In June 2021, the EU’s Group of chief Scientific Advisors (GCSA) published the Scientific Opinion entitled “A systemic approach to the energy transition in Europe”, arguing that the clean energy transition in the European Green Deal must keep people at its centre. In light of tomorrow’s RePowerEU announcement that is critical to the future of energy supply in Europe, we invite GCSA Vice-Chair Nebojsa Nakicenovic to comment on the centrality of a just transition and the importance on staying focused on a clean energy future even at times of intensifying pressure.
Tell us why the European Commission even needs a scientific opinion at all. Does not the evidence speak for itself?
This publication (A Systemic Approach to energy Transition in Europe) is part of the Science Advice Mechanism (SAM) of the European Commission. From my perspective, this is a very unique way of providing scientific advice to the decision makers. Many governments have chief scientific advisors with that function. What is unique about SAM in the European Commission is that it has three independent parts.
First, there is the Group of Chief Scientific Advisors who provide the scientific opinion. There are very clear process rules about how that happens. The other independent part is the so-called SAPEA (Scientific Advice for Policy of the European Academies). This is a consortium of over 100 European academies. They provide a scientific evidence review, similar to the climate change assessment of the IPCC (Intergovernmental Panel on Climate Change).
The assessment is a scientific analysis of what we know about a particular topic. They (SAPEA) do not provide a scientific opinion or scientific advice, importantly they look into the possible options. We, the group of seven chief scientific advisors, based on this evidence review — evidence, so factual scientific knowledge — provide a scientific opinion to the European Commission.
There is also a unit in the Commission that catalyses this process. The three groups work closely together but we are independent. That explains the context. Why would we provide a scientific opinion? It is because the topic is considered really crucial and central to multiple crisis facing Europe and the world.
Does a just transition require a transformation of the economic model of energy services? People own the problem, should they not own the solution too?
That is precisely what we have tried to address in our scientific opinion – based on the scientific evidence. We didn’t go beyond the scientific evidence.
Energy cannot be seen as a silo. We – people – have to be at the centre. That means it has to be an inclusive process involving everybody and, importantly, not leaving anyone behind. Because there is a great danger that any transformation, unfortunately, leads to winners and hopefully there will be many, many winners but also – I wouldn’t say “losers” – but there are people who fall through the cracks who might be left behind and do not have an escape hatch. This is what was a high priority – to identify how to do that.
In our scientific opinion – and in fact we say explicitly, it is essential that sustainable energy, lifestyles, and behaviours become the preferred choice for the people – become a natural choice. For that, we have to create an environment that allows that. This is clearly very, very complex, I don’t think anybody has a silver bullet on that question.
The world has changed since the paper was published in June 2021. In particular war, inflation and recent dire warnings from the IPCC about rising temperatures. How does that affect your opinion on a just transition?
I have to be very careful to distinguish what is in our scientific opinion based on the evidence and what is my personal view. It’s important not to mix the two or I would not be reflecting the scientific advice mechanism which I think is very unique – I just want to make that clear. Here is my private opinion based on our scientific opinion but not in it.
Geo-politics are changing. There is no doubt that we are in a crucial moment in history. And this is why we argued before – again, my view – that we shouldn’t lose sight of the long term objectives .
We are likely to exceed 1.5 degrees – it is almost certain that by 2040 we will be above (the limit prescribed), perhaps even earlier. From the scientific point of view, this is not new.
From the policy point of view and behavioural point of view, this is something one needs to somehow internalise. We will exceed that goal and we will bear the dangerous consequences. But, we should not lose the perspective of doing our utmost to reach 1.5 degrees in the future – and for that we need to act now.
This is another dimension of justice – intergenerational justice. We have to make sure that we leave the planet to the future generations (hopefully) in better condition than what will occur over the next decade or two.
Is it even possible for the EGD to achieve ‘a clean, circular economy, a modern, resource-efficient and competitive economy’ by 2050?
Again, we are in the realm of opinion. Nobody can tell what the future will be like.
I was very enthusiastic when in 2015 all of the world adopted the UN’s Sustainable Development Goals (SDGs) and when there was the Paris Agreement on climate change. I think those were the two really important visionary steps towards this aspirational transformation that we were talking about.
I would also argue that the European Green Deal, Fit for 55 and New European Bauhaus initiatives are even more actionable in some sense. They provide a clearer agenda for how the world and life might and should look in 2050.
I don’t want to sound too pessimistic and again let me add, this is my personal perspective – you know, 30 years is a long enough time to achieve this transformation.
We have done that before. The most recent example is of mobile phones. It all started in 1990 and today, everybody in the world has a phone. Even the poorest people have a phone because it has enabled new economic activities, because it’s beneficial for many (despite the nuisance of always being reachable!)
Another example just to show in principle this is doable, is the replacement of horses by motor vehicles. That also took 30 years in most of the countries. We have 30 years to replace our vehicle fleet by hydrogen and electric. We have just enough time for the transformation if we act immediately.
The research in this article was funded by the EU. This article was originally published in Horizon, the EU Research and Innovation Magazine.
Guterres leads call to make Africa ‘renewable energy superpower’
The flame of injustice is “scorching hopes and possibilities” across Africa as the world grapples with the climate crisis, with the continent suffering some of the worst impacts of global warming said the UN chief on Tuesday.
Secretary-General António Guterres was addressing the African Climate Summit in Nairobi, Kenya, noting that despite “extreme heat, ferocious floods, and tens of thousands dead from devastating droughts”, the continent was responsible for less than four per cent of emissions.
“The blow inflicted on development is all around with growing hunger and displacement”, he said.
But amid the “climate chaos” he said it was still possible to avoid the worst, “but only with a quantum leap in climate action.”
He said far greater climate ambition was needed from all countries led by the largest emitters, in line with his Climate Solidarity Pact and Acceleration Agenda.
He called on the G20 advanced economies meeting in Delhi this week, to take responsibility and commit to reaching net zero emissions as close as possible to 2040.
Secondly, he called for “climate justice” to reach goals on renewable and affordable energy, particularly in Africa. This means operationalizing the agreed loss and damage fund, universal early warning systems, and a “course correction in the global financial system.”
‘World leader in renewable energy’
Third, Africa is rich in untapped renewable energy with the potential to become a world leader in renewables and “green growth.”
It has nearly a third of the world’s mineral reserves for solar power, electric vehicles and battery storage.
“To truly benefit all Africans, the production and trade of these critical minerals must be sustainable, transparent and just across every link of the supply chain”.
The UN chief pointed to the Greater Horn region where over 85 per cent of electricity comes from renewables. Mozambique gets nearly all its energy from green and sustainable resources.
And wind and solar projects are already helping power Egypt, Algeria, Tunisia, Morocco and South Sudan.
He called for a collective effort to create “a true” African Renewable Energy Alliance.
“Renewable energy could be the African miracle but we must make it happen. We must all work together for Africa to become a renewable energy superpower.”
Mr. Guterres told the conference of African leaders and stakeholders hosted by Kenya and the African Union Commission that he was convinced the continent “can be at the heart of a renewable future.”
He said now was the time for all nations “to stand as one in defence of our only home. Let’s deliver the climate justice that Africans, the world, and the planet we share, demand and deserve.”
Speaking at a press conference in Nairobi after his speech, the Secretary-General said it was time to end the injustices that are holding the continent back. He pledged to work closely with African leaders and organizations such as the AU, to accelerate progress.
WP: Drop in energy needs points to a further deterioration in industrial activity in Europe
Europe has an even stronger ally to keep gas prices under check heading into the colder months: extremely weak demand. The manufacturing crisis that’s plaguing the continent — industrial activity in Germany has contracted for 14 consecutive months — is the best antidote against a gas supply squeeze. With friends like that, who needs enemies? – asks ‘The Washington Post’.
Europe is defeating its energy crisis thanks to the impact that said crisis has had on its industrial heartland. Across the continent, many energy-intensive companies have either closed or reduced production after not being able to cope with higher energy prices. The fertilizer, chemical, metallurgic, glass, paper and ceramic industries are particularly affected. All those shuttered factories don’t need gas or electricity now.
In Germany, activity among energy-intensive companies plunged in June by nearly 18% versus late 2020, according to official data. During the same month, industrial gas demand also declined 18% compared with a year ago. In July, gas demand posted an even deeper plunge, falling 22.9% from a year earlier, the largest decline so far in 2023. When official industrial production data is released for July in a few weeks, that drop in energy needs points to a further deterioration in industrial activity.
Due to anemic manufacturing activity and lower-than-expected gas-burn in the electricity sector, Morgan Stanley reckons that total gas demand in Europe is running about 15% below the five-year average, even when adjusted by the impact of the weather. With consumption low and LNG supply so far plentiful, Europe has been able to inject a record amount of gas into underground storage over the spring and summer — despite most countries in the region no longer having access to Russian pipeline gas supply.
European gas stocks are nearly 92% full — a record high for this time of the year. If the current injection pace continues, inventories would reach 100% by mid-September.
And yet, it would be of little solace for the continent’s industrialists. Currently, European gas prices are running at about €35 ($38) per megawatt hour, compared with the 2010-2020 average of just over €20. Wholesale electricity prices are running above €140 per megawatt hour, more than triple the 2010-2020 average of €38.5.
The real problem is that companies know that any supply issue, real or perceived, would trigger a price rally, because even with nearly full stockpiles, Europe needs all the gas it can grab to make it through the winter. The manufacturing sector remains the go-to segment of consumption to find extra demand destruction. Hence, why so many chief executive officers are reluctant to bring back production capacity, fearing reactivating a plant only to get caught again by higher prices.
As such, the price of avoiding the energy crisis is a deep recession in the manufacturing sector, and a long-term loss of economic growth.
German businesses are increasingly curbing investments and eyeing production abroad amid high energy prices at home, informs Bloomberg.
Over half of surveyed companies say the energy transition is having negative or very negative effects on their competitiveness, according to a report by the German Chamber of Commerce and Industry. Among manufacturers, almost a third are considering or already executing a production shift abroad — twice as much as during last year’s energy crisis.
“The German economy’s confidence in energy policy has fallen to a low point,” the group’s chairman Achim Dercks said. “Concerns about competitiveness have never been greater.”
Germany’s manufacturing-heavy economy has seen a protracted period of weakness that shows few signs of abating amid plunging business confidence, and it’s the only major European nation whose output is forecast to shrink this year. While manufacturers used to enjoy relatively cheap power costs when Germany was still receiving pipeline gas from Russia, last year’s crisis forced the country to revamp its plan for future supplies. Its energy prices are currently among the highest in Europe.
While the expansion of renewable energy sources is expected to eventually bring costs down, they are likely to remain elevated until at least 2027, according to the government. Among large industrial companies — who often already have links to production abroad — one in four have already started or completed further capacity movements.
EU imports record volumes of LNG from Russia
The EU is set to import record volumes of liquefied natural gas from Russia this year, despite aiming for the bloc to wean itself off Russian fossil fuels by 2027, Financial Times informs.
In the first seven months of this year, Belgium and Spain were the second and third-biggest buyers of Russian LNG behind China, according to analysis of industry data by Global Witness, a nongovernment organisation.
Overall, EU imports of the super-chilled gas were up 40 per cent between January and July this year compared with the same period in 2021.
The jump comes from a low base as the EU did not import significant amounts of LNG before the war in Ukraine due to its reliance on piped gas from Russia. But the rise is much sharper than the global average increase in imports of Russian LNG, which was 6 per cent over the same period, Global Witness said.
The NGO’s analysis is based on data from industry analytics company Kpler, which showed that the EU is importing about 1.7 per cent more Russian LNG than it did when imports hit a record high last year.
Global Witness said the cost of the LNG imported from January to July at spot market prices amounted to €5.29bn. “It’s shocking that countries in the EU have worked so hard to wean themselves off piped Russian fossil gas only to replace it with the shipped equivalent,” said Jonathan Noronha-Gant, senior fossil fuel campaigner at Global Witness.
Most of the Russian volumes come from the Yamal LNG joint venture, which is majority-owned by the Russian company Novatek.
As well as resulting in billions of euros in revenues going to Russia at a time when the EU continues to tighten its sanctions regime against Moscow, the import levels leave the EU exposed to any sudden decision by the Kremlin to cut supplies as it did for piped gas last year.
Alex Froley, senior LNG analyst at consultancy ICIS, said that “long-term buyers in Europe say they will keep taking contracted volumes unless it is banned by politicians”. He added that an EU ban on imports would cause some disruptions to shipping as global trade patterns would need to be rearranged, “but ultimately Europe could find other suppliers and Russia other buyers”.
Belgium imports large volumes of Russian LNG because its port of Zeebrugge is one of the few European points of transshipment for LNG from ice-class tankers used in the high north to regular cargo vessels.
Spain’s utility Naturgy and France’s Total also have continuing contracts for large quantities of Russian LNG, analysts said. EU policymakers have been urging European companies not to buy Russian LNG. Spanish energy minister Teresa Ribera, whose government is chairing the six-month rotating presidency of the EU, said in March that LNG should be hit with sanctions, adding that the situation was “absurd”.
Kadri Simson, the EU’s energy commissioner, has said that the bloc “can and should get rid of Russian gas completely as soon as possible, still keeping in mind our security of supply”.
EU officials have pointed to an overall effort to phase out Russian fossil fuels by 2027, but warned that an outright ban on LNG imports risked prompting an energy crisis akin to last year when EU gas prices hit record highs of more than €300 per megawatt hour.
One official said that despite European gas storage containers being more than 90 per cent full ahead of winter, there was still “a lot of nervousness” should there be any further cuts to supplies.
Russian LNG accounted for 21.6mn, or 16 per cent, of the EU’s total 133.5mn cubic metres of LNG imports (equivalent to 82bn cubic metres of natural gas) between January and July, Kpler data shows, making it the bloc’s second-biggest supplier of the liquid fuel after the US.
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