A New Energy Policy for Europe

[ED by Prof. Goose] Jerome a Paris also has an article on the EU energy plan today, it can be found here. It will be up on TOD:Main tomorrow morning.

Wednesday the European Commission released a series of Communications proposing a new revolutionary Energy Policy attempting to address EU’s energy challenges for the XXI century. This is a set of first comments to such proposals.

For a first perspective on what’s at stake, here’s a small graph published by the BBC, that’s worth many thousand words:

This new Energy Policy can be considered revolutionary for two reasons, first it acknowledges (although shyly) problems in the future energy supply and secondly it integrates Energy and the Environment. In doing so the Commission clearly draws a direction towards energy efficiency/conservation that suits both concerns with energy sources and sinks.

But in spite of a new clearer direction being drawn, the ways to follow it are in some cases not at all clear and in others openly wrong. Following is a brief analysis of each of the Communications, taking in perspective the daunting challenges imposed by the internal peaks in Oil and Gas production.

A New Impetus for the Internal Energy Market (full text)

The EU has clearly recognised that the internal energy market is the policy line that ensures fair prices to citizens and industries. At the same time, it guarantees that even smaller companies, for instance those that invest in renewable energy, have access to the energy market. A well functioning market also ensures sufficient investments in power plants and transmission networks to avoid interruptions in power or gas supply. In order to realise the full potential of the internal gas and electricity market, the European Commission has put forward new proposals as part of its Energy Policy for Europe.

The main goal of this Communication is a fully integrated energy market, both physically as economically. First to achieve is the complete liberalization of the electrical and gas networks. On the electrical network, emphasis is given to the decoupling of the generation and distribution sectors, still commonly hold locally by the same companies. The Commission believes that a more competitive internal market will allow more efficiency and investment, benefiting consumers and improving supply security.

On the Physical side the Commission has as goal to achieve a fully integrated internal energy network by January of 2009, leading to a true single European energy grid. An unified grid is for the Commission essential to secure sufficient generation capacity in the future. Four lines of action are drawn to achieve such grid:

  • Separation of energy production from energy distribution;
  • Management by a single body in partnership with the Commission;
  • Transparency;
  • Investment in bottlenecks (mainly borders between countries).

On the last item the Commission has a clear idea where the investment is needed:

A number of the most problematic missing links has been identified, such as power links between Germany, Poland and Lithuania, off-shore wind power connections in Northern Europe, electricity connections between Spain and France, gas pipelines from the Caspian to central Europe.

Since the model of state owned energy utilities is being put aside by the EU it is naturally better to have the private owned companies working on a fully liberalized market, improving the service to the final costumer. In such model, liberalization measures are surely welcome.

As for the Integrated Energy Grid it also presents major improvements for the EU internal energy market, allowing for better load balancing and helping to give a single “energy voice” to the Union. But beyond that, a fully integrated energy grid is essential to take complete advantage of the growing renewable energy generation sector, allowing for the compensation of its intermittent nature. Such integration is already underway in Scandinavia with encouraging results.

Absent from this section of the initiative are measures to directly address the current peaking of internal Natural Gas production. Although put forward as so, market liberalization wont secure the increasing Natural Gas imports needed in the following years to meet internal demand. Lines of action to substitute Natural Gas or to secure other foreign sources simply do not exist. The main energy problem in Europe is not mentioned even less dealt with.

A Low CO2 fossil fuel future (full text)

Climate protection involves making the most efficient use possible of our available energy sources. The potential to increase the efficiency of converting coal into electricity must therefore be exploited in Europe and worldwide. Furthermore, the technologies for the capture and permanent storage of carbon dioxide produced by power plants must be developed further and used more widely. As part of its Energy Policy for Europe, the European Commission has adopted today a Communication on how to generate power from fossil fuels in a sustainable manner with a focus on sustainable coal technologies – these will enable coal to maintain its important contribution to secure and competitive energy supplies for Europe.

In this section the Commission acknowledges that Oil and Natural Gas will leave the dominating position in the current energy mix, expecting the world-wide doubling of the electricity produced from Coal by 2030. Such doubling, thinks the Commission, will turn the EU on a net Coal exporter from the current net importer position. Internal Oil production has already peaked, Natural Gas production is peaking, Coal is being imported from as far as New Zealand; how that will evolve to a Coal surplus is hard to envision.

The Commission is endorsing Coal as the alternative energy source capable of assuring the correct energy security for the EU. To achieve such goal the Commission pretends to improve research and investment on CO2 capture and storage technology, systematizing the use of “near zero emission” power generation by 2020. To further improve it, the Emission Trading Scheme is proposed to incorporate capture and storage.

On this section two main lines of action are drawn:

  • Design a mechanism to stimulate the construction and operation by 2015 of up to 12 large-scale demonstrations of sustainable fossil fuel technologies in commercial power generation in the EU;
  • Provide a clear perspective when coal- and gas-fired power plants will need to install CO2 capture and storage. Today, the Commission believes that by 2020 all new coal-fired plants should include CO2 capture and storage technologies and existing plants should then progressively follow the same approach.

