European utilities fail to reduce emissions - report

Despite attempts to greenwash their image, European electricity producers have not succeeded in reducing their carbon dioxide emissions in 2005. They have spent a lot on marketing themselves as green and clean energy providers, but in reality they're still far from it. According to a report [*.french] by PricewaterhouseCoopers (PwC), more efficient technologies and renewable fuels are widely available, though.

Since 2001, PwC has been making annual studies on the CO2 emissions 23 of Europe's main electricity producers. The fifth edition of the study reveals that the utilities pumped out some 787 million tonnes of CO2 in 2005 for a total production of 2.16 TWh, which represents 70% of Europe's total electricity generation (which stands at 3.093TWh).

There are wide-ranging differences amongst producers, with some scoring relatively well, such as ENEL (Italy/Spain), Fortum (Finland) or PVO (Finland/Sweden), with the latter having reduced its emissions by an impressive 66%. Other utilities, like Iberdrola (Spain), EDP (Portugal/Spain) and Scottish & Southern Energy (UK) scoring badly with increased emissions.

However, the differences are not due to a change in policies or to a switch to green energy. On the contrary, they are the result of external factors, such as the weather. Droughts in Spain in 2005 pushed Iberdrola to generate more at its thermal power plants than at its hydro-power plants, pushing emissions up. PVO's reduced emissions simply come from the fact that it has started importing hydropower from Norway, where exceptional amounts of rainfall benefited hydropower. In short, there's no real committment of utilities to invest in renewables.

In the end, Europe's total power production has only increased by 0.4% between 2004 and 2005, but CO2 emissions have stabilized. This means that for each MWh produced, we now pump 373kg of CO2 into the atmosphere, against 374kg the previous year. An absolutely marginal change.

Green solutions commercially viable

However, Europe's utilities now have a range of incentives aimed at reducing their greenhouse gas emissions. The European Emissions Trading system (EU-ETS) has proved to be totally flawed (earlier post), but if corrected, the carbon market should still work. Besides trading carbon, individual governments have implemented a series of green certificates and efficiency certificates, which result in fiscal advantages.

Investing in increased efficiency, in so-called 'negawatts', is seen as the primary lever to reduce GHGs in the short term. Large producers reliant on coal, like RWE (Germany/UK) or E.ON (Germany/UK) are trying to improve the thermal output of their plants. Utilizing more natural gas and the introduction of combined cycle units is seen as a way forward as well. ENEL invests in the modernisation of its hydroelectric facilities and in its nuclear projects.

The use of carbon-neutral, renewable biomass fuels is another option. European utilities now co-fire biomass with coal for a total capacity of 1.5 GW. RWE for example, is building a 2x800MW biomass plant in the Netherlands, which will rely on biomass imported from all over the world. Belgium's Electrabel converted a coal-plant into one that relies entirely on (imported) biomass (earlier post).

Few utilities are investing in solar, geothermal, hydrogen and fuel cells or wave and tidal power:
bioenergy :: biofuels :: energy :: sustainability :: carbon dioxide :: CO2 :: climate change :: emissions trading :: CDM :: renewables :: biomass :: Europe ::

More successful is the utilities' participation in Clean Development Mechanism (CDM) projects, which allow industries in the developed world to invest in clean projects in the developing world in return for green credits. The majority of these projects come from the following countries: China (36%), India (26%), Mexico (13%), Brazil (12%) and South Korea (12%). Africa is lagging firmly behind and could use assistance in winning such projects (earlier post).

The majority of the credits comes from an industrial sector unrelated to energy, though, namely the decomposition of HFC23 (69%), fluoroforms used in for example refrigrators. These projects have been criticized because the decomposition of HFC23 releases HFC22, an ozone-destroying gas. Other CDM-projects have to do with the methanisation of animal waste (production of biogas: 21%), the use of biomass (4%) or the creation of wind turbine farms (4%).

Finally, in three European countries, including France, utilities get 'white certificates' if they launch programs aimed at consulting and helping their (industrial) clients in achieving greater energy efficiency. Carbon offsetting programs offered by some utilities are similar, in that they rely on the consumer to take decisions. EDF Energy for example offers its clients offsetting opportunities and the utility then invests in clean projects (such as afforestation).

The effects of all these measures can not be felt yet, PwC says, because they are too recent. PwC even thinks it may take years before the range of green and clean investments starts yielding noteworthy results, which means far more efforts have to be done today.