EU’s new energy strategy faces doubts

EU's new energy strategy faces doubts

The European Union has been a world leader in establishing binding targets on reducing greenhouse gas emissions and building up renewable energy supplies. But as officials in Brussels unveil a new energy strategy, questions are being asked about Europe’s commitment to combatting climate change.

LONDON, 21 January – Governments have stated their positions. Legions of lobbyists have presented final arguments. On 22 January the European Commission is scheduled to release its latest comprehensive climate and energy package, focused on developments in the energy sector up to the year 2030.

Negotiations on the package have been long and arduous: power utilities and big industrial conglomerates within the EU have been particularly vociferous in their opposition to a further set of emissions reductions or renewables targets which, they say, will seriously undermine the EU’s economic competitiveness.

Key issues to be announced by the Commission are 2030 targets for reductions in emissions of greenhouse gases (GHG) and the renewables share of the EU’s energy mix and – crucially – whether these targets will be made legally binding on states within the union.  Measures aimed at achieving greater energy efficiency within the EU will also form part of the new package.

Present EU legislation sets binding targets of a 20% reduction in GHG emissions from 1990 levels and achieving a 20% share of renewables in energy consumption by 2020. The legislation also sets an indicative, non-binding, target of making a 20% improvement in energy efficiency.

The big question now is at what level the Commission proposes to set its 2030 targets: while many countries in the EU, including Germany, France, Italy, the Netherlands and Spain, support a binding target of a 40% cut in emissions by 2030, others – including Poland with its large coal industry – say that target is too high.

Meanwhile green groups and non-governmental organisations say the EU must be more ambitious. They say a 2030 emissions reduction target of at least 50% is needed if the internationally agreed goal of limiting the rise in the global average temperature to 2°C over pre-industrial levels by 2050 is to be achieved and runaway climate change prevented.

Resistance to renewables

They also say the EU cannot expect cutbacks on GHG emissions by other nations – particularly by high carbon emitters such as China and India – if the Commission fails to back continuing substantial GHG cutbacks within the EU.

The EU has declared a long-term target of cutting GHG emissions by between 80 and 95% by 2050.

Upping the target on renewables is proving even more contentious. Though most countries within the EU subscribe to the idea of achieving a greater share of renewables in their energy mix, several are opposed to the setting of legally binding targets. Included in this group is the UK, which has recently announced a major expansion in nuclear energy and also plans a large-scale programme for the exploitation of shale gas.

Latest figures indicate global investments in renewables and low carbon energy fell last year for the second year in a row, with investments in Europe falling by more than 40%.

The EU’s power utilities and other large industrial enterprises have been lobbying hard against setting binding renewables targets and have called for the reduction or abolition of subsidies given to the renewables sector.


They say the EU, by emphasising renewables, is jeopardizing Europe’s economic future: they say EU industries can no longer compete with those in the US, where energy costs are substantially lower due to the large-scale take-up of shale-based oil and gas in recent years.

Jose Manuel Barroso, President of the EU Commission, is reported to be among those against any insistence on establishing a legally binding target for renewables for 2030.

On the other side of the argument members of the European Parliament’s environment and energy committees earlier this month voted in favour of legally binding targets for both emissions and renewables. They also said there must be more decisive action on reducing overall energy usage within the EU and called for a binding 40% target on energy efficiency by 2030.

The new EU climate and energy package is expected to include measures aimed at reforming the EU’s Emissions Trading Scheme (ETS), once touted as a key element in cutting industrial GHG emissions. The ETS has underperformed due to mismanagement and an oversupply of emissions allowances or so-called “pollution credits”.

In March 2014 leaders of the EU’s 28 member states are due to meet to decide whether or not to endorse the Commission’s new proposals. – Climate News Network

Share This:

Energy change means peril for investors

Energy change means peril for investors

Making the transition from fossil fuels to renewable energy sources is essential for the future of our planet, but taking the first steps towards real change will make hugely challenging demands.

LONDON, 1 November – The global energy system is rather like an oil supertanker, sailing the oceans with its vast cargo. Everything is fine as long as the giant ship doesn’t have to alter course or stop suddenly.

The system, overwhelmingly reliant on fossil fuels, is highly complex but over time has been remarkably resilient, delivering considerable economic growth and political and societal stability in many regions.

The trouble, according to a new report, is that climate change and other factors mean the good ship energy is having to change course – but most investors in the sector are either asleep or looking the other way.

The report, compiled by Meteos, a UK-based not-for-profit think tank and strategy company, is the result of an ongoing dialogue between a number of heavy hitters in the investment community along with advisors from the fossil fuel industries and representatives from academia.

