Thursday 24 April 2014

Currently browsing 'Energy'



Abolition of German subsidies on renewable energy is overdue

Posted by on 04/03/14
By Eberhard Rhein While the Government is busy rewriting legislation on the promotion of renewable energies a High-level Group of Scientists appointed by the German Parliament has come out with a radical proposal to abolish the legislation altogether: a complete suspension of the system. But it is unlikely that the government will have the courage to abolish one of its most cherished policies.

Promoters of mega-dam in Georgia use front group and PR campaign and discredit local community

Posted by on 27/02/14

Georgian public opinion backs the village of Kaishi in the Georgian mountains that defiantly defends its land and tradition against the planned Khudoni dam. The project promoters have now embarked on an all-out promotion campaign including a fake non-governmental organisation.

by David Chipashvili, cross-posted from the Bankwatch blog

Local communities that are demanding fair treatment when faced with a large infrastructure projects often hear promoters justifying the project with an alleged paramount national interest. It’s another way of saying: “Get out, or we will lose our patience.”

Kaishi, a town in the Georgian mountains of Svaneti, is in this very situation right now. The Khudoni mega-dam is planned to be built where now 800 people live and the land that was theirs by custom was given to the opaque investor Trans Electrica Ltd. for one dollar.

Among the project promoters is also Georgian vice Prime Minister and Minister of Energy, Kakha Kaladze who last week suggested that only a very small group of people are against the project:

“It should not been imagined that the whole population of the region is against the construction of Khudoni. There is a group of people who have a radical approach towards the matter.”

(Source: [ka], own translation, emphasis added)

Yet, the people of Kaishi are far from being a small group of radicals who are blocking the region’s development for sentimental reasons. Last week, after a meeting of the representatives of all Svaneti communities, the Kaishi community published an open letter to the government that reiterates the commitment of Kaishi as a whole to protect their village against a project that is unnecessary:

“Thus we are stating that the village of Khaishi will continue to exist and develop normally and will stay loyal to the oath that was given in front of God and our nation against the Khudoni HPP project.”

(own translation)

The mentioned oath is a traditional vow taken in the local church. The 200 families who have taken the oath pledge to protect Kaishi from flooding and accept that a curse will haunt them and future generations of their families. (The oath includes some colourful descriptions of the curse.)

A PR campaign to change public opinion

Also public opinion in Georgia is far from seeing the Khudoni dam as a project of utmost national interest. In a recent poll on 63 percent of the 1300 participants voted against the project (one vote per IP address was allowed).

There was a problem connecting to Twitter.

The lack of public approval has brought the Ministry of Energy and the investors to run an intensive PR campaign to change public opinion. The campaign includes a range of TV ads with biased or distorted facts and a facebook fan page that miraculously gathered 16 000 likes practically overnight.

Even a front group called Georgian Infrastructural Project Initiative (SIPI) appeared out of nowhere in the beginning of this year with the following mission (emphasis added):

“[...] to inform society with facts and arguments on ongoing and planned infrastructural projects in order for the latter to be correctly interpreted by the people.”

Although claiming to conduct studies and evaluations of infrastructure projects, the initiative mostly posts news articles to their website and the CNN’s iReport platform (none of the articles vetted by CNN). Almost all articles so far have been weakly veiled promotions of the Khudoni dam or of the project promoters’ activities.

A look at SIPI’s public registry file leaves no doubt that the organisation is nothing but another way of promoting Khudoni. The head of the organisation, Levan Kalandadze, is a close friend and party ally of businessman Irakli Iashvili. (Both are members of the New Rights Party). Iashvili is 50 percent shareholder of Trans Electrica Trading. The other half is owned by none other than Khudoni investor Trans Electrica Ltd. (The purpose of Trans Electrica Trading is not becoming clear from the registry. It only mentions that the company will deal with energy issues in general.)


The claimed openness of Kaladze and other project promoters to discuss with Kaishi and the rest of the Svaneti community will be put to another test tomorrow. Georgia’s Ombudsman Ucha Nanuashvili has invited all interested parties (including the ministry and the investor) for February 28 to discuss the human rights dimension of the Khudoni project. We’ll see who shows up.

In Albania, oil’s history casts long shadows over locals

Posted by on 21/02/14

The findings of a visit to the EBRD sponsored Patos Marinza oil field in Albania show how local development and investments in resource extraction often do not go hand in hand. The case provides valuable lessons for the revision of the EBRD’s safeguard policies.

by David Hoffman, cross-posted from the Bankwatch blog

I first visited Albania in 2007. I went there to dig a bit more into a thermal power plant financed by both the World Bank and the European Bank for Reconstruction and Development near the coastal town of Vlore, a popular tourist destination. In spite of fierce opposition from locals and formal grievances lodged with the investors (pdf), the power plant was constructed anyway, and now sits unused, collecting cobwebs and interest on the country’s outstanding debt repayments.

Things have changed rapidly though in and around Vlore: haphazard construction continues unabated, with once towering beachfront hotels demolished to make way for equally large yet apparently unused condominiums. The shift, I’m told, coincides with the shifting political landscape and the subsequent patronage to the favoured property developers of the moment.

But the more things change, the more some things stay the same. Fast-forward more than half a decade, and both the EBRD and IFC are at it again, financing another controversial energy project near Vlore: the extraction of oil at the Patos Marinza fields by the Canadian company Banker’s Petroleum.

Patos Marinza is one of the largest, and oldest, onshore oil fields in Europe. Oil was first discovered in 1928, and because of this long history of extraction, the area around Patos Marinza suffers from heavy pollution. That’s why a portion of the loan from the banks is intended to clean up the area (and typical of the EBRD, its loan is called the ‘Patos-Marinza Environmental Remediation and Development’ project, even though just USD 6 of 100 million extended to the company is to be used for remediation, and hardly any of that has even been drawn).