This push for “clean coal” presents some very optimistic views on this finite energy source. Coal is simply admitted as being capable of fulfilling the energy needs of the EU and the World, in whatever flow rates desired. The declining EROEI of European Coal Exploration and the EROEI reduction imposed by CO2 capture and storage are ignored, leaving a considerable hole in this Communication.

Promoting biofuels as credible alternatives to oil in transport (full text)

With the significant rise in oil prices and the growing concern about stable, secure and environmentally friendly energy supplies, the promotion of biofuels use in transport is a priority on the European political agenda. Today, biofuels are the only way to significantly reduce oil dependence in the transport sector. As part of its Energy Policy for Europe, the Commission is committed to encouraging the production and use of biofuels by proposing to set a binding minimum target for biofuels of 10% of vehicle fuel by 2020.

Unfortunately this is the weakest section of the initiative, exactly where it should be the strongest. Like the Commission notes Oil represents today 98% of the base energy used for transportation, and transportation accounting for more than half of the EU’s Oil consumption. But for the Commission life without cars and trucks is unimaginable.

The lines of action pointed are two: tax exemption for biofuels and the introduction of biofuels obligations. The fuels of election are those usable in today’s internal combustion engines: biodiesel (from rapeseed, sunflower, etc) and bioethanol (beet, cereals, etc).

The Commission seems to be taking the same unsuccessful path took by the US executive, keeping the business-as-usual auto dependency and in parallel promoting oil substitution by fuels with lower or even negative EROEI. At roughly the same latitudes, European states do not present harvest improvements over the low results already patent across the Atlantic. Absent is also an assessment of the impact of such policies in food production.

Without actions to reduce demand and with substitution policies bound to failure, Transport dependency on foreign Oil is set to grow. Without a proper energy policy for Transport the whole program rest at risk. A major change in attitude and concept towards Transport is needed; life without (or with less) cars and trucks has to start to be imaginable.

An energy policy for Europe: Commission steps up to the energy challenges of the 21st Century (full text)

The world today is facing energy and environmental challenge, a challenge that is acute for Europe, and a challenge which is shared by all Member States. This is: how to secure competitive and clean energy for Europe against a backdrop of climate change, escalating global energy demand and future supply uncertainties. If one Member State fails to meet this challenge, other Member States will be affected. If problems arise outside the European Union, they can have an impact on the whole of the EU. This is why Europe needs a strong energy policy. The European Commission' Strategic Energy Review is an important step towards an effective energy policy for Europe.

Again the Commission shyly admits to difficulties in the future energy supply. To tackle that a new integrated Energy Policy is endorsed where the EU acts to the outside as a single unified bloc. This new energy unity will promote economic growth and limit the vulnerability of the Union to Oil and Gas imports.

Such policy will mean, in the Commission words, “the EU taking global leadership in catalyzing a new industrial revolution”, defining the following lines of action:

  • Energy efficiency;
  • raising the share of renewable energy in the energy mix;
  • reinforcing solidarity among Member States;
  • a renewed focus on nuclear safety and security;
  • determined efforts for the EU to "speak with one voice" with its international partners

Although lacking more objective measures (which might not belong to such communications) these simple five items show that the Commission has the compass showing the correct direction. All of these lines of action move towards independence from foreign fossil fuel sources, and this time the optimistic views on Coal and biofuels are left out.

The sense that the European Commission is correctly acknowledging the current European energy scenario is materialized in one of the most important sentences in these Communications:

The concern is not only about climate change, it is also about Europe's security of energy supply, economy and the wellbeing of its citizens. Even without climate change, there is every reason to take the steps proposed by the European Commission.

Final Comments

“Too little too late” is a sentence that comes to mind when considering this whole set of Communications. The real problem of internal and foreign peaks in fossil fuel production is only indirectly admitted and the lines of action put forward rely either on other fossil fuels (Coal for electricity generation) or on low EROEI renewable sources (biofuels for transportation). Market Liberalization, although positive in a privatized model, is presented as a factor of securing energy supply – something it simply can not do.

Still, having an Energy Policy is better than having none, and the final tone stressing Energy Efficiency and the role of Renewable and Nuclear Energy sources on a New Industrial Revolution towards energy independency and sustainability leaves some hope.

Finally is worth stressing that none of these initiatives are effective, for they lack the approval of the European Council. Early next March the Council will reunite for the Spring Summit and analyze these proposals. The 27 member states will be at the table and the obstacle put to such measures are already unfolding, with larger countries opposing the Market Liberalization issues and smaller polluting countries opposing the CO2 emission targets for 2020. On this last subject the fact that Italy, Spain and Portugal (three of the countries farther from meeting Kyoto targets) are being governed by Socialist executives might be a point in favor, but at the Council’s table much is different.

This in turn stresses that beyond a new Energy Policy the EU still needs a new Political Model. Either in the form of the European Constitution or in other form, only with clearer effective powers can the European Commission correctly achieve “one voice” Energy Policy for the EU.

For a different take on this plan, see my post over at the European Tribune. It may be crossposted over here at some point in the future.

and an additional comment about how The Economist lies about European energy markets.

