Energy infrastructure is a fundamental requirement for the production and supply of energy, which is the linchpin of our economies and societies. But with increasing demand, the necessity of reducing greenhouse gasses, falling reserves of traditional forms of fuel, price volatility and widespread fiscal constraint, how are we supposed to approach the question of replacing and upgrading old energy infrastructure? This is one of the big questions being considered by the EU and its Member States, with the Commission due to propose legislation on energy infrastructure this autumn.
Energy “infrastructure” refers not only to the electricity grid, wind farms and solar plants, but infrastructure for oil, gas and coal. Yet less than half of the known economically recoverable oil, gas and coal reserves can still be emitted up to 2050 if we are to achieve under 2 degrees warming. Thus, the energy infrastructure we plan and build today, has deep implications for the kind and amount of energy, and the greenhouse gasses we emit, in the critical decades to come. This article considers some of the proposals for, and the discussions surrounding, the future of Europe’s energy infrastructure: permitting procedures, grid upgrade and renewables, and nuclear power.
Energy Infrastructure Permitting
The European Commission hopes that streamlining the permitting procedure will encourage the estimated €200 billion investment in energy infrastructure needed in the next decade. QCEA responded to a Commission consultation on the permitting process for energy infrastructure, because the implications of what we build today (and the processes by which we choose it) make it very important that the voices heard by policy makers are not only the voices of those who profit from the sale and consumption of fossil fuels.
Our major concern about this Consultation and the breakdown of the respondents to it, is what is not being represented or included – the need for a holistic and concerted effort to make sure we meet our energy savings (and greenhouse gas reduction) targets. The preparatory work for legislating on energy infrastructure doesn’t seem to be taking into account the EU’s commitment to reducing our energy use, at all. Having done some analysis of the respondents and responses to this consultation, QCEA found that not only were the vast majority of responses to the consultation unsurprisingly from industry, but the majority of industry that responded had economic interests primarily in fossil fuels or nuclear energy. Furthermore, non-registered stake-holders i.e. interests who have not declared themselves on the EU’s transparency register, far outnumber registered stakeholders (except in the renewables industry!), raising concerns over the basic standards of transparency and declaration of interests. We also found instances of disproportionate emphasis and selective consideration given to some views over others, in the Commission’s summary report. You can read more about it in QCEA’s full analysis of the consultation, soon to be available here.
Renewables in an upgraded, pan-European electricity grid
Scaling up the capacity for generation and transportation of renewable electricity is a significant part of the energy infrastructure picture. As explained by EurActiv, the integration of large amounts of renewable electricity requires “massive upgrades to the electricity grid, which was designed at national level for large-scale centralised production. New interconnections and intelligent systems will be required to handle decentralised, intermittent power sources such as renewables”. An event run by the European Wind Energy Association on 22 September 2011, examined the need, benefits and challenges of a European electricity grid and a single European electricity market. Both are seen as prerequisites for the integration of large-scale renewables, particularly wind, into the grid.
The investment costs for energy infrastructure (both low-and-high carbon) are staggering – but as Eddie O’Connor, the CEO of Mainstream Renewable Power argued – the world is transforming from fuels that cost to fuels that are free. And we must bear this in mind in how we think about funding the transformation, adjusting the old reality to the new one. The cost of new grids may be high, but then “we will have free fuel forever”.
Discussion around how we plan to meet Europe’s future energy tends to bring up questions like “how can we plan infrastructure when we don’t know the future energy mix, or how demand for electricity will respond to prices?” Answers tend to revolve around balancing “continuity with flexibility”, and the use of different scenarios – or roadmaps – appraising them, based on cost, security, emissions and dependency. However, a less frequently asked question is “why do we appear to be planning energy infrastructure to meet a projected increase in demand in Europe, when the EU has a commitment to energy savings”?