Our visit highlighted that while Banker’s had done quite a bit to improve its facilities for extracting oil, it wasn’t immediately clear what was being done to benefit both the environment and the locals living in the immediate proximity of the oil wells.

Making the unseen visible

Just as in the case of the power plant at Vlore, locals have lodged a formal complaint at the World Bank, alleging among other things that Banker’s drilling activities have led to increased seismic activity. An investigation by the IFC’s Compliance Advisor Ombudsman is ongoing, and in the meantime, a formal working group has been established to investigate the source of the increased seismicity.

But what struck me most about the attention being paid to issues happening underground (and for the most part, unseen) was the conditions it created for inaction on the very visible unemployment and pollution blighting the residents of Patos-Marinza, issues that residents repeatedly raised during the trip. And if Banker’s security had had its way, the issues would have remain unseen, as shortly after arriving, we were unwelcomingly escorted out of the area by a caravan of security vehicles.


Prior to the heavy-handed guards removing us from the villages, we spoke with about twenty residents in the nearby village of Kallmi, all of whom were unemployed. A former employee of the state-owned oil company Albpetrol, from whom Banker’s is taking over the oil fields, explained that men who had technical training and worked in the fields could not find work with Banker’s, complaining that ‘hundreds’ had sent CVs not only to Banker’s but also the different subcontractors building things like roads.

When it was noted that Bankers has a hiring policy in place to give preference to former Albpetrol employees, the man dismissed it, reiterating that he knew not one of his former colleagues that was now employed by Bankers. Another migrant worker explained that upon returning from Greece, he had nowhere to send his children because the school was in such disrepair.

These types of investments – roads, schools and the like – came up often as the kinds of social programmes that Banker’s should support. As one man put it, social programmes ‘that made sense.’ He referred to his arrangement with Banker’s, where he rents the company land of oil extraction, and they in turn teach him how to care for tomatoes. The programme is of little use however, since the man already knows how to care for tomatoes, and he no longer has any land on which to grow the tomatoes. Along with other projects like the recently-constructed health centre and a programme for pruning trees, what the community wants and what why company constructs are entirely two different things.

See images from Patos Marinza on flickr >>

There is no god that could live here

Even after just a few hours on site at Patos Marinza, the effects of breathing polluted air were noticeable: discomfort in the throat, a slight irritation resulting in eyes watering. For those who call the area home, the situation is taking its toll. Locals in Kallmi complained that there are significant amounts of air pollution, particularly early in the morning, and in the neighbouring village of Jagodina, others confirmed that ‘heavy’ air in the mornings, leading to problems with breathing. Locals say that an inoperable pipeline leaks methane, and the slag pits evaporate in the summer, further deteriorating the air quality. When asked about the conditions of the slag pits, one man alluded to an Albanian saying, ‘There is no god that could live there’.

Lessons learned for the future policy

This week in Sofia, the EBRD will hold its penultimate public consultation about the future of its safeguards policies. Colleagues from Albania who were present during our trip to Patos Marinza will present the mission, and we hope that this case will provide some lessons learned for the bank as it moves forward in revising in its safeguard policy. Otherwise it is possible that the next trip to Albania will be to visit another environmentally and socially-destructive EBRD energy investment.

Las dos revoluciones pendientes europeas: energía y talento

Posted by on 16/02/14

Europa ha sido protagonista de las dos primeras revoluciones industriales de la historia. En el continente y las islas británicas se desarrollaron en los dos siglos pasados los procesos tecnológicos y productivos que han cambiado la vida en la Tierra. La era digital, sin embargo, la que nos ha conducido a la globalización mundial, nos vino dada en el final del siglo XX desde América bajo predominio económico de los Estados Unidos. La nueva forma de gestión del conocimiento y la implantación de una sociedad de la información ya no podemos decir que haya sido fruto del progreso europeo. Ahora que los grandes gurús consideran que Internet ya nos ha llevado al límite de donde nos podía llevar, se plantean los nuevos retos del tercer milenio y con ellos los escenarios que concebirán los avances de la Humanidad. Y si acudimos al razonamiento lógico, correspondería al continente que da vida al 60% de la población del planeta, es decir a Asia, liderar los nuevos tiempos de desarrollo. Lo cual no debe ser obstáculo para que Europa sea capaz de aportar su valor añadido al proceso. Es más, está obligada a hacerlo si no quiere ver empobrecido su paisaje productivo, ser dependiente tecnológicamente y a la postre poner en riesgo definitivo el sistema de libertades que nos hemos dado.

Cabe preguntarse y debatir, por tanto, sobre cuáles son las revoluciones pendientes que debemos acometer. Cuáles son las nuevas tecnologías que nos harán avanzar hacia una nueva era de la civilización y cuáles los pasos a dar para que su implantación nos ayude a mejorar la calidad de vida de nuestra sociedad. En Europa esa reflexión resulta fácil empezando por su principal carencia y dependencia. El continente que parió la industrialización y que es hoy la mayor potencia comercial del mundo, tiene un desbalance energético gravísimo, lo que le convierte en un gigante con pies de barro. Una crisis de seguridad en el Golfo Pérsico o en el Magreb, o el endurecimiento de las condiciones de abastecimiento del gas ruso, puede colapsar las principales economías de la zona euro y poner en peligro la estabilidad de empresas y de las propias necesidades básicas de nuestros ciudadanos. Un tema crítico al que Europa no ha sido capaz de dar una respuesta común armonizando políticas energéticas nacionales y gestionando conjuntamente un problema que a la larga es de todos los europeos. Nos hemos acomodado confortablemente en el desarrollo de las energías renovables, pese a que relación de su precio y el retorno a la red de las mismas sea claramente insuficiente.


