“First of all energy efficiency must be given a new boost. But after energy efficiency, Carbon Capture and Storage is considered to be the second most powerful tool for emission reductions in the long term,” says former EU Commissioner for energy Andris Piebalgs.
1. EU Commissioner for development Andris Piebalgs, after five years as Commissioner in charge of energy in the European Commission, what do you consider to be the most important issue or initiative that has taken up your time?
Significant achievements have been reached over the past five years. A real European energy policy has been developed based on three pillars: competitiveness, sustainability and security of supply. The so-called 20/20/20 targets for 2020 have been set – 20% of energy should come from renewable energy sources, greenhouse gas emissions should be reduced by 20% and energy efficiency should be improved by 20% – laying the foundations for the transition to a low-carbon energy society. The directive on renewable energies translates the 20% objective for renewables into binding legislation.
A legal framework has been put in place that will lead to a truly integrated internal market for electricity and gas for almost 500 million people. Energy efficiency has been given a boost through legislative measures, most recently relating to buildings, labelling and tyres. And our external energy relations have also been developed, in particular vis-à-vis Russia and our neighbouring countries.
2. Guided by proposals made by the European Commission, the EU Council has during your tenure set ambitious goals for energy efficiency, the increased use of renewables and indeed for reducing the climate impact from energy use in general. At the same time, the EU has to an impressive extent managed to have a constructive influence on the agenda for post-Kyoto discussions at a global level. How would you describe the role of the Commission in this complex game?
It’s true that the strategy we developed for energy policy has been high on this Commission’s agenda. In addition, our integration of energy policy and climate change policy has brought focus and synergy to a key area of global concern.
For our part, I would say that the Commission worked very effectively to develop its proposals. On the basis of solid analysis and discussions with member states, we put together a package which highlighted the urgency of acting against climate change and the need to improve the security of our energy supplies. Naturally, the package emphasised the environmental and political concerns of our energy and climate policies but it also stressed the economic imperative of taking action now to avoid higher costs in the future. I think that this economic emphasis, coupled with the philosophy of burden sharing we introduced, ensured it was a solid, well thought through package of measures.
Of course what really counted were the great efforts made by the member states, in Council and Parliament, to reach agreement on the package. There were some tough debates and some long nights, but the agreement they reached on the package was a great success. Apart from ensuring that we in the EU achieve our policy goals and avoid the high costs of not acting, the package has also ensured that the EU is leading the global climate debate and the growth of renewable energy.
The challenge for the next Commission will be to build on Copenhagen, to ensure we adopt a global strategy to mitigate the effects of climate change. For the EU’s part, President Barroso has already made it clear that we cannot stop the actions to achieve 20% in 2020. It has become clear that this is only meaningful if we pursue the course to the end and develop a carbon neutral energy sector by 2050. This will be one of the top priorities of the new Commission.
3. In your opinion, what are the key components of a solution to the combined challenge of in-creased global energy demand and the need for a low-carbon economy?
Low or no-carbon technologies for electricity generation, clean vehicle technologies and the eco-efficient heating and cooling of buildings must be at the centre of any decarbonisation agenda. Energy efficiency must be given a new boost. Furthermore, the energy infrastructure, which contributes to our security of supply, needs to be further developed. And a proper functioning of the internal energy market must be ensured by full implementation of the third internal market package.
CCS is considered by many, including the International Energy Agency (IEA), to be the second most powerful tool for emission reductions in the long term (after energy efficiency). IEA scenarios show that achieving the necessary emission cuts by 2050 without CCS can be 70% more costly than using a set of measures including CCS.
4. How would you describe the role of the European CCS Project Network as a contributor to identifying solutions?
As the supporting structure for the CCS demonstration projects in Europe, the CCS Project Network facilitates the exchange of new information and experience and provides a joint communication platform and a distinguished European identity. These projects will be the first-of-a-kind large-scale CCS undertakings that link together CO2 capture, transport and storage. A lot will be learned from the process of establishing these projects and integrating the CCS value chain. The CCS Project Network will also help projects to benefit from each other’s experiences. I believe that this will be especially important in the area of public engagement, where there is a clear need for the progress of our CCS demonstration efforts to be communicated transparently and collaboratively.
One of the CCS Project Network’s key contributions will be to bring the projects together and help them to identify best practices for CCS development and future research needs through collective activities. This will also allow them to cooperate efficiently with partners in third countries with one voice, strengthening global interaction. The results of this demonstration phase are extremely important to bringing forward the deployment of CCS technologies. While the EU is currently taking the lead in generating and communicating these results, the CCS Project Network, and the input from DNV as a contributing contractor, should play a central role in promoting CCS in Europe and worldwide.
5. What are in your opinion the major challenges for the CCS technology to become politically and commercially viable?
The technical feasibility of this innovative technology is acknowledged and its legal framework has been established by the EU, so I believe the major challenge for CCS to become politically and commercially viable is its financial aspect. The costs of CCS-equipped plants are higher than of those applying conventional technologies. More-over it seems that investors do not see sufficient incentives to put substantial amounts of money into developing the CCS technology further so it can reach market maturity.
I am nevertheless confident that EU funding will have a leveraging effect on investment, both private and public. Last December, the Commission granted €1bn for six CCS demonstration projects in six member states under the framework of the European Energy Programme for Recovery adopted earlier this year. In the long run, the revised EU Emission Trading Scheme (ETS) is expected to bring about a robust CO2 price, closing the cost gap between conventional technologies applied today and the more expensive CCS technologies. In the short term, a special mechanism including 300 million allowances from the ETS New Entrants Reserve will be used to support large-scale CCS projects and innovative renewables. This mechanism should help us deploy up to 12 large-scale CCS demonstration projects by 2015. In a few years’ time, the operation of these plants should in turn give the industry the necessary time and experience to upgrade the technology further so it could become commercially viable as early as 2020.
6. Looking into your “crystal ball”, how do you see the energy mix in 2020 – in Europe and beyond?
Different energy scenarios exist for 2020. For our part, the Commission will enforce the new Directives on renewables and emission reductions and will continue to help develop new carbon-free energy sources. As a result, I fully expect to see us reach the 20% targets – for renewable energy, emission reductions and energy efficiency.
By 2020, I would also expect us to have a well established strategy for reaching a zero carbon energy sector by 2050. For the rest of the world, I believe other countries will still be following the EU, but they will not be far behind. It is already obvious that on-going environmental degradation is not compatible with sustainable human existence, and the need for a carbon-free global energy sector is clear. There is movement and change around the world – the development of renewable energy industries, in China and India for instance, shows how emerging countries, as well as developed countries, can generate economic benefits from the industrial adaptation of their economies. All countries are learning that such structural change is inevitable and that the only feasible strategy is to plan the smoothest possible path towards our goals.