Bright ideas on energy

Ballarat Courier
Wednesday 10/1/2007 Page: 10
By Barry Hatton in Brussels

AN ENERGY crunch that chokes fuel supplies, dims the lights in homes and workplaces, and ravages Western economies may no longer be the stuff of 1970s history books. It could be a vision of the near future. The 1970s oil crisis gave Western countries a glimpse of what life is like when the energy supply isn't enough to go around.

Worried that an even bigger crisis lies in wait, the European Commission is presenting an energy "road map" that aims to steer the bloc's 490 million people in a different direction. The policies, of unprecedented scope, will carry a plain warning: high and volatile oil prices, surging demand, unreliable supplies and global warming compel Europe to reconfigure its energy supply before it's too late.

"It's the biggest issue. It affects all of us. Just try living without energy for a few days," said Elena Nekhaev, director of programs at the London-based World Energy Council, a non-governmental organisation.

The European Union, the second-largest consumer of energy in the world after the United States, is also the largest energy importer, looking abroad for just over half the energy it needs. Within 20 years, at current rates of consumption, the EU could depend on foreign suppliers for 70 per cent of its energy, the Commission says.

The EU's blueprint, sketched out over the past year, plots a different path: lower energy consumption, the development of renewable sources and research into other alternatives, and ways of cutting carbon emissions from fuels already in use, particularly coal.

But changing course won't be easy, experts say. The big debate is, who is going to pay for it and equally, are people willing to make the modifications that will be needed to do it," said John Loughhead, executive director of the UK Energy Research Centre in London.

Are Europeans ready to change the habits of a lifetime? Shoulder the added costs of research? Open the door wider to nuclear power? Surrender their countryside to fields of wind turbines and solar panels? Eero Heinaluoma, the finance minister of Finland who recently headed a group of experts reporting on the European energy sector, detects a shift in public attitudes.

He says public alarm over possible climate change coupled with last year's spike in oil prices, which provided a 1970s-style jolt, brought a tipping point that will inspire "a third industrial revolution".

Other observers, though, fear governments may baulk at signing up to drastic changes that could cause a backlash at the ballot box. The European Renewable Energy Council, a Brussels-based industry group, says all but two of the European Union's 27 member states - Germany and Denmark -are shying away from binding targets for renewable energy production that are a central plank of the new policy. EU nations generate only six per cent of their energy from renewable sources and almost all of that is hydropower from dams, according to the European Commission, which wants an agreed target of 15 per cent by 2015.

Private investment is vital if the new energy plan is to gain traction. State subsidies alone are unlikely to meet the challenge of developing alternative energy sources, analysts say, as voters balk at possible tax hikes. Intermittent sources are also unreliable. A cloudy, windless day consigns solar panels and wind turbines to idleness - which is why at the moment they account for less than one per cent of Europe's energy production.

Michael Liebreich, CEO of research firm New Energy Finance, says the investment market for clean energy companies gathered momentum this year after US President George W Bush's encouragement of new energy sources in his State of the Union speech.

Britain's publication of the Stern report on global warming, and the ratification by 165 countries of the Kyoto Protocol which calls for steep cuts in carbon dioxide emissions, provided another push. Experts say renewable sources cannot provide a comprehensive solution in the short term.

"It's difficult to see any scenario in which fossil fuels are not still the dominant (European energy) source in 2050," says Loughhead of the UK Energy Research Centre.

The European Commission envisions biofuels from plants and waste accounting for eight per cent of energy consumption within 10 years - and replacing 20 per cent of oil products for road transport by 2020.

The public also remains jittery about nuclear power stations, which provide about 15 per cent of Europe's electricity and 80 per cent in France. In the meantime, the Commission wants Europeans to cut back on their energy usage, seeking a 20 per cent reduction in consumption by 2020. It recommends some simple steps, such as avoiding use of the standby button on appliances which, it says, drains away almost seven per cent of Europe's electricity supply.