Europa precisa de todas las fuentes de energía de las que podamos disponer, es absurdo encarecer nuestra factura energética o nuestras dependencias de importaciones de combustibles sin caer en la cuenta de que esos costes nos hacen menos competitivos, nos endeudan y ponen en peligro el mantenimiento de nuestro Estado del Bienestar. Trabajar por la producción de energías limpias y seguras no significa en modo alguno prescindir de fuentes que precisamos. ¿Podemos seguir anclados en argumentos de la década de los 70 para prohibir la energía nuclear en nuestros países? ¿o podemos permitirnos el lujo de excluir sin prueba o debate alguno científico las extracciones de gas pizarra? Rotundamente no. Europa necesita aprovechar todos y cada uno de los recursos energéticos a su alcance sin desestimar una sola posibilidad. Y debe desnacionalizar sus fuentes para ponerlos en común. Si tenemos una moneda común, debemos tener una capacidad energética común, algo que nos lleva a los propios orígenes de nuestro proyecto europeo que no fue otro que una comunidad del carbón y del acero, es decir, la garantía de abastecimiento interno de materias energéticas básicas.

Pero junto a la tarea de no despilfarrar y gestionar comunitariamente nuestras fuentes de energía, está el reto superior de la investigación en alternativas a los combustibles fósiles. Europa ha hecho un alto esfuerzo inversor en proyectos comunes de esta naturaleza. EURATOM o el CERN son ejemplos claros de una apuesta decidida por dar pasos definitivos en la revolución energética. Resulta difícil saber el estadio en que nos encontramos en el camino al éxito cuando ni nuestros científicos saben valorar sus descubrimientos, pero no tenemos más remedio que incrementar las aportaciones a estos campos investigadores en la certeza que tarde o temprano darán sus frutos. En el estudio del comportamiento de los elementos del átomo y las partículas es seguro que encontraremos las soluciones que requerimos para hacer el Planeta sostenible y frenando el impacto medioambiental negativo que hoy producen los combustibles que empleamos. La ecuación a resolver por nuestros físicos está en el ahorro de resistencias para frenar las necesidades de combustión. Un mundo global donde todos sus ciudadanos tienen derecho a una vida digna y confortable precisa alternativas al modelo energético actual.

Pero esa revolución energética va íntimamente ligada a la revolución del talento, es decir, a la liberación de todas las capacidades del hombre en su ecuación de tiempo y espacio. El brutal incremento de las posibilidades de comunicación e información que Internet nos ha brindado está transformando profundamente la gestión del conocimiento. Pero, sin embargo, está pendiente derivar dicha potencialidad a la generación de talento. Tenemos muchos más medios pero no estamos aprovechando las herramientas para extender nuestro recurso más sagrado, la creatividad de las personas. La incorporación acelerada de la población de los países emergentes a herramientas del saber y la movilidad que de las ideas podemos hacer hoy, debería suponer la mejor oportunidad de la historia para producir exponencialmente arte y ciencia, o lo que es lo mismo, para desarrollar al máximo las potencialidades de individuos y sociedades. Si estamos a obligados a realizar una gestión más eficiente y respetuosa con las generaciones venideras de los recursos naturales, o estamos más aún en ser mucho más productivos en la adecuada extracción del talento de las personas.

El caso es que las revoluciones para producirse siempre han contado con tres elementos básicos que prenden la mecha del cambio abrupto. Lo primero la incorporación a los procesos de una tecnología altamente novedosa y transformadora. Algo que puede que una vez más estemos cercanos a alcanzar en los próximas dos décadas según nos cuentan los científicos de vanguardia. En segundo lugar, al filósofo que observador de la realidad se encarga de describir el paradigma de futuro bajo una idea innovadora. Eso, hoy por hoy, no abunda o por lo menos no está en el top de visitas de un blog o en la lista de best sellers de un mundo que no lee y solo entiende las cosas en clave audiovisual. Y tercero, un liderazgo político inspirado en la base ideológica engendrada por el susodicho pensador, que se pone al frente de los movimientos generados por los cambios sociales que provocan las nuevas tecnologías y ejecuta las reformas necesarias del de convivencia. De este último ingrediente es del que andamos más carentes ahora mismo. En Europa tenemos algún científico insigne, escasean los filósofos y carecemos de líderes. Probablemente esto es así porque el problema de origen que debemos resolver es el del inmediatismo que rige nuestros actos. Nos comportamos mecánicamente sin darnos tiempo para pensar las cosas, el imperativo ya no es ser, sino estar para hacer por hacer. Pero no me veo a Merkel o a Rajoy enfrascados en tan estériles reflexiones como las que a mi me ocupan, tienen altas cuestiones de Estado en las que atarearse como la enésima discusión sobre los mecanismos de garantía de depósitos de los bancos europeos. Ya se sabe primum vivire y que siempre vivan mejor los mismos.


Georgian hydro projects are a test case for the EU’s development bank

Posted by on 12/02/14

As activists pointed out at a consultation meeting in Tbilisi, Georgia’s hydropower sector has plenty of lessons to be learned by the European Bank for Reconstruction and Development.

by David Chipashvili, cross-posted from the Bankwatch blog

Yesterday in Tbilisi, during a public consultation on the good governance policies of the European Bank for Reconstruction and Development, an unexpected thing happened.

A Georgian activists movement staged a protest action against two potentially harmful hydropower projects, the Dariali and Shuakhevi HPPs, which had appeared in the EBRD’s project pipeline. The activists held banners asking the bank not to fund the two projects for they would destroy the gorges of Dariali and Adjaristskali.

