What EU policy responses to the Ukraine crisis reveal about energy security priorities

  • 26 Jun 2014, 13:00
  • Mat Hope

CC: F Kovalchek

With Russia threatening to  limit the flow of gas through Ukraine's pipelines, energy security has been pushed to the top of the European agenda. But between fracking East Sussex to insulating homes in Riga, policymakers can't seem to agree on the best course of action to secure Europe's energy supply.

We take a look at some proposals and assess if - and how - they contribute to Europe's energy security.

Defining energy security

But what is energy security? One reason there's a plethora of proposals is it doesn't mean just one thing.

Politicians have  three aims when designing energy policy: ensure consistent supply, keep prices stable, and address climate change. If they misjudge their policies, any of those three could go awry and make the system insecure.

Some policymakers are keen for a like-for-like swap - replacing Russia's gas with imports from elsewhere. Others see the potential for a coal revival, or argue that investing in low carbon energy sources is the best plan. Each option could help secure Europe's energy future in a different way, as this table shows:

Energy Security Table Coloured 3

Alternative fossil fuels

One option is to explore shale deposits dotted around Europe and ramp up domestic oil and gas production. Britain's prime minister David Cameron even suggested the UK had a "duty" to get its fledgling shale gas industry up and running in the wake the Ukraine crisis.

Read more

Updated: The UK, Europe, and an energy efficiency revolution

  • 19 Jun 2014, 16:30
  • Simon Evans

CC2.0 Mohammed Saeed

Update 19/6/14: Uncertainty over the European Commission's preferences for a 2030 energy efficiency target continue. A  leaked impact assessment suggests it favours a binding EU-level reduction of at least 30 per cent with no national targets. But commission President Jose Manuel Barroso and energy commissioner Günther Oettinger are said to favour a non-binding 27 per cent goal.  See paragraph five onwards for updates.

Does Vladimir Putin secretly want you to get your walls insulated? He certainly seems to be doing his best to encourage strong EU energy efficiency legislation.

But if the EU does raise its ambition on energy efficiency as part of its   2030 climate and energy package, UK energy saving policies would also have to become much more ambitious. How big a task would it be to meet an EU energy saving goal, and how would the UK go about it?

Persuasive Putin

EU member states are currently negotiating the details of the 2030 policy package that will set targets for emissions and - maybe - for renewable energy and energy efficiency too.

The UK and many other member states are   against an energy efficiency goal. But Russia's decision on Monday to   shut off gas supplies to Ukraine will have focused minds. The EU currently   spends more than €1 billion per day on imports, a figure that is expected to rise. Russia   supplies about a third of its coal, oil and gas imports. A 40 per cent energy efficiency target   could remove the need to import Russian gas entirely.

European energy commissioner Günther Oettinger is today meeting commission president Jose Manuel Barroso and climate commissioner Connie Hedegaard to discuss efficiency.   Germany and   six other EU member states have backed a binding efficiency target in a   letter sent to the commission. They write:

"The current situation in the Ukraine emphasises the importance of reducing dependence on imported oil and natural gas."

Read more

New statistics show world’s tentative steps towards low carbon energy

  • 17 Jun 2014, 17:00
  • Mat Hope

CC: Walter Baxter

Europe's green fields are becoming dotted with wind turbines, North American cars are chugging biogas rather than oil, and China's rooftops are ever more adorned with solar panels. Everywhere, there are signs that the world is undergoing a clean energy revolution. But for all politicians' talk of the  "promise of clean energy", new data shows the world is still heavily reliant on fossil fuels.

While countries are taking tentative steps down a path to a low carbon energy sector, BP's  annual statistical review shows just how long that road could be. We take a look at some of the potential obstacles ahead.

Curbing consumption

Policymakers are increasingly touting energy efficiency as a strategy to improve  energy security and curb emissions. But BP's data shows that whatever progress rich countries are making to reduce demand is largely being cancelled out by energy-hungry developing economies.

BP says global energy consumption increased by 2.3 per cent in 2013, continuing a long-term trend of growing energy demand - as the grey line on the graph below shows. Emerging economies were responsible for around 80 per cent of that increase, it reports.

BP Stats Global Consumption Blog

The data shows South and Central America, the Asia Pacific and Middle East combined were responsible for about 56 per cent of energy consumption. North America and Europe consumed around 20 per cent of the world's energy each.

The IEA says that if energy demand continues to grow at this rate, the world is on track for almost  four degrees of warming - so implementing energy efficiency policies will be key to curbing emissions. But Europe was the only region to see demand decrease compared to the year before - by about 0.3 per cent.

So as it stands, policymakers must do much more to reduce demand worldwide if energy sector emissions are to be curbed.

Accelerating renewables

As well as reducing demand, policymakers must ensure renewables provide for much more of the world's energy needs. For all renewable energy's growth, BP's data shows most of the world's energy demand is met by fossil fuels.

Read more

A detailed look at why UK homes are using less energy

  • 16 Jun 2014, 10:41
  • Simon Evans

CC2.0 Stephen Shrubsole

UK homes are using less energy than they used to. Demand for energy had been rising inexorably for decades, but has fallen about 11 per cent over the last ten years. So what changed? And will the trend continue?