Thanks to And1 for bringing up the links to the Communications.

Your BBC graph is indeed significant in thatit obliviously expects unimpeded, regular demand growth over the next 25 years.

When will we learn that the solution is on the demadn side, not on the supply side???

Given the brilliant sentence of “life without cars and trucks is unimaginable” I think we’ll have to learn that the hard way…

It's strange they use the term “unimaginable” to describe a time barely one human lifespan ago. Unimaginable better describes the notion of continued material growth and increasing rate of drawdown on a clearly finite resource base.

Amen.

And, if I can add a comment, an "unimaginable" situation actually experienced by 80 % of the current mankind. They are of course not totally deprived of transportation means powered by thermal engines, but have only a very limited access to them (and probably much less than Europe in 2050 in any case).

Regarding oil, my description for this phenomenon is the expectation of a continued exponential growth in petroleum imports versus the reality of an exponential decline in export capacity.

For US and EU petroleum imports to just stay constant, our consumption, in bpd, has to fall at the same rate that our domestic production, in bpd, declines. And we have to do this every single year.

If you plug in some assumptions about the decline in Russian oil exports, I estimate that total oil exports by the top three oil exporters--Saudi Arabia; Russia and Norway (which accounted for half of the exporters by the top 10 in 2005)--may be down, from their 2005 levels, by as much as 2.5 mbpd in February, 2007. The whole question is to what degree the decline is "voluntary."

In any case, if as I suspect, Saudi Arabia, Russia and Norway are all now, or will be, declining because they have no choice and assuming that China is about to peak, we will face the following situation regarding oil: (1) what the US, the EU and China want to import is going up as our consumption goes up and our domestic production declines and (2) what the big three exporters can, or will, export will decline as their production declines and their domestic consumption increases. (According to the EIA, the Big Three's consumption increased by about 600,000 bpd, Total Liquids, from 2004 to 2005).

"the Commission has as goal to achieve a fully integrated internal energy network by January of 2009, leading to a true single European energy grid"
...
"Since the model of state owned energy utilities is being put aside by the EU"

Sounds like your usual quango power grab to me.

From my experience of trying to deal with the screwed up and corrupt entity known as the EU, the sooner countries go their own way - the better. Centralisation isn't the cure, fully distributed is the way.

Beyond region, beyond country, back to local accountability.

Hello Garyp,

I agree. If techno-advances and conservation [Plan A] can enlarge or sustain the myriad distribution spiderwebs plus the ecosystem--that is great. But if not, govts, at all levels, need a thoroughly detailed Plan B for 'graceful decline' to minimize the obvious blowbacks, and accelerate the paradigm shift to intense relocalization.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Dear garyp
Regarding corruption in the EU- and other places on planet earth please study the Transparency international annual index for corruption.
Can be downloaded here- I cannot figure out how to show graphs.
http://www.transparency.org/policy_research/surveys_indices/global/cpi
Click on the english version for TI Corruption Perceptions Index 2006 media pack .
Table page 5.
You will notice that among the 20 least corrupt countries in the world ( US is no 20), there are 12 EU countries...
So even if corruption is a problem everywhere it is maybe not the biggest problem in the EU ....
Kind regards
And1

The individual countries may well be virtuous, but once they get together in the EU it all goes downhill into a mess of deals, backbiting, lies and pork barrel politics.

I'm not saying the corruption enriches the individual, but the gap between how its supposed to work and what actually happens could swallow the grand canyon. If you want to see the EU in miniature, watch the eurovision song contest.

The more power and money that is kept away from that lot, the more progress will be achieved.

Dear garyp,

The Eurovision metaphor is a very fortunate one, thank you, I wouldn’t remember a better one myself.

Here’s the clip from last year’s winners.

As you can see these folks come from Scandinavia, exactly where the Grid integration is having great results, allowing to take full advantage of the wind farms in Denmark and Germany.

Things do change, that’s I’m here wasting my time writing this stuff, instead of running to the hills.

Best.

You know ... if every region produced one of these graphs where you can see exports crossing over with imports, it would give you a very good idea when demand exceeds supply on the aggregate level.

Someone in the mainstream media said 'Europe will show the way'. Don't think so. There are ample grounds to think clean coal will never deliver even with carbon trade and government handouts. This could be as big a delusion as 'winning' in Iraq. I haven't read the full text yet to see if electrification of transport has been factored in along with travelling less but it would seem unlikely. Any mention of V2G?

I guess to a Euro bureaucrat sitting in a comfortable office the notion of major cutbacks doesn't bear thinking.

Well, naturally the European Comission, and all their employees, as well as the Parliament and all their employees will naturally be exempt from any conservation efforts, either by getting to buy fossil fuels tax free or by special rationing, or both. After all, the EU nomenclatura is never hit by any of their own decisions. The goal of any proposals will naturally have to make sure that the Parliament gets fuel, while the rest of the population does not. It's been that way so far.

The Parliament could start by not moving all their paperwork, offices, people etc between Strasbourg and Brussels every week. Not only does it cost billions, but just think of the total waste of energy just to make sure that the french farmers don't pour manure (literally) all over the Parliament.

