A Fair-Market Scenario for the European Energy System

Abstract

The Fair-Market Scenario represents a new development in the use of scenario techniques, an area in which the Roskilde unit has worked for over 20 years. The first scenarios constructed during the first half of the 1970’ies were aimed at demonstrating the existence of consistent energy demand and supply systems incorporating large amounts of renewable energy (Sørensen, 1975a-d). The next ten years saw several scenarios based on normative or market assumptions, the latter becoming possible as the cost of energy efficiency measures and new energy technologies became more established and the literature on market trends and prices increased (e.g. Blegaa et al., 1976; 1977; Sørensen, 1979; 1981a; 1982a; Hvelplundet al., 1983). Although the background for constructing these scenarios included environmental impacts, no detailed attempt was made to quantify them. During the 1990’ies, further emphasis on the environmental issues in scenario construction was imposed by the increased focus on global impacts such as greenhouse warming (Sørensen et al., 1994; Sørensen, 1996a; Ishitani et al., 1996), and progress was made in bringing the description of the externalities of energy conversion systems from the early qualitative level (Sørensen, 1974; 1981b) to a data-based quantitative level (e.g. Sørensen, 1993b; 1995b; European Commission DGXII, 1996; Kuemmel, Nielsen & Sørensen, 1997). The market-driven scenarios were based upon projected costs of new energy technologies (whether renewable, fossil, nuclear or related to end-use), while the more normative scenarios assumed changes in consumer attitudes. One may say that all scenarios have a normative component and the assumption that choices will be made on the basis of market prices is of course also a normative statement disproved by many historical examples.