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Germany’s gas plan: diversify, increase, clean

June 9, 2019 by Zuzanna Nowak

German Gas plan: diversify, increase, clean

by Zuzanna Nowak, June 10, 2019

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The German Energiewende is under stress. Nuclear and coal have both been consigned to eventual history putting gas firmly back on the agenda environmentally, economically and politically. It makes Germany, like the UK, an informative prism through which to consider gas’s role in the EU energy transition and there are some clear signals about the direction of travel. The recently-launched German Gas 2030 Dialogue should answer the EU-wide question that whilst natural gas is abundant, relatively cheap and up to 60% cleaner than coal, is it clean enough to have a role in the long run? Balancing climate concerns with security of supply and affordability make this a politically-charged, complex debate. Zuzanna Nowak considers the over-arching factors informing German policy decisions – decisions which could create a template for the EU as a whole.

Back in 2014 and contrary to expectations, Ralf Dickel of the Oxford Institute for Energy Studies observed that “the role of gas in the Energiewende was hardly discussed and is not addressed in official policy”. While climate and energy policies have remained at the top of government considerations, only now is gas receiving due attention as a way of supporting the transition. The Gas 2030 dialogue process launched recently by the Federal Ministry for Economic Affairs and Energy attempts to provide answers to pressing questions on the role for gas in the German energy transition now and in the long term. Conclusions from expert consultations are not due till the Autumn, so what factors are at play for the role of gas in Germany?

Consumption overview

Germany is still relying to a large extent on fossil fuels. The country’s power production mix currently comprises coal (lignite’s share amounts to 22,5%, hard coal 12,9% of the mix)and natural gas (12,9%), nuclear (11,8%) and renewables (34,9%), and others (5%). (See more tables)

These equations are, however, to be changed. Nuclear phase-out should be accomplished in 2022 with the last reactors, in Isar 2, Emsland and Neckarwestheim 2 plants, shutdown. Yet, renewables have overtaken the electricity generation gap created so far by nuclear infrastructure closure and are likely to mop up the remaining nuclear market share after 2022 with no impact on security of electricity supply.

It appears there is little room for gas plants to manoeuvre except as baseload for RES’ intermittency. However, at the beginning of the year, in addition to nuclear phase-out, Germany’s coal exit commission proposed a pathway towards decommissioning the last coal-fired power plants by 2038. While it is not obvious which energy sources will cover the demand gap, there is a high likelihood that the pace of renewables development will slowdown leaving at least a few percent of the market open to natural gas.

Gas demand growth will come from outside the power sector

Or more. Electricity production is not all. In fact it is only small part of the German gas story, as over 3/4 of this resource is used for other purposes – heating, cooling and heat for industrial processes.

The primary energy consumption structure shows a far greater predominance of fossil fuels: oil (34,3% share), natural gas (23,7%), coal (lignite 11,3%, hard coal 10%), nuclear (6,4%) and renewables (14%), and others (0,3%). Furthermore, with LNG development, transportation provides an increasing role for gas. (See tables)

Hence, whilst gas will probably remain in the background for electricity generation discussions, its role in other sectors is far more interesting. A lot will depend on the ability of renewables to respond to energy policy developments, the measure of success of energy efficiency measures and its own technological evolution but in any event, the quick carbon reduction wins combined with increasingly competitive price put gas in a strong position compared with alternatives under current and medium-term market conditions.

The Challenge: overcoming the Energiewende impasse

There is no doubt the Energiewende is in trouble. At the beginning of April 2019, Federal Environment Minister Svenja Schulze said that after four years of stagnation, Germany’s levels of CO2 emissions are finally decreasing. However, as well as being down to higher use of solar and wind energy and lower use of oil, gas and coal, it was also a direct result of freak weather conditions. She stressed that Germany has to implement new energy policy measures in order to get back on track vis-a-vis climate protection. Indeed, ambitious goals set in the framework of the EU energy policies and Paris Agreement will only partially be met by Germany in the next years. It seems that this impasse stems from the fact that they have set too much store by an all-renewable/all-electric approach while devoting less attention to the wider use of energy. In such a situation, the question on the supportive role of gas (after all, the fossil fuel with lowest CO2 emissions) in Germany’s energy transition becomes highly pertinent.

Security of supply and affordability

This imperative for growth is what makes price and security of supply such a pressing issue across the EU but especially in Germany. Angela Merkel admitted in her January 2019 speech, that due to nuclear and coal phase-outs, gas will play a more important role in Germany for another few decades and therefore announced that gas infrastructure is to be expanded in all directions. This kills two birds with one stone.

Firstly, whilst Germany’s gas supply sources have been reliable over in recent years, supply patterns will have to change by 2030.

Domestic gas production (currently catering for around 7 bcm out of 102 bcm consumed) is expected to decrease rapidly and by 12 years’ time only two major suppliers (Russia and Norway) will continue supplying when the Groningen field in the Netherlands will finally stop production. Both Gazprom and Equinor claim they are able to increase supplies to Germany in order to fill the supply gap that might occur but that leaves serious questions concerning security of supply. Germany, like Europe as whole, must diversify its supply to address this – and to maintain a competitive market to manage affordability.

Diversification = LNG

In order to stimulate diversification, in March 2019 the German cabinet agreed on a draft regulatory reform to reduce the costs to private investors willing to build LNG infrastructure. Three projects, in Brunsbuttel, Stade and Wilhelmshaven, are already in the pipeline. What sense does LNG make in a country that has a very well developed gas pipeline grid, numerous interconnectors and is a major European gas hub (planning to merger its two gas market areas)? By acknowledging LNG’s importance for security of supply as well as a solution to cleaner maritime and road transport, the reforms serve as a way to ease tensions with the U.S., counter the risk of tariffs (e.g. on cars) and mitigate against possible Nord Stream 2 sanctions. And of course, import American LNG. Politically and economically, it fits the bill.

Looking ahead – clean gas

Germany has it all to benefit from abundant and relatively cheap gas which in the short and medium term can constitute a flexible friend (combining access via pipeline and LNG transport infrastructure) as well as a temporary remedy (quick win) along the energy transition path. Yet, at least in theory, despite important infrastructural investments, there is little chance of perpetuating the use of this fossil fuel beyond the 2050 milestone of the “extensive greenhouse gas neutrality in Germany”. Being short-termist could result in expensive-to-undo carbon lock-in. Building in diversified, secure competitive gas as renewables’ partner of choice means Germany (like the rest of the EU) needs to think long term…ie post 2050. That means gas has to get clean.

