A new report by the Belgrade-based NGO CRTA shows that the Serbian government is supporting the Kostolac coal power plant and mines with loan guarantees and potentially VAT exemptions. Propping up the already dominant coal sector, however, will likely further increase Serbia’s vulnerability to extreme weather events. Increasing Serbia’s energy efficiency and renewables generation would be the wiser choice.
by Pippa Gallop, cross-posted from the Bankwatch blog
Since 2006 when the Energy Community was founded and its member countries committed to adhere to EU legislation on state aid, the Serbian government has provided several forms of support for the Kostolac lignite power plant and mines company, part of state company Elektroprivreda Srbije (EPS), and is now planning to provide further support by approving loan guarantees in the National Assembly for the construction of the 350 MW Kostolac unit B3.
The state support for Kostolac outlined in the new report (pdf) is just one example of how Serbian state authorities are systematically propping up an already almighty coal industry. If plans for a new energy strategy for Serbia are anything to go by (discussions are ongoing about the blueprint for the energy sector for the period 2015-2025), Serbian authorities also plan to continue with this kind of support for the dirtiest of fossil fuels into the next decade.
On a path prone to disasterSerbia, as a member of the Energy Community, has committed to abide by the EU’s complex rules on subsidies and it is not yet clear whether the support outlined above is in line with these. But in any case, as a candidate country for EU accession and a member of the Energy Community, Serbia needs to increase its energy efficiency and reach a renewable energy target of 27 percent by 2020. This implies a decrease in the percentage of coal in the energy mix.
But these are not the only reasons to pursue such a path. Serbia, like all of south east Europe, is vulnerable to natural disasters, including those exacerbated by climate change such as floods, heat waves, cold waves, droughts and forest fires. This May’s tragic floods – which claimed at least 51 lives and led to the evacuation of nearly 30,000 people from flooded towns and villages in Serbia alone – propelled the issue into the global headlines, but extreme weather events have been increasing in frequency for years already.
Among others, between 2000 and 2010 eight serious flood events affected 51 290 people and killed four (pdf), while a 2012 drought led to the loss of 45 percent of Serbia’s maize crop (pdf).
With each disaster costing huge amounts of money to clear up, Serbia, like other countries in the region, needs to be quicker in recognising its self-interest in slowing climate change and making its infrastructure more resilient to extreme weather events.
In this respect, lignite power stations are problematic in both cause and effect. On one hand, coal is the biggest contributor to climate change (IEA, pdf). At the same time, coal power plants are vulnerable to extreme weather, as the recent Serbian floods showed, in which two pits of the Kolubara open cast lignite mines were completely flooded – with estimated costs of EUR 100 million – and electricity generation was cut by 40 percent at the height of the floods. While a mammoth effort to stop the Kostolac B plant from being flooded was ultimately successful, here too it was a close shave and could easily have resulted in generation capacity being shut down.
At the other end of the scale, coal power generation is also extremely water-intensive and – like hydropower and nuclear – vulnerable to drought. Some countries have started to recognise this problem (pdf) however in south east Europe the discussion so far on drought has centred almost exclusively on hydropower.
The positive flip-side is that non-hydropower renewable energy is both a climate change mitigation tool and an adaptation one, since it is decentralised and with the exception of biomass has no CO2 emissions during operation, and energy efficiency measures are better still. Yet Serbia, along with its neighbours, consistently treats these as a side salad rather than the main dish.
After the recent floods it is high time for Serbia to think again about its energy strategy – a new one of which is currently in its draft stages – and avoid tragedies recurring again in the future. But as money often ends up being the defining factor in what goes ahead and what doesn’t, CRTA’s new report (pdf) gives every reason to re-think state support for the coal sector whether or not Serbia opens up its draft energy strategy for discussion again.
With the presentation on June 18th of a comprehensive energy transition programme the French energy minister has started to fulfil promises made during the 2012 Presidential election campaign.
The programme is a valuable contribution to the ongoing discussion on European energy and climate policy beyond 2020 and the preparation for the decisive international climate conference in Paris in the fall of 2015.
France wants to create a new “energy model” for the post-fossil era that should make it less dependent on fossil energy imports, create jobs and help develop new energy technologies. Energy efficiency and renewable energies enter the forefront, nuclear power loses its predominance.
Its overriding objective is to reduce energy consumption by half until 2050, an ambitious objective.
To that end, it defines energy targets and some 50 specific actions addressing energy efficiency, transport, renewable energies and administrative procedures.
Nuclear power will continue to remain the main pillar of French electricity supply, though its share in power generation is set to fall from 75% presently to 50% by 2025.
France is thus proceeding differently from Germany which – somewhat too hastily – envisages to shut down its last reactor by 2022. An adequate French nuclear capacity might supply Germany with electricity in periods without sunshine or wind and avoid it from having to install extra gas fired power plants for this eventuality. One more reason for the rapid completion of the single power and gas market!
In order to halve its energy consumption France intends to launch a campaign for more energy efficiency, especially in buildings, which account for 44% of C02 emissions (123 million tons). Many French citizens face high heating costs due to insufficient thermal insulation: while average households have to shoulder an annual bill of € 900, those with good insulation pay only € 250 and badly insulated houses as much as € 2500. The government therefore wants to renovate 0.5 million apartments annually in order to reduce the energy consumption of housing by half until 2050.
It will offer significant fiscal incentives and loan facilities to facilitate the necessary investments. It will also step up training for some 25.000 energy specialists annually, set up demonstration buildings that achieve a positive energy balance through the combination of perfect insulation and solar energy installations. Municipalities will provide one-stop desks to advise citizens about fiscal advantages and credit facilities.
Transport accounting for 27% of CO2 emissions and most of the oil consumption is the s second major axis of the programme.
