EU Energy Policy Blog

Renewable energy resources, according to the European Wind Energy Association (EWEA), are poised to meet over half of EU’s electricity demand by 2030. In a statement released in mid-January 2012, Justin Wilkes, EWEA’s Director of Policy, said that the EU had already achieved the 21% target set in a 2001 directive for the end of 2010 by generating somewhere between 665-673 TWh from renewable resources, or 21% of total EU consumption of 3,115-3,175 TWh in 2010.
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South Korea’s rapid ascent to join the ranks of the developed economies of the world has been nothing short of miraculous. With a per capita GDP of $31,750, its citizens make more than the average European, based on purchasing power parity (PPP), a fact that surprises many. In stark contrast to its improvised neighbor to the north, the country is blessed with a dependable electricity delivery infrastructure that is the envy of many. Power shortages afflicting other parts of the world are unheard of in Korea, which enjoys low – albeit subsidized – electricity prices.
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There is little disagreement that, with a few exceptions, renewable energy technologies tend to be more expensive than conventional options, especially considering their intermittent and unpredictable nature, which often requires backup generation or storage. Their main selling point is that they are non- or significantly less polluting. Renewables gain comparative advantage if a price were put on greenhouse gas emissions. This has always been among the main arguments for providing subsidies and encouraging their growth.
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China may not be where cutting edge research takes place or innovative technologies emerge, and Chinese manufacturers are not usually the first to develop and market new products. But once they identify a product as globally marketable, Chinese manufacturers typically copy and apply reverse engineering techniques and then undercut their Western competitors in their own markets. With substantially lower wages, they can be fierce competitors. This pattern is repeated to one product after another, and in one market after another. A recent example is the market for utility-scale wind turbines where China has made impressive progress in the last few years.
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The Energy Information Administration’s (EIA) latest Annual Energy Outlook, released in April 2011, not only offers the usual reams of information and data, but also a number of useful insights that are sometimes lost in such bulky documents. The overall message, however, resonates with a number of other recent reports and studies, all – more or less – coming to the same conclusions.
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In 2004, the Electric Power Research Institute (EPRI), the collaborative research arm of the electric power industry, estimated that to implement the smart grid would cost around $165 billion for the US, give or take a little. That, many said, is a lot of money, and questioned if the benefits would outweigh the costs.
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The answer to this rather trivial question, to a great extent, will determine if all the money going into smart meters, two-way communications, smart devices, energy management technologies, and ultimately the smart grid, will be worth it. The reason is simple. At the core of nearly every smart metering scheme is the ability to implement dynamic pricing – which in turn – is expected to influence consumer behavior and energy consumption, presumably from peak to off-peak periods.
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After a century of trying, the network service industries, including the electric power delivery business, succeeded in fully disengaging customers from the upstream side of the business. This was accomplished through massive investment in an extensive and ubiquitous distribution network, the so-called poles and wires, which now connects nearly every consumer in developed parts of the world to the grid. Within our premises, we are never more than a few feet away from a switch or a plug – and for all practical matters, that is virtually all we need.
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Sometimes events happen so fast that even the experts are baffled by the speed of developments. Barely a decade ago, when the economy was booming, many were concerned about the rapidly dwindling US domestic natural gas supplies. There was talk of the need to build multiple liquefied natural gas (LNG) terminals to import the stuff from foreign sources, as far away as Qatar. For a while, the price of natural gas went as high as $12 per million BTUs. That picture has dramatically changed thanks to discoveries of non-conventional gas supplies – more plentiful than previously thought. And with stunning advancements in hydraulic fracturing technology, US Energy Information Administration has doubled its estimate of the country’s technically recoverable reserves of shale gas from 353,000 to 827,000 Billion cubic feet. How fast things change even in the slow moving energy business.
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With the usual fanfare, Paris-based International Energy Agency (IEA) released its 2010 World Energy Outlook (WEO), a flagship publication that gives a global perspective on energy prospects through 2035. And as usual, it is a good read with a compilation of facts and figures that are hard to find in a single document anywhere else.
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