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Backsliding towards fossil fuels
27/7/2022
6 min read
Feature
As Russia threatens to stall or cut-off gas supplies next winter, an alarming number of European countries, including the UK, are backtracking on climate pledges – firing up mothballed coal plants temporarily and boosting oil and gas developments. Brian Davis reports.
Can climate plans keep on track? Faced with the threat to limit or cut-off gas supplies from Russia due to the Ukraine war, a growing number of European countries are adopting measures that ‘backslide’ from well-publicised climate change targets.
As a result, European Commission (EC) President Ursula von der Leyen recently warned European Union (EU) members ‘not to backtrack’ on the long-term drive to cut fossil fuels as several nations turn to coal following Russia’s decision to limit their gas supplies.
Others have ramped up gas drilling initiatives, while some governments seem set on u-turns which will greenlight drilling operations that had previously been taken off the table.
For example, a drilling operation in the Dutch-German North Sea which had previously been halted by objections in Lower Saxony has recently been given the go ahead by the Dutch government ‘because of the war in Ukraine’. And Shell is reportedly reconsidering its pull-out from the controversial Cambo oil field development offshore the Shetland Islands.
IEA warning
The International Energy Agency (IEA) has warned that Europe should be prepared for Russia to turn off all gas exports to the region this winter – although this is not a foregone conclusion by the Kremlin.
IEA Executive Director Fatih Birol told the Financial Times that ‘measures taken by European governments’ had ‘not gone far enough to ensure that energy supplies were ready for a potential cut-off’. He maintained that the bloc needs a contingency plan, particularly when it comes to gas.
The EU has been working on measures to reduce reliance on Russian fossil fuels under the RePowerEU plan, with an emphasis on wind and solar to diversify in particular from gas. However, some member states have warned that this could mean burning more fossil fuels to bridge the energy gap.
More recently, the EU has proposed a gas reduction plan to reduce gas use in Europe by 15% until next spring.
Nord Stream 1 cut-off
Meanwhile, in late June, Russia cut off 60% of capacity of the Nord Stream 1 pipeline, blaming maintenance issues. This action was seen by some gas-dependent countries as a significant threat. There was also concern that Moscow could slash supplies further before the winter.
Russia’s state-owned Gazprom blamed the reduced capacity on the delayed return of equipment being serviced by Germany’s Siemen’s Energy in Canada, due to sanctions. In a surprise move, Canada temporarily waived sanctions and agreed to release the turbine equipment for the 10-day Nord Stream 1 maintenance programme. However, when the pipeline reopened, it did so at a reduced capacity; with Gazprom later announcing this would be reduced to just 20% capacity on 27 July in order to carry out maintenance work on a second gas turbine.
Within days of the first pipeline capacity reduction, both Germany and Austria announced the emergency restart of coal power stations to protect their economies. New legislation will allow Germany to use 15 coal-fired power plants, all of which were slated to be phased out this year or next.
Germany’s move to use previously mothballed coal plants has alarmed environmentalists given the climate change crisis. Germany had an ambitious target of 80% clean energy in its power mix by 2030 (raised from 65% last April). Officially, the country is aiming to phase out coal by 2035, and this target is still believed to be in place. Currently, about half of Germany’s electricity is produced by renewable sources, and green lobbyists express confidence that the retro-fossil fuel move will only be a temporary measure.
The Netherlands has also followed suit, lifting restrictions on power stations that use fossil fuel, where previously they had been limited to a maximum of 35% of the country’s power capacity. Removal of the cap on production at coal-fired energy plants is the first phase of the country’s energy crisis plan.
Denmark has also initiated the first step of an emergency gas plan due to the Russian supply uncertainty.
Scrambling to fill gas storage
Both Italy’s Eni and German utility Uniper have reported that they’ve been receiving less than contracted Russian gas volumes, although Europe’s gas inventories are still filling slowly as European governments scramble to fill underground storage with natural gas supplies to provide households with enough fuel this winter to avoid temporary brown-outs. Gas storage reached 54% capacity in late June against an EU target of 80% by October and 90% by November 2022.
Other EU countries, including Italy, are also expected to fire up their old coal-fuelled power stations as the energy crisis escalates.
The ‘temporary’ boost in coal use has raised concerns about the EU shift towards less polluting power alternatives. The EC’s von der Leyen has urged governments to ‘stay focused on massive investment in renewables’.