Here France is much more ambitious than Germany, which has focused on “green electricity”. By 2030 the transport sector should obtain 15% (7% in 2012) of its fuel from renewable sources, above all biofuels and green electricity. The government will grant premiums for the purchase of e-vehicles indefinitely .
In addition, it will continue encouraging the use of bicycles as an alternative to cars, most of which are used for trips of less than two km.
Recycling will be the most innovate chapter of the new energy model. The more material, from metals to paper, is being recycled the less energy will be necessary. France already recycles some 50% of all materials. But it wants to do even better and progress toward the “circular economy” which will become the paradigm of the future.
To implement this ambitious programme the French bureaucracy will have to simplify and accelerate its procedures. This is the last and not least important aspect of the programme.
But first of all a legislative proposal needs to be presented to stake holders, civil society and, of course, parliament, for an intensive nation-wide debate, which should last until October/November. Implementation, which is crucial, will not start before the beginning of 2015.
If everything proceeds according to schedule, France can proudly present its comprehensive approach toward energy and climate to its EU partners and the international climate conference in Paris in November 2015 for inspiration.
Eberhard Rhein, Brussels, 22/6/2014
EU energy ministers have struck an agreement to limit the use of first-generation biofuels with negative indirect land use change, or ILUC, effects. The agreement would cap the share of such fuels in transport at 7 per cent, higher than the 5 per cent proposed by the Commission and the 6 per cent approved by the European Parliament last year. The proposal is expected to come before the Parliament this fall. Several countries — mostly in Eastern Europe but also France and Spain — said that the 7 per cent cap was the lowest they would go. Ministers also agreed on a non-binding 0.5% national sub-target for advanced biofuels.
The Sustainable Aviation Fuel Users Group (or SAFUG, a consortium of airlines and aerospace firms of which Boeing is a part) has called for policymakers to consider mechanisms to lower the contribution of high ILUC risk biofuels and create incentives for sustainable fuels that have been certified as low risk of ILUC. SAFUG members made a public pledge to promote robust standards for sustainable aviation fuels.
The aviation industry is committed to developing high-efficiency, sustainable advanced biofuels. These fuels can reduce the sector’s carbon footprint, provide a more diverse (and thus resilient) supply of energy, and develop a new, environmentally progressive industry. And as the industry develops these fuels, it is working to ensure they avoid ILUC effects.
Montenegro’s new draft energy strategy needs cutting down to size if environmental and economic damage is to be avoided.
by Pippa Gallop, cross-posted from the Bankwatch blog
Looking at the Montenegro government’s draft White Paper on the country’s Energy Development Strategy until 2030, due to be approved on June 19, you would never think that this is a country of around 650 000 people that plans to join the EU within six years.
Why? One reason is that the amount of planned electricity generation infrastructure is reminiscent of a bigger country. Three new major projects are planned to be carried out simultaneously during the next few years – the Pljevlja II coal power plant (220-250 MW) and Moraca (238 MW) and Komarnica (168 MW) hydropower plants – which seems ambitious to say the least, especially considering that the last tender for Moraca hydropower cascade failed in 2011 when not a single investor applied.
Why does Montenegro need so much electricity? The short answer is that it doesn’t. For decades Montenegro’s electricity demand has been largely dictated by the Podgorica Aluminium Factory – KAP – which has at times used around 40 percent of the country’s electricity. But the company has been in long-term decline and has been bankrupt since last year. Undeterred, the government’s draft White Paper sees the factory working at half capacity during the coming years.
Another driver for the ambitious plans is economic growth – notoriously hard to predict – which the White Paper puts at 3.7 percent from 2010 until 2015. But so far Montenegro’s annual GDP growth hasn’t hit that figure even once since 2010, let alone averaged it, and according to the EBRD’s (pdf) and the World Bank’s current forecasts it doesn’t look like it will do so by 2015 either.
Even that electricity that Montenegro does use could be reduced significantly if more attention was paid to residential energy efficiency and stopping wasteful practices such as using electricity for heating, yet the government is not pursuing this potential with anything like the zeal it reserves for new large infrastructure.
In addition to overestimating domestic demand, the Montenegro government is set on positioning the country as an ‘energy hub’ with spare electricity to export to its Balkan neighbours and Italy. This might be fine if it had a vast supply of clean energy sources to export environmentally benign electricity from, but this is not the case. The Moraca and Komarnica dams are both highly controversial due to their impacts on protected natural areas, and one of the planned sources of electricity for export is none other than the Pljevlja II lignite power plant. The town of Pljevlja is already choking from years of lignite pollution and its inhabitants can hardly be expected to be thrilled at the prospect of a new lignite plant that will export the electricity and leave the pollution behind.
The existing power plant in Pljevlia.
Much of the draft strategy also overlooks EU rules and obligations, even though decisions taken now will only just be being implemented when Montenegro joins the EU, assuming it manages to enter by 2020 as planned. Montenegro has adopted a renewable energy target of 33 percent by 2020 as part of its Energy Community obligations, but it names Moraca and Komarnica as important for achieving it, even though the same document says they will be ready in 2021 and 2022 respectively. The strategy foresees an increase in greenhouse gas emissions until 2030, in a period when the EU as a whole plans to decrease its emissions by 40 percent compared to 1990 levels. And the Industrial Emissions Directive, which should play a decisive role in decisions about the planned and existing Pljevlja power plant units, is treated as something hardly worth mentioning.
In short, the draft strategy is outdated before it has even been approved. Rather than rushing ahead with it, the Government should scale down its ambitions to something more achievable and befitting of an ecological state.
Find out more: New website for coal campaignersBecause of some investors’ undiminished appetite for financing coal power, Bankwatch created an interactive toolkit that explains how to contact the investors behind a project, which policies guide their decisions and how best to influence them.
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