“Fossil fuel subsidies distort the market”

» By | Published 12 Mar 2014 |

Executive Director of the International Energy Agency, Maria van der Hoeven, talked to Sarah Azau at EWEA 2014 Annual Event in Barcelona about power markets, subsidies and the Crimea.

Will the Crimean situation make a difference to our relationship with Russian gas? Or are we simply too dependent on it?

We are quite dependent on fossil fuel imports, but rather than gas I would look to talk about coal – Europe is burning more coal, more lignite than before and gas is being squeezed between coal and renewables, as the price of gas is rather high. But diversifying your energy mix is always good for a region.

Christine Lagarde has spoken out strongly on fossil fuel subsidies recently. What is your view on her comments?

There are two types of subsidies – subsidies on consumption, which is where the IEA works, and on production, which is what the OECD works on. But we spent $544 billion on fossil fuel subsidies in 2012 – that is a huge amount!

We can see this everywhere, for instance in a number of oil producing countries like Saudi Arabia, also in big countries like China, India and so on. But some efforts are already being made.
However, fossil fuel subsidies distort the market, they encourage wasteful consumption, they are not useful.

The wind industry and other campaigners are calling for a renewable energy target of 30% at least for 2030 in the EU. In your speech at today’s opening session you said you welcomed a renewables energy target – is anything else needed?

Whenever there is a target, you need to have the instruments in place to meet that target, so if there are no EU national targets you will need a European mechanism to meet that target. We would like to see targets, we would like them to be clear and with a mechanism that can be implemented.

On infrastructure we don’t necessarily think there should be a target, but we want interconnectors between different markets or there won’t be a properly functioning market for energy. It is important to have an objective for interconnection and it must not be forgotten – at the moment it seems to be under the table. Europe needs to have flexibility, storage, and demand side measures. To have a good energy market in EU is of utmost importance.

In a recent report you found integrating 30 percent or more of annual electricity production from wind and solar PV into power systems can come at little additional cost in the long term. TSOs often say that they cannot integrate more wind because of the power system – what would your message to them and to EU governments be?

Let me say first that there is one precondition – in a stable system like Europe there is not much growth in power demand and there is overcapacity. In dynamic systems with growing power demand the situation is different, you can build your flexible system from the beginning, but in Europe you have to transform it. Some questions need to be answered – what are we going to do with most polluting power plants, how are we going to deal with stranded assets? Europe has to come up with an answer. But what is true is that by transforming your whole energy supply chain you can have flexibility, allowing variable renewables to grow.

How do you see the future of wind and renewable energy, in the EU and further afield?

That’s a difficult question – Europe was at the forefront of renewables and paid the price for that. But without Europe the renewables issue would not be as it is in other parts of the world. But if Europe wants to keep its front position in renewables is has to transform its energy system and develop a market for renewables. It can’t be done overnight, but it must be looked into to have a mature renewable energy sector.

Share

Wind energy is a “massive new paradigm of employment”

» By | Published 11 Mar 2014 |

Eddie O’Connor panel discussion

Wind energy can create hundreds of jobs as part of a new climate change-aware world, said Eddie O’Connor, founder and CEO of Mainstream Renewables. O’Connor described this point in time as a “massive opportunity to go entirely renewable.”

He was referring to today’s threat of rising sea levels which could swamp many of the world’s major cities – a consequence of climate change in turn fuelled by carbon emissions. The fact remains that we are emitting the equivalent of “four Hiroshima bombs into the atmosphere every second of every minute of every day,” he said at EWEA 2014 in Barcelona.

And, if we ignore the threat of climate change, “how do we actually get the money to pay for the consequences?” he asked. If we don’t pay attention to climate change, we might not have a species, he warned.

By 2050, 90% of the EU’s electricity can be powered by renewables, O’Connor said. Meanwhile, for Paolo Frankl, head of renewable energy division at the International Energy Agency (IEA), a level of 58% renewables by 2030, rising to 70% by 2050 is attainable.

But to reach these levels “we need a robust CO2 price, a price that has a meaning”, greater flexibility in electricity markets and more interconnections, Frankl said. We need to work out how to fit in new power generation and phase out the old – “this is a massive power transformation,” he said.

Alexandre Affre, director of industrial affairs at Business Europe, backed the call for a stronger carbon pricing as part of the European Emissions Trading System. He also said a greenhouse gas reduction target for 2030 is needed, and said that Europe must continue to build renewables. However, he questioned whether or not Europe has been “too quick” and has “gone too far” with its renewables build-out, chiding the continent’s “excessive subsidies” and questionable priority grid access for renewables, he said.

Turning to another issue high-up on the energy agenda – costs – Frankl underlined that the high price of fossil fuels is the driver behind today’s high energy prices. “The high prices of fossil fuels is the problem number one in the last five years in Europe,” he said. Rounding-up cost the issue, O’Connor asked: “What can be cheaper than an energy system based on 95% free fuel?”

Share

Where will wind energy be in 2020?

» By | Published 11 Mar 2014 |

CEObannerIn five or six years’ time, the wind energy sector will see an end to regulatory uncertainty, increasing levels of consolidation within the industry and leaps ahead in technology – said CEOs speaking at EWEA 2014 in Barcelona today.