I asked the Commissioner for Energy’s Head of Cabinet, Michael Köhler, how the EU’s commitment to 20 per cent energy savings, compared to business as usual projections, by 2020, is reflected in the way the Commission is setting its infrastructure priorities. Because today’s infrastructure choices have such strong implications for the amount of energy Europe will consume in the future, unless we plan infrastructure to meet lower levels of demand, the commitment doesn’t appear to be a genuine commitment at all.
Left to right, José Carlos Fernández, Michael Köhler, Sonja van Renssen, Eddie O'Connor and José Carlos Fernández, at EWEA debate on energy infrastructure. Photo CC BY SA Rachel Tansey
Köhler responded that if we achieve 20 per cent savings, which, he emphasized, is a big IF, that might not mean a decrease in primary energy use, because it is 20 per cent savings compared to business as usual projections. However, as shown in the Commission’s own graph, presented by a representative from DG Energy a few weeks before, 20 per cent less energy use in 2020 compared to business as usual, still shows, quite clearly, that we would be using far less energy than today, by around 200 million tonnes of oil equivalent. The other critical point to make is that, because the EU must cut its domestic emissions by at least 80% by 2050 (compared to 1990 levels), and because different sectors offer different possibilities to become green (cost, speed etc.), the emissions cuts will not be spread equally around the economy. The power sector is expected to lead the way. Energy companies need to cut carbon-dioxide emissions by up to 99% by 2050. The EU’s own targets necessitate that we plan our energy infrastructure to meet lower demand, and with zero emissions. It is time the EU institutions and Member States took its own commitments seriously, by:
- making the energy savings target binding;
- making policy that reflects the reduced demand levels we recognize we need to meet, and;
- using its infrastructure priorities and permitting process as a means to reaching these targets, rather than locking ourselves into a high-energy-high-carbon future.
Nuclear power
No discussion about energy infrastructure would be complete without some debate about the future of nuclear energy. At a policy dialogue held by the European Policy Centre, “After Fukushima – the future of European nuclear power”, on 23 September 2011, QCEA heard from Phillip Lowe, the director-general of DG Energy at the European Commission, that before the Fukushima accident, 143 nuclear reactors in 14 Member States were producing almost 30% of the EU’s electricity and two thirds of its low-carbon power. Fukushima did not radically alter the position of most European countries, it simply reinforced or speeded up existing national trends.
Germany has had a consensus since the 1980s about phasing out nuclear, the question was timing. Switzerland, which has followed Germany in announcing its phase-out of nuclear power, was already facing the fact, as the Swiss Environment and Energy Minister has noted, that nuclear energy is “becoming more expensive, due to the rising cost of making plants safer and more secure.” Indeed, given that energy production costs must include, inter alia, load factors, capital investment, fuel costs, operation costs, lifetime of the system, decommissioning and waste management, it has been argued that the majority of costing data favours onshore wind power to nuclear, including levelised energy costs. Nonetheless, France and Finland, amongst others, who saw a strong role for nuclear in their energy mixes prior to Fukushima, are pushing ahead with plans to build new reactors, albeit with the additional challenge of ensuring very high safety levels within original cost limits.
But, of course, national decisions about whether to continue with nuclear power are only part of the picture, because, as Lowe noted, nuclear safety does not stop at national borders – the effects of accidents are felt across Europe. The other major issue is the disposal of radioactive waste, for which the Radioactive Waste Directive was adopted in July. An understandably outraged MEP, Rebecca Harms, co-chair of the Greens /European Free Alliance group, responded to this by noting that “it is a disgrace that it was only after the Fukushima accident that the EU delivered a directive on disposing of nuclear waste”! Moreover, the fact that it took the Fukushima disaster for Europe to wake up to the fact that it has no binding nuclear safety standards, after 50 years of using nuclear energy, is shocking.