At a conference last week energy secretary Ed Davey spoke of his desire to create an "energy saving society". Homes are using around a fifth less energy than they were in 2004, he said, and still more could be done.

A minor quibble with Davey's figure is that overall household energy demand in 2013 - the latest year available - was only 11 per cent below 2004 levels. Only in the particularly warm year in 2011 was demand 20 per cent down.

Still, demand really is falling. This is particularly impressive as the number of households is 6 per cent higher than it was in 2004.

Falling demand

The chart below shows that UK household electricity use peaked in 2005 (blue lines). UK household gas use (pink lines) peaked a year earlier, in 2004. DECC now produces adjusted figures that account for higher energy needs in cold weather. These adjustments (darker lines) smooth out temperature effects.

It's worth noting that UK homes use about three times more energy from gas (right axis) than from electricity (left axis). So falling gas demand has had a much bigger overall impact.


Read more

Competition and interconnection - how and where should we spend green energy subsidies?

  • 12 Jun 2014, 12:15
  • Simon Evans

CC2.0 Global Marine Systems

The government's new system to allocate green energy subsidies is called contracts for difference (CfDs).

The government plans to use auctions to annually divide up a fixed pot of money to support established forms of renewable power. Different technologies will compete against each other for support. Other less mature technologies may not have to compete for money initially, on the basis that they need the support more.

Best value for consumers

Consumer group Which? supports the scheme, but wants the money - which comes from a levy on household energy bills - to deliver the best value possible. Introducing competition more quickly for less-established technologies would help ensure this happens, it argues in a letter to the government seen by Carbon Brief.

It suggests offshore windfarms, for example, are being unfairly shielded from competition. Offshore developers should be forced to compete against each other for subsidies, Which? says, in theory driving costs down. This could happen even if offshore wind is insulated from competing against cheaper onshore wind, or power stations converting to burn wood instead of coal.

Massive power cables under the sea

Centre-right thinktank Policy Exchange also has views on how the scheme could be improved. It suggests allowing foreign green energy schemes to compete against those in the UK for government cash. Money could go to windfarms in Ireland, for instance, or hydropower schemes in Norway. The idea would be to deliver low-carbon power at the least cost.

Policy Exchange thinks that allowing foreign low-carbon energy projects to bid for CfDs would also indirectly give developers an incentive to build more interconnectors - large undersea power cables that allow trade in electricity between the UK and other countries.

It points out that France, Norway and Iceland all have much cheaper and much greener electricity supplies than the UK. French power is 36 per cent cheaper than the UK's and is 85 per cent lower carbon because most of it comes from nuclear or hydro. Norway gets its electricity almost exclusively from hydropower, making it 83 per cent lower carbon and 25 per cent cheaper than UK supplies.

Cheaper, cleaner power from overseas?

Policy Exchange suggests households in the UK could save up to £1 billion per year if there was more interconnector capacity allowing greater access to this cheaper, cleaner energy.

Read more

Why National Grid will pay companies to switch off

  • 11 Jun 2014, 14:50
  • Mat Hope

CC: Firstfreddy

Network operator National Grid yesterday announced plans to balance the UK's electricity supply and facilitate more renewable energy generation. As part of the move, it intends to pay some companies to use less power at times when demand is high.

That hit headlines, with the new measure variously described as an  "emergency plan" to avoid power blackouts and a  "safety net" to ensure the kettle always boils. So which is it?

Here's a guide to the small but significant new policy.

What is it?

The plan has two components. National Grid intends to pilot what it calls a 'demand side balancing reserve' this winter, and introduce a 'supplemental balancing reserve' next year.

The demand side reserve is the measure that  caught  the  media'sattention. National Grid will pay energy intensive business to reduce their use during peak times - 4pm to 8pm on winter weekdays. Reducing the amount big power users need at peak time should help National Grid match demand for power with supply.

National Grid says the measure should be good value for consumers, as it avoids the need to build additional power stations just to meet sporadic peaks in demand. National Grid stresses that the scheme is volun  tary, and no business will be forced to switch off. Many large companies already reduce their energy use in peak times to save money, it notes.

Moreover, the measure covers less than one per cent of peak winter demand. So the new measures are smoothing around the edges, rather than making a big dent in demand.

The supplemental reserve is something quite different. It's a measure intended to keep power plants that would be mothballed because of a lack of demand open. National Grid will pay energy generators to keep these plants - normally gas - in a state where they can be switched on quickly to meet peak demand.

National Grid already buys some extra power through the  short term operating reserve when there's unexpected shortages, such as when a power plant fails. The supplemental reserve is just an extension of that policy. 

Read more

Carry on coal? The cost of keeping the UK's dirty power stations alive

  • 10 Jun 2014, 16:30
  • Mat Hope

CC: Mitch Rue

Both parties in the coalition government got elected on promises to decarbonise the UK's energy sector. But as the next election nears, is the government considering extending the life of the UK's most polluting energy source, coal?  

The UK's coal power plants are getting old, with many that were built in the 1970s and 80s  due to be shut in the next few years. But in theory, the plants could be upgraded and kept open for another decade or so.

