WTI Crude

Loading...

Brent Crude

Loading...

Natural Gas

Loading...

Gasoline

Loading...

Heating Oil

Loading...

Rotate device for more commodity prices

Breaking News:

Bay Area Sues Big Oil For Billions

Alt Text

The Single Biggest Player In The Electric Car Market

The announcement from China last…

Alt Text

5 Top Marijuana Stocks For 2017

The marijuana market is growing…

Alt Text

Does Russia Really Need The OPEC Deal?

OPEC and Russia are leading…

Scott Belinksi

Scott Belinksi

Scott Belinksi is an international energy consultant currently based in Moscow. His interests and areas of expertise include Eastern European politics, shale gas, deep-water drilling…

More Info

Is Europe’s Reliance On Renewables Dangerous?

Renewables

The European Commission released its long-awaited “Clean Energy For All Europeans,” otherwise known as the “Winter Package.” The package is a bundle of over four dozen legislative proposals ostensibly aimed at strengthening and standardizing the EU’s energy markets. The Package places a strong emphasis on increasing the Union’s use of renewables and reducing the usage of fossil fuels. The Commission’s blind spot for the pitfalls of relying too heavily on renewables and for Eastern Europe’s continuing need for affordable energy production, combined with the Package’s complete disregard for the importance of reliable baseload power in the overall European energy scheme, is a worrying sign.

According to its authors, the Plan is intended to reduce the Union’s dependence upon fossil fuels coming from Russia. It plans to achieve this goal by dropping energy usage on the continent by thirty percent over the next thirteen years, largely by making buildings throughout the Union more energy efficient. Indeed, up to forty percent of the EU’s energy is spent on heating, cooling, and electrifying buildings across the continent.

The EC says its proposals will boost the local economy as well. Beginning in 2021, the Plan allocates US$186 billion yearly in public and private investments in such sectors as energy, construction, and steel. Brussels defended these requirements by positing that such measures will help Europe decrease costs paid across the board for energy, which have gone up despite the significant dive in the global price of oil and gas. The EC says such a decrease in cost would, in turn, boost the overall economy in the region.

While the push to achieve energy independence is undeniably a smart move, renewables’ inherent intermittency has been shown to risk energy security – the latest example being South Australia, which suffered a state-wide blackout in October. When the Sun is behind a cloud and the wind is still, energy generation falls off, but the demand still must be met. It has long been an open secret that countries who promote renewables as part of their power production, fall back on gas- and coal-fired plants to ensure the power stay on.

A quick glance at the statistics show that Great Britain, France, Germany, and Italy as a group consumed sixteen percent more coal in 2013 than they did in 2009. In its push to wean itself from nuclear power, Germany has upped its coal consumption, leading to a forty-four percent increase in coal usage. It has also expanded existing coal mining operations and begun new ones. There’s no indication that this will do anything but increase, either. Coal is slowly filling half the country’s energy needs – it accounts for 45.5 percent at last count, which is a higher portion than it has been in two decades. Related: BP CEO Dudley: We’ll Double Our North Sea Oil Production By 2020

Countries to the east of Germany face an even greater and longer-term reliance on coal. In Poland, the Czech Republic, and Romania, the coal industry is a significant and powerful player in the local economy. There are more coal miners at work in the mineral-rich Silesia region of Poland than there are in the rest of the EU, all countries combined.

The mining industries in these Eastern European countries are dependent on subsidies to stay afloat, as the mines are significantly older than those in the west, and the deposits are significantly deeper. Consumers in these same countries also derive obvious benefits from keeping energy inexpensive and always available. However, the EU’s Plan as it is currently written prohibits such subsidies, putting Eastern Europe’s older mines and its coal companies in jeopardy.

As such, the EC is in danger of establishing two worlds within its borders, where countries in the West dictate to poorer Eastern European countries what power sources they should use. While countries like Germany are expanding their coal consumption without facing any obstacles, countries like Poland are routinely criticized for their desire to modernize their coal industries. The effect would be not only to risk the East’s energy security but also hundreds of thousands of much needed jobs. The “coal curtain” as some experts have called this, is poised to fall across Europe, cladding much the same territory as the Iron Curtain did thirty years ago. Related: Filling The Gap: Tomorrow’s Most Popular Oil Trade

Should the Commission choose to rectify its error, among the better compromises include clean coal. Methods for ever-cleaner utilization of coal continue to be developed at a feverish pace, in countries such as China and India. The feasibility of clean coal is hardly news to Poland though, as former Prime Minister Jerzy Buzek pointed out in an interview late last year. Saying that his country has “witnessed a huge technological transformation in the coal industry” because of his country’s focus on the use and continued development of clean coal, Buzek pointed out the fact that investments made in the clean-coal sector “quickly pay for themselves” by increasingly efficient uses of coal, and ever-diminishing levels of pollution when it is used. Earlier this month, Polish President Andrzej Duda echoed those same ideas, calling renewables not economically feasible at this point.

Focusing on renewable energy sources is all the rage nowadays, but it shouldn’t come at the cost of energy security, thereby threatening countries’ economic development. Concentrating exclusively on renewable sources and excluding further improvements in the use of fossil fuels is a mistake. Coal will continue to be a steady source of jobs and power, especially if new technologies are given the space to manifest themselves. The Commission’s plan ignores it at the EU’s peril.

By Scott Belinksi

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • Randy Verret on December 10 2016 said:
    Good article. I wish a few of our government officials (here) would bother to read it! All this 100% renewables "drivel" by 2050 or whatever these activist groups are pushing in the U.S is pure MANURE. Basically, the EU is (at best) creating a punishing consumer power market and (at worst) destabilizing their grid. All you hear is about the "German Miracle" with the propaganda in our media. What is that? Three times the cost per kilowatt hour for residential electricity or could it be more coal power plants to continue the ramp up of their GHG? Meanwhile, almost unnoticed, the U.S (still) has some of the most competitive energy costs in the world and it's GHG numbers are at 1992 levels by EPA estimates. Of course with the "Green Agenda" in full tilt, why look at the facts? I guess when our lights go out, we can blame BIG OIL or the utilities, right? When are folks like the Sierra Club going to be (finally) held accountable for the ongoing "Beyond Coal," "Beyond Nuclear" and "Beyond Oil & Gas" campaigns that threaten to de-stabilize our energy markets? It's about time for an HONEST debate about energy and the long transition away from fossil fuels. WAKE UP, folks...
  • Lee James on December 11 2016 said:
    Beyond, coal, beyond oil and gas, and ... beyond Russia.

    Russia is devoting all available resources to war preparation. Revenue to do this comes mostly from exporting petroleum. Oh... and whatever foreign governments wish to buy in newly floated Russian bonds, at a attractive prices.
  • C. R. Stucki on December 12 2016 said:
    Germany's ridiculous fear of nuclear power resulting from the Japanese tidal wave disaster is irrational to the extreme. Nuclear is the hope of the future to supplement renewables, and I pray the U.S. is smart enough to recognize that fact.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News