The good news is there are numerous initiatives designed to create favourable conditions for synthetic and renewable gas technology development. These will directly contribute to 2050 decarbonisation goals. Turning clean electricity from RES (with temporary or seasonal oversupply) into energetic gases such as hydrogen or methane is not a new idea. Over 128 power-to-gas research and demonstration projects in Europe are already realized with the aim of testing such possibilities, with, among others, two flagship projects underway in Germany – Uniper in Falkenhagen for methanation and HaSynGas in Brunsbuttel for hydrogen. What is more, the existing and soon-to-be constructed gas infrastructure can be used for the purpose of storage of such carbon-free energy. This repurposing can prove in the future to be more economically viable than building new grid infrastructure, transmission lines and batteries for RES. Not surprisingly, both Russia and Norway want to include decarbonised gas in their export portfolios.

The topic has also reached the EU level. The clean gas and system repurposing idea was recently discussed during the 1-2 April 2019 meeting organized by the Romanian presidency. 17 countries’ delegates signed the Declaration on Sustainable and Smart Gas Infrastructure for Europe. But Germany wasn’t among the signatories (they refused to sign the document claiming it was not ambitious enough), whilst some major German companies did give their support (e.g. Uniper, Ontras).

Diversify, increase, clean

The Gas 2030 dialogue is Germany’s first move to attempt to answer the most salient questions on the future of gas demand, importance of renewable gas for non-power sectors, cost-effectiveness and the possibility of industrial scale implementation of new gas technologies, etc. It is clear that the fate of the German gas sector will depend on how climate-friendly it becomes and at what price. But it also depends on the capacity of the German authorities to properly guess where political and regulatory intervention is necessary, and where it might be harmful, so that in the short term, the government does not hamper natural gas (necessary for the transition) and in the medium and long term encourages green gas solutions.

***

Thanks to Heiko Lohmann from ener|gate Gasmarkt for sharing his knowledge and views on this topic.

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Filed Under: 2050, Gas, locked Tagged With: competition, equinor, Gas 2030 Dialogue, Gazprom, German gas, LNG, security of supply, US LNG

Net Zero UK: chance for Parliament to restore international leadership credentials

May 10, 2019 by Mike Scott

Net Zero UK: chance for Parliament to restore international leadership credentials

by Mike Scott, May 10, 2019

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The UK may be in turmoil politically thanks to Brexit, but it has revived its efforts to take a leadership position on climate change, after the Committee on Climate Change (CCC) recommended that the government adopt a new target of net-zero greenhouse gas (GHG) emissions by 2050, a tightening of the current goal to cut emissions by 80% from 1990 levels. Mike Scott reports for Energy Post

The country that launched the Industrial Revolution may have just launched a new green revolution. Other countries, such as Norway and Sweden, have set net-zero targets, but they both allow for carbon offsets which, as the Economist points out, are “convenient nationally, but incompatible with global decarbonisation”.

The CCC has gone a step further by calling for an end to emissions of all GHGs, not just CO2, and the proposal includes emissions from the UK’s share of international aviation and shipping, both of which are growing fast. “A net-zero GHG target for 2050 will deliver on the commitment that the UK made by signing the Paris Agreement,” the CCC says. “It is achievable with known technologies, alongside improvements in people’s lives, and within the expected economic cost that Parliament accepted when it legislated the existing 2050 target for an 80% reduction from 1990.”

The government is thought likely to accept the recommendation, in the face of strong cross-party support for such a move, backed up by equally forceful backing from the public and business, even sectors that might be expected to resist the move. Everyone, it seems, has seen the writing on the wall.

“Not only is this absolutely the right thing to do, but setting this challenge creates a massive new market for British innovation and engineering to crack.” Harry Theochari, Maritime UK

For example, Harry Theochari, chair of Maritime UK, which represents the country’s shipping industry, said: “The UK maritime sector supports the CCC’s ambition. Not only is this absolutely the right thing to do, but setting this challenge creates a massive new market for British innovation and engineering to crack.”

This level of support would have been unthinkable even a year ago, and it is an indication of the extent to which sentiment has changed on the issue of climate change in recent months, driven by events such as the global climate change school strikes, the Extinction Rebellion protests and the continuing fall in cost of renewable and clean technologies, which make net zero more feasible.

This momentum for a net zero target is not just a UK phenomenon and there is reason to believe that pressure for net zero targets will grow elsewhere. A group of leading European corporations and investors have called on the EU to adopt a similar strategy, not just to combat climate change but to ensure that their businesses can thrive in the future. The companies, including Unilever, Ikea and DSM, said: “Putting climate change at the top of Europe’s agenda will provide business with the clarity and confidence to invest in the sustainable, net zero emissions industries of the future, driving innovation and protecting European competitiveness on a global scale.”

The group pointed out that the combination of science and digital technology is making it clearer what is required from companies and countries alike, which is likely to increase the impetus for more net zero targets.

“Every year more of us are setting science-based targets for our companies’ emissions, we are purchasing clean energy and signing up to renewable energy commitments, using low emission and electric vehicles, converting land to carbon sinks and improving energy efficiency throughout our operations.

“We are doing this because we see the threat that climate change poses to our businesses. The impacts of climate change are already affecting our bottom lines: degrading worker health and productivity, disrupting our operations and supply chains, and damaging assets … A clear, coherent vision from European governments and institutions for climate neutrality by 2050 at the latest will give businesses like ours the long-term guidance we need to invest.”

In response, eight EU countries – Belgium, France, Denmark, Luxembourg, the Netherlands, Portugal, Spain and Sweden – called on other member states to adopt a 2050 net-zero target, as well as to allocate a quarter of the bloc’s next budget to climate-friendly projects.

However, in an indication that the consensus is not universal, heavy coal users Germany, Poland and Italy notably failed to sign up to the proposal.

Nonetheless, the UK’s move is likely to inspire others by showing how moving to net zero can be achieved.

Despite the momentum, it won’t be easy, though. The CCC says that the UK will need to quadruple the amount of low-carbon electricity it generates as well as expand technologies that have virtually no traction at the moment, such as low-carbon heating options like electric heating and heat pumps, carbon capture and storage and low-carbon hydrogen. Other measures that are needed include phasing out fossil fuelled vehicles by 2035 at the latest (compared to the current target of 2040) and stopping biodegradable waste going to landfill.

The Committee warns that to meet the target, the government must introduce “without delay, clear, stable and well-designed policies across the emitting sectors of the economy. Current policy is insufficient for even the existing targets. Government must set the direction and provide the urgency. The public will need to be engaged if the transition is to succeed. Serious plans are needed to clean up the UK’s heating systems, to deliver the infrastructure for carbon capture and storage technology and to drive transformational change in how we use our land.”

