A report published by Citibank, a major international bank, has found that the future of shale gas in Europe is shrouded in uncertainties and the energy technology may not be as viable as had been previously claimed.

The same report found that renewables will cost the same as conventional fuels (including gas) in many parts of the world in the very near term. “The cost of renewables is falling fast,” it said.

The Citibank report, first published in September 2012, says that in Europe shale is likely to be particularly challenging to extract, leading to a higher than predicted level of uncertainty surrounding the industry’s future. “Even if shale gas resources are as large as initially reported, it is unknown to what extent shale gas will be recoverable in practice,” it said.

Poland – a country which rushed to develop its shale gas reserves in 2007 – proves this point, as “producers have so far failed to establish a viable shale gas industry, despite 112 exploration licences having been issued,” the report says.

Yesterday the European Parliament voted against a proposal to delay the auctioning of 900 million tonnes of carbon allowances in the EU’s Emissions Trading System (ETS) – a move proposed by the European Commission to rescue the ailing ‘cornerstone’ system of Europe’s climate legislation which puts a price on carbon emissions.

As a result, the European Voice reported that the price of carbon plummeted 45% to a record low of €2.63. The ETS system was designed around a carbon price of approximately €20, but an over-allocation of allowances and the economic crisis has meant the price of carbon has been around €7 per tonne in recent years – not expensive enough to make it a disincentive to invest in carbon polluting industries like fossil fuels.

“MEPs have voted against the polluter pays principle: the carbon price will continue having no impact on investment decisions in the power sector,” Rémi Gruet, Senior Climate Advisor at EWEA, said.

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Headlines in the German media have said recently that Germany’s offshore wind sector could be facing support cuts, on top of suffering from the already costly grid connection delays. So what is the future of German offshore wind power? We spoke to Andreas Wagner, CEO of the Offshore Wind Foundation (Stiftung Offshore-Windenergie) and part of the team negotiating with German Chancellor Angela Merkel to try and find out…

 EWEA Germany’s Environment Minister Peter Altmaier has proposed to substantially change the law for financial support for renewable energy in Germany. Could the offshore wind industry be affected by the same retroactive changes we’ve seen in other EU countries?

Wagner On 21 March, Chancellor Angela Merkel discussed all options to change the EEG-law [the current law supporting renewable energy – ed] with the Prime Ministers of the 16 German Länder. As a result of this so-called ‘energy summit’, we will definitely not face retroactive changes for projects for which legally binding contracts have been signed. I doubt if other changes in the EEG will or can be made before the German federal elections in September.

EWEA What were the arguments raised with Chancellor Merkel?

Overall, 70% of EU citizens think renewable energy should be prioritised as an energy option for the next 30 years, a Eurobarometer has found. The survey, “attitudes of Europeans towards air quality” published earlier this year found that the 70% compares to just 9% for unconventional fossil fuels like shale gas, and 8% for conventional fossil fuels.

In all 27 EU Member States, “renewable energy sources in the most mentioned priority for energy options in the next 30 years,” the survey says.

The share of people favouring renewables over other sources rises to 82% in Portugal and 81% in Austria, Spain, Germany and Denmark. In only two EU countries did fewer than half of all respondents favour renewables – Bulgaria (45%) and Romania (49%), but in both countries renewables were still by far the most popular option.