“The fact that energy contributes so much both to economic activity and political stability often leads analysts to conclude that the main characteristics of today’s fossil fuel-reliant system are immutable”, says the report.

Many of those contributing to this study do not agree. “The pace of change (in the sector) has been astonishing”, says the study. If investors and the industry itself don’t take notice of what’s going on, then they’ll end up shipwrecked.

Shale oil and gas have brought about an energy revolution in the US, with a dramatic drop in overall energy prices: all this is having a big impact on the finances of the energy companies. Meanwhile in Europe energy utilities are being hit by falling fossil fuel energy demand, particularly in Germany where renewables are taking an ever greater share of the market.

Beware stranded assets

The report says China might exploit its shale gas reserves, the world’s biggest. There’s also a push in the country towards cleaner energy and a decline in the take-up of some fossil fuels, particularly of coal.

“Efficiency improvements, slowing economic growth and aggressive pollution abatement measures are combining with competition from alternatives (particularly hydro and nuclear), leading some analysts to predict an absolute decline in Chinese coal consumption by 2016”, says the report.

And, overhanging the whole energy sector, is the question of climate change.

The study says the market continues to underestimate the potential for climate-related change to the energy system.

“…At some point the disruptive economic impacts of climate change will come to outweigh the benefits of business as usual, and that will eventually lead to a concerted effort to constrain how much carbon is put into the atmosphere.”

Energy investors, says the study, should be more concerned about so called “stranded assets” – fossil fuel reserves listed as corporate assets which will have to stay in the ground if any meaningful action is to be taken on global warming. They also need to keep pace with climate- and energy-related policy and regulatory changes in various countries.

Investors should also take note of significant changes in public opinion on climate-related issues, such as the concerns raised about smog in China which led to environmental issues being highlighted in the country’s 2011-15 Five Year Plan.

The other factor having a big impact on the global energy system is the move towards greater energy efficiency in many countries.

Thinking local

“Across the Organisation for Economic Co-operation and Development countries (OECD) energy consumption has fallen while the economy has grown; for instance, in 2012 energy consumption fell 1.2% while the economy grew 1.4%.”

In Europe there is a big push for more energy efficiency, driven by both climate change and price factors. China has developed targets to reduce the energy intensity of its economy. Even the US, the world’s most profligate energy user, aims to double energy productivity by 2030.

The big energy companies are also threatened by a move towards localised, micro-generation power projects in many areas which could spark a phenomenon described as the “utility death spiral”.

“…As more customers leave, fewer utility customers are left to finance an expensive infrastructure. This in turn drives up utility prices, leading to more customers leaving the utility, and so on.”

Some groups say investors in the fossil fuel industry should divest quickly so as to avoid a fall in corporate share prices when the carbon bubble finally bursts.

Those involved in the Meteos report take a more measured approach, saying investors need to be far more proactive and to take a systematic approach to analysis of the energy system.

The considerable risks of investing in the sector need to be understood. Perhaps most important of all, fossil fuel companies need to be more transparent and willing to disclose their strategies for the future, including how they plan to tackle the risks to their operations posed by climate change. - Climate News Network

Share This:

Air conditioning rise raises temperature

Air conditioning rise raises temperature

Studies into how we use air conditioning technology suggest that our attempts to keep cool are in fact adding to rising temperatures.

LONDON, 27 August – As the world swelters, so will energy demand rise: the heat extremes generated by climate change are likely to raise the global demand for air conditioning by 72%. So people will generate more heat and release more carbon dioxide just to stay cool as the thermometer soars.

Michael Sivak of the University of Michigan began asking questions earlier this year about whether air conditioning created more energy demand than central heating: he now reports in American Scientist that investment in air conditioning technology in the developing world could lead to an “unprecedented increase” in energy demand.

Right now, the US uses more energy to keep cool than all the other countries in the world combined. “But this distinction might not remain true for long,” he says. “Several developing countries rank both among the most populous and hottest areas of the world. As personal incomes rise in those countries, their use of air conditioning will likely go up.”

In just one Indian city, metropolitan Mumbai, he calculates there could be a potential demand for cooling that is about a quarter of the current demand of the entire US.

In all, 87% of US households now have air conditioning and it takes 185 billion kilowatt hours of energy annually to keep American homes cool. But other countries have begun to turn down the thermostat. In 2010 alone, 50 million air conditioning units were sold in China. Air conditioning sales in India are growing at 20% a year.