The UK could do with some quick wins after the debacle of Brexit – committing to a net zero target offers one and the government should commit to it fully.

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Filed Under: 2050, locked Tagged With: CCC, climate leadership, Committee on climate Change, Extinction Rebeliion, net zero, School protests, UK

Cement emissions: GCCA’s Claude Lorea sets out concrete plans

May 3, 2019 by Mike Scott

INTERVIEW

Cement emissions: GCCA’s Claude Lorea sets out concrete plans

by Mike Scott, May 3, 2019

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Sydney Opera House, Australia: one of the many reasons we love concrete

Concrete is, after water, the most consumed resource on the planet and no other man-made material is more widely used. Without it, there are no buildings, bridges, dams or roads – no Sydney Opera House, no Hoover Dam or Golden Gate Bridge, no Pantheon in Rome.

It is no surprise, then, that it has significant environmental impacts. More than 4bn tonnes of cement, the main ingredient of concrete, are produced every year according to the think tank Chatham House, leading to around 8% of the world’s man-made greenhouse gas emissions (other figures estimate somewhere between 5% – 8%).

At the same time, concrete is essential to global development – to house a growing population and build the infrastructure the world needs. Cement production will have to rise by 25% by 2030, say Chatham House researchers.

But at the same time, “to bring the cement sector in line with the Paris Agreement on climate change, its annual emissions will need to fall by at least 16% by 2030,” the think tank says in a report, Making Concrete Change: Innovation in Low-carbon Cement and Concrete. Steeper reductions will be required if assumptions about the contribution from carbon capture and storage (CCS) technologies prove to be optimistic – as they have consistently over the last 10 years.

“How can we provide the world with the concrete it needs in a sustainable way?” Claude Lorea, Cement Director, GCCA

But while other sectors looking to cut their impact can simply reduce the amount of fossil fuels used in their production processes, things are more complicated for cement.

Claude Lorea, Cement Director, GCCA

Only about 40% of the sector’s emissions come from energy consumption, with the remainder being released during the production process, principally from the chemical reaction when limestone is heated to about 1,450C. “It’s a very important point,” says Claude Lorea, cement director at the Global Cement and Concrete Association (GCCA). “The industry has a unique emissions profile. Solving the energy issue will not solve the whole problem.”

The GCCA is a CEO led initiative of the cement manufacturing sector. It builds on the sustainability work of the World Business Council for Sustainable Development’s Cement Sustainability Initiative, and has taken on the body’s work on reducing the industry’s environmental impacts while adding a key communications and advocacy role to highlight the full benefits of concrete. “There is a lot of confusion about what cement is and what concrete is. Concrete is the end product that people see in their lives. Cement is what glues together that end product,” Lorea adds.

The key issue facing the industry is: “How can we provide the world with the concrete it needs in a sustainable way?” she says. The sector has reduced its emissions per tonne of product by 18.4% since 1990, and it has a target to reduce emissions by 32% in absolute terms by 2050. This is a battle it is fighting on a number of fronts.

The first step is to use more renewably-generated electricity, but power use only accounts for about 5% of emissions, while 40% come from heating the kilns used to create the cement. Here, there is considerable potential to cut emissions and reduce the use of fossil fuels and primary raw materials by fuel-switching. “Cement kilns are the perfect tool for using waste from other sectors, especially biomass,” Lorea says. These waste products include paper and packaging, coffee and rice husks, animal waste and used car tyres. It is also possible to heat kilns using electricity, but unless the electricity is renewable, the benefit of this is minimal.

“Clinker substitution is not only a very effective solution, but also one that can be deployed cheaply today, as it does not generally require investments in new equipment or changes in fuel sources” Chatham House

Worthwhile as these efforts are, they do nothing about emissions from the process of ‘calcination’, which is crucial in making clinker, the main ingredient of cement. From a chemical point of view, the point of the calcination is to remove the CO2 from limestone, producing significant emissions. It is possible to reduce the impact by replacing part of the clinker in cement with other materials such as fly ash or slag – waste products from burning coal and making steel, respectively. Huge amounts of these materials are available in the two biggest cement markets, China and India, so there is great potential for a “quick win” cut in emissions. In Europe, some plants have replaced 90% of the fossil fuels they used to use, but eventually supplies will reduce as power generation and steel production are decarbonised.

“Clinker substitution is not only a very effective solution, but also one that can be deployed cheaply today, as it does not generally require investments in new equipment or changes in fuel sources,” Chatham House says. “It is, therefore, especially important to scale up clinker substitution in the near term while more radical options, such as the introduction of novel and carbon-negative cements, are still under development.”

Carbon capture utilisation and storage (CCUS) is another option – most efforts to introduce carbon capture have focused on power generation and have had limited success. But companies such as CarbonCure and Solidia Technologies are using CO2 to make concrete that both locks up the carbon and, they claim, is stronger than conventional concrete. Some novel cements can cut emissions by up to 90%, but at the moment they are only used in niche applications and have yet to reach large-scale commercialisation.

Concrete does not seem an obvious area for the application of circular economy principles, but there are a number of possibilities, Lorea adds. Fuel substitution and the use of captured CO2 have obvious circular applications, as do efforts to replace clinker. But concrete is also fully recyclable and can be reused in products such as aggregate for use in further concrete production and as a base layer for roads. Another huge opportunity is to make use of the heat produced in the cement production process.

“There is also a lot of thinking going on about building to last and building to recycle, with a focus on designing in efficient use of concrete,” Lorea says. “If we build smartly, then when, say, an office building comes to the end of its life, it can be repurposed as accommodation.”

There is no silver bullet when it comes to decarbonising the cement and concrete sector, Chatham House warns. Rather, “Shifting to a Paris-compliant pathway, with net-zero CO2 emissions by around 2050, will require going further and moving faster on all available solutions, as well as making sure that the next generation of innovative technology options is ready as soon as possible”.

Lorea is optimistic, “the sector is committed to taking climate action, spreading best practice across the globe, increasing the speed and adoption of innovation, and working across the built environment value chain to make myriad efficiencies and improvements – it’s why the GCCA was created!”

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Filed Under: 2050, locked Tagged With: 2050, cement, Claude Lorea, concrete, emissions, GCCA, paris

Sails make a comeback as shipping heads for complete decarbonisation by 2035

February 19, 2019 by Eric Marx

Sails make a comeback as shipping heads for complete decarbonisation by 2035

by Eric Marx, February 19, 2019

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Maersk Pelican replete with Norsepower Flettner rotary sails

Last year’s ITF report asserts that an almost complete decarbonisation of shipping could be achieved by 2035 using currently known technologies. Whilst LNG is gaining momentum, hydrogen, ammonia and biofuels could be more sustainable means of delivering much of the required reductions, complemented by a mix of electronic propulsion and wind assistance. The message, according to independent journalist Eric Marx, is “Hold on. There’s a decade of experimentation ahead”. He counsels against becoming locked-in to any one solution with so many alternatives about to come to market. One, the power of the wind, is already making waves.