Anyway, once fuel shortages starts, the french farmers may very well exhaust all their remaining fuel by doing protests. Good bye, and good riddance.

The real people in power in the EU are french farmers. They will set the policy, and they will never give up their diesel.

Is there something call agronomphobia? Fear of farmers? The french government has it at least, and so does the EU.

Your ignorant anti-EU rants are tiresome. There are actually lots of arguments to criticize the EU institutions or the French farmers, but you don't provide a single one.

Yes, lets ignore that a majority of the EU citizenry are hostile towards the EU, ignorance or not.

Idiots. "Clean" Coal. Biofuels. Does this need any comment?

I'm afraid the highly deluded, short-sighted and irresponsible energy policy of the EU commision and the likes, has the potential of destroying the whole idea of the European Union. Potentially Europe is in a much deeper sh*t than USA, because it has almost nothing. And whatever it has left (counting in North sea and the patience of Russia) is vanishing quickly. But I am an optimist - if we send the myriad of incompetent and distanced from reality leaders which Europe is generously gifted with to the coal mines they can possibly bring at least some contribution in tackling our energy problems. Not very likely, unfortunately... It will be a pity to see EU coming apart when the dog-fight for energy gains momentum, but this is exactly what I expect if we continue letting these clowns guide our energy policies.

Sorry for the rant...

Want to reduce energy usage? Kill all EU agricultural subsidies, so no energy is wasted growing crops nobody wants or needs.

Use up a lot of diesel, pesticides and fertilizer to grow something that has no market, and then waste additional energy by exporting it to an African third world country, killing their local farming.

Great way to waste energy. And lives.

Or at least simply pay the farmers subsidies which are *not* driven by the amount they produce.

You can preserve the rural countryside, without making Africa pay a disproportionate price for your silly agricultural policies.

(one small problem, of course. If we produce less food locally, we *import* more from further away

*however*

I am reasonably persuaded that an efficient food market (in the sense of non-distorted) is the place to start for creating a low energy food market.

Local Food is a coming wave in the developed world (already we shop in Farmer's Markets in London) and I don't think the EU's crazy agricultural policies help it much).

Yes.

The problem is greater than any solution and we are still at the talking stage.

With each passing week, the problem gets worse and solutions (if any) become less attainable.

There doesnt appear to be any over-arching acceptance of several key issues:

- Immediate and drastic Energy Conservation.
- Achieving a secure, minimum electrical base-load. I cannot see how this can be achieved without a major Nuke building program.
- Bio-fuel competing with food staples in a world where crop reductions are more likely than not.
- A failure to understand the liquid fuel problem will not be solved by bio-fuels or hydrogen or electric cars.
- A failure to understand that the right to mobility will not remain a right within a few years after Global Peak.
- A failure to understand that the growth paradigm is not the only possible future. In fact anyone looking at the above graph must see that it is the least likely future.

All of this will occur in a world of regional competitors for declining oil and gas.

They should have started with Westexas's: Economise, Localise, Produce.

Looks like they are suffering from Kunstler's Syndrome: The Psychology of Previous Investment.

Still, it will look as if they are doing something.

I wonder if this document, like the Stern report is another let off clause ('well, we did tell you...')for Politicians in years to come.

I dont think it will stop the lynch mobs though...

The absence of nuclear power in the document is like a silent scream. These people had 15 years of post-Kyoto experince to examine - with the results being close to nil. Let's look at the EU green energy champions compared to 1990 (numbers from memory):
1) Germany - reducing CO2 emission by 10%. But due to closure of East Germany industries. Past 5 years - reduction of 0.2%.
2) Denmark - increasing emissions by 6%.
3) Spain - increasing emissions by 20%. Currently the worst offender of the Kyoto treaty in EU.
4) UK - reduction of 5%. By replacing coal with NG. And we know where UK NG is headed to...

Now if they only read 1)-4) and put some thought on them... These people don't learn - they insist on applying failed policies to almost hopeless and now increasingly deteorating situation. And these are 15 years we are talking about... Short of a coordinated effort to build nukes worldwide the future will spell as C-O-A-L. Now by attatching the "Clean" boondoggle to it, the EU commission just gave green light to the brave new coal era... and I am simply stunned by the hypocricy of what they are doing now.

Levin,

The Natural Gas situation in North America is worse than anywhere else. It is true that internal production in the EU is peaking, but Algeria and Russia still have margins to grow; the declines rates in the EU will be much lower than those North America will face in the next 5 years.

I’m not sure as to that dog-fight; I don’t see any country being able to fight that war alone. But alas, 8 member states supported the invasion of Iraqi, deliberately prejudicing the EU and the Euro.

I expect that very soon Russia will be overwhelmed and Algeria will not to be enough.

EU has been playing tough with Russia for a long time trying to make it open its energy market for foreign investments. This is absolutely unacceptable for Russia, which is determined to benefit from its strategical position. Neither side seems to be willing a compromise, but I blame mostly the EU which is unable to accept the reality - which is that Russia is getting to the position of superpower and must be treated at least as equal. If you want its energy you must offer something in return - ideologically backed calls for "free market" etc. will not work. Don't try to treat Russia like Nigeria, damn it.

