These were the not-so-subtle statements British TV host and journalist Stephan Sackur doled out in his role as moderator of the plenary panel discussion of the Power-Gen Europe conference held in Amsterdam.
His part, though, was an important one as his crude dismissals emphasized by contrast the balanced opinions of the 5 panelists and – as far as I have seen – the general attitude of attendants at the conference. The power generating sector is facing huge challenges on an exceedingly complex playing field. There seemed to be as many positions on the best way forward as there were people attending - or as Stephan Singer, Director Global Energy Policy at WWF put it: 'no one here is neutral' - but the overarching position appeared to be that everybody is working toward the same goal: decarbonization of the energy system by 2050 while maintaining and improving energy security, sustainability and competitiveness.
During the introductory statements of the panelists Koen Noyens, Advisor at Eurelectric said the power sector was fully committed to fully decarbonize by 2050 and that it is willing to face the challenges and embrace the opportunities. Stephan Singer advocated a total phase-out of all fossil fuels to prevent disastrous climate change. Mark Garnett of Doosan Power Systems agreed with Singer that the common goal is zero carbon, but differed on how to get there. Instead of an energy system powered solely by renewables he expects a balanced mix of renewables, storage, thermal, gas, coal plus CCS and nuclear.
Damian Wagner, Coordinator of the Smart Cities Initiative at Fraunhofer IAO, said the challenges of the energy transitions are in urban systems. “That's where the challenges are and where we need to find solutions.” In cities energy, mobility and infrastructure need to be interconnected. And in this space opportunities can be found by shifting from providing energy to providing energy services, in mobility, decentralization and interconnection. “Utilities can play a big part here because they have always been in urban spaces. They generate a lot of data and that is valuable for cities.”
A day earlier Marie Donnelly had said something similar. The Director for Renewables at the DG Energy of the European Commission was not on the panel but had given a keynote speech on June 9, the first of the 3-day Power-Gen event. “We need to look at energy in a different way. We should no longer focus on the sources but on the benefits it brings. In Europe the services we get from energy are fairly stable: 46% heating and cooling, 33% mobility and 21% power.” And instead of considering gas, electricity and transport as separate categories “we have to look at energy in a holistic sense. Different parts of the energy system need to be linked up. That is a significant shift in the research agenda.”
Sackur said he had little confidence national governments or EU policy would be equipped to facilitate such a radical change. He asked Wagner: “Who is going to be the driving force behind this shift? City planners? Engineers? Politicians? “There will be a strong drive from local movements and initiatives”, answered Wagner. He also sees a role for the ICT sector because it has a good track record of involving citizens. “So, not one big solution but many small solutions?, Sackur asked. “That and big collaboration schemes”, answered Wagner.
Redesign of the market
“The transition to low carbon results in a change of economics”, said Eurelectric's Noyen. High capex is required upstream to invest in low carbon technologies and downstream consumers are buying more energy efficient appliances which is also an investment. “So there is a need to redesign the market into one that properly values flexibility and capacity.”
Dr. Martin Giesen, Executive Chairman of the Swiss-based company Advanced Power AG added: “In the past utilities sold commodities in the future they will be more into insurance. There is nothing wrong with selling insurance.”
It was noted that the EC is working on proposals to revise the electricity market which will address capacity and flexibility but Sackur once again expressed his doubts the EC was up for the task: “The EU member states all have different policies. Will they ever sign up for the energy union?”
But the EU is more like a choir that still needs a lot of practice than a group of renegade toddlers running in different directions. “Brussels is one of the voices but it is an important one” said Giesen. “It does not have complete control but it has a strong voice. The member states are in control of their energy systems but they do listen to the pressure. The European Commission sets the direction but it does not go fast. It will need to become more compatible over time.”
“Uncertainty in this industry is a killer”, Sackur shot back. But Giesen wasn't deterred. “The member states will make individual decisions to patch things up. Life consists of little steps.”
But the push back against Sackur's devil's advocating is not to say that the panelists were content with the way things are going. One issue everybody agreed on is that the market currently lacks investment signals. “What should a market do?”, asked Donnelly in her speech. “Supply services, operate in an environment of profitability and send investment signals. That last one is not happening in the EU”.
“We've wasted a huge amount of money on renewables”, said Giesen. “Where did the ETS go? We should have said, here is a target, and an ETS mechanism to achieve the target, then we could have done this at a much lower cost”. “I agree”, said Noyens. “The Commission and the member states have acknowledged this. They recognize that more competitiveness is needed.”
A well-functioning ETS would drive investment in new technologies. The disappointing results of CCS thus far are caused by a lack of investments. “There is a total of 14 CCS projects globally”, said Garnett. Every credible scenario to stay within the carbon budget relies on CCS, Wagner pointed out. “But investments in CCS are based on a high CO2 price.”
“Energy efficiency and energy management are also very important for decarbonization”, said Wagner. “The ETS would have driven that.” Giesen added: “Public money should be used to make new ideas work better such as CCS and storage. There is a lot of work to be done there”.
What can the EU do to make it right?
When the microphone was open for the audience a woman stepped forward who said she had mostly been active on the Asian energy markets. She had come to PowerGen to see how the Europeans were handling it and she confided she was very very surprised. Especially by the stories of renewable energy initiatives in different member states that worked against each other. Her question to the panel was at once simple and very difficult: “What can Europe do to make it right?”.
The answer of Martin Giesen was hopeful and perhaps very European: “Many different solutions will be put forward in the EU. Some will fail, some will be optimized in time. Through trials and tribulations better solutions will be found. The individual member states will make sure their energy systems won't collapse and the EC will bring it all together. Having that diversity is actually a benefit.”
Image: Plenary panel dicussion. From left to right: Stephan Singer, Koen Noyens, Stephan Sackur, Mark Garnett, Damian Wagner, Martin Giesen.
Source: PowerGen Europe conference