The commercialisation of various wind propulsion technologies, underway in Europe since 2018, is set to take off this year as looming carbon targets generate renewed interest in one of the world’s oldest means of travel – catching and harnessing the wind.

The future of shipping could see automated kites deployed from 40-foot containers. Fixed wing sails hoisted atop 35-meter-tall rigs are also being taken seriously, as is the recent deployment of Flettner rotors on a Greek-owned dry bulk carrier, a Scandinavian passenger ferry and the Maersk Pelican, a 100,000 ton tanker vessel.

Flettner rotors were first trialled in the 1920s, but only now have been brought into commercial use with the advent of modern composite materials and software automation, explained Jarkko Väinämö, the CTO of Finland’s Norsepower, which added its Rotor Sail Solution technology to the Pelican in August, a world’s first for a tanker vessel.

It took all of 24 hours to install the two 30-meter-high spinning cylinders, which don’t resemble sails but which create a similar vertical force that can be used as an “auxiliary system” to a ship’s main engines.

“Without any integration, we can bring from five to 20 percent fuel consumption savings,” said Väinämö.

Integration in this case would include new-build ships that take into account wind propulsion together with innovative hull designs, and the use of alternative fuels such as hydrogen, ammonia, LNG and second- and third-generation biofuels, alongside engines powered by electricity or fuel-cell technology.

Each has its drawbacks and advantages. There’s no single solution, warn experts, and yet there’s much that can be done quickly by retrofitting existing ships.

Carbon regulations

Wind propulsion took on greater urgency after the International Maritime Organization (IMO) reached an agreement in April to slash emissions by 50 percent by 2050.

This helped prod Maersk, the world’s largest container shipping company, to announce in December a pledge to cut its emissions to zero by 2050 – going beyond the IMO targets, but in line with a report issued by the International Transport Forum (ITF), an intergovernmental organisation with 59 member countries which acts as a think tank for transport policy.

“We will have to abandon fossil fuels,” Soren Toft, Maersk’s chief operating officer, told the Financial Times. “We will have to find a different type of fuel or a different way to power our assets. This is not just another cost-cutting exercise. It’s far from that. It’s an existential exercise, where we as a company need to set ourselves apart.”

For Maersk to meet its targets, carbon-neutral vessels will have to be sailing by the early 2030s, say experts.

As well as all the new fuelling options, The ITF report authors also point to a list of efficiency measures, such as “slow steaming”, which could yield a substantial part of the needed emission reductions. Over the past two years, for example, Maersk has discovered it could cut fuel use by as much as 30 percent by slowing down ship speed.

LNG-fuelled hybrid could be dead-end

Why then commit to LNG-powered vessels if zero-carbon shipping is just on the horizon?

“LNG can reduce air pollutants significantly, but it’s carbon footprint is more or less the same as with Diesel/HFO [residual fuel oil],” e-mailed Dietmar Oeliger, head of transport policy at NABU, a German environmental group that monitors shipping.

Some LNG ships claim a reduction in CO2 emissions of 15 percent, though that depends crucially on keeping leakage of the greenhouse gas methane to a minimum in ships and bunkers.

“If we are serious about decarbonisation mid-century, that [LNG] is wasted money,” Dr. Lucy Gilliam, T&E

Investing massively in LNG infrastructure might cause lock-in effects, said Dr. Lucy Gilliam, an aviation and shipping expert with Transport & Environment, which campaigns for cleaner transport in Europe. “Why not instead switch to diesel, install emission abatement technology, and wait for a decarbonized fuel?”

That’s the course many are now taking – in light of a global sulphur cap due to take effect next year and owing to the high cost of new LNG engines.

“If we are serious about decarbonisation mid-century, that [LNG] is wasted money,” added Gilliam.

Diesel engine manufacturer Man Energy Solutions is one of those in the LNG camp.

“Switching ship engines to LNG as a fuel not only reduces harmful emissions at a first step, but also enables the engines to use fully decarbonized e-fuels as soon as these are available on a large scale at a later time,” e-mailed Jan Hoppe, a Man spokesperson.

E-fuels are the result of transforming electrical energy from renewables into CO2-neutral synthetic fuels.

But backing e-fuels – by, for example, producing synthetic methane or synthetic diesel through electrolysis from water using cheap renewable energy – would require a massive build-up in solar and wind deployment, noted Gilliam. Moreover, it would necessitate advanced isotope analysis in order to ensure proper regulatory oversight.

“It’s useful to actually reduce the amount of fuel you need to burn,” she added. “We are very much saying we need to do both – alternative fuels and new propulsion systems.”

Transport & Environment, which represents the environmental community on matters before the European Union in Brussels, favours hydrogen made from natural gas in land-based industrial processes. Ammonia is also top on an efficiency basis and is easier to transport and store, though large scale ammonia usage does present health and safety issues that still need to be worked out.

Electric power with battery storage could also play a role, especially on short haul, regularly scheduled ferry passage. Norway’s parliament certainly thinks so – having adopted a resolution last April that would halt emissions from cruise ships and ferries in the Norwegian world heritage fjords “as soon as technically possible and no later than 2026.”

The assumption is that the fjords will only service electric ships in just 8 years time, bringing about what would be the first zero emissions zone at sea.

Wind sails ahead

As for wind propulsion, shipping companies are waiting to see what can actually be delivered.

A total of 14 Flettner rotors are currently sailing on six commercial vessels, according to Gavin Allwright, secretary of the International Windship Association (IWSA), a trade body that represents the wind propulsion sector.

Generally, retrofit wind propulsion rigs can deliver between five to 20 percent fuel savings, with an upwards potential of 30 percent, and 30 percent and above for new build optimized systems, meaning a renewable energy source with free and abundant delivery at the point of use, said Allwright.

In addition to Norsepower, the British company Anemoi Marine Technologies has four rotors spinning on the MV Afros, a 64,000 ton bulk carrier operating in the Pacific. Magnus, a US company, has developed a retractable rotor that acts like a telescope, while the interregional project fund Marigreen has seen German and Dutch partners recently launch a commercial vessel in the North Sea.

The sector is also expecting announcements this year from other hard and soft sail developers.