Cooling is a complicated business. Humans have only to step into their own homes to raise indoor temperatures: body heat – along with the heat from cooking, refrigeration and other activities – stays within the four walls. If the outdoor temperature is 18°C or more, then the surest way to keep the indoor temperature to an equable 21°C is to install air conditioning.

Demand to rise

Dr Sivak used an index of the potential demand for cooling – a quantity called annual person cooling degree days – to calculate future demand and work out what energy usage would be if air conditioning became as prevalent in other countries as it is in the US.

Out of his top 25 countries, 14 were in Asia, seven in Africa and two each were in North and South America. The US has the coolest climate of these 25 countries, even though it has the highest demand for cool indoor breezes.

Altogether, he reasoned, eight of the world’s nations have the potential to exceed US air conditioning use: India would surpass the US 14-fold if Indians adopted US standards of cooling; China more than five times and the Indonesians three times.

Because 22 of the 25 countries are by World Bank definition low-income nations, demand is currently nowhere near its potential peak. But, he writes, future demand has the potential to exceed demand in the US by a factor of 50.

The calculations are crude. They don’t factor in local variations in cloud cover, building design, available personal space, variations in energy efficiency or local difference in the tolerance of high temperatures.

But, Sivak warns, as affluence increases, and as global average temperatures rise, so will demand: “This trend will put additional strains not only on global energy resources but also on the environmental prospects of a warming planet.” – Climate News Network

Share This:

‘World can end poverty and limit warming’

'World can end poverty and limit warming'

EMBARGOED until 1800 GMT on Sunday 24 February
A United Nations scheme intended to guarantee everyone access to clean energy could help to keep global temperature rise below 2°C, researchers say, although it would not achieve this without sharp cuts in emissions of all the main greenhouse gases.

LONDON, 24 February – Eradicating poverty by making modern energy supplies available to everyone is not only compatible with measures to slow climate change, a new study says. It is a necessary condition for it.

But the authors say the scheme to provide sustainable energy worldwide will not by itself be enough to keep the global  average temperature rise below the widely accepted international target level of 2°C. While the scheme can help measures to tackle climate change, it cannot achieve that by itself.

The scheme, the UN’s Sustainable Energy for All initiative (SE4All), if it proves successful, could make a significant contribution to cutting greenhouse gas emissions, according to the analysis from the International Institute for Applied Systems Analysis (IIASA) and ETH Zurich.

The study, published in Nature Climate Change, shows that reaching the three energy-related goals of SE4All would cut GHG emissions and is achievable.

“Achievement of the three objectives would provide an important entry point into stringent climate protection”, says Joeri Rogelj, ETH Zurich researcher and IIASA-affiliated scientist, who led the study.

It found that the short-term goals, due to be reached by 2030, would help achieve long-term climate targets. But to ensure stringent climate objectives were reached, SE4ALL would need to be matched by other measures, the researchers say.

SE4All ‘necessary – but not sufficient’

SE4All’s objectives include providing universal access to modern energy, doubling the share of renewable energy globally, and doubling the rate of improvement in energy efficiency – all by 2030.

While the objectives do not explicitly address climate change, sustainable energy is accepted as vital for cutting GHG emissions: 80% of CO2 from human activities comes from the global energy system, including transport, buildings, industry, and electricity, heat, and fuel production.

“Doing energy right will promote the Millennium Development Goals and at the same time kick-start the transition to a lower-carbon economy”, says IIASA researcher David McCollum, who also worked on the study. “But the UN’s objectives must be complemented by a global agreement on controlling GHG emissions.”

SE4All has global goals, but the researchers say action at regional and national levels will be essential to achieving them. IIASA’s energy programme leader Keywan Riahi, a co-author of the study, says: “The next step for this initiative is already under way, with a large number of national plans that underpin the global objectives.”

They analysed the likelihood of the world limiting global warming to target levels if each or all of the SE4All objectives were achieved. Using a broad range of scenarios, they found that if all the objectives are met, the likelihood of keeping temperature rise below 2°C will be more than 66%.

Many variables

If only the renewable energy goal is met, chances of staying below 2°C will range from 40 to 90%, they say, while achieving just the energy efficiency goal will improve the chances to between 60 and 90%.

But the researchers warn that this result depends strongly on what future economic growth is assumed. They say the  likelihood of reaching climate targets within the scenarios depend on a range of other factors, including energy demand growth, economic growth, and technological innovation.

The study also found that providing universal energy access by 2030 will not hinder long-term climate goals, thanks to the marked gains in energy efficiency that will result. “Sustainable development and poverty eradication can go hand in hand with mitigating climate risks,” says Rogelj.