Yesterday, consultants Parsons Brinckerhoff released a government-commissioned  report looking into the cost of keeping the UK's coal power plants online. The report could be seen as the next step in a government plan to keep existing coal plants running, although the Department for Energy and Climate Change denies this.

So does the report offer any insights into the future of coal in the UK?

Paying to keep coal burning

There are two things that could influence the government's decision on whether to keep coal plants open: economics and politics.

Yesterday's report contains detailed estimates of what would need to be done to keep the UK's fossil fuel power plants open. It says companies would have to spend millions to upgrade existing equipment and add new technology to reduce the plant's emissions.

In January 2016, the European Commission's  Industrial Emissions Directive (IED) will require existing fossil fuel power plants to reduce their nitrous oxide emissions to 200 milligrams per normal cubic meter. That's about half the emissions they were allowed under the  Large Combustion Plant Directive, which the IED replaces.

To get to that level, the plants will have to add technology that converts the nitrous oxide into nitrogen and water. If the plants choose not to comply with the IED, they will have to curb their operational hours and close by 2023.

Parson Brinkerhoff's figures seem to suggest it could be around £147 million to keep an average-sized 1,000 megawatt coal power plant going for an extra 10 years.

Read more

Can the world curb global warming and save $740 billion? Only if the alternative becomes more costly

  • 09 Jun 2014, 14:40
  • Mat Hope

The world could save billions of dollars and avoid dangerous global warming if policymakers double the amount of energy people get from renewable sources, a new report claims.

Sounds great. But the calculation uses a slightly circular logic which relies on the assumption that the alternative - polluting - becomes more costly.

Curbing emissions

The  International Renewable Energy Agency (IRENA) calls for governments to increase renewable energy's global share from 18 per cent of demand in 2010 to 36 per cent in 2030. Doing so could prevent temperatures rising by more than two degrees above pre-industrial levels, it claims.

It bases that statement on figures from the International Energy Agency (IEA). The IEA says global emissions must not exceed 25 gigatonnes in 2030 to prevent warming of more than two degrees. IRENA claims global emissions could be limited to 25.5 gigatonnes in 2030 if policymakers follow its proposals. That's 15.9 gigatonnes lower than they otherwise may be, as this graph shows:

IRENA emissions

IRENA concludes "renewable energy and energy efficiency are the world's best chances to avoid catastrophic climate change". But it acknowledges those can't be the only policy focuses.

If global emissions are around 25 gigatonnes in 2030, the IEA says policymakers will have to accelerate their efforts to prevent dangerous warming in the following two decades. That means ensuring policymakers divert resources toward curbing industrial and transport sector emissions, too.

$740 billion

While few people doubt renewable energy's potential to curb emissions, critics remain concerned about how much a mass rollout could cost. But IRENA says its proposal could save the global economy $740 billion a year by 2030.

Read more

The EU energy security strategy in 5 graphs

  • 09 Jun 2014, 14:00
  • Simon Evans

CC2.0 World Bank

The EU wants to insulate itself against the risk of energy supply disruption. The crisis in Ukraine has heightened the sense of vulnerability, particularly for those countries in the eastern EU that rely heavily on Russian gas.

In a 237-page background paper the European Commission has explored recent and expected future trends to see how greater energy security could be achieved. Here are five graphs that give you a flavour of what it says.

1. The EU is becoming less energy independent, particularly for gas.

This chart shows that energy imports have accounted for more than half of total EU energy demand since 2005. The growing orange bars at the bottom are for gas. The large green bars are for oil. The blue-green chunk is for coal. The small slivers at the top are for other types of energy imports.

Screen Shot 2014-06-09 At 11.03.38

2. The EU is producing fewer fossil fuels

Fossil fuel production in the EU has declined dramatically since the mid-1990s. Gas production fell by 30 per cent between 1995 and 2012 (below left) and coal production by 40 per cent.

The decline was particularly rapid for oil as North sea production started to dry up (below right). EU oil production has halved in the decade to 2012. The UK is still the biggest producer but its share of EU oil production is down from four-fifths to three-fifths of the declining total.

Fossil Fuel Production EU

Read more

Intensity, pragmatism & flexibility: Three key components of Obama’s carbon pollution plan

  • 05 Jun 2014, 15:55
  • Mat Hope

CC: Greg Goebel

President Obama's plan to cut US emissions was launched with great fanfare earlier this week. Analysts are now scratching their heads trying to work out the details. Here are three of the plan's key components.

Carbon intensity

Monday's  announcement led to a spate of headlines declaring the plan would cut power plant emissions by 30 per cent by 2030. But while that's the potential outcome of the plan, it's not the goal.

The EPA is not telling states how much their power sectors can emit. It is telling them how much they can emit per unit of power generated. The EPA calls this  a "pollution-to-power ratio", but it's more often called carbon intensity.

Based on expected demand for power, it thinks these limits will add up to a 30 per cent power sector emissions cut compared to 2005. But its expectations of demand could be wrong. So emissions could go up even if states meet their carbon intensity targets.

Read more