The next step is to establish regional hubs, said Allwright, in order to bring down costs and bring further integration to the sector.

Yet, all eyes are on Flettner rotors, for now at least, given the recent announcements from Maersk and Viking.

Norsepower alone has another six to seven rotor sails launching in 2019, with its first new-build project in hand and set for installation in 2020, according to Väinämö. In five years the company forecasts annual revenue exceeding €100 million, a projection that would see upwards of 60 to 70 installations a year.

“That’s where the market is currently focused,” said Allwright. “Rotor sails are on the water and have opened the market.”

A vision for shipping’s net zero-emissions future is rapidly coming into focus. The industry should hold off from making any sudden moves as we enter a decade of experimentation which will reveal the optimum cost/benefit result using the best combination of all the solutions on offer.

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Filed Under: 2050, locked, Transport Tagged With: 2035, 2050, IMO, itf, LNG, rotary sails, shipping, T&E, transport

Can nuclear compete for a bigger role in the transition?

February 15, 2019 by Paul Evans and River Bennett

Can nuclear compete for a bigger role in the transition?

by Paul Evans and River Bennett, February 15, 2019

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With plans to phase out coal-fired generators in most of Europe, nuclear is trying to compete with gas to become the most viable baseload power source to accompany renewables on the path to net-zero emissions. Both technologies have their advantages. Gas is competitively priced while nuclear generates power with almost no emissions. Right now, gas’s cost advantage is evidently great enough to tip the balance.

If nuclear advocates are to distill the debate down to a straight-up contest they must first demonstrate that nuclear generation can be competitive on cost. River Bennett and Paul Evans believe there are significant opportunities for savings which could do just that.

The lesson from Hinkley Point is that nuclear power must supply cheaper electricity in order to compete with natural gas. In 2012 prices, the plant delivers electricity at a strike price of £92.50 per megawatt hour – significantly higher than even expensive offshore wind projects and natural gas in the UK. Dieter Helm, a professor of energy economics at Oxford University, estimates that if Hinkley Point were financed through government borrowing rather than private capital it would have been roughly half the cost. This may seem a brazen subsidy, but since the public is already footing the bill through electricity prices and other direct subsidies, such a strategy would effectively save the British-taxpayer billions. Simply changing the financing model would have reduced the Levelized Cost of Energy (LCOE) to a cost in line with natural gas, but with 40 times lower carbon emissions.

Cost of baseload technologies with 3%, 7%, & 10% cost of capital:

However, allocating more taxpayer cash to nuclear projects is not necessary to reduce costs.

A 2018 report by the Energy Technology Institute, a government-backed research body, showed that huge savings are possible with simple modifications. Kirsty Gogan, the report’s author, commented that, “just by implementing best practices and achieving economies of scale it would be possible to obtain cost reductions of 30-40%”. This cost reduction is not a project manager’s spreadsheet-built fantasy either. The construction of similarly designed nuclear power plants in South Korea can deliver an LCOE of $51.37 (£39.61) per megawatt hour, even when financed with private capital at 10%.

Perhaps the most important takeaway from the ETI report is that the main cost determinant for nuclear new build is whether the plant design is complete before breaking ground. Design modifications that take place during construction have proven to significantly increase construction length and overall cost. New builds for similar designs to those experiencing overruns in the UK are being delivered at competitive prices in countries like the UAE and China. Costs came down further when the companies constructing those plants had more experience. Adopting these best practices can also improve the financing conditions of a power plant through reducing costs and risk – allowing “the borrowing of less capital, at a better rate, and with a shorter payback time” according to Gogan.

Finally, the majority of existing light water reactor designs, including Hinkley Point, are capable of operating far past their originally-licensed 35-40 year life spans: these extensions can vastly improve the economics. In the United States a number of plants are already obtaining 20 year extensions to keep generating into their 50s and beyond. Dominion Energy, the utility that manages Surry Nuclear Power Plant in Virginia, has already filed to extend the plant’s life to 80 years.

In the medium-term new technologies known as small modular reactors (SMRs) show promising cost reduction potential without compromising safety. One such technology designed by the Oregon-based company NuScale Power has already made it through the first stage of licensing at the U.S. Nuclear Regulatory Commission. NuScale also has interested utility customers in the state of Utah and most recently The Kingdom of Jordan. Modular reactors have promise since they are designed in part to reduce the length, risk, and costs associated with large-scale infrastructure projects, accomplishing much of the reactor construction as a manufactured product. Producers hope to capture similar economies of scale as the aircraft industry where Boeing and Airbus mass produce complex engineering projects.

Whilst the cost reductions with SMRs are important, they are far from revolutionary. We are not going to see electricity ‘too cheap to meter’. NuScale Power estimates they can provide electricity at an LCOE of $99 per megawatt hour for private investors and $67 per megawatt hour for a state or municipal client, with further cost reductions of up to 20% for multiple reactors. This also assumes a plant life-cycle of 40 years, which in most cases is extended. In the best-case scenario this is at a cost as low as coal when considering the whole life-cycle of the plant, and even before taking into account negative externalities from carbon emissions. Compared with gas though this is more economical, particularly in Europe. NuScale CMO Thomas Mundy commented that “beyond $5/MMBTU our technology is competitive with Combined Cycle Gas Turbines”. At the National Balancing Point, Europe’s most liquid gas exchange, natural gas has been traded at a spot price above $5/MMBTU since August 2017.

Nuclear power becomes even more economically interesting if you factor in a carbon price. Carbon prices in the European Union, measured via the Emissions Trading System (ETS) effectively tripled in 2018 – outperforming any other commodity. Research by Mckinsey Energy Insights shows that even low carbon prices will encourage the use of gas over coal, but prices above $30 per ton could make gas less attractive. With a higher carbon price and the use of best practices for plant construction, nuclear energy might just stay in the race.

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  • River Bennett is a researcher for the Nuclear Innovation Alliance and currently pursuing graduate studies in nuclear engineering (twitter: @riverbennett)
  • Paul David Evans is a graduate student of International Energy at SciencesPo Paris. (twitter: @_pauldevans)

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Filed Under: 2050, locked, Nuclear Tagged With: 2050, emissions, hinkley, lcoe, nuclear

EU can help bring far-ranging benefits of a meaningful energy transition

February 11, 2019 by Komila Nabiyeva

South East and Eastern Europe: Part II

EU can help bring far-ranging benefits of a meaningful energy transition

by Komila Nabiyeva – February 11, 2019

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In Part 1 of this special report, Komila Nabiyeva demonstrated how investment conditions in South East and Eastern Europe, South Caucasus and Central Asia make it almost impossible to justify development of renewables infrastructure on any great scale. That being the case, she calls on the EU to play a greater role. Their initiatives are already making a difference. This is encouraging because it shows that with more EU engagement, a more meaningful energy transition is possible. As well as getting the region on the road to Paris targets, that would help solve their pressing energy security and health issues, boost economic growth and contribute to democratisation and peace building.