The activists specifically referred to the case of the Paravani hydropower plant (HPP) as a reminder for the bank’s management not to repeat the mistakes made earlier. The 87 MW Paravani HPP includes a 14 km derivation tunnel to divert water from the Paravani river to the Mtkvari river upstream of the village of Khertvisi. In some periods this would leave only 10 percent of water in the Paravani river – inadequate to ensure the survival of downstream flora and fauna – while at the same time, the project creates a significant risk of flooding Khertvisi.

Beyond exemplifying what can go wrong in small hydro projects in Georgia, the Paravani case also clearly illustrates the shortcomings of the EBRD policies that were under discussion yesterday. As Bankwatch reported in January, the EBRD’s Project Complaint Mechanism concluded (six months after we filed our complaint (pdf)) that three sections of the EBRD’s Environmental and Social Policy had been breached. The current review of the bank’s policies can be an important turning point to avoid similar debacles and strengthen independent control mechanisms.

Pleasantly EBRD staff agreed to listen to the activists’ concerns which were presented by one activist and which I summarise below these images from the action.

Shuakhevi HPP

The Norwegian company “Clean Energy Invest” plans to construct a cascade of three HPPs on the Adjaristskali river in the Autonomous Republic of Adjara. The cascade includes the 185 MW Shuakhevi HPP, the 150 MW Koromkheti HPP and the 65 MW Khertvisi HPP. According to the project information of the EBRD, the Bank plans to fund the first HPP from the cascade Shuakhevi HPP.

The project includes the construction of a 22 metres high Skhalta Dam with a flooding area of 19 hectares) and the 39 metres high Didachara Dam (16.9 hectares) as well as three diversion tunnels. The project envisages leaving only 10 percent of the average annual water flow of the Adjaristskali river downstream from the dam.

Dariali HPP

The Dariali hydro power plant (HPP) project envisages the construction of a derivation type hydro power plant with an installed capacity of 110 MW on the river, in the Kazbegi municipality, close to the Russian-Georgian border.

The project would divert the greatest part of Tergi’s water, about 90 percent, leaving an approximate eight-kilometer section of the Tergi River without water. This would result in the landscape being radically changed on the eight-kilometer section of the Dariali gorge with a total length of 11 kilometers. As a result of the water diversion, the Gorge will additionally lose its historical cultural-ethnographic values and tourism importance.

In additional to causing environmental damage, the project would also harm the historical and cultural heritage as well as the local economy. The Tergi river was a source of inspiration for famous Georgian writers and poets like Ilia Chavchavadze, Alexander Kazbegi and Grigol Orbeliani. The river and its adjacent landscape are also attracting tourists, who would inevitably stay away, if the Dariali HPP project were implemented in its current form, resulting in adverse effects on the incomes of locals engaged in the tourism industry.

Abolish gasoline and fossil energy subsidies

Posted by on 30/01/14

Subsidies on petroleum products and fossil energy have become a deeply rooted vice in many countries across the globe, especially oil-rich ones.

They can be quite expensive, absorbing two to ten percent of GDP in a dozen countries resorting to this fallacious political favour.

They constitute a hidden economic and environmental burden to the respective countries.

When poor countries like Egypt or Yemen spend 20 to 30% of their budget on fossil fuel subsidies they lack the means for investing more in vital education and health services, while imploring the international donor community to fill the gap.

Gasoline subsidies favour car owners at the expense the poor who cannot afford a car and enhance social inequalities in developing countries. According to World Bank estimates they amounted to more than $ 100 billion in 2012 which governments should rather invest in education and health care.

They are also perverse from a climate perspective: low gasoline prices induce people to ride more. Thus countries with low gasoline prices like Venezuela, Saudi Arabia, United Arab Emirates and Kuwait register the highest per capita fuel  consumption.

They do not offer any incentives for buying fuel-efficient vehicles. Venezuela is a good example. Its citizens enjoy the lowest gasoline price on earth: $ 0.015/liter, which is 10% of the Saudi price and 1% of EU prices! No wonder that the highways are also crowded with gas guzzlers.

Some countries like Iran and Indonesia have made efforts in phasing out their subsidies; in other others like Nigeria such efforts have temporarily aborted because they were too hasty provoking popular unrest.

To be successful countries have to proceed incrementally. The longer subsidies have been in place the more difficult it is to scrap them. With its decades-old and unsustainable grain and gasoline subsidies Egypt is a sad example.

Gasoline and diesel subsidies are only part of the wider story of fossil energy subsidies, which annually amount to more than $ 500 billion globally.

In the forthcoming climate conferences the EU should combine with UN, IEA and other countries to insist that all countries commit to phase their subsidies out before 2025 latest.

Eberhard Rhein, Brussels, 30/01/2014

Europeans do not step back from Climate Goals

Posted by on 27/01/14

After months of internal debate the Commission has presented EU climate goals for 2030. The green lobby has called them inadequate,while utilities, heavy industry and most member states are prepared to give their blessing.

Assuming that the European Council will endorse them at its June session, the EU will be the first group of countries to announce its cards for the decisive 2014-15 international climate conferences in Lima and Paris.

What matters there will be commitments from all countries to lower their green house gas emissions, high-income countries at higher rates than emerging ones. So far the EU has been the only the group of countries to effectively decree and implement significant reductions of emissions.

The USA has done so too, by replacing coal through gas for power generation, but not by legislation. Australia, Canada, Russia have given no sign for any reductions of their emissions. And China, which boasts of big efforts in renewable energies, has only slowed the pace of increase of its emissions, through raising the level of energy efficiency.

