Thursday, January 05, 2006

Europe seeks home-grown power solutions

Europe seeks home-grown power solutions

ated Press/BRUSSELS, Belgium
By AOIFE WHITEAP Business Writer
Europe seeks home-grown power solutions

JAN. 5 11:29 A.M. ET The EU has a harsh New Year's resolution to keep after a gas dispute between Russia and Ukraine led to official exhortations for Europe to look for a wider range of suppliers and energy sources.
European governments must tighten their belts, concentrate more on renewable energy and reconsider nuclear power, EU officials said this week.
"As long as we spend more and more on energy, we will be getting more and more dependent," said EU Energy Commissioner Andris Piebalgs. "We should be looking more at the energy sources we have in the European Union."

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The Russian-Ukraine gas spat, which led to European customers reporting a sharp drop-off in their own gas supplies, is yet another wake-up call after oil prices last year rose above US$70 a barrel.
Unless it changes its consumption or savings habits, the EU will import almost 70 percent of its energy by 2030 and it will compete for a finite pool of oil and gas with energy-hungry boom economies such as India and China.
After the oil shocks of the early 1970s, European countries tapped into North Sea oil and gas deposits. But these supplies are dwindling, Piebalgs said. "The issue is to diversify supplies as far as we can."
Europe is a growth market for gas as it turns away from coal. In 2004, gas imports increased by 5.5 percent and consumption grew by 3.1 percent.
A quarter of Europe's imported gas comes from Russia, but the nation's dispute with Ukraine raised questions about its reliability as a supplier. If Europe is to lean less on the state-controlled monopoly Gazprom, it will have to buy more from North Africa and the Middle East, build new pipelines -- such as the Caspian Sea route via Turkey -- and use more liquefied natural gas, which is easier to pump and transport.
But these are short-term solutions. "Over time we can create a dent," said Valerie Marcel of the London-based Royal Institute for International Affairs. "Nuclear could feasibly take a bigger bite of the missing gas supply than renewables but even the rate at which gas demand is growing in Europe means that neither can catch up."
In June, the European Commission said the EU could shave 20 percent off energy consumption by 2020 without hurting the economy by taking action to use less power. It is also urging governments to turn away from fossil fuels, seen as a cause of global warming.
Piebalgs has chided EU governments for not meeting targets to generate at least 12 percent of their energy from the sun, wind and energy crops and wants them to reconsider an energy source many European countries are phasing out: nuclear power.
He argues that nuclear power must remain a source of energy and the EU must keep producing a third of its electricity from atomic power stations.
The atomic attraction is that -- unlike fossil fuels and some renewables -- there are no major economic or technical barriers to a large ongoing program, said Malcolm Grimston, also of the RIIA. While the initial investment is high, running costs are much lower than oil and gas power stations at current prices.
Nuclear power has a bad name in Western Europe even though it is the EU's biggest single source of electricity. Thirteen EU member states use nuclear power, while several others are determined to shun it.
Thousands of French and German protesters turn out each year to block German nuclear waste shipments.
Germany -- the EU's biggest gas importer -- reaffirmed its commitment this week to phase out the nation's nuclear power plants. Sweden also plans to shut down its 10 nuclear power stations in the coming decades.
Grimston said people's minds change as they become aware that the alternatives are limited and are not without problems of their own.
"The new designs ... should mean that it is easier to demonstrate the safety standards," he said.
France, Italy and Britain have not ruled out building new plants. In Finland, construction is already under way.
Italian Industry Minister Claudio Scajola said this week that nuclear power was "an important element for Italy's energy policy" along with using more LNG, solar and wind power.
France said Thursday that it would build a pilot nuclear reactor by 2020 designed to produce less waste and burn more efficiently. The nation generates nearly 80 percent of its electricity from nuclear power, more than any other country.
In November, Prime Minister Tony Blair said Britain faces a "difficult and challenging" issue as it turns off old nuclear and coal-fired power stations. "Some of this will be replaced by renewables, but not all of it can," he said.
The EU is pushing Europe to raise its use of renewables -- even though it admits that bioenergy made from waste and energy crops is generally more expensive than burning oil and gas.
Europe's one renewable energy success story is electricity. In 2002, 12.9 percent of EU electricity came from natural resources -- a share the Commission wants to increase to 21 percent by 2010. Most of that -- 9.9 percent -- came from hydroelectric power dams but other areas are gaining ground. Denmark generated 13.1 percent of its electricity from wind farms in 2002.
Oliver Schaefer, a policy director at the European Renewable Energy Council, said Europe could generate 30 percent of its electricity from renewables and become the most energy independent region in the world. But he said officials are being short-sighted.
"We are basing decisions on gas-powered stations that run for the next 30 years on forecasts that say oil will cost US$34 (euro28.14) in 2030," he said. "Who believes that? I don't, but I know what wind will cost and what sun will cost in 2030 -- exactly the same as today."


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