Background

Energy infrastructure in the countries of South East and Eastern Europe, South Caucasus and Central Asia is largely inherited from the Soviet era. This has led to fossil-fuel based monopolies where policy-makers and energy industry see little advantage in creating the conditions for a transition to renewables.

High fossil fuel and nuclear subsidies (including the complete over-looking of the cost to health and the environment) going hand-in-hand with artificially low electricity prices hinder investments in renewables capacity and infrastructure. As a result, the region as a whole is missing out on a whole raft of fundamental long-term economic, environmental and health benefits.

Benefits of an energy transition

An energy transition would be extremely beneficial from social, economic and political standpoints, and a number of drivers and opportunities could foster the process.

The region remains extremely dependent on fossil fuels and nuclear in its total primary energy supply (see figure 1). Most countries are net energy importers, heavily dependent on oil and/or gas imports. (For instance, in Armenia, Belarus and Georgia net energy imports account for over 60% of total energy use and in Moldova as high as 90%.) The deployment of renewable energy and energy efficiency measures could help solve pressing energy security and energy poverty issues.

Meanwhile, the economies, heavily dependent on revenues from local fossil fuel energy production (e.g. Russia, Azerbaijan and Kazakhstan) can increase their resilience to external shocks, such as volatile oil prices, by diversifying their energy supply.

Power generation, transmission and distribution infrastructure across the region is poorly maintained and often operating beyond its design life. In the coming years, many countries will have to replace their aging and inefficient fossil fuel and nuclear energy infrastructure (operating beyond its design-life), opening up a great opportunity for advancing the switch to clean energy.

In 2013, about 37 million emigrants came from countries in this region[1] – 16% of all international migrants in the world and nearly 10% of the total population in the countries of origin. Investment in renewable energy will create new domestic jobs, helping slow the rising rural depopulation, labour emigration and brain drain.

Deployment of decentralised renewable energy could also help to significantly advance the democratisation process. Investments and support for renewable energy projects by energy cooperatives, communities and citizens can help significantly to reduce oligopolistic control of large conventional power plants and levels of corruption.

An effective transition would help to dramatically reduce air pollution and to solve numerous health and environmental problems in the region, resulting from fossil fuel and nuclear energy generation. For instance, coal power plants in five Western Balkan countries are among the most polluting in Europe, causing about 7,200 premature deaths per year. Depending on weather and wind conditions, air pollutants can travel more than 1,000 km and cause damage to health in neighbouring EU countries and beyond.

Last but not least, renewable energy deployment can foster regional cooperation through the expansion of interconnection capacities to neighbouring countries and cross-country trade and help to end conflicts over limited and unevenly distributed fossil fuel energy and water resources.

EU engagement

Until the conditions for renewables investment are addressed in the region, its neighbours in Western Europe and the rest of the world cannot expect much in the way of a contribution to global efforts to reduce greenhouse gas emissions.

EU engagement is especially important in light of China’s controversial “Belt and Road” initiative which includes plans on construction of new coal power plants across the region. These would lock the countries into coal assets for decades, further damaging people’s health and the environment, and aggravating climate change.

It should focus on know-how transfer and dialogue on favorable sustainable energy legislation and investment climate, as well as technical capacity-building on integration, planning and operation of renewable energy.

With the targeted and concerted technical and financial cooperation of the EU and other international organizations, the countries in the region could significantly accelerate their currently slow pace of energy transition, improving their own social-economic situation and contributing to global efforts to stop global warming.

Part one: Subsidised fossil-fuel power blocking the way for renewables

***

This article is based on the report “Energy transition in South East and Eastern Europe, South Caucasus and Central Asia: Challenges, opportunities and best practices on renewable energy and energy efficiency”, published by the Friedrich-Ebert-Stiftung in December 2018. http://library.fes.de/pdf-files/id-moe/14922.pdf

About the author: Komila Nabiyeva is a freelance journalist, reporting on climate change and energy issues. She has worked as a communications consultant, moderator and trainer and has organized workshops on climate and energy issues for the United Nations and other organizations. Currently, she is coordinating the work of the Energy Watch Group, an international network of scientists and parliamentarians.

  1. The figures refer to the entire region covered in the article plus Turkey and Israel. ↑
Graphic produced for and first printed at the publication of the Friedrich-Ebert-Stiftung: Nabiyeva, Komila (2018): Energy Transition in South East and Eastern Europe, South Caucasus and Central Asia Challenges, Opportunities and Best Practices on Renewable Energy and Energy Efficiency

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Filed Under: 2050, locked, Renewables Tagged With: central asia, eastern europe, EU policy, fossil fuel subsidies, south caucasus, south east europe, transition

Subsidised fossil-fuel power blocking the way for renewables

February 8, 2019 by Matthew James

South East and Eastern Europe: Part I

Subsidised fossil-fuel power blocking the way for renewables

by Komila Nabiyeva – February 8, 2019

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Multimillionaire Vasyl Khmelnytsky (L) passing solar panels of the UDP Renewables power plant in Kyiv Oblast - Photo: Kostyantyn Chernichkin

Right on the border with Western Europe, countries in South East and Eastern Europe, South Caucasus and Central Asia have enormous potential for renewable energy, but it remains largely untapped. A stark contrast to the situation a few kilometres further North and West. The region’s fossil-fuel and nuclear subsidies are among the highest in the world. The subsidies and accompanying low electricity prices translate to an unrealistic cost of capital (along with other major barriers) discouraging investment in clean energy. In Part 1, Komila Nabiyeva explains the barriers to, and possible drivers for, a meaningful transition in the region.

Background: the region’s renewables facts

During 2015 and 2016, the region[1] – spanning over 18 countries and home to over 300 million people – added just over 2GW of additional renewable power capacity, with hydropower accounting for 70% of these additions. By comparison, Germany installed 5GW of onshore wind energy in 2016 alone. By the end of 2016, total installed renewable power capacity in the entire region reached 85GW, less than in Germany with 104GW.

Several countries in the region have historically high shares of hydropower. With large hydropower (over 10 MW) included, shares of renewables in total final energy consumption vary from less than 5% to up to 45% (see Figure 2). Yet, including large hydropower does not show the real dynamics and new developments in the sector. The share of renewables excluding large hydropower barely reaches 3%, with only Armenia and Macedonia reaching slightly over 4% (see Figure 3).