The result of this stallmate is that russian energy sector remains underinvested, with potentially disastrous consequences for EU in the longer run - though it plays well for the long-term Russia's self-interest. The EU is growing impatient, totally unable to accept the reality of loss of control and continuing its pathetic bullying attempts. I wonder when will these people wake up?

Whatever the background picture, this path taken is leading to fierce confrontantion with the Russian state. EU is unable to introduce structural conservation measures, making cosmetic efforts to develop alternatives, not willing to treat Russia as equal, what the hell do they expect as a result? Like I said - they are idiots. Paper tigers, thinking they make the reality what they want it to be from their warm Brussels cabinets.

"reinforcing solidarity among Member States;"

ie, if you have it due to sound policies or pure luck we will take it from you, and if you refuse, we will take it by force. Tragedy of the commons will take care of the rest.

So now the cheap hydroelectricity and nuclear power of Sweden and Finland will be exported to the rest of the EU, killing the base industry and freezing the population to death. After all, why should 14 million people have access to more energy than the rest of the EU? Swedes are such total wimps that they will bend over straight away. They always do, and always will. At least the Finns have some guts. In the past anyway.

I'll stick to my firewood. If the EU wants it, come and get it. But they propably fix some legislation stating that it is bad solidarity to burn your own firewood, and/or illegal to heat by firewood. My trees will probably be forced to be exported to Portugal, where some EU susidised factory will waste energy converting them to wood pellets, and then shipping them back to Sweden. Or something equally EU-like.

Sweden and Finland will export power *if* the price is high enough.

If they chose not to export that power, they would be losing that buying power (the opportunity cost) that they might have earned by exporting it.

That is the first principle of foreign trade, and it works.

Whilst I can see Finland and Sweden exporting along a 10GW capacity interconnector, I think it quite unlikely that it will be massively bigger than that (not sure what the existing interconnectors are?).

The distances are large and the biggest power consuming markets are not close (southern Germany, northern Italy etc.).

Re Grid in northern Europe.
see this nice ABB presentation.
http://www.abb.com/cawp/gad02181/09264cb2d17c4cc6c1256d8800402659.aspx
I am sure the Learned TOD - Redin and others can give much more detail.
and the European Electricity producers organisation EUrelectric has a wealth of information on the topic.
here: http://public.eurelectric.org/Content/Default.asp?PageID=505
kind regards/And1

Grid in Northorn Europe:

Please consider the advantages this brings to windpower. The problem has been that production in Northorn European small nations is so limited in area that a calm period disrupts the baseline power of the grid. Just as the original pioneers predicted, this problem is already disappearing, as the grid spreads out, and takes in diversified types of production (wind, nat gas, nuclear, hydro, etc.) and each can act as spinning reserve for the other, and take the strain off of any one type. But of course, once more, the doom and gloomers said wind was finished, the variabiltiy would kill it dead.

Take not America, with the land space available here, and the variety of power sources, we have orders of magnitude to gain!

Roger Conner known to you as ThatsItImout

The first problem in Sweden is getting more capacity built, we currently have no "excess" to export.
We still have a political deadlock regarding nuclear power but it has changed from "it should be dismantled" to "uprating of powerplants and some new uranium mines is ok".

Power producers acting as oligopols, electricity export and side effects from CO2 certificate trading has given the Swedish heavy industry higher electricity prices. Ordinary people have much higher electricity prices due to much higher taxation on top of that. Cheap electricity is no longer the competetive advantage it once where and manny companies now discover that they squandered the advantage by inefficient processes, inefficent ventilation, leaking compressed air systems etc. This is being adressed but I could happen faster.

Much of the power generation, mostly hydro power, were owned by heavy industry that traditionally used hydro power from pre electricity times and then built much of the new dams when HV AC made it possible to transfer electricity over long distances. When the electricity market were deregulated manny of these companies bought the free market propaganda and sold their hydro powerplants cheaply in anticipation of them being run by competent competing specialists to let them concentrate on their core markets of pulp, steel, etc. This backfired when the new electricity market were withouth real competition.

Now have 32 of these heavy industry companies formed a new cooperation organization Basel to build new owned electricity production to get back to the old times and how it is run today in Finland. They have recently pledged that they have 70-100 billion SEK, $10-13 billion to build at least two new large nuclear powerplants, they are currently trying to find electricity to import(!), building some windpower and everything elese they can think of but the big prize is to get some reliable 24 TWh for the next 60 years. I find it incredibly stupid to not let them build this ASAP, I think most other countries would kill for having such an initative.

The big oligopol companies seems to be tolerated as long as they invest a lot of their enourmous profits. They do invest quite a lot, there is a cablification program underway for most of the rural grid to make it storm proof and as a side effect return manny km2 of forest to normal production. There are also reinvestments and investments in the 130kV district grid, manny hydro powerplants are being renovated and having their dams strenghtened and they invest in district heating and a fair number of combined heat and power district heating plants and upratings of the current nuclear powerplants.

Unfortunately there also is an old political push to get them to invest massively in wind power and that is not as economical as nuclear, hydro and using the district heating cogeneration potential. And one of the largest of these comopanies Vattenfall is 100% state owned making this state of affairs fairly good for our government budget. It is as if the largest US oil company where delivering its profits to the federal budget, katching!

If we build combined heat and power plants that mostly burn biomass and utilizes all of the large and medium sized district heating nets in Sweden we could add about 13 TWh of production. The current production is around 7 TWh. Its very good for us since it would be maximal when the weather is cold and a lot of electricity is used for heating. Continuing with round numbers we could have another about 10 TWh if the fuel source is natural gas.

There are plans for around 10 TWh of wind power, this is a very uncertain number. The current production is close to 1 TWh. Myself I would rather build less expensive nuclear power instead of the very large wind power installations and export ballance power to the countries that build more wind power then they can ballance on their own.

There is an unused potential for more hydro power in the streams and rivers that already are exploited. The current production is between 50-75 TWh depending on rainfall. Another 3 TWh is probably possible by improving old installations and 5-11 TWh as infill in old exploted streams. If we sacrificed all of the untouched rivers it would give 12 TWh but that would get me to demonstrate against the buildout and I am a hard line pro technology geek. ;-)

We have one closed down and still conserved nuclear powerplant Barsebäck with two old BWR reactors. Its built close to Denmark and its coluse has much to do with Danish complaints. After its closure they made billions exporting coal power, oh well. My own crazy idea is that our governmnet who paid Eon for the capital and production loss should force ownership of it and then give it away to the Danes provided they renovate and run it. That should give 2 x 4 TWh of CO2 free power for about 20 years.

Barsebäck is very strategely placed in our grid and the greens have a point of it being an old planty close to large cities. It would be better to tear down the old plants and build 2-3 modern arliner crash proof EPR:s instead. 2-3 x 12 TWh. It is probably reasonable to lay a couple more 400 kV AC cabels to eastern Denmark, a HVDV link between eastern and Western Denmark is already planned and additional 400 kV high tension lines would go over farmland with close to zero impact on farming. This could replace all of the condencing coal power in Denmark and free up grid capacity to the hydro power in northern Sweden for ballancing wind power in Denmark and Germany. A massive enviromental win and a massive economical win for Sweden, a profit that could be shared with Denmark by Danish investment and ownership in the plant.

With the same priciple for the south east coast could an additional 12 TWh reactor be sited at Oskarshamn, and 1-2 in for instance the Karlshamn area and most of the grid strenghtening would be alongside old powerline corridors and HVDC cabels in the sea to Germany and Poland. But this only makes sense if they have an intrest in importing nuclear power instead of having it run locally, I hope having solved the waste issue and having all authorities in place compared with Poland is of significant value.

The same reasoning could be applied to Norway but they ought to have an enourmous savings potential from decades of dirt cheap hydro electricity and if they overcome som mostly aesthetic enviromental issues they could build much more hydro power. The grid to Norway seems to be weak with few link between southern Norway and Sweden making the powerline investments large and intrusive.

For medium sized reactors we have a potential for combined heat and power production in the urban areas in Stockholm, Göteborg and Malmö and perhaps also in the largest refinery close to Lysekil. But this will only become politically possible when we get forest biomass scarcity wich will follow when high oilprices make forest biomass to fuel profitable. It would be kind of ironic if we could have a nuclear powered refinery in a close to zero oil country in 20-30 years. But it would be a high tech trade income generator and an extra energy security. It would follow our old trade and industry tradition and our acceptance of foreign owned investments, the refinery is saudi owned, massively profitable and its owner shows his fondness of us by investing in Sweden. But this is only a personal vision from thinking about synergies.

I have not counted the ongoing upratings of the 10 present nuclear reactors, if I remember right it is about 7 TWh.

If I sum this up we could with streamlined processes and if people are serious with making the investments have about 50 TWh online within about 15 years. It would require a willingness for our neighbours to import power and a political concensus of getting out of the way for the investments.

I would realy, realy like to see this happen. And it should be done in parallell with a continued build out of ground source heat pumps
past the present >300 000, massive installation of plug-in hybrid and EV charging outlets, more electrified railways and a natural gas and biogas pipeline grid and so on.

Therin lies a problem, all of these investments use massive ammounts of concrete, steel and so on and lots and lots of workhours. A fair part of our economy is already about building heavy long term infrastructure but more of it needs to be invested in that and that will limit some other areas in our economy.
Perhaps people could buy shares and bonds in these investments shifting more of the economy from short term spending to long term dividends? A majority of small house owners already has this thinking in their own house investments. We have a large increase in lending for spending but the banking system dont seem to have become perverted.

I think we should make this gamble in Sweden and act like peak oil is about now. If it is incorrect and the peak is in the medium term future we will take some beating in the competition but most of the investment will still be there a generation later and then become extremely profitable. And in the meantime the CO2 savings will be huge and we will continue developing a nice to live in post peak oil logistics and building structure and will thus be able to carry on our way of living in the post peak oil times and post fossil fuel times.

IMHO this deserves to be reposted on the frontpage as a guest post, most impressive. You know alot about swedish and scandinavian energy systems.

Regarding norwegian hydro potential it is true that it is great, but most of what is politically acceptable is in the form of small run of river plants, in itself a great addition to our system of circa 100% large scale hydropower. Already in the 80s the opposition to the Alta plant was so immense that it's output is still the benchmark preferred by the media when the output of new powerplants are discussed. (much like the way the discovery channel likes to state the weight of airliners in how many elephants it weighs, a strange unit indeed).

The thing few people seem to take into consideration is that norway is perhaps the country in the world that is best suited to a massive program of windpower, balancing it against the current hydropower should be advantageous to everyone, even the european union, since the plans for norwegian gasfired plants could be scrapped. I don't know what portion of the electricity demand could be met by wind in a system currently consisting of 100% hydro, but it should be extremely high compared to most other countries with significant wind resources. The key to achieving this ofcourse is upgrading the grid, but that regrettably faces the same seemingly insurmountable NIMBYism as all other new energy infrastructure projects.

According to http://www.nve.no/admin/FileArchive/282/Rapport%2019-04%20nettversjon.pdf the potential of small plants (>10MW) is 7 TWh + 18 TWh annually , alot knowing that norwegian production is around 120 TWh annually.

According to this page http://www.nve.no/modules/module_109/publisher_view_product.asp?iEntityI... the total potential is 206 TWh annually, meaning that around 80TWh of hydro alone could be added, a significant addition to the scandinavian, and by extension, the EU electricity system.

If we allow ourselves to also consider wind, the potential is truly impressive, http://www.nve.no/modules/module_109/publisher_view_product.asp?iEntityI... says the offshore alone could supply 180 TWh at depths less than 10m, and 800 TWh at depths less than 50m. Onshore according to http://www.nve.no/vindatlas/ (in english)

"The maximum theoretical energy production from the total land area with wind speed above 6 m/s is: 1165 TWh/year"

Summing this up gives over 2000 TWh. Alot of renewable energy is available, that much is clear. These numbers are all from the government agency "Norges Vassdrags og Energiverk". They describe themselves like this on their english language pages: http://www.nve.no/modules/module_109/publisher_view_product.asp?iEntityI...

The Norwegian Water Resources and Energy Directorate (NVE) is subordinated to the Ministry of Petroleum and Energy, and is responsible for the administration of Norway´s water and energy resources.

I discovered a lot of typos and it were quite irritating to have the time limit(?) pass while fixing them and then lose the edit. I will redo the post after having supper with less typos and more references.

Norwegian natural gas fired electricity production dont make sense for me unless it can be in the form of cogeneration for industrial and residential heating. The gas ought to be far more valuble as exported for continetal wehicle fuel and to keep continental pre nimby powerplants running.

I hope you can overcome aesthetical problems for more wind power since if it is to be built it would make more sense in Norway then Sweden. And regarding district heating it could be even more economical to burn garbage and biomass and export the natural gas.

Gas fired powerplants here (in Norway) don't make much sense to me either. Especially since, with todays gas prices, it will be as expensive as wind-power. And the gas price will surely go higher still.

But main reason behind the new gas-fired powerplants is actually gas production. The large fields need more and more pressure support for extracting and moving more and more gas through the long pipe-lines. This needs a lot of electrical power for the compressors. We could drop the pressure support but volume delivered would shrink and then England would surely complain :(
Also the compression to LNG needs a lot of power.

Hydro today is ~105-135TWh/year depeding on how much rain we get. Small scale hydro and modernization of old plants could get this up to 140-150TWh on average. New large scale projects are not politically acceptable at this time, the scars from the last controversial one is still too fresh.

On-shore wind also often meet a lot of resistance so progress is slow. Thus I see off-shore wind as the power source with the best future potential. This is still a more or less immature field but it is being worked very hard on by several companies.

Quite a lot of our hydro plants could be converted to pumped storage (some are already in the progress) so the potential for wind power might even exceed that of hydro power. Thus we might be able to export in excess of 100TWh/year of renewable power in the future if we make the investments necessary.

Regrettably, Norway doesn't have much of a district heating grid, we are way behind Sweden there. On the other hand there has been lots of talk lately about building high-speed railways to replace plane routes and old, slow railways.

Building a decent road and railway network is an exellent way for investing a short era of large oil incommes and then have use for it for a very long time. I do understand that you prioritized your roads with immense tunnel building etc but it is great news if the next big investment will be a high speed railway network.

The discussions on Norwegian high speed rail networks are probably pie in the sky given the current costs in the norwegian labour markets. Figures of $3-10 billion have been quoted for one west-east link - very nice but not competitive with any other form of transport :-( - not good, but reflecting the supremecy of air travel in a country with a lot of mountains and very hard rock.

Re. Wind, there are a lot of norwegian projects under planning, but virtually none are making it into the building phase. This is related to the main problem in the Norwegian (read scandinavian) el market - relatively low energy prices and no investment subsidies for new low carbon energy sources. Typical lifecycle costs for offshore wind are around €70/MWh, this looks ok in Germany with power prices not far off this level, but Nordic prices this week were around €35/MWh and long term prices with the area moving into surplus are probably in this ballpark too (until 2015-2020). Carbon pricing is factored into this - most nordic generation is carbon free hydro or nuclear (if we exclude Denmark).

