This morning a new lobbying group was launched in Brussels, but instead of representing the interests of a particular sector, it is uniting two industries that might seem like natural competitors – renewable energy and natural gas. So is this a match made in heaven, or a shotgun wedding?
The Energy Partnership is starting with five companies – Shell, GE Energy, Dong Energy, Alpine Energie and First Solar. “Natural gas is the perfect partner for renewables - it's highly efficient and highly flexible,” Jan Ingwersen, a vice president with Dong, said at the launch this morning. “But the current market conditions and policy framework does not incentivise the transition to renewables and gas.”
Because renewables such as solar and wind are intermittent sources, stable sources of energy are needed as a backup. Coal and oil plants generally must emit power at the same rate constantly, so they are not ideal for this purpose. But gas plants can be flexible, generating more power during periods of no wind or sun. The partnership is calling for better infrastructure to connect renewable installations to gas plants.
Speaking at the launch, EU energy commissioner Günther Oettinger said that with technologies like carbon capture and storage (CCS), which stores CO2 emissions underground, “in the long-term gas could be part of a low-carbon electricity sector for many decades.” He also said it could contribute to security of supply, perhaps through new southern oil pipelines or new forms of unconventional gas.
Oettinger pointed to the Spanish market as one of the best current examples of synergy between renewables and gas. On some days 64% of electricity in Spain is generated from renewables. When that isn't available, gas can step in to fill the gap.
But some environment campaigners have been wary of the partnership, concerned that the synergy between gas and renewables is being exaggerated in order to give “low-carbon” EU funding to a fossil fuel. Brook Riley of Friends of the Earth Europe asked the commissioner and the executives at the launch how gas can be said to contribute to security of supply when the EU currently imports 65% of its gas, and what little gas it produces itself is about to run out. He also questioned how gas can be considered a low-carbon source based on CCS when it is as yet an unproven technology.
Oettinger acknowledged that the current situation with gas in Europe is far from ideal. But he said the EU is making changes that would change that situation, such as exploring for new gas sources and requiring member states to keep gas reserves.
Not all environmental campaigners are against the renewable-gas synergy. The European Climate Foundation is working with the new partnership. A representative of the group said at the launch that the EU should not be technology neutral when it comes to what fossil fuels might work with renewables, because gas is obviously a better choice than coal or oil.
A representative of the European Wind Energy Association said that investment in gas infrastructure and gas plants in turn spurs investment in renewables, because investors see certainty in the fact that there is a flexible power source for the renewables to work with. Not all green campaigners would agree with this concept.
The main purpose of the partnership, said Stephan Reimelt of GE Energy, is to push the two energy sources out of the idea that they are in competition. “We're coming out a time when traditional energy and renewable energy were competing,” he said. “We have to get away from the competition and move toward integration. Gas is the optimal vehicle to show that synergy.”
But the two industries may not always see eye to eye on everything. After Commissioner Oettinger revealed at the launch, to the surprise of many in attendance, that he supports further binding renewables targets after 2020, the partnership had to admit that they would not all back that idea.
“Different companies [in the partnership] have different positions on that,” said Dick Benschop of Shell.
Dave Keating reports on the interrelated issues of environment, energy, climate change, transport, health, agriculture, fisheries and research for European Voice. In this blog, Dave brings you insights into the sometimes byzantine world of European Union policymaking as well as the equally confusing nature of life in Brussels. Originally from outside New York City, Dave has lived in Europe for six years. He can be reached at DaveKeating@economist.com.
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