the probabilistic analysis of uncertain parameters that affect the business case of the investments. Our results show major differences in the profitability of the considered projects, mainly due to differences in initial CAPEX. The sensitivity analysis allows to rank these variables in terms of which of them mostly affect the results of the profitability: CAPEXì/well; discount rate; gas prices in years 5-8 and 4, 9-10 of the project; corporate tax; and finally the gas prices in years 11-13 of the investment.JRC.C.3-Energy Security, Distribution and Market

The economic and environmental assessment of electricity storage investments. Any need for policy incentives?

This study contributes to the current discussion on the economic viability of new investments in electricity storage technologies, its environmental impact in terms of CO2 emissions and level of renewables in the system and some policy related questions. The analysis is based upon a price-taker model under perfect price forecast simulating the dispatch of a marginal pumped-hydro storage (PHS) plant. The operation of a PHS, despite being costs minimizing, does not guarantee optimality in terms of environmental impact. Policy support should be granted if the social value of the investment would at least compensate the negative results of the private profits.JRC.C.3-Energy Security, Distribution and Market

Spatial arbitrage value of transmission upgrade investments. An economic and environmental assessment

This study contributes to the current discussion on the economic viability of new investments in transmission line upgrade and the associated environmental impact in terms of changes in CO2 emissions and renewable power integration. The line upgrade investment increases the power capacity between two interconnected zones, thus alleviating intra-zonal congestion. Its operation maximizes spatial arbitrage value by shifting power from the cost-efficient zone (with low marginal generation costs) to the neighbouring zone (with higher marginal costs), up to the interconnection capacity. The investment analysis focuses on the case of Sicily. In the first part of the study we assess the profitability of the line upgrade project. We assume 2013 as the reference year for the NPV analysis, so that profits and costs flow are the same as in 2013 during the entire investment period. In the second part of the study we assess the environmental impact of the project's operation in terms of CO2 emissions and changes in the share of renewable generation in the system. The environmental impact is determined by considering the carbon content/share of renewable of the power transferred from the lower price zone to the neighbouring zone. Both private and system values of investments in line upgrade result to be positive for the considered project. Power flows from one zone to the other as long as marginal costs of the first zone are lower than the marginal costs of the second zone. Power trade allows for economies of scale and improvement in environmental quality, as long as conventional (expensive/dirty) sources are replaced by renewable (cheap/clean) sources of power.JRC.F.6-Energy Technology Policy Outloo

Spatial and temporal power shifting from flexible sources. An economic and environmental assessment

The push to integrate massive Renewable Energy Sources (RES) puts the future development of power systems under significant uncertainties. This study analyses a private investment in Pumped Hydro Storage (PHS) operating in a zonal market characterized by transmission congestion between zones. This study shows negative NPV values for the investment in PHS technology in two Italian zones. The profit analysis of the private investor should be accompanied by the assessment of its impact on social welfare, represented here in terms of avoided CO2 emissions and RES system integration. PHS operation, despite being costs minimizing from a system standpoint, does not guarantee optimality in terms of social welfare improvement. On the other side, transmission upgrade investment projects are profitable and might contribute to increase the overall social gain. Policy incentives in support to one technology or another would intervene if its social value would at least cover the net loss.JRC.C.3-Energy Security, Distribution and Market

Demand for flexibility in the power system under different shares of renewable generation

peer reviewedIn 2014 EU leaders agreed on a new framework for 2030 for climate change and energy policies. By 2030 targets renewable power in the European market should be at least 27% of the EU's energy consumption. This major change will require the deployment of flexible technologies to ensure stability and security of supply. In this paper we study the role of electricity storage and renewable power curtailment as possible options in providing flexibility when high shares of renewable enter the system. We simulate the Italian power market with a power dispatch model developed in GAMS. Our results for the benchmark scenario show that increases in shares of renewables are associated with increases in the demand for flexibility. When we add one storage plant in three zones at a time - SUD, SICI, NORD - demand for flexibility, respectively does not change, reduces and increases compared to the benchmark