We will see “advanced technology that is subsidy free,” said Anne McEntee, Vice-President of renewables at GE, adding that the sector needs to get more inventive. Xabier Viteri, CEO of renewables at Iberdrola, concurred saying that technological breakthroughs and innovations will surface by 2020.

While Anders Runevad, President and CEO of Vestas, said that in the offshore market we will be “starting to see the results of offshore investments,” Viteri said that cost cutting in offshore “is a must”. “Without cost reductions there will be no offshore industry after 2020,” he warned, adding that costs must come down by at least 40%. continue reading »

Share

“I was the biggest polluter in Ireland”

» By | Published 10 Mar 2014 |

EddieOConnorspeaking

Eddie O’Connor, Irish wind energy entrepreneur and visionary – and winner of this year’s Poul la Cour prize for excellence in the field of wind energy – spoke to Sarah Azau at EWEA 2014 in Barcelona about his career so far, why climate change drives him in all he does, how to bring offshore wind prices down, and why wind and solar power are a winning team.

How do you feel about winning this award?

I feel very honoured, deeply grateful, delighted, lots of superlatives!

Andrew Garrad [EWEA’s president, who presented the award] is a really good guy, so it is very meaningful to receive it from him.

What for you is the most important discussion affecting Europe’s energy mix today?

We should be preoccupied with the fact that we can’t penetrate more than 30% wind in any one country so we need grids, we need a single European market for electricity – and we need to think about how it affects customer price wise.

How do you get the cheapest price? Well you build your wind offshore, where there are high capacity factors of up to 54%. Then you put your solar power in the south where the sun is. To have minimal cost renewables, you have to put wind and solar together. The price of solar is collapsing and it must continue to do so. In Europe we need to work on distribution and storage – we have a vested interest in all of this, we must ensure it happens, like it has in California. We’ll lose our lead here in Europe if we don’t adopt similar strategies.

You mention offshore wind – what needs to happen for it to become cost competitive?

You need bigger ships and dedicated ports, more experience with wind turbines and bigger wind turbines, 6 MW, and lots of know-how, special cranes. We’ll be able to see £150 per MWh today go down to £100 per MWh by 2020.

If you can build turbines on land and transport them out to sea prepared, in principle in one day you can load the ship, drive out and put up six turbines. It would make a gigantic difference to cost. We should be joining up with the photovoltaic people. We will supply the solution. How can you say power is cheaper in US when it’s all done on tax breaks, the industry in 2012 lost $8 billion, so how much is gas really? You can’t build an industry that loses money – I’d love to know the true cost of shale gas… You should do a proper environmental impact assessment – see how much methane it is letting into the atmosphere.

What do you see as the highlight of your career?

Well I built some very elegant engineering systems when working with the Electricity Supply Board in Ireland, then I went to Bord na Móna. When I arrived the company was losing 17 million, when I left we were making 5 million with 40% less staff. Then of course building electricity and wind  farms was very exciting – you got into the right area at the right time, economies were growing at that time, so I got lucky! Actually today the big achievement is still being alive today after three crises as we’ve had since I started Mainstream Renewable Power – first the financial collapse, then 2010 with investors not wanting to invest in Euros, and again in 2012.

You have been described as a visionary… why in the mid 1990s did you decide to put your money on wind energy?

I became a CEO just before 40, before that I was running a peat company, I was the biggest polluter in Ireland!  Then I met the scientist John Tyndall who passed radiation through various gases, and he found some of the light went through with no effect, and CO2 and methane absorbed stuff. It’s a scientitifc fact that when content of CO2 goes up, we are changing the climate of the planet. I became convinced of that in 1989 – I build first wind farm soon afterwards, and when I left that company in 1996 I shortly afterwards away set up Airtricity.

We are here in Barcelona at EWEA 2014 – what would you say to the Spanish wind energy sector, which is going through a difficult time?

I’d build grids, I’d integrate Spain and Italy, the Mediterranean area into the rest of Europe. Spain needs much bigger grids, linked profoundly with northern France, UK, Germany, east-west, and north south. I’d say to them, we all have tough times but remember that there is light at the end of the tunnel, with wind energy you’re not importing all that gas, you are saving billiions of tonnes of CO2, it’s a big native industry.

Share

Top wind industry award goes to Mainstream chief Eddie O’Connor

» By | Published 10 Mar 2014 |

EddieOConnorawardThe wind energy industry’s prestigious Poul la Cour prize was awarded this afternoon to Airtricity and Mainstream Renewable Power founder Eddie O’Connor.

“This year, the award goes to someone who is a very rare breed: both a visionary and a businessman”, commented the president of the European Wind Energy Association (EWEA) Andrew Garrad, presenting the award in Barcelona at the EWEA 2014 Annual Event.

O’Connor co-founded Irish wind farm development company Airtricity in 1997 – at a time when wind energy was a minor player in the energy mix – and acted as chief executive until he sold the company for around €2 billion to E.ON and Scottish & Southern Energy in 2008.

He went on to set up Mainstream Renewable Power, now six years old, which has 180 staff and offices around the world, and was until 2013 a member of the supervisory board of EWEA.

“Eddie is a very great colleague and dear friend,” said Garrad. “No-one could be more deserving of the Poul la Cour prize and it gives me enormous pleasure to award it to him.”

The EWEA 2014 Annual Event runs from 10-13 March in Barcelona: www.ewea.org/annual2014

Share