By implementing the Commission targets until 2030 the EU will emit only 60 per cent of what it had emitted in 1990! It can be proud of this unique achievement. Still, its contribution to the global climate will be negligible because of its declining share in global emissions to some 12 per cent!

Globally it will therefore no matter if the EU were to adopt even more ambitious targets, as Greenpeace (45 per cent of the 1990 emissions) calls for.

Nor are mandatory commitments for the share of renewable sources sensible.

The proposal for a “mandatory” 27 per cent target (of overall energy consumption (!) for the EU as a whole and annual action plans for each member state is not ambitious but reasonable.

There is no point expanding the capacities of solar and wind too rapidly if the grid and storage capacities do not follow. It is rather appropriate to slow down the build-up of further generation capacities and put the emphasis on building European-wide grids to transport the wind and solar power across the continent.

A substantial reduction of the “guaranteed” subsidies, especially in Germany, which will must spend more than € 25 billion annually for its over-generous “feed-in” tariffs for many years to come, is overdue to keep electricity prices at reasonable levels and conserve the competitiveness of energy intensive industries.

Even if this does not please the fledgling European renewable power industries, subsidies on renewable energies must be phased out, the sooner the better.

The EU has done well to substantially increase research expenditures for renewables until 2020. It desperately needs a strategy for the storage of solar and wind power to ensure a perfectly reliable electricity supply .

Energy efficiency matters at least as much as renewable sources to reduce C02 emissions. Here the Commission has been too discreet. A multiannual renovation programme for the building stock – which is Europe`s biggest energy consumer and C02 emitter- would be helpful both for reducing emissions and creating jobs.

The Commission should submit appropriate proposals when it comes to the implementation of the targets.

Additional reductions of the emission allowances for utilities and heavy industries may not be enough and difficult to impose.

The tougher emission standards for passenger cars to come into effect in the early 2020s will not carry enough weight.

In conclusion, Europeans do not step back from climate goals. But they shift the emphasis away from the excessive build up of renewable energies which has proved too expensive relative to the impact on the climate.

Eberhard Rhein, Brussels, 23/01/2014


Europe should not expect miracles from shale gas & oil

Posted by on 24/01/14

The European Commission is due to present its policy guidelines for shale gas production on 22 January. It is expected to leave member countries large latitude for the exploration and production, subject to respect specific health and environment safeguards, e. g. for water.

We should not expect a boom comparable to what the US Middle West has been experiencing in the last few years and which has sent shivers to European energy-intensive sectors. Far from it!

In the USA the “big boom” is already over. The size of the deposits seems to have been grossly over-estimated. Investments in new deposits have fallen dramatically, from $35 billion in 2011 to only $3.4 billion in 2013.

We can therefore expect American gas and oil prices to rise again in the near future.

According to geological surveys Europe is much less endowed with shale gas deposits. Most of these are concentrated in Poland and Great Britain, most interested in shale gas/oil. In addition, Europe’s population density will make the exploration and production more expensive than in the USA.

There is not the slightest chance for Europe approaching energy self-sufficiency through shale gas/oil, as the USA is about to achieve, even if only for a short time. In 2035 domestic production might cover just 10% of total EU gas demand, according to Commission estimates.

Shale gas will be no more than a transitory solution. Its reserves will be depleted within a few decades. Europe must therefore focus on energy efficiency and renewable sources as the only valid panaceas.

This being said, Great Britain and Poland should be free to exploit their shale gas reserves if that helps them bridge the gap towards more sustainable solutions.

Eberhard Rhein, Brussels, 17/01/2014

‘Green diesel’ identified as sustainable aviation biofuel

Posted by on 22/01/14

Boeing researchers have identified green diesel as a potential aviation biofuel of high sustainability, cutting carbon dioxide emissions by at least half over its lifecycle. Boeing said last week that it is working to gain approval from government agencies for aircraft use of renewable green diesel, which is already used in ground transport.

Biofuel research in a Boeing laboratory in Seattle.

Biofuel research in a Boeing laboratory in Seattle.

Green diesel — chemically distinct from biodiesel — is made from fats and oils, and Boeing’s researchers have found it to have a chemical profile similar to today’s sustainable aviation biofuels, meaning it could be blended directly with conventional jet fuel. Moreover, U.S. and European industry has existing capacity to provide 600 million gallons per year, accounting for up to 1 percent of current global aviation fuel needs at a price — $3 per gallon, given government incentives — competitive with conventional fuel.

“Green diesel approval would be a major breakthrough in the availability of competitively priced, sustainable aviation fuel,” says James Kinder, a Technical Fellow in Boeing Commercial Airplanes Propulsion Systems Division. “We are collaborating with our industry partners and the aviation community to move this innovative solution forward and reduce the industry’s reliance on fossil fuel.”

The green diesel initiative is part of Boeing’s long-term commitment to sustainable growth in aviation, following its Optimal Flights programme and ecoDemonstrator aircraft. Boeing is also part of the Sustainable Aviation Fuel Users Group, an alliance of aviation industry participants seeking to develop sustainable biofuels that avoid adverse local land-use and environmental effects while lowering CO2 emissions overall.

“Boeing wants to establish new pathways for sustainable jet fuel, and this green diesel initiative is a groundbreaking step in that long journey,” adds Boeing executive Julie Felgar, managing director of Boeing Commercial Airplanes Environmental Strategy and Integration. “To support our customers, industry and communities, Boeing will continue to look for opportunities to reduce aviation’s environmental footprint.”

Independence costs a lot, but dependence always costs much more

Posted by on 19/01/14

Minister of Energy and Coal Industry of Ukraine Eduard Stavitskyi declared that at this stage Ukraine intends to import natural gas only from Russia and not carry out import in the reverse mode from Europe, as the price of the Russian gas is lower.

A similar step of the Ukrainian government arouses double feelings.  It is obvious that the gas price offered by Russia now is much lower, than the price of spot gas at the European market in the winter period.  And from this point of view to buy this gas now is indeed inappropriate.

At the same time, Ukraine has already experienced the period of cheap Russian gas when it seemed stupid to buy it in other countries.  But dependence on one gas supplier is always dangerous.  At some point the monopoly supplier will wish to increase the price significantly to the level which will be absurdly high.  And there will be no more choice. And the buyer will be compelled to buy it, incurring unbelievable losses.

The monopolist, however, may look like a “philanthropist”. Suggesting thus to sell him some strategic enterprises or, for example, a national gas transport system. Exactly this was the way in which some countries of the former Soviet Union remained without their own GTS. They passed under the control of the Russian gas monopolist.

Cheap gas from the monopolist is the same thing as a free first portion of drug offered by the drug dealer. But having tried it, the person becomes drug addict, and afterwards is willing to pay already anything to get the next portion.

Therefore, to become dependent on one gas supplier is extremely unwise.  And Ukraine had an opportunity to feel this on its own experience.

It’s no coincidence that non-admission of receiving over a third of the general consumption of gas from one source is one of the basic principles of energy policy of the EU.  Such approach, quite probably, costs more expensive.  But under such circumstances it is already impossible to blackmail the EU countries, threatening them with a technogenic catastrophe.

It is necessary to recall that Ukraine faced exactly such blackmailing in 2006 and 2009.   And consequentially, we were compelled to make concessions to the gas monopolist. Yes, in both these cases the corruption component of the arrangements was not the last one. But corruption is the basis of energy dependence.

It’s clear that such poor country as Ukraine is right now and which, besides that, suffers from the economic crisis can’t constantly buy more expensive gas in Europe.  At the same time, it would be expedient for Ukraine to have arrangements with European partners concerning the possibility of the reverse gas supply from Europe.

At least in spring-summer period it can be completely favorable for Ukrainian business structures to buy spot gas and upload it into the gas storages in the Western Ukraine which are the greatest ones in Europe. In spring and in summer spot gas can be cheaper, than the Russian gas. Thus, in winter periods its remains can be rather favourably sold to European consumers at that same European spot market.

Under such circumstances, Ukraine can solve two tasks at a time. The first one is to reduce its energy dependence on Russia. And the second – is to use the capacity of the Ukrainian gas storages in full, earning on this.


The EU should define an effective energy and climate strategy until 2030

Posted by on 13/01/14

2014 will be important for European and global energy and climate policy.

In preparation for the international climate conferences 2014-15 the EU will have to define its emission targets for the next 15 years and beyond. That process has started. The Commission will present its proposals on January 22.

The targets must be ambitious.

Reducing emissions by less than 45% would be incompatible with the 2050 reduction target of at least 80% over 1990.The EU should therefore also confirm its emission targets for 2040 and 2050.

Fixing targets will not be enough: it also needs a clear view on how to achieve them.

For 2010-20 the EU has relied on three major instruments.

  • Emission caps
  • Energy efficiency standards for automobiles, appliances and buildings
  • Renewable energy objectives

It should continue this way.

Emission caps apply to power, steel, chemical, coal, glass and cement companies.

As in the past, the power sector will have to bear the brunt: cutting its C02 emissions by 45% in the next 15 years will imply profound changes for the utility sector: the closure of more coal- fired power plants, a further switch to gas power plants and above all more imports of nuclear, gas or renewable electricity from neighbour countries. A European electricity market is overdue: There is no more need for member countries to be self-sufficient in electricity.

Steel, chemical, glass, paper and cement industries will have to undergo similar structural adjustments. These are crucial for raising energy efficiency and lowering energy imports.

Emission allowances will need to be reduced by 45% until 2030 to end the over-supply of allowances and the low CO2 prices of € three to five/ton, which have handicapped investments in energy efficiency and wind/solar power generation without exorbitant subsidies.

This will enable the emission cap & trading system play a pivotal role for reducing energy consumption and promoting the use of renewable sources.

Raising energy efficiency must remain the second pillar of the energy and climate strategy. It will help to reduce energy consumption and maintain the competitiveness of European business.

The EU should therefore continue setting energy-efficiency standards for main energy-consuming sectors and encourage more research efforts.

Trucks, electric engines, electric appliances and above buildings are the areas on which to focus the attention.

Buildings are the biggest energy consumer followed by power generation, with respectively 40 and 25% of consumption.

The EU should tighten its energy efficiency target for buildings. 3% of the building stock should undergo annual renovation. This will give a big push to employment in the building and related industries

Member states should launch programmes for improving heating installations and insulation, to be financed by a combination of private funds, bank loans and subsidies from European structural funds.

Raising the share of renewable energy must be the third axis. Without raising the share of renewable energy in energy supply it will not be possible to reduce emissions by at least 80% until 2050.

In view of the different renewable potentials of member states the EU should fix an indicative 30% share of renewables for 2030, leaving member countries to set their national targets. By 2040 most member countries should be able to supply essentially all electricity from a combination of solar, hydro, wind and geothermal power.

In parallel subsidies should be phased out. The fast technological advance and decline of costs and prices allows doing so.

During the next 15 years the efforts should focus on the inter-connections of the European grids, which are indispensable for a better capacity utilisation.