He told the Climate News Network: “To ensure effective climate change mitigation, a global treaty on greenhouse gases should enforce a cap on global emissions which limits emissions from all sources.

“With such a cap SE4ALL can help to limit emissions from the energy sector, but other measures will have to tackle those from other sources like deforestation, or other gases, like methane from agriculture and waste, or facilitate an even quicker decarbonization of the energy sector, like carbon-capture and storage.”

The new work also quantified the potential costs of reaching the SE4All objectives, which would amount to increasing energy investment by between 0.1 and 0.7% of global GDP. The authors’ estimates account for the substantial savings in energy use and reduced fossil energy investment that would result from promoting more sustainable energy technologies and lifestyles. – Climate News Network

Share This:

‘Most fail’ to end poverty while cutting emissions

'Most fail' to end poverty while cutting emissions

EMBARGOED until 0001 GMT on Monday 21 January
The world’s attempts to achieve sustainable development – tackling poverty and simultaneously curbing greenhouse gases – seem condemned to widespread failure unless politicians change course, a study claims.

LONDON, 21 January – World leaders have so far failed to raise people out of poverty by economic development while at the same time avoiding the worst effects of climate change, Swedish researchers say.

A study of 134 countries published by TCO, a confederation of 15 Swedish trade unions (based on data from the TCO RioRank database), shows that sustainable development is not yet close to being achieved, despite it being the stated aim of many politicians.

Yet it remains the official policy of the United Nations, the aim of climate negotiations, Earth summits and many international economic forums.

The theory is that countries can develop and at the same time reduce carbon dioxide emissions by combining energy efficiency and the greater use of renewable sources of power.

About 40 countries have managed to do this, but the vast majority have not – and among those that have failed, the study says, are the fastest-growing economies and the most polluting: China, the US and India.

Efforts nullified

The starkest example is China, whose development has been monitored since the first Earth Summit in 1972 in Stockholm. There the economy and the environment were for the first time discussed together in a United Nations setting, giving rise to the idea of sustainable development.

In an extraordinary period of growth, in which it has lifted many millions out of poverty, China has also topped the league in energy efficiency measures. It became 77% more fuel-efficient per unit of GDP between 1972 and 2007, saving billions of tonnes of CO2 from entering the atmosphere.

At the same time the country’s economy has grown so dramatically, more than 10 times, that it has wiped out all these gains. That means that despite these efficiencies China also leads the world as the country that has increased CO2 emissions by the largest amount, to six times more than in 1972.

The world’s other large polluter, the US, has done the same. It has become more efficient, producing 27% more with the same amount of energy. But because the economy has grown, although much more slowly than in China, pollution levels have continued to rise – only 22% since 1972, but still adding to the overall atmospheric CO2 load.

One important point in the report, by the Swedish Confederation of Professional Employees, is that energy efficiency makes countries and companies more competitive. The report says it is very bad news for countries engaged in world trade if they are less energy-efficient than their competitors while the price of energy continues to rise.

This is especially bad news for India. Unlike China, with its 77% increase in energy efficiency, India has managed only 3%, while using 500% more energy. This makes it a major polluter saddled with inefficient industries that will not be able to compete in world markets.

Across the world it is the European Union countries that do best overall, although for different reasons. The eastern European countries now in the EU, formerly part of the Soviet bloc, suffered economic collapse after 1991 and as a result emissions went down hugely.

They are now rising again as economies grow, but these countries have new fuel-efficient industries so emissions overall are still well below 1991 levels.

Conflicting pressures

Of the larger economies Germany, the United Kingdom and France have all managed to reduce their emissions over a 40-year period while their economies have continued to grow, albeit well below the pace of the tiger economies of Asia. Germany has reduced total emissions by 22%, France by 20% and the UK 18%.

One point the report underlines is that all 134 countries studied have different resources and politicians prone to making different decisions. Some produce most of their energy from renewable sources, like Iceland and Zambia.

China’s example is especially instructive. Thirty years ago it produced 40% of its electrical power from renewables: since then, to keep pace with development, it has invested heavily in fossil fuels. China’s renewable industry has grown dramatically, but it now accounts for only 14% of overall electricity supply.

The report shows how difficult sustainable development is to achieve, as governments are pulled in opposite directions, and also how agreement on a fair way to cut emissions becomes almost impossible. Because resources, growth rates and stages of development differ, so do priorities and policies.

And because politicians have already made strategic decisions on building power plants, it is very difficult to see how they can settle on another agreement to succeed the Kyoto Protocol that will involve the entire world and seem fair to everyone. – Climate News Network

Share This: