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South Stream Shapes European Energy Security, Nabucco Falls Behind By Igor Alexeev South Stream is an ambitious endeavor of Russia’s energy giant Gazprom to get direct access to the EU energy market. It is portrayed and criticized by some politicians in Europe as a “dangerous” gateway to a broader economic relationship with Moscow. Remarkably enough, Bulgaria, Serbia, Croatia, Slovenia and Hungary have one-by-one opted for the project. |
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The Big Drill: All Eyes on Cyprus’ Aphrodite By Ana-Maria Tolbaru It’s Spring 2013. The time is now for Noble Energy men to start gearing up for a new drilling leg in the Eastern Mediterranean waters, offshore of Cyprus. In a usual so-called ‘appraisal’ procedure, several wells will be drilled in various spots of Cyprus’ Aphrodite gas field to determine its size and quantify the hydrocarbon reserves. A rig should be made available by June, so that the operation can kick off as planned. Cyprus, together with the Noble Energy team, is holding its breath: this discovery could turn Cyprus into Russia’s main competitor in European gas supply. But are they right to be hopeful? European Energy Review looks into the level of certainty of the recent gas finds. |
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The EU Third Package for Gas and the Gas Target Model: major contentious issues inside and outside the EU By Katja Yafimava, Oxford Institute for Energy Studies The general provisions introduced by the Third Package (which became law in March 2011) and the detailed provisions to be outlined in the pan-European network codes for cross-border issues (currently under development) are set to fundamentally change the architecture of the EU gas market heralding a transition to a new model. Ensuring that the transition to this new model is as smooth as possible, and that it results in the creation of a fully liberalised EU gas market, requires a clear vision of its main characteristics and the means of achieving them. |
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Health costs associated with air pollution By the Health and Environment Alliance (HEAL) Health and Environment Alliance (HEAL) has launched a major new report which provides the first even economic assessment of the health costs associated with air pollution from coal power plants in Europe. |
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Current German Energy Policy - the "Energiewende": A UK and climate change perspective By John Rhys, Oxford Institute for Energy Studies This comment considers German energy policy, as set out in the Energiewende, as seen from the perspective of attempts to reduce CO2 emissions, and the ambitions of the EU to be considered global leaders on this issue. |
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First steps towards into the unknown. The possibilities prospects of unconventional gas extraction in Ukraine By Mykhailo Gonchar, Centre for Eastern Studies Ukraine’s deposits of unconventional gas (shale gas, tight gas trapped in non-porous sandstone formations, and coal bed methane) may form a significant part of Europe’s gas reserves. Initial exploration and test drilling will be carried out in two major deposits: Yuzivska (Kharkiv and Donetsk Oblasts) and Oleska (Lviv and Ivano-Frankivsk Oblasts), to confirm the volume of the reserves. Shell and Chevron, respectively, won the tenders for the development of these fields in mid 2012. Gas extraction on an industrial scale is expected to commence in late 2018/ early 2019 at the earliest. According to estimates presented in the draft Energy Strategy of Ukraine 2030, annual gas production levels may range between 30 billion m3 and 47 billion m3 towards the end of the next decade. |
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How the Alternative Energy Megatrend will impact global geopolitical relations The Greening of Geopolitics By Dr Alexander Mirtchev The advent of renewable energies is generally regarded from a fairly narrow perspective: whether – and to what extent – they are able to replace fossil fuels and what this would mean for the energy system and the economy. Such a perspective profoundly underestimates the potential consequences of what is in fact a revolutionary global development: a socio-political and techno-economic megatrend that has the ability to become a global societal game-changer, writes Alexander Mirtchev, Vice-President of the Royal United Services Institute for Defence and Security Studies (RUSI). According to Mirtchev, the ‘Alternative Energy Megatrend’ will have far-reaching effects on global geopolitical relations and security concerns – effects that have yet to be fully grasped by most observers. This article is adapted from his upcoming book: “The Alternative Energy Megatrend: A Global Security Discourse in the Universally-Securitized World”. |
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EER Monthly May 2013
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Collaboration is Shell’s strategic answer to future volatility By Ben Warner With its recently published New Lens Scenarios, Shell provides contrasting visions of the future in the decades ahead. In the foreword, the company’s CEO Peter Voser indicates what may emerge: “We expect demand for critical resources, like water, energy and food to have risen by 40% - 50% by 2030. To meet those needs without significant environmental detriment, business as usual will not be an option – we require business unusual.” |
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New Approach towards “the life blood of our society” - EU Energy Infrastructure By Jozef Badida The importance of energy infrastructure for the integration of European energy markets is unquestionable. The European Union and its member states have already recognized many times the significance of the development of trans-European networks, contributing to the achievement of the EU´s ambitious energy and climate goals (20/20/20 targets, decarbonisation, competitiveness, sustainability, security of supply, and elimination of energy isolated islands). [note 1] |
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Profile: Jochen Homann, Marathon Man for the Energiewende By Paul Hockenos, Berlin The Merkel government thought it was getting something different when it appointed Jochen Homann to the powerful post of President of the Federal Network Agency (Bundesnetzagentur, BNetzA) just over a year ago. After all, the 59-year old Homann – even though member of no political party – had been a loyal cog in the machinery of the Federal Ministry of Economics and Technology, a bastion of neo-liberal conservatism, where he served as State Secretary since 2008 and in other functions since 2001. |
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Can power markets resuscitate natural gas in Europe? By Timon Dubbeling If the integration of variable renewables into Europe’s power systems is to continue in the decades to come, more needs to be done to ensure that the most flexible resources are available in the market. Gas-fired power generation is considered to be a key enabler of the energy transition due to its ability to compensate for variable renewable output. However, increased electricity production by renewables, low coal prices, energy efficiency measures and overall economic woes have reduced gas demand in recent years. In order to obtain the flexibility needed to manage a system with an ever-increasing share of variable renewables, power markets will have to reward generators on the basis of the ramping services they can deliver. Doing so will also help to get the flexible gas capacity back into the market and counter the coal renaissance that has a detrimental impact on Europe’s climate agenda. |
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Vattenfall – is the state the right and a good owner? By Reiner Gatermann Vattenfall is Sweden’s by far largest utility. In the year 2000, the state owned company left its national territory to become Germany’s third and Europe’s seventh largest electricity supplier. In general it has become a success story. However, not everyone, especially in Sweden, sees it that way, and even less so after the acquisition in 2009 of the Dutch gas company Nuon for €8.5 billion. Some, among them the newly elected leader of the social democratic opposition party, Stefan Löfven, calls it the “worst business transaction in Swedish history”. |
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East Africa Gas - The Potential for Export By David Ledesma, The Oxford Institute for Energy Studies In the world of upstream oil and gas, the emergence of a major new prospective area always creates a frisson of excitement. David Ledesma's paper on the prospects for gas in Mozambique and Tanzania captures the excitement of the confirmation of a major new hydrocarbon play and conveys the pace at which resources were mobilised and the sheer scale of the discoveries made over a very short time period. |
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Study: building efficiency off track By the Buildings Performance Institute Europe Without further guidance, EU countries may mismanage their energy efficiency commitments and risk missing their energy savings' target. |
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Buildings Energy Efficiency in China, Germany and the US By Climate Policy Initiative This report compares energy efficiency policy in buildings in China, Germany, and the United States, providing the context for, and describing, policies in these three countries in order to lay the groundwork for future review of policy effectiveness. |
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International Energy Agency Photovoltaic Power System Programme (IEA PVPS) publishes its new 'Snapshot of Global PV in 1992-2012' report By International Energy Agency Photovoltaic Power System Programme IEA PVPS published its new Snapshot report on Monday 8 April. Preliminary to its Trends Report that will be published in September 2013, this report provides estimated data about photovoltaic (PV) capacity in the 23 countries reporting to the IEA PVPS Programme. At least 96.5 GW of PV are now installed worldwide, while in 2012, we observed a stabilization of the market and significant market growth in Asia. |
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Kurdistan's natural gas resources may become a game-changer over the longer term By Olgu Okumus If a firm manages to create a dominant position in the Kurdistan Region of Iraq (KRG) oil business this could, in the long term, open a door to the gas business, as it did in the Caspian zones in the 1990s, when the Baku-Tbilisi-Ceyhan oil pipeline prepared the ground for the South Caspian gas pipeline and TANAP, the Trans-Anatolian gas pipeline. A similar future may be possible for the KRG and the firms working within it. The KRG’s proven gas reserves are estimated at 2.8-5.7 trillion cubic meters. That is about four times more than Azerbaijan's reserves. In the perspective of the southern energy corridor projects, KRG’s natural gas sources may become a game-changer over the longer term. |
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The Netherlands has to speed up its transition efforts By Gert van Wijland With its strategic location, huge gas reserves, highly developed infrastructure and well-developed information economy, the Netherlands is a crucial link in the northwest European energy market. But due to the lack of a long term vision – combined with its economic dependence on fossil fuels – its much-needed transition to a sustainable energy supply has barely taken off. A badly managed transition could severely damage the economy, but failing to reduce the dependence on fossil fuels is both economically and environmentally unsustainable. |
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EER Monthly April 2013
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Onshore power supply: caught in a chicken and egg situation By Gert van Wijland The EU is mulling ways to get ships to use onshore power instead of diesel generators when they are in port. Onshore power supply (OPS) can play a key role in improving local air quality and cutting noise pollution in port regions, as well as being an effective weapon in the battle against climate change. On many inland waterways in Europe berthed vessels are already prohibited from using onboard generators. Following the lead of US states such as California, Europe is now weighing the introduction of a similar ban for maritime shipping. But the initial investment involved is substantial for both ship owners and infrastructure providers and that’s why both are holding back. An EU-wide directive could break the impasse, experts say. But the European Commission won’t go that far – yet. For now, it’s mulling tax breaks. |
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Nordic Balance Settlement, cornerstone to a common Nordic power retail market By Reiner Gatermann The EU has many visions, more or less realistic ones. One vision is the creation and establishment of an European common retail market for electricity. On the way to this goal there are many obstacles to be removed. It begins with the insufficient political will, continues with fragmented legislation and ends with technical problems. Norway, Sweden and Finland however are convinced that all these barriers are surmountable. Their goal: To start in 2015 their own common power retail market with many positives (legal and technical harmonisation and long term savings) and a few negatives (high start up costs). And their hope: To present an effective and workable example to the up to now hesitant partners in the EU. |
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The True Challenges Facing the German Energiewende Two years after Fukushima the road to a renewable future is gradually becoming clear by Rainer Baake, Director of Agora Energiewende A new German expression is making its way into the English language, joining Kindergarten and Zeitgeist – Energiewende. Directly translatable as "energy transformation," it refers to the broad effort underway in Germany to remake the country's energy economy and transition to renewables. This effort has attracted international attention. And the adoption of the term in English reveals a certain sense of wonder. For indeed, if the phasing out of coal, gas, and nuclear in favour of wind and solar were an everyday affair, there would be little reason to memorize a cumbersome new German term. |
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Japanese utilities may snub Putin's plan to feed Asia with LNG By Rudolf ten Hoedt DISPATCH FROM TOKYO: "LNG from Vladivostok is no go -STOP- utilities not buying -STOP- Gazprom needs to change strategy." Friday February 22nd, this news dispatch from news agency Nikkei exploded in energy circles in Japan's capital Tokyo. Nikkei had just suggested that Russian gas export monopoly Gazprom had taken the final decision to build a liquefied natural gas plant (LNG) in Vladivostok on the Pacific coast of Russia's Far East. That morning telephone lines from Tokyo to Moscow were red hot. The LNG plant in Vladivostok is scheduled to start operations in 2018, Nikkei reported, and is meant for export to customers in Asia, including Japan. |
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Lowering the Price of Russian Gas: A Challenge for European Energy Security Part II An uphill battle on Russian gas prices on the horizon By Adnan Vatansever and David Koranyi Europe's energy discourse has been unjustifiably preoccupied with concerns about potential physical disruptions of Russian gas. The real challenge for European-Russian energy relations, and in fact, for European energy security, lies in settling on a price that leaves both sides content. While Europe will come under increasing pressure to acquire affordable energy resources to enhance its competitiveness, Gazprom may find it increasingly difficult to deliver gas at lower prices in the coming years. |
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Never think conventional if it is about the future By Ben Warner In the former editorial I argued that the fast changes in the energy sector could lead to a race between market developments and strategies in a more complicating environment. Let me explain. |
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Lowering the Price of Russian Gas: A Challenge for European Energy Security By Adnan Vatansever and David Koranyi Europe's energy discourse has been unjustifiably preoccupied with concerns about potential physical disruptions of Russian gas. The real challenge for European-Russian energy relations, and in fact, for European energy security, lies in settling on a price that leaves both sides content. While Europe will come under increasing pressure to acquire affordable energy resources to enhance its competitiveness, Gazprom may find it increasingly difficult to deliver gas at lower prices in the coming years. |
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A race between fast changes in markets and strategies comes into being By Ben Warner How fast can markets and strategies turn? Those who thought that the relationship between Russia and Europe concerning energy supply in former days was rather complicated may reconsider their opinions in view of what is coming into focus. The writers oftoday's main feature offer you a factual analysis of new market factors that make pace influencing the pricing of energy, especially that of natural gas. |
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Battleground Energiewende, part II The Lost Honor of Germany's Energiewende: An Analyst Returns Fire in the War of Words By Paul Hockenos Claudia Kemfert, Director of the Energy, Transportation, and Environment Unit at the prestigious Deutsche Institut für Wirtschaftsforschung in Berlin and one of the best-known energy experts in Germany, has had enough of the "Energiewende-bashing" that she feels has stymied the progress of the country's energy transition and sullied its reputation. She has set out to explode the myths and lies that are being spread by Energiewende-sceptics. "When these myths are repeated again and again, they sink in," she tells EER's Paul Hockenos in Berlin. "Not so long ago Germans were extremely concerned about climate change and the dangers of nuclear power. Now they're scared of the Energiewende." |
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Diversification: a blessing or showstopper? By Ben Warner It seems that Europe is following two tracks concerning the energy transition. Eurocratics believe in a topdown approach in order to unite the member states under an umbrella of collective regulations that advance the transition towards a sustainable future. The member states themselves follow a trail very much linked to their national characteristics as far as energy is concerned. Discussions are rising, as this weeks main feature makes clear. |
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EER Monthly March 2013
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Christof Rühl, Group Chief Economist of BP, unveils the hidden forces that steer the global energy market to a new future "The energy system moves slowly – but it does move" By Karel Beckman Speaking with Christof Rühl, Group Chief Economist of BP, is like getting a unique tour through the past, present – and future – of the global energy world. Rühl has a crucial – and inspiring – story to tell about how market forces, even though they are sometimes deeply buried beneath stormy state interventions, slowly but surely steer the Ship of Energy to new and undiscovered lands. EER's editor Karel Beckman spoke with Rühl about what our energy future holds in store: about the tremendous importance of technological innovation in the fossil fuel industry, which most outside observers completely miss; about what role renewables could play, if they were harnessed by market forces; about the far-reaching changes taking place in the global gas sector, which are primarily a result of liberalization and competition; about the evolving roles of national and international oil companies and governments who are all tugging at the energy beast. "It may be a slow-moving beast", Rühl says about the global energy system, "but it does move." |
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Hello goodbye By Karel Beckman As you can read in the publisher's notice above, this is my last editorial for European Energy Review. It's goodbye for now, but I hope there will be many hellos again in the future. |
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Interview: Susanne Nies of Eurelectric "We have a problem with politics" By Karel Beckman The goals the European Commission has set for Europe's energy transition and for the internal energy market cannot possibly be met with current policies. That is the stark message given out by Eurelectric, the European electricity industry association. Of the investments of about €1 trillion that are needed to ensure the energy transition, no more than half will occur, according to a Eurelectric survey among energy executives. Nor is the EU's ambition to complete the internal market by 2014 likely to be realised, the association adds. According to Susanne Nies, who is in charge of Energy Policy at Eurelectric, "overregulation" and "unpredictable policies" have wrecked the investment climate in the European electricity sector. |
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Back in the USSR? By Karel Beckman This was the dream: a single European copper plate. A single dynamic innovative European energy sector with suppliers competing freely - like car manufacturers or oil companies. The State? It would have withered away. It would be present only in the background, setting the regulatory framework, but not interfering in the market. |
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The EU's vision: across the continent, cars will be able to tap into electric plugs and hydrogen, LNG and CNG refuelling stations How Europe is shaping its future road transport fuel mix By Sonja van Renssen With its new "clean fuels strategy" the European Commission is proposing the rollout of a standardised charging infrastructure that is supposed to finally unleash the long-awaited, large-scale introduction of electric cars on the European market. In addition, Brussels wants to see the build-up of a network of hydrogen, LNG and CNG refuelling stations for cars, trucks and ships. The goals are to reduce Europe's dependence on expensive oil imports, create jobs and decarbonise the transport sector. The initiative comes at a crucial moment for the transport sector, as biofuels, thus far the only successful renewable alternative to oil in road transport, are facing uncertainty as a result of new sustainability proposals. Sonja van Renssen reports from Brussels. |
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Long and winding roads By Karel Beckman In this edition of our newsletter I discuss some possible Roads to Re-industrialisation in Europe. I have this strange notion that this is a subject that we should perhaps be reading and talking about every day rather than about some sordid murder on the other side of the world. I know, very naive of me. |
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Evan Thornley of Better Place on why "the oil reduction business" is the place to be "People hate buying gasoline more than anything else" By Sonja van Renssen "Batteries are getting cheaper, gasoline is getting more expensive and every single public policy variable is in favour of electric cars." This is how Evan Thornley, ex-CEO of electric car infrastructure provider Better Place sums up the future of electric vehicles. When it was created five years ago by charismatic Israeli entrepreneur Shai Agassi, Better Place rapidly became one of the most talked about green ventures. It turned conventional thinking on its head with a focus on electric cars for long-distance driving, not just for city centres, and the innovative concept of battery switch stations. Lately, with the departure of Agassi last October, and the announcement that the company is scaling back operations in North America and Australia, Better Place seems to have run into trouble. But the company has lost none of its drive, said Thornley in an interview with European Energy Review in December: "We're a little slower than we would have liked. But we're just about at that point now where it's all out there." And he is convinced electric cars have the future, because "people hate buying gasoline more than anything else." |
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It's electrifying! By Karel Beckman I got chills they're multiplying; and I'm losing control; cause the power you're supplying; it's electrifying! |
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A Presidential Decision That Could Change the World The Strategic Importance of Keystone XL By Michael T. Klare On Sunday, February 17th, a large "forward on climate" rally is to take place in Washington. Originally organized by the environmentalist group 350.org and writer-activist Bill McKibben, but now involving dozens of groups, it is expected to draw protestors from all over North America. Their goal is, in part, to push President Obama to put a halt to the Keystone XL pipeline. Should he do so, the Canadian tar sands industry could suffer a fatal blow, as Michael Klare explains in this article. "Fundamental views about the future of energy are in conflict." |
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Can leak detection end the pipeline impasse? By James Stafford, oilprice.com One of the issues that is being hotly debated in the US at the moment is that of pipeline safety. We tend to think of pipeline leaks and accidents as things that take place mostly in countries like Nigeria. Actually, oil companies in the US pay up to $5 billion in damages each year due to pipeline-related accidents. A US company called Synodon has developed new technology to detect pipeline leaks. Founder and CEO Adrian Banica explains how this technology could help allay at least one environmental concern of pipeline protesters. But he does not believe that it will persuade environmentalists to give up their protests against the Keystone XL pipeline. They have a "philosophical position based on decreasing CO2 emissions rather than one based on spills in the environment which will not be appeased by regulations", he notes. |
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Twenty Something By Karel Beckman After the EU adopted the famous 20-20-20 targets, we now learn that 20% of the new proposed EU budget for 2014-2020 is to be spent on climate action. Does Mr Barroso want to go down in history as Mister 20%? |
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Kosovo's complex energy crisis might be solved by the Turks rather than Europe or the US Blackouts, black clouds and guns By Ana-Maria Tolbaru Kosovo's single energy distribution and supply company has recently been taken under the care of a joint-venture of two Turkish companies, Limak Insaat and Calik Holding, who won a long-drawn out bid. The acquisition is part of a wave of privatisation of the state's assets, which started in 2008, to attract investments in one of Europe's poorest countries. Limak and Calik bought the company in June 2012 at what many considered to be a rather advantageous price for such an asset: €26.3 million. But the package includes some treats that most energy companies would not very much relish: regular electricity cuts, non-payment of energy bills, political duties and even the possibility of having to deal with future civil unrest are just some of the daunting challenges the Turks will face. |
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Why the Energy Charter Treaty could become the key to the success of the Trans-Afghan energy corridor By Danila Bochkarev The energy deficits and power shortages in Southwest Asia force key regional players to look for new sources of supply at home and abroad. Turkmenistan's gas and Central Asia's hydroelectricity could become indispensable sources of energy for the regional states, in particular for Pakistan. Afghanistan could become a key gas and electricity transit corridor. But this can only happen if a regional multilateral framework is created in which energy investments are secure. Probably the best way to achieve this is by further extending the Energy Charter Treaty (ECT), which already has a considerable presence in Central Asia, to encompass all the major players in Southwest Asia. The ECT might even become for Southwest Asia what the European Coal and Steel Community was for Europe. |
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Climate wins, energy loses in new EU budget By Sonja van Renssen The proposed EU budget for energy interconnections and smart grids has been cut sharply under last week’s budget deal. Climate funds, however, are set to triple compared to today, as EU leaders agreed to commit 20% of all EU spending to climate action. Director-General for Energy Philip Lowe insists that less money in EU funds may not mean fewer projects, since 'a lack of money is not the main barrier to new energy infrastructure'. |
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Smog on the water By Karel Beckman What does it mean when the Chinese authorities plead with people to please not set off fireworks during the Chinese New Year celebrations? I guess it means good news for the global gas industry. |
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After tackling biofuels, Brussels turns its guns on solid biomass By Sonja van Renssen The European Commission plans to issue proposals for binding EU sustainability criteria for biomass in the first half of this year. The idea is to pre-empt an environmental backlash of the kind that has thrown biofuels from favour. |
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Bert den Ouden, CEO of APX-Endex, sounds alarm on the internal energy market "European power markets are being split apart by political fickleness" By Karel Beckman Bert den Ouden, CEO of APX-Endex, the Amsterdam-based gas and power exchange raises the alarm: power prices in North West European markets are diverging for the first time in years. This means that markets are becoming more fragmented again instead of more integrated - in contradiction to what EU internal market policy is all about. According to Den Ouden, this development is the result of political decisions. "As a result of their unilateral and inconsistent policies, policymakers are splitting up markets faster than network operators and power exchanges can tie them together which can potentially be detrimental to end-users." Den Ouden calls on policymakers to agree to an "EU Energy Stability Pact" that would at least compel national governments to take into account the effects of their measures on their neighbours. |
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Mean Mrs Merkel By Karel Beckman On Monday an interesting meeting of minds took place at an energy conference in Essen, Germany, on the eve of the big annual E-World Exhibition. The idealistic German energy world view brushed with more pragmatic outside views. With instructive results. |
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German and Polish Energy Policies: Is Cooperation Possible? By Jaroslaw Cwiek-Karpowicz, Aleksandra Gawlikowska-Fyk, Kirsten Westphal Neighbours Poland and Germany have recently started to engage and intensify their dialogue on bilateral energy issues. This may prove to be an indispensable step forward in the future design of integrated EU energy and climate policies. |
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Evolution in the Russian gas market - competition for customers Oxford Institute for Energy Studies The Oxford Institute for Energy Studies has published papers by James Henderson and Simon Pirani which evaluate the development of competition in the Russian gas production sector and the impact of the recession and pricing policies on demand for Russian gas in its main markets. |
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Risk Gaps Climate Policy Initiative Risk — whether real or perceived — is the single most important factor preventing renewable energy projects from finding financial investors, or raising the returns that these investors demand. It is also one thing that policymakers can cause, control, alleviate, or help mitigate. In a series of three studies, titled Risk Gaps, CPI maps the availability of risk instruments against demand and analyzes several new, potential instruments designed to address the biggest gaps: first-loss protection instruments and policy risk insurance. |
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The Performance of Wind Farms in the United Kingdom and Denmark Gordon Hughes The Renewable Energy Foundation published a new study showing that the economic life of onshore wind turbines is between 10 and 15 years, not the 20 to 25 years projected by the wind industry itself, and used for government projections. |
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Battleground Energiewende, part I How Germany's conservatives are trying to navigate the stormy waters of renewable energy in election year 2013 By Paul Hockenos Germany's environment minister Peter Altmaier of the CDU opened the election year debate over the Energiewende with a bombshell: he proposed that the renewable energy surcharge paid by consumers (currently 5.3 cents kWh) be frozen for two years, that some previously exempt industries step up to pay at least some of the costs, and that owners of clean energy production facilities chip in to cover costs. The proposals led to a storm of criticism. Regardless of who is wrong and right, what the affair illustrates above all is that the Energiewende is already a prickly, fast-moving campaign topic. The conservatives (CDU and CSU) in particular often reveal an ambivalent attitude towards their own Chancellor's prestigious project. In the first part of a two-part series, Berlin correspondent Paul Hockenos explains the conflicting attitudes of the various conservative factions towards green policies. |
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The rise of the gas independents: a game changer for Russia By Danila Bochkarev The rise of independent gas producers in Russia marks a paradigm-shift for the domestic market, and could ultimately challenge Gazprom's dominant position in the export market, according to Danila Bochkarev, Senior Fellow at the EastWest Institute in Brussels. For the EU's drive towards diversification of gas supplies, the emergence of new suppliers could be welcome news. |
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February made them shiver By Karel Beckman Some Anglo-Saxon media last week announced the death of the German Energiewende, as CDU Environment Minister Altmaier announced measures to curb rising energy prices. But this is a misunderstanding of how the ruling German conservatives of CDU and CSU feel about renewable energy. Which is very different from their UK and US counterparts. |
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EER Monthly February 2013
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Algerian attack signals dwindling prospects of North African oil and gas production By David Drury The tragic and dramatic events at the BP/Statoil In Amenas gas plant in Algeria provided a shocking reminder of the vulnerability of major energy installations to terrorist attacks. The incident prompts a whole series of questions about the physical security of oil and gas workers and installations in dangerous environments, as well as raising the inevitable concerns about Europe's security energy of supply. The implications of the attack certainly seem disquieting for the international oil companies. But how worried should Europe be about the security of its oil and gas supplies from North Africa in the wake of the In Amenas horror? Here there may be less cause for serious concern. David Drury, Managing Consultant with Gas Strategies and former General Manager of BP Algeria, reflects on the immediate and longer-term implications of the In Amenas attack. |
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Why international oil companies are turning their back on Bagdhad By Olgu Okumus Iraqi Kurdistan has fairly suddenly become a magnet for international oil companies (IOCs), who are increasingly turning their back on the central government in Bagdhad and seeking their fortunes in Erbil. The reasons for this change have to do with Bagdhad's inability to create a reliable investment framework, but they are also geopolitical in nature. With the Syrian crisis, two alliances have formed in the region: the Ankara-Erbil axis, supported by the US and the Gulf States and the Tehran-Baghdad-Damascus axis. As a result, energy investments in Kurdistan will inevitably have political overtones, as they will serve as support for one party over the other. |
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Eve of destruction By Karel Beckman Who remembers the "Arab Spring"? The bright hopes for North Africa and the Middle East seem to have become very black in a very short time. This should make us all very worried. |
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The uncertain future of Gazprom: the moment of truth is approaching By Andrej Tibold Gazprom is finding itself between a rock and a hard place. Adverse market circumstances are putting pressure on the company's financial results and international market position. At the same time, the government is pushing Gazprom into huge investments that the company can ill afford and demanding much better results. If the company does not deliver, it might lose its export monopoly and be broken up into a production and supply unit and an infrastructure unit, say leading experts on Russia's gas industry. EER spoke with two of them. |
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Europe should address the "coal renaissance" by reforming its gas market By Maria van der Hoeven, Executive Director of the International Energy Agency (IEA) Coal is making a remarkable comeback in Europe. Indeed, Europe, which collectively pays so much to stay at the forefront of the clean energy revolution, is consuming ever more of the dirtiest mainstream fuel. But the way to address this problem is not merely to reform the EU Emission Trading Scheme (ETS) to push up the price of coal high enough to make gas competitive. This would be hugely expensive to energy users and hurt the European economy. Instead, policymakers should finally get serious about reforming the gas market to make gas a more competitive fuel. |
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Energy Wonderland By Karel Beckman In which King Coal makes a comeback, President Putin loses his patience with Gazprom, Prime Minister Cameron contradicts himself and Executive Director Maria van der Hoeven says it's time for some real action on the gas market. |
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Interview: Benjamin Gallèpe of the Mediterranean Energy Regulators (MEDREG) Clearing regulatory hurdles to exploit renewable energy in North Africa By Heather O'Brian It is taking longer than expected for renewable energy in the Middle East and North Africa to develop, as political and social unrest make investors uneasy and the European economic crisis has taken a toll. According to Benjamin Gallèpe, Director of the Permanent Secretariat of the Mediterranean Energy Regulators (MEDREG) association, North African countries will have to develop an economic model that better reflects "the real costs of energy". European countries for their part will have to develop a model that will make imports of (more expensive) renewable energy from the south possible. Gallèpe says the EU-sponsored Mediterranean Solar Plan, the flagship initiative of the Union for the Mediterranean to promote renewable energy in North Africa, has so far been "largely a diplomatic exercise", which will now have to be turned into a more practical approach: "We need to facilitate dialogue with the main energy investors" and "build a common, level playing field in terms of regulatory and economic conditions". |
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Reassessing "market relevance": why national boundaries are increasingly irrelevant in measuring competition in gas spot markets in Northwest Europe By Santiago Katz and Catrinus Jepma The 'relevant market' for gas spot sales in Europe is currently being determined by most regulators along national boundaries. The widely accepted 'Gas Target Model', developed by the Council of European Energy Regulators (CEER), similarly measures competition in the spot gas market on a national basis. In the final segment of a three-part series on European gas hubs, Catrinus Jepma and Santiago Katz of the Energy Delta Institute argue that such an approach does not do justice anymore to the reality of the gas market in North West Europe. On the basis of the criteria specified in the European Commission's key Notice on the definition of relevant market for the purposes of Community competition law, they show that the relevant geographic market for spot gas wholesale is regional (international) rather than national. This is important because it turns out that on a regional basis competition in the North Western European gas markets is much stronger than has thus far been assumed by regulators. |
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We all stand together By Karel Beckman The struggle for European energy market integration is an uphill one - certainly when you want to connect North Africa to Europe as well. Here are two dispatches from the integration front. |
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Why the UK's new energy master plan sets an example for the rest of Europe By Robert Hensgens The UK once set the trend for the rest of Europe with the liberalisation of its energy market. Now, with a series of new legislative and policy proposals, London seems to be turning back the clock on liberalisation and returning to considerable state intervention in the energy market. Many observers have criticised the UK for having "lost faith in the market". But according to Robert Hensgens, the UK government deserves credit for its ambitions and the way it faces up to the twin challenges of the energy transition and security of supply. Although he is critical of the UK's unilateral approach, he believes London may well once again be leading the way in Europe. |
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Ever the twain shall meet By Karel Beckman "Where politics and markets meet" is - since the beginning of this year - the slogan of European Energy Review - and it was never as appropriate as in today's edition of our newsletter. |
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Dieter Helm's new thriller separates climate fiction from fact By Karel Beckman Dieter Helm's new book "The Carbon Crunch" reads a bit like a detective novel. It is about "who killed climate policy". And how we can revive the corpse. |
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Biofuels under attack - Germany's Best Practice Certification to the rescue By Paul Hockenos, Berlin With the growth of bioenergy across the globe, the debate over its relevance and impact has intensified, pitting the industry and bioenergy's diverse adherents against climate campaigners, critical scientific organizations, and even the likes of the European Commission's DG Climate. The proponents say that the shortcomings of bioenergy production can be ameliorated with regulation, such as certification schemes that set rigorous sustainability criteria. Germany was the first to push for such regulation at home and on the European level. Today it has two schemes in place that are considered best practices in Europe and beyond, and are perhaps even applicable to other sectors. These programs could prove the saviour for an industry that is simultaneously surging and under attack. From Berlin Paul Hockenos reports. |
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Transforming energy systems in Europe: towards a German-Polish model By Dietmar Nietan, Member of the German Bundestag No two countries seem to be further apart in their energy policies than Germany and Poland. Whereas Germany is pursuing a hugely ambitious Energy Transformation, Poland is probably the most reluctant country in the EU when it comes to embracing ambitious climate policy goals. This is leading to increasing frictions between the two countries. However, according to Dietmar Nietan, a Member of the German Bundestag for the SDP and Chairman of the German-Polish Association, despite their different approaches, there are plenty of opportunities for the two big neighbours to work together in the energy field. Nietan issues a strong plea for a new German-Polish energy partnership that could be a model for Europe. |
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The Infant Industry Argument and Renewable Energy Production Sergey Mityakov, George C. Marshall Institute In this paper we review the necessity of government production subsidies for renewable energy on the basis on the infant industry argument, which argues that government support and protection of nascent industries is acceptable. |
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European renewable energy share increases to 13.4% in 2011 EurObserver'ER In the Renewable Energy Directive from 2009 all European Member States agreed to increase the share of renewable energy in gross final energy consumption in such a way that for the 27 Member States the share would be 20% by 2020. This has resulted in mandatory targets for all countries. EurObserv’ER has determined whether these countries are on track to meet their target. Calculating the share is a delicate exercise, and EurObserv'ER is the first organisation estimating this share for the year 2011. |
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Perspectives for biogas in Europe Floris van Foreest, OIES This paper by Floris van Foreest assesses the prospects and challenges facing biomass in the future European energy mix. |
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Interactive Emissions Trading Scheme map launched Ecofys and ICAP An interactive map compiling up-to-date information on the status and design of Emissions Trading Schemes around the world has been launched by the International Carbon Action Partnership (ICAP) and Ecofys. The project was made possible by the Dutch Ministry of Infrastructure and the Environment. |
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A View to 2040 ExxonMobil Updated each year, the Outlook for Energy analyzes the trends that will shape global energy supply and demand over the coming decades. |
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EU sets out to save CCS: emission performance standard or mandatory certificates? By Sonja van Renssen The European Commission remains committed to carbon capture and storage (CCS) in Europe, despite acknowledging that CCS policy so far has failed to live up to its goals. This appears from a still unpublished draft policy paper on CCS that European Energy Review has seen. In this long-awaited "CCS communication" the Commission makes a number of proposals to salvage the CCS sector that are bound to be highly controversial. Sonja van Renssen has the latest news from Brussels. |
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Of biofuels and Polish-German energy relations - plus breaking news on CCS By Karel Beckman There has been a strong backlash against biofuels. But aren't we in danger of throwing out the bio-baby with the bathwater? |
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New nuclear power in Europe - will Finland show the way? By Sonja van Renssen With the news in December that EDF's flagship nuclear reactor at Flamanville, France, is going to cost an extra €2 billion to build, ratcheting up costs to €8.5 billion from an initial cost estimate of €3.3bn - you would be forgiven for wondering whether Europe is ever going to get a new nuclear reactor off the ground. But some people still believe it can happen. Hopeful eyes are turned now to Finland, where another European Pressurized Reactor (EPR) is under construction. But this project too is late, over budget and unfinished. Nevertheless, the Finns are confident that they will get their nuclear power plant running -and will solve the nuclear waste storage problem in the process. EER's Brussels correspondent Sonja van Renssen travelled north to learn about the Finnish way. |
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Forward to the cave By Karel Beckman Does Olkiluoto-3 in Finland represent the first practical demonstration of a new generation of nuclear power plants in Europe? Or the last gasp of a dying technology? |
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How unconventional oil and gas are turning 2013 into the Year of (Even More) Uncertainty By Karel Beckman When I got together with an associate* recently to take stock of what 2013 might hold in store for the energy sector, we soon discovered there was one overriding theme that came up in all our deliberations: the profound effects the rapid growth of unconventional oil and gas are having on every aspect of global energy markets. Like it or not, but the revolution in unconventional gas that is set to spread across the world from the US, and which is now likely to be followed by a revolution in unconventional oil, is making the global energy world look very different - and a lot more uncertain - than a few years ago. Welcome to the Year of Yet More Unprecedented Uncertainty. |
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Oil Fields Forever By Karel Beckman If I had to select one outstanding feature of the Energy Year 2012, I would say it's how much the perspective has changed on the availability of oil and gas resources. |
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EER Monthly January 2013
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Fallout of Fukushima: an energy giant awakens By Rudolf ten Hoedt The disaster in Fukushima will probably not lead to the end of nuclear power in Japan after all. With the victory of Shinzo Abe's Liberal-Democratic Party in the elections on 16 December, the prospect of a German-type Energiewende have faded. Nevertheless, Fukushima will prove to be a turning point in Japan's energy history: old monopolistic structures are being broken up, new players are entering the market, the renewable energy market is growing, Japanese companies are increasingly active in gas production around the world and Japan may even become a gas trading hub for East-Asia. EER correspondent Rudolf ten Hoedt reports from Tokyo. |
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Why policy failures are opening up gas opportunities in Europe Gas is dead. Long live gas! By Alex Forbes Europe's natural gas industry is going through dark times. Policy failures within the European Union have combined with unexpected developments elsewhere to create a business environment hostile to gas. Amidst all the gloom, however, there are glimmers of light. Sooner or later Europe's policy-makers will have to wake up to some inconvenient truths: that gas is being elbowed out of the energy mix by coal and subsidised renewables; that greenhouse gas emissions are falling much more slowly than expected, largely because of the failure of carbon-pricing policy; that the US now has a competitive advantage over Europe because of its cheap energy; and that political opposition to shale gas in Europe is preventing some countries from exploiting their own unconventional resources. Sooner or later the EU will need to re-think energy and climate policy – as the UK is currently doing. |
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Imagine By Karel Beckman This is our last newsletter of the year – and we end on some hopeful, positive notes. |
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A Christmas present for EU renewables By Sonja van Renssen "Christmas has come early," announced EU climate commissioner Connie Hedegaard in Brussels on Tuesday in awarding €1.2bn of EU grants to 23 innovative renewables projects. This is money raised on the EU carbon market over the past year by selling the first 200 of 300 million carbon allowances ("NER300") set aside specifically to raise funds for innovative renewables projects – and for carbon capture and storage (CCS). CCS was the initial target in mind when this fund was created back in 2008 as part of the EU Emission Trading Scheme (ETS) review. Yet not a single CCS project was funded on Tuesday. |
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Germany's Little Energy Co-ops Make a Big Splash By Paul Hockenos, Berlin When Germany's environment minister Peter Altmaier addressed the first-ever congress of energy cooperatives in Berlin on November 19, he knew he was looking out over one of the Energiewende's core constituencies. "If all Germans were as engaged as you," he said, "my job would be a lot easier. But we're not that far yet," he joked. Locally based co-ops have become hugely popular in recent years, their numbers tripling in size since 2010 to over 600. Every second day a new clean energy co-op is formed in Germany. Moreover, this tradition-imbued model is now entering a new phase, becoming professionalised as they grow in size, enter into onshore wind power production, and find adherents in big cities, including Berlin. From Germany's capital, Paul Hockenos reports. |
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A Christmas Energy Story By Karel Beckman With Christmas coming up, what could be more appropriate than to have a story about brave Little Guys who are fighting Big Business and Big Government to make the Energy World a better place? |
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Energy expert Joan MacNaughton on why it is vital to prevent the Clean Development Mechanism – and the EU Emission Trading Scheme – from collapsing Save the carbon markets! By Karel Beckman If the battle cry of Greenpeace once was "Save the whales", the battle cry of Joan MacNaughton, President of the Energy Institute in the UK, senior advisor to the World Energy Council and former Chair of the Governing Board of the International Energy Agency (IEA), might well be: "Save the Carbon Markets". As Vice-Chair of an independent, high-level panel set up by the United Nations to take a good hard look at the Kyoto Protocol's Clean Development Mechanism (CDM), MacNaughton has come to the conclusion that carbon markets, and the CDM that ties them together, are far too valuable to let go to waste – despite all the troubles that they face. She says that "the CDM and carbon markets are essential tools to generate investment in emission reduction projects at the scale that is needed." EER talks with the woman who for many years was the top energy civil servant in the UK and who is still on a mission to save the world from climate and energy disaster. |
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Be my carbon baby By Karel Beckman Is carbon emission trading the Holy Grail that will lead us out of our climate predicament? Or is it rather a diversion that is leading us into a dead end of fanciful accounting and even downright fraud? |
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Why Bulgaria, Romania and the Czech Republic have turned against shale gas The big fracking chill in Eastern Europe By Tomasz Daborowski and Jakub Groszkowski To the surprise of many observers, Bulgaria, Romania and the Czech Republic have fairly suddenly joined the group of shale gas sceptics. For various reasons they have decided or they are planning to ban fracking for the time being. Tomasz Daborowski and Jakub Groszkowski of the Centre for Eastern Studies (OSW) in Warsaw explain why they did so and what lessons can be drawn from this. Their main conclusion: policymakers and energy companies failed to win the hearts and minds of the public. |
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UK goes for gas By Karel Beckman Sighs of relief were no doubt breathed across the European gas industry when the UK government last week unveiled its gas generation strategy. The European gas market is in the doldrums currently as electricity producers are massively turning to cheaper coal and renewable energy. Many wonder what the long-term prospects are for gas in the European power sector. The UK government's clear statement in favour of gas-fired power production brightens those prospects considerably. |
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Interview Philip Lowe, Director-General for Energy at the European Commission "If there's one area where the European dimension makes economic sense, it's energy" By Sonja van Renssen and Karel Beckman Philip Lowe, the top civil servant in Brussels for energy, takes an upbeat view of the progress to date on the internal energy market in Europe and of the prospects for decarbonisation of the European power sector. In an interview with EER, he says the internal energy market has already led to more choice, more competition, more liquid and transparent wholesale markets, and more secure energy supplies. He is also convinced that decarbonisation targets can be met, in spite of current setbacks. "There's no reason to believe that indigenous sources of energy, i.e. renewables, could not provide competitive energy to Europe by 2020." |
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Everything's gonna be alright By Karel Beckman In the energy sector many feel that the internal energy market is in crisis. Unilateralism seems rife and the tensions in the system seem to be getting worse. Is the energy market following the path of the Eurozone? |
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EER Monthly December 2012
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Will Desertec ever move from Power Point to Power Plant? By Paul Hockenos Is Desertec in crisis? At its annual conference in November in Berlin, the Desertec Industrial Initiative (DII) had hoped to announce the signing of a ground-breaking agreement between Germany, Morocco, France, Italy and Spain that would open the way for a first "Reference Project" in Morocco. But at the last moment Spain baulked. And there has been more bad news, as Bosch and Siemens, two of DII's biggest-name supporters, pulled out of the project. Yet many other private and public backers remain supportive. Moreover, countries in the Middle East and North Africa (MENA) are increasingly enthusiastic about renewable energy. Indeed, Desertec's biggest hurdle may well be Europe's fragmented energy policies. "What worries me is not the political situation in MENA", said one shareholder, "but rather that in Europe." And there's the success of the Energiewende in Desertec's "home country" Germany, which makes people wonder whether power from the desert is necessary at all. |
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Why South Stream is the beginning of the end of Gazprom's dominance A Tale of Two Gazproms By Matthew Hulbert Gazprom has done it: with the final decision to build South Stream, they have the won battle against the EU for the Southern Corridor. Surely a severe geopolitical defeat for the EU and South and Eastern Europe in particular. On a global scale, however, Moscow's move to stitch up the European market through an uneconomic pipeline is a monumental mistake, argues energy security specialist Matthew Hulbert. In an uncompromising analysis, Hulbert concludes that Vladimir Putin and his friend Alexei Miller are blind to all parts of the gas market that really matter: LNG, unconventional gas, hub trading and Asia. In that respect, the European Commission's anti-trust probe into Gazprom is a waste of resources, says Hulbert: Gazprom's market power will collapse by its own. |
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A tale of two energy visions By Karel Beckman What a luxury for me as an editor to be able to present two great articles to you. In fact, they might well be called two tales of Europe's energy future. One is about Gazprom's great new pipeline project South Stream. The other about the great Desertec project that is aimed at bringing solar power from North Africa to Europe. |
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Interview: biofuel-expert André Faaij "EU biofuel policy is addressing the wrong issue" By Loes Knotter With its latest proposals to cap the production of first-generation biofuels, the European Commission is threatening to wreak havoc on the European biofuels sector, and undermining its own decarbonisation programme, warns bio-energy expert Professor André Faaij of the University of Utrecht in the Netherlands. According to Faaij, European policymakers are addressing the wrong issue. "They should focus on how to organize the synergies between food and fuel rather than wasting time on theoretical models of land use changes that do nothing to improve matters in the real world." |
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Europe’s misshapen market – Why progress towards a single energy market is proving uneven David Buchan, Oxford Institute for Energy Studies Progress to a single European energy market is proving very uneven. David Buchan explains the European Commission’s worry that rapid development of national renewable and back-up capacity markets could shut off countries’ energy sectors from each other, before efforts to improve cross-border electricity connection and trading can produce results. |
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UK Electricity Market Reforms: Cash is King Malcolm Keay, Oxford Institute for Energy Studies After much discussion and debate, the Government has come to an agreement on the contents of the Energy Bill to be introduced next week. This comment, by Malcolm Keay, looks at the implications of the new agreement. |
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New Global Assessment Reveals Nearly 1,200 Proposed Coal-Fired Power Plants Ailun Yang, World Resources Institute Coal-fired power plants are a major source of greenhouse gas emissions—one that could be increasing significantly globally, according to new analysis from the World Resources Institute. |
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Bio Battle By Karel Beckman It is one of the most striking about-turns ever made by the environmental movement – and by the European Commission. They have collectively turned against biofuels made from food crops. It does sound like the Right thing to do. But is it? |
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A Secret War of Activists - With the World in the Balance Frack Fight By Ellen Cantarow There's a war going on that you know nothing about between a coalition of great powers and a small insurgent movement. It's a secret war being waged in the shadows while you go about your everyday life. In the end, this conflict may matter more than those in Iraq and Afghanistan ever did. And yet it's taking place far from newspaper front pages and with hardly a notice on the nightly news. Nor is it being fought in Yemen or Pakistan or Somalia, but in small hamlets in upstate New York. There, a loose network of activists is waging a guerrilla campaign not with improvised explosive devices or rocket-propelled grenades, but with zoning ordinances and petitions. The weaponry may be humdrum, but the stakes couldn't be higher. Ultimately, the fate of the planet may hang in the balance. |
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Interview: Howard Chase, industry representative with the Energy Charter "This is not the time to lose the Energy Charter" By Karel Beckman Representatives from governments around the world will be meeting in Warsaw on 26 and 27 November to discuss the future of the Energy Charter. There is broad awareness that the Charter needs to be "modernised" to retain its relevance, but it is unclear how far governments are willing to go to support this modernisation process. Howard Chase, Chairman of the Charter's Industry Advisory Panel, which represents some 40 companies and business associations, appeals to policymakers to give the Charter their support. Chase, a long-time government affairs specialist for BP and Dow Chemical, notes that in an ever-more volatile world, the Energy Charter is an "eminently sensible way" to support a stable international investment climate in the energy sector: "This is not the time to lose the Energy Charter." |
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Good cop, bad cop By Karel Beckman On Monday, the 18th session of the Conference of the Parties (COP) to the UNFCCC will kick off in Doha, Qatar. Yes, here we are with another UN climate conference, or COP, as these annual talkfests are affectionately called by their habitués. |
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IEA's 'changing energy landscape' portends a dysfunctional future By Alex Forbes Beyond the headline-grabbing projection that the United States will soon be the biggest producer of oil and gas, the latest energy outlook from the IEA is its gloomiest yet. The world will be well supplied with oil only if troubled Iraq becomes the second-largest exporter. Even so, oil prices will go on rising unless we enter another global recession. Carbon emissions will spew ever-faster into the atmosphere as we career towards being locked in to dangerous climate change; a credibility-stretching efficiency push could postpone this, but only by five years. Even by 2030, a billion people will lack electricity. Water is fast becoming a constraint on future energy supply. Perversely cheap natural gas will give US industry a competitive edge that will suck wealth away from OECD and emerging countries alike. And all this only if the IEA's arguably optimistic "central scenario" comes to pass. It could all end up a lot worse. |
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Interview Fatih Birol, Chief Economist of the International EnergyAgency "European countries missed a big opportunity by closing their doors to shale gas in a dogmatic way" By Karel Beckman Energy decisions that are being made in Europe are seriously hurting the European economy, says Fatih Birol, Chief Economist of the International Energy Agency (IEA) and the guiding spirit behind the IEA's flagship publication, the World Energy Outlook, in an in-depth interview with EER. In particular, Europe has failed to use the trump card of unconventional gas to obtain more favourable terms from its major gas suppliers, says Birol. As a result, European industry and consumers are faced with unnecessarily high energy prices. |
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The fine line of the IEA By Karel Beckman The annual flagship publication of the International Energy Agency's World Energy Outlook (WEO) has become a major event in energy land and indeed far beyond. The IEA's Chief Economist Fatih Birol told me in an interview I had him with on Thursday in The Hague, that on Monday, when the 2012 edition of the WEO came out, it got as many hits on Google as the Petraeus affair! |
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Italy finally has an energy plan By Heather O'Brian Italian energy policy is widely seen as suffering from a lack of national planning, but now the country's economic development ministry has set about to change that. It has published a draft version of a new Strategia Energetica Nazionale (SEN), which is out for consultation and comments until the end of the month, and should be finalised by January. "The aim is to provide a clear and a shared vision of the direction for energy," Leonardo Senni, the head of the ministry of economic development's energy department, told European Energy Review. The government wants to continue to promote renewable energy, although it wants to scale down support. It also wants to establish a competitive gas market, reduce import dependence by promoting hydrocarbon production and take decision-making powers away from local governments. |
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The EU risks ending up with not a single CCS demonstration plant The CCS mess By Sonja van Renssen The most likely recipient of millions of fresh EU funds for carbon capture and storage (CCS) now appears to be the unlikeliest candidate of all: a French steel plant that was shut down a year ago. All the projects recently tipped as top contenders for the money – up to €337m per project in carbon market funds – appear on the verge of falling off a cliff for reasons that are not yet clear. What is clear is that this soap opera has left CCS advocates flabbergasted and perhaps for the first time seriously wondering whether CCS has a future at all in Europe. Sonja van Renssen has the latest news from Brussels. |
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Interview: Andrew McCarthy, CEO of Emperor Oil "Investing in Africa and the Middle East is no riskier than in the US or Europe" By James Stafford, oilprice.com More and more western oil and gas companies are braving high-risk places like Sudan, Iraq and even Yemen. Emperor Oil is a case in point. The Canadian company is undertaking a large oil project in Sudan. It is also very active in Turkey. According to Emperor Oil's CEO Andrew McCarthy it is no riskier to invest in conventional oil projects in Africa than in unconventional projects, for example in the deep sea, in North America or Europe. "Is it less risky to drill a mile below the ocean surface and create the kind of disaster we saw BP with in the Gulf, or do we continue to look for work in regions that have accessible resources and are anxious to advance their economic position?" he asks. Interview by James Stafford of oilprice.com. |
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Happy days are here again By Karel Beckman It's official. Peak oil is dead. If the United States can become an oil exporter again in the future, surely we no longer have to fear an energy crisis? |
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Commission vs Gazprom: Antitrust Clash of the Decade? By Alan Riley This new CEPS Policy Brief boldly asserts that the antitrust case launched by DG Competition against Gazprom on September 4th will turn out to be the landmark antitrust case of this decade, in much the same way that Microsoft v. Commission was the defining antitrust lawsuit of the last decade. The paper argues that, for a host of political and economic reasons, this case is likely to be hard fought by both sides to a final prohibition decision and then onwards into the EU courts. In the process, the European gas market and the powers of DG Competition in the energy field are likely to be transformed. |
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Why America can make or break a new global gas world By Matthew Hulbert and Andreas Goldthau These are exciting times for international gas markets. Not only has gas demand grown at twice the pace of oil over the past decade, with the IEA forecasting further consumption growth of 50% over the next twenty (golden) years. What’s more, after decades of long term contracts linked to oil indexed prices, we’re starting to see the first serious signs of global gas prices based on actual gas fundamentals. |
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A fossil-free future? The Danes just do it! By Walt Patterson Acclaimed author, energy thinker and nuclear critic (and nuclear physicist) Walt Patterson visited north-western Denmark to discover what a fossil-free future might look like in practice. Although Walt is a veteran proponent of renewable energy - and has long argued that we should radically redesign our energy systems - he was still impressed by the routine, matter-of-fact manner in which the Danes show how accessible a sustainable energy future really is. |
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Energiewende collides with Czech and Polish nuclear power projects Germans and Central Europeans lock horns over energy By Paul Hockenos With winter creeping nearer, the Czech Republic has warned Germany in explicit terms that it will not tolerate surges of excess German electricity swamping its transmission grid this winter. It has stated plainly that it will shut its grid to Germany if blackouts threaten. The Germans for their part aren't pleased in the least with the plans of the Czechs to build new units at their Temelin nuclear plant, just 60 kilometers from the German border in Bavaria. With Slovakia and Poland taking the Czech side and Austria backing Germany, the energy imbroglio in Mitteleuropa is complete. EER's Berlin-correspondent Paul Hockenos reports from Ostrava in the Czech Republic. |
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Can we still be friends? By Karel Beckman Will the Eurozone crisis be followed by an Energyzone crisis this winter? The Czechs have warned the Germans they will shut their grid to German power exports if blackouts threaten. The Germans and Austrians for their part, fearing a Fukushima-disaster in their backyard, are calling on the Czechs not to build any new nuclear power reactors. The energy divisions across Europe are running ever deeper. |
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Interview: Christoph Frei, Secretary-General World Energy Council "Energy is bigger than any single country" By Karel Beckman The World Energy Council can truly be said to be the United Nations of Energy, bringing together the greats of the energy world. Yet the 89-old institution is not very well known to the outside world. Secretary-General Christoph Frei is trying to raise the relevance and visibility of the WEC - without endangering its unique depoliticized, low-stakes approach to energy diplomacy. EER spoke to him about this balancing act - and the energy challenges facing the world. The key, he says, is inclusiveness. "You need to work with, not against." |
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The Da WEC Code By Karel Beckman Five years ago, in November 2007, European Energy Review was launched - at the triennial Congress of the World Energy Council in Rome. Today we publish an interview I had with WEC’s Secretary-General, Christoph Frei, in which he explains what this slightly mysterious worldwide energy network is all about. "We try to keep the political stakes low." |
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The US LNG export stampede: another gas revolution in the making By Alex Forbes Thanks to the shale gas revolution, the United States - not long ago expected to become the world's largest importer of liquefied natural gas (LNG) - is on its way to becoming one of the world's largest LNG exporters, unless the US government intervenes to limit exports of cheap gas to its industrial competitors. But what we are seeing is not just another large wave of LNG supply of the kind we have seen from Qatar and are now witnessing from Australia. This new wave promises - or threatens, depending on your point of view - profound changes in the way that natural gas is traded and priced in markets across the world. |
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Why the EU should stop relying on a global climate treaty By Oliver Geden The European Union's decarbonization policies are closely linked to progress in international climate negotiations. But despite the results of last year's world climate summit in Durban, there will not be a comprehensive and ambitious global treaty by the end of 2015. Waiting for summits to produce "grand solutions" will eventually derail the EU's domestic climate policies. Therefore, a new sense of pragmatism is needed. Europeans will have to prove that a low carbon strategy is technologically and economically feasible even under present-day conditions. |
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US LNG - coming soon to a place near you! By Karel Beckman A stampede to export cheap US shale gas in the form of LNG will shake up gas markets around the world. In Europe, it will increase pressure on the big pipeline gas suppliers, Russia in particular, to re-think how they price their gas, or risk losing market share. The gas market will never be the same again. |
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US and EU trade sanctions against Chinese solar PV cells: a blow for solar power and sustainable development By John A. Mathews US and (potential) EU trade sanctions against Chinese solar panel producers will only benefit a handful of domestic panel producers, and will inflict great damage on the rest of the solar power industry in the US and EU, argues John A. Mathews, professor of global strategy at the MGSM Macquarie University in Sydney, Australia. Worse, they threaten to block the sensational cost reductions that have been going on in the global solar sector, ultimately hurting developing countries the most. "The contrast between the narrow calculations displayed in these trade actions, and the broader concerns over sustainable development and mitigation of global warming, is stark indeed", concludes Mathews. |
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We need to move beyond the East-West division inside the European Union By Emilia Zankina In a recent article in European Energy Review, Friedbert Pflüger criticizes the EU Energy Roadmap 2050 and EU climate and energy policy in general for not making any distinction between "East" and "West" Europe, or what he calls the EU-11 versus the EU-15. According to Pflüger, when it comes to climate and energy, special considerations should apply to Eastern Europe. However, his argument is quite misleading, as there are huge differences among East European countries, which make any simplistic East-West divide misplaced. What we really need is a common energy and climate strategy that ultimately applies equally across the EU. |
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Harmony and understanding By Karel Beckman In these days of global conflict and confrontation, I am glad to say that this issue of European Energy Review is dedicated to international peace and partnership. |
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Investing in East African Oil and Gas: Going for the (Fragile) Golden Egg Oilprice.com As East African nations line up to become the next key oil and gas market, now is the time to enter the game, but beware the pitfalls. Major discoveries are tantalizingly promising, but questions of infrastructure to make them commercially viable, uncertain regulatory environments and the potential for conflict put up plenty of roadblocks. Oilprice.com examines five key markets inside-out. |
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Analysis of climate and energy roadmaps in North West Europe Netherlands Environmental Assessment Agency PBL Although energy markets are interlinked and energy companies operate internationally, European countries have a strong national focus in their climate and energy policies. Countries have little regard for the impact of their national policy measures on neighbouring countries and vice versa. Better coordination between countries would support the desired energy transition and reduce costs. |
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European CCS industry faces moment of truth By Sonja van Renssen It will soon become clear which carbon capture and storage (CCS) projects in Europe are still alive. EU member states face an end-of-October deadline to announce which CCS demonstration projects they will invest in - and render eligible to receive hundreds of millions of Euros in fresh EU funds. The original demonstration programme from 2007 - which envisaged a dozen demos on the go by 2015 - is but a shadow of its former self. Yet it is questionable whether Europe can do without CCS if it is to decarbonise its economy by 2050. As pressure mounts on member states to finally commit, the CCS industry is looking beyond its traditional partners in coal and power to become a story about gas, biomass, manufacturing and jobs. Sonja van Renssen reports from Brussels. |
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Peering into the fog of a Russian energy war Why Is AAR Worth $28bn? By Matthew Hulbert Nobody has quite dared to pose the question, but why is Rosneft apparently willing to pay $28bn for the AAR oligarch's 50% stake in TNK-BP, when it only paid $26bn for BP's other 50% holding? Good question; don't expect pretty answers. Commercial and political interests always go hand in hand in Russia, and this deal isn't an exception to rule. |
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Ranking European gas markets By Santiago Katz and Catrinus Jepma In this article, Catrinus Jepma and Santiago Katz of the Energy Delta Institute show how the widely accepted indicators of market performance in the European "Gas Target Model" can be turned into a methodology that gives a simple, transparent score for each European gas hub. Applying their methodology, the authors conclude that most North West European gas markets are functioning (reasonably) well. And the winner is ... you guessed it: the UK's National Balancing Point. |
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What Germany can learn from the Nordic Energiewende By Paul Hockenos The German government belatedly seems to realise that it may have been a mistake to pursue its Energiewende and nuclear phase-out without involving its neighbours. At a recent German-Nordic conference in Berlin, German Environment Minister Peter Altmaier said he regretted the unilateral course his country had taken. He proposed setting up an international club of countries going renewable and called for more cooperation between Germany and its neighbours to ensure the success of the Energiewende. The Nordic countries, which are much further advanced on the energy transition than Germany, appear eager to extend a helping hand. The most important secret to their success? "We trust in trade with one another." Reporter Paul Hockenos reports from Berlin. |
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Smart energy: a revolution from above Europe is to be smothered by smart meters - but does the consumer want them? By Karel Beckman The massive introduction of smart meters and smart grids in Europe in the coming years could lead to a thorough shake-up of the traditional division of roles in the energy value chain. Incumbent producers, suppliers and grid operators are already engaged in a battle over who will control what parts of the new value chain, while new entrants, such as service providers, technology companies and retailers, are busy looking for opportunities to corner parts of the new market. At the same time it is still highly uncertain how the smart energy market will be organised across the EU. Most market watchers agree that policymakers are currently in the driving seat, but they also agree that the transition will not succeed unless consumers can become much more engaged. What no one knows for sure, however, is whether consumers are interested at all in becoming smart energy users. EER's editor Karel Beckman reports from the high-level Metering Europe conference and exhibition which took place last week in Amsterdam. |
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Biodiesel back from the dead as EU drops ILUC factors By Sonja van Renssen In what some may see as cruel twist of fate it is the bioethanol, not biodiesel, industry which in the end has most to lose from the European Commission's long-awaited proposals on preventing indirect land-use change, or ILUC, from biofuels. Bioethanol that is, and climate change. |
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Putin increases control over Russian energy By Alexander Gusev Russian President Vladimir Putin has recently created a new Energy Commission by which he is seeking to wrest control over the energy sector from the government of Prime Minister Dmitry Medvedev. This move will lead to a further strengthening of the role of the State in the Russian oil and gas industry. It is bad news for those who are hoping for a more transparent investment climate, argues Alexander Gusev, Research Fellow at the German Institute for International and Security Affairs (SWP). |
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Success of energy harvesting depends on collaboration between industry and academics By Paul Weaver A mobile phone charged from your body heat. Pavements that scavenge energy from your footsteps. Less than 10 years ago these were fanciful academic dreams, blue sky ideas floated at university conferences. Today energy harvesting is serious business and an emerging industry potentially worth billions with European developers at the forefront. However, for European companies to develop this market successfully, they must start to embed metrological principles and standards into their products and performance claims, argues Paul Weaver, the UK representative in the EU-funded Metrology for Energy Harvesting Project. Without such standards, the market will not take off. |
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Oil Prices: Energy Investment, Political Stability in the Exporting Countries and OPEC’s Dilemma Paul Stevens, Chatham House and Matthew Hulbert, European Energy Review During the summer of 2012, there were growing concerns that, faced with global economic upheaval originating in the problems of the eurozone, there was increasing oversupply in the oil market, which threatened prices. At the same time, geopolitical concerns in the context of the Iranian nuclear programme were helping to provide upward support for prices. This paper attempts to consider possible future paths for crude oil prices and their implications. |
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Crisis in the ETS comes to a head By Sonja van Renssen The EU Emission Trading Scheme (ETS) is in crisis and Climate Commissioner Connie Hedegaard and her Director-General Jos Delbeke are in an impossible position. They must reassure EU member states there are no plans to permanently remove carbon allowances from the market - this would equate to tightening the overall emissions cap, a highly sensitive issue. Yet they must also tell market players that yes, the big allowance surplus will be cut down to size so please do go ahead and make those low-carbon investments. The ETS-crisis is coming to a head in Brussels as the carbon price stubbornly stays below €10 a tonne and pressure intensifies for policymakers to intervene. Sonja van Renssen reports from Brussels. |
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Power market headed for potential oversupply By Twan Vollebregt The economic crisis in Europe is having a far-reaching impact on the electricity market. The collapse of economic growth combined with the growth of renewable energy is leading to a situation of potential oversupply. But this broad European picture hides strong regional differences. Twan Vollebregt, CEO of Energy Fundamentals, a Swiss company that provides data and models to help energy companies with investment decisions, unravels the real story behind the development of European power demand. |
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What it takes to be a successful executive in the energy industry Energy Delta Institute Energy Delta Institute has published a survey that presents the results of 40 interviews held with executives of energy companies. 11 questions compose the interviews that aim to identify the most important skills and competencies required by energy executives today and in the future. The report further describes aspects that had a vital contribution to the professional development of the executives interviewed and what they believe are the best ways to develop their successors better and faster. |
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The New "Golden Age of Oil" That Wasn't By Michael T. Klare Many are proclaiming a new Golden Age of Oil and US energy independence, thanks to the development of new, 'unconventional' oil resources. Michael Klare argues that these 'forecasts of abundance' will collide with 'planetary realities'. He warns that to pursue those forms of 'extreme energy' will lead to environmental disasters: "There is just one possible golden age for US (or any other kind of) energy and it would be based on a major push to produce breakthroughs in climate-friendly renewables." |
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Are the days of the European biodiesel industry numbered? By Sonja van Renssen The continuity of the European biodiesel industry appears threatened as this summer's food vs. fuel debate has injected fresh life into long-pending EU proposals on how to prevent the indirect displacement of forest by crops grown for fuel ('indirect land-use change' or ILUC). Studies have shown that production of biofuels can lead to a net rise in CO2 emissions if ILUC effects are taken into account. Debate has raged in Brussels over whether and how these effects should be handled in new biofuels legislation. In October, proposals originally due in early 2010 are finally likely to see the light of day. A leaked draft suggests they are full of surprises - but one thing is evident: they spell big trouble for the European biodiesel sector. Sonja van Renssen reports from Brussels on the implications of the draft proposals for the bioenergy market, oil companies and EU climate goals. |
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Sino-Russian Oil and Gas Cooperation: The Reality and Implications Oxford Institute for Energy Studies (OIES) China and Russia are giant countries whose recent economic and energy experience could hardly be more different: in the one, unprecedentedly rapid industrialisation has sent its share of world primary energy consumption soaring from 7 to 20 percent since 1985 (overtaking the USA); in the other the collapse of centrally planned industry has reduced its share from 11 to 6 percent during the same period. |
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Investors look to China and the US as confidence in Europe’s renewable energy sector declines European Voice A new report released by EuropeanVoice examines the factors that are making investors nervous about renewable energy in Europe, and looks at examples of what is working. It will also look at the issue of further targets beyond 2020 and how this might make a difference to investor confidence. |
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Shell's controversial Arctic campaign - how safe is it? By Tseard Zoethout How safe is the drilling programme that Shell has started in the Arctic waters around Alaska? Environmental activists fiercely oppose Shell's activities, but the US Department of Interior has approved the company's plans and issued the necessary permits. Independent experts agree that, in theory, Shell's plans look safe. But they point out that very little is yet known about the real risks of Arctic oil drilling. They would like to see more research being done before the vulnerable region is given over to the oil industry. |
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The birth of a European gas infrastructure market By Karel Beckman At the same time that the European gas market is being liberalised and integrated, a separate development is taking place, with a dynamic of its own, namely the Europeanisation of the gas infrastructure sector. This is a development that gets much less public attention but is no less important for the success of a competitive European gas market. What is happening, in effect, is that the (unbundled) gas infrastructure companies are 'following the market': rather than confining themselves to their traditional national markets, they are expanding internationally, competing with each other, innovating and diversifying. They have to do this, they say, to be able to service the trading markets efficiently. EER's chief editor Karel Beckman discussed this new development with the management of one of the companies that is taking the lead in this process: Dutch gas infrastructure company Gasunie. The company's message: don't stop us now - we are making the European gas market work. |
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The Future of the Druzhba Pipeline International Institute of Political Science (IIPS) The International Institute of Political Science (IIPS) has recently released a new study which was prepared by the researchers from both IIPS and the Department of International Relations and European Studies. It focuses on the future of oil supply of the Czech Republic through the Druzhba pipeline, threats endangering this supply route and potential cooperation between the Czech Republic and Poland on issues of oil supply. |
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The end of the honeymoon period for renewables By Timon Dubbeling Electricity markets across Europe are experiencing a once-in-a-generation transformation, which is largely driven by the exponential growth of intermittent generation from renewable energy sources - solar PV and wind in particular. Although the rise of such renewables is both necessary and inevitable in the transition to a low-carbon economy, it is becoming increasingly difficult and costly to integrate them into the current power system. Inevitably renewable generators will be asked to play a bigger role in managing the impact their production has on electricity systems. In addition, they will have to deal with reduced financial support and legal prerogatives as policymakers will try to end their insulation from energy markets. The honeymoon period for renewables is ending, and their existence in electricity markets is bound to get a lot more challenging. |
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Unconventional sources of natural gas: development and consequences for Central and Eastern Europe The International Institute of Political Science (IIPS) The International Institute of Political Science (IIPS) has recently released a new study which was prepared by the researchers from both IIPS and th Department of International Relations and European Studies and which focuses on potential impacts of unconventional gas development in Poland. |
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Gas with CCS in the UK – Waiting for Godot? Howard Rogers, Oxford Institute for Energy Studies A new paper by Howard Rogers addresses the issue of the challenges in establishing Carbon Capture and Sequestration at a commercial scale in the power generation sector, especially as this has been repeatedly proposed as a key policy in furtherance of CO2 emission abatement in the last decade. |
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German offshore wind industry sees sunshine behind the clouds By Paul Hockenos Offshore wind energy is envisioned to play a key role in Germany's Energiewende. The German government wants to see 25,000 megawatts of offshore wind parks installed in the Baltic and North Seas - the equivalent of 20 large nuclear power reactors. But unclarity over the transmission grid and regulatory issues has slowed progress. Nevertheless at a recent conference in Hamburg, the industry's leading representatives sounded an optimistic note. They said crucial legislation is finally coming into place that will enable them to proceed with their ambitious offshore plans. |
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Leaked draft of Internal Market communication shows EU not satisfied with progress By Sonja van Renssen In a leaked draft of a policy paper not expected until mid-October, the European Commission's energy department says the EU is not on track to meeting a 2014 deadline to complete the EU internal energy market. The document, entitled "Making the internal energy market work", is undergoing internal revision as we write, but it gives a flavour of what the Commission's priorities are. |
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Resetting Gazprom in the Golden Age of Gas By Alan Riley The Golden Age of Gas appears to provide more threats to Gazprom than opportunities. Shale gas has undermined the commercial rationale for the Shtokman project. The European Commission's plan to open up the European gas market and the recently announced antitrust investigation against Gazprom, threaten the company's position in European markets. However, Gazprom also enjoys substantial opportunities. Greater supply diversity in Europe reduces the 'Gazprom fear' which makes it difficult for Gazprom to acquire assets, access markets and deal with European customers and partners. And as the prospects for a larger European and global gas market grow, Gazprom as the holder of the world's largest conventional gas resources could also be well placed to benefit. But to be successful in the new gas age, the company needs to undertake a fundamental reform of its business model and market priorities. If it fails to do this it risks ending up as a 'supplier of last resort' for Europe. Does President Putin really want to preside over the decline of Gazprom? |
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What Brussels holds in store for the energy sector By Sonja van Renssen It's tough, la rentrée, but the bureaucrats are back, the crisis has resurfaced and the EU machine is in motion once more. What does it hold in store for energy policy this autumn? Cyprus, which took over the rotating 6-month presidency of the EU in July, has four main priorities: grids, the safety of offshore oil and gas platforms, renewables, and Energy Star (an energy efficiency programme with the US). Also on the agenda are: the reform of the EU Emission Trading Scheme (ETS), the internal energy market, energy taxation, biofuels, shale gas, carbon capture and storage (CCS) and nuclear energy. EER-correspondent Sonja van Renssen takes a look at what to expect from Brussels this autumn. |
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European climate policy must distinguish between East and West By Friedbert Pflüger EU energy and climate policies are exerting a disproportionate burden on the economies of Central and Eastern European countries. This is leading to growing discontent and opposition in these countries. The only way that unity can be maintained, argues Friedbert Pflüger, is a new approach within the EU on energy and climate policy that takes the needs and interests of Central and Eastern European states into consideration. |
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Shell's Pearl proves its worth, but it's early days yet for gas-to-liquids By Alex Forbes The successful launch of Shell's giant Pearl gas-to-liquids (GTL) project in Qatar has demonstrated not just that GTL technology works at large scale, but also that its economics can be very attractive indeed. So, after a decade of disappointments, and in an era of structurally high oil prices and increasingly abundant natural gas, the GTL industry is looking forward to a more promising future. However, with the technology leaders Shell and Sasol jealously guarding their secrets, and other technologies yet to be tested at scale, growth will be constrained by the availability of proven technology. |
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Europe must wean IEA from dependence on US By Matthew Hulbert European countries should firmly resist any move made by the US and G7 to release strategic oil reserves in the current situation. Such blatant interference in the market, which would clearly be made only for political (US electoral) purposes, would hurt the credibility of the International Energy Agency (IEA) and make a mockery of the IEA's ambition to become a truly global (rather than 'Western') organisation by extending its reach to China and India. In view of the US' renewed striving for ‘energy independence’, Europe has a vital interest in making the IEA’s global ambition work: the only way for Europe to reduce its dependence on Russia is to connect with China. |
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The European Gas Target Model: how it could be improved By Catrinus Jepma and Santiago Katz European regulators have adopted a "Gas Target Model" on the basis of which they will determine whether gas markets in Europe are functioning properly. However, although this model is useful as a starting point, it has a number of shortcomings which urgently need to be addressed. The model is based on a set of indicators which are in some ways unclear and not integrated into a coherent methodology. In addition, its vision of what constitutes the size of the relevant market is too limited and the model ignores the important function of long-term contracts. |
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Interview: energy economist James Hamilton on the real causes of high oil prices "World oil production is not going to increase forever" By James Stafford, Oilprice.com Nowadays the energy picture is confusing at best. We hear numerous reports on how the shale revolution will transform the energy sector, why advances in oilfield extraction techniques and new finds will help to lower oil prices. Yet oil prices remain stubbornly high and sceptics warn that "unconventional" oil and gas can never make up for the decline in conventional production. So where do we really stand? James Stafford of Oilprice.com spoke with one the world's leading energy economists, Professor James Hamilton, about the underlying global energy trends. Hamilton recognizes the success of the US shale revolution, but warns that "anyone who thinks that US production alone is going to make up for declines from mature fields and burgeoning consumption of emerging economies is in my opinion way too optimistic." |
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Time to re-appraise the IEA's energy statistics By Rick Bosman The International Energy Agency and other established institutions come to mistaken conclusions about our energy future because they rely on a paradigm that fails to take into account the real potential of renewable energy. As a result, the transition to a sustainable energy future that the world is making is seriously hampered, argues Rick Bosman. |
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Walking the Waters - How to Bring the Major Oil Companies Ashore and Halt the Destruction of Our Oceans Subhankar Banerjee When you go to the mountains, you go to the mountains. When it’s the desert, it’s the desert. When it’s the ocean, though, we generally say that we’re going “to the beach.” Land is our element, not the waters of our world, and that is an unmistakable advantage for any oil company that wants to drill in pristine waters. |
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The Offshore Discovery in the Republic of Cyprus – Monetisation Prospects and Challenges Anastasios Giamouridis, OIES This paper assesses the prospects and challenges facing the Republic of Cyprus in developing the discovery of a significant offshore gas field by Noble Energy in December 2011. |
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The Energy Showdown in Argentina - Interview with Sam Logan Jen Alice, Oilprice.com Angering Spain by seizing and nationalizing a majority of Repsol’s shares in YPF and ramping up the rhetoric over the Falkland Islands as exploration deals promise to make the territory a major oil player overnight, Argentina is making few friends in the fossil fuels industry these days. Sam Logan, owner of the Latin America-focused private intelligence boutique, Southern Pulse, speaks to Oilprice.com about the politics of populism behind Argentina’s energy aggression. |
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CCS: Creating a secure environment for investment in Europe Zero Emissions Platform CCS will play a critical role in meeting EU and global climate targets cost-effectively – as confirmed by the EU Energy Roadmap, the IEA and almost every global emissions reduction scenario. The technology is on a critical delivery path as demonstration projects must take FID imminently so that commercial projects can operate from 2020 with widespread deployment from 2030. However, the long-term business case – which relies on a strong EUA price – is now seriously undermined. |
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Interview Alex Salmond, First Minister of Scotland: "We are aiming for a transformation - a re-industrialisation along the lines of a green economy" By James Stafford, Oilprice.com No other country in the EU has more ambitious renewable energy plans than Scotland. One of the chief architects of the Scottish sustainable energy drive is government leader and leader of the Scottish National Party Alex Salmond, who also intends to lead the Scots into independence from the UK in 2014. In a wide-ranging interview with James Stafford of Oilprice.com, which Oilprice.com consented to share with European Energy Review, Salmond discusses his views of Scotland's radical new energy future: "We want to make Scotland the destination for international investment in low carbon, and for the development of the financial architecture for a global low carbon economy", he says. "We are aiming for a transformation - a re-industrialisation along the lines of a green economy." |
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How Beijing is targeting physical assets to maximise leverage over global energy prices China's super smart acquisitions strategy By Matthew Hulbert & Christian Brütsch Just when you thought it was a good time for summer vacations, China has been busy rewriting the upstream acquisitions script, and doing so on an entirely new level. The Chinese do not limit themselves any longer to investing in far-flung and exotic locations, they're taking key stakes right inside OECD countries, with the clear intention of hedging their international price risk exposure. China is deliberately targeting North America (WTI) and North Sea (Brent) plays, alongside sinking major investments into North American LNG export facilities, to be able to dictate what happens on the trading markets. |
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The IEA dares not lose faith in a "clean energy future" By Karel Beckman The International Energy Agency's latest Energy Technology Perspectives report presents a bleak picture of the world's current state of progress towards a low-carbon energy system. Nevertheless, the IEA tries to put a brave face on things. "We can still get on track on a clean energy future", says Executive Director Maria van der Hoeven. Probably the brighest spot is the growing enthusiasm worldwide for emission trading - just at a time when the EU's Emission Trading Scheme (ETS) has fallen into disrepair. |
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The UK's far-reaching energy plan: not perfect, but the only realistic road to decarbonisation By Jonathan Lane Some of the key provisions of the UK government's draft energy bill, released in May 2012, have come under sharp criticism. This applies in particular to the new scheme aimed at supporting investment in low-carbon generation (nuclear power and renewable energy), which will give producers government-guaranteed prices for their output. Yet, according to independent energy analyst Jonathan Lane, the government has little choice but to go ahead with its plan if it is to deliver on its decarbonisation agenda. The main problem will be in getting the details right once the bill is passed in the second half of 2012. |
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Arctic oil: Putin's last chance By Matthew Hulbert President Putin is back, but this time he faces daunting challenges on the energy front. The easy times throughout the 2000s when prices were rising, production was steady, and petro-dollars kept rolling in, are gone. Russia is facing steep depletion rates on key oil fields in East Siberia, the Far East and West Siberia, a dynamic that has already seen the country slip back to second place on the international roster of oil producers behind Saudi Arabia. The only chance Putin has to retain his long term global energy stake is successful exploitation of Russia's Arctic reserves, but that's going to need serious foreign investment. The good news for Putin is that international oil companies have welcomed the initial 'policy certainty' his return has brought to the Kremlin, but if Russia wants to attract serious amounts of foreign capital, Moscow also needs to display very long term consistency. |
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Bulgaria's renewables market goes from boom to bust By Mariyana Yaneva The government's efforts to cool down the overheated photovoltaic (PV) market in Bulgaria are threatening to halt all investment in renewable energy production in the country, reports Mariyana Yaneva from SeeNews Renewables in Sofia. Yet some observers remain optimistic about the long-term opportunities of the Bulgarian renewable energy markets. "Even the most populist and reactionary government will eventually have to face realities." |
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Secret Pentagon papers reveal pre-war plans to get Big Oil into Iraq Greg Mutitt Government officials meeting in the Pentagon before the Iraq War planned to use the U.S. occupation to open the country to Big Oil, according to new documents published today. |
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A Partnership of unequals - Electricity exports from the eastern neighbourhood and western Balkans Bankwatch Cooperation in the energy sector is one of the European Union’s key priorities in its relationships with neighbouring states. Although the promotion of energy efficiency, energy savings and the use of renewable energy sources should be the primary areas of cooperation along with “energy security”, the latter receives the lion’s share of attention and in several cases also a disproportionally large amount of financial support. This can have several negative environmental and social implications as this study shows. |
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Interview: Arne Mogren, Programme Director Power of the European Climate Foundation "Everyone agrees on where we need to be in 2050, but not on how to get there" By Sonja van Renssen A more flexible Emission Trading Scheme (ETS), harmonised support schemes for renewable energy technologies, and much stronger EU coordination of the development of the transmission grids - that's the policy cocktail Europe needs to achieve its decarbonisation goals, says Arne Mogren, Director of the Power Programme of the European Climate Foundation (ECF) in a wide-ranging interview with EER. According to Mogren, a key official in this highly influential NGO, "everyone agrees on where we need to be in 2050", but it's not clear at all what the next steps must be. He sees tremendous opportunities for the power sector. The only problem is that these opportunities are "policy-driven" , so "you need to trust the policies". |
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German government backtracks on the Energy Transition By Katharina Mikulcak The "Energiewende" is still on the political agenda in Berlin, but there is also a firm amount of backtracking going on in the German capital. The Merkel government now stresses that fossil fuels will remain the foundation of German energy supply for many years to come. It has also announced it will produce a new national energy plan in 2013, "with support from all institutions". In the meantime, the energy transformation is entering a chaotic phase. |
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CCS in Europe - the way forward Agata Hinc, demosEuropa - Centre for European Strategy In this paper, which was written with the support of the European Climate Foundation, the author argues that the EU should ajust its CCS policy to "new facts" that are presenting themselves. |
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How is the Keystone XL Pipeline Progressing? Jen Alic, Oilprice.com Four and a half years of studies and five failed votes in the House later, exactly where are we with the Keystone XL pipeline? Stuck on the US-Canadian border where it is likely to remain until mid-2013 despite the headline-grabbing issuance of one of three permits to begin construction in Texas for the smaller and much less controversial portion of the pipeline. |
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Interview: Walter Peeraer, CEO Fluxys Why the national Belgian gas transmission company is looking far beyond its national borders By Karel Beckman The Belgian transmission system operator (TSO) Fluxys has, over the last two or three years, "quietly grown into a European company", says Fluxys CEO Walter Peeraer in an interview with European Energy Review. Fluxys views itself as a "first mover" in the rapidly changing European gas market. Through a series of well-placed investments, the national TSO of Belgium has extended its reach far into Europe. As a result, it is competing with other TSO's - while at the same time cooperating with them to make the single European gas market a reality. Welcome to the complex new world of European gas infrastructure. |
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The political perils of low oil prices By Matthew Hulbert Oil prices have rapidly dropped in recent months, and some analysts predict a further (steep) decline. This might seem like good news to consumer states, but there is a catch. Whereas producer states could balance their budgets at $30 a barrel less than ten years ago, they now need $100 a barrel to make ends meet. If oil prices continue to correct, expect instability to hit producer states across the board. That might (ironically) help to set a price floor and push prices up again, but it's not a development that consumer countries should be happy about. Keeping oil prices at $100/b remains a better plan than seeing producer states collapse. |
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German solar bubble? Look again! By Craig Morris A string of bankruptcies among German solar panel producers has led many to question the wisdom of Germany's renewable energy policies. However, according to energy journalist Craig Morris, the financial problems are part of a normal consolidation process taking place in the sector. He argues that a broader look at the entire value chain of the solar sector reveals that the German economy will continue to benefit from the country's role as a first mover in solar energy: "In the middle of the value chain, cell and panel manufacturers are suffering everywhere. Further down the value chain, things look much brighter." |
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How solar subsidies can distort the power market: the case of Italy By Carlo Stagnaro Italian policies to stimulate power production have been a success in the sense that solar power capacity has exploded, but they have also led to formidable costs. What is more, argues Carlo Stagnaro of the Italian think tank Istituto Bruno Leoni, support for green power has profoundly distorted the functioning of the Italian energy market. As solar power is subsidized and given unlimited priority access to the grid, the size of the "contestable market", where power producers compete with each other, has shrunk dramatically. Stagnaro warns that the measures now being discussed to remedy the problems will put further pressure on the market model in Italy and lead to more control from above. |
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The Energiewende - Germany's gamble By David Buchan, Oxford Institute for Energy Studies Germany has set itself a huge challenge in trying to move away from fossil fuels and abandon nuclear power, while remaining a major industrial economy. This challenge to create an Energiewende – an energy turnaround or transformation – has ambitious targets. |
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The four great challenges for the European gas market By Kirsten Westphal The transition to a new regulatory regime has left the European gas market in an extremely vulnerable position. Liberalisation has destroyed old certainties while new structures are not yet in place, undermining Europe's security of gas supply. Kirsten Westphal, Senior Researcher at the German Institute for International and Security Affairs (SWP), identifies four major challenges that market players and policymakers urgently need to address - and gives several recommendations on how to do so. "The market alone will not ensure security of supply." |
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Francesco Starace, Chief Executive Officer of Enel Green Power, puts brakes on European expansion "We have shifted investments to places where demand is growing" By Heather O'Brian It wouldn't make sense for European government to push for growth in renewable energy at this moment in time, says Francesco Starace, chief executive officer of Enel Green Power (EGP), the renewable energy arm of giant Italian utility Enel. Overcapacity and stagnant demand in a number of European markets - including EGP's core markets Italy and Spain/Portugal - means cuts in renewable energy incentives are logical, Starace says in an interview with European Energy Review. Even without incentive cuts, he adds, EGP would have pursued its current strategy, which sees the renewable group temporarily scaling back growth in Europe and pursuing growth in emerging markets instead. |
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A challenge for Brussels How to find a cure for the Emission Trading Scheme without killing it By Sonja van Renssen and Karel Beckman Reports of the death of the EU Emissons Trading Scheme (ETS) have been greatly exaggerated. That was one of the key messages from European policymakers at an "Energy Policy Breakfast" organised by European Energy Review and public affairs agency Interel in collaboration with Italian energy company Enel on the 21st of June in Brussels. Representatives from the European Commission and the European Parliament acknowledged that the ETS has shortcomings which need to be addressed, but they are intent on it remaining the backbone of the EU's climate policy for decades to come. They are now debating how they can intervene into the ETS without destroying its credibility as a market-based scheme. Remedies are expected to be proposed in July. |
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A new EU Gas Security of Supply Architecture? Florence School of Regulation Policy Brief The Clingendael International Energy Programme (CIEP), together with the Fondazione Eni Enrico Mattei (FEEM), the Loyola de Palacio Chair at the Robert Schuman Centre of Advanced Studies, European University Institute (EUI) and Wilton Park have organized a series of workshops in order to take stock and discuss a possible new architecture for EU gas security. Discussions and reflections reported from the workshops held under this project have developed into the following recommendations for a new EU gas security of supply architecture that are synchronized in this policy brief. |
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Electricity Storage: How to Facilitate its Deployment and Operation in the EU Florence School of Regulation Policy Brief The future electricity system will face various challenges originating from both supply and demand side. Adaptations in system architecture are required to allow for decarbonization while ensuring stability and reliability of the system. Many claim today that larger variability and intermittency of supply must inevitably be accompanied by a significant development of electricity storage. |
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How to Refurbish All Buildings by 2050 Florence School of Regulation Policy Brief In order to deliver the 2050 objectives of greenhouse gas reduction, significant changes are essential in the building sector. This report describes the building refurbishment challenge, maps the policy options to tackle this challenge and gives recommendations to the EU on how to achieve it. |
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Why CO2-pricing must be central to any successful climate change policy The limits of energy efficiency By Jonathan Sample, Shell Upstream International Many commentators and policymakers seem to believe that energy efficiency alone can address much of the CO2 problem - and that it can do so at very low cost (or even negative cost), at least compared to a 'do nothing case'1. In fact, however, any successful policy toward mitigation of CO2 emissions must centre on CO2 pricing. Energy efficiency can only be a contributory factor and, in some circumstances, can even have a negative long-term impact if the centrality of CO2 pricing is not recognised. |
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Four ways the present US administration is pursuing the energy geopolitics of the previous one Is Barack Obama morphing into Dick Cheney? By Michael T. Klare As details of his administration's global war against terrorists, insurgents, and hostile warlords have become more widely known - a war that involves a mélange of drone attacks, covert operations, and presidentially selected assassinations - President Obama seems to be following more and more into the footsteps of his predecessor George W. Bush. When it comes to international energy politics, however, it is not Bush but his vice president, Dick Cheney, who has been providing the role model for the president, argues Michael Klare, professor of peace and world security studies at Hampshire College. |
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The increasing threats to global energy supplies - an interview with Jellyfish Jen Alic, Oilprice.com As global energy supplies come under increasing attack by non-state actors and private energy holdings become key targets of political maneuverings and criminal activities, Oilprice.com discusses the nature of the growing threat and how to reverse the risk with "smart power." |
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Continental European Gas Hubs: Are They Fit for Purpose? Patrick Heather, Oxford Institute for Energy Studies This paper by Patrick Heather assesses the development of the European Continental Gas Trading Hubs. It is a natural successor to his 2010 paper ‘The Evolution and Functioning of the Traded Gas Market in Britain’. |
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High oil prices are caused by consumers, not speculators By Steven Kopits High oil prices are often blamed on speculators, but it is perfectly possible to explain recent oil price history in terms of supply and demand forces, argues energy consultant Steven Kopits. His analysis shows that it was the reluctance of US consumers to reduce oil demand in the face of rising oil prices that led to the price spike in 2008. If this is true, then why did prices peak again in 2012, although US consumers had adjusted their consumption? Because, says Kopits, prices are not set anymore in the US, but in China. That's the bad news: in the battle for barrels, China and the other emerging economies will force the US and other OECD countries to yield consumption. |
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Free to choose, can German consumers remake their energy sector from below? By Paul Hockenos Although Germany's energy sector has been liberalized for over a decade, German consumers have been slow to embrace the opportunities of the free market, certainly compared to countries like the UK and Ireland. The main reason is that they are fearful of being cheated and uncertain about the advantages. Still, the German energy market is changing slowly but surely. New green (and nuclear-free) energy providers are making inroads, the big incumbent suppliers are offering new products and, most surprising of all, the old Stadtwerke are being bought back by municipalities and eagerly competing in the market. The government in Berlin meanwhile has adopted new laws designed to make switching a piece of cake, which could give another boost to the free energy market in Germany. Paul Hockenos reports from Berlin. |
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Bridging the greenhouse-gas emissions gap By Kornelis Blok, Niklas Höhne, Kees van der Leun & Nicholas Harrison Twenty-one coherent major initiatives could together stimulate sufficient reductions by 2020 to bridge the global greenhouse-gas emissions gap. |
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The US unconventional oil revolution: are we at the beginning of a new era for US oil? Dr. Salman Ghouri and Areeba Ghouri Everyone is familiar by now with the unconventional (shale) gas revolution in the US, which has transformed US and global gas markets. Less well known to the wider public is that an unconventional (shale) oil revolution is also gathering pace, with equally far-reaching implications. It is not unlikely that the US, the world's largest crude oil importer, could go a long way towards self-sufficiency by 2035. This would drastically change the global energy equation. |
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Open markets to the rescue - the story of energy in 2011, and its lessons for the future By Alex Forbes Despite energy supply disruptions of unprecedented scale - and against a backdrop of ever-rising demand - energy markets coped surprisingly well in 2011 in "keeping the lights on". So said BP yesterday as it launched its 61st annual Review of World Energy Statistics. This was thanks largely to the proper functioning of open and competitive markets and the growing interdependence and interconnections that characterise the global energy system. Long-term trends continued to assert themselves, especially the shift of energy consumption from the industrialised to the emerging nations and, worryingly, our continuing failure to bring greenhouse gas emissions under control. Alex Forbes reports from London. |
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The fragile foundations of the Russian oil sector By Wojciech Konoñczuk In 2011, oil production in Russia reached 511.3 million tonnes (10.26 million barrels per day), the highest level since the collapse of the Soviet Union and the highest in the world together with Saudi Arabia. Russia's declared goal in its oil policy is to maintain annual output at around 505 million tonnes over the next few years and increase it to 535 million tonnes by 2030. However, despite the fact that proven Russian oil reserves are still vast, and that Russia probably has very large undiscovered deposits, it will be practically impossible to achieve this goal. As a result of structural deficiencies in the market structure, a significant fall of Russian oil production is almost inevitable. The degree of the decline will depend on the actions the government takes in its fiscal policy and the investment climate in general. The opening of Arctic deposits for some Western oil majors, widely reported on recently, will not be a solution for the problems of the Russian oil sector. |
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Greenhouse gases are responsible for warming, not the sun By Rob van Dorland and Bart Verheggen Scientists working on climate on a daily basis must have been rather astonished by the recent interview with professor Fritz Vahrenholt published by European Energy Review (May 2, 2012). Vahrenholt, chief of RWE Innogy, self-proclaimed climate expert and co-author of the book Die Kalte Sonne (The Cold Sun), claims that "the contribution of CO2 to global warming is being exaggerated". This claim, however, does not stand up to scientific scrutiny. We assess his ideas in the light of the scientific literature on the role of the sun versus other climate forcing factors. The dominant influence of greenhouse gases follows not only from their basic physical properties, but also from their "fingerprint" in the observed warming. The sun, in contrast, has not exhibited any warming trend over the past 50 years. The sun is thus not responsible for the warming seen during this period. Greenhouse gases in all likelihood are. |
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Gas: supporting a future global growth By Alexander Medvedev (keynote address at the 25th World Gas Conference) Our forum is being held under the motto “Sustaining Future Global Growth”. It expresses the main task that stands before us, the energy and gas companies today, – to as soon as possible meet the growing energy demand and at the same time improve energy’s ecological index. |
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Czech solar energy industry faced with retroactive change in support Alliance for Energy Independence Czech politicians have created conditions for investing in green technologies that are similar to conditions in other countries in the European Union. Despite this, the Czech Republic has become the only country that has decided to hamper the solar energy industry with a retroactive tax. |
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Interview Urban Rusnák, Secretary-General of the Energy Charter "The Energy Charter Treaty is entering a crucial phase" By Karel Beckman The next few years are crucial for the future of the Energy Charter Treaty. If it does not manage to expand its constituency and to adapt its rules to a changing world, it risks remaining a regional player in Eurasia, says Urban Rusnák, the new Secretary-General of the Energy Charter Secretariat, in an interview with EER. According to Rusnák, who started his job on the 1st of January this year, the Energy Charter Treaty is unique in that provides a legally binding set of rules for international energy investments. "At a time when the energy sector is faced with the need to invest huge amounts of capital, the Energy Charter Treaty is uniquely suited to reduce risk premiums and supply the framework for global energy governance that the world so badly needs." |
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Golden age of gas comes at a price By Alex Forbes In a stark message to gas producers and governments last week, the International Energy Agency (IEA) set out seven golden rules which it believes are essential to granting gas producers "a social licence to operate". The IEA's chief economist Fatih Birol estimates that applying the agency's "golden rules" to the drilling of unconventional gas wells will increase production costs by around 7%. There could also be a price in terms of climate change. In a world awash with cheap gas, Birol fears that governments may be tempted to eliminate much-needed subsidies for renewable energy technologies. The ideal energy mix is probably some combination of renewables with gas and carbon capture and storage, says Birol. |
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The environmental nightmare you know nothing about How rural America got fracked By Ellen Cantarow Hydraulic fracturing (or fracking) does not use only a lot of water, but also a lot of sand. In the US a whole new sandmining (or "frac-sand mining") industry has been created on the crest of the shale gas revolution. Environmental reporter Ellen Cantarow describes the devastating consequences this industry has on some rural communities in the US. "The big thing is, you're removing the hills that you can't replace. They're a huge water manufacturing factory that Mother Nature gave us, and they're gone." |
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Nuclear is not the solution to the energy challenge, it is part of the problem By Thiemo Gropp As the UK gears up for a crucial decision on the building of new nuclear power plants, the voices in support of nuclear energy are getting louder. They claim that climate change cannot be addressed without an expansion of nuclear capacity. Renewable energies are said to be too costly and immature. Actually, the reverse is true, argues Thiemo Gropp, Director of the Desertec Foundation. Nuclear power is too costly and immature. What the UK and Europe should be doing is investing in building a supergrid that can support the expansion of renewables. |
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For Italy it's TAP or being left out in the cold By Friedbert Pflüger The shape of the Southern Gas Corridor is gradually becoming clear, as far as the delivery of gas from Azerbaijan to Europe is concerned. The first leg through Turkey will be controlled by Azerbaijan and Turkey. From the Turkish border there will be a northern route - either BP's South East European Pipeline project or a Nabucco "light" version - and/or a southern route to Italy. The Shah Deniz II consortium, the producers of the Azeri gas, have indicated that for the southern route they favour the Trans Adriatic Pipeline (TAP) over the Italian-backed ITGI project. However, TAP has one weakness: it does not (yet) have an Italian partner. This is where the Italian government comes in: in the interest of Italian and European security of supply, Rome should make a clear commitment to back TAP. |
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Death by a thousand regulations: the new Energy Bill Malcolm Keay, Oxford Institute of Energy Studies An earlier Oxford Energy Comment (Electricity Liberalisation in the UK – the end is nigh from February 2009) forecast that the liberalised UK electricity industry was likely to die not with a bang (renationalisation) but with a whimper, suffocated by an increasingly complex network of regulation. |
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Shortfall, Rebound, Backfire : Can we rely on energy efficiency to offset climate policy costs? Renewable Energy Forum A new assessment of the Department of Energy & Climate Change’s (DECC) proposed energy efficiency measures and their supposed benefits to UK consumers reveals that the public has been seriously misled by the Government about the likely impact of climate policies on energy bills. |
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Interview: EU Energy Commissioner Günther Oettinger on renewable energy targets and emission trading "Four instruments may be too much" By Sonja van Renssen In an upcoming policy paper on renewable energy, the European Commission says a "binding supportive framework" for renewable energy is needed beyond 2020. But the Commission has not yet decided whether such a framework should be primarily based on markets (i.e. on emission trading) or on a combination of EU targets and national support schemes. In an interview with EER, Energy Commissioner Günther Oettinger says he is "open" to the idea of extending the current renewable energy target by another decade to 2030. About the EU Emission Trading Scheme (ETS) he says it is not sufficient to promote renewable energy on its own. "A CO2 stand-alone target is not the guarantee for ambitious investments in renewables". He also says that "four instruments" (the 2020 targets for CO2 emission reductions, energy efficiency and renewable energy, plus the ETS) "may be too much". Sonja van Renssen reports from Brussels. |
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Interview with Adnan Amin, Director-General of the International Renewable Energy Agency (IRENA) "IRENA should be a platform where anybody who has good ideas is welcomed" By Thijs Van de Graaf The prestigious International Renewable Energy Agency (IRENA), brainchild of the late German politician Hermann Scheer, is back on track after a difficult and turbulent start-up period. Under the new leadership of Adnan Amin, IRENA, which boasts 156 member states, seems destined to make a significant impact on the development of renewable energy in the world. In a candid interview with EER, Amin explains his plans for the young, ambitious organization. He does not want to create another bureaucracy and he wants to stay away from politically sensitive declarations. "What we're looking for is practical solutions to real issues that governments are facing on the ground when they want to move forward with renewables." |
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How Shell is trying to help develop the European gas storage market (after selling its storage assets) By Karel Beckman Shell was one of the first companies in the European gas market to toe the EU's unbundling line. Early on the company made a radical decision to divest its gas pipeline and storage assets and focus exclusively on gas production and trading. Now, it has started offering its services to independent storage operators to help them commercialise their storage assets. Is Shell moving back into the gas infrastructure business? No, says Thorsten Dinkela, Head Of Business Development Northern Europe at Shell Energy Europe in an interview with EER. "What we are doing is supporting the market. That is in our own interest as well." |
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Out in the Cold – new report on Shell’s plans in the Arctic BankTrack Shell’s Annual General Meeting tomorrow is unlikely to go calmly. The company’s problems range from anger over excessive executive pay to spills in the Niger delta. At this time, Platform, Greenpeace and FairPensions are putting to scrutiny offshore Arctic exploration as a key direction in the company’s strategy. |
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Joint Ventures in the Russian Offshore – Positive News but only for the Long Term Oxford Institute for Energy Studies The increasing maturity of Russia’s onshore fields, especially those in West Siberia, and the potential for the country’s production to go into sharp decline over the next decade has prompted the Russian government to promote offshore development as a potential solution. |
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Azerbaijan: knock, knock, knocking on Europe's door By Matthew Hulbert While policymakers and pundits debate which pipeline consortium will bring Azeri gas to European markets through the Southern Corridor, they rarely stop to think about what Azerbaijan might want out of the deal. The assumption is that state oil company SOCAR will be happy to sell gas at the Turkish border and that Ankara and Europe can safely sort out the rest of the route. However, the actions of the Azeri's show that this is a mistake. They clearly want 'in' on every part of the Southern Corridor value chain, all the way to European end consumers. High time for Brussels to consider opening its doors to Baku - or risk failure of its crucial Southern Corridor. |
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Is Europe giving up on energy efficiency? By Sonja van Renssen Virtually everybody agrees that energy efficiency is the number one energy priority for Europe, that it can provide growth, jobs, energy security and environmental benefits, and that it needs intervention by policymakers to really get going. So why is it so difficult for Brussels to agree on a legislative framework to drive energy efficiency? The EU's 27 member states and the European Parliament are further apart than ever in negotiations on a new EU energy efficiency law. The major measure on which a deal is likely to centre is a requirement for energy retailers to deliver 1.5% energy savings per year from their customers. Sonja van Renssen reports from Brussels. |
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The Future of Oil: Geology versus Technology IMF Working Paper Future oil prices have been notoriously difficult to predict. In a recent paper, Alquist, Kilian, and Vigfusson (2011) conclude that forecasts based on monthly futures prices, monthly surveys of forecasts, simple econometric models, or other commonly employed forecasting techniques cannot consistently beat a random-walk forecast out of sample. This result is well known within the oil industry. |
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The Energy Wars Heat Up: Six Recent Clashes and Conflicts on a Planet Heading Into Energy Overdrive Michael T. Klare, Tomdispatch.com Conflict and intrigue over valuable energy supplies have been features of the international landscape for a long time. Major wars over oil have been fought every decade or so since World War I, and smaller engagements have erupted every few years; a flare-up or two in 2012, then, would be part of the normal scheme of things. |
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Italian free-market think tank in new report: "Replace emission trading scheme with a carbon tax" By Karel Beckman If the European Commission wants to stimulate "green growth", as its official policy states, then the Emission Trading System (ETS) is the wrong instrument. That's one of the major conclusions of a new study from the prestigious Italian free-market think tank Istituto Bruno Leoni (IBL). The authors, Stefano Clò and Emanuele Vendramin, argue that a carbon tax would be much more suitable to the goals of the EU's green growth agenda than an emission trading scheme. The ETS is the EU's flagship climate policy instrument, but it is widely criticized for being ineffective. |
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UK Government: Fracking Causes Earthquakes, but It's Worth the Risk John C.K. Daly of Oilprice.com The process of hydraulic fracturing is a mining technique which uses injected fluid to propagate fractures in a rock layer to release hydrocarbon deposits that would otherwise be uncommercial. Developed in the U.S. and first used in 1947 for stimulating of oil and natural gas wells, the use of "fracking" soared in the past decade as thousands of wells have been drilled into the Marcellus Formation, also referred to as the Marcellus Shale, a deposit of marine sedimentary rock found in eastern North America. |
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Peak oil revisited: the real challenges are investment and sustainability, not availability By Noé van Hulst The general perception of global oil reserves is unnecessarily gloomy and far removed from reality, even among many policymakers and academics. This is dangerous because it obscures the real and serious economic and environmental challenges faced by the oil sector, argues Noé van Hulst. The Director of the new Energy Academy Europe calls on the oil industry to devote more effort explaining the public what the real challenges are. |
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European gas market reforms undermine security of supply By Sergei Komlev Market reformists who are trying to put an end to oil-indexed gas contracts fail to understand the unique value of the current "hybrid" pricing system Europe enjoys in the gas market. If they get their way, Europe will lose the protection of long-term contracts altogether and will move to a purely hub-based short-term pricing model as exists in the US, warns Sergei Komlev, Head of Contract Structuring and Price Formation at Gazprom Export. This model, he says, is not suitable for an import-dependent market like Europe. It will leave Europe at the mercy of short-term market forces without any regard for security of supply. |
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The optimistic message of Fritz Vahrenholt, climate dissenter and CEO of RWE Innogy "The sun is giving us time to come up with smarter solutions for the Energiewende" By Marcel Crok Fritz Vahrenholt, head of the renewable energy arm of RWE and a former hero of the German environmental movement, has been derided in Germany as a lobbyist for the fossil fuel sector after he published a book highly critical of the global warming consensus. But Vahrenholt's message is far from simplistic. He supports the idea of an "Energy Transformation", but argues that the current German approach is too costly and even counterproductive. Germany's renewable energy policies are undermining the country's biodiversity and destroying its forests, he says in an interview with EER. He is convinced that the contribution of CO2 to global warming is being exaggerated and that there is more time to come to genuinely sustainable solutions. "We run the risk of destroying the foundations of our prosperity." |
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Interview: Jean-François Cirelli on change the European gas industry can believe in "We need a decarbonisation policy that favours gas" By Sonja van Renssen The European gas industry is bracing itself for tremendous changes. "The market is changing to a degree which has never been seen before", says Jean-François Cirelli, President of natural gas trade association Eurogas and Vice Chairman and President of French energy company GDF Suez, in an interview with EER. According to Cirelli, the market will see a gradual shift from fewer oil-indexed long-term contracts to more liquid wholesale markets. "All our membership is very market-oriented", he says. He does warn for "over-regulation". And he is also only half-satisfied with the EU's decarbonisation policy. "We believe gas should be more favoured than it is today." He calls for a single CO2 emission reduction target for 2030, but no other new targets, such as for renewable energy and energy efficiency. "The CO2 price must be raised in a predictable manner. The value of gas is clearly linked to the carbon-price." |
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Aphrodite’s Gift: Can Cypriot Gas Power a New Dialogue? International Crisis Group Although newly discovered gas reserves off Cyprus are currently driving the Greek and Turkish Cypriot communities further apart, they could offer both newfound wealth if, together with Turkey, they would agree to start a new dialogue about exploiting and transporting this find. |
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Wind energy sector growing over twice as fast as EU economy European Wind Energy Association (EWEA) The wind energy industry increased its contribution to the EU’s gross domestic product (GDP) by 33% between 2007 and 2010. In 2010, the industry’s growth was twice that of the EU’s GDP overall, with the sector contributing €32 billion to an EU economy in slowdown. |
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The Financialization of Oil Markets: Potential Impacts and Evidence Oxford Institute for Energy Studies The financialization of oil futures markets has been held responsible for a variety of phenomena including changes in price volatility, increased co-movement between oil futures prices and other financial asset and commodity prices, a breakdown of the statistical relationship between oil inventories and the price of oil, and an increased influence of the decisions of financial investors such as swap dealers, hedge funds and commodity index traders on the oil futures price. |
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Will There be a Shale Gas Revolution in China by 2020? Oxford Institute for Energy Studies This paper assesses the extent to which China is likely to achieve levels of shale gas production by 2020 which would make a meaningful difference to its growing need for imports of pipeline gas and LNG. |
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EU–Russia Gas Relations: How to Manage New Uncertainties and Imbalances Ralf Dickel and Kirsten Westphal, SWP EU–Russia gas relations are at a critical stage in 2012. Uncertainty is predominant: The balance between security of supply and security of demand is under threat and long-term business relations are under pressure from market developments and a new regulatory framework. |
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Repsol down - European mid-caps out by Matthew Hulbert The nationalisation of Spanish oil producer Repsol's Argentinian assets cannot be seen in isolation. It points to a much wider problem for mid-sized European energy producers: they are being squeezed out of the market on one side by independent wild-catters and on the other by increasingly powerful emerging market governments that prefer to deal with Big Oil companies. To get out of this bind, the Repsols of this world may have to band together - or seek Asian assistance. What they cannot afford to do is stand still, argues energy analyst Matthew Hulbert. |
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What history should teach us about blockading Iran By Juan Cole and Tom Engelhardt It's a policy fierce enough to cause great suffering among Iranians - and possibly in the long run among Americans, too. It might, in the end, even deeply harm the global economy and yet, history tells us, it will fail on its own. Economic war led by Washington (and encouraged by Israel) will not take down the Iranian government or bring it to the bargaining table on its knees ready to surrender its nuclear program. It might, however, lead to actual armed conflict with incalculable consequences. |
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Germany's stalled energy transition: waiting for the master plan By Paul Hockenos The Merkel government's "energy revolution" was hailed across the political spectrum in Germany as an inspired step forward. But after a forceful start following the Fukushima disaster, the Energiewende has stalled, partly as a result of internal bickering but also because of the tremendous challenges involved in its implementation. Critics are calling on the government to come up with a master plan that will show how the Energiewende's ambitious targets can be met. "Where we want to be is in black and white. The problem is how to get there", notes one German expert. The world is watching for the next moves from Berlin. |
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State of Charge: Electric Vehicles’ Global Warming Emissions and Fuel-Cost Savings Across the United States Union of Concerned Scientists Electric vehicles (EVs) burn no gasoline and have no tailpipe emissions, but producing the electricity used to charge them does generate global warming emissions. The amount of these emissions, however, varies significantly based on the mix of energy sources used to power a region's electricity grid. |
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Why the oil industry has buried the idea of "peak oil" Cheer up: the world has plenty of oil By Robin Mills It's widely believed nowadays that global oil production is running up against its limits. "The days of easy oil are over", we are told and we should brace ourselves for an age of relative oil scarcity. The reality, however, is very different. As more and more people within the oil industry have come to realize in recent years, the world has plenty of oil that can be produced at competitive prices for a long, long time to come. This means the world does not face inevitable "energy poverty" and there is no reason to be afraid of unavoidable "energy wars". |
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Oil Markets in 2012: Calm or Turbulent Waters? Bassam Fattouh, Oxford Institute for Energy Studies To most analysts, the combination of geopolitical and economic factors constitutes a ‘perfect storm’ that will keep an upward pressure on oil the price for the rest of 2012. The purpose of this short article is to broaden the debate and consider some potential weaknesses in the dominant story. |
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China at the crossroads: are the reformers winning the argument? European Council on Foreign Relations China has reached a crossroads. After years of political stability and enviable economic growth, the regime has been facing a stark choice about how the country should move forward. But two crucial recent political events have turned Chinese politics on its head, and are forcing it to decide whether to regress or reform. |
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The fate of the EU carbon market hangs in the balance By Sonja van Renssen If European policymakers do not intervene soon in the EU's emission trading scheme, Europe's flagship climate policy risks sinking into oblivion. This is bad news when debate is just beginning over a new EU climate and energy package for 2030. If the EU ETS cannot deliver, what should lie at the heart of this new package? A carbon tax? A myriad of national policies? To save the ETS, many stakeholders - including energy companies - are advocating a "set-aside", or one-off removal of carbon allowances from the market, to raise the CO2 price. Others want a complete overhaul of the system. Sonja van Renssen reports from Brussels. |
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A New Energy Third World in North America? By Michael T. Klare The “curse” of oil wealth is a well-known phenomenon in Third World petro-states where millions of lives are wasted in poverty and the environment is ravaged, while tiny elites rake in the energy dollars and corruption rules the land. Recently, North America has been repeatedly hailed as the planet’s twenty-first-century “new Saudi Arabia” for “tough energy” -- deep-sea oil, Canadian tar sands, and fracked oil and natural gas. But here’s a question no one considers: Will the oil curse become as familiar on this continent in the wake of a new American energy rush as it is in Africa and elsewhere? Will North America, that is, become not just the next boom continent for energy bonanzas, but a new energy Third World? |
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EGEC policy paper on the European Commission’s Energy Roadmap 2050 European Geothermal Energy Council The European Union (EU) is committed to decarbonising its economy while at the same time ensuring security of supply and preserving industrial competitiveness. This objective implies the reduction of greenhouse gas (GHG) emissions by 80-95% in 2050 compared to 1990 levels. As regards to the energy sector, this means some 85% GHG emission reductions by mid-century. |
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The EU's Energy Roadmap 2050: targets without governance By Severin Fischer and Oliver Geden With the Energy Roadmap 2050 of December 2011, the European Commission has opened the debate about the future shape of Europe's energy sector. But two central conflicts within the Union narrow the relevance of this planning instrument in the ongoing political process. Firstly, the European consensus that climate policy should determine energy policy, which has held since 2007, is likely to erode. Secondly, formulating European targets for 2050 suggests a greater scope of governance than the EU actually possesses, mainly because the European treaties still reserve the decisive role in shaping the energy mix for the member states. If the governments of the EU member states take the long-term approach of a European energy roadmap seriously, they will have to accept a major curtailment of their national sovereignty over energy policy. |
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Renewable Technologies and our Energy Future - An Interview with Tom Murphy "I don't think we can solve all our problems by tapping low-hanging shale-gas fruit" By James Stafford of Oilprice.com Rising geopolitical tensions and high oil prices are continuing to help renewable energy find favour amongst investors and politicians. Yet how much faith should we place in renewables to make up the shortfall in fossil fuels? Can science really solve our energy problems, and which sectors offers the best hope for our energy future? To help us get to the bottom of this, James Stafford of Oilprice.com spoke with energy specialist Dr. Tom Murphy, an associate professor of physics at the University of California. Tom runs the popular energy blog Do the Math which takes an astrophysicist's-eye view of societal issues relating to energy production, climate change, and economic growth. Oilprice.com was kind enough to share this interview with European Energy Review. |
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It's finally coming: the great European gas market transformation By Karel Beckman The European gas market is awaiting radical changes in the years ahead. The old market structure, based on bilateral long-term contracts between a limited number of big suppliers and buyers, will be replaced by (presumably) thriving wholesale markets where sellers and buyers meet on trading hubs to make short-term deals. Some analysts are sceptical. 'Europe is taking a big risk if it relies on this single model', says Dick de Jong of the Clingendael International Energy Programme (CIEP) in the Netherlands. 'We are too much focused on the internal market instead of on the external market on which we increasingly depend.' But Jean-Michel Glachant of the Florence School of Regulation is positive. 'The global gas market is changing fast. Europe has to adapt to the new realities. Otherwise there will be a bloodbath.' |
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Oil, Alternatives, and Nuclear Weapons - An Interview with Marc Faber James Stafford, Oilprice.com As the world economy teeters on the brink and rising oil prices threaten to de-rail the delicate roots of recovery we asked legendary investor Dr. Marc Faber to join us and give his views on high gasoline prices, the shale boom, alternative energy, developments in the Middle East and much more. |
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Comments on October 2011 Guidance Issued by Treasury on Valuation of Greenhouse Gas Emissions John Rhys, Oxford Institute for Energy Studies The EU emissions trading system is failing to produce a carbon price that is efficacious in promoting low-carbon investment or a low-carbon economy. Carbon price projections from this scheme are nevertheless incorporated in the formal guidance issued by the UK Treasury to guide government departments in appraising policy initiatives and projects. |
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How the US policy shipwreck over Iran is undermining the credibility of Saudi Arabia and the IEA Banking on Saudi-Parabia By Matthew Hulbert Lulled by dreams of energy independence, the US thought it could slap sanctions on Iran without having to pay a price at the pump. That has proven to be a miscalculation. Now, rather than abandoning its Iran policy, the US is relying on Saudi Arabia and the Paris-based International Energy Agency (IEA) to bring down oil prices and prevent the world economy from going under. According to energy security specialist Matthew Hulbert, this is a highly risky policy which could seriously hurt the credibility of both Riyadh and Paris. He warns that "until the US ditches its energy independence myth and gets back to current reality, the Saudi-Parabia ship is going to struggle to make it to port over the next decade." The world is entering dangerous waters. |
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New nuclear in the UK? It all depends on the government's policies By Alex Forbes Nowhere in the OECD region has a government shown more enthusiasm for new nuclear power stations than in the United Kingdom. The government's efforts to smooth the path for new projects have so far been impressively successful, with key milestones being reached with only a few months here and there of delay. For now, the proposed new projects - amounting to over 16 GW - have built up a head of steam, despite last week's news that big German investors Eon and RWE have decided to pull out. But even the front-runner projects face the uncertainty of not knowing how much they will be paid for their output. Much will depend on how the government chooses to implement its ongoing electricity market reforms. |
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How IRENA is reshaping the global energy architecture By Thijs Van de Graaf Though it has gone largely unnoticed, the signing of a partnership agreement between the "traditional" energy agency IEA and the new renewable energy agency IRENA last January is a milestone event. With the agreement, the organizations seem ready to overcome the deep distrust that characterized their relationship when IRENA was created three years ago. In an article written for EER, researcher Thijs Van de Graaf retraces the origins and stormy beginnings of IRENA and analyzes the future impact the new agency may have on the international energy scene. |
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The CCS challenge for the gas industry: the practical potential for gas carbon capture and storage in Europe in 2030 Green Alliance This analysis provides the first assessment of the practical potential for gas power with carbon capture and storage (CCS) in Europe in the medium term. Much of the debate around CCS so far has focused on coal. However, the December 2011 European Commission Energy Roadmap 2050 identified the need for a significant ramp up of gas power with CCS and indicated it will be of greater importance than coal CCS within two decades. |
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After Durban it's back to the trenches By Sonja van Renssen As the dust from Durban settles, the mountain left for world governments to climb to agree a new global climate treaty by 2015 is coming sharply into focus. The generous rhetoric of the UN climate conference last December is rapidly giving way to the defensive language of entrenched positions. China and India appear to see little role for themselves in helping to do what needs to be done to avoid dangerous climate change, the US is pussyfooting, post-Fukushima Japan is helpless and countries like Australia, Russia and Canada show no signs of wanting to step up their pledges. All this leaves international climate policy in a perilous state. Hope rests mostly on initiatives that lie outside the scope of the climate negotiations, reports Sonja van Renssen. |
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EU wind power wavering between flagging onshore and huge and promising offshore market EurObserver Notwithstanding the economic crisis affecting most of the globe’s major economies, wind energy continues to gain supporters around the world, reports the EurObserv’ER barometer, a project supported by the European Commission within the Intelligent Energy Europe programme and by Ademe, the French Environment and Energy management Agency, and by Caisse des Dépôts. |
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Interview: Jean-François Conil-Lacoste, CEO of Epex Spot "We are confident that we will continue to play a key role in integrating European electricity markets" By Karel Beckman Epex Spot, the joint venture that was set up in 2008 between the German and French power exchanges EEX and PowerNext, is now pursuing cooperation with the Nordic power exchange Nord Pool. The overriding goal of the Paris-based power exchange is to be the prime mover in the creation of a single EU-wide integrated electricity market, says Jean-François Conil-Lacoste, CEO of Epex Spot in an interview with European Energy Review. Conil-Lacoste is confident that the investigation the EU antitrust authorities have started into the Epex-Nord Pool joint venture, will not affect this plan. In the ongoing process of European energy market integration, "one exchange will emerge as the best one", he says. |
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Subsidy cuts show that renewable energy is coming of age By Maria van der Hoeven, Executive Director, International Energy Agency A number of governments in Europe are introducing measures limiting their financial support for renewable energy. These moves should not be viewed as a backlash against renewables, argues Maria van der Hoeven, Executive Director of the International Energy Agency (IEA). On the contrary, they show that renewable energy is coming of age. Van der Hoeven does warn, however, that policy changes should be made in a transparent and predictable way. |
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Why High Oil Prices Are Here to Stay By Michael Klare Oil prices are now higher than they have ever been - except for a few frenzied moments before the global economic meltdown of 2008. Many immediate factors are contributing to this surge, including Iran's threats to block oil shipping in the Persian Gulf, fears of a new Middle Eastern war, and turmoil in energy-rich Nigeria. Some of these pressures could ease in the months ahead, providing temporary relief at the gas pump. But the principal cause of higher prices - a fundamental shift in the structure of the oil industry - cannot be reversed, and so oil prices are destined to remain high for a long time to come. |
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Why the IEA should resist a US strategic oil stock release now By Matthew Hulbert With Presidential elections approaching, and oil prices showing no signs of dropping, the temptation for the Obama Administration to release strategic oil stocks becomes ever greater. Such a move, for short-term electoral reasons, would seriously hurt the credibility of the oil emergency scheme of the International Energy Agency (IEA), argues Matthew Hulbert. "Asian consumption of Iranian oil is the only safety valve left from making the IEA look very silly." |
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The impact of tar sands pipeline spills on employment and the economy Lara Skinner and Sean Sweeney, Cornell University Global Labor Institute The negative impacts on employment and the economy of tar sands pipelines have largely been ignored. To date, a comprehensive spills risk assessment for the proposed Keystone XL pipeline has not been conducted. Such an assessment would provide an independent review of both the risk of spills and their economic consequences. This is what this report intends to do. |
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Interview: Maria van der Hoeven, new chief of the IEA "We must find mechanisms to strengthen cooperation with the emerging economies" By Karel Beckman The International Energy Agency (IEA), whose membership is limited to the countries of the OECD, is faced with a steady decline of its clout in the global oil market at the expense of the fast-growing emerging economies. Will the IEA become obsolete? Maria van der Hoeven, the new Executive Director of the International Energy Agency (IEA), is convinced that the Agency has a future, if it manages to adapt to changing times. Above all, she believes it is crucial for the IEA to involve countries like China and India in the work of the IEA on a formal basis. "I cannot change the constraint of OECD membership", she says in an interview with EER - the first in-depth interview she has given about the IEA since she took over from Nobuo Tanaka in September 2011. "But I am working on proposals for more institutional, more binding agreements with those countries." |
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Report finds rapid expansion in global deployment and improving cost-competitiveness for solar and wind Clean Edge Clean-energy markets continued to expand rapidly in 2011, even against a tough economic and political climate, increased industry consolidation, and downward pricing pressures on manufacturers. Combined global revenue for solar PV, wind power, and biofuels rose 31 percent over the prior year, growing from $188.1 billion in 2010 to $246.1 billion last year, according to the Clean Energy Trends 2012 report issued by clean-tech research and advisory firm Clean Edge, Inc. The bulk of this expansion came from double-digit growth rates for both wind and solar deployment globally. |
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Interview: Fatih Birol, Chief Economist IEA "If Iraq fails, it will mean trouble for all of us" By Karel Beckman What the world needs to keep up with the strong global growth in energy in the coming decades is two things above all: Iraq - and shale gas. That is the view of Fatih Birol, Chief Economist of the International Energy Agency. "If it does not come from Iraq, I don't see where significant production growth will come from", notes "Mister IEA". He urges the international oil companies to "listen carefully to the perspective of the federal government in Iraq." And he has news on the shale gas front: the IEA is preparing, with a number of governments, a set of "best practices" for shale gas production, which will be presented to the world on the 29th of May. "Governments need to ensure that all companies adhere to the best standards, or they will risk a public backlash against unconventional production". |
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Nuclear energy one year after Fukushima: no retraction of nuclear power outside Europe and Japan World Energy Council The incident at the Fukushima Daiichi nuclear power plant—the result of a devastating earthquake and subsequent tsunami on March 11, 2011—has re-invigorated the debate about how to meet the world’s growing demands for energy and the contribution of nuclear power to the global energy mix. |
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There is life for the Southern Corridor after Nabucco By Alan Riley Both for reasons of security of supply and for climate policy it is crucially important for Europe to develop the Southern Gas Corridor. But it is not necessary to do this on the basis of a large, politically motivated project like Nabucco. The same purpose can be achieved with smaller, more commercially motivated pipelines that gradually build up capacity. |
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JRC study describes state of the art of renewable energy technologies Joint Research Centre A new edition of the Strategic Energy Technologies review has been published. This "2011 Technology Map", produced by the European Commission's in-house science service, the Joint Research Centre (JRC), provides a European and worldwide analysis of 15 low-carbon energy technologies, energy efficiency in industry, energy performance of buildings and electricity storage in the power sector. |
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Time for a grand bargain with Poland on energy and climate By Thomas Spencer Energy relations between Poland and the EU have been extremely difficult in recent years, especially when it comes to climate policy. This situation is highly damaging to both sides. It is time for the EU to gain a better appreciation of Poland's unique challenges and to offer the country a credible long-term deal on energy and climate, argues Thomas Spencer, Research Fellow in Climate and Energy Economics at the Paris-based think tank IDDRI. |
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Interview: Judith Curry "The IPCC May Have Outlived its Usefulness" By James Stafford As the global warming debate increases in its intensity we find both sides deeply entrenched, hurling accusations and lies at one another in an attempt to gain the upper hand. This divide within the scientific community has left the public wondering who can be trusted to provide them with accurate information and answers. |
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Brussels pushes for full carbon accounting of all road transport fuels By Sonja van Renssen It's never been about banning oil sands or killing off the fledgling biodiesel market, but about correctly calculating the carbon footprint of fuels and incentivising those that are cleanest, European policymakers insist. Yet they are caught in a whirlwind of controversy over accounting methodologies that would, if they became law, effectively do just that: put an end to the use of high-carbon fuels, which could include certain forms of biodiesel. They would also stimulate the use of petrol at the expense of diesel, causing a sea-change in European road transport. At the heart of the roaring controversy are the EU's 2009 fuel quality directive, which demands a 6% greenhouse gas emission reduction in road fuels from 2010-20, and a proposal to revise EU energy taxation law. Sonja van Renssen reports from Brussels. |
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Putin’s return: why Europe should prepare for a weaker Russia European Council on Foreign Relations On Sunday 4th March Russians have elected their next president. Although Vladimir Putin is certain to win, it will be a hollow victory and his next presidency will be weaker than before. |
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Lessons learned from Japan Tsunami & Meltdown at Fukushima: rethink nuclear power Shunji Murai Governments all over the globe using nuclear power should rethink their choices after the meltdown at Fukushima in Japan last year. According to professor Shunji Murai a government has to choose between economic development and health of local people in an area where a nuclear power plant is built. Murai writes this in a new and remarkable book Higher Ground: Learning from the East Japan Tsunami and Meltdown at Fukushima NPS. |
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Why Saudi Arabia holds the key to a resolution of the Iranian crisis By Matthew Hulbert It is highly doubtful that the current Western sanctions policy towards Iran will bring about the desired result: to dissuade Iran from continuing on its nuclear course. The only peaceful way to solve the Iran crisis is by bringing Saudi Arabia and China into the equation. They are the only countries that can make an oil boycott work. But for this to happen, the Saudi's should start withholding oil from the market instead of making up for any Iranian shortfalls, as they are doing now. |
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Regulatory lag threatens to slow down the stormy growth of the European gas market By Santiago Katz and Catrinus Jepma Gas trading markets on the European continent have developed surprisingly fast in recent years. Europe, or at least North Western Europe, is closer to a single gas market than many might realize. There is just one snag: policymakers have yet to catch up with this reality which they themselves have helped to create. Regulations are lagging behind. As a result, pipelines remain utilized suboptimally, and investment in cross-border infrastructure is hampered. According to Santiago Katz and Catrinus Jepma of the Energy Delta Institute, regulation will have to catch up with the markets if the EU is to become a fully-functioning single market. |
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How Germany's powerful renewables advocacy coalition is transforming the German (and European) energy market By Rick Bosman German energy policy is increasingly being dominated by a diverse and growing group of renewable energy supporters, who enjoy broad political and public support. These forces have convinced the Merkel government to transform the nuclear and fossil-fueldominated energy system into one based predominantly on renewable energy sources: the "Energiewende". Germany's nuclear sector has been the first victim, but pressure on the coal sector is growing as well. The German renewables advocacy coalition will likely be able to continue to use their clout to tilt the energy playing field in their favour. Their biggest challenge will be to convince neighbouring countries of the merits of the Energiewende. |
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€200 billion will flow into the low-carbon agenda - or will it? New: the EU budget - it has never been so green By Sonja van Renssen For the first time ever decarbonisation is an explicit goal of the next EU budget. And it shows: the European Commission wants to devote fully 20% of the €1 trillion budget, which runs from 2014 to 2020, to climate-related actions. The goal: to change the face of the European energy system and sow the seeds for a low-carbon economy in 2050. But it is the Member States who will ultimately have to make up their minds whether they want to make the EU's green dream come true. Sonja van Renssen reports from Brussels. |
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Five reasons the new energy efficiency directive will not work - and what can be done to remedy this By Jacob Huber The success of the EU's climate policy depends to a large extent on the realization of very large energy efficiency gains. It is questionable, however, whether the Energy Efficiency Directive proposed by the Commission, which the European Parliament will vote on at the end of March, will deliver the required results. Jacob Huber of the Energy Delta Institute suggests five ways to improve the Directive, and notes that it is time for Member States to start taking energy efficiency more seriously. |
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Dong goes one better than energy savings By Karel Beckman Denmark is an example of a country with a successful energy savings obligation scheme. Danish energy consumption has been flat for many years. In fact, Danish energy producer Dong Energy goes one step further. It offers its large and medium-sized clients "Climate Partnerships" that not only help reduce energy consumption but also stimulate renewable energy production. Dong Executive Vice-President Kurt Bligaard Pedersen finds it strange that many energy companies in Europe resist savings obligations. "The customers demand it." |
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Promising biofuel potential for shipping Ecofys Biofuels replacing conventional fossil fuels could enable marine transport to become carbon neutral. Biofuels can also substantially reduce the harmful emissions in the air and water, compared to fossil marine fuels. Air quality in port areas and other populated areas around our water ways will improve. In the case of a ship accident, such as the recent Costa Concordia1 tragedy, the effects of the fuels on the environment are expected to be much lower. |
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Rosneft – On the Road to Global NOC Status? Oxford Institute for Energy Studies Since the election of Vladimir Putin as president of Russia in 2000 Rosneft has become one of the cornerstones of the strategy for the Russian state to retake control over the ‘commanding heights’ of the economy, and in particular the energy sector. |
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The Fatal Conceit of the EU 2050 Roadmap By Kent Hawkins The EU 2050 Energy Roadmap is meant to guide Europe to a low-carbon future. But Kent Hawkins argues that the plan is deeply flawed. He notes that the Advisory Group set up to advise the European Commission about the Roadmap issued a highly critical report - which has not received much attention yet. |
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Iran Sanctions: Right Intent, Wrong Approach By Friedbert Pflüger While the oil boycott the US and EU have instituted against Iran is understandable, in view of the repulsive nature of the Iranian regime, it will end up hurting the West rather than the rulers in Tehran, argues Friedbert Pflüger, Director of the European Centre for Energy and Resource Security (EUCERS) at King’s College London. According to Pflüger, the West should deal with Iran the way it dealt with the Soviet Union during the Cold War: with a policy of containment and cooperation, particularly in the energy sector. "While the dangers and malicious character of the ruling regime should not be watered down, stronger economic cooperation, like for instance the 'gas for pipes' deal in 1970 between Germany and Russia, should be pursued." |
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State of Renewable Energies in Europe EurObserv'ER The annual bilingual (French-English) EurObserv’ER report ‘The State of Renewable Energies in Europe’ has been released, in which not only background information is provided on the renewable energy realisations and the renewable energy share, but additionally estimates have been presented for renewable energy related employment and turnover in the EU Member States. |
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From Civil War and Braveheart to the Battle of the Pylons The fight over UK wind power is not over yet By Chris Cragg As far as the UK Government is concerned, the battle over onshore wind power is won. Wind farm capacity has been growing rapidly both on and offshore and there is much more to come. Given the incentives offered this is not a surprise. However as more and more turbines begin to dominate the British skyline, local opposition is by no means finished. Indeed it may have just begun, especially as another front is opening up, namely the grid expansion necessary to connect the turbines. A possible "nuclear renaissance" in the UK will only serve to complicate the picture. Chris Cragg reports on the UK's Battle of the Pylons - which has some surprisingly deep historical roots. |
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On Oil Embargos and the Myth of the Iranian Oil Weapon Oxford Institute for Energy Studies The exchange of threats between Iran and the West vis-à-vis Iranian oil exports to European and other consumer countries has received wide attention among policy makers and analysts; IMF officials predict that crude oil prices could increase by as much as 30 percent in case of a halt of Iran's exports to OECD countries, and if other sources don’t offset the loss of Iranian crude oil. |
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The Future of Russia: Modernization or Decline? Adam Balcer and Nicolay Petrov There is fresh socio-political ferment in the run-up to the presidential elections in Russia. The real challenge, however, is the uphill struggle that the country faces when it comes to its internal prospects and international position. |
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Auditors criticise decommissioning of nuclear reactors in Eastern Europe By Hughes Belin The European Court of Auditors (ECA), which checks the management of EU money, has published a highly critical report on the management of the EU's financial assistance for the decommissioning of eight nuclear reactors in Bulgaria (Kozloduy), Lithuania (Ignalina) and Slovakia (Bohunice). As one "Green" member of the European Parliament puts it, the ECA's report shows 'the enormous hidden costs of nuclear energy'. |
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Harvesting Transition? Energy Policy Cooperation or Competition around the North Sea Clingendael International Energy Programme (CIEP) The Northwest European electricity markets are increasingly becoming intertwined with the advance of the internal market. This implies that national fuel mix policies increasingly have cross-national implications. |
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But serious obstacles still stand in the way of a real smart grid revolution Smart grids move from research to early industrialisation phase by James Osborne There is widespread consensus that the transition to a "sustainable" energy economy requires the introduction on a large scale of "smart grids". At this moment, pilot projects with smart grids are multiplying across Europe. Indeed, according to most industry insiders, the smart grid is moving from a research and development phase to an early industrialisation phase. Still, as our Milan-based energy correspondent James Osborne found out when he dug into the matter, it is by no means certain that smart grids will become a success in the long term. For one thing, new regulatory frameworks are needed to provide investment incentives. In addition, new players need to be brought into the market: Google-type companies that can get consumers to start having fun with their energy consumption. |
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Poland's Flame of Hope By Tim Boersma and Corey Johnson Poland has pinned its energy hopes for the future on a shale gas miracle. But this dream will not be easily to realize, observe Tim Boersma and Corey Johnson. They argue that Poland would be wise to make its shale gas ambitions part of a 'grand strategy' towards a low-carbon economy. |
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To shale or not to shale: that is not the (only) question By Roderick Kefferpütz By focusing too much on the pros and cons of local shale gas production, Europe threatens to lose sight of the bigger gas market picture, argues Roderick Kefferpütz of the Centre for European Policy Studies. That picture, he says, could be quite bright. |
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"A Japan without nuclear industry is almost impossible" Japan's "Nuclear Village": too big to fail? By Rudolf ten Hoedt This year will be decisive for the future of nuclear energy in Japan. Japan had built its industrial, economic and political future on nuclear power. Up until the Fukushima disaster in March 2011 nuclear reactors provided close on 30 percent of national electricity supply. Moreover, Japan had far-reaching plans to significantly boost its nuclear capacity, both domestically and in the form of exports. Now there's a chance that due to maintenance and inspections there won't be a single plant in operation in a few months' time. For a significant minority of the population that's fine - they'd like to see an end to nuclear power for good. But it would be premature to write off Japan's nuclear industry. The political and economic stakes are too high for the nuclear power lobby to give up without a fight. Rudolf ten Hoedt reports from Tokyo. |
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The great transformation: decarbonising Europe's energy and transport systems Georg Zachmann et al, Bruegel The euro-area crisis dominates the economic news. Yet, the world and Europe may face even more important challenges that will shape our lives and the lives of our children.World population is projected to increase to 9 billion or more by 2050. At the same time, current trends indicate an increase in living standards and a growing middle class around the world. These two mega-trends will have profound implications, and the way they are managed will be one of the key determinants of prosperity and peace in the decades or even centuries to come. A number of factors are important in this respect. |
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A new EU gas security of supply architecture Jacques de Jong, Clingendael International Energy Programme (CIEP) As part of a four-party project (with FEEM, the Loyola de Palacio Chair in Florence and Wilton Park) on a new EU Gas security of Supply Architecture, a CIEP-workshop was held in July 2011. The "invitation-only" workshop discussed issues on the global gas market setting and its consequences for the EU gas supply perspectives, on the infrastructure challenges accommodating those (external) supplies, and on the market and regulatory designs that might be needed in that context. |
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Hormuz-Mania: Why Closure of the Strait of Hormuz Could Ignite a War and a Global Depression Michael T. Klare Ever since December 27th, war clouds have been gathering over the Strait of Hormuz, the narrow body of water connecting the Persian Gulf with the Indian Ocean and the seas beyond. On that day, Iranian Vice President Mohammad Reza Rahimi warned that Tehran would block the strait and create havoc in international oil markets if the West placed new economic sanctions on his country. |
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The exciting future of LNG – and how it will transform the global gas market By Alex Forbes Analysis of worldwide LNG investment projects conducted by energy correspondent Alex Forbes reveals a surprising picture. Within just a few years, Australia is set to become a bigger LNG producer than Qatar. North America looks as though it could become a major exporter of gas in the form of LNG. And much of the LNG coming from these sources will be produced using unconventional gas as a feedstock. The message to be gleaned from the behaviour of both LNG buyers and sellers is that global demand for gas is likely to be much more rapid than current projections suggest, with growth led by a ravenous appetite for gas in China. The implications for the global energy market are staggering: the dash for gas will continue with full force. |
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"Netherlands needs to step up its efforts on all fronts" Dutch energy companies show the way to a low-carbon future By Karel Beckman It is "technically possible" to achieve a 40% CO2 emission reduction in the Netherlands in 2030 compared to 1990. A "least-cost" approach to realise this would lead to a "total additional cumulative cost to society" of between €20 and €50 billion. This translates into a cost of €100 to €300 per household per year.These are the main conclusions of a study carried out by Energy Forum NL, a group of seven energy companies active in the Netherlands (Dong Energy, EBN, Eneco, Gasterra, Gasunie, GDF Suez and Shell). |
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A four-point plan for a new international energy cooperation By Noé van Hulst International cooperation in energy markets has been strengthened in recent years, observes Noé van Hulst, Director of the new Energy Academy Europe and former Secretary-General of the International Energy Forum (IEF). But he also notes that energy markets remain far from stable. More needs to be done. For this reason, Van Hulst has drawn up a bold four-point plan to improve international energy relations: nations should agree on a standardized form of communication about their energy policies, they should try to get some agreement on the "pathways" that they want to follow to a cleaner energy future, and they should set up mechanisms to deal with energy crises as well as conflicts or disputes. The IEF, he says, should take a leading role in this global effort. |
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The Boardroom Perspective: How does Energy Efficiency Policy Influence Decision-making in Industry? International Energy Agency Improving energy efficiency (EE) in the industry sector enhances competitiveness and productivity, and provides a range of ancillary benefits. While many investments bring some EE benefits, their aim generally is to enhance core business through an increase in production or replacement of old equipment rather than deliver energy efficiency improvements. |
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Solar photovoltaic market continues to grow in Europe and around the world European Photovoltaic Industry Association (EPIA) The world-wide solar photovoltaic (PV) market continued to grow in 2011 even in the midst of financial and economic crisis, with new grid-connected PV capacities rising by 27.7 GW and propelling the global PV capacity from 39.7 GW at the end of 2010 to 67.4 GW at the end of 2011. Almost 21 GW of this growth occurred in Europe. |
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Shale-Shocked - Fracking Gets Its Own Occupy Movement Ellen Cantarow This is a story about water, the land surrounding it, and the lives it sustains. Clean water should be a right: there is no life without it. New York is what you might call a “water state.” Its rivers and their tributaries only start with the St. Lawrence, the Hudson, the Delaware, and the Susquehanna. The best known of its lakes are Great Lakes Erie and Ontario, Lake George, and the Finger Lakes. Its brooks, creeks, and trout streams are fishermen’s lore. |
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Offshore Grids: Towards a Least Regret EU Policy Florence School of Regulation The objective of the 5th report of THINK has been to formulate policy recommendations to the European Commission (DG Energy) on offshore grids in this context, and this brief is derived from that report. |
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EU Involvement in Electricity and Natural Gas Transmission Grid Tarification Florence School of Regulation Current EU involvement in the regulation of TSO revenues and transmission grid tarification is rather limited and the existing heterogeneity among national regulatory practices and transmission tariff structures might be an obstacle for functioning competition and adequate investments in the grids. |
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Following the petrodollar in the Persian Gulf crisis The Myth of Isolated Iran By Pepe Escobar, Introduction by Tom Engelhardt The US has framed the question of Iranian sanctions as being about the threat of an Iranian atom bomb. In reality, argues Asia Times correspondent Pepe Escobar, it is about oil, the struggle with China for Asian dominance and the future of the US dollar as a global reserve currency. And although the US claims Iran is "isolated", writes Escobar, this is only true from a western perspective. Tom Engelhardt, author, editor and creator of the website www.tomdispatch.com, introduces Escobar's story with some historical background information on the growing crisis in the Gulf. |
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Time to reform the EU Emission Trading Scheme By Thomas Spencer and Emmanuel Guérin While the ongoing debt crisis has absorbed European attention, another centrepiece of European economic integration is also seeing hard times: the European Emissions Trading Scheme (EU ETS). According to Thomas Spencer and Emmanuel Guérin of the French think tank IDDRI (Institut du Déeveloppement durable et des relations internationales), the ETS needs to be urgently reformed if it is to play its role as backbone of European climate change policy. Failure to do so will lead to huge extra costs and damage the credibility of the EU. They analyse the key weaknesses of the ETS and suggest three steps that could be taken to salvage the system. |
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The ambitions of Gottfried Steiner, CEO of Austria's Central European Gas Hub "This will be a heaven for traders" By Alexander Bakst Austria's Central European Gas Hub (CEGH), situated at the crossroads of gas routes between East and West, wants to become one of Europe's major trading hubs. In an interview with European Energy Review, CEO Gottfried Steiner reveals CEGH's strategy to expand the hub's spot-market trading, raise its liquidity and diversify the supply lines to the physical hub at Baumgarten that is connected with the CEGH. 'There will be a lot of gas from different sources all coming to Baumgarten. It will be like heaven for traders.' |
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BP Group Chief Economist Christof Rühl draws optimistic lessons "Availability of affordable energy no obstacle to long-term growth" By Christof Rühl For the second time BP has published its annual Energy Outlook 2030, which contains the energy company's projections of future energy trends. In an article for European Energy Review, BP's Group Chief Economist Christof Rühl discusses some of the major implications of the report. He draws a number of important and surprisingly positive conclusions: market forces, he writes, are driving massive and accelerating energy efficiency gains across the world. Thanks to this trend, and to the innovations produced by the market, there will be enough affordable energy available to support global economic growth. |
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The Vital Relationship: Why Russia needs Qatar (and Qatar could use Russia) By Matthew Hulbert The European gas market is undergoing a profound change. Spot trade is rapidly gaining importance, with lower-priced spot supplies increasingly undermining the long-term, primarily Russian contracts that have traditionally dominated the market. With Gazprom's main buyers losing market share, it seems only a question of time before the Russians are forced to adjust their pricing policies and adapt to the liberalised European market. There is one way out for the Russians, though, argues energy security specialist Matthew Hulbert: to strike some deal with their main rival Qatar. In this article, Matthew sketches various scenarios under which such a Russian-Qatari cooperation in the gas market could develop - and what this could mean for Europe. |
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Sustainablity indicators for bioenergy Global Bioenergy Partnership (GBEP) The Global Bioenergy Partnership (GBEP) has published its report on sustainability indicators for bioenergy, providing an invaluable resource in helping countries assess and develop sustainable production and use of bioenergy. |
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Geology Professor Jan de Jager (ex-Shell) puts West European shale gas prospects in perspective "Unconventionals are easy to find but hard to get" By Annemieke van Roekel Don't expect a US-style boom in shale gas production in Western Europe. It's still not proven that economically viable reserves of shale gas even exist over here. Compared with North America, the regions in Europe characterized by the necessary geological conditions for shale gas are scarce. This is the opinion of Jan de Jager, newly appointed professor in Regional and Petroleum Geology at the University of Utrecht, who before his appointment worked as exploration geologist for Shell for over 30 years. In an interview with science journalist Annemieke van Roekel, De Jager notes that unconventional gas tends to be 'easy to find, but hard to produce' - certainly in North Western Europe. |
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Wind and Gas, Back-up or Back-out, "That is the Question" Nora Méray, Clingendael International Energy Programme The focus of this study is to explore the effect that the deployment of a large share of wind energy has on the Northwest European power generation mix in the current market circumstances. Natural gas is often mentioned as a suitable partner for wind. This paper tries to substantiate and quantify the current and potential relationship between gas and wind in Northwest European electric power supply in the context of the transition towards a low-carbon energy economy. |
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The Future of Coal: Clean coal technologies and CCS in the EU and Central East European Countries Frank Umbach, EUCERS The study “The Future of Coal: Clean Coal Technologies and Carbon Capture and Storage (CCS)” addresses the global and European dimensions of CCS - the opportunities but also the challenges associated with this new technology that may spark a revolution in our future energy policies. |
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Who will win the first leg of the pipeline race in South East Europe? The Southern Gas Corridor: Reaching the Home Stretch By Friedbert Pflüger After many years of speculation about possible gas pipelines to be built in the so-called Southern Corridor, a first likely winner will be announced shortly. It probably won't be the EU-backed Nabucco nor the Russian-backed South Stream, but the much less ambitious Trans Adriatic Pipeline (TAP), owned by Eon, Statoil and EGL. This is the prediction of Friedbert Pflüger, Director of the European Centre for Energy and Resource Security (EUCERS) at King's College London. In this article written for EER, Pflüger, who served for twenty years as a Member of Parliament and was State Secretary in the first Merkel government, explains why the Southern Gas Corridor is crucial to Europe's energy future and how it is likely to develop. |
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Danger Waters: The Three Top Hot Spots of Potential Conflict in the Geo-Energy Era Michael T. Klare Welcome to an edgy world where a single incident at an energy “chokepoint” could set a region aflame, provoking bloody encounters, boosting oil prices, and putting the global economy at risk. With energy demand on the rise and sources of supply dwindling, we are, in fact, entering a new epoch -- the Geo-Energy Era -- in which disputes over vital resources will dominate world affairs. In 2012 and beyond, energy and conflict will be bound ever more tightly together, lending increasing importance to the key geographical flashpoints in our resource-constrained world. |
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A quick guide for energy decision-makers 11 tips, trends and traps for 2012 By Matthew Hulbert and Karel Beckman Energy security expert Matthew Hulbert and European Energy Review's chief editor Karel Beckman got together to provide a quick guide to 2012 for European energy decision-makers. Their most important recommendations: check your plan B, prepare the International Energy Agency for a new future, launch an Apollo programme for energy efficiency, free nuclear power from the embrace of the State, put an end to UN climate conferences and hold on to your hats. |
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Responses to the 2050 Energy Roadmap: "Oettinger's think piece" now needs to be backed up with concrete actions By Karel Beckman Responses to the EU's 2050 Energy Roadmap range from "broadly" positive to fairly and sometimes highly critical. The most heard criticism is that the Commission fails to put words into action. As WWF puts it, 'Oettinger's roadmap will remain a pure think piece if not backed by effective legislation'. |
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Two years of EER online And the winner is ... Dutch windmills By Karel Beckman Editor Karel Beckman looks back on the second year of EER's online existence. For EER, the news has been overwhelmingly positive: the number of subscribers and visitors has continued to grow. He also reveals what was EER's best-read story of 2011. Rather surprisingly, it was a story about Dutch windmills! |
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Energy Efficiency - Should we take it seriously? Malcolm Keay, Oxford Institute of Energy Studies In this Paper, Malcolm Keay looks at governments’ uncritical reliance on energy efficiency to achieve multiple energy policy objectives. He concludes that most existing programmes are ill-directed, badly monitored and probably ineffective in reducing energy demand and emissions – indeed they may be diverting attention from more effective measures. A more targeted approach is needed under which efficiency programmes are properly designed and monitored and integrated more effectively into low carbon strategies. |
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Peering into the future fog of C02 – how road maps can help David Buchan, Oxford Institute for Energy Studies The term ‘road map’ is proliferating in energy and climate policy to denote any policy or aspiration projected into the future. Connie Hedegaard, Europe’s environment commissioner, hailed the Durban conference agreement as a ‘road map’ to an eventual global climate deal. |
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Homes responsible for one quarter of European greenhouse emissions from energy European Environment Agency Home energy use is responsible overall for 25 % of energy-related greenhouse gas emissions in the European Union (EU), according to a new analysis from the European Environment Agency (EEA). The report calculates emissions based on their 'end use', or the sector using the energy. Homes in the EU only emit 12% of energy emissions directly, but this doubles when related emissions from power plants and district heating are factored in. |
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Algeria is at risk without EU-backed reform European Council on Foreign Relations While Tunisia, Egypt and Libya have been convulsed by uprisings and conflict, Algeria has remained calm. But if upheaval does spread to Algeria this will further destabilise the region and harm Europe’s interests on issues of energy, security and migration. |
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A radically different transport sector by 2050 World Energy Council The World Energy Council (WEC) expects that transport fuel demand in the next forty years will come mainly from developing countries such as China and India, where demand will grow by 200% to 300%. In contrast, the transport fuel demand for the developed countries will drop by up to 20%, mainly due to increased efficiencies. The demand of the developing countries is expected to surpass that of the developed countries by the year 2025. |
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Pier Nabuurs, Chairman Smart Energy Collective, ex-CEO KEMA, on how to go forward with liberalisation and smart grids "My smart meter should belong to me, not to the network company" By Karel Beckman Pier Nabuurs, retired CEO of the prestigious Dutch energy consultancy KEMA, Chairman of the Smart Energy Collective in the Netherlands and former President of the European Technology Platform Smart Grids, is concerned that anti-market sentiments could derail the liberalisation of the European energy market. That would be a disaster, he says. 'The transition to a low-carbon economy needs a free, competitive energy market.' Nabuurs is dismayed that the European Commission has put responsibility for the development of smart grids into the hands of the network companies. 'We need to involve a wide range of different companies to build the platform that will launch innovation in the energy market.' |
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It's energy that will make or break the BRICs By Matthew Hulbert The future of the world economy (including the global energy market) depends increasingly on how the partnership of the BRIC countries will develop. Of course Brazil, Russia, India and China hardly form a natural 'bloc', yet the BRIC acronym has acted to some extent as a self-fulfilling prophecy, corralling the four emerging economies into an uneasy alliance. But how far this partnership can go, depends more than anything else on the energy relations between the four countries, argues Matthew Hulbert. It is ultimately how they will play out their energy interests that will come to define - or destroy - BRIC relations. |
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Renewable Energy: Vision or Mirage? Adam Smith Institute There have been many studies on renewable energy technologies in recent years, both from a UK perspective and elsewhere. Some cover a rather narrow aspect, a number present a somewhat one-sided view, and most focus on a single source of energy, generally wind. |
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Durban leaves large question marks hanging over climate policy By Sonja van Renssen The EU hailed the outcome of the climate conference last weekend in Durban, where world governments agreed to create a new global climate treaty by 2015, to enter into force in 2020. This successor to the Kyoto protocol will for the first time require emerging economies such as China and India to cut their emissions. The world is once more set on the path to a low-carbon future, said EU representatives. Yet there will be no increase in emission cuts for a decade and uncertainties continue to plague the future climate regime. The big question is whether Durban gives energy companies the signals they need to invest in a low-carbon future. The answer is far from clear. Sonja van Renssen reports from South Africa. |
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Denmark, holder of the next EU Presidency, goes for 100% decarbonisation Danes decline oil, gas, coal and nuclear By Frede Vestergaard The newly elected Danish centre-left government has set Denmark on a radical decarbonisation course. It has raised the CO2-reduction target from 20 to 40 per cent by 2020 and wants a complete phasing out of all fossil fuel use by 2050. Denmark, poised to take up the EU Presidency in January, already has the highest energy prices in Europe, but the government believes its new ambitious green policies will be good for the economy: they will stimulate green technology with a big potential for jobs and exports. |
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Obama's risky oil threat to China Playing with fire By Michael T. Klare When it comes to China policy, is the Obama administration leaping from the frying pan directly into the fire? In an attempt to turn the page on two disastrous wars in the Greater Middle East, it may have just launched a new Cold War in Asia – once again, viewing oil as the key to global supremacy. |
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The new EU External Energy Policy: an important move - if it is not too late By Alexander Mirtchev With the adoption of its new External Energy Policy, the EU has finally made a first step towards its integration as a single negotiating bloc in the world energy market. As such the External Energy Policy could become an important factor in the global energy security picture and a possible geopolitical game-changer. However, it remains to be seen whether the big EU member states will be willing to subordinate their interests to the wider EU interest. The External Energy Policy has probably come five years too late, argues Alexander Mirtchev, President of Krull Corp. and Vice-President of the Royal United Services Institute for Defence and Security Studies. |
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California's Energy Future: Powering California with Nuclear Energy California Council on Science and Technology This report is aimed at examining the potential of nuclear energy to meet California’s electricity demand in the year 2050. The main focus of our analysis is on the CCST Realistic Model (described in detail elsewhere) which assumes that total electricity demand in California in the year 2050 amounts to 510 terawatt-hours per year (TWh/y). |
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UN: Bridging the Emissions Gap to Meet 2-Degree Target Do-able UNEP Cutting emissions by 2020 to a level that could keep a global, 21st century, temperature rise under 2 degrees C is technologically and economically feasible, says a comprehensive new study released today by the UN Environment Programme (UNEP). |
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New policy approaches key to attracting massive private capital needed to scale up renewable energy IEA-RETD Governments should consider scaling up of renewable energy as part of their robust economic development strategy, rather than as an environmental strategy with the secondary benefits of job creation. Such an approach is fundamental for attracting new private-sector investment to finance renewable projects at a scale that is needed to address climate change. Proven mechanisms should not be abandoned, but new policies have to target ways to reduce the risk-to-reward ratio in order to enhance private sector investor confidence for investment in large-scale renewable energy. |
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New stability and prospects for Kurdish oil and gas By Friedbert Pflüger and Arash Duero ExxonMobil has become the world's first major international oil company to venture into Iraqi Kurdistan. ExxonMobil's bold move may be seen as a validation of investor confidence in Iraqi Kurdistan's economic progress. It may even signify that the Kurdistan Regional Government (KRG) is inching closer to reaching an agreement with the central government in Baghdad on the long-standing dispute over the ownership and revenue sharing of the region's hydrocarbon resources. It is high time for European policymakers and businesses to start engaging themselves with Iraqi Kurdistan - as the US, Turkey, Japan and Korea are already doing. |
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Ready … set … go! The European decarbonisation race is on By Sonja van Renssen In February European political leaders called for an energy revolution. Next week on 13 December the European Commission will release its long-awaited response to this call: a 2050 Energy Roadmap that sets up the signposts and the routes that are meant to lead Europe to a decarbonised future. However, drafts of this Roadmap, including the accompanying impact assessment, have already been circulating for weeks in Brussels, and have given rise to the first heated debates. EER's Brussels correspondent Sonja van Renssen spoke to stakeholders and gives a first overall sketch of the European energy revolution-in-the-making. Her most important conclusion? Despite all the modelling, it is the decisions taken by policymakers that will determine what our energy future will look like. |
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Europeanising the German Energy Transition Severin Fischer, Oliver Geden, German Institute for International and Security Affairs (SWP) Germany's so-called »Energiewende« (energy transition) of summer 2011 could be the final episode of a long-running political conflict over the use of nuclear energy. |
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Huge renewable energy growth this decade, if EU countries meet projections European Environment Agency Offshore wind energy capacity in Europe is projected to increase 17-fold between 2010 and 2020, while newer renewable technologies such as concentrated solar power and wave/tidal power will also increase more than 11-fold according to projections. European countries are also expected to significantly boost solar photovoltaic power, onshore wind and other renewable technologies over the next decade. |
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Where is the renewable energy equivalent of Amazon, Google or Facebook? Why Silicon Valley will never become Green Energy Valley By Andrew McKillop Despite spending hundreds of billions of venture capital on developing "Green Energy", Silicon Valley never produced any companies or technologies that managed to achieve a breakthrough in energy. That was left to the son of a Greek goat herder who worked in the dirty old fossil-fuel sector that attracted no interest from the likes of Bill Gates. Analyst Andrew McKillop explains why the Silicon Valley model does not work in the energy sector. |
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Norway regains faith in its oil future By Reiner Gatermann Barely a year ago, many voices were heralding the end of the Golden Oil Age for Norway. The country seemed to have less than 10 years of oil production left. But recently the mood has changed. Several large discoveries were made that promise to extend Norway's oil and gas paradise far into the future. Not only that, but the new Minister of Petroleum and Energy, Ola Borten Moe, has effectively indicated that Norway will wholeheartedly join the rush for the riches of the Arctic, environmental concerns notwithstanding. |
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Forks in the road - Alternative Routes for International Climate Policies and their Implications for the Netherlands Netherlands Environmental Assessment Agency In recent years many ‘alternative routes’ for international climate policies have emerged or have been suggested in response to a perceived too slow progress in the climate negotiations. In these proposals, three general pathways can be identified. |
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French study: Electricity liberalisation has failed to deliver benefits to households By Hughes Belin A new study by the Institut Français des Relations Internationales (IFRI) shows that the liberalisation of electricity markets in the EU 'has not had a major effect on prices'. It also shows that opening up and connecting markets does not necessarily lead to a more efficient system. The results of the study, which was presented in Brussels earlier this week, are contrary to what the European Commission has always claimed. |
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Together Alone: BASIC countries and the climate change conundrum Nordic Council of Ministers Since 2009, Brazil, South Africa, India and China – known as the BASIC group of countries – have cooperated in international climate negotiations, reflecting their aspiration to have a larger say in global politics. But there are some who claim that the approach of the bloc has obstructed progress in the talks. |
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How CCS can transform our energy future By Robin Mills Carbon capture and storage (CCS), perennially described as an 'unproven' or 'non-commercial' technology, should be able to shake off those tags over the next few years - and emerge as one of the pillars of Europe's and the world's future energy supply, argues author and energy expert Robin Mills. With CCS, writes Mills, we can continue to use our massive fossil fuel resources for the benefit of people across the globe. "CCS offers a qualitative change to climate strategy, a third dimension beyond efficiency and renewable energy. Rather than the static aim of sustainability, carbon capture adds to the energy system's resilience." |
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Carbon capture and storage has large impact on air pollution European Environment Agency Carbon capture and storage (CCS) involves capturing carbon dioxide released by power stations and other industrial sources, and burying it deep underground. But in addition to keeping an important greenhouse gas (GHG) out of the atmosphere, this technology will lead to benefits and trade-offs for air pollution. A new report from the European Environment Agency (EEA) describes the effects that CCS may have on emissions of some key air pollutants. |
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Study reveals how to build a CO2 transport system for Europe Finally, the plan for the CCS revolution By Karel Beckman European plans for CCS (carbon capture and storage) will require a network of 22,000 kilometres of CO2-pipelines to be built across Europe. The construction of this network, which will be able to transport 1200 million tons of CO2 per year by 2050, will cost some €50 billion. This is concluded by an international consortium of companies and research institutions, CO2Europipe, that has conducted a unique in-depth study to find out what it takes to build a European-wide CO2 transport network. According to CO2Europipe, the most important challenge lies in coordinating all the many activities the complex project requires. For this reason it recommends that a small "vanguard" of nations (UK, Germany, Norway, the Netherlands and Poland) take the lead and develop a Master Plan in collaboration with the European Commission.In an interview with EER, Stijn Santen, one of the authors of the report, calls on policymakers to come forward and support CCS. 'Without CCS, fighting climate change will be much more expensive.' |
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Industry sounds warning: interest of key players will be lost if no firm action is taken CCS in Europe under serious threat By Sonja van Renssen Carbon capture and storage (CCS) is facing strong headwinds in Europe. EU member states have so far failed to translate an EU CCS law into national legislation. In the UK, a prestigious demonstration project has been cancelled. The European Commission still supports CCS, but sees an important role for it only after 2030. Too late, say beleaguered industry representatives. They fear that the momentum for CCS will be lost and key players will desert their CCS activities if policymakers don't take firm action soon. "The moment to push is now." |
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Fatih Birol's sombre perspective on our energy future 'Depressing ... disappointing ... bad news' By Alex Forbes The world's slow progress towards legislating for a sustainable energy future means we may have to live with the consequences of global warming as we lose the ability to get it under control. Such is the stark warning coming from the International Energy Agency's latest World Energy Outlook, published last Wednesday. Alex Forbes asked Fatih Birol, the IEA's Chief Economist, what can still be done to avert climate disaster. Birol's answers are sombre throughout. |
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JRC Report on Critical Metals in Strategic Energy Technologies Joint Research Council The Institute for Energy and Transport of the Joint Research Centre (JRC) of the European Commission has conducted a study to assess whether there could be any potential bottlenecks to the deployment of low-carbon energy technologies in the EU due to the shortage of certain metals. The study examined the use of metals in the six low-carbon energy technologies of SET-Plan, namely: nuclear, solar, wind, bioenergy, carbon capture and storage and the electricity grid. |
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Messages from the IEA's Energy World Energy Outlook 2011 Act now - or be locked in By Alex Forbes EER's UK correspondent Alex Forbes attended the launch last week of the International Energy Agency's flagship publication, the World Energy Outlook, and reports on its major findings. The IEA has been sounding strong warnings to policymakers for some years now about the necessity to tackle climate change by switching to a low-carbon energy future. This year, for the first time, it has put a deadline to its warnings: by 2017, if present trends continue, the world will be locked into a 2°C temperature rise. |
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Domestic Gas Prices in Russia – Towards Export Netback? James Henderson, Oxford Institute for Energy Studies This paper, by James Henderson, concludes that Russian domestic gas prices are not likely to reach European netback levels any time soon, but that the momentum of the past five years towards significantly higher domestic prices will continue, leading to an eventual liberalization of the Russian gas market. Over the next decade, this could create fundamental changes in Russia’s relationship with European gas markets with potential competition for available supplies between domestic and European export markets. |
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EU Treaty revision - a plea to update energy policy in Europe's constitution By David Buchan, Oxford Institute of Energy Studies The German decision to abruptly shut down seven nuclear power plants has had major adverse consequences for some of its neighbours, who have already responded with countermeasures. David Buchan proposes that a possible revision of the EU Treaty – if this were to take place as the result of Eurozone crisis – be used to amend the Treaty’s energy article, requiring member states to consult with each other before making major changes to their energy mix. This would help prevent similar surprises in future and put the internal energy market on a firmer footing. |
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Why "energy independence" means less power for the US, not more By Matthew Hulbert American energy observers are super-excited about the huge unconventional prospects popping up all over the Americas. "Energy independence" is the new buzz word: with a bit of help from the likes of Canada and Brazil, the US can pack up, go home, and recycle petrodollars in its own back yard, the pundits say. But they are forgetting one thing: become "independent" and you lose your power in the world. Besides, Brazil, Canada and other countries in the Americas may have other ideas. For Europe, though, the new American independence game should be a wake-up call. |
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Wind energy and EU climate policy European Wind Energy Association Achieving 30% lower emissions by 2020. A report from the European Wind Energy Association. |
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The pros and cons of building a new nuclear power plant in Bulgaria - and why it matters to Europe By Atanas Georgiev Bulgaria has to decide whether to finish the construction of the Russian-made nuclear power plant Belene, which was started in the 1980s and halted in 1990 after the dissolution of the Soviet Union. The stakes are high, and not just for Bulgaria. A positive decision would make Belene the first Russian-built atomic energy facility within the borders of the EU. |
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Power Perspectives 2030 – On the road to a decarbonised power sector European Climate Foundation Power Perspectives 2030 builds on the widely referenced Roadmap 2050: a practical guide to a prosperous low-carbon Europe, and provides an analysis of the next steps required in the development of the European power sector by 2030 in order to remain on track to full decarbonisation by 2050. |
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Power and gas exchange APX-Endex branches out into wood pellets Dutch launch world's first biomass exchange By Karel Beckman The Dutch power and gas exchange APX-Endex has opened the world's first Biomass Exchange in Amsterdam. The new Exchange will serve as a platform for trade in standardized industrial wood pellets, which are increasingly used as a renewable alternative for coal in coal-fired power stations. 'We hope that our Exchange will bring long-term security and stability to this growing market', says Pieter Schuurs, COO of APX-Endex. |
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Climate Change and National Security: Are They Linked? William O'Keefe Increasingly, it has become common to assert that environmental change brought on by rising temperatures caused by humanity's industrial activities and lifestyle choices will negatively impact U.S. national security interests. A new paper by Institute CEO William O'Keefe examines the basis for these claims. |
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A necessary kick-start to energy infrastructure from Brussels Just build it! By David Buchan, Oxford Institute for Energy Studies (OIES) The European Commission, accused of timidity and irrelevance in the eurozone crisis, has launched bold proposals to involve the European Union, for the first time, in streamlining national planning approval of vital energy infrastructure and in financing it. Brussels finally seems to have lost its market innocence. |
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JRC Report on Critical Metals in Strategic Energy Technologies Joint Research Council The Institute for Energy and Transport of the Joint Research Centre (JRC) of the European Commission has conducted a study to assess whether there could be any potential bottlenecks to the deployment of low-carbon energy technologies in the EU due to the shortage of certain metals. The study examined the use of metals in the six low-carbon energy technologies of SET-Plan, namely: nuclear, solar, wind, bioenergy, carbon capture and storage and the electricity grid. |
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Expanding the European Dimension in Energy Policy David Buchan, Oxford Institute for Energy Studies This paper relates to events taking place at the European level to help the European Union towards its ambitious 2020 energy and climate goals. Specifically, the paper tracks the European Commission’s initiatives in 2011 to streamline national planning approval of vital energy infrastructure, to use EU funds to leverage more private finance for energy projects, and to lend some reality to a common external energy policy through Commission-led negotiations with foreign energy suppliers on international infrastructure. |
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Europe's green energy chaos By Andrew MacKillop The EU's climate and energy policies are too expensive, too ambitious, too complex - and ineffective to boot, argues Andrew MacKillop. Brussels' blind faith in drastically reducing CO2 emissions and liberalising energy markets will profit only a select group of companies and officials at the expense of everyone else. EU officials would do well to rethink their plans - before the public rises up in anger. |
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Europe's new energy frontier By Vlad Popovici Europe is about to acquire a new major oil and gas province: the Levant Basin. In this region in the Eastern Mediterranean the world's two largest deepwater gas discoveries were made in 2009 and 2010. More exploration is underway. But it is too soon to start cheering; players in this new energy frontier have to address formidable challenges - complex regional geopolitics, huge technical and financial requirements, and the lack of a stable regulatory and fiscal framework. |
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Europe needs one voice on energy - and one pair of ears By Adnan Vatansever Europe is increasingly trying to to speak with one voice on energy, in particular towards its principal supplier - Russia. The question for Brussels is how to shape Europe's external energy policy without exposing otherwise mutually beneficial energy relations with Russia to new risks. |
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Interview: Anders Eldrup, CEO Dong Energy How to make the world safe for offshore wind By Karel Beckman The relatively small Danish energy company Dong is world leader in offshore wind. With a large pipeline of projects, and institutional investors lining up to participate in them, the state-owned company is bound to remain so for some time to come. CEO Anders Eldrup explains the strategy behind Dong's offshore wind activities: 'We are working towards an industrialisation of the sector. With one goal: to bring costs down.' But with how much, he does not want to say. Karel Beckman reports from Copenhagen. |
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Russia and Europe: Time to bury the hatchet - and embrace the market By Friedbert Pflüger In the current economic climate, strong energy ties between Russia and Europe could be beneficial to both sides. But an intensive energy relationship can only work if it is based on equality, argues Professor Dr. Friedbert Pflüger, Director of the European Centre for Energy and Resource Security (EUCERS) at King's College London, and former State Secretary in the first Merkel government. The EU should make it clear that it will not discourage Russian pipeline and downstream investments in the European market - if Russia makes it clear it is willing to play by the European rules. |
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The role of natural gas in enhancing global energy security Alexander Medvedev, Deputy Chairman of Management Committee, Gazprom Speech at the IEA Ministerial meeting, Paris, 18 October 2011. Ladies and gentlemen, Dear colleagues. You would probably be surprised if — as a representative of the world’s largest gas company — I would not call natural gas the main leverage of the future energy security. Actually, I will reiterate this dictum today at our meeting but not only because I represent precisely this industry. |
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The Myth of Green Jobs Global Warming Policy Foundation One of the UK's leading energy and environment economists warns that the government's promise that green energy policies will create tens of thousands of jobs and stimulate competitive industries is an illusion. |
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Kiruna: a case study in public acceptance By Mary Harries Magnusson Policymakers and energy companies are increasingly faced with the question how to overcome the growing public opposition to their projects and plans. Some answers may be found in an unlikely place: Kiruna, a mining community in Swedish Lapland. The residents there did not merely consent to a large expansion of the neighbouring mine - they even agreed to move their town to accommodate this project. Although some aspects of the Kiruna case are exceptional, in many other ways it can serve as a model of how to go about winning public acceptance, as Mary Harries Magnusson discovered when she visited Lapland recently. |
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Brussels: energy projects of "common interest" should get special treatment By Sonja van Renssen The European Commission will launch a proposal next week intended to stimulate the construction of major new electricity, oil, gas and CCS infrastructure projects. The primary aim of the proposal, of which EER has obtained a draft copy, is to establish a number of 'projects of common interest' (PCI's) that will be able to benefit from specially designed fast-track permitting procedures. These should override the cumbersome national procedures that are now in place in various member states. The proposal further puts pressure on national energy regulators to grant extra financial incentives to investors and sets out conditions under which projects will get special EU subsidies. |
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An achievable goal: Giving modern energy to the billions who lack it IEA Energy poverty is an unacceptable blight – one that won't disappear unless strong, co-ordinated actions are taken on a global scale. Now, a new report from the International Energy Agency shows that universal access to modern energy by 2030 is an achievable goal and spells out exactly how to pay for it. |
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New report supports incentives that further the sustainability of biofuels Ernst & Young A report by Ernst & Young published on 5 October 2011 indicates that indirect land use change (ILUC) risks can be mitigated by incentives that encourage existing and additional sustainable practices in biofuels production, as well as other sectors that use agricultural commodities. |
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Interview: Fulvio Conti, CEO Enel and President Eurelectric "We are ahead of the pack and we will try to stay ahead" By Karel Beckman 'I want to make this the best company in our sector in the world.' Fulvio Conti, CEO of Enel and newly elected President of Eurelectric, has a clear vision of where he wants to go with Europe's most internationalised "utility" company. His ambition is to create the world's leading utility multinational on the model of the multinational oil companies: through vertical integration, geographical and technological diversification, innovation and transparency. 'I think we are ahead of the pack', he says in an interview with EER, 'and we'll try to continue to be ahead.' But he sounds a warning note about the internal European energy market. 'The European energy sector is becoming uninvestable.' |
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Attention all passengers: this plane is flying on abattoir waste By Reiner Gatermann Test flights recently carried out by Lufthansa and Finnair on passenger flights in Europe show that conventional kerosene can be replaced by biofuel without any technical problems. There are also sufficient feedstocks available to produce large amounts of "aviation biofuel" in the future. The main obstacle currently holding back the growth of the market are lack of demand and high price. Still, the world's number one producer of aviation biofuels, Neste Oil from Finland, is confident that the market will start to grow now that airlines will be included in the EU's Emission Trading Scheme from 2012 onwards. |
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BP drives stake through the Southern Corridor By Matthew Hulbert Just when Moscow thought it had sealed the Southern corridor through the nascent South Stream pipeline, BP has thrown a serious spanner in the works. For Brussels, BP's plan to build its own pipeline from Azerbaijan might even be more upsetting. |
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The case against CCS By Peter Droege and Matthew Ulterino Governments all over the world are spending billions to build a massive carbon capture and storage (CCS) infrastructure. This money would be much better spent on helping to develop renewable energy, argue Peter Droege, Professor of Sustainable Spatial Development at the University of Liechtenstein and and urban planning consultant Matthew Ulterino. A plea for governments and research groups to rethink their CCS pledges. |
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Long-Term, Stable Policy Support Key to Reducing Cost of Financing Renewable Energy Projects Climate Policy Initiative Climate Policy Initiative (CPI)’s analysis of six large-scale renewable projects in the United States and Europe found that policies can deliver the largest reductions in project financing costs by providing long-term revenue support, offering revenue certainty, and reducing investor perceptions of risk. CPI identified specific ways in which policies affected the cost of finance for these projects and estimated the size of these effects by modeling a range of policy scenarios for each project. |
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The coming breakdown of the power grid (Or: why electric cars can work only if consumers turn to smart charging)
If millions of Germans were to switch to electric cars, would this put an unbearable strain on Germany's power generation capacity? Not at all, says German technology executive and Eurelectric specialist Peter Birkner. But it would lead to a breakdown of the power grid. There is only one solution, according to Birkner: the widespread introduction of smart charging systems. The consumer will have to become an integral part of the electricity system. |
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Steep increase in global CO2 emissions despite reductions by industrialised countries with binding Kyoto targets Joint Research Council After a 1% decline in 2009, global carbon dioxide (CO2) emissions increased by more than 5% in 2010, which is unprecedented in the last two decades, but similar to the increase in 1976 when the global economy was recovering from the first oil crisis and subsequent stock market crash. CO2 emissions went up in most of the major economies, led by China and India with increases of 10% and 9% respectively. |
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Nord Stream: Neue Sorgen for Europe By Matthew Hulbert With Nord Stream coming online, South Stream proceeding smoothly and the main German Nabucco-supporter RWE being driven into the arms of Gazprom by Germany's nuclear policy, the geopolitical gas power play in Europe is going Moscow's way. When will European countries wake up to the dangerous situation they are creating for themselves, wonders Matthew Hulbert? |
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Industry body warns that climate policies and regulatory burdens will have 'major impacts' on EU oil market European refineries face 'dramatic' future By Sonja van Renssen An inexorable decline in the demand for oil in combination with ever more stringent regulatory burdens will lead to the closure of roughly half of the capacity of the 100 oil refineries in Europe by 2050. This 'dramatic' picture emerges from a new long-term report produced by Europia, the European Petroleum Industry Association. Although Europia accepts that the importance of oil in the European energy sector will decline as a result of climate policies and the rise of renewable energy, it warns that stifling European regulations are threatening the viability of the remaining refineries. This could have major consequences for the European economy and Europe's import dependence, says Europia's Secretary-General Isabelle Muller in an interview with EER. |
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Dutch natural gas strategy: historic perspective and challenges ahead R. Weijermars and S.M. Luthi This paper in the Netherlands Journal of Geosciences discusses the history and the future of Dutch natural gas strategy. |
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How Washington Creates Global Instability By Nick Turse It was built for... well, not to put too fine a point on it, victory. I’m talking, of course, about the ill-named Camp Victory, the massive military complex, a set of bases really, constructed around an old hunting lodge and nine of former dictator Saddam Hussein’s opulent palaces near Baghdad International Airport. |
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EIA projects world energy use to increase 53 percent by 2035 Energy Information Administration The International Energy Outlook 2011 (IEO2011) released by the U.S. Energy Information Administration (EIA) presents updated projections for world energy markets through 2035. The IEO2011 Reference case projection does not incorporate prospective legislation or policies that might affect energy markets. |
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French Parliament: blind to the bigger energy picture By Boris Martor and Raphaël Chétrit In October, two new bills will be examined in the French Parliament, which, if adopted, will halt any further development of shale gas and oil in France. The bills aim at forbidding the exploitation of shale oil and gas irrespective even of future innovations in exploitation techniques. According to Boris Martor and Raphaël Chétrit, the shale gas debate in France is not based on rationality or science, but on ideology and electoral posturing. The outcome is likely to cost France billions of euros and hurt the EU's security of energy supply. |
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Scotland's sweeping green energy ambitions By Scottish European Green Energy Centre (SEGEC) If it is up to the Scottish government, the waters around Scotland will become the green energy powerhouse of Europe. The country has formulated highly ambitious renewable energy targets. These will have to be met by an offshore wind power revolution in the rough Scottish waters. The Scottish Green European Energy Centre gives an overview of the plans. |
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Peak Oil: Security Policy Implications of Scarce Resources Bundeswehr Transformation Centre Study from the German Army looks into the security consequences of peak oil. It was published last year and has now become available in an English translation. It was made available through the internet by energybulletin.net. |
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European Climate Foundation calls on policymakers to engage the financial community Energy transition: power companies can't do it on their own By Karel Beckman European energy companies will not be able to finance the transition to a decarbonised power system on their own. They will need the help of institutional investors. But these investors will only become involved if the EU and member state governments become more actively engaged with them and reduce the policy risks associated with low-carbon energy sources. Those are some of the main conclusions coming out of a new report from the European Climate Foundation about how to finance Europe’s transition to a low-carbon economy. EER's editor Karel Beckman spoke with two of the report’s authors, Martijn Broekhof and Sean Kidney. "There has been too much emphasis on pushing risk on to investors." |
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External energy policy: Brussels takes charge By Sonja van Renssen For the first time, Brussels is taking concrete steps to wrest control of external energy policy from the EU member states. To begin with, the European Commisson wants to monitor all intergovernmental energy deals between EU member states and third countries. In the longer term, it wants to be allowed to negotiate energy deals on behalf of the EU. The proposals come at a sensitive time in the history of the European Union. |
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Switching from coal to natural gas would do little for global climate, study indicates National Center for Atmospheric Research Although the burning of natural gas emits far less carbon dioxide than coal, a new study concludes that a greater reliance on natural gas would fail to significantly slow down climate change. |
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Lithuania on collision course with EBRD over dismantling of Ignalina By Reiner Gatermann Lithuania is following a two-track nuclear energy policy: it is decommissioning the closed-down Ignalina nuclear power plant and wants to build a new nuclear plant at Visaginas. Despite having recently selected GE-Hitachi as "strategic investor" for Visaginas, it is still far from certain whether this project will ever be realised. But the decommissioning project has also run into major problems. The Lithuanian government has come into sharp conflict with the European Bank for Reconstruction and Development (EBRD), which administers the decommissioning fund, about how to dismantle the plant. In addition, the project is facing a financing gap of €1.5 billion after 2014. |
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Winners and Losers in the Great Global Energy Struggle to Come The New Thirty Years' War By Michael T. Klare A 30-year war for energy preeminence? You wouldn’t wish it even on a desperate planet. But that’s where we’re headed and there’s no turning back, says energy author and Professor of Peace and World Security Studies Michael Klare. |
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There's still hope for Exxon's rivals in the Russian Arctic By Matthew Hulbert The Rosneft-ExxonMobil deal looks sensational at first sight, but the actual commitments from the two companies are still quite small. Both sides look to be hedging their bets. Which means Exxon's rivals can still hope to become part of Russia's Arctic future. |
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CIEP Energy Paper: “CIEP Vision on the Gas Target Model” Clingendael International Energy Programme CIEP sheds its light on the European discussion concerning a Gas Target Model. A discussion around a future framework for gas regulation should start with the market and its developments, i.e., the gas industry and its transaction mechanisms, which are represented in a variety of forms, from long-term contracts to spot deals. Each has its own role to play in the total make-up of the gas business, and each represents a transaction between two willing market players. |
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Shale gas battle in Bulgaria - high stakes for Europe by Atanas Georgiev The recent announcement from the Bulgarian Ministry of Energy that US oil company Chevron has been awarded a shale gas exploration licence in the north of the country, has brought a new urgency to the long-simmering debate on shale gas in Bulgaria. The Bulgarians are asking themselves whether shale gas would be the best way of achieving greater energy independence and what its potential environmental hazards might be. For the Russians in particular there is more at stake than may be apparent at first sight. Atanas Georgiev reports from Sofia. |
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Shale gas: controversy and resources By Karel Beckman In this space we recently reported that a new assessment of the Marcellus Shale in the northeastern US by the US Geological Survey seemed to indicate that shale gas resources in the US may be a lot smaller than was previously thought. This, however, turned out to be incorrect. Below we give the correct story - and provide an overview of recent shale gas publications, including our own. |
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IEA: the Age of Gas is coming, but will not solve all our energy problems By Karel Beckman China’s ambitious new gas development policy, troubles in the nuclear sector, the need to reduce carbon emissions and the discovery of vast new unconventional gas resources are all combining to lead us into a “golden age of natural gas”, says the International Energy Agency (IEA). But, the IEA adds, a global dash for gas will not change the industrial world’s dependency on oil imports and it will not reduce the need to take drastic climate measures. ‘There is no doubt that energy is going to be more expensive’, says IEA division head László Varró. |
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The Impact of Import Dependency and Wind Generation on UK Gas Demand and Security of Supply to 2025 Oxford Institute of Energy Studies This paper by Howard Rogers challenges the assumption of UK government policy papers and projections that, as a result of substantial increases in renewable and other low carbon generation capacity, the role of gas in the will decline rapidly over the next decade and beyond. The study suggests that gas will retain a central and undiminished role in the UK power generation sector. |
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The Spanish Gas Market: Demand Trends Post Recession and Consequences for the Industry Oxford Institute of Energy Studies In parallel with a flourishing economy, the natural gas industry in Spain was characterised by rapid consumption growth in the late 1990s and 2000s. Infrastructure and supplies were designed to meet the needs of a gas market growing at double digit rates each year. |
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Life Cycle Greenhouse Gas Emissions of Marcellus Shale Gas Mohan Jiang, W. Michael Griffin, Chris Hendrickson, Paulina Jaramillo, Jeanne VanBriesen, Aranya Venkatesh This study estimates the life cycle greenhouse gas (GHG) emissions from the production of Marcellus shale natural gas and compares its emissions with national average US natural gas emissions produced in the year 2008, prior to any significant Marcellus shale development. |
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EU wind power will triple by 2020 European Wind Energy Association The European Wind Energy Association (EWEA) has published its scenarios for onshore and offshore wind power deployment in the EU, ahead of the European Commission's Energy Roadmap 2050, due to be published later this year. |
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USGS Releases New Assessment of Gas Resources in the Marcellus Shale, Appalachian Basin US Geological Survey The Marcellus Shale contains about 84 trillion cubic feet of undiscovered, technically recoverable natural gas and 3.4 billion barrels of undiscovered, technically recoverable natural gas liquids according to a new assessment by the U. S. Geological Survey (USGS). |
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A quick holiday guide to EER By Karel Beckman Back from holiday? Please note that EER is taking a break in August. We will be back with new publications on the 29th of August. Ready for another run! Until that time we are not publishing new material. However, while you were gone you may have missed some of the interesting articles we published in June or July. So, to help you find your way, we have prepared a quick overview of our recent publications. And we reveal what were our best-read articles in the first half of 2011! We hope you enjoy catching up on your reading and to see you back at the end of August. |
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The risks of radiation By Jan Willem Nienhuys Further research into a little-known theory on the effects of low-level toxic exposure could revolutionise the way we assess radiation risk, with huge implications for the nuclear power industry, argues Jan Willem Nienhuys. |
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Return of the P-word: the Government’s Electricity White Paper Malcolm Keay, Oxford Institute for Energy Studies The P-word is back – the Government’s latest White Paper on electricity market reform (published on 12 July) is entitled Planning our electric future. For many decades, planning seemed to have been dropped from the electricity policy maker’s tool kit, indeed to have become something of a dirty word, but it has now returned, and apparently without shame. |
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France's 'green vote' kills shale gas - and targets nuclear power as well By Yves de Saint Jacob France became the first country in Europe to explicitly outlaw hydraulic fracturing. The move is symptomatic of a wider change in French public opinion, which is increasingly critical of technologies such as genetically manipulated organisms (GMO's), nanotechnology, and even nuclear power. The 'green vote' has become a firm reality in France, reports our correspondent Yves Saint de Jacob from Paris. With Senatorial elections this year and Presidential and General Elections next year, the energy sector will feel the impact. |
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Gazprom: back in the game - and ready to take on Brussels By Rudolf ten Hoedt Russia’s Gazprom is aggressively expanding its presence in Europe by building new pipelines and buying up gas storage capacity. After a difficult period, the Russian gas company is oozing confidence and convinced it can further conquer the European market. And it is challenging the European Commission in the process. ‘The gas industry has been too shy with politicians and regulators,’ Gazprom vice-president Alexander Medvedev recently said in Austria. |
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Research report: CCS can be competitive with other low-carbon technologies Zero Emissions Platform The companies, scientists, academics and environmental NGOs that together make up the Zero Emissions Platform (ZEP) have undertaken a ground-breaking study into the costs of CO2 Capture and Storage (CCS) based on new data provided exclusively by ZEP member organisations on existing pilot and planned demonstration projects. The conclusion: following the European Union’s CCS demonstration programme, CCS will be cost-competitive with other sources of low-carbon power, including on-/offshore wind, solar power and nuclear. |
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Europe's new push for energy efficiency: too little, too late, too complex? By Sonja van Renssen The European Commission’s first-ever Energy Efficiency Directive, which was unveiled last month, has the traces of fierce disagreements and lobbying efforts written all over it. It fails to propose binding targets for energy efficiency, but does require member states to realise minimum energy savings. Then again, it does not say how these savings should be realised, leaving room for plenty of ambiguity. The draft Directive also includes obligations on the public sector to realise a minimum amount of renovations and contains a strong regulatory push for combined heat and power (CHP). Reactions have predictably been mixed – if only because the proposal is so complicated that stakeholders are still struggling to grasp all its ramifications. Sonja van Renssen reports from Brussels. |
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Renewables 2011 Global Status Report: Strong Growth and Increased Geographical Distribution Rick Bosman In the wake of global (energy) turmoil embodied in the Deepwater Horizon oil spill, the global financial crisis, the Arab Spring and the Fukushima nuclear disaster, Mohamed El-Ashry, Chairman of the Paris-based renewable energy network ‘REN21’, reminds us that ‘A positive constant amid this turbulence has been the global performance of renewable energy.’ |
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Plea for a bold strategic energy shift: Brussels should bet on Beijing By Matthew Hulbert The current European energy security strategy, based as it is on the fast-fading military and diplomatic power of NATO and the US, has proven a failure. To safeguard its worldwide energy interest, the EU should replace it with a radical new strategy: an energy consumer partnership with China. This new Brussels-Beijing Alliance would serve as a hedge against Russia and other large power producers, argues Matthew Hulbert. |
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Applying belt and braces to EU energy policy David Buchan, Oxford Institute for Energy Studies New proposed rules to save energy are encroaching on the Emissions Trading Scheme. David Buchan examines the growing tension inherent in Europe’s belt and braces approach of trying to combine increasing regulation of energy efficiency and renewables with the market mechanism of the ETS. The simple solution would be to reduce the supply of ETS carbon allowances in line with the regulation-induced drop in carbon demand. But the politics of doing this are proving impossible. |
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The coming UK energy meltdown By Hugh Sharman The UK desperately needs a new energy strategy based on a realistic assessment of its assets, its needs and the options available to it. Unfortunately, its freedom for technical and financial manoevre is deeply restricted by its self-imposed Climate Change Act and its commitment to the EU's 20-20-20 targets. Its technically illiterate, if financially canny politicians and civil service do not appear to understand that the world’s financiers are not likely to place the required £200 billion of long-term investment into their vision of a "low carbon" infrastructure while this concept remains so woolly and badly defined. If the UK government continues on this course, it will lead the country toward certain energy failure. |
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Saving electricity in a hurry International Energy Agency Electricity shortfalls occur when demand outpaces electricity available to customers. Shortages in energy supply for electricity generation can cause electricity shortfalls, as can insufficient generation, transmission and distribution capacity. |
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The silent Energy Revolution Greenpeace The bright future for renewable energy is already underway. This new analysis of the global power plant market shows that since the late 1990s, wind and solar installations grew faster than any other power plant technology across the world - about 430,000 MW total installed capacity between 2000 and 2010. |
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"Doctor Areva" tries to cash in on nuclear crisis By Yves de Saint Jacob with Meriem Sidhoum Delahaye French nuclear flagship Areva is putting a brave face on "Fukushima". It is positioning itself as a nuclear safety specialist that can help power producers everywhere improve the security of their reactors. It has even announced that it is ready to come to the rescue anywhere in the world when there are problems at nuclear power stations - like a Nuclear Doctor Without Borders. But this opportunistic response to the Fukushima crisis, thought up by CEO Anne Lauvergeon just before she was dismissed from her job by French President Nicolas Sarkozy, cannot hide the considerable long-term challenges the state-controlled French nuclear industry is facing. Yves de Saint Jacob reports from Paris. |
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Dutch gas production can be maintained at current level EBN The total production of natyural gas in the Netherlands can remain at the current level until at least 2030 if the right measures are taken. This is one of the major conclusions of the annual gas report of EBN (Energie Beheer Nederland), the Dutch government institution that manages the gas reserves of the Netherlands. |
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Desertec can integrate the EU with North Africa and the Middle East on many different levels Desert Powered Progress Oliver Gnad and Marcel Viëtor The technical, economic and political obstacles to the famous Desertec vision are considerable. It seems much simpler to increase renewable energy production inside the EU without making ourselves dependent on external sources. Yet energy and climate policies should not be the only considerations when we think of Desertec, argue Oliver Gnad and Marcel Viëtor. When viewed from a geopolitical, strategic viewpoint – as a key integration and political project that can bind together Europe with the MENA region (Middle East and North Africa) – Desertec can be part of the answer to many of Europe’s long-term challenges, ranging from migration to economic growth and dependence on fossil fuels. It is time to bring Desertec to the highest political level in Europe: under the aegis of Lady Catherine Ashton and the European External Action Service. |
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A strategic slip from the IEA By Matthew Hulbert The IEA's unexpected intervention in the oil market looks to be an all-around bad call. It will serve to heighten volatility in the already highly volatile market. At the same time, it will only hamper the things that need to be done by OECD countries (investing in oil exploration and production) and emerging countries like China (cutting price subsidies), argues Matthew Hulbert. |
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A proposed target model for the European natural gas market Frontier Economics A report prepared for GDF Suez by Frontier Economics as contribution to the debate on a European target model for the natural gas market. |
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Stagnant European gas market needs radical reforms Break it up and shake it up By Iana Dreyer The German nuclear phaseout will catapult gas to the top of the European energy agenda. Unfortunately, at this moment the European Commission gas market policy, such as it is, has no priority. Brussels must get its gas act together, argues Iana Dreyer, and shake up Europe's stagnant gas market. 'The real problem is the absence of integration and competition.' |
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Angela's message to the energy sector By Karel Beckman The Merkel government’s nuclear U-turn, argues EER's editor Karel Beckman, is a game-changer for the energy sector. It shows that in today's political climate public opinion counts more than anything else. This has profound implications for the industry: energy companies will have to come out of the corridors of power and start engaging the public directly. |
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UK energy situation: near the tipping point - speech at Economist Energy Summit Sam Laidlaw, Chief Executive Centrica (23 June 2011) Good morning ladies and gentlemen, and thank you for inviting me to make the keynote address at the Economist energy summit. It’s a very timely event and very topical. It seems that scarcely a day goes by without the issue of the nation’s energy security raising its head, whether it’s the debate about building a new generation of nuclear power stations, or the impact on oil prices of events in the Middle East and North Africa. |
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The Commission's new Energy Efficiency Directive European Commission A new set of measures for increased Energy Efficiency is proposed today by the European Commission to fill the gap and put back the EU on track. This proposal for this new directive brings forward measures to step up Member States efforts to use energy more efficiently at all stages of the energy chain – from the transformation of energy and its distribution to its final consumption. |
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Impressions from the Eurelectric conference in Stockholm An industry plagued by uncertainty, waiting for political leadership By Karel Beckman ‘Europe we need you!’ The European electricity industry is crying out for political leaders that can usher in the long-awaited, liberalised and integrated European energy market. But at a gathering of industry leaders, the mood was fairly sombre. As one top consultant expressed it: ‘If we don’t get some form of protection or support, we are not going to see enough investment.’ |
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Message from the International Gas Union to European policymakers: Let's get serious (about gas)! By Reiner Gatermann The 'golden age' for gas that the International Energy Agency is predicting for the world, certainly looks to be coming true in Europe. Long-term demand looks set to rise as a result of various factors: the nuclear rethink in Germany and elsewhere, the need for companies and countries to substitute coal and oil for lower-carbon gas, and the fact that gas-fired power stations are flexible and do not present major public acceptance issues. At the same time, long-term supply looks more secure than it has in a long time. Norway is opening up new acreage for exploitation, Russia and the Caspian countries are eager to export their gas to Europe in newly to be built pipelines, more and more LNG is coming to Europe - and then of course there is the promise of a shale gas boom beyond 2020. |
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Public acceptance: the energy sector's biggest headache Plus: a practical guide to winning public support for energy projects By Sonja van Renssen These days no energy project can succeed without public backing. This holds true not only for nuclear, coal-fired and other power stations, but also for grid expansions, carbon capture and storage projects, shale gas developments, wind power schemes and even energy efficiency programmes, such as smart grids. Policymakers and energy companies may have the grandest of plans, a simple "no" from a local community can put all their efforts to naught. Sonja van Renssen, EER's correspondent in Brussels, discusses how the energy sector can overcome the biggest hurdle it is facing today - public acceptance. |
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Tenfold increase of geothermal power and heat is possible International Energy Agency A new report by the International Energy Agency shows that it is possible to achieve at least a tenfold increase in the global production of heat and electricity from geothermal energy - heat emitted from within the earth's crust - between now and 2050. |
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Shale gas doesn't make Poland the new Norway yet Ekke Overbeek Poland is being hailed as Europe's new Qatar. Located deep beneath its rolling landscape are 5300 billion cubic metres (bcm) of recoverable shale gas, more than enough to meet the country’s needs (currently 14 billion bcm per year) for centuries to come. This has captured the imagination of a country that sees its dependency on Russian gas as a threat to national sovereignty. But Poland already seems to have sold its resources to American oil companies – and they might find it more lucrative to sell into the Russian-controlled pipeline network. As one analyst puts it, ‘Poland is not on course to become a second Norway, more a second kind of Turkmenistan.’ Ekke Overbeek reports from Warsaw. |
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The security of energy supply in Europe The European Files A 48-page brochure in which top European politicians (Van Rompuy, Barroso, Oettinger, Brüderle), policymakers and academics give their views on European energy strategy. |
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IEA report shows how to achieve dramatic energy savings in the buildings sector by 2050 International Energy Agency A new report |
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Three energy developments that are changing your life The global energy crisis deepens By Michael T. Klare What do the Arab Spring, Fukushima and worldwide droughts add up to? The bottom line, says Michael Klare: Any expectations that ever-increasing supplies of energy will meet demand in the coming years are destined to be disappointed. A grim energy future is on the horizon. |
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BP Statistical Review: China overtakes USA as largest energy consumer BP China became the world’s largest energy consumer in 2010 overtaking the USA during a year which saw the rebound in the global economy drive consumption higher and at a rate not seen since the aftermath of the 1973 oil price shocks. |
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Interview: Robert Jan Jeekel, Eurometaux "EU climate policies are driving smelters out of Europe" By Karel Beckman The EU's climate and energy policies are threatening the survival of the European producers of non-ferrous metals like aluminium, copper, zinc and nickel, says Robert Jan Jeekel, Director Energy & Climate Change of Eurometaux, the European Metals Association. According to Jeekel, the models the European Commission uses to calculate the effects of climate policies on the industry are deeply flawed. The EU's 'unilateral policies' are driving up electricity prices for European producers compared to their international competitors, he says. 'As a result, factories are closing. This could spell the end of the production of aluminum and other non-ferrous metals in the EU.' |
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Natural gas vehicles should take their rightful place in the debate on the future of European energy Alexei Miller, Gazprom This conference is taking place at a time that can be rightly called a turning point for the European energy sector. Many external factors are forcing Europeans to take a fresh look at the target model for the continent’s energy security. |
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Much Bigger e-Mobility Picture Revealed Peter Harrop, Chairman, IDTechEx Electric vehicle parts are not evolving: they are changing completely. Sometimes, the traction battery will be replaced by a supercapacitor or supercabattery and the dumb skin of the vehicle by smart skin. Energy harvesting and range extenders are new key enabling technologies and AC motors are often replacing DC motors. This is an industry in ferment. |
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Time for Obama to Say No to the Fossil Fuel Wish List Bill McKibben In our globalized world, old-fashioned geography is not supposed to count for much: mountain ranges, deep-water ports, railroad grades -- those seem so nineteenth century. The earth is flat, or so I remember somebody saying. |
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Can Foreign EV Makers Prosper in China? Peter Harrop, IDTechEx To understand the burgeoning electric vehicle EV industry, it is important to look at all forms of electric vehicle, land, sea and air. China has ambitions across all of them but none of the EV leaders are currently in China. |
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Now playing in the European Capital The Eurovision Energy Contest 2050 By Sonja van Renssen Many people will agree that the process that decides the winners of the Eurovision Song Contest is, well, not necessarily designed to award top musical genius. But what of the processes that will decide the winners of the Eurovision Energy Contest? |
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European survey on CCS and climate change reveals ignorance about CCS Eurobarometer This report details the findings of a survey about awareness and acceptance of carbon dioxide (CO2) capture and storage (CCS) conducted in 12 European Union countries. The countries included in the survey are Germany, United Kingdom, Italy, Spain, the Netherlands, Poland, Finland, France, Greece, the Czech Republic, Bulgaria and Romania. |
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The geo-economic blessings of shale gas "European energy companies risk missing out on a tremendous opportunity" By Karel Beckman While countries like China, India and Australia are jumping on the shale gas bandwagon, European policymakers and energy companies seem reluctant to embrace this new energy resource that was first developed in the United States. Frank Umbach, Associate Director of the new European Centre for Energy and Resource Security (EUCERS), urges the European energy industry to overcome its skepticism and the EU and its Member States to start supporting unconventional gas production. 'Shale gas offers a tremendous opportunity to change Europe's increasingly vulnerable geopolitical and geo-economic position in the world. It is time that we in Europe start seizing this opportunity instead of only focusing on its potential drawbacks.' |
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The Truth About Greenhouse Gases William Happer The object of the Author in the following pages has been to collect the most remarkable instances of those moral epidemics which have been excited, sometimes by one cause and sometimes by another, and to show how easily the masses have been led astray, and how imitative and gregarious men are, even in their infatuations and crimes,” wrote Charles Mackay in the preface to the first edition of his Extraordinary Popular Delusions and the Madness of Crowds. I want to discuss a contemporary moral epidemic: the notion that increasing atmospheric concentrations of greenhouse gases, notably carbon dioxide, will have disastrous consequences for mankind and for the planet. |
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Vattenfall - multinational on a leash By Reiner Gatermann Vattenfall, Sweden's largest, Germany's third-largest and Europe's sixth-largest electricity producer, is not having it easy. Technological failures, poor communications, heavy reliance on fossil fuels and overgenerous bonuses for its top management have tarnished the company's reputation. Its owner, the Swedish government, is sending out conflicting signals. It does not want to forego the large profits it makes from the supply of coal-based energy, yet wants to establish the company as a model of green energy. Meanwhile Vattenfall's ambitious carbon capture and storage activities in Germany are facing strong public resistance. The government is now pondering what to do with its energy champion. One solution being discussed is to split it into a public Swedish division and an international private one. As Norwegian CEO Øystein Løseth is careful to wait for directions from the government, a lot may depend on the new Chairman, Lars Nordström, who was appointed last Friday. |
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Does Natural Gas Need a Decarbonisation Strategy? The cases of the Netherlands and the UK Oxford Institute of Energy Studies A commonly heard view from European gas stakeholders is that low carbon supply sources – renewables, nuclear power and coal with carbon capture and storage – on the scale necessary to achieve carbon reduction targets over the next decade will be unrealistically expensive, and that gas will inevitably become the “default” choice for future power generation. |
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The Myth of Natural Monopoly Thomas J. DiLorenzo The very term "public utility" … is an absurd one. Every good is useful "to the public," and almost every good … may be considered "necessary." Any designation of a few industries as "public utilities" is completely arbitrary and unjustified. — Murray Rothbard, Power and Market |
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CEO GasTerra Lankhorst launches plan for Energy Academy 'The public energy debate is ill-informed and superficial' By Karel Beckman "Public acceptance" has become a huge problem for the energy industry in Europe. Public opinion is increasingly turning against almost any kind of energy project - from CO2-storage to new networks, windmills, coal-fired power stations and nuclear power stations. According to Gertjan Lankhorst, CEO of Dutch gas trading company GasTerra and vice-President of industry association Eurogas, the level of the energy debate must be drastically improved. As a first step, he wants to see an Energy Academy set up in the Dutch gas capital Groningen. |
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Shale Gas Shock Global Warming Policy Foundation The Global Warming Policy Foundation has published a detailed report about the shale gas revolution and its likely implications for UK and international climate policy. |
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Groundbreaking study into the impact of wind and solar generation on electricity markets in North-West Europe Pöyry Consulting The creation of an offshore 'super grid' and a major upgrade of energy interconnections are not the silver bullet solutions to Europe's energy needs, an independent study published by Pöyry has found. The report has found that the introduction of improved connectivity would only partially alleviate the volatility of increased renewable energy generation. |
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China’s Natural Gas Price Dilemma Saltanat Berdikeeva As the Chinese government began making clean energy sources and energy efficiency a priority in recent years, the role of natural gas has become increasingly important. The Chinese government’s 12th Five-Year Plan put a particular emphasis on the use of clean energy, including natural gas. |
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How to win public acceptance for green energy The case of Samsø By Stefan Nicola The tiny Danish island of Samsø is a role model when it comes to overcoming resistance to renewable energy projects. Completely eliminating big business, organizers there have involved their fellow citizens in large-scale energy infrastructure decisions by enabling them not only to discuss the changes to their landscape, but also offering them to own the wind turbines to be installed. Once a fossil fuel importer, Samsø today meets all its electricity with renewables and offsets more greenhouse gases than it emits. Experts from all over the world travel to this island to learn from its example. |
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The rising costs of ethanol in the US EPRINC The US Federal government provides a range of subsidies, tax incentives, and regulatory mandates to promote the use of ethanol and other renewable fuels into the national gasoline pool. Until recently, ethanol use was limited by law to a maximum of 10% of the gasoline pool, or as a specialty fuel at high levels of concentration (a 70-85% blend called E85) for use only in “flex-fuel” vehicles. |
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Policy instruments for renewable electricity in the Netherlands Energy Council of the Netherlands In a letter addressed to the Dutch Minister of Economic Affairs, the Algemene Energieraad (Energy Council of the Netherlands), examines the possibilities of the new Dutch support scheme for renewable energy and the supplier obligation, the effects on the market and the consequences for achieving the target. |
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Brussels' energy taxation revolution By Sonja van Renssen The European Commission has issued proposals that, for the first time, attempt to regulate fuel taxation rates in EU member states, rather than simply setting minimum values. It wants to see motor and heating fuels taxed according to their energy content and CO2 emissions rather than by volume as is the case today. If the proposals are accepted, diesel will in future cost more than petrol, biofuels will become relatively cheaper and LPG and CNG (compressed natural gas) will become more expensive. From the perspective of climate policy and the internal market, the proposals are not unreasonable. The question is, will the member states be willing to bite the Commission's bullet? |
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IPCC sees large potential for renewable energy IPCC Close to 80 percent of the world‘s energy supply could be met by renewables by mid-century if backed by the right enabling public policies, according to a new report. |
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World Nuclear Industry Status Report: Nuclear power in a post-Fukushima world Worldwatch Institute Four weeks after the beginning of the nuclear crisis on Japan’s east coast, the situation at the country’s Fukushima Daiichi power plant remains far from stabilized. The damaged reactors continue to leak radioactivity, and although it is impossible to predict the overall impact of the disaster, the consequences for the international nuclear industry will be devastating. |
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"Shale gas will not be as important in Europe as in the US" By Karel Beckman Eurogas, the European association for the natural gas industry, does not believe that the role of "unconventional gas" will become as important in Europe as in the US, at least not in the short to medium term. For the foreseeable future, Eurogas expects that developing new gas supply routes - such as South Stream and Nabucco - and new supply sources, e.g. in the Caspian region, the Middle East and North Africa - will make a more important contribution to Europe's security of energy supply than the development of domestic unconventional gas resources. This picture emerges from an in-depth interview that European Energy Review held with Jean-François Cirelli, President of Eurogas and President of French energy company GDF-Suez, in combination with a background interview with Margot Loudon, Deputy Secretary-General of Eurogas. |
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Seasonal Flexibility in the Northwest European Gas Market: An Outlook for 2015 and 2020 Clingendael International Energy Programme This paper examines whether the Northwest Europe has sufficient supply capacity to physically meet the cumulative gas demand over a severe winter in 2020. It is argued that the current outlook does not give rise to major concerns. |
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EIA examines alternate scenarios for the future of U.S. energy Energy Information Administration The complete version of Annual Energy Outlook 2011 (AEO2011), which includes 57 sensitivity cases that show how different assumptions regarding market, policy, and technology drivers affect the previously released Reference case projections of energy production, consumption, technology, and market trends and the direction they may take in the future. |
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The smart grid vision of Distribution System Operator Enexis 'A complete transformation of the system as we know it' By Ron van Duuren and Karel Beckman There is widespread agreement among energy experts that a transition to a low-carbon future will not be possible in Europe without the large-scale introduction of "smart grids". But this is no simple matter. According to experts Han Slootweg and Jan Peters of the Dutch network company Enexis, the development of smart grids represents a revolutionary technological change in the electricity market. One moreover that involves a great many stakeholders. But the benefits are significant: 'the introduction of smart grids means that you invest in ICT instead of in expansion of your networks'. |
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Assessment of the Greenhouse Gas Footprint of Natural Gas from Shale Formations Robert W. Howarth, Renee Santoro and Anthony Ingraffea Natural gas is widely advertised and promoted as a clean burning fuel that produces less greenhouse gas emissions than coal when burned. While it is true that less carbon dioxide is emitted from burning natural gas than from burning coal per unit of energy generated, the combustion emissions are only part of story and the comparison is quite misleading. |
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The Climate Impact Of Natural Gas and Coal-Fired Electricity: A Review of Fuel Chain Emissions American Clean Skies Foundation This paper provides an updated, comparative fuel chain calculation of the greenhouse gas (GHG) emissions of natural gas- and coal-fired electricity. The analysis incorporates revised 2011 US EPA estimates of fugitive methane emissions from the upstream (i.e., production) portion of the fuel chain. |
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Five Things to Know about the Cornell Shale Study Energy in Depth Almost year to the day after first attempt to smear shale gas fails, Howarth and crew back at it again in new report set for release this week. |
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The Ten Inconvenient Truths that shape our new energy world order By Matthew Hulbert Analysts and decision-makers everywhere are trying to find their bearings in a world that has undergone a radical transformation in just a few months' time. Matthew Hulbert, Senior Fellow at the Centre for Security Studies (CSS) at the Swiss Federal Institute of Technology in Zürich, draws ten lessons from the recent perturbations on global oil markets plus one grand conclusion: forget about fundamentals. Politics is now what matters in the oil market. |
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Europe is banking on Brazil Biofuels market about to turn the corner By Rudolf ten Hoedt After having gone through a difficult phase, the worldwide biofuels market seems about to turn the corner. The image of the sector is slowly improving. And whereas the market suffered from oversupply until recently, analysts expect strong demand growth for the rest of the decade, particularly for ethanol. Indeed, the main question that is starting to worry market players is where the necessary supplies will come from in the coming years. There is only one country that could possibly fill the gap: Brazil. But what if Brazil won't be able to deliver? |
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The Oil Trading Markets 2003-2010: Analysis of market behaviour and possible policy responses Oxford Institute of Energy Studies In this working paper Adair Turner et al. consider price movements in the oil trading markets between 2003 and 2010 and provide an analysis of factors which potentially explain the significant trends in this period. |
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The Strategic Implications of Russia's Eastern Oil Resources Oxford Institute of Energy Studies Russian oil exports have historically been focused on western markets but the rapid growth of the Asia-Pacific economies over the past two decades has led to a re-focusing of Russia's strategic and energy interests. |
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Report on the Caspian Development Corporation European Commission Europe's growing dependence on imported fuels is evident in the gas sector. The Southern Corridor would be – after the Northern Corridor from Norway, the Eastern corridor from Russia, the Mediterranean Corridor from Africa and besides LNG – the fourth big axis for diversification of gas supplies in Europe. |
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The EU Emission Trading Scheme: designed by committee By Arnold Mulder Ever since the EU Emissions Trading Scheme (EU ETS) came into effect on January 1st 2005, it has been surrounded by uncertainty. Although the scheme is intended as the most powerful weapon in the effort to reduce European carbon emissions, doubts about its effectiveness and feasibility have remained. In theory, 'the ETS should allow the European Union to achieve its emission reduction target under the Kyoto Protocol at a cost of below 0.1% of GDP, significantly less than would otherwise be the case', according to the European Commission. (2008). In practice, the efficiency and effectiveness of the ETS remain questionable. |
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Gas industry, it's time to cross the bridge By Marcel Viëtor The natural gas industry is seeking to establish itself as the preferred "bridging solution" ahead of nuclear energy. But instead of rejoicing at the troubles of nuclear energy in the wake of the Fukushima accident, the gas sector would do better to prepare itself for a future without fossil fuels. |
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Energy comes to Brussels By Sonja van Renssen They came from far and wide and their achievements were quite impressive. No, this was not a meeting of European heads of state, but the night of the annual EU Sustainable Energy Europe Awards. These may be considered Europe's energy Oscars, where Brussels generously rewards projects from all over Europe for real, measurable reductions in energy use, switching to renewables, or increasing awareness of green energy. |
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Energy is ugly: Tar Sands Make their Mark Ellen Cantarow A startling account of how, in the wake of the Fukushima nuclear disaster and turmoil in the Muslim world, the United States is mapping out an energy security strategy that emphasizes one of the dirtiest and most dangerous energy sources around -- Ellen Cantarow, “Energy is Ugly: Tar Sands Make Their Mark”. |
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Eurelectric Position Paper: Smart charging is indispensable to deliver the benefits of electric vehicles Eurelectric Eurelectric is convinced that electricity is a solution for making transport more sustainable. Using low]carbon electricity in the transport sector can decrease greenhouse gas emissions, encourage energy]efficiency gains through the greater efficiency of electric drive]trains, decrease the EU’s oil dependence, improve the situation in cities with regard to air pollution and noise, and help to maintain the EU’s competitiveness by taking the lead in these new technological developments. |
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Vulnerability and Bargaining Power in EU-Russia Gas Relations Edward C. Christie This report contains three separate papers, each addressing selected issues concerning natural gas policy and security of gas supply in Europe. |
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Algeria's shifting gas export strategy: between policy and market constraints Oxford Institute of Energy Studies This paper by Hakim Darbouche analyses the main drivers of Algeria's gas export strategy since the early 2000s. It argues that after suffering a series of setbacks owing to the policy inconsistencies of the administration of former energy minister Chakib Khelil Algeria's gas export strategy now faces a number of constraints as a result of changing market conditions. |
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German shale gas faces uphill battle By Stefan Nicola Major oil companies are exploring tight and shale gas reservoirs in Germany, hoping to be able to reproduce the American unconventional gas revolution. German resources, experts say, could be large enough to change the energy equation in Germany significantly. Europe's largest economy is a major importer of gas and oil. But there is still uncertainty about the size of recoverable reserves. Worse, public opposition to shale gas production is growing, making it not unlikely that the German gas boom will go bust before it has started. |
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Our unpredictable, bright energy future By Karel Beckman No forecast, scenario or "roadmap" is ever going to give a correct prediction of our energy future. If we want to know what is in store for us, argues Karel Beckman, we should keep in mind that our supply of energy does not primarily depend on the availability of "natural resources", but on the knowledge and capital that we have at our disposal. 'We will never run out of natural resources or energy.' |
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Investment needs for future adaptation measures in EU power production sector due to effects of climate change European Commission This Final Report of the study: “Investment needs for future adaptation measures of in EU nuclear power plants and other electricity generation technologies due to the effects of climate change” is based on previous comments received from the Commission on the Draft Final Report, on feedback from the stakeholder consultation the Consortium conducted among a representative distribution of power plants throughout the EU and on the Ecorys Risk Assessment Model for analyzing the potential climate change risk thresholds for EU power plants and necessary accompanying investments. |
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China is world's clean energy powerhouse Pew Charitable Trusts Global clean energy finance and investment grew significantly in 2010 to $243 billion, a 30 percent increase from the previous year. China, Germany, Italy and India were among the nations that most successfully attracted private investments, according to new research released by The Pew Charitable Trusts. |
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The transition to hub-based gas pricing in Central Europe Jonathan Stern and Howard Rogers, OIES This paper argues that Continental European gas markets are moving inexorably from oil-linked to hub-based pricing. |
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86 countries sign up to International Energy Forum's new charter 'There should not be a fear that 2011 will be like 2008' By Alex Forbes Given the multiple conflicting challenges faced by the global energy industry, dialogue between energy-producing countries and energy-consuming countries has never been more important. This imperative was recently recognised by the 86 member countries of the International Energy Forum (IEF), the organisation that provides the main platform for such dialogue, when they signed a new Charter at an Extraordinary IEF Ministerial Meeting. In this exclusive interview, the Secretary General of the Forum, Noé van Hulst, gives his views on why the new charter was needed and discusses the impact of 2011's 'Black Swan' events - the Arab Spring and Japan's nuclear crisis - on energy economies. 'If you look at the fundamentals there shouldn't be a fear that 2011 is going to be like 2008.' |
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The best of what’s around in sustainable rural electrification Alliance for Rural Electrification A new report by the Alliance for Rural Electrification (ARE) – Best Practice of ARE: What Renewable Energy Can Achieve In Developing Countries – showcases the diverse actions the renewable energy industry is undertaking as a response to the particular conditions and energy needs of rural areas in developing nations. |
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China and Germany invest most in renewable energy Pew Charitable Trust Funds Global clean energy finance and investment grew significantly in 2010 to $243 billion, a 30 percent increase from the previous year. China, Germany, Italy and India were among the nations that most successfully attracted private investments, according to new research released by The Pew Charitable Trusts. |
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Energy investment needs 'strong regulatory push' By Karel Beckman Europe needs to invest hundreds of billions of euros in new energy networks and renewable energy production. Most of this money will have to come from "the market", but financial experts agree that, left to their own devices, banks and energy companies are neither able nor willing to do all that needs to be done. They say that a strong inflow from additional sources, such as dedicated investment funds and public institutions, will be indispensable. The European Commission has already started preparing a "tool box" that will contain "innovative market-based solutions" intended to seduce investors. But one private investor warns that if the EU is to achieve its ambitions with regard to climate and the internal market, the EU and member state governments will have to take a much more active role. 'A strong regulatory push is required'. |
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The risks of a Russian-Turkish energy bargain By Adnan Vatansever Nearly two years after Russia and Turkey signed a series of energy cooperation protocols, the two countries remain unable to reach a breakthrough in their energy relations. Negotiations are deadlocked on two principal projects: the Samsun-Ceyhan oil pipeline and the South Stream gas pipeline. The ongoing deadlock, while leading to frustrations, can and probably will be solved. But if the two countries come to a bargain that ignores the wider interests of all stakeholders, they may have to pay a steep price. |
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Fukushima: an earthquake for the French nuclear sector By Yves de Saint Jacob Professor Jacques Foos, one of France's most highly regarded nuclear experts, is frankly shocked by the accident at the Fukushima power plant in Japan. 'The accident is an earthquake for us engineers', he says in an interview with European Energy Review. 'We all have had our convictions shaken'. Foos calls for the establishment of a global "policeman" for civil nuclear energy and a global research effort into all fields of energy. 'We need to believe in the progress of science.' |
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Interview Philip Lowe, DG Energy "The energy sector is still in the dark ages" By Karel Beckman and Sonja van Renssen Philip Lowe, the highest energy official in the EU, is impatient. The internal energy market, whose creation he is supposed to oversee, is still meeting with skepticism all around. Financial institutions are reluctant to invest because they don't believe the market will be free of political interference. Member States tend to pursue their own short-term policies even if they conflict with market principles. And the energy companies? 'They don't seem to be too eager to compete', says Lowe, in an interview with European Energy Review. 'They are focused more on regulations than on their customers. The energy sector is still in the dark ages when it comes to satisfying consumers.' |
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Nuclear Renaissance headed for a Thirty Years' War? By Chris Cragg The nuclear renaissance has always been more a promise than a reality, certainly in the OECD countries, where expansion of capacity remains an illusion. The tragedy in Japan will probably cause further delays, leaving other power production technologies to fill the future gap in demand, predicts energy editor Chris Cragg. Nuclear energy might become like the old soldier that does not die, but simply fades away. |
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Uncertainty, expectations and fundamentals - whatever happened to long-term oil prices? Bassam Fattouh and Pasquale Scaramozzino One of the major features of the oil market during the 1990s was the relative stability of the long-term oil price. While the spot price and the price of near-term futures contracts sometimes exhibited sharp price volatility that volatility was only partially transmitted to the back end of the futures curve which was anchored around the $20-22/barrel range. |
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Progress in Scottish CO2 storage SCCS and Scottish Energy Minister Scotland can realise the employment, economic and environmental benefits of carbon storage. A consortium of Scottish Government, industry and researchers has shown that rocks deep beneath the Moray Firth are capable of storing decades of CO2 output from Scotland’s power stations. This emerging Carbon Capture and Storage {CCS} industry could create at least 13,000 new Scottish jobs by 2020. |
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Nabucco's CEO Analyzes Strategy Theodoros Tsakiris Reinhart Mitschek is Managing Director of the Nabucco consortium, which is promoting the construction of a 31 bcm/year capacity, 3,300km long gas pipeline to carry gas from the Caspian region and the Middle East to Eastern and Central Europe. He outlines the project’s prospects in an interview with Dr. Theodoros Tsakiris. |
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Electric Vehicle battle moves beyond cars Peter Harrop, Chairman, IDTechEx By a big margin, Toyota is number one in hybrid car sales and indeed in sales of electric vehicles overall thanks to such things as sales of its electric forklifts, where it is in the top three in most countries. For example, it is number two in material handling vehicles in the United Kingdom. Indeed, Toyota’s position in electric material handling vehicles may have been strengthened even further by the fact that world number one, Linde sold its materials handling business, rebranded as KION Group to financiers KKR and Goldman Sachs for €4bn, not to an engineering company optimising long term success with synergies. |
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A giant comes to life in the deserts of Qatar By Alex Forbes Imagine a technology that could take natural gas and turn it into premium oil products, such as low-sulphur vehicle fuels, petrochemical feedstocks and high-quality lubricants. In today's era of cheap abundant gas and worryingly expensive oil it would be like turning water into wine. This technology not only exists, but is being implemented at massive scale in the deserts of Qatar by Shell. Having invested $19 billion in constructing this modern-day wonder of the world, Shell is in the process of starting it up. Alex Forbes visited Qatar to see Pearl GTL for himself. |
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Assumptions and accidents By Marcel Viëtor If we want to continue with nuclear energy, we should think the risks of nuclear power through to their logical conclusion. |
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The growing vulnerability of the European energy system By Karel Beckman Almost ten years after 9/11, the EU has barely taken any steps to develop a common policy to protect its critical energy infrastructures. Responsibility for the security of the crucial energy infrastructure systems that our societies depends on continues to lie with the governments of member states, many of which do not give the matter much priority. At the same time, as the integration of the European energy market is proceeding apace, countries are becoming more and more dependent on each other's security systems. 'The chain is as strong as the weakest link.' |
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The financial situation of the electricity industry Eurelectric This report intends to show how the financial crisis has affected the European electricity industry and to provide a view on its ability to meet its future challenges. |
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Regulatory issues of global significance for the gas industry International Gas Union On 8 March 2011, members of the International Confederation of Energy Regulators (ICER) and the International Gas Union (IGU) participated in their first joint ICER-IGU workshop. The workshop was held in Washington DC with the participation of ICER Chair Lord John Mogg, the IGU President Datuk Rahim Hashim and ICER and IGU members from 28 countries. Moderators and presenters for each session were senior representatives from ICER and IGU, plus some honoured guests. |
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Ireland's daring wind energy experiment By Chris Cragg Ireland is planning to take a giant leap in wind power capacity, propelling it to a leading position in Europe. The government wants to increase the share of wind power in the country's electricity production capacity to over 40%, more than double the current share. The problem is that these plans come at a time when demand has been falling as a result of the economic crisis, so that their realisation would lead to a huge overcapacity in the electricity market. The new government is beginning to show some signs of concern. |
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The collapse of the Old Oil Order By Michael T. Klare Whatever the outcome of the protests, uprisings, and rebellions now sweeping the Middle East, one thing is guaranteed: the world of oil will be permanently transformed. Consider everything that's now happening as just the first tremor of an oilquake that will shake our world to its core. |
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EU gas consumption grows 7% in 2010 Eurogas According to preliminary figures and estimates from Eurogas, total natural gas consumption in |
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KEMA white paper finds competitive electricity markets spur innovation Kema - 04/03/2011 According to new research from KEMA, competitive electricity markets around the United States have promoted and accelerated innovation and will likely continue to foster future innovation. |
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Desertec sees positive side to political change By Karel Beckman With North Africa in the grip of political turmoil, doubts have arisen about the prospects of the Desertec Industrial Initiative (Dii), which aims to launch a renewable energy revolution in the region. But representatives from Desertec view the current developments as a positive rather than a negative factor for their plans. 'What we offer is employment and economic opportunities for the growing populations of North Africa and the Middle East', says Mouldi Miled, Executive Director of the new Desertec University Network, which was set up recently to coordinate renewable energy research in North Africa. 'That is exactly what the people here demand.' |
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Will UK competition be sacrificed at the altar of low-carbon power? By Alex Forbes Next week is the deadline for consultation on market reforms aimed at decarbonising electricity generation in the UK. The government has yet to publish the responses. But at a recent Ofgem seminar in London it was clear that the spread of views will be wide. Power company EDF Energy supports the proposals because they would create strong incentives for investment in low-carbon energy sources, such as nuclear power and renewables. But investment bank Rothschild fears they would unravel all the work of recent decades to make electricity generation competitive. |
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Smart grid revolution gets underway in Austria By Stefan Nicola One of Europe's most comprehensive smart grids is currently coming into existence in Austria. Energie AG Oberösterreich has been rolling out 21,000 smart meters, with 80,000 more to follow by the end of next year. A new tariff will enable homeowners to pay different rates at different times of the day. German technology giant Siemens, the supplier of the smart grid infrastructure, banks on a robustly growing market. Siemens and Energie AG say the new smart grid will benefit customers as well as the utility. But there are concerns, too, for example about the costs for consumers and the impact on their privacy. |
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The moral dilemmas of oil companies By Karel Beckman With the unrest in North Africa and the Middle East spreading, some oil companies might ask themselves whether they are sitting on the wrong or right side of various fences. Depending on a company’s relationship with a regime, "regime change" can wreck investments – or create new opportunities. But in our fast-globalising world, the broader issue for energy companies to address is how moral issues should feature into their long-term strategic considerations, argues EER's editor-in-chief Karel Beckman. |
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Overseas activities of China's oil companies demystified International Energy Agency New research published today by the International Energy Agency (IEA) highlights inaccuracies in some commonly held views of China's National Oil Companies (NOCs). |
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Environmental regulation threatens small hydropower production in Europe By Karel Beckman Small hydropower producers in Europe are sounding the alarm. Many are unable to expand or even to maintain power production as a result of growing opposition both from local authorities and environmental groups. In particular, it is the implementation of the EU’s Water Framework Directive into national laws that is making life increasingly difficult for the producers. In Italy, they have now banded together with WWF Italy to develop a “green” certification procedure, called CH2OICE, in the hope of stemming the negative tide. |
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Burgas-Alexandroupolis - death of a great pipeline project? By Theodore Tsakiris Chancers are that the Burgas-Alexandroupolis oil pipeline project, intended to give Russia a new outlet for its oil exports, avoiding the busy Bosporus Strait, will be scrapped. The main reason is procrastination from the new Bulgarian government. The Russian partners have now given the Bulgarian government until 20 March to pay their dues, which are in arrears. Theodoros Tsakiris, the Director of EKEM’s Observatory for European Energy Policy in Athens, explains what is behind the bickering around the Trans Balkan Pipeline. |
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Lack of cohesive policy holding back renewable energy in Australia Datamonitor Policy uncertainty is holding Australia back from realising its enormous renewable energy potential, according to Datamonitor. |
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UK Energy Policy and the End of Market Fundamentalism Ian Rutledge and Philip Wright (eds) For the past 25 years the UK has been very influential worldwide in how governments should manage their energy industries and it is therefore important that a shop window should be opened onto the granular reality of UK experience, as opposed to its complacent ideological projection. The consequences of an energy policy dominated almost entirely by “the market” are now becoming increasingly evident, to the detriment of both business and household consumers. Domestic and industrial energy prices continue to rise, fuel poverty is once again on the increase and concern grows over the UK’s future energy security. |
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Interview Marcel Kramer, CEO South Stream ‘It is the market that will decide whether South Stream will be built’ By Karel Beckman In the EU many people believe that the planned South Stream pipeline is a political project by means of which Russia is trying to keep Europe dependent on Russian gas. According to Marcel Kramer, the Dutch CEO of the South Stream consortium, this notion is demonstrably at odds with the facts. In an interview with EER, he points out that most of the gas that will flow through South Stream, is currently flowing through Ukraine to Europe, so the new pipeline will not significantly enhance Russia’s market share. All it will do, Kramer says, is make Russian supplies more secure by providing a new route from Russia to Europe. ‘South Stream is an economic project. It is the market that will decide whether it will be built.’ |
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India has potential to be world's renewable energy powerhouse Datamonitor India has the potential to become a global renewable energy powerhouse due to its need for alternative energy sources, international pressure and strong government support, according to independent market analyst Datamonitor. |
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Energy Taxation in Europe, Japan and The United States Finnish Energy Industries A summary of the energy taxation survey of electricity, fuels, district heat and transport in the EU and EFTA countries, Japan and the United States released by Finnish Energy Industries in November 2010. |
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Another gas giant below the Marcellus? Geology.com The Marcellus was the Opening Act. A rock layer below the Marcellus Shale could prove to be another incredible source of natural gas. |
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CCS faces mounting obstacles By Sonja van Renssen Carbon capture and storage (CCS) has been widely touted as a ‘bridging technology’ to take us from an economy based on fossil fuels to one based on renewables. However, high costs, public opposition and lack of political support make its prospects increasingly uncertain. Not all is lost for the proponents of CCS, though. It may find some unexpected new applications in industrial manufacturing and in biomass- and gas-fired power plants. |
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Dutch Energy Council embraces unconventional gas by Karel Beckman The Dutch Energy Council, the highest advisory body of the Dutch government in energy affairs, has come out strongly in favour of the development of unconventional gas in the Netherlands. In an official advice to the government, the Council recommends a number of policies that should stimulate the exploitation of shale gas and coalbed methane in the Netherlands. Most importantly perhaps, the Council advises the government to ensure that landowners and tenants benefit financially from unconventional gas development on their land. This would enhance public support for the exploitation of unconventional gas, the Council says. |
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Country Analysis Brief on Egypt Energy Information Administration The US Energy Information Administration has released an update of its Country report on Egypt. Timing of this publication is coincidental, but the report is no doubt useful at the moment to analysts. |
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Financing of low-carbon technologies Accenture/Barclays This new joint Accenture-Barclays report estimates that Europe requires €2.9 trillion in capital for low carbon infrastructure between 2011 and 2020. This report covers 15 commercially viable technologies across the transport, buildings, electricity generation and distribution sectors. Eighty percent of the capital required would be used to finance procurement and implementation, with the rest required for research, development and production. |
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European leaders, aren’t you forgetting something? By Sonja van Renssen When EU heads of state and government met in Brussels on Friday, 4 February, for a first-ever high-level summit dedicated to energy and innovation, they paid scant attention to their energy ministers’ recommendation last December that efficiency should be Europe’s number one energy priority. They thereby forgot to prioritise the one measure that is best-suited to improve not only security of supply, competitiveness and sustainability, but also their citizens’ energy bills. However, a draft version of the European Commission’s upcoming energy efficiency action plan that is circulating in Brussels shows the Commission has plans to repair this omission. |
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The Rush to Russia By Matthew Hulbert The significance of the BP-Rosneft deal has not been sufficiently appreciated by mainstream media, argues energy analyst Matthew Hulbert. According to Hulbert, the agreement signals the start of a new M&A frenzy in the upstream sector, as international oil companies (IOC’s) are rapidly stepping up their attempts to realise joint-ventures with national oil companies (NOC’s). This rush to Russia and other resource-rich countries, he notes, is the direct result of the “Macondo” oil spill. ‘The disaster in the Gulf of Mexico has turned traditional notions of political risk on their head. Ironically, Russia is now deemed a safer and potentially more rewarding bet than a politically capricious country like the US.’ |
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WWF sees future entirely powered by renewable energy WWF/Ecofys 'The world needs to transition from its current unsustainable energy paradigm to a future powered by entirely renewable energy supply. Only by making such a transition will we be able to avoid the very worst impacts of climate change.' |
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BP and ExxonMobil energy forecasts The low-carbon economy: not in sight yet By Alex Forbes Long-term energy forecasts just launched by ExxonMobil and BP foresee two decades of robust economic growth, accelerating growth in energy efficiency, and a gradual shift to a less carbon-intensive fuel mix. But these positive trends are not enough to put us on a trajectory to avert damaging climate change. Fossil fuels will continue to dominate our energy mix and greenhouse gas emissions will rise inexorably. The low-carbon economy still lies somewhere far behind the horizon. |
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A goodbye to stability in the Middle East By Cyril Widdershoven What will be the effects of the Egyptian crisis on the oil and gas market? The first indications at present are that there is no real threat to the position of Egypt’s main transit route, the Suez Canal. This could change of course if the current protests were to turn ugly. Military action is still possible and could induce opposition groups to economic sabotage. Suez, one of Egypt’s largest cities, is already known to be a breeding ground for opposition. |
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The G-factor is back By Matthew Hulbert Energy analyst Matthew Hulbert wonders, if markets are already jittery about unrest affecting small players such as Egypt and Tunisia, what will happen if major oil producers are affected? One thing is certain: after two years of “fundamentals” dictating oil prices, the “geopolitical factor” has returned to the oil market. And it is sending a strong message to OPEC: better quell the market now, or it might crush you later. |
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European power industry calls on policymakers to focus on carbon price Eurelectric Ahead of the European Council on Energy on 4 February, EURELECTRIC, the association of the European electricity industry, has developed a position paper outlining its position on the European Commission communication “Energy 2020 - A strategy for competitive, sustainable and secure energy”, published on 10 November 2010. |
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Record growth for EU offshore wind power in 2010 EWEA With 308 new offshore wind turbines installed in 2010 - an increase of 51% in installed wind power capacity on the previous year - offshore wind power experienced a new record growth in Europe. |
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Germany’s coming civil energy war By Stefan Nicola Germany’s Environment Minister Norbert Röttgen calls the new German energy strategy a ‘civil revolution’, but he could just as well have described it as the making of a future civil energy war. The extremely ambitious strategy is pitting the coddled renewable energy sector against the neglected gas sector. It requires the building of large new power grids, which are being sharply opposed by the public. And it is setting up Germany’s four major utility companies, which demand an EU-wide renewable energy policy, against the German Environment Ministry, which wants to create renewable energy jobs – in Germany. |
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North West European gas market: integrated already By Rudolph Harmsen and Catrinus Jepma The gas hubs in North Western Europe already form one integrated market for natural gas. That is the main conclusion that emerges from recent research carried out by Rudolph Harmsen and Catrinus Jepma at the University of Groningen in the framework of the Edgar research programme. Harmsen and Jepma analysed price movements on six major North West European gas markets and discovered that there are strong statistical correlations which show that the markets function as an integrated whole. The authors describe the result of their research as ‘striking’, since there are ‘numerous reasons that could have prevented expedient market integration’. |
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More for Asia: Rebalancing world oil and gas John V Mitchell, Chatham House The oil and gas industry is set to undergo a decisive transition over the next 10 years as global balances of demand and investment shift towards Asia and away from Europe and North America. These are sectors where geography matters and such a transition will have major geopolitical implications and a profound effect on industrial strategy. |
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How high could oil go? Global Commodity Research Oil prices have risen quickly since Bernanke's Jackson Hole speech last August, reflecting strong fundamentals and easy money. |
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BP: Back to Petroleum By Chris Cragg BP’s deal with Russia's Rosneft is indeed, as it is claimed to be, "a groundbreaking strategic global alliance", for lots of reasons, not just those advanced by the two companies. It is also a deal fraught with ironies and shadows of the past. In the view of our energy editor at large, Chris Cragg, who happened to work for BP for a number of years, it means above all that BP is returning to its core business after having strayed "beyond petroleum". Russia is probably the only place where it can now do what it is best at: offshore and often deep-water exploration and drilling! |
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An assessment of some of the global energy game-changers Through a Glass Darkly By Ian Walker, Executive Director of Windsor Energy Group St Paul wrote about seeing the future through a glass darkly. That is particularly true of energy markets. You stand a better chance of making money by backing an outsider at a horse race than betting on global energy price trends. A lot of people have lost their shirts trying to predict energy futures so this article needs to be treated with caution. The energy market has proved massively unpredictable over several decades despite attempts by oil tycoons, such as Paul Getty, or energy producers, such as OPEC, to fix the market. So what is coming down the tracks that could make things different? |
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The Danube region – a future European Energy Corridor? By Vlad Popovici Last December the European Commission adopted the EU Strategy for the Danube Region (EUSDR). Energy is one of the themes of the new Strategy. While EUSDR mentions some energy topics such as renewable energy and energy efficiency, other significant pieces of the regional energy puzzle are absent – an integrated regional energy infrastructure plan, the energy poverty challenge, and the regional nuclear energy sector, among other things. More work should also be done to create links to other regional and EU organizations, programs and policy instruments with relevance to the energy sector and to convince the participating countries that regional energy cooperation is critical to the Strategy’s success. |
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Manufacturers: 'Fuel cell cars market-ready by 2015' Energy Research Centre of the Netherlands The hydrogen hype of the first few years of the new millennium is well and truly over. So, are car manufacturers still working on hydrogen projects or have fuel cells been put on ice? |
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Natural gas supply, demand and prices: what happened in 2011? Oxford Institute for Energy Studies The Oxford Institute for Energy Studies has published a short study by Dr Anouk Honoré Senior Research Fellow at the Institute on natural gas demand in Europe in 2008-2010. The paper is a companion piece to the book “Natural Gas Supply Demand and Prices: Cycles seasons and the impact of LNG price arbitrage” published in January 2011 by the OIES. It offers a statistical update on gas demand since the book was finished. |
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‘It’s a digital world’ - communications lessons from the BP oil spill disaster By Karel Beckman The BP Oil Spill will in many ways be a “game-changer” for the energy industry. For one thing, there will be significant repercussions for deepwater oil and gas exploration, both in the US and Europe, as we discuss here. But the disaster will also leave a lasting impact on the way in which energy companies conduct their communications with the outside world. Neil Chapman, former Head of Refining and Marketing Communications at BP, shares with EER his thoughts on the public relations lessons from the event and has some recommendations for his fellow corporate communicators. ‘If you focus solely on the mainstream media in a time of crisis, you make a big mistake as an organisation.’ |
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BP oil spill: some lessons for Europe Hans-Jochen Luhmann The European Commission is studying the implications of the BP oil spill disaster for the regulatory framework in Europe. Brussels intends to come up with proposals before the summer. Hans-Jochen Luhmann, researcher at the Wuppertal Institute for Climate, Environment and Energy, has some recommendations to offer. |
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Joint Declaration on the Southern Gas Corridor European Commission The President of the European Commission José Manuel Durão Barroso and the President of Azerbaijan Ilham Aliyev have signed on 13 January 2011 a Joint Declaration on gas delivery for Europe in Baku. Azerbaijan commits to supplying substantial volumes of gas over the long term to the European Union, while Europe provides access to its market for them. This Joint Declaration is an important step in the realization of the Southern Gas Corridor and the diversification of Europe's energy supplies. |
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The Dutch lose faith in windmills Karel Beckman and Alexander Haje The new Dutch right-wing government has announced a radical overhaul of Dutch energy policy. It is cutting subsidies for most forms of renewable energy drastically, and is even putting an end to all subsidies for offshore wind, solar power and largescale biomass. It has also announced a warm welcome for new nuclear power stations – the first time a Dutch government has done so since the Chernobyl-disaster in 1986. However, not all is lost for the renewable energy sector: the cabinet is still brooding on a long-term strategy and a “Green Deal” that might yet put the Netherlands back on a “greener” course. |
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Gambling on Greenland By Uchenna Izundu For the first time in its history, Greenland has awarded offshore oil and gas exploration licenses to oil companies, opening up this Arctic frontier to future oil and gas production. The licensing awards followed the first ever oil and gas discoveries in Greenland, made in August by Cairn Energy, propelling this nation with a population of 56,000 into the limelight of the global energy market. The government welcomed the discoveries, but Greenpeace has embarked upon an aggressive campaign to stop any more exploration in the area dubbed Iceberg Alley. |
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A Russian Solution to Europe’s Energy Problem By Adnan Vatansever Russia’s supply of natural gas could hold the answer to Europe’s great energy challenge: to reduce its carbon emissions in the midst of a financial crisis. But a successful partnership between Russia and Europe will require greater mutual trust. One way to achieve this is for the two sides to expand the level of investment in each other’s gas sectors. |
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The growing role of Turkey in the EU’s security of energy supply By Yusuf Yazar, Deputy Undersecretary, Ministry of Energy and Natural Resources, Turkey Turkey is dedicated to playing a driving and constructive role in the timely, reliable, cost-effective and environmentally responsible transportation of Caspian, Middle Eastern and Central Asian hydrocarbon resources to European and world markets. To this end Turkey is doing all it can to develop new projects which will enhance its own energy security and those of its partner countries, as well as to bolster prosperity and peace in the region and the world. In this context, Turkey’s accession process to the EU is of great significance. With its dynamic energy market, its rapidly modernizing energy infrastructure, its developed regulatory framework and unique geographical location, Turkey as a EU member could contribute significantly to the energy security of the EU and Europe as a whole. |
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It’s all in the fine print By Chris Cragg The 337 page “Circular” detailing the “combination” of International Power plc with GDF Suez Energy International, which is to become effective early 2011, has just thudded through my letter box. It explains the “compelling industrial logic” and the excellent geographical and operational “fit” of the merger. It will give “Enlarged International Power” a robust capital structure and access to the committed financial support of GDF Suez. |
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California's Climate Policy - A Model? David Buchan, Oxford Institute for Energy Studies California’s energy and climate policies deserve study for three new reasons. First, the impasse on climate legislation at the US federal level leaves climate action largely to individual states, of which California is the biggest. Second, California’s politicians have taken climate policy further than those of any other US state, and won popular backing in the world’s only direct referendum on greenhouse gas reduction in November 2010. Third, in the absence of any new legally-binding agreement in the United Nations climate negotiations, California, which on its own would be the world’s eighth largest economy, is increasingly vaunting itself as a model of how a sub-national entity can take climate action irrespective of its national government’s immobility on climate policy. |
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Beyond Turkey: The EU's Energy Policy and the Southern Corridor Kristin Linke and Marcel Viëtor, editors The European Union is seeking to diversify its natural gas supply and intends to establish a new supply route in addition to the three existing ones, from Norway (Northern Corridor), Northern Africa (Western Corridor) and Russia (Eastern Corridor). The fourth, Southern Corridor will make it possible to have natural gas shipped from the Caspian region and the Middle East to customers in Southeastern Europe and the EU. Turkey will be the key transit country for these deliveries via a multitude of pipelines, including Nabucco. Although several pipeline projects have reported development progress, it remains uncertain whether and when they will be able to secure sufficient gas supplies so that their realisation can commence. |
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Statoil’s crucial role in the EU’s Southern Gas Corridor ‘To us it is just a money game’ By Rudolf ten Hoedt Norwegian state oil company Statoil, the second largest gas supplier to Europe, is doing all it can to cash in on the Southern Gas Corridor, Europe’s strategy to secure energy supplies from the Caspian region and the Middle East. Statoil is not only a co-owner of the crucial Shah Deniz-II gas field in Azerbaijan, in a separate venture it is also trying to bring Shah Deniz gas into Italy through the Trans Adriatic Pipeline (TAP). By doing so, it is competing directly with the EU’s flagship strategic project for the Southern Gas Corridor, the Nabucco pipeline. But Statoil does not seem to be primarily concerned with the EU’s strategic considerations. Rune Bjoernson, Statoil’s Senior Vice President of Natural Gas, says, ‘To us this is a money game. It is about getting the best value from the Shah Deniz value chain.’ |
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Annual Energy Outlook 2011 Energy Information Administration The AEO2011 presents long-term projections of energy supply, demand, and prices through 2035 based on results from EIA's National Energy Modeling System (NEMS). The AEO2011 Early Release Overview is the first document released as part of AEO2011. This release only includes the Reference case. The full publication, including many additional cases and a complete discussion of the projection results and energy market issues, will be released in March 2011. |
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One year of EER Online By Karel Beckman It has been one year now since European Energy Review (EER) changed from a paper magazine to a fully online medium. In this brief update, I would like to tell you a little bit about what happened in this year, and what our plans are for the future. |
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Electric cars: not ready for prime time George C. Marshall Institute The George C. Marshall Institute has released a new paper examining the viability of electric cars. Authored by the Institute's CEO, William O'Keefe, "Electric Cars: Not Ready for Prime Time", considers whether public subsidization of electric vehicles is worthwhile, concluding: "Like many of the solutions to national problems that are invented in Washington DC, there is less to the electric car movement than the public has been led to believe. The image created for electric cars does not match today's reality." |
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Global Clean Power Sector Could Attract $2.3 Trillion by 2020 Pew Charitable Trusts Private investments in G-20 clean power projects could total $2.3 trillion by the end of the decade, according to a report released today by The Pew Charitable Trusts. Massive energy demand and strong clean energy policies will drive investment to Asia, led by China and India. However, by adopting such policies, every G-20 member has the opportunity to attract more private investment in clean power projects and compete more effectively for business in this emerging global industry. |
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Baltic Rim Economies Pan-European Institute The Pan-European Institute publishes a bimonthly discussion forum, Baltic Rim Economies (BRE), which focuses on the development of the Baltic Sea Region. In BRE, high-level public and corporate decision makers, representatives of Academia and several other experts contribute to the discussion. |
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Baltic Rim Economies Pan-European Institute The Pan-European Institute publishes a bimonthly discussion forum, Baltic Rim Economies (BRE), which focuses on the development of the Baltic Sea Region. In BRE, high-level public and corporate decision makers, representatives of Academia and several other experts contribute to the discussion. |
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The uncertain prospects of Norwegian gas By Reiner Gatermann It is generally accepted that Norwegian oil production peaked in 2001, but both in Norway and in the EU it is assumed that gas production in Norway will continue to grow in the next twenty years. A recent study from researchers from the University of Uppsala in Sweden, however, predicts that Norway’s gas production will peak between 2014 and 2020. The Norwegian Petroleum Directorate rejects this pessimistic outlook – but does not provide an alternative of its own. Norwegian Energy Minister Terje Riis-Johansen concedes that ‘if we don’t make any significant discoveries in the future, it will be difficult to supply as much gas to Europe as we would wish.’ Market players meanwhile demand a more active policy from the Norwegian government to ensure that production will be kept up. |
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Eurogas Statistical Report 2010 Eurogas Eurogas has finalised its statiscal report 2010. The data presented in this report has been collected with the assistance of the national gas associations and member companies of Eurogas. Additionally, for a full picture of the European Union (EU27), data was kindly provided by the natural gas company from Estonia (EestiGas). Malta and Cyprus are not included as they are not supplied with natural gas. |
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EU fires first shot in new round of the global CO2 struggle By Sonja van Renssen The European Commission’s recent proposal to ban carbon credits from emission reductions of certain controversial projects in China and India from the EU carbon market is more than just an attempt to fix a defect in the system. Brussels has a much broader goal in mind, namely a thorough overhaul of the international carbon market. In the meantime it does not expect a significant impact of the ban on the EU’s own carbon market, an assessment not everyone agrees with. Get ready for the next round of the global CO2 war. |
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Europe’s guerrilla war for energy efficiency By Hanno Bakkeren Backed by the EU’s Concerto programme, 58 cities in Europe are carrying out energy efficiency and sustainability projects, often in very difficult circumstances, and sometimes with highly instructive results. The biggest challenge, says Rudy Rooth of Dutch consultancy Kema, who managed to install a biogas-fired district heating system in a low-income neighbourhood in Amsterdam, was ‘getting the tenants involved and enthusiastic’. Stefan Tostmann of the European Commission, who is responsible for the Concerto programme, is convinced of the tremendous potential “his” city projects offer. ‘I can already tell you that tremendous gains can be achieved, much more than the 20 percent the EU is currently aiming at.’ |
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Photovoltaics play a major role in the shift toward renewable energies Roland Berger The German solar power sector has a key role to play in the move toward 100% renewable energies by 2020, provided it targets its efforts carefully. That is the result of the study entitled "Directions for the solar economy" ("Wegweiser Solarwirtschaft") by Roland Berger and Prognos, commissioned by the German Solar Industry Association (Bundesverband Solarwirtschaft, BSW-Solar). |
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Energy Efficiency: Accelerating the Agenda World Economic Forum Energy efficiency is the cornerstone to meeting our climate change goals and in enabling us to meet growing energy needs. |
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Report: creation of "gas hub" good for Dutch economy Ministry of Economic Affairs of the Netherlands The strategy of the Dutch government to strengthen the position of the Netherlands in the European gas market - to become "the gas roundabout" of North-West Europe - has a positive overall impact on the Dutch economy. |
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If there has to be a choice, we should have a proper debate first about the pros and cons Nuclear or gas? By Marcel Viëtor Both nuclear power and natural gas are regularly presented as interim or ‘bridging’ solutions on the way to the energy supply of the future. However, the arguments for or against one or the other are all too often shaped by partisan interests. It is high time to take an impartial look at the advantages and disadvantages of both technologies. |
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Possibilities of renewable energy generation in Ukraine Uliana Pysmenna, Galyna Trypolska, Roman Podolets, Oleksandr Diachuk, Viktor Tochylin In Ukraine, deployment of traditional and renewable energy generation technologies is gradually moving forward. Potential of renewables in Ukraine is significant. |
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Special report: get ready for the Electric Vehicles era Reuters Over the past few years, Eiji Makino has met with heads of state, governors and mayors around the globe pursuing an unconventional strategy for Nissan's new electric car, the Leaf: lining up support for the model before it was even on the road. |
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Russia proposes “electricity pipeline” to Germany By Karel Beckman Russia is proposing to build a high-voltage electricity cable from Kaliningrad to Germany across the Baltic Sea to export power produced from a newly to be built nuclear power plant. The cable would be laid alongside the last part of the gas pipeline Nordstream that Gazprom is building together with western partners and that will be used to transport gas direct from Russia to Germany across the Baltic Sea. The electricity cable would similarly bypass third countries, in this case Poland. A representative from the German Ministry of Economic Affairs says he does not expect Germany to be willing to acquiesce to the plan. ‘I cannot imagine that the German public will want to import nuclear power (“Atomstrom”) from Russia’, he says. |
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The Value of Canadian Oil Sands - to the United States EPRINC - 01/12/2010 An assessment of the Keystone Proposal to expand oil sands shipments to Gulf Coast refiners |
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A primer on Canadian oil sands EPRINC - 01/12/2010 Canadian oil sands have long been recognized as one of the world’s largest endowments of oil resources with over 170 billion barrels in place. The resource endowment places Canada second only to Saudi Arabia. |
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Azerbaijan Country Analysis Brief Energy Information Administration - 01/12/2010 Azerbaijan is emerging as one of Caspian region’s most important strategic export openings to the West and increasingly becoming an important exporter of oil and natural gas. Oil production in Azerbaijan more than quadrupled between 1997 and 2008 to 875,000 bbl/d and is expected to increase further as new wells come online. |
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Doubts grow over the effectiveness of Europe’s flagship climate instrument The EU Emission Trading Scheme: can it deliver? By Sonja van Renssen There is growing doubt over whether the EU’s flagship climate policy instrument, its emissions trading scheme (ETS), will drive the green investment needed for Europe to reach its long-term climate and energy goals. Carbon prices in the ETS are lower than many had hoped for and threaten to stay that way for many years to come. Some argue that emission limits should be lowered to drive up the carbon price, but industry representatives strongly resist this idea. Other observers are more optimistic and suggest that the mere existence of a price for carbon is getting things moving. ‘What is critical is to create confidence that the ETS is here to stay.’ |
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Finally, Brussels’ battle plan for the European energy market By Hughes Belin The European Commission has set out its vision on how to develop the European energy networks needed for a low carbon and more import-dependent future. Brussels’ infrastructure battle plan, adopted on 17 November, is to focus on a limited number of priorities with high added value in terms of achieving European energy and climate change goals, to identify specific but flexible projects that enable the EU to adapt to a changing economic and technological environment and to create tools that can support this policy. Legislative proposals will follow soon. The stakes are high. Success or failure of the new infrastructure policy will be crucial to Europe’s entire strategy on energy efficiency, renewable energy, the Single Market, and security of supply. |
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Europe’s gas industry deeply divided over the future By Stefan Nicola Gas conferences have rarely been more exciting than the European Autumn Gas Conference (EAGC) in Berlin recently. Reeling from turbulent market forces, Russian divide-and-conquer tactics, pipeline wars and complex EU energy and climate policies, gas industry representatives proved to be ready for a frank exchange of views. |
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Population change: an underestimated influence on climate change IIASA/NCAR Changes in population, including aging and urbanization, could significantly affect global emissions of carbon dioxide over the next 40 years, according to a study published in the Proceedings of the National Academy of Sciences (PNAS). The study was conducted by researchers from the National Center for Atmospheric Research (NCAR), the International Institute for Applied Systems Analysis (IIASA), and the National Oceanographic and Atmospheric Administration. It was funded by a European Young Investigator’s Award*, the Hewlett Foundation, and the US National Science Foundation. |
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Managing energy: rethinking the fundamentals Walt Patterson In the past half-century a vast array of government and corporate entities has come to manage energy, or some aspect of energy, in one way or another. They have attained high levels of technical achievement and, in some cases at least, economic success. Nevertheless, the results overall have been less than satisfactory. Despite technological and economic advances, some two billion people are still without electric light. Moreover, scientific evidence indicates ever more forcefully that human use of energy is upsetting planetary systems, with consequences that could be catastrophic. The way we manage energy worldwide is creating serious problems for climate and energy security. |
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The EU’s energy strategy: By Hughes Belin The European Commission has updated for the second time the energy strategy for the European Union, as it does every two years. Although the new strategy, “Energy 2020”, sounds a more urgent note than the two previous editions, it does not offer much in the way of new plans or insights. It also generated few reactions in energy circles in Brussels. The strategy, which was published on 10 November, will be discussed by EU leaders during a summit on energy on 4 February 2011. The idea is that it will then be agreed upon by EU leaders at another EU summit in March 2011 to become the framework for all new EU energy policy initiatives – at least until the next update, in late 2012. |
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EU infrastructure package: questions and answers European Commission On 17 November, the European Commission presented a new "Communication" on energy infrastructure. |
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Crusade 2.0 - the lies of Islamophobia John Feffer The Muslims were bloodthirsty and treacherous. They conducted a sneak attack against the French army and slaughtered every single soldier, 20,000 in all. More than 1,000 years ago, in the mountain passes of Spain, the Muslim horde cut down the finest soldiers in Charlemagne’s command, including his brave nephew Roland. Then, according to the famous poem that immortalized the tragedy, Charlemagne exacted his revenge by routing the entire Muslim army. |
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New research report: Gas can play a major role in UK energy mix Energy Networks Association When looking out to 2050 there is huge uncertainty surrounding how gas will be consumed, transported and sourced in Great Britain (GB). The extent of the climate change challenge is now widely accepted, and the UK Government has introduced a legislative requirement for aggressive reductions in carbon dioxide (CO2) emissions out to 2050. In addition, at European Union (EU) level a package of measures has been implemented to reduce greenhouse gas emissions, improve energy efficiency and significantly increase the share of energy produced from renewable sources by 2020. These policy developments naturally raise the question of what role gas has to play in the future energy mix. |
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Interview: Azerbaijan’s top negotiator Elshad Nassirov ‘We do not want to depend on only one pipeline’ By Rudolf ten Hoedt ‘We do not consider the idea of Nabucco merely transporting our gas from Baku to Baumgarten. We demand from the Nabucco consortium access to the nearby markets as well.’ In an exclusive interview with EER in Baku, Azerbaijan’s top negotiator Elshad Nassirov, sets out quite clearly what his country wants in return for supplying the EU-backed Nabucco pipeline with gas: not just competitive tariffs, but access to downstream markets as well. Azerbaijan is Europe’s main hope to source gas from the Caspian region and reduce its dependency on Russia. Its huge gas reserves could easily fill one or more of the competing projected pipelines through Turkey to the EU. The country is willing to supply Europe, but the question is with how much and under what conditions. As Elshad Nassirov, Vice-President of national energy company Socar, tells EER’s reporter Rudolf ten Hoedt in his office in Baku, Azerbaijan’s main concerns are revenues and independence. Azerbaijan does not want to supply more than 10 billion cubic metres (bcm) annually to the 31 bcm Nabucco pipeline, and only against very sharp tariffs and conditions. ‘We are not going to pay for the empty capacity of Nabucco’, says Nassirov. Azerbaijan wants to keep all doors open to alternative sources of transportation. ‘We will not put all our eggs in one basket, however attractive and beautiful it may seem.’ |
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‘What is needed is a clear signal for the energy sector to transform itself’ By Karel Beckman ‘Ringing the alarm bells’. That is how Fatih Birol, Chief Economist of the International Energy Agency, sums up the underlying message coming from the new 2010 edition of the World Energy Outlook (WEO), the annual flagship publication of the International Energy Agency (IEA) that was published on Tuesday. For the first time, Birol and his team calculated what would happen if the world’s governments continue to follow the weak climate change policies they are following now. The long-term result, according to the WEO, would be a 3.5 degrees rise in global temperatures. In short: disaster. ‘What is needed very badly’, says Birol, ‘is a clear signal for the energy sector to transform itself’. Birol, who does not drive a car ‘out of ideological reasons’, has started on a tour of European capitals with his team to present the results of the WEO. EER caught up with him on Wednesday in The Hague. |
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‘There is a total lack of competition in the regional gas market’ By Jeroen Bult Estonia, the smallest of the Baltic States, is striving after diversification of its energy resources to reduce dependence on its mighty neighbour, the Russian Federation. Estonia has found a welcome ally in the European Commission, but it is also facing obstacles to its energy policy, notes Einari Kisel, the Deputy Secretary General of Energy of the Ministry of Economic Affairs, in an interview with EER. Kisel, who is generally regarded as Estonia’s leading energy expert, specifically notes the ‘total lack of competition on the regional gas market’ and ‘the lack of reciprocity between the EU and Russia’. These aspects ‘have a major impact on the operations of the energy markets and on the security of energy supply in the Baltic region’, he says. About the nuclear power plant that Russia apparently intends to build in the Russian enclave of Kaliningrad, he says that the project is ‘aimed at creating confusion’ among western investors who are considering investing in a new nuclear power plant in Lithuania. |
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From Stockholm to Sofia, Europe is sleepwalking its way into far greater dependency on Russian gas By Matthew Hulbert Having been on the road of late at various energy bashes, it was fascinating to get closer insights into how “opposite poles” on the European map see energy security playing out, namely in Stockholm and Sofia. Both capitals are key players in the future pipeline complexion of Europe. Nord Stream = up North in Scandinavia and the Southern corridor = down South in South East Europe. |
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Russia takes another step away from Burgas-Alexandroupolis as Bulgarian procrastination continues Theodoros Tsakiris On 30 September, Russia’s Deputy Energy Minister Anatoly Yanovsky told RIA Novosti that Moscow has offered Turkey a Draft Intergovernmental Agreement (IGA) regarding the participation of Russian companies in the 1-1.5 mbpd Samsun-Ceyhan oil pipeline project. The Russian proposal constitutes the strongest signal up to this point that Russia is seriously considering TAPCO as an alternative to Burgas-Alexandroupolis. |
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Political hurdles could derail the Desertec initiative Nikolaos Sofianos One year after the establishment of the so-called Desertec Industrial Initiative (DII), in October 2009, when the DII took a step forward becoming a limited liability company under the German law named DII GmbH, the project is considered as technically and financially feasible but could still stumble on political issues in some countries. |
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‘For Nabucco it is now or never’ By Rudolf ten Hoedt and Karel Beckman Will Europe be able to source gas from the Caspian region and the Middle East, bypassing Russia? That is the question on everybody’s mind in the European gas market, as the battle between the Russian-backed pipeline project South Stream and the EU-backed Nabucco project is coming to a head. (See the box below.) Brussels, Berlin and Washington are pushing hard for Nabucco, but it is the supply countries – Azerbaijan and Turkmenistan in particular – that will ultimately determine the fate of Europe’s great non-Russian gas pipeline. ‘The supply countries will need to make some key decisions in the coming months’, says Jeremy Ellis, Head of Business Development of RWE Trading in an interview with EER. ‘If the political will is there, Nabucco will get built. If not, the window of opportunity for Nabucco will be lost for a long, long time.’ |
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The Dutch Energy Valley: the two-edged sword of the energy transition By Karel Beckman The northern Netherlands – which bills itself as the Dutch “Energy Valley” – is rapidly turning into one of the great energy hubs of Europe. Three large new power plants are currently being built in this region. In addition, many billions of euros are being invested in a wide range of other energy activities – gas and oil storage, biogas production, gas pipelines, power lines, enhanced oil recovery, carbon capture and storage, offshore wind parks and Research & Development. An important driving force behind the development of the Energy Valley is the desire to find ways to facilitate the transition to a sustainable energy future. Still, for the time being, coal, oil and gas continue to form the foundation of the north-Dutch energy hub. ‘We are an economic program, not a sustainability program’, says Gerrit van Werven, General Manager of Energy Valley. 'Although sustainability remains our long-term goal.' |
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Nuclear power in China: Chinese are becoming self-sufficent World Nuclear Organisation This new report from the World Nuclear Organisation provides comprehensive data on the development of nuclear power in China. |
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Green technologies key for IT industry profitability in 2020 Institute for Sustainable and Applied Infodynamics (ISAID) and Rice University's Baker Institute for Public Policy Unless the IT industry adopts new energy-efficient technologies in the coming decade, it runs a serious risk of being unable to contribute to growing the global economy if limits are placed on carbon emissions. |
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Energy in the EU from Northern Africa: a realistic option? Speech by Günther Oettinger, European Energy Commissioner Thank you for inviting me to the first annual conference of the Desertec Industrial Initiative. What brings us together today lies at the core of the European Union policy in two ways. |
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Energy Perspectives for the Kaliningrad Region as an Integrated Part of the Baltic Sea Region Baltic Development Forum This report hopes to provide a basis for a better dialogue on energy policy and energy planning in the Baltic Sea region. The report is a continuation of the 2009 study on regional energy scenarios that presented various alternatives for a more integrated energy sector in the Baltic Sea Region. The energy scenarios were discussed at the 2009 BDF Summit in Stockholm and proved to be a very effective way of promoting a dialogue on priorities for the regional energy cooperation. The scenarios offered opportunities rather than fixed solutions. This report looks more closely on Russia and Kaliningrad as an integrated part of the Baltic Sea region. |
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‘For GDF-Suez, the key word is diversification’ By Yves de Saint Jacob After the takeover of International Power in August, GDF-Suez has probably overtaken Eon as the largest utility company in the world. Two years after the new French giant was founded and partially freed from the grip of the French state, it is facing an uncertain world, in which it sees its nuclear ambitions thwarted by that very same state, and its LNG operations in the US buffeted by adverse market circumstances. Nevertheless, GDF-Suez, with is broad portfolio of global activities in electricity, gas and energy services, seems in a good position to weather most storms that could come its way. According to Professor Jean-Marie Chevalier, one of the foremost energy experts in France, the key word for GDF-Suez is diversification. ‘The answer to uncertainty is to diversify judiciously.’ |
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Indian Renewable Energy Status Report: Background Report for DIREC 2010 REN21 India has great potential to accelerate use of endowed renewable resources in powering its growing economy with a secure and affordable energy supply. The Government of India recognizes that development of local, renewable resources will be critical to ensure that India is able to meet both economic and environmental objectives and has supported the development of renewable energy through several policy actions. As background report for the Delhi International Renewable Energy Conference DIREC 2010, taking place in New Delhi from 27 to 29 October 2010, this paper describes the status of renewable energy in India as of today. |
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By Karel Beckman With spot market gas prices noticeably lower compared to oil-indexed long-term contract prices, more and more calls are heard in Europe to abandon the traditional gas pricing structure and embrace the “spot market model”. Sergei Komlev, Head of the Contract Structuring and Price Formation Directorate at Gazprom Export, warns that such a policy might look attractive in the short term, but would entail price and security of supply risks for Europe in the longer term. ‘The European gas market is not designed for the spot market pricing model’, he argues. |
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Speech of Commissioner Oettinger at the Dinner Debate with the European Energy Forum European Commission Mr. President, Ladies and Gentlemen, Thank you for inviting me tonight. It is a pleasure to see some familiar faces, as well as many new friends. It is always good to exchange views on energy policy with an informed audience and it is a pleasure to have the chance to do so in this relaxed setting. |
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Turbulent times for European gas market By Alex Forbes Europe’s natural gas industry is undergoing a revolution. Tough new competition legislation is forcing gas companies to restructure their businesses and make room for new entrants. Demand and supply uncertainties – in the form of increased import dependency, new security of supply legislation, economic crisis and a surge in unconventional gas production – have multiplied. At the same time, it remains unclear whether the European Union’s climate change policies will stimulate or dampen demand for gas. The great challenge for Europe’s gas companies will be to navigate these multiple uncertainties while taking advantage of the opportunities. |
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The oil industry between hopes and fears By Karel Beckman This week’s Oil & Money Conference in London, a meeting place for the oil industry, identified four “game changers in global energy”: Iraq, China, Macondo and shale gas. Game-changers these may be – but none of them bodes particularly well for “Big Oil”. And they don’t even include climate change, national oil companies and electric cars. Karel Beckman wonders whether we are witnessing the end of “Big Oil” as we have known it in the West. |
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Electric vehicles: implementation challenges move into top gear Eurelectric Report of a EURELECTRIC conference - Electric Vehicles: Implementation Challenges Move into Top Gear - which took place on 28 and 29 September 2010 in Hotel Amigo in Brussels |
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The impact of financial market regulation on energy trading and power prices Paul Dawson, Head of Regulatory Affairs, RWE Supply & Trading and Karl-Peter Horstmann, Head of Markets Regulation, RWE Supply & Trading Press briefing from RWE on financial market regulation. |
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China’s Pipelineistan “War” - Anteing Up, Betting, and Bluffing in the New Great Game Pepe Escobar Future historians may well agree that the twenty-first century Silk Road first opened for business on December 14, 2009. That was the day a crucial stretch of pipeline officially went into operation linking the fabulously energy-rich state of Turkmenistan (via Kazakhstan and Uzbekistan) to Xinjiang Province in China’s far west. Hyperbole did not deter the spectacularly named Gurbanguly Berdymukhamedov, Turkmenistan’s president, from bragging, “This project has not only commercial or economic value. It is also political. China, through its wise and farsighted policy, has become one of the key guarantors of global security.” |
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Shah Deniz: King of the Sea By Ramiz Mammadov Shah Deniz translates from Azeri as “King of the Sea” and it really is the king of Caspian region, being the 9th largest gas field in the world with reserves of around 1.2 trillion cubic meters. The “King” is situated in the South of the Caspian Sea, off the Azerbaijan shore, approximately 70 km south-east of Baku, the capital of the Azerbaijan Republic. It is being operated since the end of 2006 through a production sharing agreement (PSA) ratified in 1996 by a consortium of companies consisting of lead operator BP (25.25%), Statoil (25.5%), Socar (the State Oil Company of Azerbaijan), Lukoil of Russia, Total of France, NICO of Iran (10% each) and TPAO of Turkey (9%). |
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'We need to produce as much home-grown energy as possible' By Alex Forbes Humankind can rise to the challenge of mitigating climate change, but businesses will need to play a major role if we are to succeed. The EU is right to set over-arching targets for emissions reductions but should resist the temptation to meddle in the details of member states’ national policies. And UK energy policy under the new coalition government is likely to continue moving along the tracks that were laid by Labour.These are some of the views of Malcolm Wicks, former Minister for Energy (twice) and Science Minister and currently Labour MP in the UK. As ‘special representative on global energy issues’ for former prime minister Gordon Brown, the highly experienced Wicks wrote a report concluding that Europe is underestimating the risks of energy insecurity and needs to produce ‘as much home-grown energy as possible’. EER-correspondent Alex Forbes caught up with him at the recent World Energy Congress in Montreal and had a fascinating exchange of views with him about global, European and UK energy issues. |
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China’s future troubles By Matthew Hulbert No political risk appears to be too high for China in its quest for energy and commodities. The Chinese seem to thrive on political instability, much to the chagrin of western governments and multinationals. But what might look appealing to Beijing in the short term, could become a big headache in the long run. Ultimately China depends just as much on political stability as everyone else. |
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The Role of Investment Protection in EU-Russia Relations ECIPE - 05/10/2010 Russia’s model for investment policy is unsustainable, argue Fredrik Erixon and Iana Dreyer in a new paper. It has for long been clear that Russia arbitrary and Kremlinbased approach to investment protection has been damaging the prospects for Russia’s industrial sector to attract foreign investments. But now it is increasingly clear that the old model does not deliver gains to the Kremlin and oligarchs in the way it did in the past. Russia now needs to reform its investment policy, and the European Union should be a key partner in this task, e.g. through a new investment treaty. |
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Surge of patents since Kyoto European Patent Office Six countries – Japan, USA, Germany, Korea, France and the UK – are the source of almost 80% of all innovations developed worldwide in the field of clean energy technologies (CETs). This is one of the key findings of a patent-based study on the emergence and distribution of these technologies across the globe jointly conducted by the European Patent Office (EPO), the United Nations Environment Programme (UNEP) and the International Centre for Trade and Sustainable Development (ICTSD). |
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Emission trading scheme is starting to bite By Sonja van Renssen The future structure of Europe’s flagship climate instrument, its emission trading scheme (ETS), is currently being pieced together in Brussels. Starting in 2013, the power sector will have to buy CO2-allowances for some €15 billion a year at current CO2-prices. The industrial sector will get part, though not all, of its allowances for free, at least until 2020. Power companies complain that it is taking too long for the auctioning of allowances to get started. Industry sources complain that the ETS is going to drive up costs and hamper innovation. How effective the ETS will be in stimulating low-carbon investment remains to be seen. |
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Brussels to unveil new energy infrastructure vision By Hughes Belin A single European energy network. That is the goal towards which the European Commission is moving. Its new “infrastructure package”, set to be unveiled in November, will lay down plans and legislative proposals for connecting up offshore wind and hydropower to the European grid, developing new routes for gas imports, improving the liquidity of the European gas market, building new east-west gas and electricity interconnections, the development of a CO2-grid linking power stations to carbon storage facilities, the roll-out of smart grid technologies and even the development of a “supergrid” to bring the whole European network together. Together these plans amount to a revolution in the EU’s energy infrastructure. Our Brussels correspondents Hughes Belin lifts the veil and takes a look at the huge changes awaiting the European energy sector. |
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Swedish biofuels do have major benefits for the climate Lund University For the first time, researchers have taken an overall look at Swedish biofuels and analysed what impact they have on the environment, both in relation to one another and to the fossil fuel alternatives petrol and diesel. The results show that they produce between 65 and 140 per cent less greenhouse gas emissions than petrol and diesel, even when direct and indirect land use changes are taken into account. |
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China: the 21st century energy superpower By Michael T. Klare If you want to know which way the global wind is blowing (or the sun shining or the coal burning), watch China. That’s the news for our energy future and for the future of great-power politics on planet Earth. Washington is already watching - with anxiety. |
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Copenhagen’s Revenge: Danish capital wants to be greener than green By Reiner Gatermann In December last year, the eyes of the world were on Copenhagen, as host of the UN Climate Convention. Despite high hopes, “Copenhagen” did not become the successor to “Kyoto”. The image of the Danish capital was tarnished. In an effort to regain its reputation as a “green role model”, the Danish city is hosting World Climate Solutions 2010. Bo Asmus Kjeldgaard, Environmental Mayor, is convinced that people understand that it was not his city, but the Danish government, that was to blame for the failure of the UN Conference. Indeed, the left-wing local government of Copenhagen has ambitious plans to make the city CO2-neutral by 2025 – whatever the national government may say. |
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'Gas must reposition itself in the new energy world' By Karel Beckman Natural gas is promoted by the gas industry as an ideal “transition fuel” on the road to a renewable energy future. Thanks to their flexibility and low CO2-emissions, gas-fired power stations are supposed to be the ideal “balancing partners” for intermittent renewable energy sources such as solar and wind power. But how this “partnership” will work in practice, and what its financial and technological consequences will be, is by no means clear. A new research programme in the Netherlands, EDGaR, will try to throw light on these and other questions. EDGaR, Europe’s largest research programme focusing on the role of gas in the energy transition, will actively seek cooperation with foreign institutions in Italy, Germany, the UK, France and elswhere, says its Scientific Director Catrinus Jepma. |
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The Shale Gas revolution: hype and reality Chatham House The recent ‘shale gas revolution’ in the United States has created huge uncertainties for international gas markets hat are likely to inhibit investment in gas – both conventional nd unconventional – and in many renewables. If the revolution continues in the US and extends to the rest of the world, energy consumers can anticipate a future dominated by cheap gas. However, if it falters and the current hype about shale gas proves an illusion, the world ill face serious gas shortages in the medium term. |
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A market test for renewable energy by James Osborne With European governments looking to rein in subsidies for renewable energy generation, boom times are over for clean technology investors. Still, Italian utility Enel is pressing ahead with plans for an initial public offering (IPO) of its Enel Green Power unit next month amid sliding stock prices. The Rome-based company wants to retain control over the subsidiary and may be driven more by a need to honour its promise to reduce debt than a desire to get the best value for Enel Green Power. |
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Light and shade – German photovoltaic companies in the global competitive arena Roland Berger This new study investigates the strategic positioning and financial capabilities of 16 photovoltaic companies. |
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Russian Arbitrage: pipedream or Eastern Promise? By Matthew Hulbert Things are looking up for Russia. Prime Minister Putin finally opened a new pipeline exporting east Siberian oil to the Chinese mainland. Dubbed the Eastern Siberia-Pacific Ocean (ESPO) link, the plan is to pump 1.6 million barrels per day towards the Pacific Ocean over the next few years. The rationale is clear. Diversifying supplies to Asia offers Russia what all energy producers want: leverage over competing consumers in the East and West. Keep Asia keen, treat Europe mean. Cash in on the premium. |
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An outlook of ‘unprecedented uncertainty’ By Alex Forbes A highlight of last week’s World Energy Congress in Montreal was the glimpse provided by the International Energy Agency’s chief economist, Fatih Birol, into some of the key themes in the forthcoming World Energy Outlook. This year’s edition of the IEA’s influential analysis of energy trends is due out in November. Birol identified ‘four crucial factors’ that will drive our energy future: major uncertainties over economic recovery, shale gas and climate change policies, growing insensitivity of oil markets to price changes, China’s increasingly huge impact on global energy dynamics, and the changing role of public energy policy. It all adds up, concludes Birol, to a time of ‘unprecedented uncertainty’ for the global energy industry. |
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My Road Trip With a Solar Rock Star - Or Notes on the Enthusiasm Gap By Bill McKibben I got to see the now-famous enthusiasm gap up close and personal last week, and it wasn’t a pretty sight. |
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Swedish vote will decide future of nuclear power On Sunday 19 September, Sweden will elect a new parliament (Riksdag). The outcome may have important consequences for Swedish energy policy. If the Left succeeds in gaining back the majority in Parliament from the Right, the Swedish “nuclear renaissance” will likely be nipped in the bud. As regards state-owned energy company Vattenfall, the right-wing parties are contemplating opening the door for private shareholders and selling off the company’s German and Dutch assets. The Left is opposed to privatisation, but might agree to the divestment of non-Swedish assets. When it comes to renewable energy, there is not much difference between left and right: both sides have lost faith in ethanol and have promised to boost biogas, wind power and electric cars. |
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‘A remarkable turnaround of past trends’ By Karel Beckman The Commission’s report, “EU energy trends to 2030”, presents two scenarios. The Baseline scenario is based on current trends and policies, including the European Emission Trading (ETS) scheme and several energy-efficiency measures. The Reference scenario also assumes that the national targets under the Renewable Energies Directive are met. |
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Big Oil, massive future? By Matthew Hulbert Following BP’s environmental disaster in the Gulf of Mexico, it wasn’t long before the obituary of ‘big oil’ was drafted. Offshore drilling was a goner, environmental tightening will squeeze the life out of the majors, and lumbering corporate structures can no longer cope in a world of localized and specific operational risks. Big oil R.I.P. It sounds plausible, but it is wrong. If anything, big oil will continue to get bigger thanks to a number of compelling commercial and political reasons on the back of the BP catastrophe. |
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The Russian gas price reform and its impact on Russian gas consumption Edward Hunter Christie This article provides quantitative assessments of the impact of Russia's ongoing reform of domestic natural gas prices on the country's consumption of natural gas. The base assumption is that Russia could go through an adaptation process analogous to what occurred in more advanced transition countries. Empirical gas demand models are thus estimated for the transition countries of Central Europe for the period 1992-2006. |
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Energy efficiency – a new energy resource for Russia? Hanna Mäkinen Investing in energy efficiency is an economically rational choice for Russia. By investing in energy efficiency Russia will be able to meet supply needs at approximately one third of the cost of building new production capacity. Moreover, if all of the oil, gas and oil products that could be saved by realising Russia’s energy efficiency potential were exported, Russia would obtain additional revenues of 80–90 billion USD every year. For example, Russia has a potential to reduce its natural gas consumption by 240 billion cubic meters, which would largely exceed the volume of Russian gas exports in 2005–2008. |
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Nabucco gas pipeline Bankwatch.org The main justifications for Nabucco pipeline are its role in ensuring energy security and fighting climate change. Yet there remain serious doubts over whether the Nabucco pipeline can help to solve any of these problems. Moreover, it will bring limited public benefits and comes with serious social and environmental concerns. Bankwatch believes that Nabucco should not receive public support, either financial or political. |
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Speech Commissioner Oettinger at the Odessa Forum European Commission - 10/09/2010 Günther H. OETTINGER EU Commissioner for Energy Speech of Commissioner Oettinger at the International Odessa Forum International Odessa Forum Odessa, 27 July 2010. |
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EU natural gas demand: uncertainty, dependence and bargaining power Edward Hunter Christie This paper reviews and compares major long-term scenarios for the European Union’s demand, supply and imports of natural gas. The analysis includes scenarios from the IEA, the European Commission and Eurogas, and pays particular attention to the role of climate policy commitments. |
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Jatropha in Ghana: right or wrong? By Rudolf ten Hoedt In many African countries, agricultural land is a hot commodity. Now foreign players are getting involved, touching down in countries such as Zambia, Sudan and Ethiopia to grow crops for biofuel. In Ghana, where increasing amounts of jatropha are grown to produce biofuel for the European market, the foreign investors’ lack of familiarity with local customs and systems of land rights have stoked tensions with the indigenous population. Some western producers have fallen into the trap of making deals with irresponsible chiefs. Others try to do things right, but are taken advantage of by corrupt authorities or NGOs. |
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Realigning UK energy policy: does the government have the will? By Nick White, Murray Hartley and Kirsty Ingham of Arthur D Little For more than a decade, the UK Government has pursued a series of inconsistent policies in the electricity sector, flip-flopping between conflicting policy objectives that if implemented would likely lead to a high cost, but low quality, electricity system that will not deliver the desired climate change objectives. We question whether the current policies offer good value for money for consumers. Lower cost solutions are possible, which would be easier to implement and produce a better quality outcome while still achieving worthwhile reductions in greenhouse gas emissions. The question is whether or not the coalition Government has the political will to change direction: if it can, there is a sizeable prize at stake for UK plc – a lower cost way to achieve the energy policy objectives will free up resources for use in other areas. The first Annual Energy Statement published on 27 July 2010 shows that the Government is willing to grapple with the challenge. |
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German government unveils ‘road map into the age of renewable energy’ By Stefan Nicola The German government Monday unveiled a first draft of its energy strategy, a long overdue overhaul for the energy policy of Europe’s largest economy. The plan banks on renewable energy sources, energy efficiency measures and climate protection programs. Yet it will also extend the running times of the country’s 17 nuclear reactors by an average of nearly 12 years, a decision that has at least half the country fuming. |
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‘The integration of the European electricity market will transform the European economy’ By Karel Beckman European power exchanges are fast moving towards the integration of some 80% of the European electricity market. ‘The old ideal of one European copper plate is rapidly coming within reach’, observes Bert den Ouden, CEO of power and gas exchange APX-Endex and one of the long-time champions of European market integration. ‘With highly beneficial consequences for European consumers and producers. It means more efficiency for everybody. An optimal use of generation and transmission capacity in Europe. And a crucial stimulus for the large-scale use of renewable energy.’ |
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To Russia with love By Hugh Belin In early August, as most Europeans were enjoying their holidays, Energy Commissioner Günther Oettinger broke a taboo by making a significant political energy statement at a time when the EU is still busy discussing its energy strategy for 2020. He told journalists from Kommersant, one of Russia’s leading business newspapers, that ‘Russia’s stake in the EU’s gas market will in the medium-term perspective increase to 35%’. Our Brussels correspondent Hughes Belin wonders what this means for the EU's energy diversification policy - and for the Nabucco pipeline in particular. |
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South Stream steals a march on Nabucco By Kash Burchett, Datamonitor Until recently, Europe’s booming demand for gas and its limited reserves made it plausible to argue that the Russian-backed South Stream gas pipeline and the EU-backed Nabucco pipeline could both be viable. However, now that the recession and diluted environmental commitments have reduced demand and the unconventional gas revolution has increased supply, the competition between the two projected pipelines has become a zero-sum game. Nabucco and South Stream have become engaged in a ‘winner-takes-all’ contest to supply Europe with gas. And recent developments suggest South Stream may have stolen a march on Nabucco. |
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Dutch gas experts ready for global mission By Karel Beckman The major Dutch gas infrastructure companies have launched a unique non-profit company that stands ready to solve gas infrastructure problems anywhere in the world. The Global Gas Networks Initiative (GGNI), as it is called, is manned by just-retired senior gas experts eager to share their know-how and experience. The Dutch government supports the venture ‘for strategic reasons’. ‘If Dutch companies win tenders because of GGNI’s efforts then that would be a positive outcome of course.’ |
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Navigating between Nabucco and South Stream By Ramiz Mammadov Italian energy giant ENI has come up with a proposal to transport gas in the form of CNG (compressed natural gas) by ships across the Caspian Sea from Turkmenistan to Azerbaijan. This looks like a clever move to facilitate both the EU-backed pipeline and its Russian-backed competitor South Stream, in which ENI has a stake. |
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New power capacity from renewable sources tops fossil fuels again in US, Europe Renewable Energy Network In 2009, for the second year in a row, both the US and Europe added more power capacity from renewable sources such as wind and solar than conventional sources like coal, gas and nuclear, according to twin reports launched today by the United Nations Environment Programme and the Renewable Energy Policy Network for the 21st Century (REN21). |
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Eurobserver releases new European biofuels barometer Eurobserver Total 2009 biofuel use amounted to 12.1 Mtoe (see Table 2 on pdf page 5), which represents a 4% share across all road transport fuels estimated at 300 Mtoe in 2009. The European Union needs to raise biofuel consumption by 6 Mtoe in 2010 if it is to reach the Directive’s goal (5.75%). |
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Oceans of … By Karel Beckman The BP oil spill in the Gulf of Mexico drew some interesting responses from the European Commissioner of Energy, Günther Oettinger and the Commissioner of Maritime Affairs and Fisheries, Maria Damanaki. In a speech to the European Parliament on 7 July, Oettinger referred to ‘the maritime aspects of the challenges we’re facing, notaby how we can turn the terrible accident in the Gulf of Mexico into an opportunity for literally “untapped waters” so far, such as the potential for renewable ocean energy’. Renewable ocean energy – as an alternative to deepwater oil? Was the Commissioner serious? |
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Europe’s deepwater operations face political storm By Uchenna Izundu Energy Commissioner Günther Oettinger caused consternation within Europe’s oil and gas industry recently by suggesting a freeze on the drilling of new deepwater wells. He also announced that he is thinking of proposing a ‘European framework’ to ‘control’ the work of the member states’ national authorities that are currently in charge of regulating the offshore sector. The outcome of this political battle may have a significant impact on the future of Europe’s offshore industry, as deepsea oil and gas production is becoming increasingly important to Europe’s energy supply. |
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Eastern Europe’s energy challenge: meeting its EU climate commitments David Buchan - Oxford Institute for Energy Studies This study of eastern Europe's painful energy adjustment over the past 20 years concludes that the region has, overall, done well in wasting less energy and in cutting CO2 emissions, but stresses that it could do far better. Central and eastern Europe is still a veritable orchard of low-hanging fruit, in terms of potential efficiency improvements and renewable energy increases, for the European Union to grasp. |
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Making Nordstream a European project Lena Kolarska-Bobinska MEP The European Commission says it is considering the introduction of "a general framework to deal with transmission pipelines entering the EU". Such a framework could include intergovernmental agreements, Energy Commissioner Oettinger said in the name of the Commission in a reply dated July 28th to MEP Lena KOLARSKA-BOBINSKA's written question. In her question, she urges the need for such agreements including on Nordstream (also see her European Voice's article of 20 May 2010). If enacted, this would see the creation of new EU-wide rules governing all external oil and gas pipelines and would have a major effect on external energy policy. |
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Algerian gas – still a key part of southern Europe's energy mix by David Drury As a reliable supplier of natural gas – on which some Southern European countries, particularly Spain and Italy, have grown heavily dependent – Algeria has a long-established position as Europe’s second largest external supplier of natural gas. But there have been some dramatic events in Algeria in the last few months. The sacking of long time energy minister Chakib Khelil and the dismissal of the Sonatrach CEO and several top managers of the national company on corruption allegations coincide with an aggressively pursued export programme now carried out at a time that European markets are awash with natural gas. Furthermore, Algeria continues to find it difficult to interest foreign investors in some of Algeria’s new prospective regions. Algeria’s new energy minister, Youcef Yousfi will have his work cut out not only in housecleaning at Sonatrach in the wake of the corruption scandal, but also in ensuring future gas supplies and defining a new Algerian energy policy. |
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BP’s future may be decided in Russia by Matthew Hulbert As BP CEO Tony Hayward clears his desk from St. James’s Square in London, Robert Dudley is getting ready to take his place, effective Oct. 1. The rationale is clear: BP wants an American to take care of its U.S. assets. But in the end, this could prove to be misguided. BP is a global player, not just a Gulf of Mexico upstart. |
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France considers its nuclear position World Nucelar News France is revising its nuclear strategy to improve reactor technology and boost cooperation between national champions Areva and Electricité de France (EdF). Up to 15% of Areva will be sold as optimisation takes place on the EPR design. |
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Will Venezuelans be eating more rice or borscht or both in the future? by Kevin Rosner Venezuelan threats to cut off oil exports destined primarily to US refineries, in response to a row which erupted last week between Columbia and that country, may end up backfiring on this South American petro-dictator. |
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Speech of Commissioner Oettinger at the International Odessa Forum EU Commissioner for Energy The European Union, its Member States and companies have a long-standing record of cooperation on energy in the Black Sea region and with its coastal States. The accession of Romania and Bulgaria to the European Union in 2007 was a major development for the EU perspective on the Black Sea. |
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Wet barrels versus paper barrels by Rik Komduur According to the International Energy Agency, the global population can be expected to considerably force up its daily consumption of oil in the five years to come. This growth is completely due to a highly increasing demand for oil in the developing (non-OECD) countries, particularly in Asia. The increase of production capacity, on the other hand, is expected to be considerably lower. This means reserve production capacity will drop drastically. It is not unlikely that the financial sector will see this as a signal that the time has come to abandon the relatively stable range of around $70 to $80, within which the oil price has fluctuated for a considerable time now, and once again drive up the oil price. |
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EU struggles to phase out coal subsidies by Hughes Belin The European Commission wants to extend the aid regime for Europe’s coal sector, which is set to expire at the end of the year, for another decade. In a proposal for a new regime, Brussels puts more emphasis on the need to close unprofitable mines. But environmental organisations and some European commissioners say this does not go far enough. They argue that an extension of aid flies in the face of the EU’s climate policy. What complicates the issue that it is not just about climate or the envirionment – but about employment and security of supply as well. |
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Reality check, call to arms or pipe dream? By Karel Beckman The International Energy Agency (IEA) has updated its technological roadmap to a low-carbon future. If the IEA’s road is followed, it will be bad news for gas producers and good news for the nuclear power sector. The nuts and bolts of a proposed energy revolution. |
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Blowing up the blowout by Karel Beckman Disastrous as the “Macondo Oil Spill” may be, the fact is that, as a new report from the Energy Policy Research Foundation (EPRINC) shows, offshore oil spills caused by blowouts are extremely rare, particularly in the US. In fact, historically the most common and largest spills have been those from oil tanker accidents. Thus, ironically, as the US has to import more oil if it cuts domestic production, a reduction of offshore drilling will lead a higher risk of accidents, argues EPRINC. It is just one of the fascinating details coming out of EPRINC’s contrarian cost-benefit analysis. |
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A breakthrough for second-generation biofuels by Karel Beckman Dutch companies have developed a new technology that could become a breakthrough in the use of wood residues in electricity generation. By perfecting the so-called torrefaction process, they are able to achieve industrial-scale production of “bio-coal” pellets that can be used as a perfect substitute for coal in coal-fired power plants. RWE Innogy, the renewable energy subsidiary of the giant German utility RWE, has invested several millions in the technology. RWE Innogy is now building a €120 million wood pellet plant for the production of biomass pellets in Georgia in the US, which is likely to use torrefaction in the future. According to Leonhard Birnbaum, Board Member of RWE, the new product has the potential ‘to decarbonise our existing coal power infrastructure’. |
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Shell: from oil tanker to floating LNG vessel by Karel Beckman Shell is fairly rapidly changing from an oil into a gas company. While Shell’s gas production has been growing modestly, its oil production has been declining rapidly. As a result, the contribution of oil to Shell’s total production has slipped from 65% just a few years ago to 50% last year. In a few years from now, oil will be good for only 45%, gas 55%. This transformation, partly driven by choice and partly by necessity, opens up new possibilities for Shell, but also entails significant new risks. The most important question, perhaps, is how profitable will the gas market turn out to be? |
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EU must take action to secure Caspian oil by Ramiz Mammadov The two national companies of Kazachstan and Azerbaijan – KazMunayGas (KMG) and State Oil Company of the Azerbaijan Republic (SOCAR) – have signed several agreements to create a legal and commercial basis for the Trans-Caspian Project, also known as the Trans-Caspian Oil Transportation System (TCOTS). The latest step forward was announced early in June when a pre-qualification round was started for feasibility studies. The TCOTS is important as a major new source of oil supplies in Europe. It has strong backing of the major oil companies, including European companies, operating in the Caspian region and it is backed by the governments of Azerbaijan and Kazakhstan. What is lacking so far, however, is clear support from the EU and the US. This makes it possible for Russia and Iran to undermine the project. High time for Brussels to take action. |
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EU gets ready for a new energy strategy by Hughes Belin The European Union is shaping a new energy strategy for 2011-2020 against the backdrop of the global economic crisis and difficult climate change negotiations. The European Commission warns that ‘the uncertainty created by the crisis puts the brakes on many critical energy projects and risks slowing down energy technology development.’ In response to these new challenges, the Commission has now issued a strategic document that will be discussed with stakeholders and within the European institutions. Once the details of this new strategy are agreed upon, it will shape all the EU’s legislative work in the energy sector until 2020. |
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Europe not ready for unconventional gas, yet by Rik Komduur The stunning development of ‘unconventional gas’ in the United States, has led that country to replace Russia as the world’s largest gas producer last year. Can this happen in Europe as well? Theoretically, yes: the reserves are there. For the moment, however, there are factors that are putting a brake on the development of unconventional gas in Europe: the relatively high population density, a lack of know-how and an experienced service industry, possibly higher exploration and production costs and uncertainties in the regulatory and policy environment. As a result, experts expect only a marginal growth of unconventional gas in Europe in the coming decade. However, after 2020, Europe may come to experience its own unconventional gas revolution. |
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Proposed agenda for the National Commission on the BP Deepwater Horizon Oil Spill Eprinc The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling has been tasked with investigating the Deepwater Horizon accident and making recommendations on how to prevent and mitigate future spills. Given the large stakes to the marine environment, coastal and national economies, U.S. energy security, and revenues to the federal government, the Commission’s recommendations are likely to have consequences that go well beyond an investigation of the accident and implementation of a new regulatory program. |
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Wind power goes mainstream – and feels China breathing down its neck by Stefan Nicola The wind power sector is fast developing from a pioneering market into a mainstream industrial market, dominated by large utilities and industrial players. At the same time, Western players are increasingly being challenged by Chinese competitors. Not only will China be the fastest growing market in the coming decade, it also favours its own domestic manufacturers by charging high import taxes on foreign-made turbines and components. In addition, European manufacturers complain that the Chinese are violating their property rights. ‘It won’t be long until we will see a re-import of our own technology from Asia.’ |
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Unconventional gas: Producer pickle or consumer curse? Matthew Hulbert - Center for Security Studies (CSS) Gas producers have a problem. Demand is down and supply is up, largely thanks to breakthroughs in unconventional production across America. More output could potentially follow in Europe and Asia, threatening to turn the gas world on its head. But there is a catch: should this prove to be a false dawn for unconventional production either on cost or ecological grounds, then consumers are riding for a fall. Turning the screw on producers is easy in a lax market, but if fundamentals tighten, producers will assuredly take their vengeance. |
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‘We want to be a global player in renewable energy’ by Karel Beckman The small Gulf State Abu Dhabi, one of the world’s major oil producers, has the ambition to become a global centre of sustainable energy research and production. A mirage? Certainly not, says Frank Wouters, the Dutch Director of Masdar Power, one of the vehicles the Abu Dhabi government has set up to realise its green dreams. ‘Everything we do is intended to contribute to the diversification of the economy of Abu Dhabi.’ |
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The April 2010 Russo-Ukrainian gas agreement and its implications for Europe by Jonathan Stern, Katja Yafimava and Simon Pirani, Oxford Institute for Energy Studies This study by Jonathan Stern, Katja Yafimava and Simon Pirani reviews the gas agreements made between Russia and Ukraine this year. The authors warn that while prospects for a new Russo-Ukrainian “gas war” have receded in the short term fault lines remain in the agreements that could cause problems in future – which is of concern to a European market dealing this week with the latest Russo-Belarussian dispute. |
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The radical transformation of an energy company by Karel Beckman The Danish state-owned energy company Dong Energy is transforming itself from a primarily fossil-fuel dominated company to a renewable energy company. This radical shift must take place in about 30 years. ‘It may sound easy, but it’s actually quite a big step’, says CEO Anders Eldrup in an interview with EER. ‘We are turning into a totally different company from what we are today. I may be wrong but I have not seen any other company with such aggressive ambitions as we have.’ |
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Crisis structurally changes energy business by Alex Forbes Statistics and analysis presented this week by BP – at the launch of its annual Statistical Review of World Energy – suggest that the worst global recession since the second world war has not just temporarily hit demand but also caused – or accelerated – structural changes in the industry: a shift in demand from OECD to non-OECD countries, a disconnect between oil and gas prices, strengthened control of OPEC over oil prices, an increased integration of global gas markets, increased fuel switching in the electricity sector from coal to gas and the rise of renewables. These trends are likely to persist long after economic and energy demand growth have bounced back. |
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Commission sets up system for certifying sustainable biofuels European Commission The Commission decided today to encourage industry, governments and NGOs to set up certification schemes for all types of biofuels, including those imported into the EU. It laid down what the schemes must do to be recognised by the Commission. This will help implement the EU's requirements that biofuels must deliver substantial reductions in greenhouse gas emissions and should not come from forests, wetlands and nature protection areas. The rules for certification schemes are part of a set of guidelines explaining how the Renewable Energy Directive, coming into effect in December 2010, should be implemented. |
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ITER project jeopardised by European indecision by Hughes Belin The international economic crisis has a new victim in its sights: the giant international ITER project, an experimental thermonuclear fusion reactor which could help project partners solve their potential energy shortage problems by the end of the century. The estimated costs for the first components to build the reactor, to be paid out of the EU’s dedicated research programme, have soared from €2.7 to €6.6 billion. ITER’s international partners are waiting for a clear signal of Europe’s commitment at the upcoming ITER Council meeting in Shanghai on June 17, but there is as yet no agreement within the EU how to cover the missing €3.92 billion. The Commisson has warned that pulling out now might cost the EU €4.5 billion. |
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Recession drove 2009 energy consumption lower BP BP today launched its 2010 BP Statistical Review of World Energy, in which it announced that the global recession drove energy consumption lower in 2009 than the previous year, the first such decline since 1982, as the world economy contracted for the first time since the Second World War. |
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Raising the toll on the transport sector by Hughes Belin The European energy industry has long complained about the ‘easy ride’ given to the transport sector by European Union lawmakers. Transport is a big emitter of greenhouse gases and the energy industry feels that the burden of EU climate policy should be fairly distributed. As European Commission President José Manuel Barroso has made greening the transport sector one of the main priorities for his second mandate, one can expect that the sector will finally start to pay a higher toll. However, for politicians the holy motor car is a much more difficult target than “dirty” power plants. EER takes stock of Brussels’ transport policy. |
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Letter to the Editor Sir, In his article “Gazprom in crisis: a chance for reform”, Anders Åslund makes a number of allegations to which I would like to respond. No one can deny that 2009 was as testing year for Gazprom as for all other energy majors: starting with a transit crisis that cost us $100 million per day for over two weeks, it went on to see global demand for natural gas decline due to an unprecedented financial and economic crisis. Yearly sales volumes decreased in all markets: -8.8% for the EU, -13% for former Soviet Union states, -6% in Russia. But this is the only aspect of Mr. Åslund’s view with which I can agree - or which has a solid evidence base. |
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A solar revolution at the IEA by Stefan Nicola The International Energy Agency – the energy watchdog of the OECD that has often been viewed as a protector of western oil interests – envisions a major role of solar power in future global electricity production. In two new landmark reports, prepared at the behest of the G8, the IEA is unusually positive about the prospects of both concentrated solar power and photovoltaic solar power, which it says could supply up to a quarter of global power production in 2050. This is much more than the IEA has ever envisioned in any of its scenarios in its famous annual World Energy Outlook reports. |
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EU policy drives Turkey in the arms of Russia by Yurdakul Yiðitgüden The European Union’s attempts to turn Turkey into an energy corridor to reduce its dependence on Russian imports has only been partially successful. The main problem is that the EU takes insufficient account of what drives Turkish external energy policy. If Brussels and the European countries continue on this road, the Turks are likely to deepen their already close energy relationships with Russia, frustrating Europe’s attempt at diversification, warns Yurdakul Yiðitgüden, a former Turkish Under-Secretary of Energy and Natural Resources . |
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A critical time for offshore wind by Karel Beckman The prospects of offshore wind power in northern Europe depend on two key factors: the ability of industry to reduce costs significantly and the willingness of governments to provide strong political backing. That was the main conclusion to come out of a conference about the future of offshore wind power in Northwestern Europe, held last week at the Clingendael International Energy Programme (CIEP), a prestigious energy think tank in the Netherlands. As Pieter Tavenier, Director Offshore of Dutch utility Eneco, trenchantly put it: ‘Offshore wind will boom or bust in the next decade.’ |
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Energy brings South Eastern Europe together By Hughes Belin Electricity industry associations such as Eurelectric and the former Union for the Coordination of Transmission of Electricity in Europe (UCTE) have long claimed that energy interconnections play an important role in stimulating political connections in Europe. This is borne out once again as countries in South Eastern Europe have formed an “Energy Community” which provides them with an important political and legislative basis for future entry into the EU. In fact, the Energy Community of South Eastern Europe is in many ways superior to the EU’s own common energy policy. |
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Will the Obama Administration allow Shell to do to Arctic waters what BP did to the Gulf? BPing the Arctic By Subhankar Banerjee Bear with me. I’ll get to the oil. But first you have to understand where I’ve been and where you undoubtedly won’t go, but Shell’s drilling rigs surely will -- unless someone stops them. |
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Integrating intermittent renewables sources into the EU electricity system by 2020: challenges and solutions Eurelectric The EU’s decision to have at least 20% of its energy supplied by renewable sources by 2020 means that European electricity markets will have to reach a renewables share of 30-35% of all generation sources, according to most estimates. The increased production of renewables will, to a large extent, be based on wind and solar power, which are by their nature intermittent, unpredictable and unevenly geographically distributed. The resultant increase in the amounts these types of RES will have significant and far-reaching effects on both the electricity market and on transmission and distribution grids. |
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A new oil rush endangers the Gulf of Mexico and the Planet By Michael T. Klare Yes, the oil spewing up from the floor of the Gulf of Mexico in staggering quantities could prove one of the great ecological disasters of human history. Think of it, though, as just the prelude to the Age of Tough Oil, a time of ever increasing reliance on problematic, hard-to-reach energy sources. Make no mistake: we’re entering the danger zone. And brace yourself, the fate of the planet could be at stake. |
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Desertec is slowly becoming really big by Stefan Nicola At the end of April, fifteen industrial companies signed up as associate partners of Desertec, the €400 billion initiative which is to power Europe's homes with green electricity generated in deserts in Africa and the Middle East. They join the 17 shareholders, including Eon, RWE, Enel and Siemens, that had already provided backing. Desertec is rapidly evolving from a visionary, idealistic concentrated solar power project into a hard-headed, broad-based industrial movement for renewable energy in Europe and North Africa. |
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Lithuania trades in Ignalina for BaltPool By Karel Beckman The forced closure of the large nuclear power plant at Ignalina at the start of this year has led to a 30% rise in electricity prices in Lithuania. But, says Vice-Minister of Energy Romas Svedas, the country has used the loss of its nuclear capacity as an opportunity to start with the reform of the electricity market. ‘At the same time that Ignalina was taken down, the new trading exchange BaltPool took off.’ In March, 60% of the electricity that is used in Lithuania was already traded on BaltPool. |
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‘A further regulatory boost is vital for CCS’ by Ioannis Michaletos Carbon capture and storage (CCS) is not very popular among environmental organisations. Greenpeace, for example, regards CCS only as an excuse of the energy industry to continue producing fossil-fuel based energy. WWF does not necessarily object to CCS, but does not want to see it subsidised. The Bellona Foundation, a well-known anti-nuclear NGO with offices in four countries, is an exception. Its President Frederic Hauge even declares that he is prepared to go ‘on the barricades’ for CCS. In this interview he explains why he believes CCS is indispensable – and should be boosted. |
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The Finnish way: nonprofit nuclear power by Reiner Gatermann With the decision of the Finnish cabinet on 6 May to grant applications for two new nuclear power stations, Finland has taken a major step towards a significant expansion of its nuclear capacity. All that remains is for the Parliament to approve the decision. The suppliers, TVO and newcomer Fennovoima – both non-profit consortiums – believe the new reactors could become operational by 2020 and deliver power for 60 years. Remarkably, the third application, by state-owned energy producer Fortum, was rejected. |
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Remarks on the Gulf oil spill by Branko Terzic The energy industry has again provided a major story and headlines in the world press. It is not the story of the energy industry enabling longer lives, better health, more abundant food, less human toil and instant knowledge transfer, communications and entertainment shared worldwide at the speed of light. No, today’s headlines tell of the risks experienced in the extraction of the primary energy fuels of coal and petroleum. In this case attention has been turned to two energy industry catastrophes. |
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Coalition's emerging nuclear policy World Nuclear News The UK is set to have pro-nuclear policies delivered by an anti-nuclear politician as the details of a post-election coalition agreement are revealed. |
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Why Nigeria matters (a lot) by Chris Cragg In addition to the crisis in Greece and the fear that Portugal and Spain may be the next to see their treasury bonds reduced to junk status, the world may soon be facing a further worrying rise in dollar-denominated oil prices. One not-to-be-underestimated factor that may push oil prices up is the threat of renewed instability in Nigeria, as the major guerrilla group in the Niger Delta, MEND, looks to be moving back into action after a long ceasefire. After the sudden of president Yar’Adua last week, his successor, Goodluck Jonathan, will be faced with the formidable task of convincing the rebels to lay down their arms and leave the oil industry alone. |
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The 40 million barrel question by Alex Forbes The world needs another 40 million barrels a day of oil production to come on stream by 2020 if supply is to match demand. So says Shell's CEO, Peter Voser, reflecting a growing consensus in the industry and amongst watchdogs such as the International Energy Agency. But how will that be possible? A growing number of observers believe it won't be. |
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Russia making new push in Caspian Basin energy sector by Sergei Blagov, Eurasianet Russian leaders are hoping that the launch of the country’s first major Caspian Sea off-shore energy development project will re-invigorate the Kremlin’s overall oil-and-gas strategy for the region. |
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Long term outlook for gas demand and supply 2007-2030 Eurogas Speech by Mr. Domenico Dispenza, President of Eurogas, delivered on May 5th in Brussels during a Eurogas workshop. |
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Chinese-Central Asian relationship requires delicate balancing act by Bruce Pannier, Radio Free Europe / Radio Liberty It would appear to be a match made in heaven. China, in order to fuel its economic ambitions, has moved quickly to snatch up Central Asian resources. Central Asia, looking to upgrade its aging infrastructure, has increasingly opened itself up to Chinese investment. |
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Baltic Sea region needs cooperation, not nationalism by Karel Beckman The countries around the Baltic Sea would do well to integrate their energy policies as much as possible with each other. Only in this way will it be possible for them to integrate large-scale renewable energies, such as offshore wind power, into their energy mix in an economical way. |
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Gaspec: too soon to start cheering by Matthew Hulbert Now that the dust has started to settle, not only from Icelandic volcanoes, but also from the latest Gas Exporting Countries Forum (GECF) meeting held in Oran, Algeria in mid-April, it has become clear that the outcome of the Forum was far from explosive. In fact, it barely failed to register on the ‘Richter scale’ as far as global gas markets were concerned. Gas production is not to be clipped any time soon, and plans to expand oil-indexation of gas contracts did not go beyond the rhetorical level. Gas remains a buyer’s market. Yet, this is no time for complacency on the side of consumers. Tightening the screw too hard might well lead to a price volcano outburst in the future. |
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Post Copenhagen synthesis report The reformed financial mechanism of the UNFCCC Part II The question of oversight by Benito Müller, Oxford Institute for Energy Studies This Synthesis Report presents the key results of the second phase of a major analytic project on a reform of the Financial Mechanism of the UN Framework Convention on Climate Change (UNFCCC). It synthesizes four OIES Energy and Environment Papers, and (updated versions) of four preliminary policy briefs by the lead author of this Report, published in the run up to the recent Copenhagen Climate Conference. |
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Barents Sea deal enhances EU security of supply – a bit By our editor Russian president Dimitri Medvedev and Norwegian Prime Minister Jens Stoltenberg on Tuesday signed a surprise pact in Oslo on Tuesday April 27 to amicably divide oil and gas interests across a long-disputed Cold War border in the Barents Sea. The agreement may make it possible for Norway to postpone the much-feared decline of its oil production for several decades. Norwegian gas production too might be boosted. In the long term this may be good news for the EU’s security of supply situation. However, a quick “energy bonanza” is not on the cards. |
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An assessment of current challenges and new opportunities for cooperation U.S. strategic interests in the Arctic by Heather A. Conley and Jamie Kraut, Centre for Strategic and International Studies During the height of the Cold War, the Arctic region was considered a geostrategic and geopolitical playground for the United States and the Soviet Union, as strategic bombers and nuclear submarines crossed over and raced below the polar cap. Following the dissolution of the Soviet Union, the region diminished in strategic importance to the United States. Now, 20 years later, senior U.S. military and diplomatic officials have turned their attention once again to the Arctic but in a far different way than during the Cold War. |
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Gazprom in crisis: a chance for reform by Anders Åslund The economic crisis and the collapse of gas prices have shown Russian gas giant Gazprom for what it is: a bloated and wasteful bureaucratic monster, which is hurting both the Russian and the EU economy. Gazprom needs to downsize, tighten its belts and reform – and there never was a better time to do it than now. What is more, the EU should help out, and offer Russia a new legal framework for energy cooperation to replace the Energy Charter. |
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The ineffectiveness of energy efficiency by Karel Beckman Future energy scenarios from the European Commission and the International Energy Agency are all based on the assumption that improved energy efficiency and other climate policies will lead to lower energy consumption. This is wishful thinking. Human progress has always been accompanied by higher energy use – and that will not change in the future. If the EU were really to achieve lower energy use, it could only mean one thing: that Europe would start to decline economically compared to the rest of the world. |
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Academics call for ‘full rethink’ of EU energy policy by Karel Beckman Four prominent European think tanks, with the implicit support of a large section of the European energy industry, have issued a call for a major overhaul of EU energy policy. ‘Are we smart enough in the way in which we implement our objectives?’ they ask. Their answer is: ‘clearly not’. They have ‘one vision and 22 recommendations’ to offer policymakers to make EU energy policy smarter. ‘Energy policy should be made Chef-Sache.’ |
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Two out of three for Finland World Nuclear news Finnish leaders have made favourable decisions for two of the three nuclear projects put before them, meaning up to 4300 MWe in nuclear capacity could potentially come from private investment. |
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Wanted: Russian resolve on oil strategy by Rik Komduur To retain its oil production levels, Russia will need to make substantial changes in its oil policies and oil industry. Current production areas will have to be modernised and large investments will have to be made in new production areas in faraway places. Foreign and domestic private investments and technology seem indispensable to make this happen, but Russia has chased away private investors with heavy taxes and nationalisations. Now the Russian government has to make up its mind: will it allow the market to work – or will it take oil production into its own hands? As one expert puts it: ‘We need clarity. We can’t have this mixed policy which is leading us nowhere.’ |
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Ghana: a race against the oil curse by Rudolf ten Hoedt The West African state of Ghana has the potential to become a major oil producer. Its oil reserves are significantly bigger than initially estimated. But then so is the challenge posed by the management of such riches. The Ghanaian government is becoming increasingly assertive, with Members of Parliament being trained in the niceties of oil contracts and royalty arrangements. ‘In the past Ghana uncritically signed agreements with the oil companies. Those days are over.’ |
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A heavy burden on EU policymakers by Hughes Belin “Tout Brussels” gathered on Tuesday for the presentation of the “Roadmap 2050”of the European Climate Foundation (ECF). The ECF’s study – sponsored by companies (among others, RWE, Eon, Siemens) and NGO’s (WWF, GermanWatch) – purports to show that “decarbonising Europe” by 2050 is possible at virtually no extra cost. Provided policymakers take the necessary steps. |
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Let’s get together by Karel Beckman Jacques Delors’ think tank Notre Europe has come up with an impressive plea for a European energy policy. ‘Europe faces several major crises: an energy crisis, an environmental crisis and an economic and financial crisis. It is dangerous and illusory to assume that these challenges can be addressed at state or regional level.’ |
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BP and Shell: challenged, but ‘doing OK’ by Alex Forbes Aware that they are not making the best of their assets and people, the two Europe-based energy super-majors – BP and Shell – are pursuing aggressive strategies to match, perhaps even exceed, the financial performance of the sector leader, ExxonMobil. While EER looks at how they plan to close the gap, BP’s chief Tony Hayward sums up the situation: ‘It remains challenging – but we’re doing OK.’ |
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Change is in the air by Stefan Schroeter Russia seems to be ready for more international cooperation in the energy sector. The Russian government is considering easing legal hurdles for foreign companies wanting to invest in the Russian energy sector. It also wants to attract foreign investment in sustainable energy and energy efficiency projects. And it is preparing a ‘Global Energy Code’ after rejecting the Energy Charter Treaty. ‘The plan is to create global production and technology chains in the supply of Russian energy resources.’ |
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Policy Proposal by Jacques Delors Towards a European Energy Community by Notre Europe When six European states decided in 1951 to integrate two key sectors of their economies to create a Community, their purpose was to replace conflict with cooperation and antagonism with prosperity. Energy was one of the sectors, and almost sixty years later, energy is still at the top of the political and economic agenda. However, the rules that ensured equal access to common resources no longer exist. Despite increased regulatory activity, Europe has lost its ability to pursue a truly common policy covering the three objectives that are essential to energy policy today: affordable access to energy; sustainable development of energy production, transport, and consumption; and security of supply. |
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Brazil’s ethanol can break oil monopoly by Gert van Wijland Energy experts are calling on western governments to lift trade barriers for Brasilian ethanol. They point out that, in spite of the rise of the electric car, the transport sector will remain fuel-based for a long time and see massive environmental and strategic benefits in Brazilian bioethanol over petrol. Problem is, western energy policy is trumped by agricultural interests. ‘We can break the monopoly of oil. If we want to.’ |
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Eurelectric 4th environment and sustainable development report Eurelectric “It is important for the Electricity Industry to identify the impacts of its activities on the environment and work proactively to reduce them”, said EURELECTRIC President Lars G. Josefsson while unveiling the 4th edition of the association’s environmental statistics report, published every two years. Building on the legacy of the previous reports, the renamed “Environment and Sustainable Development Report” shows positive trends in the Electricity Industry’s sustainability performance in the period 1980-2008 and illustrates, by a series of concrete examples, the wide range of activities in which the electricity sector is engaged to reduce the impacts of electricity generation, transmission and distribution on the environment. |
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‘It is essential to get political support’ by Karel Beckman The market parties that have formed the Desertec Industrial Initiative (DII) are turning the grand solar power vision of founder Gerhard Knies into the practical reality of many different concrete renewable energy projects. Paul van Son, the new CEO of DII, has managed to draw in new stakeholders from countries in North Africa and Southern Europe. He is also working hard to raise political support. |
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Background paper by the IEA for the 12th IEF Ministerial meeting Global energy trends and the challenge of transforming the global energy system International Energy Agency It has been a turbulent two years for the global energy sector since the last Ministerial meeting of the International Energy Forum (IEF) in April 2008. The crisis in financial markets and the economic recession reversed the growth in global energy demand and caused investment in the energy sector to plunge in 2009. While oil market volatility has subsequently receded, another roller-coaster for prices between September 2008 and June 2009, alongside a loss of public confidence in the functioning of financial markets, led to continuing concern about the relationship between physical and financial markets. |
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Fraught with uncertainty by Karel Beckman Calculating the costs of generating electricity has never been as uncertain as today. This is the result of a number of factors, including the liberalisation of energy markets, the fast pace of technological development, the volatility of fuel prices and questions about climate policy. |
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In defence of speculators by Jerry de Leeuw Speculators (those who trade in “paper barrels”) have been blamed by politicians and energy companies for causing extreme price volatility in the oil market, and for the record high prices we saw in 2007-2008. Governments, led by the Commodity Futures Trading Commission (CTFC) in the US, are now planning to take measures to limit “speculation” in oil futures. |
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The path from regional electricity markets to a pan-European market Building a comprehensive EU market integration strategy Eurelectric The prospect of introducing an increasingly large share of RES into European electricity markets should be seen as an opportunity, which will bring new impetus to market integration. The combination of larger and more liquid wholesale markets and new grid investment opens up more possibilities to accommodate intermittent generation, reinforce security of supply and allow deployment of RES, with the least cost to society. |
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Price formation in oil markets: Some lessons from 2009 by Bassam Fattouh, Oxford Institute for Energy Studies This comment analyses the oil price dynamics in 2009 arguing that 2009 represents a remarkable year in at least two respects: it witnessed the sharpest increase in spot oil prices in decades; and in the second half of 2009 it exhibited a high degree of relative stability despite a very uncertain and volatile global economic environment. |
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A gas cartel looms by Alex Forbes After years of its members insisting that the Gas Exporting Countries Forum is anything but a cartel, the organisation appears to be on its way to becoming precisely that. How worried should consuming countries in Europe be? Not too worried – yet. |
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Europe’s gas: careful what you wish for by Matthew Hulbert European energy security was getting a bit dull. Not now. The global gas glut has seen some of Europe’s biggest energy players turning the contractual tables on Gazprom to slowly start breaking up oil indexation on gas prices. Eni, E.On and Gdf-Suez are the leaders in the pack, securing up to 15% of sales to be linked to gas spot prices. In ball park terms, this is around 25% cheaper than oil linked contracts based on current benchmark prices. |
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Energy market assessment UK Department of Energy and Climate Change The energy market in Britain has delivered significant benefits for businesses and households over the past 20 years. It is already delivering investment in the new infrastructure necessary to decarbonise and ensure continued security of supply to 2020. But the challenges of the decades ahead are significant and the Government must ensure that the right choices are taken for the long term so that the UK has the clean, secure, affordable electricity supplies it needs to deliver its 2050 climate change objectives. |
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Bridging Britain’s generation gap – an industry view by Alex Forbes After more than a year of intense debate on what Britain should do to address its looming generation gap, the electricity industry is awaiting new proposals from the government. They are due to be published jointly by the Department of Energy and Climate Change and the Treasury on Wednesday – Budget day – in an ‘energy markets assessment’ document. In an exclusive interview, European Energy Review asks Sara Vaughan, director of regulation and energy policy at Eon UK, one of the country’s biggest electricity generators, what kind of policies would be helpful, given the company’s investment strategy – and the country’s needs. |
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Gertjan Lankhorst on the best market model ‘The time for Grand Designs is over’ by Gertjan Lankhorst In designing a market structure for the energy sector, governments (including the EU), should take a pragmatic approach, argues Gertjan Lankhorst, ceo of Dutch gas company Gasterra. Yet in the end all approaches should lead to liberalised energy markets to maximise benefits for all stakeholders. ‘States that believe they can manage on their own, are deceiving themselves.’ |
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Speculation? What speculation? by Chris Cragg The French government’s report on “Oil Price Volatility” which appeared last month is a welcome blast against oil market speculation. It is questionable, though, whether its recommendations will have the desired effect. |
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It’s the money, stupid! by Karel Beckman In the reports and debates on the oil price issue, one explanatory factor seems to be consistenly overlooked. This is the “easy money” policies that have been practised by the US Federal Reserve and most other central banks. |
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An integrated and competitive electricity market: a stepping stone to a sustainable future Günther Oettinger, EU Commissioner for Energy Speech delivered at the Eurelectric Conference : "Building a secure and sustainable future: how can market integration contribute" |
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LNG trade-flows in the Atlantic basin: trends and discontinuities Howard V Rogers, Oxford Institute for Energy Studies LNG trade exerts a defining influence on the development of regional and global gas flows and prices. In this study Howard Rogers models the interactions between LNG and pipeline gas flows and prices in Europe North America and Asia. |
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Iraq - First Look Eprinc In December 2009, the government of Iraq held a competitive auction for the rights to develop 60 billion barrels (bbls) of proven crude oil reserves across 10 major fields. The output requirements under the awarded contracts yield a production plateau of 9.6 mm b/d by 2017 in addition to current production. By any standard the Iraqi auction represents a major event in the history of the world oil market – it is the largest single transfer of petroleum reserves into the production stream of the oil market since the beginning of the petroleum era. Iraq’s proven reserves are estimated at 115 billion barrels which ranks the country third in proven reserves behind Saudi Arabia and Iran. However, credible estimates of Iraqi reserves suggest Iraq contains over 200 billion barrels of recoverable reserves and potential resources of over 400 billion barrels. |
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Liberalisation called into question Britain’s electricity sector headed for a cliff edge by Alex Forbes Britain is careening towards a ‘cliff edge’ when it comes to generating enough electricity to meet demand post-2015. That was a major conclusion of a report published last month by regulator Ofgem. It urges rapid action to ensure the looming generation gap is bridged. The British government faces tough choices: it has huge climate ambitions – but cannot let the lights go out. The big question is whether and to what exent the government will intervene in the free electricity market. |
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Plea for a European oil strategy France declares war on oil speculators by Hughes Belin France is positioning itself to lead a European bid to reform the international oil market and make it more transparent. The French government has embraced a high-level report that calls for far-reaching measures to further regulate the oil trade, strengthen the dialogue between producer and consumer countries, and to develop, for the first time, a genuine European oil strategy. |
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Five questions to Jean-Marie Chevalier ‘This report won’t end up gathering dust in a drawer’ by Hughes Belin Jean-Marie Chevalier, lead author of the French government’s report on oil price volatility, tells EER his work has been ‘warmly received’ by Economy Minister Christine Lagarde. ‘Our work will not be in vain, believe me.’ |
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Interview: Gerhard König, Wingas ‘The market can take care of security of supply’ by Karel Beckman Europe is in an excellent position to secure all the gas it needs. Just let the market do its work, says Gerhard König, Chairman of the German gas producer Wingas, in an interview with European Energy Review. |
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A French rethink of the free gas market? by Karel Beckman The French government is looking into the possibility of creating a gas purchasing consortium. French experts like the idea, which would go totally against the EU’s commitment to a liberalised gas market. |
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Gas – the most obvious climate measure Helge Lund - Statoil A stronger commitment to gas as a source of energy is the fastest, easiest way to reduce global greenhouse gas emissions. This was the clear message delivered by chief executive Helge Lund at the CERAWeek conference in Houston in the U.S. on 10 March. |
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Paolo Scaroni: we will need to prepare for a tight gas market Paolo Scaroni - ENI In the decade ahead, and probably well beyond that, the world energy scene will be increasingly dominated by the consumption of gas and the supply of gas. Supply security in Europe and Asia will once again be a key issue on the global agenda. |
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The great security of gas supply struggle by Karel Beckman The Ukraine gas crisis of 2009 may seem a distant memory. But within the EU a debate is raging how to prepare for a next crisis. The outcome of this debate will not only shape the EU’s response to future emergencies, it will also determine to an important extent the future structure of the European gas market. |
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"CCS: Competitive Today. We Cannot Wait until Tomorrow" by Mohammed Al-Juaied, Harvard Belfer Center for Science and International Affairs Climate change is a fact, and it is caused largely by emissions of carbon dioxide (CO2). We must seek ways to use coal more cleanly and efficiently to reduce CO2 emissions. One effective means of reducing such emissions is to capture CO2 and store it underground, a technology known as carbon capture and storage (CCS). However, no U.S. power plant currently employs full-scale CCS technology. More strong hurricanes, of the strength of Hurricane Katrina or worse, are examples of future climate disasters that CCS could help mitigate. By failing to act now to integrate CCS technologies at power plants, we will suffer later. |
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Bulgaria – gas consumer or future gas hub? by Atanas Georgiev Being situated at one of the important crossroads between East and West, Bulgaria is frequently seen as a country that could help to improve the EU’s overall energy security. However, the country has not done much yet to live up to this expectation. As member of the EU, Bulgaria will have to prove itself as a positive factor for European gas security of supply. Otherwise it will remain just a heavily-dependent gas consumer. |
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Noé van Hulst, Secretary-General International Energy Forum ‘Extreme oil price volatility is the enemy of investment’ by Karel Beckman When the world’s energy ministers will meet for the 12th International Energy Forum, their biennial get-together, at the end of this month in Cancun, there will be one subject and one only that will dominate the agenda: how to prevent the oil price from entering another rollercoaster like it did in 2008-2009. |
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EU in desperate search for climate strategy by Hughes Belin The European Union is struggling to find a new direction after the failure of the Copenhagen conference. The mood is gloomy, with the general public feeling let down and the EU unable to agree on its climate change policy ahead of the follow-up to Copenhagen in Mexico at the end of 2010. The fact that there is a new Commission now in place might help matters, but it will still be a major challenge to get EU leaders all pulling together in the same direction. |
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Gazprom responds: we are not abusing our position The article by Iana Dreyer, analyst at the European Centre for International Political Economy in Brussels, which we recently published, and which argues that the EU should instigate antitrust proceedings against Gazprom, has prompted a reply from Sergei Kupriyanov, official spokesman of Gazprom. Kupriyanov roundly rejects the notion that Gazprom may be abusing its market position in Eastern European countries. |
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European Energy: The ‘Solidarity’ Conundrum by Matthew Hulbert European energy policy is critically flawed. It has proven impossible to square the circle between security of supply, greater sustainability, and affordable prices. Despite claims of ‘solidarity’, national politics still trumps the ‘European good’ on energy matters. Progressing liberalisation remains important for competition and resilience, but Europe’s real challenge is to re-level the low carbon technology playing field to properly realign global emission concerns and security of supply in future. |
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Small yet plentiful is the name of the game in power deal-making PricewaterhouseCoopers The power deal spotlight in 2009 continued to shift away from the very large deals of earlier years as companies focused their attention on smaller acquisitions. The overall market for power deal activity remained relatively buoyant, with the number of electricity and gas deals only 10% down in the main non-renewables power deal sector despite the more constrained financial and uncertain economic climate. These are among the key findings of PricewaterhouseCoopers annual Power Deals review. |
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Visions of our energy future Since European Energy Review started as online medium on 2 December last year, our best read article has been Peter Odell’s grand vision of the world’s energy prospects. His article, Our Long-Term Energy Future: A Reality Check, a wide-ranging, well-reasoned view of what the future will hold, clearly filled a need for our readers. |
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Russia-Europe energy relations: Implications for U.S. Policy by Keith C. Smith In this report, the author argues that the national security risks posed by Russian energy policies are only tangentially related to Europe’s dependency on Russian energy imports. The primary energy risk to Europe, and especially to the newer EU members, stems from the corrosive effect this dependency has on governance and on transatlantic cooperation. |
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Local authorities claim leading role in climate policy by Hughes Belin Whilst heads of state were vainly trying to reach agreement at the United Nations conference in Copenhagen last December, local authorities in Europe came up with concrete climate change policy objectives and achievements. To their chagrin, they got no credit for it. ‘Regions don’t want to wait anymore for the national level to act.’ |
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Gazprom is the essence of the energy curse Anders Åslund Gazprom is Russia’s leading company, but few enterprises have been as badly beaten during the global financial crisis. The Russian economy has recovered as the crisis has abated, but Gazprom may suffer from a profound structural crisis. It needs to downsize, cut waste and reform. |
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The heated debate Carbon trading: pro and con by Alex Forbes How effective is carbon trading as a method of reducing emissions? Although trading CO2-emissions has always been regarded critically by many observers, the voices of the sceptics seem to be getting louder. And they include not just environmental NGOs but also influential government committees and even some oil companies. |
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The prospects for carbon trading post-Copenhagen Down, but not out By Alex Forbes The disappointing outcome of the Copenhagen climate change talks has led to questions about the future of the international carbon market. Failure to agree a post-Kyoto climate treaty has certainly dented confidence in the short term. But analysts and traders believe the carbon market is robust enough to survive even without such a treaty. A more fundamental question is whether carbon trading is an effective way of cutting greenhouse gas emissions. That debate is far from settled. |
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Baltic Rim Economies 1/2010 Pan-European Institute The Pan-European Institute publishes a bimonthly discussion forum, Baltic Rim Economies (BRE), which focuses on the development of the Baltic Sea Region. In BRE, high-level public and corporate decision makers, representatives of Academia and several other experts contribute to the discussion. |
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Unmasking of IPCC will put brakes on climate policy by Karel Beckman The credibility of the IPCC has been thoroughly shaken by recent revelations of biased reporting. The UN’s climate change science body has been shown not to be the impartial institution that it claims to be. This will inevitably have repercussions for climate policy. Hopefully, we will move towards a less ideological, and more economic approach of the climate change issue. |
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Natural Gas in the UK: An Industry in Search of a Policy? John Elkins, Oxford Institute for Energy Studies Natural gas plays a central role in the UK (and the world) energy market in the first decade of the 21st century, but is facing the prospect of a decline in its importance as environmental factors combine to reduce the importance of natural gas and the other carbon-based fuels. This will inevitably result in the future of the gas industry becoming dependent on wider considerations, which can be summed up as ‘environmental energy policy’. |
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UK government must take control of oil and gas production by Peter Odell UK oil and gas production has been steadily declining since 1999. The reason is that the UK government, unlike those of most other countries, has abandoned oil and gas production to the private sector and has failed to create attractive conditions for private companies to invest more. The government should follow the example of Norway and many other countries by setting up a Hydrocarbons Authority which would initiate new private-public partnerships to engage in offshore oil and gas production. This would generate many billions of £s in highly-needed revenues. |
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British government must take control of oil and gas sector by Peter Odell UK oil and gas production has been steadily declining since 1999. The reason is that the UK government, unlike those of most other countries, has abandoned oil and gas production to the private sector and has failed to create attractive conditions for private companies to invest more. The government should follow the example of Norway and many other countries by setting up a Hydrocarbons Authority which would initiate new private-public partnerships to engage in offshore oil and gas production. This would generate many billions of £s in highly-needed revenues. |
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A greener aircraft landing by Reiner Gatermann A small but important step has been made towards more fuel efficient aviation with lower CO2 emissions and less noise pollution for people living near flight paths. Europe’s first “Green Curved Approach” has been flown at Stockholm’s Arlanda Airport. |
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The coming conflict over rare metals by Chris Cragg To make a transition a green economy possible, the rare metals used in sophisticated batteries, LEDs, solar panels and even the latest turbines for wind farms need to be readily available as the technologies scale up to meet global demand. The problem is, China controls 95% of the production of these metals and has put a brake on their export. If Europe wishes to remain in the game of this technological advance, then it is time to recycle many more of those old phone batteries and computers pretty quickly. |
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Copenhagen 2009 Failure or final wake-up call for our leaders? Benito Müller, Oxford Institute for Energy Studies It has been said that summits are either ‘successful’ or ‘very successful’. The time has come to face the facts: this is wrong! That is not to say that Copenhagen was a failure, but merely that it could have done better, but still probably passed the test. The final verdict will depend on what happens next. |
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The world according to ExxonMobil by Karel Beckman ExxonMobil – known as the world’s largest, most efficient, and most profitable oil company – has its own distinctive way of looking at the world. In its starkly realistic annual “Outlook for Energy”, it concludes that until 2030: CO2 emissions will continue to grow, fossil fuels will continue to dominate energy supply, and solar power, electric cars and carbon capture & storage will not become cost-competitive. But the company is not without idealism: it believes in the power of efficiency, dreams of turning algae into oil and favours a carbon tax over a cap-and-trade policy. |
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Energy fever in the Baltics by Reiner Gatermann Asked recently by EER what he thought of when he heard the words “energy” and “Baltic States”, Lithuanian Energy Minister Arvydas Sekomokas promptly responded: ‘Two things: renewable energy and nuclear power.’ And natural gas? Sekomokas has no love for this. ‘Nord Stream is a solution of the past’, he says. But things won’t be that simple for the Baltic region. There are still plenty of puzzles to sort out as the Baltic States are feverishly trying to integrate their energy systems with the European Union. |
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Al Gore ♥ geothermal by Karel Beckman What is the contribution geothermal energy can offer to the world’s energy production? Potentially, it is huge. Actually, the outlook is limited for the time being. But this does not deter visionaries like Al Gore who see in geothermal energy a way of saving the earth. |
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The business case for tapping geothermal energy by James Osborne Keeping costs to a minimum is a basic business tenet, irrespective of the economic climate. But higher energy prices have prompted some companies to look for innovative and environmentally friendly ways to save money. Italy’s Autogrill, based just outside Milan, has given itself the double task of not only cutting its spending on energy and water but also reducing its environmental impact. The company, the world’s biggest manager of airport and highway restaurants and shops, in 2008 spent €103 million on energy and water globally, 16% of its operating costs. |
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EU must use antitrust law to reduce its dependence on Russian gas The competition case against Gazprom by Iana Dreyer For years the EU has tried to use international trade agreements and political agreements to prevent Russia from taking advantage of Europe’s dependence on Russian gas. That strategy has failed. It is time now for the EU to apply its own market principles to Gazprom’s activities in Eastern Europe and to start antitrust proceedings against the Russian company. There is no reason to treat Gazprom differently from Microsoft or other companies. |
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Down With Fuel! by Walt Patterson Forty years ago this month, in December 1969, a midday edition of the Evening Standard changed my life. I was on the top deck of a London bus going around Hyde Park Corner. I picked up the discarded newspaper next to me and leafed idly through it. Suddenly my eye was caught by a one-column headline on the leader page. It said ‘Your Environment’. The article below the headline noted with approval that three poets, one of them Ted Hughes, had just published the first issue of a new magazine called Your Environment. I was fascinated. But I could not have imagined what was going to happen to me as a result. |
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Oil multinationals may face avalanche of claimsTexaco legacy could cost Chevron billions by Rudolf ten Hoedt A local judge in a little town in the Ecuadorian jungle may change the course of corporate history. In the coming months he is set to pass judgement in a multibillion dollar damages suit brought against oil giant Chevron by 30,000 inhabitants of the Amazon rain forest. The Amazonians are claiming $27.3 billion in damages arising from severe environmental pollution. If the claim is upheld, it will be the most costly judgement in an environmental suit ever. And it might pave the way for an avalanche of claims by third world countries against careless multinationals. |
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Strengthening European regulatory powers by David Haverbeke, Barbara Naesens and Wouter Vandorpe In 2009 the European institutions adopted the Third Energy Package, a bundle of Directives and Regulations which aims to remove regulatory gaps in the EU Energy markets. One of the most important changes in the regulatory institutional framework was the establishment of an Agency for Cooperation between Energy Regulators (ACER). The creation of this Agency will unavoidably lead to a general repositioning of the role and competences of the existing regulatory bodies. David Haverbeke, Barbara Naesens and Wouter Vandorpe of Lydian Lawyers in Brussels, explain how European energy regulation has evolved in recent years, and what to expect of the future. |
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The ball gets rolling in Sweden World Nuclear News New nuclear is on the Swedish agenda with moves towards revised legislation and regulatory support for new build applications. Hans Blix told a seminar he was 'absolutely convinced' of the need for new reactors. |
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Copenhagen: gone and almost forgotten by Chris Cragg Is it a bird? Is it a plane? No, it’s media coverage of the aftermath of Copenhagen and climate change, disappearing rapidly into the wide blue yonder! The post mortems have finished and the patient is not merely agreed to be dead, but the whole conference is pronounced ‘a failure’. Add in the awkward fact that most of Europe and North America has suffered the coldest winter in decades and the entire ‘global warming’ community is busy explaining that ‘climate’ is not the same thing as ‘weather’. Yet again. |
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Interview Björn Tore Godal ‘We should see developments in the Arctic as a positive possiblity’ by Reiner Gatermann The environmental protection of the Arctic should not exclude its economic development, says Björn Tore Godal, Special Adviser for Energy and Climate Issues in the Norwegian Ministry of Foreign Affairs. Godal, one of Norway’s highest ranked and respected politicians and diplomats, who served as Minister in the Norwegian government three times during his career, looks upon developments in the Arctic as ‘a long-term positive possibility’. ‘It’s a positive effect of climate change, amidst many negative effects, that new seaways may be opened up.’ |
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No scramble for the Arctic - yet by Reiner Gatermann If the ice in the Arctic melts, a new ocean five times the size of the Mediterranean will be formed, potentially providing access to huge fossil fuel resources. But oil companies are not rushing to the North Pole yet. It will be decades before there can be any question of tapping the region’s oil and gas – if it happens at all. |
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The Role of Natural Gas in the Dutch Energy Transition: Towards low-carbon electricity supply Floris van Foreest, Oxford Institute for Energy Studies The issue of climate change and its consequences is increasingly acknowledged on a global level and the idea of moving towards a low-carbon economy is increasingly becoming conventional wisdom. However, the actual implementation of emission reduction measures is a complicated process that is subject to many uncertainties and conflicting political and economic interests. Meanwhile, global CO2 emissions further increased in 2008. According to the IPCC, without serious measures, CO2 emissions will increase by 60% in the coming 25 years, which could lead to a global temperature rise of 2-4°C. |
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“Electric” Turkey poised to enter Europe by Yves de Saint Jacob Whether it ends up joining the EU or not, Turkey will soon join the European electricity network – and market. Already next year a full integration of the Turkish network within the European continental electrical network ENTSO-E (formerly UCTE) will take place, leading to new opportunities for international energy companies. |
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Dealing rooms drive prices by Jerry de Leeuw Oil prices have never been as volatile as in the past few years. This price instability is giving a lot of people in the world a lot of bad headaches. Governments (of oil exporting and oil importing countries) can’t properly budget. Energy companies are uncertain about when and how much they should invest – not only oil companies, but also producers of renewable energy who compete with oil and gas suppliers. Big energy consumers are uncertain about their production costs. |
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Fusion projects building for the future World Nuclear News Work is set to begin on the first building to be constructed at the Iter platform in France after a contract for the Coil Winding Facility was signed. Meanwhile, test facilities to help prepare for the next stages in the international pursuit of nuclear fusion are progressing. |
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The hard task of implementing a smarter electricity system by James Osborne Italy is a global pioneer in the implementation of smart electricity thanks to a precocious commitment to smart meters by utility Enel. But the delicate task of putting meters and grids to use in the name of a smarter, more efficient power system is no easy matter. ‘You need to create awareness, make sure consumers know how to behave and what to do.’ |
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Interview: Livio Gallo, COO Enel Infrastructure & Networks‘Shifting consumption in peak hours can have an enormous benefit for the system’ by James Osborne in Milan Enel, Italy’s biggest utility, made a big bet on smart grids back in 2001, when it decided to invest 2 billion euros installing digital meters at all its users in Italy. That project has paid dividends not only in reduced costs, thanks to greater automisation, but also because it has given the company a head start in Europe’s development of smart grids. What Enel does in digital meters and smart grids is closely studied by other European countries. |
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View from Brussels Günther Oettinger: a friend of industry by Hughes Belin The Minister President of Baden Württemberg Günther Oettinger could hardly have failed to pass his confirmation hearings before the members of the European Parliament last Thursday in Brussels. After all, he was perfectly briefed by his compatriot, the current Director General of Energy and Transport, Matthias Ruete. He also showed that he was broadly familiar with the issues, but made sure that he did not venture too far into the specifics. A very cautious three-hour hearing resulted. |
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Vattenfall’s crisis of confidence by Reiner Gatermann The Swedes are not really sure whether they should embrace “their” national champion Vattenfall for the dividends it generates, or whether they should despise it for its “dirty” electricity production, particularly in Germany. The company itself does not help matters, having made a complete failure of its communications. And as for the Swedish government, it seems to have no idea in which direction it should steer its treasured enterprise. |
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Why we do not have to worry about “peak oil” by Peter Odell Present day claimants for a near-future peak in global oil production fail to recognize the dynamics of the processes whereby oil reserves and production evolve. They equally avoid the central role played by both economics and politics in equilibrating the markets. Their irrational warning of an early 21st century oil scarcity should thus be ignored, particularly as one recalls the huge costs that were imposed on the world economy by the premature acceptance of the prognostications of oil scarcity in the 1970s by many policymakers and energy economists. |
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"Catalyzing Strategic Transformation to a Low-carbon Economy: A CCS Roadmap for China" by Hengwei Liu and Kelly Sims Gallagher, Harvard University Belfer Center for science and interantional affairs China now faces the three hard truths of thirsting for more oil, relying heavily on coal, and ranking first in global carbon dioxide (CO2) emissions. Given these truths, two key questions must be addressed to develop a low-carbon economy: how to use coal in a carbon-constrained future? How to increase domestic oil supply to enhance energy security? |
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The Turkish-Iranian gas relationship: Politically successful, commercially problematic Elin Kinnander, Oxford Institute for Energy Studies Iran-Turkey gas trade is the only large scale operating pipeline gas export to Europe from the Caspian and Middle East region. Given the interest in developing much larger pipeline exports to Europe from this region it is therefore of considerable importance. |
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Climate policy after Copenhagen: Managing carbon price risk in an uncertain world William Blyth, Chatham House Copenhagen alters the international policy landscapeIt’s not until something breaks that you know how fragile it is. The multilateral climate negotiation process was tested to destruction in Copenhagen. But there is a notable divide in opinion across the two sides of the Atlantic. |
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The lights are back on in Albania by Anke Truijen After years of major power shortages, the Albanian energy sector is finally getting back on its feet, thanks to new government policies and privatisations. Environmental groups, however, are critical of the lack of transparency surrounding all the new investments. |
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PwC study: by Reinhard Rümler, Robert Senger, Stefan Tenner The liberalisation of gas markets and the increasing dependence on foreign sources of gas supply are shaking up the European gas storage market. Gas storage capacity in western Europe is expected to grow by some 75% in the coming decade. The most dynamic market, Germany, offers some important lessons for the rest of Europe. |
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Europe’s sunny future by Jaap Hoogakker and Eva Bik Europe can gradually phase out the use of nuclear energy and in the longer term even fossil fuels and replace them by renewable energy sources. Solar power in particular has great potential to supply much of the energy Europe needs at no extra costs. In this transition to a “green” future, nuclear power is not needed at all, argue researchers Jaap Hoogakker and Eva Bik. |
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Fed up with feed-in by Stefan Nicola The EEG, Germany’s feed-in-tariff system for renewable energy, has been lauded and copied all over the world. However, inside the country, criticism of the EEG is growing. |
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Threat or Promise? The complexity of methane hydrates by Chris Cragg They provide the plot for the destruction of the world in numerous films and novels through extremely rapid climate change and violent explosions. Equally however, they offer the possibility for a truly gigantic increase in potentially useful natural gas reserves transforming our perceptions of the resource. In addition, they might offer a cheaper way of transporting gas than LNG. The trouble is that methane hydrates, “clathrates or “ice”, are too little researched and nobody is clear which they offer; a threat or a promise. |
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Disaster in the making? by Jeroen Ketting August is a month notorious in Russia as a disaster month. The 1991 hard-line Stalinist coup, the 1998 financial meltdown, the 2000 sinking of the Kursk submarine, various suicide bombings, plane crashes and other disasters all happened in the month of August. |
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Our long-term energy future: a reality check by Peter Odell Oil, coal and gas will continue to dominate global energy production and use in the 21st century, whether global warming activists like it or not, predicts Peter Odell. The only way realistically to reduce CO2 emissions would be through carbon capture and storage. |
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German industry pursues energy efficiency Maximum profits, minimum resources by Stefan Schroeter German industry could save 25% of its energy consumption by consistently applying existing efficiency technologies – and earn money in the process. Across the industry, initiatives have started up to tap into this potential. EER-correspondent Stefan Schroeter explores some of the most promising – sometimes downright sensational – developments. ‘Maximum profits from minimum capital has to give way to maximum profits from minimum resources.’ |
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US energy efficiency needs ‘holistic approach’ by Stefan Schroeter Huge potential for energy savings could be unlocked in the US by 2020, concludes a report from McKinsey. But this will only happen if a ‘holistic approach’ is adopted – and investments of some $500 billion are made. The investment would quickly pay for itself. |
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EU making headway on getting carbon-capture ready by Hughes Belin Supporters of Carbon Capture and Storage (CCS) are beginning to see light at the end of the tunnel. Back in 2007, in response to a request from the industry, EU leaders called for a demonstration programme of 10-12 CCS plants (costing around €1bn each) to be put in place in a number of EU countries. But no progress was made in terms of finding funding for the plants until the European Parliament started securing some money for CCS via the energy climate package in late 2008. That has given CCS promoters fresh hope that their zero-emission dreams can soon be fulfilled. |
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Gas industry hopes carbon will get a price by Stefan Nicola Gas can play an important role in reducing carbon dioxide emissions blamed for causing global warming, says the secretary-general of the industry group International Gas Union, Torstein Indrebø. ‘With gas, we don’t have to wait for new technology to de developed,’ Indrebø said in Copenhagen. ‘We can actually reduce emissions in significant amounts by replacing coal and more polluting fuels with gas.’ |
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What “Copenhagen” means? by Alex Forbes The message from Copenhagen for the energy industry is that mitigation of climate change is an imperative and an opportunity that can no longer be ignored. There may not yet be binding targets, but climate change policy will drive what some have described as a ‘technology revolution’ and others as ‘a new industrial revolution’. As US Representative Ed markey said, ‘we will be competing as nations to be the leaders in this renewable and efficiency revolution’. |
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Blow for carbon storage as UN committee recommends CDM delay by Alex Forbes The prospect of carbon capture and storage projects being included in the Clean Development Mechanism created by the Kyoto Protocol took a knock this week when a UN committee recommended that such a decision should be delayed. Further delay would put into question ambitious targets put forward by the International Energy Agency for how many plants should be operational by 2020. |
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Suzlon predicts massive growth in Indian wind energy by Stefan Nicola ‘The Copenhagen summit is crucial for the global society,’ Tanti tells this reporter in an interview on the sidelines of the Copenhagen summit. ‘Everybody wants a result from this talks and we should seal the deal.’ |
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Malmö switches to biogas by Tseard Zoethout Sweden is increasingly recovering biomethane from biowaste. Initially undertaken only by water utilities and sewage treatment plants, biomethane production is now more and more taking place on or near the farm. With natural gas and biogas prices currently around 20 eurocents cheaper per cubic metre than petrol, demand for gas-driven cars has more than doubled within the last year. |
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Carbon pricing changes Europe’s power generation fuel mix by Alex Forbes A survey published this week, the second week of the COP15 climate talks, presents clear evidence that emissions trading in Europe is having a real impact on power generation investment decisions – precisely the effect it was supposed to have. The company that published the report, New Energy Finance, is one of the many businesses in Copenhagen this week for the historic negotiations. |
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Next steps for the Transatlantic Climate Change Partnership Christian Egenhofer and Anton Georgiev, CSIS For much of the last two years the international community has worked toward developing an international agreement to lay out the basic framework of a new climate change regime. The slow progress to date does not result from a lack of effort or opportunity. |
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The carbon debate: mother of all Money Matters by Mathijs van Gool Climate change on earth is a natural process. Fluctuations in sea levels have been going on for millions of years. Carbon dioxide concentrations have never been stable. The earth's climate system can't be halted with a few billion euros to combat carbon emissions. But the CO2 debate has become a major catalyst for new forms of politics, innovation and change. Effectively it is becoming the mother of all Money Matters. |
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Schwarzenegger brings glamour and a serious message to ‘Hopenhagen’ by Alex Forbes Introduced yesterday at the Copenhagen climate talks as a ‘climate action hero’, the governor of California, Arnold Schwarzenegger, urged a select audience of delegates and journalists to recognise the role that ‘sub-national’ governments are playing in mitigating climate change. Calling on the UN to organise a climate change summit for regions, states and cities, he proclaimed: ‘80% of greenhouse gas mitigation will be done at the sub-national level.’ |
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Green lobbying in Copenhagen by Stefan Nicola Copenhagen is bustling with PR people trying to tell you that clean coal is the real deal, or that natural gas consumption needs to be boosted in favour of oil. Even the oil people proclaim that they need to be part of a sustainable solution. Everyone wants a piece of the climate cake, a huge pastry topped with giant amounts of cash. But lobbying is not reserved for big oil and gas. The renewable energy companies have also dispatched their industry leaders to the Bella Center in Copenhagen. |
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Europe's energy security after Copenhagen: Time for a retrofit? John V. Mitchell, Chatham House Whether or not the international community reaches a comprehensive climate agreement at Copenhagen in December 2009, the EU member states are among those countries set to adopt policies to mitigate the threat of climate change – as documented by the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) – by progressively reducing their CO2 emissions. In its ‘20-20-20’ Climate-Energy legislative package the EU is committed to transforming its energy system to achieve a 20% reduction in greenhouse gas emissions (30% in the case of international agreement), 20% share of renewable energy in total energy consumption (and 10% in transportation) and a 20% increase in energy efficiency, all by 2020. This amounts to an overhaul of existing energy systems across the region and brings with it fresh challenges for energy security policy-makers. |
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Unlocking finance for clean energy: The need for ‘investment grade’ policy Kirsty Hamilton, Chatham House As negotiators and policymakers look beyond the high-level politics of a global climate change deal, attention will focus on implementation. This briefing paper looks at what policy needs to deliver to provide the conditions for scaled up investment in renewable energy, drawing on work with leading mainstream financiers. |
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Private financing of renewable energy: A guide for policymakers Kirsty Hamilton - Chatham House Chatham House has worked with New Energy Finance, UNEP and its Sustainable Energy Finance Initiative to produce a short 'Finance Guide' to help policymakers understand what the different parts of the finance sector do and how they go about making decisions when financing renewable energy. The guide provides an outline of how financing renewable energy works, with a particular focus on the more mature end of the market i.e. the proven technologies that can be deployed now and at scale. It aims to show how policy looks, and where it fits in, from a financing perspective; as well as the range of other factors that need to be taken into account when doing an actual project or deal. |
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Impediments to gas to gas trading in South and South East Europe 2009 PricewaterhouseCoopers For the purpose of the survey PricewaterhouseCoopers (PwC) sought the opinions of 24 European gas traders which are active in at least one of the markets. The survey results show that there are only certain improvements compared to the last year but also some certain issues are now worse, i.e. access rules to trading location. In total PwC can state that there is only a small progress in the development to a common regional energy market. |
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Climate change: regulators claim their part by Hughes Belin Energy regulators want to play their part in the fight against climate change. They have many instruments at their disposal to promote energy efficiency and the use of renewables. But in the end it is governments that have to give them the necessary powers. |
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Clarity and certainty by Branko Terzic National energy regulators from eleven regions and 80 countries issued a “World Energy Regulators’ Statement on Climate Change” on 20 October 2009 during the World Forum on Regulation IV (WFER IV) held in Athens. Reading an initial review of the eight “concrete actions” presented, one is tempted to ask, “Why bother?”. And yet, anyone who has spent any time reviewing the capabilities and competencies of many of the signatory agencies, will see glimmers of light and hope as well as understand the rationale for the statement. |
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Ecuador wants cash for not producing oil By Rudolf ten Hoedt The government of Ecuador is trying to win over wealthy nations for a remarkable environmental project. In exchange for about $4.5 billion the country is prepared to give up drilling for oil in an ecologically vulnerable region. Ecuador says that implementing the proposal would safeguard the world against an emission of 410 million tons of CO2. Never before has a country offered to keep its oil reserves untapped and prevent the emission of CO2 in exchange for money. |
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Riders of the apocalypse Yves de Saint Jacob As we approach the Copenhagen summit, voices are increasingly raised in France calling for reason and scientific rigour when discussing energy and climate issues. Scientific experts are worried as much by preachers of the apocalypse, predicting every possible woe to the planet, as by the sudden enthusiasm about the theory of global cooling, which could make the public indifferent to climate change. These experts think that media sensationalism is not necessarily good for sustainable development. |
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The riddle of Turkmenistan’s gas reserves by Andrej Tibold According to the latest edition of the respectable BP Statistical Review of Energy, Turkmenistan holds the world’s fourth largest gas reserves. But can these figures be trusted? After President Gurbanguly Berdymukhammedov fired all the leading executives in Turkmenistan’s oil and gas industry in October, doubts have mounted. |
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How gas can change the world by Alex Forbes The astonishing potential of “unconvential” gas reserves means that we have to move beyond regarding natural gas as merely a “bridge fuel”. Instead, gas should be seen as a “fundamental fuel in a low-carbon world”. That was the clear message from the global gas industry at the recent World Gas Conference in Buenos Aires. Now the question for the industry is how to get this message to policymakers who are only looking at renewables and nuclear energy. |
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The great potential of unconventional by Alex Forbes What a difference a mere three years can make. At the Amsterdam World Gas Conference (WGC) in 2006, the conventional wisdom was that US gas production would remain flat, that imports from Canada would continue to fall, and that there would be a boom in LNG imports. The incredible rise of unconventional gas – from shale, tight sands and coal-bed methane (CBM) – has shattered these assumptions. Thanks to new technologies such as horizontal drilling and hydraulic fracturing, the US now appears to have so much economically recoverable gas that it may eventually become a net LNG exporter. |
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A new nuclear deal – at a price By Stefan Nicola The new German government will give nuclear power a second chance. That may seem like a good deal for the big German energy companies, Eon, RWE, ENBW and Vattenfall. But they don’t get it all their own way. Berlin has vowed to increase energy competition and to create an independent grid operator, measures which will undermine the dominant position of the “Big Four”. |
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The many roads to Copenhagen By Hillebrand Verkroost Today, the 15th Conference of the Parties (COP15) has started in Copenhagen. The amount of information that will be available to you via newspapers, radio and tv stations, and the internet is sure to be overwhelming. |
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Feedback link vital for positive contribution to energy efficiency Landis + Gyr The Kyoto Protocol will expire in 2012; a grass roots approach to climate change is required |
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Gas security proposal undercuts European gas market The powers conferred upon the European Commission by its proposed “Regulation to safeguard security of gas supply” represent an unprecedented violation of the principles of free markets and of equal burden-sharing which are supposed to apply in the European Union. Moreover, in the long term, the Proposed Regulation will have the opposite of the intended effect: it will make European gas supply more vulnerable, not less. |
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So let’s kill all the dogs! by Chris Cragg According to New Zealand researchers, Robert and Brenda Vale, a 4.6 litre Toyota Land Cruiser has less than half the eco-footprint of a medium sized dog. The maths is fairly simple. The dog eats its way through around 164 kg of meat and 95 kg of cereals a year, which equates to 0.84 hectares of productive land. The Land Cruiser, by contrast, needs 55.1 gigajoules to build and run it, which equates to around 0.41 hectares of productive land. Cats meanwhile require around 0.15 hectares, which is apparently slightly less than a Volkswagen Golf. |
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Interview: Christophe de Margerie, ceo Total By Yves de Saint Jacob and Karel Beckman When it comes to the energy future of our planet, Christophe de Margerie, CEO of Total, has his own “inconvenient truths” to tell. ‘I do not agree with those who say we need to develop a decarbonised world’, he says. ‘You cannot replace oil and gas. If you do that, you will face very rough times ahead’. In a wide-ranging interview with European Energy Review, De Margerie lives up to his reputation as a man who is not afraid to speak his mind. ‘It is OK to be nice’, he says at one point in the interview. ‘But only for the right reasons.’ |
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The impact of the economic crisis on Russian and CIS gas markets Simon Pirani, Oxford Institute for Energy Studies Simon Pirani's study updates the outlook for CIS gas markets in the wake of the global recession which has reduced demand throughout the region. Recovery of gas demand in both CIS and European markets is likely to be slow and this has already impacted on production exports and investment. |
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Energy and geopolitics in China: Mixing oil and politics Robert E. Ebel, CSIS The world was surprised when China emerged in 2004 as a major importer and consumer of oil. Today, that surprise has been replaced by growing concern that the China of tomorrow may be in a position to challenge the United States not only for economic leadership but for political leadership as well. |
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Europe’s gas dilemma By Matthew Hulbert and Valentin Misteli for ISN Security Watch Reduced European gas demand recently outlined by the IEA should normally equate to greater levels of ‘energy security’. Matthew Hulbert and Valentin Misteli explain for ISN Security Watch why this might not be the case should Europe’s ‘demand security’ credentials come into question. |
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Northern Europe greenlights Nord Stream Oleg Mityayev - RIA Novosti November 5 was a major milestone in Nord Stream AG history. Both Sweden and Finland authorized the construction of this seabed gas pipeline in their waters. There are now no serious obstacles in meeting the deadline to bring the pipeline on line by 2011. The plans to diversify Russia's gas supplies to Europe are beginning to take shape. |
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Power choices 2050 Eurelectric outlines the path to carbon-neutral electricity in Europe by mid-century Eurelectric “Carbon-neutral electricity in Europe by 2050 is attainable through the market system. For this to become reality, policymakers must support the carbon market so as to deliver the CO2 cap at least cost, work for an international agreement on climate change action, ensure that all sectors internalise the cost of greenhouse gas (GHG) emissions, and enable the use of all low-carbon power technology options. However, the key to Europe’s low-carbon future will be on the demand side, where a paradigm shift is needed away from direct use of fossil fuels to energy-efficient electric systems - including electric road vehicles and electric heat pumps”, said EURELECTRIC President Lars G. Josefsson in Brussels today as he unveiled a new study - Power Choices: Pathways to Carbon-Neutral Electricity in Europe by 2050 - at the European Parliament. |
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Under the authority of the COP Benito Müller, Oxford Institute for Energy Studies In the current negotiations on the future institutional arrangements for international public climate change finance one of the most controversial issues that divides developed and developing countries is the concept of being 'under the authority of the COP'. In this OIES Energy and Environment Comment Dr. Benito Müller. looks into how this controversy could be resolved. |
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A rose by any other name…? New contexts and players in European energy efficiency programmes Mourik, R.; Heiskanen, E.; Hodson, M.; Kallaste, T.; Maier, P.; Marvin, S.; Rinne, S.; Saastamoinen, M.; Vadovics, E., Energy Research Center of The Netherlands Until recent years, the promotion of energy efficiency has mainly been the mandate of national governments and energy utilities. As energy markets have been privatized and opened up to competition, utility-driven DSM programmes have run into increasing problems and thus often had to be re-configured and re-invented. New intermediary organisations are also called for to tackle the demand side, such as specialized energy service companies (ESCOs), energy agencies, or specific organizations that gain their funding from public benefit charges. |
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The global oil depletion report This report argues that conventional oil production is likely to peak before 2030, with a significant risk of a peak before 2020. The report concludes that the UK Government is not alone in being unprepared for such an event - despite oil supplying a third of the world’s energy. The report finds that we are entering an era of slow and expensive oil as resources get harder to find, extract and produce. Major new discoveries, such as those announced recently in the Gulf of Mexico, will only delay the peak by a matter of days or weeks. |
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Economic impacts from the promotion of renewable energies: The German experience Rheinisch-Westfälisches Institut für Wirtschaftsforschung The allure of an environmentally benign, abundant, and cost-effective energy source has led an increasing number of industrialized countries to back public financing of renewable energies. Germany’s experience with renewable energy promotion is often cited as a model to be replicated elsewhere, being based on a combination of far-reaching energy and environmental laws that stretch back nearly two decades. This paper critically reviews the current centerpiece of this effort, the Renewable Energy Sources Act (EEG), focusing on its costs and the associated implications for job creation and climate protection. |
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Future gas production in Russia: is the concern about lack of investment justified? Jonathan Stern, Oxford Institute for Energy Studies The author shows that the short term outlook for Russia gas supply which has emerged since late 2008 has radically changed due to the global recession and reduced levels of gas demand in Russia CIS countries and Europe. Concern about Gazprom's ability to deliver volumes contracted to European buyers has been replaced by the latter asking for relief from their contractual obligations to take these volumes. For this reason the decision to delay investments in new production is entirely logical. |
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Azerbaijan could scuttle Nabucco over Turkey-Armenia deal By Brian Whitmore, Radio Free Europe / Radio Liberty Azerbaijan has apparently decided to play its energy card. As much of the world applauded Turkey's historic rapprochement with Armenia last week, Azerbaijan felt left out in the cold and abandoned by its closest ally. Baku had argued strenuously that a deal to reestablish relations between Ankara and Yerevan should not be signed while Armenia continued to occupy Nagorno-Karabakh, and it threatened to take unspecified countermeasures if one was. |
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Continental European long-term gas contracts: is a transition away from oil product-linked pricing inevitable and imminent? Jonathan Stern, Oxford Institute for Energy Studies The author argues that a transition away from formal contractual oil product price linkage in Continental European long term gas contracts is inevitable and imminent. The conclusion of inevitability arises from the diminishing rationale of the price linkage with oil as the markets into which oil products and gas are sold have diverged substantially. |
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Crossing borders in European gas networks: The missing links Aad Correljé, Dick de Jong en Jacques de Jong, Clingendael International Energy Programme EU indigenous gas production is in decline and imports will grow. A liberalized gas market is expected to develop, leading to new movements of gas. Security of Supply has moved up on the policy agenda. Accommodation of these developments requires a significant expansion of the current EU 'interstate' natural gas transmission network in the coming decade. This study analyzes the main impediments to the development of these cross border connections. It focuses on those concrete situations in which market players have not only expressed an interest, but also the willingness to pay for new pipeline capacity. It offers recommendations for regulatory and coordination issues to overcome these problems. |
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The future role of the International Energy Agency Henry A. Kissinger, CSIS On October 14, 2009, Dr. Henry A. Kissinger, CSIS Counselor and Trustee, delivered a keynote address to the International Energy Agency in Paris to mark the 35th anniversary of its creation and discuss its future amidst a landscape of evolving energy, climate, and geopolitical realities. |
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Batteries NOT included by Hans Verwijs Leading IT entrepreneur Shai Agassi’s company Better Place has teamed up with Renault Nissan to develop a unique business model for rolling out the electric car. Under their pioneering scheme the car’s battery remains the property of the provider. |
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Power from the desert by Gert van Wijland Desertec, the sensational German initiative to create a huge concentrated solar power plant in North Africa, is technically feasible. The problem is how to get the power from the desert to places all over Europe. ‘It will not work without a pan-European grid coordinator.’ |
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View from Brussels by Hughes Belin Agassi meets DG TREN |
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Electric cars are the best option by Hans Verwijs Better Place wants more electric cars than conevntional cars to be sold worldwide by 2020. Shai Agassi's company takes the lead in achieving this target. |
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The Autobahn goes electric by Stefan Nicola Car-crazy Germany has been lagging behind when it comes to making hybrid and electric cars. German car makers have focused too long on protecting their vested interests and the government did too little to make them change their mind. But times are changing. Fahren auf der Autobahn is about to become an electrifying experience. |
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View from Berlin by Stefan Nicola Volkwagen's visionaries |
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Interview Jean-Jacques Chanaron by Yves de Saint Jacob ‘A billion electric cars? That’s a long way off’ Jean-Jacques Chanaron, an economist specialising in innovation management and director of studies at the French research organisation CNRS, is a firm believer in the electric car. But he sounds a cautious note: it took decades to perfect the petrol-driven car and it is going to take at least 20 years to develop a truly competitive electric car. |
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For Nissan the future is electric by Hughes Belin Is the electric car going to be the car of the future? Nissan, the Japanese automaker, believes so. It is about to start the mass-production of the fi rst generation of electric vehicles. |
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Electric car bumps into ethanol in Sweden by Reiner Gatermann Sweden has set itself the goal of being the “world leader” in reducing CO2 emissions. But its cars belong to the oldest and most fuel-inefficient in Europe. Moreover, heavy state support for ethanol hinders the advent of the electric car. |
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California dreaming in Holland by Tseard Zoethout The Dutch government wants to have 1 million electric or hybrid cars on the road by 2025. Cities and provincies are already taking concrete steps to make electric transport a practical reality. The province of Noord- Brabant even dreams of becoming the Silicon Valley of electric cars in the EU. |
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Money matters by Mathijs van Gool Big Oil: Difficult conditions, breathtaking prospects |
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Interview Reinier Zwitserloot, ceo Wintershall by Karel Beckman Keeping the eye on the ball Reinier Zwitserloot may not be among the world’s most famous corporate executives, he is one of the most influential. In his eight years as head of German gas and oil producer Wintershall, a subsidiary of BASF, the Dutchman, who is retiring on the first of October, managed to build up an impressive network of political contacts in Germany and Russia. And he grew the business. ‘If you really want something in life’, he says, ‘you can get it.’ |
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New LNG-terminal shakes up Italian market by James Osborne It has taken more than 10 years, but Italy’s first liquefied natural gas terminal since the 1970s signals big changes for Europe’s No. 3 gas market. Many more plants are planned and may help reduce European reliance on Russian and Algerian imports. |
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Interview Pippo Ranci by James Osborne ‘An Italian gas hub will reduce Eni’s market power’ The start of the LNG terminal at Rovigo could be a turning point in the development of a competitive Italian gas market, says Professor Pippo Ranci, Italy’s former energy regulator. But there are still many regulatory and political hurdles to take. ‘Anyone who wants to pursue the true advantages of size should encourage the removal of barriers and strong antitrust regulation.’ |
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Upside down by Alex Forbes The adequacy of global oil and gas supplies half a decade from now will depend largely on investment decisions being taken today. But forecasting demand that far ahead is being hugely complicated by uncertainties arising from the economic crisis. Indeed, OPEC and the IEA have come up with radically different views of the future. |
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Rebuilding the nuclear network by Yves de Saint Jacob The hoped-for nuclear power renaissance depends upon a reliable network of subcontractors capable of supplying the necessary hardware and software. But years of stagnation in the nuclear power sector have left production capacity in a precarious state. |
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Column Chris Cragg by Chris Cragg The Nuclear Option |
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View from london by Alex Forbes Long on ideas, short on cash |
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‘There’s a new spirit at the international table’ by James Osborne It’s an uphill path for climate negotiations on the way to Copenhagen. In this interview with EER, Stefania Prestigiacomo, Italy’s 42-year-old minister for the environment, takes stock of the two staging posts held in Italy – one in her Sicilian home town – and outlines Italy’s new approach to climate change. ‘In the past, environmental demagogy triumphed over hard fact.’ |
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Green jobs, hopefully by Hughes Belin As politicians have to take tough decisions on allocating recovery budgets, the ability to quantify the expected impact of green policies on employment and GDP is crucial. But good data are hard to come by. The EU sees net positive effects, but they will not come easily. |
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View from Paris by Yves de Saint Jacob Carbon complexities |
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"Sahara Power" needs pan-European grid operator by Gert van Wijland A consortium of leading European – mostly German – companies plans to invest €400 billion in a megaproject to generate solar power in the Sahara desert. “Desertec”, as the project is called, could cover 15 percent of European electricity demand. The problem is, how do you transport this power to Paris and Berlin? ‘It will not work without a pan-European grid operator.’ |
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Keeping cool in Helsinki by Reiner Gatermann For more than fi fty years the combination of power generation with district heating has been the norm in Helsinki. A few years ago Helsinki Energy decided to integrate district cooling into the system, with great success. ‘Helsinki is an excellent example of how the efficient use of fossil fuels can be environmentally friendly.’ |
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Column Claudia Kemfert by Claudia Kemfert More gas competition please |
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EU energy regulators struggle for power by Hughes Belin With the adoption of the third directive on the liberalisation of the energy market, European regulators have won a battle, but not the war. Watchdogs with teeth may seem to be required in a free market, this does not mean they are now automatically springing into being across the EU. Politicians don’t always like to give away their powers. |
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Interview Lord Mogg by Hughes Belin ‘Regulators have a role in fighting climate change’ For Lord Mogg, President of the Council of European Regulators (CEER), the role of regulators must be extended from market monitoring and tariff setting to today’s hot issues: climate change and recovery from the current economic crisis. Those will be among the issues tackled by the fourth World Forum on Energy Regulation (WFER IV) in Athens in October. |
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Kazakhstan wants to break free by Rudolf ten Hoedt Kazakhstan is eager to create a new route for oil to Europe that bypasses Russia and thereby finally break the Kremlin’s stranglehold on Kazakh oil transport. In natural gas, however, the Kazakhs remain closely tied to the Russian bear. A report from Atyrau. |
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The heat is on by Rudolf ten Hoedt In Kazakhstan, western oil majors managed to gain hold of some of the world’s largest oil and gas fields. But the Kazakh government is taking back what it says belongs to them. EER talked to Maksat Idenov, vice-president of KazMunayGaz: ‘We want a fair deal and equal treatment so we can create income for our country.’ |
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View from Moscow by Jeroen Ketting Russia's green Olympics |
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Iran’s clenched fist crushes energy hopes by Alex Forbes Even before Iran’s presidential election, its oil and gas industries were struggling to meet the nation’s energy needs and export aspirations. Following what some see as a thinly-veiled military coup, the outlook looks even bleaker – not just for the Iranian people, but for the global energy economy. |
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Iran’s gas export ambitions: by Alex Forbes still hazy after all these years Stand on the beach at Assaluyeh in western Iran and look out to sea to the south-west. Roughly 100 km out lies South Pars, Iran’s portion of the world’s largest non-associated gas fi eld. Shared with Qatar, which calls its portion the North Field, this immense geological structure holds over half of Iran’s 27,000 bcm (billion cubic metres) of proved gas reserves – more than any country in the world except Russia. With gas riches like these, it is no surprise that Iran has long harboured ambitions to become one of the world’s major exporters. |
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Column Branko Terzic by Branko Terzic Missing links |
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Interview Jens Moberg by Stefan Nicola Jens Moberg is ceo of Better Place Denmark. |
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Keeping the eye on the ball
by Karel Beckman The retiring CEO of Wintershall, Reinier Zwitserloot, managed to grow the German company through unique partnerships with Gazprom. At the same time, he turned Wintershall into a highly useful instrument in German-Russian relations. ‘It’s disgraceful how we deal with Russia’. |
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Surprise, surprise by Chris Cragg The almost-unnoticed, spectacular exploitation of “unconventional” gas in the US has extended American gas reserves by many decades. Soon the rest of the world will follow, with huge implications for the world energy market. |
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Prison exchange: Mikhail Khodorkovsky looks back on his choices Radio Free Europe Radio Liberty RFE/RL's Russian Service, together with "Novaya Gazeta" newspaper, recently published excerpts from correspondence between Russian novelist Lyudmila Ulitskaya and imprisoned former Yukos chief executive Mikhail Khodorkovsky in 2008-09. What follows are passages from an extended translation of some of those exchanges. |
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Unlocking energy efficiency in the U.S. economy McKinsey This report gives a detailed analysis of the magnitude of the efficiency potential in non-transportation uses of energy, a thorough assessment of the barriers that impede the capture of greater efficiency, and an outline of the practical solutions available to unlock the potential. The research shows that the U.S. economy has the potential to reduce annual non-transportation energy consumption by roughly 23 percent by 2020, eliminating more than $1.2 trillion in waste – well beyond the $520 billion upfront investment (not including program costs) that would be required. |
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Book Release: By Anders Åslund One of Europe's old nations steeped in history, Ukraine is today an undisputed independent state. It is a democracy and has transformed into a market economy with predominant private ownership. Ukraine's postcommunist transition has been one of the most protracted and socially costly, but it has taken the country to a desirable destination. |
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Who owns our low carbon future? Intellectual property and energy technologies Bernice Lee, Ilian Iliev and Felix Preston, Chatham House Ensuring access to climate-friendly technologies at affordable prices is a critical issue for international public policy - and one that cuts across economic, legal, security and geopolitical concerns. To keep the rise in average global temperatures below 2C, global greenhouse gas emissions must peak before 2020 and be reduced to 50-85 per cent below 2000 levels by 2050. Achieving these ambitious targets requires a critical mass of low carbon investment, innovation and deployment that meets mid- and long-term goals. The implications for corporate strategies and business models are profound. |
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Oil futures; The role speculators play Kenneth Medlock and Amy Myers Jaffe, Baker Institute A new policy paper by Rice University’s Baker Institute for Public Policy shows a clear increase in the size and influence of noncommercial traders, or “speculators,” in the oil futures market since regulations were eased by the Commodities Futures Modernization Act of 2000. Speculators now constitute about 50 percent of those holding outstanding positions in the U.S. oil futures market, compared with only about 20 percent prior to 2002. The report also finds that the correlation between oil and the dollar has strengthened significantly over the past several years. |
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Russian renewable energy prepares for a bigger slice of the power pie As the world’s largest producer of gas, and one of the worlds major producers of oil and coal, Russia isn’t generally seen as being at the forefront of the global thrust towards greater use of renewable energy sources. There is a good reason for this – Russia ranks amongst the world’s top oil, gas and coal producers, with reserves of all which most of the rest of the world would envy. But it has a downside. Russia is one of the world most inefficient users of energy, and with the world increasingly looking to promote renewable energy, it means that Russia’s renewable energy sector hasn’t been as prominent as those elsewhere. |
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Alternative transportation fuels and vehicle technologies By Douglas Arent, Frank A. Verrastro, Erik R. Peterson, Jennifer L. Bovair, CSIS The global energy system is changing. New demand centers are emerging, and there are numerous challenges to expanding the transportation fuels infrastructure. It has become clear that without significant changes in policy or the introduction of new technologies, the world will continue on an unsustainable path with respect to how it produces, delivers, and uses its energy resources. The confluence of heightened concerns over U.S. energy security, volatile swings in the price of oil, and awareness of climate change has refocused efforts to reduce petroleum demand, improve efficiency, and spur development of zero or low emissions fuels. |
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Nord Stream: Not Just a Pipeline Bendik Solum Whist, ISN International Relations and Security Network An Analysis of the Political Debates in the Baltic Sea Region Regarding the Planned Gas Pipeline from Russia to Germany. This report is an analysis of the planned gas pipeline from Russia to Germany through the Baltic Sea known as Nord Stream. The author examines the divergent attitudes and debates that have surged in the region regarding Nord Stream, with the aim to provide plausible explanations as to why the interpretations of the project have been so different in the various states. |
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Thirst for African Oil: Asian National Oil Companies in Nigeria and Angola Chatham House, Alex Vines, Lillian Wong, Markus Weimer and Indira Campos The report provides a comparative study of the impact of Asian companies on the two leading oil producing countries in sub-Saharan Africa, Nigeria and Angola. The report shows that Asian companies that gained a foothold in the Nigerian oil sector in return for their commitments to invest in downstream and infrastructure projects failed to understand the political context of the time. |
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Gambling in Sub-Saharan Africa: energy security through the prism of Sino-African relations By Bas Percival, Benjamin Valk and Lucia van Geuns, Clingendael International Energy Programme China has used its perceived 'blank slate' non-Colonial status to drive its expansion into Africa. Total trade between Africa and China amounted to approximately $73 billion in 2007, compared to a total of $4.8 billion in 1998 (a remarkable 1,277% increase), with oil accounting for 80% of this trade, demonstrating just how successful China has been in its endeavour. |
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The changing relationship between NOCs and IOCs in the LNG chain David Ledesma, Oxford Institute for Energy Studies Both the LNG business and IOC/NOC relationships have changed significantly over the past two decades and change is likely to continue. David Ledesma concludes that it is unlikely that the dominance which IOCs enjoyed in the LNG during the 1980s and 1990s will return. New players are offering NOCs access to parts of the chain that IOCs have been unwilling to provide. IOCs must continue to evolve in response to these approaches as NOCs seek new partners such as utilities who are keen to gain direct access to LNG supplies to meet their supply and commercial requirements and LNG shipping and service companies seeking to diversify into different parts of the value chain. The pace of divergence in IOC/NOC relationships can be slowed down but IOCs will have to clearly focus their strategy and activities and be more flexible to NOC requirements if they want to maintain their position in the industry." |
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The price band and oil price dynamics By By Bassam Fattouh and Christopher Allsopp, Oxford Institute for Energy Studies The proposal for a crude oil price band seems to be gathering support. This comment discusses some of the limitations of an oil price band then it proposes a new framework for understanding the recent dynamics of oil price movements based on feedbacks. Rather than aiming at stabilising spot prices within a band the comment argues that the main objective of both oil importing and exporting governments should be to stabilise market participants' long term expectations. This requires a move away from focusing solely on the role of speculation and transparency issues towards a more general framework that also takes into account the inflexibilities in the oil market. |
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The geopolitics of Russian energy By Robert E. Ebel, Centre for Strategic and International Studies Russia is a major player in both oil and gas exports, and much of the country's current and likely future economic growth is based on the income these exports will generate, particularly when high market prices prevail. When prices and demand decline drastically as they have recently, dependence on export income becomes a burden. Russia knows that oil and gas revenues cannot and should not form the sole foundation for its growth in the coming years, but if not oil and gas, then what? |
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Nabucco moves ahead of South Stream in regional energy race by Stephen Blank, EurasiaNet July has seen a sudden reversal of fortune in Caspian and Black Sea Basin pipeline politics. The Nabucco pipeline project has staged a noteworthy comeback, while a competing Russian-backed route, dubbed South Stream, now seems to be losing steam. Uncertainty surrounding future demand, however, raises the possibility that neither pipeline ever becomes a reality. |
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Eye Openers by Reiner Gatermann, Stefan Nicola Racing on biogas - Reiner Gatermann 400-billion-euro solar plan takes off - Stefan Nicola Berlin - Moscow on a single tank - Stefan Nicola |
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'We view ourselves as much a European as a Russian Company' by Karel Beckman Interview Vagit Alekperov, ceo Lukoil |
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Nabucco’s window of opportunity by Nazrin Mehdiyeva The psychological effect of the Russian-Ukrainian gas dispute on Europe and difficulties in relations between Russia and Turkmenistan are giving a new boost to Nabucco. But the EU’s gas pipeline hopes are being undermined by competing projects from European companies and the Caspian states’ growing realisation that they may secure a better deal if they do not commit to any pipeline just yet. For the proponents of Nabucco, the time to act is now. |
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Brussels opens Pandora’s Box by Rik Komduur The European Commission is taking a unique initiative by setting up an organisation for purchasing gas in the Caspian Sea region, the Caspian Development Corporation. The Commission feels that private European energy groups are not making enough headway in purchasing non-Russian gas. |
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EU heavily divided on South Stream by Roman Kazmin Russia’s drive for the construction of the South Stream pipeline has recently entered a new era marked by proliferation of intergovernmental agreements. Despite strong signs of support among some member states, the opinion within the EU on the South Stream project and its role for European energy security remains divided. |
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‘Our energy companies need the support of their government’ by Karel Beckman Interview Maria van der Hoeven |
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Deal – or no deal? by James Osborne Only a few months remain before the crucial climate change conference in the Danish capital but the positions of developed and developing countries remain far apart on emissions reductions as well as on financing mitigation and technology transfer. Will the world be left without a plan to combat climate change? |
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Exaggerating climate change by Marcel Crok In the run-up to the climate summit in Copenhagen in December, politicians are warning that the earth is warming up at an ever increasing rate. There is just one problem with this argument: it is not true. |
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Daunting energy challenges for new European law-makers by Hughes Belin The new European Parliament and the to-be-renewed European Commission are faced with the challenge of managing the legislation that was adopted at the end of the previous mandate – and attacking the unresolved problems that can no longer be put off. We are in for a very rough ride. |
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Lost at sea by Stefan Nicola Once a beacon of hope for the renewable industry, offshore wind has run into trouble all over Europe. The financial crisis has hit the industry hard, with banks increasingly unwilling to finance the multi-billion-euro projects. There are signs, however, that the worst is over – not least because governments are stepping in. |
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Biogas finds its way into the German grid by Stefan Schroeter In Germany, some 4,000 plants produce biogas which is used to generate electricity. The latest trend is for plants to convert biogas into biomethane, which is then fed into the gas grid. By 2020, some 6% of the gas that flows through the German grid must be from renewable sources. |
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Pulp mills to supply low-CO2 fuels by Reiner Gatermann Black liquor is a by-product of pulp mills. To date, hardly any effective use has been found for it. Now the Swedish company Chemrec has developed a gasification process by which black liquor can be turned into a new biofuel, methanol/dimethyl ether (DME). The implications could be considerable. |
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A kick-start for biodiesel by Tseard Zoethout In Rotterdam, Neste Oil has started building its first large-scale European biodiesel plant. Production will start in 2011, making the Finnish company the largest biodiesel producer in the world. But how sustainable is ‘rain forest oil’, as Greenpeace has dubbed the new product? |
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‘Stop being paranoid about being energy dependent’ by Alex Forbes Interview: Noé van Hulst, International Energy Forum |
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A historic shift in the global energy market by Alex Forbes The latest world energy statistics from BP show that for the first time in history the developing world consumed more energy than the industrialised world. The implications for the future are wide-ranging. |
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Postcard from Pipelineistan by Pepe Escobar What happens on the immense battlefield for the control of Eurasia will provide the ultimate plot line in the tumultuous rush towards a new, polycentric world order, also known as the New Great Game, argues Pepe Escobar, roving correspondent for Asia Times, analyst for The Real News and contributor to Tomdispatch.com. This article is based on his new book “Obama does Globalistan”. |
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The decline of the Venezuelan oil industry by Rudolf ten Hoedt President Hugo Chávez’s oil nationalism is wreaking havoc on Venezuela’s oil industry. Oil production has stagnated and threatens to decline even further. But Chávez has one last ace up his sleeve: the oil sands in Orinoco, that harbour more oil than Saudi Arabia. |
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From powerhouse to poorhouse by Anke Truijen As the crisis bites, Romanians seem to have forgotten the heavy labour and unhealthy living conditions that characterised working life under the communist regime. The last two decades have seen little progress in the country’s major industrial centres and inhabitants doubt the good times will ever return. |
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Brussels enlists cities in climate fight by Hughes Belin A minor revolution has taken place in Brussels where the European Commission has created a direct association with European cities – bypassing national governments – in an attempt to meet the EU’s energy and climate targets. More than 500 cities have already signed up to this Covenant of Mayors. |
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Europe’s green Capital by Reiner Gatermann The title “Europe’s green Capital” has been awarded by the EU for the first time. And the winner is … Stockholm. The city deserves the title, says our Swedish correspondent, because Stockholm’s town council has been a front-runner in cleaning up the environment. |
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The battle for better buildings by Chris Cragg A lot is to be gained from improving the energy efficiency of buildings. But the obstacles are quite formidable. As exemplified by the British government, which is doing everything to set the wrong example. |
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How to run a city on renewable energy by Stefan Nicola A wind farm, several biogas plants, solar panels, a hydropower pump storage facility and electric cars are part of a unique virtual power plant project in the Harz region in eastern Germany. The project could change the way municipalities in Germany and across Europe think about producing and using energy. |
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The most sober tower in the world by Hughes Belin The Elithis Tower in Dijon has been heralded as ’the most sober building in the world’. Even more striking than the building is its visionary builder, Thierry Bièvre. ‘Energy savings are driven by brainpower rather than by technology.’ |
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Buildings ought to be part of post-Kyoto’ by Yves de Saint Jacob The World Business Council for Sustainable Development (WBCSD) believes that the issue of “sustainable buildings” should be high on the agenda at the Copenhagen climate summit. The end of the world property crisis could create a favourable environment for it. |
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The Nature of LNG Arbitrage: an Analysis of the Main Barriers to the Growth of the Global LNG Arbitrage Market By Polina Zhuravleva, Oxford Institute for Energy Studies This paper by Polina Zhuravleva is one of the first to provide a rigorous definition of LNG arbitrage and analyse the different types of transactions, and barriers to the future growth of this type of trade. The author’s conclusion that most of the existing barriers to trade can be eliminated if participants have incentives to do so, should be of interest to all LNG stakeholders. |
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Natural Gas in China by Nobuyuki Higashi In 2007, China`s natural gas consumption increased by 23.8% and attained 69.5 billion cubic metres (bcm) (NBS 2008). Thanks to this rapid increase, China became one of the world’s top 10 countries in terms of natural gas consumption. Moreover, according to the IEA’s World Energy Outlook 2008, China will become the top natural gas consuming country in the Asia-Pacific region, overtaking Japan by 2015. Until the start of liquefied natural gas (LNG) imports in 2006, China was self-sufficient in terms of natural gas. Although China has accelerated the domestic production of natural gas, which increased by 18.3% and attained 69.2 bcm in 2007, its import dependence is expected to increase rapidly due to rising gas demand. |
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US$147/B One Year On By Matthew Hulbert This paper examines the political implications of oil prices states as high as $147/b in 2008 or as low as $33/b in 2009 on oil producing countries. After a five-year bull run from 2004-2008 oil producers became used to high receipts cementing support at home while buying influence abroad. Thus the political demise of producer regimes was expected to follow the sharp 2009 drop in prices. But amid a sustained economic crisis, the author argues, political resilience became the leitmotif of producer states. He concludes that, with prices and resource nationalism set to rise in tandem, the political impetus could shift back to producers once more, but unless lessons are learned from 2008-2009, all states will lose out. |
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Modernisation needed to meet policy targets The future portfolio of European power plants needs to be consistent with the EU energy and climate change goals set for 2020. For an optimal and yet feasible choice, the European Commission's Joint Research Centre (JRC) has examined the technology and fuel options, together with the conditions that would lead to it. |
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The scramble for Iraq's 'sweet oil' By Nicole Johnston, Al Jazeera With proven oil reserves of around 112 billion barrels and up to another 150 billion barrels of probable reserves, Iraq is the greatest untapped prize for international oil companies. To put that in context, if Iraq does turn out to have around 300 billion barrels of oil, it will rival the world's biggest producer Saudi Arabia - which has around 160 billion barrels of proven reserves. So it is little wonder that giant international oil companies are lining up to get back into Iraq after the industry was nationalised in the 1970s and the oil majors were kicked out. On June 30 major companies - including Exxon, Shell, BP and Total - will gather at Iraq's oil ministry in Baghdad for a two-day meeting to take part in the first bidding round for oil service contracts. However, what the oil companies will be entitled to if they secure a contract has become one of the most controversial elements of the bidding process. |
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Problems and prospects for the “Fourth Corridor”: the positions and role of turkey in gas transit to europe Gareth Winrow, Oxford Institute for Energy Studies Caspian and Middle East gas pipelines to Europe have become an increasingly important and emotive in the late 2000s. The role of Turkey will be critical for all of these projects. But is Turkey a potential hub for, or a potential obstacle to, Caspian and Middle East gas supplies to Europe? Gareth Winrow has consulted many Turkish stakeholders in relation to the different aspects of these issues, and his paper sets out the conflicting views which make this subject confusing for those attempting to establish the reality of Caspian gas supplies to Europe. |
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Resource rents redistribution and halving global poverty: the resource dividend Paul Segal, Oxford Institute for Energy Studies This paper by Paul Segal considers the proposal that each country distribute its resource rents directly to citizens as a cash transfer or Resource Dividend and estimates its potential impact on global poverty. If every developing country implemented the policy then the number of people living below the World Bank’s $1-a-day global poverty line would be halved. Further potential benefits of the policy and a range of administrative and political challenges are discussed. |
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Kyoto: Power shift in the making by Eric J Lyman, ISN Security Watch As countries work to create a treaty to take over when the Kyoto Protocol's compliance period ends in 2012, the balance of power between rich and poor countries is changing. The jury is still out on whether or not the battle to develop a successor to the Kyoto Protocol by the end this year will create an effective tool to significantly reduce world greenhouse gas emissions. But there is little doubt that the process will have the unintended consequence of dramatically changing the relationship between rich and poor countries. |
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New era for Gazprom, as gas giant's fortunes plummet By Bruce Pannier - Radio Free Europe / Radio Liberty It's been a tough year for Gazprom, Russia's state-controlled gas giant. Just a year ago, Russia's state-owned gas giant Gazprom was the third-most valuable company in the world, worth some $350 billion. Now, it has shrunk by two-thirds to about $120 billion, declining to the world's 40th-largest company, according to "The Moscow Times" on May 27. And the company appears set to fall another notch or two, thanks to a ruling by Russian antimonopoly authorities on June 2 that Gazprom must share its export pipelines with independent gas producers. |
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Iran and the challenges to Middle East security Anthony H. Cordesman and Adam C. Seitz, CSIS Iran presents a wide range of potential challenges to the security of the Middle East. This does not mean that Iran plans to start new conflicts in the region or will actively seek to achieve its objectives by force. At the same time, however, Iran is actively seeking to expand its influence, and is now the most serious threat to the security of energy exports in the Gulf region. |
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Energy efficiency in buildings: A global economic perspective by Trevor Houser, Peterson Institute for International Economics At the 2008 summit in Hokkaido, Japan, G-8 leaders called for a 50 percent reduction in greenhouse gas (GHG) emissions by 2050 in order to avert the most serious dangers from climate change. An essential component of meeting this goal will be improving the energy efficiency of buildings, which has been heralded by some studies as the most cost-effective way of reducing GHG emissions. Until now, however, few studies have attempted to assess the cost of completely overhauling the building sector in order to meet this emission-reduction goal. |
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Putin and Gazprom By Boris Nemtsov and Vladimir Milov Under Vladimir Putin's terms in office Gazprom, Russia's largest energy company, has performed extremely poorly. Production has not risen since 1999, despite high economic growth and increasing (domestic) demand for natural gas. The company has been loaded with debt while losing control over assets worth more than $60 billion dollars. These are some of the findings in an article by Boris Nemtsov and Vladimir Milov, respectively former Russian Minister of Energy and former Russian Deputy Minister of Energy. The authors explain that Gazprom is of paramount importance to Russia's economy. No other corporation in Russia has such political and economic clout. In fact, as argue by Nemtsov and Milov, it is the powerhouse of Russia's economy: the stability and future of the Russian economy depend on how well and reliable this corporation works. |
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Gazprom's new weakness offers opportunity By Anders Aslund Gazprom has gone from being a great commercial hope to an ailing giant. Gazprom's owners need to face up to the crisis and institute reforms. A year ago, Gazprom was the third-most valuable company in the world with a market capitalization of over $350 billion. It has shrunk by two-thirds to about $120 billion, declining to the world's 40th-largest company, even though it still accounts for about 20 percent of Russia's market capitalization and roughly 10 percent of its gross domestic product. |
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Dutch exchange looks to gas to retain independence by Karel Beckman To arm itself against the ongoing consolidation in the European energy trading market, the Anglo-Dutch gas and power exchange APX has moved ahead of its rivals into gas trading. ‘The sense of urgency to create an integrated market is bigger in gas than in power’, says ceo Bert den Ouden. |
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Energy trading at the cross-roads by Karel Beckman Power and gas exchanges in Europe multiply, but, experts say, we are nowhere near a mature, integrated European energy market as yet. Trading regulations need to be improved and harmonised and interconnections expanded. European Energy Review assesses the state of energy trading in Europe and interviews the ceo’s of NordPool and APX. |
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‘You don’t solve market challenges by merging exchanges’ by Stefan Schroeter European energy exchanges may be undergoing a process of consolidaton, Erik Saether, ceo of Nord Pool Spot (NPS), is not eager at this moment to merge with his European competitors. ‘It will be better for Europe if local markets are improved first.’ |
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Nordic power exchange aims for global expansion by Stefan Schroeter After its recent partnership with the US-Swedish stock exchange operator Nasdaq OMX, the Nordic power exchange Nord Pool is looking for further international expansion. The next target is the UK. |
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EU must act as 'one voice' on energy Radio Free Europe/Radio Liberty RFE/RL's Turkmen Service talked to Stefan Bouzarovski about the EU's Southern Corridor project and the Nabucco pipeline project to bring Caspian energy resources to Europe bypassing Russia. Dr. Stefan Bouzarovski of the University of Birmingham, a visiting professor at Charles University in Prague, is an expert on the socioeconomic, environmental, and political aspects of energy production, transport, and consumption -- in particular energy equity, security of supply, and energy pipelines. |
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Multiple pipelines, but no happiness, at EU-Russia summit Bruce Pannier, Radio Free Europe/Radio Liberty In the 1990s, U.S. energy companies intent on shoring up oil and natural-gas supplies adopted the slogan "Happiness Is Multiple Pipelines." But no echoes of that sentiment are likely to be heard as the leaders of the European Union and Russia gather for a two-day summit on May 21-22 in the Far Eastern city of Khabarovsk. Pipelines will definitely be on the agenda, but according to Anita Orban, the Budapest-based author of "Power, Energy, and the New Russian Imperialism," happiness probably will not. |
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Managing Energy Data How you manage energy data depends on how you see energy. To most of us, energy suggests vigour, vitality, an ability to get things done. Scientists and engineers make that impression more precise. To them energy is not just a metaphor; it is a quantity they can describe with numbers. A scientist or engineer can watch something happen and measure the energy involved. The measured energy describes not just a vague ability to get things done, but how much gets done and how fast it happens. |
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Influence of rising commodity prices on energy policy Keppo, I.J., Energy research Centre of the Netherlands During the past few years we have first witnessed a rapid increase in the prices of commodities and then later, as a consequence of the economic downturn, an even more drastic drop. Simultaneously with the commodity price increase, an increase in the investment costs of power plants was experienced. The rise in material costs was often stated as one of the reason for this increase. In this study the relationship between commodity costs and energy prices is studied. |
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LNG between feast and famine by Alex Forbes Between now and 2012, a new wave of LNG supply will wash over markets, with Qatar accounting for half the growth as six new “mega-trains” come on stream. It will arrive just as gas demand is being hit by the economic crisis. Beyond 2012, the situation will reverse, with growth constrained by lack of new supply. The LNG industry is facing a turbulent decade. |
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Interview Kathleen Eisbrenner: ‘Europe has not quite been willing to pay up’ by Alex Forbes Among the international oil companies, Shell claims to be the world leader in LNG. According to Kathleen Eisbrenner, head of Shell’s global LNG business, the long-term future of LNG is bright, despite the current economic setback. But she does wonder: ‘Where is Europe in the LNG-spectrum?’ |
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Dutch go from swing production to storage by Rik Komduur Demand for gas storage capacity in the Netherlands will increase over the next few years. This is because 60% of the huge Groningen fi eld, which celebrates its 50th anniversary this year, has been depleted. Around the year 2020 Groningen will no longer be able to fulfi l its role as a “swing producer”. New gas storage capacity is required to fi ll this gap. |
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Gazprom develops biggest gas storage in Europe by Stefan Nicola Gazprom aims to build one or two new gas storage sites in eastern Germany. The Russian gas monopolist argues the sites, which could hold gas delivered by the Nord Stream pipeline, would benefit European energy security. Of course they are also intended to make money. |
