PEi: Throughout your business and political career you have taken a special interest in energy and environmental issues. Why are these issues so important to you?
|Ruud Lubbers: Former Prime Minister of the Netherlands and keynote speaker at POWER-GEN Europe|
While they grew up in the same area as I had, it became, on a more personal level, very clear to me how vital and how difficult it was to combine economic growth and quality of life.
In fact, while being a business man from 1963 till 1973 my first effort for the public cause was to become member of the “Rijnmondraad”, the regional public authority responsible to combine economic growth and quality of life. From thereon it went further.
In 1973 I became Minister of Economic Affairs, including Energy. This was the very year of the first oil crisis; and in 1975 I wrote the white paper on energy, broadening the mission statement of the Dutch energy research to include, along with nuclear, also conservation, energy efficiency and renewable energy.
All this got a follow-up and comprehensive approach in the second half of the 1980s, when I agreed in my second Lubbers-cabinet on a comprehensive plan for nature and environment in a growing Dutch economy, and when my colleague, the Norwegian prime minister Gro Harlem Brundtland published “Our Common Future”.
PEi: The energy industry is being encouraged to develop ‘sustainable solutions’ – what do you understand by this term.
Lubbers: According “Our Common Future” sustainable development is an economic development, which does not compromise the possibilities for generations to come.
PEi: How effective do you feel the EU has been in creating conditions to enable Europe’s power industry to develop on sustainable grounds?
Lubbers: Over the decades I have seen the European communities develop into the European Union adding many member states. Personally I was co-responsible for the creation of the internal market and enlargement. When I take stock now, I consider it very positive that the European Union has committed itself to the system of emission rights as an instrument to promote the transition to a low carbon economy.
However, it is proving to be very difficult to drive the price for emission rights quickly up to a sufficient level. In fact in my view it is clear that this price has to be €50 per tonne/CO2.
PEi: With the Copenhagen Climate Change talks failing to lead to binding commitments, how optimistic are you that the EU will be able to achieve its climate objectives and how does this uncertainty affect the power industry?
Lubbers: In agreeing how to prevent climate change and how to realize globally a CO2-poor economy the world is making progress. However, the weakness of Copenhagen was that this was only a negotiation between countries, while the key is with companies; in particular transnational companies. Beyond that it is crucial to give shape and substance to Kyoto, where we agreed on “common, but differentiated responsibilities”.
Of course, as an economist I am aware of the need of a so-called “level playing field”. But “common but differentiated responsibilities” mean exactly that time has come for the two most matured economies, i.e. the EU and the USA, to agree that €50 per tonne/CO2 according to “the polluter pays principle” has to be internalized in the prices of these two large economies. Some people fear that this is unwise and unfair given the new expanding economies, in particular the BRIC countries.
Frankly speaking, these countries will find out very quickly that there is no other way forward than to go for that low carbon technology and economies. In the meantime the EU and USA will, as first movers, take profit of these new technologies in terms of jobs and research.
PEi: Energy efficiency is often touted as a vastly underexploited tool in tacking climate change. What role do you see it playing?
Lubbers: Energy efficiency continues to be key; but I have observed that the correct decision to implement emission permits and the optimistic view that this instrument would be put in practice very quickly, has created a too passive attitude to promote efficiency. For the power industry this is a bit dangerous. Best practices in terms of efficiency continue to be key.
PEi: What role do you think nuclear power generation should play in Europe’s future energy mix?
Lubbers: We are watching all over the world a renaissance of nuclear power generation. This is positive, especially when we learn from each other how to cope with nuclear waste. In fact there is still some old thinking as if re-processing of nuclear waste is not the way forward. By this re-processing the volume of nuclear waste can be reduced substantially and there are possibilities to reduce it further still. But the resistance against re-processing is “old thinking” and based on concerns about nuclear proliferation.
Of course this was a real concern, but a better system of non-proliferation has to be realised by practising worldwide the “Euratom” principle. This “Euratom” principle is that fissile material (at least Atoms for Peace) should not be owned by individual countries.
This is practised by the EU already for 50 years. Time has come that the world agrees for the IAEA (International Atomic Energy Agency) to be charged with the same supranational authority; in fact the ownership of fissile material for civil purposes.
Time has come that the five permanent members of the UN Security Council join forces with Brazil, South Africa, India, Japan and the European Union to make this the new reality; a sort of Security Council Plus concept for nuclear.
PEi: To what extent do you think that the smart grid can play a part in transforming the European electricity sector?
Lubbers: Electricity is on the move to realize low carbon economies; and because of that, the “grid” is becoming more and more important. The grid can be considered on two dimensions. One is to connect national grids into supranational grids. The other is to build smart grids, which are using “smart technologies” to optimize storage and production of electricity on the one hand and minimizing use (consumption) of electricity on the other.
PEi: You are closely associated with the Rotterdam Climate Initiative. Can you explain what the aims of this are and how it is going about achieving them?
Lubbers: The Rotterdam Climate Initiative is to implement the ambition to reduce carbon emissions in the Rotterdam area, port and industrial complexes by 50 per cent compared with the base level of 1990 by 2025.
This initiative was considered spectacular considering that the ambition for the Dutch nation was to reach this reduction only in 2050. This ambition was considered even more spectacular since at the same time, the Rotterdam port area will grow extensively. Nevertheless it can be done through the use of carbon capture and storage (CCS).
Roughly speaking this 50 per cent reduction ambition will become reality by speeding up CCS. This is not only about carbon capture, but very much also about transport and storage; and exactly there lies the opportunity for Rotterdam, with its transport tradition of pipelines as well as ships and the fact that in the North Sea and on Dutch soil, many gas fields are becoming empty and therefore available to make this 50 per cent ambition a reality. And even more than that; the Netherlands will become a carbon hub for North West Europe.
PEi: You are known to hold strong views on globalization. How is this phenomenon playing out in the electricity industry?
Lubbers: The globalization dimension plays out in the electricity sector in several ways. For example, we live in an era in which new technologies are developed and practised more and more worldwide. Research and development are taking place globally. The Dutch Energy Research Centre, to give an example, is working closely together with others, not only in the EU, but also with NREL in the USA and with China.
Within the EU we see trans-boundary connections. The new pilot projects to demonstrate CCS within the EU will be partly trans-boundary; and next to that I refer to what I said earlier about “grids”.
PEi: As Europe’s power industry prepares to gather in Amsterdam this June for POWER-GEN Europe, what do you believe is the biggest challenge facing the sector?
Lubbers: The biggest challenge is to play a constructive role leading the way to a low carbon economy. For this we might consider a “ l’Europe a deux vitesses” to make use of the opportunities for North West Europe to become a low carbon hub. And finally, the European power industry can play a role in agreeing with the USA that €50 per tonne/CO2 has to be the way forward to practise the “polluter pays principle” to respond in an effective way to climate change.
Ruud Lubbers will be a Keynote Speaker at the opening of POWER-GEN Europe, Renewable Energy World Europe, POWERGRID Europe and Nuclear Power Europe on 8 June at the Amsterdam RAI.