There were strongly pro-nuclear voices present too. Lady Barbara Judge, chair emeritus of the UK Atomic Energy Authority, argued that nuclear energy is the only energy choice that can answer “Yes” to the demands of energy security, independence and climate change. However, this seems an odd claim, since there are almost no domestic supplies of uranium in Europe (according to Euratom statistics, in 2010, only 3 per cent of natural uranium purchased by EU utilities came from within the EU – 556 tU out of 17 566 tU – see Appendix 4 of Euratom 2010 Annual Report), with 2.5 per cent having “Other and undetermined” origins. So much for independence and security! And as for climate change, which can be seen as an unacceptable (and unpayable) environmental price for our lifestyles and energy use, I would argue that radioactive waste is also an unacceptable environmental price to pay (especially because there are alternatives – see below).
Left to right, Jason Anderson, Lady Barbara Judge, Fabian Zuleeg, Philip Lowe, Rebecca Harms, Juhani Hyvärinen, at EPC debate on nuclear energy. Photo CC BY SA Rachel Tansey
The bulk of Judge’s argument however was that in order to meet the energy demands of the world, we are going to need all sorts of energy – oil, gas, nuclear, renewables – “a bouquet of energy”. Nuclear provides the necessary base-load generation, unlike renewables, which are only a top-up; “if you depend on them, it’ll be a dark, cold night, you’ll turn on a light and it might not go on – we don’t know!” An interesting comment (or scare-tactic) given that she later claimed “those who are pro-nuclear talk about why nuclear is good but never about why renewables are bad, whereas the pro-renewables always talk about why nuclear is bad”.
However, the divergent views that cropped up about energy base-loads provide some interesting insights. Nuclear, it was argued, provides a steady, reliable base-load: without it, what will provide that base-load, in 2030, in 2050? Jason Anderson, head of WWF, argued that we’re looking towards a new system, different models with greater variability. Talking about ‘base-loads’ is using old language. We need to move beyond the idea of base-loads to more intelligent demand and supply management, with a greater role for energy storage. A smart system that can “fill the valleys and shift the peaks to the supply”, without having a base-load acting as a burden on the system. Anderson’s analogy for those who insisted on the need for base-loads was that if you’re used to a horse and cart, the first time you see a car, you might ask where the dung is to be stored.
Anderson explained that the WWF’s priority is decarbonisation by 2050 by sustainable means. Yet, they do not consider nuclear to be part of this picture, because:
- the very low probability but very high impact safety risks significantly add to the costs;
- very little progress has been made on long-term waste facilities – this means the use of nuclear power is irresponsible;
- the costs are consistently higher than predicted, which negates the supposed benefits it has over other low-carbon technology. Nuclear power’s costs increase with time (because of more and more stringent safety standards), unlike other renewables. For example, in the time it took for the costs of the only two new build nuclear plants in Europe since the Chernobyl accident in 1989 to balloon, solar PV halved in price.
Moreover, there are viable alternatives to a future with nuclear power, and a future of nuclear power hardly appears viable at all. To replace fossil-fuel-energy use and meet the projected future energy demands, nuclear energy production would have to increase by 10.5 per cent per year from 2010 to 2050 – which, quite frankly, is nowhere near to happening. WWF has an alternative vision, of a 100 per cent renewable energy supply, with a) energy savings (including binding targets!), and b) an interconnected grid with advanced supply and demand management. And this picture is not compatible with the use of nuclear energy, which would compete rather than complement renewables. Nuclear plants can’t be turned off when demand is low (neither can coal or gas or any traditional power station), so it is renewable energy sources – wind turbines, solar plants, etc. – that get turned off. Moreover, having nuclear power as a base-load disincentivises energy efficiency and savings. With a inflexible base-load there is a certain amount of energy produced that needs to be used, and being more efficient and reducing consumption won’t have an effect on inflexible forms of production like nuclear (or other combined cycle power plants, be they coal or gas, etc.). Thus, investing more in nuclear now will impede long-term decarbonisation, because it will hamper the development and spread of renewables.
As one commentator put it, the European Union cannot tackle the global energy crisis, reduce carbon emissions and achieve its sustainable growth objectives by engaging in half measures.
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