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Nuclear 2.0: a revival with bugs by Stefan Nicola Nuclear power is undergoing a revival. Over the past years, governments all over the world have given the green light for new nuclear power plants, or have adopted legislation enabling new plants to be built. However, the fi nancial crisis is causing delays, the waste storage problem remains unsolved and safety continues to be an issue. |
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Brussels careful not to step on toes by Hughes Belin The imminent adoption of an EU Directive on nuclear safety is the main advance in European legislation in the area of nuclear power since the current Commission entered in offi ce in November 2004. But Brussels is fi nding it extremely diffi cult to take control of nuclear energy policy in Europe. The divisions are too deep. |
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Nuclear waste: the intractable problem by Yves de Saint Jacob Scientists the world over agree: we must store nuclear waste with long-life, high-level radioactivity deep under the ground. However, not a single nation has in fact started doing so. This uncertainty is disturbing to most, but it does not seem to worry nuclear engineers. They believe the problem will be solved if it is given enough time. |
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Remembering Three Mile Island by Yves de Saint Jacob There were no fatalities, but the accident at the nuclear power plant on Three Mile Island, in Pennsylvania, lingered in people’s minds and had a long-term impact on the development of nuclear energy in America. |
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Interview Mycle Schneider: ‘There is no revival of nuclear power’ by Hughes Belin The renowned nuclear policy consultant Mycle Schneider has come to the conclusion that there is no nuclear revival, that nuclear’s role in energy generation is declining and that it has little relevance as a tool for avoiding CO2 emissions. For the Germanborn Frenchman, the challenge is elsewhere: to fi nd new ways for providing energy services intelligently. |
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Interview Santiago San Antonio, Foratom: ‘The word nuclear has lost its taboo status’ by Hughes Belin The Director-General of Foratom - the association for the nuclear energy industry in Europe - Santiago San Antonio, is confi dent of a nuclear renaissance in Europe, stemming from the renewed support for nuclear energy from politicians across the continent. |
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Chernobyl Legacy by Chris Cragg After Chernobyl, it might be thought that all reactors of the same design would be shut down. Actually, there are 11 such reactors still operating. The Russians are even thinking of building a new one. |
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Spring comes to East Europe again by Anke Truijen Countries in Eastern Europe are facing a variety of serious energy problems: shortages, rising prices, rising CO2 emissions and heavy dependency on Russia. Nuclear power will solve all these problems at one stroke. Or so many governments believe. Critics charge that simpler options are being ignored. |
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Cracks in the nuclear showcase by Reiner Gatermann Finland’s new nuclear power project is in a crisis. Delivery has been delayed by 3 years and costs have risen 50%. Still, the government has received applications for three more new nuclear plants. The Minister of Energy says Finland needs ‘zero additional reactors, or at most just one.’ |
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Saving children with nuclear power by Remco de Jong Belgium is preparing itself for a national debate on keeping open its nuclear power stations. The industry spent €2 million on a media campaign, which seems to have had some effect. |
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UK takes first step in long journey by Alex Forbes Europe’s biggest energy companies have been scrambling to acquire land on which to build the UK’s next generation of nuclear power stations. Some say the fi rst of a series of such stations could begin generating electricity as soon as 2017. But the obstacles – political, technical and fi nancial – remain formidable. |
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A world to conquer for French technology by Yves de Saint Jacob As the main shareholder in the leading companies in the nuclear industry, the French government calls the nuclear shots, even appointing the managers at the top nuclear companies. President Nicolas Sarkozy’s strategy is to ‘conquer the world’ with French nuclear technology. |
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Interview Jacques Saulnier, Areva: ‘Our model is unique’ by Yves de Saint Jacob Nuclear energy supplier Areva sees orders piling up for its third-generation European Pressurised Reactor (EPR). But the agressively expanding group is in dire need of investment funds and is looking actively for investors. Jacques Emmanuel Saulnier, personal spokesman for Lauvergeon, talks to EER about the prospects of Areva. |
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Interview Dominique Vignon: ‘Politics interfered’ by Yves de Saint Jacob Dominique Vignon was technical director of the French-German EPR project and presided over Framatome, the company producing the EPR reactors, from 1996 until 2001, until Framatome was merged with Cogema into Areva. In 2000, he concluded the agreement with Siemens that has now been terminated by the Germans. |
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Interview Pierre Gadonneix, ceo EDF: ‘I am convinced we have what it takes’ by Yves de Saint Jacob Pierre Gadonneix, Chairman and Chief Executive of EDF since 2004, surprised everyone by publicly inviting German electricity producers to join EDF in building the second French EPR, in which oil company Total already participates for 10%. ‘If we could also have German partners on board, it would be very good for the development of the EPR.’ |
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The ominous parallels between finance and energy by Mathijs van Gool The world economy has two lubricants: the financial system and the energy system. There are important parallels between the two. The financial crisis might trigger politicians to act more decisively when it comes to financing the energy transition. |
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Interview: Todd Onderdonk, ExxonMobil: ‘Oil and gas will grow more than renewables’ by Rudolf ten Hoedt ExxonMobil sees great perspectives for renewables, but has no intention of entering this sector of the energy business. Instead, the US oil giant, the wealthiest company in the world, is making record investments in exploration and production of oil and gas. A market-driven strategy. “Oil and gas are going to grow much more in absolute terms than renewables.” |
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The Obama Energy Plan: a reality check by Herman Franssen The US needs to move in the direction President Obama’s new Energy Plan calls for. At the same time, we need to be more realistic about costs and lead times and take a more balanced approach towards domestic oil and natural gas, or the plan will fail as all the previous presidential energy plans have. |
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The Brussels liberalisation march continues by Hughes Belin After 18 months of wrangling between different European institutions, the EU on the last day of March finally adopted the Third Energy Package. The Council of European Ministers and the European Parliament approved the legislation, which gives regulators more powers and consumers more protection, but allows utilities to avoid splitting off their grid assets. The Brussels march to liberalisation continues, even if the troops do not always stay in line. |
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Sustainable biofuels technically near take-off by Leen Preesman Boeing says it has proven the ‘technical viability’ of biofuels for use in commercial aircraft. Now the company wants to ‘accelerate’ the process of making biofuels available on a commercial scale. |
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Flying high on fuel-efficiency by Leen Preesman Within an industry where little things count in terms of weight, distance and economy, KLM Royal Dutch Airlines has come a long way in maximizing its fuel- efficiency. |
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Energy trading at the cross-roads by Karel Beckman Power and gas exchanges in Europe multiply, but, experts say, we are nowhere near a mature, integrated European energy market as yet. Trading regulations need to be improved and harmonised and interconnections expanded. European Energy Review assesses the state of energy trading in Europe and interviews the ceo’s of NordPool and APX. |
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Nord Pool aims for global expansion by Stefan Schroeter After its recent partnership with the US-Swedish stock exchange operator Nasdaq OMX, the Nordic power exchange Nord Pool is looking for further international expansion. The next target is the UK. |
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Interview: Erik Saether, ceo Nord Pool Spot: ‘Merging exchanges is not the solution’ by Stefan Schroeter European energy exchanges may be undergoing a process of consolidaton, Erik Saether, ceo of Nord Pool Spot (NPS), is not eager at this moment to merge with his European competitors. ‘It will be better for Europe if local markets are improved first.’ |
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Interview: Bert den Ouden, ceo APX by Karel Beckman To arm itself against the ongoing consolidation in the European energy trading market, the Anglo-Dutch gas and power exchange APX has moved ahead of its rivals into gas trading. ‘The sense of urgency to create an integrated market is bigger in gas than in power’, says ceo Bert den Ouden. |
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Russia and the Caspian States in the Global Energy Balance The Baker Institute Energy Forum Russia's status as a current and future energy producer is close to unrivaled. However, the countries energy geopolitical reach is limited, constrained by dependence on the European market, as a result of geography and historical investments. The authors claim that Russia's limited acces to seaborne export have historically under-optimised revenues from energy exports, as well as Moscow's direct energy market influence. however, Russia has been rethinking its energy strategy in order to assert itself on the international stage. |
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State-Owned vs. Multinational Oil: New Rules for Market Intervention Angelica Austin, EastWest Institute Energy markets, unlike financial markets and other goods and services, are more generally characterized by substantial government intervention. The energy sector is dominated by companies that either had or still do have substantial support from national governments. Beyond the formal state-owned sector, private energy companies have always been under scrutiny and or control by government given the importance of providing reliable supplies of ‘essential services’ and energy security to a country’s people and businesses. This aim of governments has meant that domestic energy policy impacts on foreign policy in a number of ways, including escalating fears regarding resource nationalism when oil prices are volatile. |
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The vulnerability of energy infrastructure to environmental change Cleo Paskal, Chatham House Energy generation, extraction, refining, processing and distribution require a complex, interlinked, expensive and sometimes global infrastructure. However, much of that infrastructure lies in areas that may become increasingly physically unstable owing to changes in the environment. Of particular concern are disruptions caused or exacerbated by climate change. A compromised global energy supply could result in a range of undesirable ancillary affects. |
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End Game: What now for Europe’s energy markets? Kash Burchett, Datamonitor At the end of April 2009, the European Parliament will hold its plenary session, in which it will approve the so-called ‘Third Energy Package’. The details pertaining to the liberalization of the EU’s gas and power markets have now been agreed and are of critical importance to all involved in European energy. |
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Russia's new gas projects by Jakub M Godzimirski, Nina Poussenkova Current pricedrops and lower gas demand have forced Gazprom to lower its income forecasts and with that its investment budget for the coming years. This issue of the Russian Analytical Digest digs into the effects of this income loss on Russia's gas strategy. Specifically, it considers the importance of the northern areas in the realization of the country's energy strategy and discusses energy cooperation with Japan and South Korea. |
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US energy regulators in a green state of mind Deloitte Centre for Energy Solutions A majority of energy regulators agree that reducing greenhouse gas emissions will increase the costs of electricity, but that the public is willing to pay as much as 5 percent more for green energy, according to a survey from the Deloitte Center for Energy Solutions. The survey, which was completed by 60 state regulators in March and April 2009, found that 70 percent of surveyed regulators believe that the cost of electricity is likely to increase next year ¯ with 50 percent identifying environmental compliance as the strongest contributing factor to these increased electricity costs. |
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Transit Troubles: Pipelines as a Source of Conflict Paul Stevens, Chatham House Any reading of the history of transit oil and gas pipelines suggests a tendency to produce conflict and disagreement, often resulting in the cessation of throughput, sometimes for a short period and sometimes for longer. It is tempting to attribute this to bad political relations between neighbours. This is certainly part of the story, but also important is the nature of the 'transit terms' - tariffs and offtake terms - whereby transit countries are rewarded for allowing transit. Put simply, the trouble with transit pipelines has a significant economic basis. |
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Geopolitics of energy and the role of Russia in global power shifts Sofie Vanmaele and David Criekemans At the Flemish Centre of International Policy (FCIP), located in Antwerp (Belgium), Sofie Vanmaele and Dr. David Criekemans wrote a study on the topic of “Geopolitics of Energy and the Role of Russia in Global Power Shifts”. |
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Pipeline explosion raises tensions between Turkmenistan and Russia Bruce Pannier, Radio Free Europe/Radio Liberty Turkmenistan’s President Gurbanguly Berdymukhammedov is calling for talks with Russia as part of efforts to repair a damaged natural gas pipeline and, more importantly, damaged Turkmen-Russian relations after last week’s pipeline explosion. Berdymukhammedov said he is prepared to call for an independent investigation into the cause of the April 9 explosion that struck the Central Asia-Tsentr-4 pipeline that connects Turkmenistan to Russia. |
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Canada's new geopolitics: When a green country becomes a petroleum country Roberto De Primis, European Strategic Intelligence and Security Center (ESISC) Canada has always projected an image of a green country with vast open spaces and with politicians supporting the environment and sustainable development. Nonetheless, since the beginning of the new millennium gigantic reserves of heavy oil coming from bituminous sands in the province of Alberta have been promoted commercially by the large worldwide energy companies. Canada now has the world’s second largest proven oil reserves, just behind Saudi Arabia. The geopolitical implications resulting from this fact have transformed the bilateral relations with its American neighbour and modified its international posture with respect to such strategic challenges as the Kyoto Protocol. |
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European renewable energy targets expensive PricewaterhouseCoopers Making renewable energy 20% of total energy consumption in the 27 countries of the EU will require an investment of €1.8 to €22 trillion over the next decade depending on the type of renewable technology. In practical terms, that will mean building more than a million windmills or installing enough solar panels to cover an area twice the size of Belgium. |
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Transatlantic Cooperation for Sustainable Energy Security Franklin Kramer, John Lyman, Centre for Strategic & International Studies According to these two authors we are in a decisive interval for the institutions of the Euro-Atlantic community. Traditional concerns — security, economic, political, and societal — have become increasingly bundled into circumstances that cannot be addressed by any nation alone, however powerful, or any single institution, however influential. Under such circumstances, capabilities, too, need to be bundled for use through a comprehensive approach that combines hard and soft power into smart power, as well as the states and institutions that can best provide or even share them. Americans and Europeans must work together to develop these comprehensive approaches to today's challenges, and thus ensure that tomorrow's solutions are effective for them and the rest of the world. |
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Public warms to the use of nuclear energy More than two-thirds of people around the world believe that their countries should start using or increase their use of nuclear power. Men are more likely to support nuclear energy than women and concerns over energy security, energy prices and climate change were cited most often as grounds for supporting nuclear energy. These are the main findings of a recent global survey by Accenture. |
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EU funding a shot in the arm for NabuccoKash Burchett, Datamonitor The European Union has finally signaled its willingness to finance Nabucco; the proposed gas pipeline linking the Caspian Basin with Europe via Turkey. At a summit in Brussels on the weekend, leaders gave final approval to a €200 million finance package intended to kick-start the controversial project. However, according to Datamonitor energy & utilities Kash Burchett, the pipeline is still by no means guaranteed as a number of other obstacles, including ensuring reserves, remain. |
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A green example to the world by Alex Forbes The business of clean energy is here to stay. That was the unequivocal message of the second World Future Energy Summit in Abu Dhabi that is fast becoming the “Davos” of the energy industry. In the following pages our correspondents Alex Forbes and Stefan Nicola talk to some of the global leaders in the energy revolution sweeping the world. |
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Interview Vivienne Cox, ceo BP Alternative Energy: A time for choices by Alex Forbes The economic downturn is sharpening the focus of clean energy investment, says Vivienne Cox, the head of BP’s Alternative Energy business. Cox detects an increasingly business-like approach that the industry is taking towards new investment. ‘It is a time for choices.’ |
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Green energy test by Alex Forbes Investment growth in clean energy plummeted from phenomenal rates of more than 50% a year in 2005-7 to just 5% in 2008. With credit hard to get hold of and oil prices languishing in the region of $40 dollar/barrel, what does the future hold for what was a booming alternative energy industry? Michael Liebreich – founder and CEO of New Energy Finance, clean energy analysts – is surprisingly bullish. |
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Green Utopia in the desert by Stefan Nicola The world has a new energy giant. In oil-rich Abu Dhabi, the government-driven Masdar Initiative is investing billions of euros into clean energy projects all over the world. At home, Masdar is erecting a green Utopia aimed at turning this desert emirate into a Silicon Valley for green technologies. |
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Europe’s quest for the best of biofuels by James Osborne EU leaders are pushing ahead with ambitious biofuel targets and trying to answer critics of the industry by attaching environmental and social safeguards. Years of work remain putting a proper framework into practice. Meanwhile, biodiesel production is ballooning in Europe’s agricultural heartland. |
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Interview Javier Salgado, President Abengoa Bioenergy: ‘Biofuels have reached the point of no return’ by Steven Adolf Biofuels have won the battle with fossil fuels in Europe, says Javier Salgado, President of the Spanish company Abengoa Bioenergy. According to Salgado, the new European legislation paves the way for biodiesel and ethanol to become the primary fuels. Europe’s largest producer of bioethanol is getting ready for a major swing in the energy power balance. |
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No easy transition by Chris Cragg The development of biofuels in the developing world is a matter of high emotion. It promises a huge range of benefits from increased local employment to decreased greenhouse gas emissions. It could bring greater energy security and prosperity. On the other hand, it could increase deforestation, shift the poor off the land and reduce the availability of food. |
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Italy looks for new balance by James Osborne The lack of a national strategy hampers investment in Italy’s renewable energy industry. Yet at the local level some remarkable bio-energy initiatives are taking place. And with an association of half a million farmers beginning to look at “agro-energy”, anything may happen. |
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Netherlands steps on the brakes by Monique Smits The Dutch government is less than enthusiastic about biofuels. It has set low domestic targets, putting a damper on investments. The only bright spot is the port of Rotterdam, which is aiming to become the “Bio-port” of Europe. |
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The Brazialian succes story by Joost Kanen Brazil is on its way to become the first country to no longer depend on crude oil but on biofuels. Thanks to their competitive advantages, Brazilian companies look set to dominate the rapidly growing global biofuels market. |
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Belgian biofuels in the doldrums by Remco de Jong Belgian biofuel manufacturers have invested half a billion euros in installations for the production of biodiesel and bioethanol in the last few years. But the brand new machines mostly stand idle. The market is not getting off the ground, as there is no legal obligation for oil companies to mix in biofuels with standard fuels. |
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Leipzig reforms its energy base by Stefan Schroeter In Wittenberg, Stadtwerke Leipzig is building its second wood-fired power plant. Leipzig has also become the host of the German Biomass Research Centre, turning the region into an important bio-energy hub in Germany. |
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Sweden’s nuclear power struggle comes to a head by Reiner Gatermann The Swedish government has taken a ‘historic’ decision to end the ban on new nuclear power stations. But it is by no means certain yet that any nuclear power stations will be built. |
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Trouble breweing on the industrial front by Chris Cragg An obscure industrial dispute in northern England may herald increasing labour unrest in the European Union. The freedom of contractors on big industrial projects like power stations and refineries to choose who they employ is likely to be under threat. |
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A new light on saving energy by Annemiek Planting Energy consumption in the outdoor lighting sector is roughly equivalent to the power consumption of 18 million households. Modernising these light points could lead to energy savings of up to 70% with a payback time of only 5 to 8 years. A growing number of cities are seizing the opportunities. |
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Europe turns a blind eye to big battery by Hans Verwijs Substantial use of sustainable energy can only be realised if electricity can be stored on a large scale. In batteries for instance. Japan has already successfully built a combined mega-battery and wind turbine park installation. The US is experimenting with new flow batteries. Not much is going on in Europe. |
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Interview fuel cell specialist Jan van Dokkum: ‘Hydrogen fuel cells are part of the solution’ by Hughes Belin The promise of the hydrogen fuel cell has been a long time in the making. Where do we stand today? Is this the techology of the future – or will it stay a dream? EER talked about this with Jan van Dokkum, fuel cell expert and until a few months ago President of UTC Power, world leader in fuel cell technology. According to Van Dokkum, stationary fuel cell applications are already competitive today, as opposed to fuel cells for use in automobiles. Perhaps most importantly, his message is that fuel cells should be regarded as part of a total energy solution that is different in each situation. |
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Alliance to boost declining energy research in EU by Leen Preesman In October 2008, ten leading European research institutes signed an intention to closely work together in developing a new generation of energy technologies, needed to achieve the EU goals on climate change and energy security. They have some catching up to do. |
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Creating a regional power market by Karel Beckman The Netherlands is taking a leading role in the pursuit of a fully integrated North West European electricity market. This is a matter of self-interest: the policy is aimed at transforming the country from a high-priced electricity island and net importer to an electricity exporter. |
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Wanted: LNG from Shtokman by Roman Kazmin Gazprom is preparing to build a huge LNG facility in the subarctic region of the Shtokman field. The Russian LNG is destined for the US, but it could still go to Europe, if the EU makes the right policy moves. |
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Interview Jean-Marie Devos, Secretary-General Eurogas: ‘I am convinced that Russia is a reliable partner’ by Hughes Belin Europe was a hit by a “gas crisis without precedent” last January. Jean-Marie Devos, Secretary General of Eurogas, the European Union of the Natural Gas Industry, describes three crazy weeks during which the gas producers worked doggedly on the ground while the politicians debated ways of starting deliveries up again. |
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Interview George Verberg: ‘Gas market has become too politicised’ by Karel Beckman George Verberg, former chief executive officer of the Dutch gas producer Gasunie and former President of the International Gas Union, was asked by the Energy Charter Secretariat to stand ready to serve as mediator in the Russia-Ukraine gas conflict in January. However, the conflict escalated so quickly that it was almost immediately handled at the highest political level. ‘I never got the chance to become involved’, says Verberg. |
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Bulgaria attempts to break Russian hold by Anke Truijen Bulgaria has been striving to distance itself from energy giant Russia since the Ukraine gas crisis and has turned to Brussels for alternative gas routes and financial support. However, Bulgarian and Russian energy interests are inextricably mixed. Meanwhile, Bulgaria’s citizens are demanding more transparency. |
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The Ukraine crisis: Not solved yet by Alex Forbes The resolution of the gas crisis between Russia and Ukraine remains fragile. Although ten-year agreements are now in place, it is far from clear that Ukraine will be capable of meeting the terms of the agreement. According to Professor Jonathan Stern, Head of Gas Research at the Oxford Institute for Energy Studies, the future is very worrying. ‘It’s not clear what will happen if the Ukranians fail to pay.’ |
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German gas system proves highly resilient by Stefan Schroeter German gas providers coped remarkably well with the supply disruption in January. They even managed to supply extra gas to hard-hit customers in Eastern Europe. Even so the companies are expanding their storage capabilities and looking for alternative supply routes. |
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Baltic strained by oil traffic by Reiner Gatermann Maritime traffic on the Baltic, already one of the world’s most intensively travelled seas, is continually increasing. The risks of accidents are growing as the limits of what the Baltic can handle seem to be in sight. |
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Angola wants bigger piece of the pie by Rudolf ten Hoedt With its fast developing oil production, Angola is becoming increasingly more important for energy supplies in Europe and the US. The western oil multinationals have been able to maintain their leading position in Angola but oil nationalism is on the rise. National oil company Sonango is demanding a bigger piece of the pie. |
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Enter the Dragon: economic turmoil and resource acquisition Matthew Hulbert, Centre for Security Studies (CSS/ETH) The economic crisis has taken a heavy toll on commodity prices as demand destruction firmly sets in. While Western oil, metals and mining giants rethink investment strategies in light of commercial constraints, China will continue to use the downturn as a ‘perfect storm’ to invest on strategic grounds to fuel long term domestic growth while underlining the pronounced role of the state in natural resource acquisition. |
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Russia’s Energy Relations with its Caspian Neighbors International Relations and Security Network (ISN) |
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‘The state of renewable energies in Europe’ by the EurObserv’ER consortium Although the 2010 targets are very likely not to be met, current trends allow to be optimistic regarding the future of renewable energy sources in the European Union (EU). EurObserv’ER indicates that for the year 2007 the renewable energy share in total primary energy consumption has gained 0.4 percentage point with respect to 2006 (from 7.1% to 7.5%) and the renewable energy share in total electricity consumption has increased 0.6 percentage point (from 14.3% in 2006 to 14.9% in 2007). |
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Second Strategic Energy Review: the wrong focus Associate Fellow at Chatham House and EER Editorial Board Member Walt Patterson was interviewed 20 February on the Iranian channel PressTV programme Energy World. In this interview Mr Patterson comments on the EU Second Strategic Energy Review and argues that the Commission starts at the wrong end of the issue. Instead of looking at the supply of fuels and electricity we should look first at how we use them, and what for. We know that we waste far too much, and could use them much better. |
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The Russo-Ukrainian gas dispute of January 2009: a comprehensive assessment Simon Pirani, Jonathan Stern and Katja Yafimava, Oxford Institute for Energy Studies This is the first major academic study of the January 2009 Russo-Ukrainian gas dispute during which 20 per cent of Europe's gas supplies were cut off for two weeks. This study, published less than a month after the dispute was settled, concludes that this dispute had no winners. Moreover, with the exception of European gas companies and some European heads of state, none of the parties involved have emerged with any great credit. There is no evidence that Russia intended to use energy as an economic or political "weapon" against European countries. The role of "oligarchs", while certainly unhelpful, was not decisive. |
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Thoughts on a strategic partnership with Russia MEPs and experts debated the future of relations with Russia and its influence over its closest neighbours at a Foreign Affairs Committee hearing at the European Parliament on Thursday 12 February. They questioned Moscow's reliability as a partner at a time when the EU is negotiating the renewal of its framework agreement with Russia. |
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Speech by Tony Hayward at CERA energy week 2009 Tony Hayward, Chief Executive Officer of BP, gave his view on the developments of the world energy sector in a speech at the CERA energy week 2009 in Houston, Texas (US). In his speech he puts forward 7 policy suggestions to create a well functioning regulatory framework for the energy sector to flourish in and to result in the desired outcomes. |
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Mandil: Energy solidarity 'still just words' Many European countries were not playing the card of solidarity in the gas crisis at the beginning of this year. The Italian government even issued a decree that said that any operator supplying gas in Italy had to divert all its imports in order to supply Italy. According to Claude Mandil, former director of the International Energy Agency and the author of the report on European energy security that was written for the French presidency of the EU, this was a shamefull act. |
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EU foresees major role for carbon trading in efforts to tackle climate change. European Commission press department In a paper outlining its position ahead of international climate talks, the commission says the costs of containing global warming are likely to soar in years to come – adding €175bn to the world's annual bill by 2020. More than half that amount will be needed in developing countries like China and India. The EU and other economic powers should help defray the costs of reducing greenhouse gases emitted by developing nations. |
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Energy-hungry Europe misses another wake-up call By Alexandros Petersen, Radio Free Europe / Radio Liberty It has become cliche to say that the latest natural-gas row between Russia and Ukraine should be a wake-up call for the EU in its sluggish struggle to secure energy supplies devoid of Kremlin control. A similar flap between Moscow and Kyiv in 2006 was supposed to have set off alarm bells. But, it did not. And, this latest crisis will not either. |
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Will the real Gazprom ceo please stand up By Anders Aslund The great Russian-Ukrainian gas war is over, and it is time to assess the outcome. On the surface, the result looks promising. Finally, Russia and Ukraine have concluded a normal long-term gas agreement. Both gas prices and transit tariffs are market-related and based on clear principles without shady intermediaries or arbitrariness. The gas prices will probably average $230 per 1,000 cubic meters in 2009, while investment bankers had expected $250. |
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Strengthening global energy security by Rex W. Tillerson, Chairman and CEO of ExxonMobil Chairman of the world's largest integrated energy company, Rex Tillerson, laid down his views on how the world can enhance the security of its energy needs in a speech delivered at the Woodrow Wilson International Center for Scholars in Washington. In his Speech, Mr Tillerson adressess the different challanges the world's energy sector is faced with today. |
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Nabucco pipeline conference ends with EU support, By Bruce Pannier, Radio Free Europe / Radio Liberty There was an air of optimism following a one-day Nabucco international gas pipeline conference in Budapest. Though the event failed to provide as much clarity as many had hoped, the conference did end with pledges of financing - although no cash yet - and vows to start work on the pipeline this year. |
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New concepts for solar collectors in 2030 M. Bakker, J. Nijs, W. van Helden, A. Reinders, Energy research Centre of the Netherlands What will our homes look like in 2030? By that time, solar energy is expected to cover the full energy demand of newly built houses. Naturally, we do not want this to interfere with our living standards or the associated costs. In order to achieve this, new collector concepts are required, based on new materials, new production technologies, and on increased intelligence of the collector system. This article gives us an insight in what the future will bring to us. |
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They can do it - but it won't be easy by Chris Cragg Barack Obama has assembled a powerful policy team in the area of energy and the environment. Two complementary policies appear to be emerging. The first is to reduce America’s dependence on foreign oil imports. The second is to significantly reduce the country’s carbon footprint. Yet the new administration will face tremendous hurdles, such as the sorry state of the electricity grid. |
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Obama's new Green Deal by Stefan Nicola Barack Obama is expected to turn around America’s energy policy by boosting renewable energy sources and energy efficiency, and by vigorously rejoining global efforts to curb climate change. This opens up new possibilities for cooperation between the US and Europe. It also means that Europe will have to step up pushing green innovation in order not to lose its leadership. |
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Fatih Birol: ‘We need to find four new Saudi Arabias’ by Alex Forbes The latest World Energy Outlook (WEO) from the International Energy Agency is more pessimistic than ever about the world’s future oil supplies. ‘Even if demand between now and 2030 were to be completely flat, we would need to find four new Saudi Arabias in the next 22 years’, says Fatih Birol, the IEA’s chief economist and lead author of the influential report, in an interview with EER. |
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IEA sees peak oil on horizon by Alex Forbes The IEA strikes a sombre note in its latest World Energy Outlook. It warns of an oil crunch, a gas shortage and a climate crisis. |
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Lars G. Josefsson: ‘Politicians must deliver the policy framework’ by Reiner Gatermann Vattenfall, the Swedish state owned utility, developed from the biggest national player to the fifth biggest one in Europe. Its ceo Lars G. Josefsson has commanded a leading role in the global debate on sustainable energy. He believes the market can and should deliver a sustainable energy future, but this will only happen if politicians set a stable and consistent policy framework. |
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Power in Europe: dirtier, less secure by Yves de Saint Jacob Several studies published in France warn that without massive investment, the security of electricity supply in Europe will deteriorate, emissions of CO2 will rise and power will become more expensive. |
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A green renewal in Brandenburg by Stefan Nicola Brandenburg, once East Germany’s coal mining centre, is transforming itself into a |
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Ruhr Area sticks to black power by Gert van Wijland Despite heavy opposition from environmentalists and scientists, brown coal continues to be the backbone of Germany’s energy supply. This will not change for some time to come, says German energy group RWE. ‘Environmental obstacles are surmountable.’ |
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VNG’s fight for independence by Stefan Schroeter East German gas company VNG Verbundnetz Gas has managed to remain independent since the transition to a market economy in 1990. With major shareholder EWE, based in northwestern Germany, now trying to take control, the board and other shareholders are fighting back. |
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All eyes are now on Copenhagen by Stefan Nicola The UN climate change summit in Poznan ended without groundbreaking results, but it left the road to a post-Kyoto Protocol clear. To strike an ambitious deal by the end of 2009, however, the world will have to significantly step up its efforts. |
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Confessions of a climate doubter by Karel Beckman “Climate change” has grown into a large bureaucratic, industrial and political machine, on which the livelihood of many thousands of people depends. In this intellectual climate there is little room for doubt. Changes to the energy system may be inevitable, argues Karel Beckman, editor-in-chief of European Energy Review, but we should not blindly follow the beliefs of the climate preachers. |
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Solar power in growing pains by Annemieke van Roekel The global market for solar cells is growing explosively, mainly thanks to lavish subsidy schemes. Is solar power the wave of the future – or is its success based on ‘misguided political intervention’? |
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Italian sunshine and subsides lure investors by James Osborne With generous incentives and the prospect of generation costs soon falling in line with market prices, foreign companies are taking position in Italy’s solar market. But success may hinge on finding the right local partner to negotiate Italy's legendary bureaucracy. |
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The sun is shining on PV in Saxony by Stefan Schroeter More and more solar technology companies are establishing themselves in the eastern German state of Saxony. The conditions in the state provide a solid basis for strong growth and the further development of their technologies. |
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Solar modules head for grid parity by Stefan Schroeter Scientists, plant manufacturers and module producers in Saxony are working on new technologies that can be used to produce solar electricity cost-effectively. The goal is to bring the price down to match that of conventionally generated electricity within the next few years. |
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Belgian solar sector may overheat by Remco de Jong Thanks to generous subsidies, the development of solar power has taken off in Belgium. Many players even fear that ‘oversubsidising’ could lead to the market overheating. ‘It's really only about money. We never hear ecological arguments.’ |
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Sunny Nice, capital of French contradictions by Yves de Saint Jacob France, which used to be a pioneer in solar technology, produces only a fraction of the solar output of market leader Germany. But new, attractive feed-in tariffs are changing the solar landscape drastically. |
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Europe’s ambitious new energy course by Hughes Belin The European Commission has produced a new roadmap aiming to ‘guarantee secure and sustainable energy supplies’. Stakeholders in the energy sector take note: this new EU Strategic Energy Review will form the basis of all future EU energy policy and pave the way for a reflection on the energy challenges facing Europe between 2020 and 2050. |
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The climate ship comes in by Hughes Belin European Union institutions have managed to push through the difficult adoption of an ambitious legislative package on energy and climate change in less than a year. The global financial crisis did not derail the plan, though it did force some concessions. Our Brussels correspondent Hughes Belin takes stock of the results. |
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Medvedev and Gazprom: hanging together by Nazrin Mehdiyeva President Dmitry Medvedev’s close affiliation to Gazprom has until recently been a source of strength for both. With energy prices slipping, the growing risks for Gazprom also become a risk for Medvedev. Nazrin Mehdiyeva is a gas consultant and Russian/CIS specialist at Pöyry Energy Consulting. |
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Ukraine versus Russia: the real story by Jérôme Guillet The gas conflict between Ukraine and Russia is not what it appears to be in the western media, argues Jérôme Guillet. It has been going on for at least 15 years and it is really a war between private parties in Russia and Ukraine who engage in illicit gas trading. |
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The Chinese threat by Hans van Koningsbrugge While the US and Europe compete for Shtokman gas, China is increasingly asserting as an attractive market for Russian energy. Yet, in the end, Russia will give Europe preference, expects Hans van Koningsbrugge, Director of the Netherlands-Russia Centre of the University of Groningen. |
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Who's afraid of a gas cartel? by Alex Forbes Are the big gas producers setting up a cartel à la Opec? Most experts argue that the structure of gas markets makes the gas business much less amenable to cartelisation than the oil business. If that is true, why are so many people in the gas industry afraid of a gas cartel? |
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Sleeping African giant awakes by Cyril Widdershoven While European policymakers fret about the EU’s energy relationship with Russia, they forget that it is not Russia, but North Africa that will be Europe’s most important gas and energy supplier in the near future. High time to give the African continent the attention that it deserves. |
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Lithuania's nuclear power dream by Reiner Gatermann Lithuania is pinning its energy hopes on keeping the nuclear plant at Ignalina open beyond 2009 and building a new nuclear power plant at the same spot. But many observers believe both projects are pipe dreams. ‘The government should face reality.’ |
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Croatia on course for nuclear power by Anke Truijen Croatia needs to re-assess and upgrade all its energy sources in order to safeguard future power supplies. Energy experts are lobbying for a nuclear power plant, but it remains to be seen whether the population will agree to such a step. |
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China slowly cleaning up its act by Bert van Dijk China’s coal-driven economy has become the largest emitter of CO2 in the world. This is not about to change any time soon, though high prices, blackouts, mine-accidents and pollution all contribute to a drive towards cleaner alternatives, including cleaner coal technologies. |
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A Prince and Four Peaks: Peak Oil, Gas, Coal and Uranium His Royal Highness, Crown Prince Willem-Alexander of the Netherlands, transcribed by Rembrandt Koppelaar, The Oil Drum On January the 20th, the second three-day world future energy summit began in Abu Dhabi. One of the biggest energy conference in the world that is being attended by key policy makers, financiers, leading academics and no less than 400 journalists from all over the world. The conference was opened by the Dutch Crown Prince Willem-Alexander, Prince of Orange and the Netherlands. He spoke about the lessons that we need to learn from the collapse of the Roman civilization in perspective to the four peaks of oil, gas, coal and uranium that await us. |
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Final Warning James Sherr, The World Today, Chatham House It is far from clear that the sources, dynamics and implications of the Russia-Ukraine gas crisis are understood, writes James Sherr in the forthcoming issue of The World Today. He warns of the dangers of this dispute and insists that the EU must act swiftly. |
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Oil 2009. Be careful what you wish for By Michael T. Klare, TomDispatch As the price of a barrel of oil has edged back up, energy expert Michael Klare, author of Rising Powers, Shrinking Planet: The New Geopolitics of Oil, reminds us of one crucial fact. Whether the price of oil is high or low, someone's going to pay - and sooner or later all of us will - because our civilization is based on the stuff. Starting with the question of energy seems once again an appropriate way to go this year. |
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Where east meets west: European gas and Ukrainian reality Edward Chow and Jonathan Elkind, The Washington Quarterly This article looks at the internal situation of the Ukraine.The authors argue in this article that while Ukraine plays a critical role as the key transit connection between gas producers in Russia as well as Central Asia and gas consumers in the EU, its incomplete market economic transition and culture of corruption weaken its own energy security and with it, European energy security. |
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The impact of the EU ETS on electricity prices. Final report to DG Environment of the European Commission Sijm, J.P.M.; Hers, J.S.; Lise, W.; Wetzelaer, B.J.H.W., Energy Research Center of The Netherlands The present study analyses the impact of the EU Emissions Trading Scheme (ETS) on electricity prices, in particular on wholesale power markets across the EU. To study this impact, it uses a variety of methodological approaches, including theoretical, empirical, model, literature and policy analyses. |
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EU, Russia to hold talks over gas flow Radio Free Europe Radio Liberty The European Union has scheduled talks with Russia to press for a speedy resolution of a dispute with Ukraine that has reduced gas supplies to eastern and southern Europe. |
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Ukraine-Russia: some background and context by Jérôme Guillet, The Oil Drum, European Tribune Although western public opinion has only recently become aware of the Ukraine-Russia gas conflict, the dispute has been going for at least fifteen years, since the break-up of the Soviet Union. This article helpes us to understand why the two countries find it so hard to solve the problem. |
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From polar to nuclear? By Vladislav Larin, Bellona Russia is planning extensive development of offshore oil and gas reserves in the Arctic. Due to severe climate conditions and the energy demands inherent in this exploration, proposals have emerged to use nuclear-powered underwater drill ships and floating nuclear power plants for the upcoming projects. |
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2008 in review: Russia, EU see Caspian energy dreams deferred Bruce Pannier, By Radio Free Europe/Radio Liberty Entering the year, Russia appeared to have the upper hand in securing a lion’s share of the immense natural gas and oil reserves in the Caspian basin. |
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Iran: Breaking the nuclear deadlock Sir Richard Dalton (ed), Chatham House The dispute over Iran’s nuclear programme is deadlocked. Five years of negotiations, proposals, UN resolutions and sanctions have failed to achieve a breakthrough. As diplomacy struggles and Iran continues to advance its nuclear capabilities, the issue becomes ever more grave and pressing. There is some encouragement for progress in 2009. Iran’s economic and political weaknesses could make it receptive to US president-elect Barack Obama’s willingness to consider new approaches. |
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Europe’s complex climate compromise David Buchan, Oxford Institute for Energy Studies In this paper it is argued that the EU's December 2008 agreement raises almost as many questions as it settles. Buchan says that, although passage in less than a year of the post-2012 reforms to take the European Union’s climate and renewable energy programme beyond Kyoto is a remarkable legislative feat, the December 2008 compromise is a step backwards from the Commission’s blueprint of January 2008. Since it is based on far more free allocations of emission allowances than the Commission proposed in its original blueprint. |
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Conversion of excess wind energy into hydrogen for fuel cell applications Kraaij, G.J., Weeda, M., Energy Research Centre of The Netherlands Large-scale offshore wind power can lead to the situation that more electricity is available (including the base load electricity supply) than needed in the Netherlands. Excess wind power is defined as the effect that the production from the base load power plants and the wind power plants exceeds the electricity demand. |
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Is the competitive electricity supply market dying Tim Tutton, Oxera Ofgem, the energy regulator in Great Britain, has always aspired to create 'effective' competition in electricity supply - which would require regulation only through the normal application of general competition law. Its recent Energy Supply Probe is notably pessimistic about achieving this. Tim Tutton, Oxera Principal, suggests that such pessimism is appropriate, but that it may matter less than Ofgem thinks. |
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The impact of the EU ETS on electricity prices. Final report to DG Environment of the European Commission by Sijm, J.P.M.; Hers, J.S.; Lise, W.; Wetzelaer, B.J.H.W. On February 2, 2009, a revised edition of the report has been released, including some adjustments and editorial corrections particularly in Section 2.2 and Appendix A. The present study analyses the impact of the EU Emissions Trading Scheme (ETS) on electricity prices, in particular on wholesale power markets across the EU. To study this impact, it uses a variety of methodological approaches, including theoretical, empirical, model, literature and policy analyses. |
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European Parliament seals climate change package After eleven months of legislative work, the European Parliament gave its backing to the EU's climate change package which aims to ensure that the EU will achieve its climate targets by 2020: a 20% reduction in greenhouse gas emissions, a 20% improvement in energy efficiency, and a 20% share for renewables in the EU energy mix. Ahead of Parliament's first-reading vote, MEPs had reached informal agreements with the French Presidency on the six proposals which all fall under the co-decision procedure, placing the European Parliament and Council on an equal footing as co-legislators. |
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Climate policy and energy security: Two sides of the same coin? Peter R. Hartley,Kenneth B. Medlock III, James A. Baker III Institute for public policy “We must treat energy security and climate security as two sides of the same coin”, this was said by Tony Blair on the 20th of november 2006, when he visisted the United States. The claim that policies may be able to address climate change and energy security at the same time is plausible. On one side of the coin, climate policy is aimed at limiting or reducing human impacts on climate. On the other side of the coin, energy security is often identified with the goal of reducing macroeconomic vulnerability to disruptions in energy supplies and accompanying price increases. |
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Factors underpinning future action – country fact sheets Niklas Höhne, Sara Moltmann, Markus Hagemann, Tana Angelini, Ann Gardiner, Reemt Heuke, Ecofys This report is the 2008 version of the country fact sheets that were first provided in the report “Factors underpinning future action” in October 2006 (Höhne et al. 2006b) and updated August 2007 (Höhne et al. 2007). The objective of the fact sheets is to provide an analytical basis to underpin discussions on future commitments to reduce greenhouse gas (GHG) emissions at the end of the first Kyoto Protocol commitment period (i.e. post-2012). |
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The reality of official climate aid by J. Timmons Roberts, Kara Starr, Thomas Jones, and Dinah Abdel-Fattah, Oxford Institute for Energy Studies This paper by Prof Timmons and his team provides preliminary findings on trends in climate aid from the world's major donor nations from 2000 to 2006 based on individual categorization of over 115,000 aid projects randomly selected from the OECD/CRS database. |
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Perspectives on Caspian Oil and Gas Development International Energy Agency Working Paper Series The Caspian region is one of the oldest hydrocarbon producing areas in the world, and is emerging once again as a major source of growth in global oil and gas supply. In the IEA‘s medium-term projection for global oil supply to 2013, the Caspian is projected to increase its oil production by over 800 kb/d by 2013, representing some 70% of the net increase in non-OPEC oil supply growth during this period. |
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Energy Commissioner Rides Electric Car to Council Press release by Eurelectric EU Energy Commissioner Andris Piebalgs tested out today in Brussels a fully-electric vehicle. On his way to join EU Energy Ministers at their Council session, where vital energy-climate policy proposals were on the agenda, Mr Piebalgs tried out the electric car being showcased by EURELECTRIC this month as part of the Electricity Drives Cleaner campaign, to show his support for electric transport. |
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Gazprom's view on the new EU initiatives and Russian gas export By Alexander I. Medvedev On November 18, Deputy Chairman of OJSC Gazprom’s Management Committee Alexander I. Medvedev gave a reaction to the New Energy Policy that was presented by the European Commission on the 13th of November 2008. You can read his speech below. |
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German coalition on nuclear bombshell by Stefan Nicola For years, German politicians turned a blind eye to the massive amounts of nuclear waste dumped in a research repository near Hannover. Then a report warned that the site, Asse II, was in danger of collapsing. The scandal over Asse is only the tip of a highly radioactive iceberg. |
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Whitewashing the black sheep of energy by Monique Smits A Coal War has flared up in Europe. Encouraged by their national governments, energy companies are planning to build new coalfired power stations throughout the Continent. They promise ‘Clean Coal’, but angry environmentalists want them to ‘Quit Coal’. |
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Revolt against black power by Stefan Nicola Germany is experiencing a coal renaissance. Partly thanks to the anticipated nuclear phase out, dozens of coal-fired power plants are in the planning phase or under construction. But there is fierce public opposition. |
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Italy discovers carboni by Maarten Veeger Italy relies heavily on oil and gas for its electricity generation. But recently coal has entered the picture. ‘It is wise and vital for Italy.’ |
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Belgium set to diversify by Remco de Jong In Belgium, at least one new large coal-fired power plant is being planned. Environmental organisations are opposed, but the government and the general public are not yet showing much concern. |
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Danish coal trumps wind by Reiner Gatermann Hardly anything irritates the Danes more than to be told that they deliver “dirty power” and export it as well. But the fact remains, the Scandinavians continue to be dependent on coal and will remain so for a long time to come. |
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Turkey wants to have it all by Marc Guillet Turkey is planning at least 8 and maybe even 40 new coal-fired power stations. The government encourages any kind of new power production, whether it is from coal, nuclear or renewables. |
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Spanish coal on way out? by Steven Adolf Coal rapidly seems to be losing ground as an energy source for Spain’s electricity supply. The government favours gas-fired power stations. |
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A small revival in France by Yves de Saint Jacob With nearly 80% of its electricity generated by nuclear power, France has little need for coal, at least as far its own national energy needs are concerned. But that hasn’t stopped plans for new coal-fired power plants. |
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UK government put on spot by Chris Cragg British electricity producers want to replace old coal-fired power stations with new, more efficient ones. Environmental activists want to have none of it. The government is deeply divided. |
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Netherlands - CO2 capital? by Rik Komduur The Netherlands hopes to neutralise additional coal power plants with an ambitious programme for carbon capture and storage. The Dutch even see an opportunity to become the CO2 traders of Europe. |
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Capturing that Carbon by Chris Cragg If our economies cannot do without coal-fired power, the climate must be saved with carbon capture and storage (CCS). The good news is, the techniques for CCS are all in place. The bad news is they cost a lot of money. |
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Vattenfall takes the plunge at Schwarze Pumpe by Stefan Schroeter The world’s first pilot plant for the capture of carbon dioxide in a coal-fired power station has commenced operations at the eastern German power station Schwarze Pumpe. |
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Russia’s great transit game by Vladislav Inozemtsev Russia is trying desperately to maintain a monopoly on the transport of all oil and gas produced in the former Soviet Union. The country would do better to create an open, competitive market and invest in developing its own resources. |
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Interview Sevak Sarukhanyan: Nabucco in danger. by Marc Guillet The crisis in Georgia is bad news for Nabucco. The EU’s pipeline project could become the victim of the power struggle between Russia and the West. One solution might be to involve Iran and Armenia. |
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Solidarity is not a one-way street by Karel Beckman Interview Gerhard Schröder The former German chancellor and current Chairman of the shareholders’ committee of Nord Stream, Gerhard Schröder, is convinced that the EU needs a ‘common energy policy’, but, he says, ‘it has to be one that all members can live with.’ |
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'The Nord Stream pipeline is a fait accompli' by Reiner Gatermann Interview Paavo Lipponen Finland’s former prime minister, Paavo Lipponen, was hired as consultant for Nord Stream AG in Finland, joining the team of Gerhard Schröder. In an interview with EER, Lipponen does not shy away from chiding the EU for its lack of support for the Baltic States. ‘It is essential that the Baltic states and Poland are connected to the European energy supply system.’ |
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Russia versus Gazprom by Nazrin Mehdiyeva Rising domestic demand and the depletion of traditional gas-fields mean that Russia will have to make choices as to where to send its gas. But the priorities of profit-hungry Gazprom and the Russian government often conflict – a trend likely to be exacerbated by the deteriorating relationship between Russia and the West. Nazrin Mehdiyeva is a gas consultant and Russian/ CIS specialist at Pöyry Energy Consulting. She is based in Oxford. |
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Energy package survives in battered shape by Hughes Belin With just one short paragraph the French presidency managed to rescue the climate-energy package at the Summit of the European heads of state and government in mid-October. But some compromises will be inevitable. |
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‘I am convinced that this is a lasting change’ by Yves de Saint Jacob Interview Jean-Louis Schilansky |
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‘Crisis may lead to structural change’ by Yves de Saint Jacob Interview IEA-expert Eduardo Lopez |
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‘High oil prices are a good thing for the world’ by Hughes Belin Interview Philippe Chalmin |
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Gas supply under pressure by Alex Forbes The latest review of natural gas markets from the International Energy Agency (IEA) paints a picture of growing demand in the face of rising prices, a strengthening link between gas and electricity markets, and a globalising influence from increasingly flexible LNG supplies. But there are growing signs that security of supply is under threat from underinvestment, delays and cost escalation. |
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GTL/BTL help Audi to third Le Mans win by Alex Forbes When the Audi R10 triumphed at Le Mans in 2006, it was the first diesel-engine car ever to win the world’s toughest endurance race. It went on to win again in 2007 and 2008. EER interviewed Shell’s Future Fuels specialist Jack Jacometti about the role new fuels played in those successes. |
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Racing to develop a new fuel by Alex Forbes The emerging gas-to-liquids (GTL) industry has led to the development of a commercially viable technology that allows the conversion of natural gas into highperformance synthetic oil products, such as gasoil, naphtha and base oils for high-spec lubricants. These products are now proving themselves in a variety of demanding applications – notably, in the case of Shell, on the racetrack. |
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Mexico fails to stop oil decline by Rudolf ten Hoedt The administration of President Felipe Calderon introduced cautious reforms in the oil industry, but they will not be enough to halt the accelerating decline of Mexican oil production. Experts are sombre about the prospects for Mexico if the political situation does not change. |
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Norway’s continental shelf gets a new lease on life by Reiner Gatermann Stavanger, Norway’s oil capital, is brimming with optimism. Investment is booming, especially in the gas sector. But environmental, political and financial clouds are gathering on the horizon. |
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A long way to integration by Erik Steen Sørensen The South East European Electricity Market is highly fragmented, with most national markets too small to support a regional market that’s liquid and efficient. There is some reform in the electricity sector, but with many rates still below cost and people not used to paying their electric bills it is not enough to make the region attractive to investors. |
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Bosnia – divided powerhouse by Anke Truijen With its untapped coal reserves and landscape of mountains and rivers suited to generating hydropower, Bosnia Herzegovina could become a powerhouse for the region. But the absence of a national energy policy and the ongoing political divisions within the country still look to be an insurmountable hurdle. |
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Power exchanges move towards European integration by Stefan Schroeter The interlinking of the European Energy Exchange in Leipzig and Powernext in Paris was another step in the consolidation of European energy exchanges. Many other moves are being made, but bottlenecks in market coupling will have to be overcome before trading markets can become truly integrated. |
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‘The euro is our example’ by Stefan Schroeter Interview Hans-Bernd Menzel, ceo EEX |
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Climate compensation; is the planet getting what you pay for? by Gert van Wijland The rapidly growing market for voluntary CO2 compensation is developing quality marks and standards to battle its poor public image. In this way, market players hope to grow their business - and to keep the government out of it. |
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Oil from algae a long way to go by Leen Preesman Oil-from-algae could be a promising alternative to biofuels from land-based crops. But there are many hurdles still to overcome. Commercial production is at least ten years away. |
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Nuclear revival divides Germany by Stefan Nicola Germany agreed eight years ago to phase out nuclear energy by 2021. More and more politicians argue that the phase-out should be reversed, but they are faced with strong anti-nuclear sentiment. The issue could make or break a government in next year’s elections. |
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Why a Gas Troika and cartel will prove to be hot air… By Matthew Hulbert and Tariq Akbar, senior analysts at Datamonitor energy and utilities Despite endless media speculation that the world is about to witness the formation of a gas ‘OPEC’ spearheaded by a ‘troika’ of Russia, Iran and Qatar, such speculation is vastly overblown. Russia is currently working on a draft charter for the Gas Exporting Countries Forum (GECF) to sign off on in late November 2008 before the forum next meets towards the end of the year. |
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Kazakhstan’s gas: Export markets and export routes Shamil Yenikeyeff, Oxford Institute for Energy Studies As the second largest oil and gas producer in the former USSR after Russia, the method with which Kazakhstan chooses to develop its gas resources and export infrastructure will have significant implications for gas exports from Central Asia and the Caspian region, as well as for the existing European and Chinese plans for diversification of natural gas supplies. |
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Obama's Toughest ChallengeAmerica's Energy Crunch Comes HomeBy Michael T. Klare Of all the challenges facing President Barack Obama next January, none is likely to prove as daunting, or important to the future of this nation, as that of energy. After all, energy policy -- so totally mishandled by the outgoing Bush-Cheney administration -- figures in each of the other major challenges facing the new president, including the economy, the environment, foreign policy, and our Middle Eastern wars. Most of all, it will prove a monumental challenge because the United States faces an energy crisis of unprecedented magnitude that is getting worse by the day. |
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Parallel worlds of political risk: why geopolitics does and doesn’t matter for oil By Matthew Hulbert and Tariq Akbar, senior analysts at Datamonitor energy and utilities While OPEC was largely a gleeful spectator of the oil markets up to July 2008 when prices hit a staggering $147/b, it has resumed centre stage in the oil markets once more as prices plummeted to $62/b. Geopolitical friction was undoubtedly used to drive prices up, just as readily as investors ignored political r |
During April EER travelled through the world. In our story ‘Towards a future-proof energy system for The Netherlands’ by Gert van Wijland, you can read how the benevolent possession of a huge volume of natural gas is not per se stimulating a progressive transition towards the input of renewable energy sources. An in-depth research led to the conclusion that the Dutch have to accelerate to reach the EUtargets. That will not be easy in harsh economic times. Reiner Gatermann put together the facts concerning the difficult position in which the Swedish company Vattenfall has ended up. The title of his article is a possible indication of one of the main causes: Vattenfall - is the state the right and good owner? Of course, between the lines one can read that such a question also can be applied to similar relations in other countries...
Energy sources, sectors and systems, whether it concerns markets, volumes, technology, prices or politics nothing displays a standstill. The world of energy is like energy itself. Actual activities cast their shadows on the future, long term scenarios touch today’s decisions. It seems as if all time zones interfere. Our March features form an impression of this whirlpool or should I write worldpool...
"Where politics and markets meet" is the slogan of EER. Looking back over the articles we published over the past month, it is clear that this is a very appropriate motto. Boy, do politics and markets meet in the energy sector – and usually not in very pretty ways...
For this month's top story, we have selected Sonja's report on the Finnish Olkiluoto-3, the first so-called European Pressurised Reactor (EPR) that is being built in Europe. Does it represent the first practical demonstration of a new generation of nuclear power plants in Europe, or the last gasp of a dying technology? Although the project is late, over budget and unfinished, the Finns are confident that they will get their nuclear power plant running - and will solve the nuclear waste storage problem in the process. Sonja travelled north to learn about the Finnish way.
For this month's top story, we have selected Paul Hockenos' report on the growing number of energy co-operatives in Germany and their increasing impact on energy policy. It's an important story, I believe, because it may well indicate a trend for Europe. Energy cooperatives have been around for some time, but they are rapidly becoming bigger and more professionalised. This could have major consequences for incumbent energy suppliers. 
November was the month of the broad Energy Perspectives. The most important publication to come out this month was no doubt the IEA's annual World Energy Outlook (WEO). The WEO is not only getting bigger every year, it is also getting more and more publicity. This year's edition led to a veritable media storm, thanks to its sensational message that the US, after first causing a shale gas revolution, is now following this up with an unconventional oil revolution. If you have no time to peruse the WEO yourself, the best we can offer (and it is a good alternative indeed) is our UK correspondent Alex Forbes' analysis that we published on 19 November. This provides you with an objective yet well-informed and critical overview that you won't find in any of the major media nor in the WEO's own executive summary or in the IEA's press releases. Alex, who has closely followed the WEO over the years, concludes that – in spite of the cheers with which the document was greeted in the US – the IEA’s latest energy outlook is its gloomiest yet.