Eberhard Rhein, Brussels, 13/1/2013

EU policy makers: Think not what you can do to save energy; think what energy savings can do for you

Posted by on 07/01/14

By Adam White, Research Coordinator at WWF European Policy Office’s Climate and Energy Unit

This article was first published in “Solidarity: Towards 2030 ambitions in energy policy”, a publication by the Foundation for European Progressive Studies

Having your own energy scenario is fast becoming the price of entry into the debate over the future shape of the EU’s energy system. NGOs have them, businesses have them, and governments have them. The European Commission has many of them. If scenarios are a unifying feature of this debate, then energy efficiency is a unifying feature of those scenarios. Every new way of limiting our production of greenhouse gases depends, usually to a significant extent, on limiting our consumption of energy. Without energy efficiency, none of our plans will work. With it, all of them become cheaper, and easier to achieve. So, surely, energy efficiency should be the one thing all parties can agree on?

Sadly, the opposite is true. Energy efficiency has become the most contentious part of EU climate and energy policy making. Efficiency was left out in the cold when climate and energy policies were agreed up to 2020. While greenhouse gas emissions reductions and renewable energy generation were given the high level political support of legally binding targets for Member States, energy efficiency was only given an indicative target. The weakness of the signal from policy makers makes it hardly surprising that the EU will miss its goal to reduce energy consumption by 20% against business as usual projections, unless further action is taken.

At the crux of the problem is a question of perception. Do you consider using less energy to be positive, or negative? Do you think about what you have to do to save energy, or do you think about what saving energy can do for you? Those in the first group see limitations to economic growth, upfront payments for building renovations and more efficient equipment, and other short term costs. Those in the second group see long term savings on fuel bills, reduced dependence on imported fossil fuels, and lower emissions, among other long term benefits. It seems support for stronger action on energy efficiency varies with the length of the time horizon you are looking at.

How can these two viewpoints be brought together? How can each side of this divide come to balanced and acceptable views of both the costs and the benefits? Could new actors in the debate, such as those who allocate and receive regional and structural EU funding that is often directed towards efficiency, raise the ambitions of policy makers to the point that energy savings take their rightful place at the”- centre of EU climate and energy policy?

WWF’s European Policy Office recently completed new research into exactly these issues and has developed 6 key principles for achieving more momentum and greater ambition on energy efficiency:

  1. The development of future energy savings policy must be coordinated with the development of other climate and energy policies, and included in a 2030 framework;
  2. Policy makers should not wait until the 2014 Energy Efficiency Directive review of progress on the EU 2020 energy savings target before preparing options for the 2030 framework. This would mean missing, yet again, the timeline of the other energy and climate policies. It is simply asking for failure;
  3. Coordinated climate and energy policy development must include detailed modelling of the interaction of binding targets on energy savings, renewable energy, and CO2 emissions reductions (including through the EU ETS);
  4. The effective and timely implementation of the EED by EU Member States is crucial to realising the long term potential for energy savings;
  5. A binding EU target does not exclude binding measures -the two approaches can be complementary;
  6. The agreement to spend at least 20% of the EU’s Multiannual Financial Framework (MFF) 2014-2020 on climate action must be implemented, with appropriate funding channelled towards the delivery of energy savings.

Ensuring that future policy making is based on these principles will require a break with the failures of the past. The small world of Brussels law making, which becomes smaller still when it is focused on climate and energy in general, and energy efficiency in particular, means this will not be easy.

However, the same WWF research, which included interviews with key players in negotiations over EU energy efficiency policy, highlights three important positive insights:

1. The new context of prolonged economic crisis puts greater premium on saving money by saving energy – for example, meeting the 20% energy savings target would save households over €1,000″each per year;

2. Measures whose primary aim is addressing the economic crisis also provide new opportunities for delivering energy savings;

3. These new opportunities are bringing new actors into the energy savings policy sphere.

New actors will bring a new perspective, unburdened from old arguments. But we must help them to learn fast – by this time next year, the 2030 climate and energy framework should be nearing conclusion.

There is no time to lose


Litmus test for EBRD rhetoric on democracy with Egyptian oil project

Posted by on 19/12/13
By Kuba Gogolewski, BankWatch On December 18 the EBRD board of directors approved a loan of USD 50 million to finance a project aimed at the expansion of oil operations and reducing gas flaring in Egypt. Yet the tenuous political situation in the country continues to raise concerns about the bank’s ability to make a positive contribution towards the democratic process, and whether it should be investing there at all.

La France et l’Europe parmi les bons élèves de la transition énergétique

Posted by on 18/12/13

En l’espace d’une semaine, l’Institut Fraunhofer de Fribourg et le Forum économique mondial ont publié deux études sur l’avancement de la transition énergétique dans le monde et le futur de l’énergie. Au sein des deux classements, la France, la Suède ou encore l’Allemagne, figurent parmi les pays les mieux notés. Les engagements pris en matière de gestion des déchets, d’énergies renouvelables et de nucléaire ont pesé dans la distribution des bons points.


Le premier classement, publié le 5 décembre par l’Institut Fraunhofer pour les systèmes énergétiques solaires de Fribourg-en-Brisgau, rend compte de l’avancement de la transition énergétique pour un panel de pays limité. L’indice mesure à la fois la mise en place des formes renouvelables de production d’électricité et l’utilisation efficace de l’énergie.

Au sommet de ce classement se trouve la Suède, pays à qui l’indice 40 a été accordé. Suivent le Brésil, avec 39, et l’Italie avec 34. Le Royaume-Uni et l’Allemagne ont tous deux reçu l’indice 30, tandis que la France atteint la 7e place, avec 27. Outre le Brésil et le Japon, bien notés par l’Institut Fraunhofer, l’Europe apparaît comme la région du monde la plus en avance dans la mise en place de la transition énergétique. Notée dans son ensemble, l’Union européenne (à l’exclusion de la Croatie) atteint l’indice 25.