The govt here recently announced feed-in subsidies for wind, however these were a very small part of a delta required to make onshore wind economic and offshore wind has a magnitude more difficulties. If Norway had a system like UK ROC's (renewable obligation certificates) this would kick off a bonanza of investment - and a lot of new capacity. But until this happens, hydro and nuclear will rule the markets.

On gas fired power stations - agree totally that norwegian projects will have trouble making money when gas can be sold in european markets at much higher prices. Especially when there is basically a negative sparkspread in the market for gas today.

However.......the power generation system is running short of capacity (in dry and normal years anyway) particularly due to oil / gas developments offshore but also onshore industry and domestic demand growth - more power gen is required. The political establishment has managed to paint itself into a corner with gas fired power stations (with carbon capture) being the only way out.

Carbon capture and storage is either a visionary step, or a waste of money depending on your view of carbon capture technology and costs. For my money, a more hefty subsidy on wind, and modulation using pumped or natural storage hydro would have been a better bet...... Carbon capture is important for europe however, and developing the first truly large scale schemes in Norway may give industry a real advantage in winning business elsewhere in the world !

Carbon capture in Norway is brilliant if you need the CO2 for preassurizing oilfields and dissolving more oil if I remember right.

It ought to be logical for Norway who has built a large offshore industry to try if it is possible for the same industry to series produce very large offshore windmills in an economical way. I dont think subsidizing large parks of windmills is smart but installing test serieses would if successfull give a large Norwegian industry a future after the peak :) in the gasfield buildout. I am more a fan of nuclear power then wind power but if I were king over Norway I would test this alongside developing thorium reactors. You got the money, use them while you have them, you could pay for the best windpower and thorium reactor experts that money can buy.

That Norwegian labour is expensive is a problem that sooner or later will be solved. :-/ And you currently do afford large investments in road tunnels etc. You could start with better maintainance of the railways you got and perhaps gestures like electrification of the short link from the Swedish border to the Trondheim harbour and be less anal retentive about certifing Swedish rail wehicles on Norwegian tracks and thus get some selfish use out of the Swedish railway investments.

If you on top of that planned for high speed rail and capacity investments and started to adapt your towns for it you could get the investments rolling when its time has come in 5-20 years when the economics are favorable after the immediat road need is satisfied.
If you got a strong roadbuilding lobby and industry it will also give them something worthwhile to do when the most pressing road need is filled and they can probably recycle exactly the same arguments for making the investments.

I think this would be good for you and what is good for Swedens closest neighbour ought to be good for us.

Btw, we should buy natural gas from you alongside developing our own biogas resources and it would be long term smart for you to use our biogas technology. You dont realy need the tiny additional export income but it is a sustainable asset and you got a strong farming tradition but your farms need more long term competetivens for the future when there is no more government surplus for farm subsidies.

I also think there is a potential of 3 TWh if all old scrapped small-scale hydro stations were started up. Sweden is about centralization and large organisations, so small-scale hydro has been almost killed due to different regulations.

I think the main reason for the scrapping of small scale hydro in Sweden first were ordinary competition with large scale hydro and then overbuilt nuclear power. We probably built way more nuclear power then needed as an overreaction to the 70:s oil crisis and following old trends for increasing industrial electricity use that did not materialise. This gave a long fire sale on electricity that made all kinds of small scale power production uneconomical and its probably a main reason for us not yet having exploited the full potential of electricity and heat cogenerations as the fins have done.

But this overbuilding is of course a result of government and large corporation centralization.

During this we had a long influence struggle between the established power companies protecting the economically vulnerable nuclear investments and greens trying to get the nuclear program dismantled. Both influenced politics and lawmaking and made our energy policy into a 25 year long schitzophrenic nightmare. It more or less ended up with massive use of biomass for heat production, lots of heat pumps and government support of small scale electricity production, closure of two reactors and uprating of the other 10 equaling about 4 of the closed reactors and killing most of our very advanced industry for building nuclear powerplants and lots of research perhaps mostly commercialized outside of Sweden. And our greens had an internal battle on deciding if small scale hydro is good or bad, the leftist greens decided on it being bad, the right wing have decided on it being good.

From an energy policy standpoint global warming and peak oil is a godsend for the internal Swedish energy interests and politics, finally something we can agree on for all the different groups. If these groups stop competing by bullshitting about each other and start investing and our governmnet get out of the way by making the permit procedures a lot faster I think we could go from about 150 TWh/year of electricity production and consumption to about 200 TWh/year of production, consumption and export in about 15 years. Thats from 16600 kWh/capita to 22000 kWh/capita almost all of it close to zero CO2 and half of it would be nuclear power.

But this do of course depend on our neighbours being willing to import
electricity and trusting that we will deliver on the contracts. If not this could become a repetition of the old cycle of overinvestment and then a crash and small and large scale producers will be at each other throaths to avoid it and then survive it.

Hear, hear.