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Graphic produced for the Friedrich-Ebert-Stiftung


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Graphic produced for the Friedrich-Ebert-Stiftung

Barriers

Most countries of the region have inherited energy supply infrastructure from the Soviet era, characterised by strong centralisation and monopolies as well as large-scale and inefficient generation facilities. The centralisation of a fossil-fuel based energy industry makes it much more prone to corruption than decentralised renewable energy. In many cases, government officials have a vested interest in existing business structures and see no advantage in changing the status quo.

Accordingly, high fossil-fuel and nuclear energy subsidies lead to artificially low energy tariffs which significantly reduce the competitiveness of renewable energy and discourage investment.

Subsidies

Energy subsidies to both fossil fuel production (through direct spending, tax reduction and exemption, credit subsidies to energy producers and utilities) and to consumption (through tariffs for electricity, heat and fuel for industry and households below their cost-recovers) as a percentage in the region’s GDP is one of the highest in the world, with 61% in Ukraine, 37% in Bosnia and Herzegovina and 35% in Serbia. These percentages are particularly high due to the fact that no charges are levied against the polluting effects of burning fossil fuels.

Chart: IMF, OECD

Electricity prices

Although some countries have started addressing the problem, electricity prices for households in the region are much lower than the EU average of 0.2 EUR per kWh. The highest, Montenegro, is half what is paid in Western Europe, the average is around a quarter (see Belarus) right down to 0.009 EUR per kWh in Kyrgyzstan:

Source: Author’s compilation based on Eurostat, 2018 and Climatescope, 2017

Tariff increases are a very sensitive topic for the population. But elimination of fossil-fuel subsidies, combined with targeted social assistance and compensation mechanisms, would release financial resources for targeted support for vulnerable social groups as well as for health care and energy efficiency.

Cost of capital for renewables

The investment climate in the region remains insecure due to unstable regulatory frameworks as well as complex administrative procedures and regulations on permits and licensing leading to long project development periods and additional transaction costs. This translates into high costs of capital for renewable energy technology.

At current cost of capital levels, investments in renewables in the Western Balkans (for example) can cost up to twice as much as in Germany or France. As a result, almost all recent utility scale renewable energy projects – such as solar and wind farms in Kazakhstan and wind farms in Georgia and Serbia – were only possible with the financial backing and guarantees of the European Bank for Reconstruction and Development (EBRD).

Following years of criticism for financing fossil fuel projects in the region, the EBRD started greening its portfolio in the last years. In 2018, it finally announced plans to stop financing coal and most of oil projects, as part of global efforts to combat climate change.

Meanwhile, high risk perception also leads to very limited access to affordable capital for individual investors, farmers and communities. As a rule, municipalities, often more interested in local energy efficiency measures, have extremely limited budget for retrofitting buildings. Several countries, e.g. Ukraine and Bosnia and Herzegovina, have started to address this issue through specialised funds with the support of international donors.

Opportunity

With targeted support, countries of the region could overcome numerous barriers to the energy transition. A mechanism for the countries of South East Europe – the European Renewable Energy Cost Reduction Facility, which aims to lower the financing costs for renewable energy – is currently under discussion. Increased financial support and the introduction of de-risking and financing mechanisms would help to decrease the cost of capital and enable access to affordable finance.

Programs supporting research and education on renewable energy and energy efficiency, capacity-building and exchange of best practices, would help to increase public awareness and support.

Last but not least, regional cooperation and interconnectivity could significantly facilitate the integration and balancing of renewables in energy systems. Across the region, numerous interconnections between power grids were established across national borders during the Soviet era. The existing infrastructure could be re-established and improved, which would help to overcome many of the technical challenges of renewable energy deployment.

Currently, the EU, with its associated programs, is the most significant driver across the region. A number of highly promising initiatives by the EU and IRENA[2]already exist. It is my opinion that the EU should step up its support further, in keeping with global efforts to tackle climate change, and aided as the costs of renewables continue to fall too.

Until this deeply entrenched systemic problem is addressed, it remains a fundamental barrier for renewables in the region.

Part 2: EU can help bring far-ranging benefits of a meaningful transition

***

This article is based on the report “Energy transition in South East and Eastern Europe, South Caucasus and Central Asia: Challenges, opportunities and best practices on renewable energy and energy efficiency”, published by the Friedrich-Ebert-Stiftung in December 2018. http://library.fes.de/pdf-files/id-moe/14922.pdf

About the author: Komila Nabiyeva is a freelance journalist, reporting on climate change and energy issues. She has worked as a communications consultant, moderator and trainer and has organized workshops on climate and energy issues for the United Nations and other organizations. Currently, she is coordinating the work of the Energy Watch Group, an international network of scientists and parliamentarians.

Many thanks to the Friedrich-Ebert-Stiftung for the use of the graphics which were produced for and first printed at the publication of the Friedrich-Ebert-Stiftung: Nabiyeva, Komila (2018): Energy Transition in South East and Eastern Europe, South Caucasus and Central Asia Challenges, Opportunities and Best Practices on Renewable Energy and Energy Efficiency

  1. The following regions and countries were covered by the research: South East Europe (Albania, Bosnia and Herzegovina, Kosovo, FYR of Macedonia, Montenegro and Serbia), Eastern Europe (Belarus, Moldova, Russia and Ukraine), South Caucasus (Armenia, Azerbaijan and Georgia) and Central Asia (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan). ↑
  2. In 2016–2017, IRENA launched two very promising regional initiatives on South East Europe and Central Asia, which should help to accelerate the uptake of renewable energy in the regions by providing support to policymakers and investors. See https://www.irena.org/europe/South-East-Europe-Regional-Initiative and https://www.irena.org/asiapacific/Central-Asia-regional-initiative ↑

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Filed Under: 2050, locked, Renewables Tagged With: eastern europe, fossil fuel subsidies, investment, south caucasus, south east europe, Ukraine

Electric buses: China leads through policy ambition but Europe could overtake

February 8, 2019 by Arasan Aruliah

Electric buses: China leads through policy ambition but Europe could overtake

by Arasan Aruliah

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News comes of another renewables record for China. The Shenzhen based manufacturer BYD has launched the world’s largest pure electric double decker bus fleet, to be delivered to the city of Xi’an. To illustrate China’s drive to dominate this market, they have already won the international tender to deliver 37 of a total of 68 new electric double decker buses to London, where the red double decker is an icon. That’s more than the remaining 31 that will come from the British company Optare.

China’s success is everyone’s success, when it comes to climate change. But, according to T&E, a serious question must be asked about Europe’s determination to lead the transition to renewables when its own long established vehicle manufacturers, and the policy environment they exist in, lag behind any nation.

European picture

Transport & Environment (T&E) released a study in November 2018 showing the current state of play in Europe, and their recommendations for European buses to go 100% electric. The first thing to note is that electric bus sales are rising fast.

Sales of electric buses doubled in 2017, and available figures show that by mid-2018 electric bus orders had matched the whole of 2017.

Yearly electric bus orders in Europe from 2009 to mid-2018 (2018 H1). About 1,600 electric buses are on the roads and another 1,600 are on order (as of mid-2018)

European bus manufacturers are clearly stepping up their game. The top five European bus manufacturers, Daimler, Scania, MAN, IVECO and Volvo, all offer fully electric 12 meter buses. On top of this about 30 more manufacturers also offer electric buses to the European market.

“Cities all over Europe will only buy electric buses from 2025 onwards – and I am very sure of this. Urban transport will be electric – we are on the brink of radical change” – Joachim Drees in 2018, CEO of MAN Truck & Bus

More than half of the electric buses are in five countries

The Netherlands, UK, France, Poland and Germany account for more than half the total number of electric buses in Europe, including those on order. The reasons for these differences will be – apart from size, obviously – a mix of national electricity costs, and transport policies and infrastructure. In any event, electric buses average a couple of percent of the total across Europe, so there’s plenty of room for growth.

Total electric bus fleet including orders in Europe (up to the first half of 2018)

Just as fuel sovereignty matters, so does “bus sovereignty”

So now that there is a clear trend upwards, T&E says Europe must manufacture here. That’s the kind of message we’re getting from all players across the energy market: the green economy mustn’t just save on emissions, it must and can save jobs, even create them. To do so, we need to learn a few lessons from the Chinese.

Chinese bus makers benefit from generous national subsidies. According to the World Resource Institute, the city of Shenzhen – hometown of the leading manufacturer and engineering company BYD – received $150,000 in subsidy per bus prior to 2016 to electrify its entire bus fleet with BYD e-buses.

This state support has made China the world leader in this space. It has about 99% of the 385,000 electric buses on the roads worldwide in 2017, which is 17% of the country’s entire fleet. Every 5 weeks China adds as many to this total as all the working buses in London (around 9,500), or three times the existing European fleet of electric buses (including those on order). The size of the Chinese electric bus fleet exceeds the number of all city buses in Europe. (Latest figures for 2017 from ACEA give the number of buses and coaches in operation in Europe as 892,861. 38% are urban buses, which equals around 340,000 city bus units.)

In Europe itself, BYD already has a production capacity of around 400 electric buses per year. All this tells us two things, says T&E: policies and state support are needed here, and there’s no time to lose.

Europe’s cities are tightening the emissions rules

The pressure to transition is already building. Many European cities are committing to low/zero emission zones. The list includes lots of big names: Amsterdam, Athens, Barcelona, Brussels, Copenhagen, Hamburg, Heidelberg, Liverpool, London, Madrid, Milan, Oslo, Oxford, Paris and Rome. Some of these cities are part of the C40 Fossil Fuel Free Street Declaration that pledge to procure only zero emission buses from 2025, and to make their city emissions-free by 2030.

About 7,750 local European authorities, totalling more than 250 million inhabitants (accounting for three quarters of the CO2 emissions produced in the EU) have committed to signing the EU Covenant of Mayors for Climate & Energy. Part of their programme is the decarbonisation of urban buses. Bus emissions matter to mayors who make promises to voters over emissions. According to the International Council on Clean Transport (ICCT), buses are just one percent of all vehicles on the road but 25% of emissions in the transport sector.

Forget emissions. The TCO is moving against diesel

 

Even putting emissions aside, the cost trends are not looking good for diesel anyway, says the T&E study. Looking at the total cost of ownership (TCO) to the bus operator, diesel beats electric only if you ignore all externalised costs: emissions and health. Add in health – a measurable cost for healthcare services that has to be paid for today – and diesel loses. Add in the emissions cost – a future cost, but a big one! – and diesel makes no financial sense at all, today. And in the near future, as battery prices drop due to investment and R&D the cost of electric buses will drop too. The T&E study quotes BNEF figures that predict battery prices for e-buses will decrease by 9% to 12% annually on average over 2016-2030, depending on the level of demand in the European market. That is a 75%-83% drop in the cost per kWh.

Of course, the TCO can vary a lot from one country or city to another since it depends on many factors such as fuel / electricity prices, annual driving distances, charging infrastructure, financing costs, battery specifications and lifetime, vehicle taxes, road charges (e.g. congestion charging), and subsidies. To take electricity costs as a stark example, in Sweden it’s €0.06/kWh and in Germany it’s €0.15. So EU, national and city policies are an essential part of the equation, says T&E.

Policy recommendations: follow China

There are a large number of levers that the authorities at the EU, national and local level can pull. So T&E breaks down its recommendations into local and national. For city authorities it recommends:

  • Procure electric buses en masse to replace aging and polluting fleets.
  • Communicate to manufacturers urging them to ramp up scale of production which in turn would reduce prices.
  • Have a TCO-focused approach by shifting from upfront payments to lease or loan payments aligned with the durability of the asset to cover full lifetime over a long period of time.
  • Include external costs in the tendering process when comparing different options.
  • Seek and encourage new financing mechanisms from traditional funding institutions. In particular, investigate EU grant options (CEF, ERDF and Cohesion Fund) and low-interest loan options from EIB.

At the national and EU level, T&E recommends

  • Incentivise and deploy financial instruments to fund the deployment of zero-emission buses though CEF, ERDF or Cohesion Fund grants and low-interest, long-term EIB loans. In particular easily accessible directly to cities.
  • Set a zero-emission bus mandate as part of the HDV CO2 emissions standards for both 2025 and 2030.
  • Exclude gas vehicles from the scope of the Clean Vehicle Directive as gas buses offer no real gains compared to diesel buses and can’t be considered “clean”. From 2030 all newly procured vehicles should be zero emission.
  • Consider a temporary additional weight allowance for zero-emission buses to limit the passenger restrictions due to the additional weight from the batteries.

The manufacturers are convinced, and so are the policy makers. But when time is not on your side, something more is needed, which is why the focus is on new rules, financing models, and mechanisms to accelerate the transition.

Meeting our climate goals is not about winning records. But if winning records helps us meet those goals, then everyone should join the race to electrify their bus networks. And if Europe wins the record from the Chinese, and then China wins it back, we all win in the end.

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Filed Under: 2050, EVs, locked, Transport Tagged With: China, electric buses, europe, ev

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