« Jusqu’à présent, il n’existait pas d’approche méthodique avec laquelle on pouvait décrire quantitativement les progrès de chaque pays ou région sur la voie de la transition énergétique », explique Eicke Weber, directeur de l’Institut Fraunhofer. « Cet index permettra pour la première fois de décrire la situation d’un pays à cet égard par un chiffre. Il montre que par rapport à d’autres pays, la transition énergétique allemande n’est pas aussi avancée que ce qui est généralement supposé ».

A l’avenir, un pays comme l’Allemagne est appelé à occuper une place encore plus élevée dans ce classement. En effet, le pays pâtit aujourd’hui de sa consommation de charbon, fortement polluante, mais qui devrait diminuer dans les années à venir grâce aux investissements engagés en matière d’énergies renouvelables.

La France également dispose d’atouts significatifs pour mener à bien la transition énergétique. C’est en tout cas ce qu’estime le Forum économique mondial, qui classe la France au troisième rang mondial et au premier rang européen (UE 28) en la matière. Seules la Norvège et la Nouvelle-Zélande, en raison de leurs investissements colossaux dans les énergies renouvelables, ont fait mieux que la France. Pays « à l’avant-garde » pour la durabilité énergétique, le rapport explique que « la politique énergétique française s’est concentrée sur l’équilibre entre énergie durable et abordable ». En outre, la France se distingue par sa gestion des déchets et composants nucléaires, ainsi que par l’engagement du Gouvernement de réduire la part du nucléaire de 50% à l’horizon 2025.

A l’avenir, indiquent l’Institut Fraunhofer et le Forum économique mondial, ce sont naturellement les efforts fournis pour développer les énergies renouvelables qui seront déterminants pour évaluer l’avancement de la transition énergétique. Cela explique la 6e place du Danemark dans le classement du Forum économique mondial, pays appelé à occuper un rang encore plus élevé à l’avenir. Copenhague a en effet pris l’engagement de ne plus recourir aux énergies fossiles d’ici 2050. A cet égard, le Danemark s’appuiera sur les réseaux intelligents, moyen incontournable pour pouvoir intégrer toutes les énergies vertes dans le mix énergétique d’un pays et pour remédier à leur intermittence. La France également, avec la généralisation des compteurs intelligents Linky, pour l’électricité, et Gazpar pour le gaz, a pris pareilles dispositions.


Will Germany cease to be the driving force behind EU climate policy?

Posted by on 17/12/13

The new coalition in Berlin has defined detailed, though rather vague and ambiguous guidelines for its energy and climate policy.

These are bound to have a bearing on EU policy which will be reviewed in 2014-15 during the preparations of the decisive Paris Climate Conference in 2015 (COP 21).

The coalition had little choice but to continue the outgoing government line of reducing green house gas emissions until 2020 by at least 40% over 1990.

However, it refrains from fixing any intermediate steps for reaching the EU-wide target of cutting emissions by 80%-95% until 2050, while the outgoing government had ventured for a 55% reduction until 2030.The new coalition wants to wait for the results of the 2015 Paris International Climate Conference, which are bound to be unsatisfactory!

In view of cutting emissions the new government will continue to focus on expanding renewable power. By law it will fix the future shares of electricity to be generated by wind, solar, hydro, biomass: 40-45% in 2025 and 55%-60% in 2035.

Compared to a 23% share of renewable electricity generated in 2012 these are not very ambitious objectives, because they imply that in 20 years almost half of Germany’s electricity will still be generated by lignite, coal or gas. This is in line with the basic objective of the new government, especially the Social Democrats not to renounce on fossil power plants in the foreseeable future. The new government is therefore likely to have more sympathy with Poland, the other big champion of coal-generated electricity. This does not promise well for EU climate policy.

As a matter of priority, the government will, of course, have to overhaul the present support system for renewable energy, make it compatible with EU competition rules and abolish excessive subsidies. It will get an indirect support in this job by the announcement of EU Commission to open an investigation and potentially declare the German solar and wind premiums as state aids.

The new coalition plans to put more weight on raising energy efficiency through a “horizontal approach” covering buildings, industry, services and households in the framework of “energy efficiency action plans” starting in 2014 and providing for annual monitoring. That deserves praise; but for the time being these ideas do not go beyond vague indications.

The same goes unfortunately also for the objective of achieving an almost “climate-neutral” stock of buildings until 2050. That is an ambitious objective that deserves full support. The coalition should have been more explicit about the volume of renovation during its four-year mandate and the financial resources- grants, low-cost loans and tax allowances (special depreciation) – to be made available. After all, the future must begin today and a multi-billion programme for improving energy efficiency of buildings should be a major instrument for cutting emissions from heating, the biggest source of emissions, and creating a few million jobs during the next 30 years!

Hopefully, the new integration of buildings into the competence of the Environment Ministry might give an unexpected push to overdue thermal retrofitting of buildings.

In conclusion, the platform for the next German government is disappointing for German and European energy and climate policy in the coming years. It lacks a long-term perspective for enabling Germany to succeed its transition to a non-nuclear industrial country with very low green house gas emissions.

Replacing nuclear power plants by lignite and coal fired ones should not become the purpose of the hasty 2011“energy turn-around “.

If the government fails to be much more forthcoming in its actions than the coalition platform Germany will lose its leadership on energy and climate policy in Europe, which would be a shame for Germany and Europe. Unfortunately this appears to be the most likely outcome considering the integration of the Environment Ministry into Economics Ministry and the first declarations of the new minister to make the defence of German industry interests and low energy costs a priority.

Eberhard Rhein, Brussels, 16/12/2013