Europe must diversify energy sources, say experts

Britain might not be reliant on Russian gas to keep warm, but British utilities are only too aware that if Moscow turns off the taps this winter, there will be significantly increased demand for alternative gas supplies and higher prices to match.

As a result, utility executives will have been keeping a close eye on talks in Berlin over the weekend of 27 September, where the European Union’s (EU) energy commissioner Günther Oettinger successfully mediated a gas supply deal between Russia and Ukraine to head off a supply freeze.

Meanwhile, the Ukraine crisis has been focusing minds in Europe and Britain about the long-term need to diversify supplies. The issue was a high priority at a European Energy Security Forum conference in Brussels on Friday, attended by Utility Week.

It heard how the use of industrial waste gases must be intensified to boost energy security across Europe, to reduce help reduce the continent’s 60% reliance on imports.

New technologies are now able to make important profits from waste gases used to generate base-load clean energy, Alain Castro, CEO of US-based Ener-Core Inc, said.

Yet there is still too much disposal of such gases such as methane by venting them into the atmosphere or flaring, he stressed. With this known to be a significant contribution to greenhouse gas generation, Castro complained: “Few are asking about using waste gases rather than disposing of them in ways which also provide a significant amount of air pollution.

“Turbines and reciprocating engines powered by waste gases offer an alternative solution to the renewables line of thinking. Waste gas technology provides base-load power and heat continuously,” he added.

However, while admitting most waste gases are not viable as such for power generation, they can be made so by oxidation, thus providing additional home-grown and reliable gas feedstocks.

By chance this debate on Europe’s energy dependence took place on the day Hungary signed a deal to increase gas imports from Russia aimed at heading off its vulnerability to a Russian gas embargo in the continuing Ukraine crisis. As it stands, Budapest looks as though it has promised to stop resupplying Ukraine through its own pipelines.

That agreement certainly sharpened the conference discussions given the background of Europe’s declining use of nuclear power and coal plants while strongly supporting renewables in final energy consumption.

Professor Britta Thomsen, of Copenhagen Business School, was one speaker calling for Europe to redouble its green-energy capacity expansion to ease its import dependence. She hoped that 75% of European Union (EU) energy production could be from renewable sources by 2050. “Most of all, it involves lower energy consumption through efficiency and conservation and requires that energy consumption be tailored to availability,” she argued. There is no doubt, said Thomsen, that Germany’s aggressive expansion of renewables through its Energiewende programme would be influential on a large number of EU member states.

Thomsen however was less than sanguine about the European Commission’s proposal for a new 2030 climate and energy framework, which she said “lacks decisive steps for a more integrated and ambitious RE [renewable energy] framework; it proposes an RE share of only 27% by the target date – and completely fails to consider national sub-targets,” she complained.

But she was nonetheless happy with one element of EU strategy to launch energy security stress tests to check how its existing energy system can cope with risks and to develop back-up mechanisms – which also implies a shift to alternative fuels. This would be especially relevant if Europe accused Russia of further military adventurism, intensifying current sotto voce discussions about boycotting Russian gas.

A contribution by Professor Christian Breyer, Lappeenranta University, Finland, suggested that renewables such as on-shore wind energy, solar and hydro power could provide up to 80% of future power production, even 100% in optimal circumstances. Such ambitions are feasible in economic and ecological terms, he claimed.

“The question is whether they are possible in political terms.  There is no lack of energy resources in Europe, he continued, but RE policy has to be redefined in the EU. For instance, Ireland already has excellent prospects of winning 100% in renewables.”

Breyer’s optimistic assessment suggested the power sector could reach power generation cost levels under EUR100/MW/h for 100% RE supply in the medium term.

Echoing Castro’s comments, he said biogas production should be developed as an important substitute to natural gas, providing sustainability criteria are met.

On a political level the meeting was less optimistic than the technical presentations. Jeppe Kofod MEP, member of the European Parliament’s industry, research and energy committee, described Europe’s energy difficulties as “the tragedy of the foreseeable crisis” echoing the energy crises of the 1970’s.

He said European governments must face up more realistically to the geo-political consequences of EU energy sources and the types of energy EU members consume: “The promise of a domestic, that is to say European, shale adventure, has seriously impeded necessary developments towards both energy supply diversification and energy mix diversification. Waiting for the promises of tomorrow, we let the opportunities of today pass us by,” the socialist group member said.

Indeed, shale oil came in for a special drubbing at the conference. Europe should not raise its hopes that this energy source could bring any substantive benefits said Matthias Altmann, senior consultant, at German energy advisors Ludwig-Bolkow-Systemtechnik GmbH, not least because its long-term losses causing serious financial difficulties.

“Production costs are expected to make unconventional production uneconomical in most, if not all, European resource basins – unless gas prices are to rise to unprecedented levels,” he warned.

“In this situation aiming at supply security should focus more on avoiding natural gas consumption by energy savings and by replacing natural gas by RE while putting less emphasis on risky unconventional resources,” Altmann stressed.

He said, even without the Ukraine crisis to consider, Gazprom is having difficulty in maintaining production – currently only at 1987 levels – and immediate succor from the USA via LNG is unlikely given Europe’s shortage of LNG capacity, which in any case is an expensive supply method.

Moreover, gas production in the UK is falling, as in The Netherlands which has passed peak production, to decline to practically zero by 2035. This means the EU will have to rely more on imports from Russia and North Africa: “Between the projected deficits in gas supply and the expected demands to be made on them, there is no answer,” claimed Altmann.