Іntroduction
This report is an update of the previous trend scenar-ios, such as the ―European energy and transport - Trends to 2030‖ published in 2003 and its 2005 and 2007 updates. Two scenarios, the Baseline 2009 (finalised in December 2009) and the Reference sce-nario (April 2010) are presented.
The economic context has dramatically changed since the 2007 Baseline scenario. In autumn 2008 the EU and the global economy entered the steepest downturn on record since the 1930s. The energy in-tensive industries experienced considerable drops in their production, while energy and electricity demand displayed negative rates of change in 2009. The eco-nomic analysts, including official bodies such as the IMF, OECD and European Commission (DG ECFIN), published gloomy forecasts about economic activity and growth. Their medium term and sometimes long term economic outlooks have been drastically revised compared to 2007, in order to reflect significantly lower economic growth.
In addition, legislation that will significantly affect en-ergy demand and production has been adopted at both the EU (i.e. the Climate and Energy Package adopted in December 2008 and several energy effi-ciency measures adopted in 2008 and 2009) and the national levels. Both the crisis and the new legislation made imperative the conception of a new energy baseline scenario.

The report was commissioned by Directorate General for Energy in collaboration with Directorate General for Climate Action and Directorate General for Mobility and Transport.

Macroeconomic and demographic Scenario
The energy Baseline scenario of 2007 reflected the optimistic economic growth outlook, prevailing in 2006 and 2007.
The 2009 Baseline scenario builds on macro projec-tions of GDP and population which are exogenous to the models used. They reflect the recent economic downturn, followed by sustained economic growth resuming after 2010. GDP projections for the short term (2009-2010) mirror economic forecasts from the European Commission, DG Economic and Financial Affairs (European Economy, May 2009), which com-plement the up to date statistics for 2005-2008 from Eurostat. The medium and long term growth projec-tions follow the "baseline" scenario of the 2009 Age-ing Report (European Economy, April 2009).
The Baseline assumes that the recent economic cri-sis has long lasting effects leading to a permanent loss in GDP. The recovery from the crisis is not ex-pected to be so vigorous that the current GDP losses will be compensated. Modelled growth prospects for 2011 and 2012 are also subdued in line with these trends at around 1% per year. However, economic recovery enables higher productivity gains, allowing somewhat faster growth rates from 2013 to 2015.

After 2015, GDP growth rates mirror those of the 2009 Ageing Report. Hence the pattern of the base-line scenario is consistent with the intermediate sce-nario 2 "sluggish recovery" presented in the Europe 2020 strategy. However, given the recent juncture characterized by the financial and economic crisis, there remains uncertainty concerning the medium-term economic developments. The average EU-27 growth rate for the period 2000-2010 is now only 1.2% per year, while the projected rate for 2010-2020 is recovering to 2.2%, similar to the historical average growth rate between 1990 and 2000. GDP in 2020 is thus significantly lower than assumed in the 2007 baseline.

The population projections for EU27 are based on the EUROPOP2008 convergence scenario (EUROpean POpulation Projections, base year 2008) from Eurostat, which is also the basis for the 2009 Ageing Report. Population projections are higher compared to the 2007 PRIMES baseline due to different migration assumptions.These projections were used as an input to the multisector and multi-country general equilibrium model GEM-E3 to develop projections at sectoral level (i.e. gross value added by branch of activity) while ensuring consistency with the short and long term GDP and demographic projections of the European Commission (DG ECFIN). The macroeconomic scenario comprises numerical projections of GDP (volume), households’ income, population and sectoral activity (using gross value added in volume as a proxy) for 22 sectors, in each EU Member State. The 22 sectors are divided in 10
energy intensive industries, 6 non energy intensive industries, 3 service sectors, construction, agriculture and the energy supply sector (the value added of which is not used as input to the energy model). The results show the considerable economic downturn which started in autumn 2008. The reasoning
behind the macroeconomic projection can be summarized as follows:

1. The financial crisis induced a marked deterioration of global economic prospects in the final quarter of 2008. The causes of the vicious recession spiral were the downturn in asset markets, the reduction in consumers and businesses confidence accompanied with increased uncertainty, and the resulting reduction in bank lending.
2. A credit rationing practice synchronized worldwide had a detrimental effect for emerging economies through reduction in global trade (credit facilitation to trade was dramatically decreased). Thus EU exports were negatively affected.
3. Credit rationing together with increased uncertainty resulted into a slowdown of private investment in all sectors and lowered households’ expenditures on durable goods and real estate. The rate of private savings increased, exerting further depressive effects on consumption. Altogether, the drop of exports, the lower private consumption and investment explain the negative effects on GDP growth rates for the EU Member States.
4. To alleviate the effects of the crisis, extraordinary measures were put in place, including reduction of basic interest rates, expansion of money supply and facilitation of credit availability. These measures are expected to remove the effects of credit rationing and reduce the ―shadow‖ interest rate and so encourage investment and spending on durable goods and houses. The relatively low levels of oil and commodity prices compared to the first half of 2008 facilitate economic growth as costs of domestically produced goods fall. The worldwide global trade starts recovering due to increased credit availability. Thus, demand is progressively recovering in the EU, thanks to the contribution of exports, private consumption and investment.
5. The recovery process is accompanied by efficiency and productivity gains in many sectors, also because of the restructuring that takes place during the recession period. As a result, growth prospects of the EU are in percentage terms somewhat larger than before the crisis, albeit for a limited time period. Based on this logic, the projection displays higher growth rates compared to a similar projection carried out before the crisis. Despite this, a permanent loss of GDP and welfare is encountered when considering the entire period from 2008 to 2030.

Source: Energy Trends to 2030 - European commission