The IEA recently reported that nearly €2.3tn is earmarked for investment by the energy sector in the next year, including spend on renewables. Birol maintained that investment in oil and gas could not meet rising energy demand without being directed towards cleaner energy.
He emphasised: ‘We cannot afford to ignore either today’s global energy crisis or the climate crisis. But the good news is that we do not need to choose between them – we can tackle both at the same time.’ Although Birol sees renewables investment rising, he said: ‘It needs to be much faster to ease the pressure on consumers from soaring fossil fuel prices and ensure energy systems are secure.’
Europe is also intent on importing more LNG to restore sufficient gas reserves for the coming winter. But the global LNG market is very tight and producers lack the capacity to move quickly to meet increased demand.
Some countries have decided to accelerate gas drilling projects or make u-turns on previous decisions against drilling or fracking.
UK u-turn on fracking and coal
UK Business Secretary Kwasi Kwarteng recently told a meeting on energy security at Chatham House that the UK government has ‘always been clear that shale gas could be part of the UK’s future energy mix’. However, he added: ‘But we need to be led by the science and above all we need to have the ongoing support of local communities.’
Kwarteng explained that since the Russian tanks rolled into eastern Ukraine earlier this year the whole world has changed. As a result, he had asked ‘the British Geological Survey to look again at the science around shale gas extraction in England.’ The report is due for publication shortly.
In addition, although the UK had committed to phase out coal by 2024, the government has also recently signed deals with EDF and Drax to extend the life of coal units through this winter, according to The Guardian. UK ministers hope to secure a similar deal with Germany’s Uniper to extend the life of its coal operations in Nottinghamshire.
Nuclear initiatives
However, the picture is not straightforward when it comes to boosting nuclear supplies.
In May, France’s EDF said that time had run out for safe life extension of Hinkley Point B in Somerset. One unit was shut down in early July and another is due to shut on 1 August. Together they provided enough power to supply 1.5mn homes. Looking forward, Hinkley Point C is not expected to come online until 2027.
Back in Brussels, Frans Timmermans, EC Vice President, has warned that Europe is in danger of ‘conflict and strife’ this winter over high energy prices. Timmermans said his goal was to be able to reassure the EU public, by 1 November at the latest, that they would not face a crisis in heating their homes this winter. He insisted that coal would have to be used. ‘If we were just to say no more coal right now, we wouldn’t be very convincing in some of our member states and would contribute to tensions within our society getting even higher,’ he said.
Here again, Timmermans emphasised the importance of energy efficiency and insulation, but admitted they were not being introduced fast enough to lower prices. He blamed bottlenecks ‘caused by the lack of workforce to do it and lack of materials we need, because of the disruption of global supply chains’.
The German government is also intent on the phase-out of nuclear power to continue as planned. Germany’s Chancellor Olaf Scholz has also called for the G7 to reverse its stance on banning overseas investment in gas projects, to assist in the controversial exploration of fossil fuel fields in developing countries.
Green taxonomy issue resolved
This month also saw the EU formally agreeing to class some gas and nuclear power activities as forms of ‘green and clean’ energy for investment purposes, despite ardent opposition by Austria, Luxembourg and a few other EU members. This removes the last major hurdle to potentially billions of euros funding, under the so-called EU Taxonomy – a list of economic activities deemed to be in line with the bloc’s transition to climate neutrality.
Barring any further objections from member states, the reclassified regulation is due to start from the beginning of 2023.
So where do we stand?
Historically, the EU has more than doubled its share of renewable energy from 9.6% of total energy in 2004 to 22.1% in 2020. Since 2012, coal-fired power fell by almost one-third. A total of 10 countries, including Austria, Portugal and Sweden, were coal-free as of 2021. While another six, including France and Italy, had pledged to go coal-free in the next three years.
Now the picture seems to have taken a turn for the worse on the emissions front – hopefully only temporarily.
With only four months to go before the next UN climate conference, COP27 in Egypt, it will be interesting to see if Europe will commit nationwide to accelerate low carbon energy initiatives in the wake of Russia war on Ukraine… or continue to backslide in order to keep lights on and homes warm in winters to come.
See also this week's Comment piece from Promise Nwogu on What happened to Europe's climate commitments?