It is no secret now that the forecast ,made early in the 21st century and predicting an annual 2% gas demand increase in the EU until 2030, has failed. The opposite scenario occurred (as predicted by Caspian Energy in 2008: “Euromagic 20-20-20 to reduce demand for gas”). The demand for gas in 35 European countries fell from 594 bcm, fixed in 2008, down to approx 528 bcm in 2013 and kept demonstrating the same tendency in 2014-2015. Instead of stimulating gas export, the governments of the European countries preferred state support to developing green energy and in this way left gas generation in state of protracted crisis. Even in conditions of oil price decline, EU must get ready for “overheating of supply on markets and increase investments into green energy”. European Commissioner for Economic and Financial Affairs, Taxation and Customs Union Peirre Moscovici stated at that session of the Economic and Financial Affairs Council of the EU (“Ecofin”) late in 2014.
“Europe must be vigilant, ambitious and activate investments into green energy. It is one of the priorities of the investment plan of Juncker”, Moscovici said.
Radical changes in Germany, Great Britain and France
Since 2008 20 large corporations of the EU have lost over 1.5 trillion EUR at share prices. In spite of the lack of the growth of demand for electricity, companies are rapidly expanding capacities: they commissioned 85GW capacities, based on fossil fuel, over the past 10 years. Head of RWE Peter Terium stated: “traditional business-model is collapsing in front of our very eyes”, it is “the worst structural crisis in history of energy production”.
While conventional power plants reduced profits, small scale green energy related projects were quite successful. For instance, Iberdrola, E.ON, Enel earned over 4-5 bln EUR from alternative energy in 2013.
Adaptation of small companies happens faster: Dong Energy and EDP have appreciably increased the share of green energy, which had a positive impact on their profits.
Late in 2014 the German concern E.ON decided to be no longer engaged in sale of conventional energy resources and fully change its business stream, directing it toward the renewable energy sources.
“Very rapid changes in global energy markets, emergence of a high amount of technical innovations and growth of expectation of our clients, all of it requires from us to boldly launch a new business model. The old model of E.ON no longer meets new requirements. Therefore, we are making radical changing”, head of the concern Johannes Teyssen emphasized.
He also noted that E.ON intends to close up business associated with generation of energy out of gas, coal and nuclear energy sources. New strategy of the company supposes broad use of renewable energy sources only, development of energy networks and provision of services on search for new solutions in the energy field.
It seems like that France’s and Great Britain’s traditional conservatism focused on conventional energy resources and nuclear energy is over. Capacities of solar plants in Great Britain grew from 2.8 GW up to 5GW through 2014. According to the data of the British Department for Energy and Climate Change, a total of 650,000 solar panels have been installed in Great Britain by the beginning of 2015.
British Association of Solar Energy Producers assumes that the price for solar energy will be fully competitive with conventional energy by 2020 even without a state support. The level playing field of market participants is everything that is needed for it.
The French parliament is developing a governmental project of energy reforms which shall gain force in the second half of 2015. Major energy line of France envisages fixing of stable nuclear generation at 62.3GW. Electric vehicles will also be used broadly in order to reduce CO2 emissions.
The ratio of nuclear energy must be reduced from 75% down to 50% by 2025. However, it must be obtained via the growth of renewable sources of energy but not nuclear units. Three years ago, a future president of France at that period, Francois Hollande promised closing of the old French nuclear power plant Fessenheim. A new approach of the government does not envisage this measure since an advanced nuclear unit EPR is planned to be installed there.
The government thinks that closing of this facility with two units is not the best solution. The best way out would be shutting of two units on those plants where there 4 or 6 of them. The oldest plant underwent thorough and expensive modernization after the tragedy at Japanese NPP Fukusima-1.
“Green” redivision
According to the new report of the International Renewable Energy Agency (IRENA), the cost of electricity production out of renewable energy sources has reached parity or fell below the price of fossil fuel in many part of the world.
The report runs that the “green” energy is actively competing with the conventional energy even despite the lack of financial support and decline of oil prices.
Experts predict that the cost of generation of solar energy will fall down approx by 40% in several years.
“The game has changed since decline of prices for renewable sources of energy provides a historical opportunity for creating clean, sustainable energy system and makes it possible to prevent catastrophic climate change in the available way”, General Director of IRENA Adnan Amin said.
According to the forecasts of the International Energy Agency, the total volume of investments into renewable energy will grow until 2020. The growth will be in much slower rates compared to recent years.
IEA, Paris consultant on energy issues for 29 states, made a statement that about 22% of electricity is generated out of renewable energy sources in the world. This rate can rise up to 26% by 2020 and even to a higher figure if governments work harder on encouragement of private financing.
The report says that financing of green energy reached the highest rate in 2011 ($280 bln). The figure totaled $250 bln in 2013. However, this figure is expected to reduce down to an average indicator ($230 bln per year) as early as by 2020. It is partially caused by high cost of technologies and governments’ opposing to adoption of laws which would make such investments more attractive.
