Brussels sets out target on greenhouse gas emissions

The European Union (EU) has set what been called the world’s most ambitious goal for fighting global warming – cutting, by 2020, greenhouse gas emissions to 20 per cent below the level of 1990.

The EU is prepared to go further and would increase its target to 30 per cent below 1990 levels by 2020 as part of a deal with the developed world. It also wants developing countries to agree targets, a distant prospect at the moment. Under its Kyoto protocol commitment, the EU is cutting emissions by 8 per cent by 2012.

Meanwhile, Germany and France geared up for a battle to save their powerful integrated energy companies from being broken up after Brussels published plans on Wednesday to tackle “serious competition problems” in the sector.

The European Commission wants to break the market grip of national energy incumbents, which it believes are stifling competition and deterring new market entrants, including suppliers of renewable energy.

José Manuel Barroso, Commission president, said there was a “clear preference” for the full ownership unbundling of integrated power companies such as Germany’s Eon and EdF of France, forcing them to sell off grids and pipeline networks.

EU emissions trading scheme will fail – report

The European Union (EU) emissions trading scheme will ultimately fail to deliver in its current form, according to a recent report by an independent market analyst.

Datamonitor says that over-allocation of emissions credits in phase one of the scheme continues to subdue the price of carbon below the levels necessary to promote genuine investment in carbon abatement. Furthermore, a lack of policy cohesion is consistently undermining Europe’s attempt to get the second phase of the scheme back on track threatening to see the EU collectively miss its Kyoto targets.

Datamonitor energy and utilities analyst Paul Stewart says: “Of the 23 member states that reported their first year emissions on time, only Austria, Ireland, Italy, Slovenia, Spain and the UK were short of credits. Germany, the largest emitter in the scheme, accounting for over a quarter of the EU’s overall quota, had over-allocated by 4.5 per cent.”

Stewart adds that with Europe awash with carbon credits, the price is simply too low to persuade generation companies to switch away from cheaper coal while the rising wholesale gas price across western Europe acts as a further disincentive.

Even at their peak in April 2006, when EU emission allowance prices hit the €30 ($39) per metric tonne mark, it was still more profitable for power generators to burn coal as opposed to gas, Datamonitor says. This year is the final year of the first phase of the scheme.

UK to get first coal plant for 20 years

Eon has submitted a Section 36 planning application for UK’s first new coal fired units in over 20 years.

Having submitted a scoping document for the two supercritical coal-fired 800 MW units at its existing Kingsnorth power station in Kent late last year, Eon UK has now decided to apply to build the new units.

The new units would be built next to the existing four units at the station and would come on line in 2012 once they had been proven. The existing units would then be shut down and demolished. The new units would cost around à‚£1bn ($1.93bn) to develop and could be capable of co-firing biomass.

Eon is also conducting a feasibility study into a clean coal power station at Killingholme in Lincolnshire.

German nuclear phase-out goes on

Chancellor Angela Merkel has said that the current programme of dismantling all of Germany’s 17 nuclear reactors is to continue, adding that there is no intention of going back on the policy of abandoning nuclear power.

However, while Merkel’s support for this policy appears to be unambiguous and was part of the contract between Christian Democrats (CDU) and the Social Democratic Party (SPD) in November 2005 that saw her assume leadership of the country, a European energy summit in a few weeks’ time is expected to raise the issue once again.

While the SPD environment minister in her coalition, Sigmar Gabriel, is a campaigner for denuclearisation, his views have come under increasing attack from the right-wing Economics Minister Michael Glos and from the major German energy groups which have called for delays on closing the plants.

RWE, for example, is arguing for a delay on the shutdown of Biblis A, scheduled for 2008. RWE is joined by Vattenfall Europe and EnBW, both of whom are in the same position over their Brunsbuettel and Neckarwestheim-1 reactors, respectively.

Both these nuclear power plants are scheduled for closure in 2009.

News digest

Belgium: Venture capital company 3i is to invest €30m ($39m) in order to acquire a minority stake in Electrawinds, a local independent renewable development company.

Denmark: Cable company Nexans is to develop a 42 km transmission cable for Dong Energy’s Horns Rev 2 offshore wind farm on the west coast. The turnkey, €30m ($39m) contract is expected to be finished in autumn 2008.

Finland: Aker Kvaerner is to develop a €50m ($65m) multi-fuel CFB boiler for an industrial plant for Porin Prossivoima. A CHP plant is being developed at Pori on the west coast that will use the 177 MW boiler system, due for delivery in late 2008.

Finland: TVO’s Olkiluoto 3 reactor project is not now expected to begin operations before the end of 2010, some 18 months behind schedule. The delay is due to a mixture of both technical and administrative problems.

France: Suez has reaffirmed the validity of its proposed merger with Gaz de France, despite the postponement of the project to the second half of 2007 and uncertainties over the timetable.

Germany: Dillinger Hutte steelworks has awarded a €100m ($637m) contract for the turnkey development of a 90 MW gas fired CHP plant to Austrian Energy and Environment. Partners include Steag, VSE and Rogesa. The plant is to be built by mid-2009.

Germany: The new Rheinfelden hydro plant is to be fitted with four 25 MW Voith Siemens Hydro Kaplan turbines in a consortium deal with Alstom. The €380m ($492m) plant is backed by EnBW and is due to commence operations in 2010.

Italy: Fortore and Irpina windfarms are to be fitted with 69 Vestas turbines generating 138 MW. Turnkey delivery of the turbines to developers IVPC Power 3 is due to begin in the second quarter 2007.

Spain: Industry association Unesa reports that local power companies invested an estimated €5.5bn ($7.1m) in Spain in 2006, up from €4.84bn in 2005. Of the total outlay €2.58bn went on generation, and €2.26bn on transmission and distribution.

UK: British authorities have given the go-ahead for two major offshore wind farms – the London Array and Thanet, to be built in the Thames Estuary. The two projects will generate up to 1.3 GW when fully operational.

UK: Vestas has won an order for the 180 MW Robin Rigg offshore wind farm in the Solway Firth. The order has been placed by Eon UK Renewables and comprises 60 turbines as well as a five-year operations maintenance contract.

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