SPEECH/06/328
Andris
Piebalgs
Energy Commissioner
A place for coal in the EU Energy
Mix
Speech at the Conference "Future EU Energy Mix - will coal play an important
role?"
Gliwice, Poland. 29 May 2006
Ladies and gentlemen,
It is a great pleasure to have been invited to speak at today’s conference, especially in a region that can boast over 200 years of rich history in the energy field, as Gliwice and its surroundings can. I am also delighted to have the opportunity to address an audience that will be crucial to the realisation of our vision for European energy. Firstly, I would like to compliment the organisers on this excellent initiative to stimulate discussion on this vital topic, and to thank Mr Buzek for his invitation and chairmanship.
It is quite clear that these are exceptional times for energy, both for Europe and globally. Global demand for energy is increasing very rapidly. Oil prices continue to rise to unprecedented heights and major new oil discoveries are increasingly rare. Gas demand is also increasing and gas supply prospects appear less reassuring than ten years ago. The nuclear debate is alive, but several European countries are far from being confident about its future orientation. Climate change is a reality to be tackled; and the present state of progress of renewable energy technologies means that renewables alone cannot be relied upon to resolve these problems in the near future. This places us at a crossroads from which we cannot turn back. The path that we choose now has the potential to determine whether or not Europe can guarantee sustainable and affordable energy supplies in the decades to come. These are, therefore, unique times.
Alongside these recent developments, which shape the energy landscape of the early 21st Century, the European Union has enlarged to 25 Member States. In terms of energy resources, EU25 looks different to EU15. Declining coal production in the EU has been bolstered by that of Poland, the world’s 7th largest coal producer. Not only has this raised the relative importance of coal in the EU, but it has also reinforced the need for Europe to value its indigenous resources. Improving the technologies that can help make all our energy resources compatible with an efficient market and a clean environment will be one of the key challenges. In this context, I will talk about the opportunities for coal in a few moments, but now I will turn to the EU’s reaction to the current energy situation.
The Green Paper
In response to the soaring energy prices and to the potential threats of high reliance on imported energy, the European Commission adopted a new Green Paper on 8 March 2006. We believe that a stronger and more integrated approach is needed in the energy field to face truly global challenges. We see a new beginning for energy policy in Europe. A change of direction is required, one that takes a European approach to energy, and builds on our combined strengths to meet our fundamental objectives. The Green Paper emphasises three core objectives: sustainable development, competitiveness and security of supply.
The European Commission has prioritised 6 work areas that will contribute to meeting these core objectives:
- The completion of the internal market for energy that will allow companies to become European-wide competitors. Under these conditions market players will receive the right incentives to invest, to reduce environmental impact and to minimise consumer prices.
- Establishment of solidarity between Member States so that a unified approach is taken to emergency response and provision of reliable market signals.
- Diversification of the overall energy mix to balance the choices made by individual Member States. In this context a Strategic EU Energy Review has been proposed to analyse the advantages and drawbacks of different energy sources; and to suggest how we can maximise these positive impacts across the EU.
- Continuation of the EU’s leadership in addressing global climate change. Initiatives such as the EU Emissions Trading Scheme and ambitious targets for renewable energy should play an important role in shaping our energy policy.
- Development of new technologies that can deliver greater efficiency, low-carbon energy and industrial competitiveness is to be accelerated by a well-resourced strategic energy technology plan.
- Application of a coherent external energy policy that allows the EU ‘to speak with the same voice’ on energy issues and foster strong relations and co-development with energy producing and consuming countries.
Finally, the work of the Green Paper should complement our work on tax policy, agriculture, trade and environment, to name just a few.
What does this mean for coal?
But what does this mean for coal? What signals are we trying to give to the coal industry, to researchers, and to those looking to invest in new capacity?
The primary message is a clear one. If coal can be demonstrated to be secure, competitive and sustainable, then it has a place in the future European energy mix. The Green Paper does not prescribe the future of individual fuels, but it challenges each of them to prove that they can make a valuable contribution to Europe’s core objectives. From this perspective, the outlook for coal is more positive today than it has been for many years. The Green Paper recognises that coal and lignite account for around one-third of the EU’s electricity production, and that this is due to reliable access to sources and to stable prices. Europe’s own abundant coal reserves offer security of supply.
However, the challenge of global climate change means that coal use must be accompanied by a reduced environmental impact, which means lower emissions.
The Green Paper strongly emphasises the role for new technologies in driving this programme forward. For coal this means bringing clean coal technologies as well as carbon dioxide capture and storage to the European and global markets. Employing the best-available-technologies for new generating capacity will maintain Europe’s position at the forefront of coal expertise. Applying our excellence in research to meet the challenges of even higher efficiencies will also allow European operators to benefit from opportunities in third countries where greenhouse gas emissions are rising sharply.
Of course, this cannot happen overnight, and it will not come for free. The Commission is making provisions to include the full spectrum of clean coal technologies in its 7th Framework Programme for research.
To this regards, the Commission believes that Community funds can be profitably directed to projects that demonstrate the viability of zero-emission coal-fired power generation, as well as energy efficiencies that exceed 50% for the electricity generation parts of the plants. Timely investment in Europe’s coal industry is crucial. Investments in restructuring programmes, such as that undertaken here in Poland, have allowed some European countries to continue to derive up to 60% of their energy needs from coal, whilst meeting strict environmental criteria and operating competitively. Sustained investment is now required to complete the internal market in energy and help coal to fulfil its potential as a part of a sustainable energy mix.
I intend to propose to the Commission a Communication on clean coal that will assist the search for the right new policies to support these trends. It will evaluate how investments in new technologies can be best facilitated through policy measures, and what can be done to ensure effective penetration of clean coal technologies in Europe and abroad.
But coal can also play other important roles that should not be undermined. There is potential for coal to provide the flexibility needed to complement other energy sources. Coal already complements the use of renewable biomass through co-combustion and combustion with waste. It already provides responsive power generation as back-up capacity for wind power. Both of these uses can serve to reinforce the European energy mix, and there are other opportunities to be explored. These include the use of coal combustion plants to pioneer carbon dioxide storage techniques that could dramatically reduce our CO2 emissions; the conversion of Coal-To-Liquid fuels and chemical products so that future oil price spikes are reduced; and the use of coal to kick-start hydrogen production for transport. The opportunity for in-depth research into these various new options will be provided by FP7, which has low CO2 emitting power generation as one of its key themes.
Ladies and gentlemen,
I hope I have begun today’s conference with a positive message on the outlook for coal in the European energy mix. There is much good news to be taken from the new energy Green Paper. There are many opportunities to be seized with regard to innovation and investment in the technologies of the future. We encourage research centres, such as Gliwice, which has teamed up with like-minded academic institutions in the Czech Republic, to embrace these opportunities and continue to pioneer new methods and processes. The challenge, however, is that considerable investment is required. It is no secret that new investment is necessary throughout the energy industry, and this is no different for coal. Carbon dioxide intensive processes will be hardly compatible with combating climate change, wherever alternatives exist. Therefore, we would like to challenge researchers, industrialists and Member States to demonstrate how coal can contribute to sustainable, secure and competitive energy for Europe. It is without saying that these measures are not the only ones that should be encouraged at EU level and by Member States. The Green Paper offers various other policy priorities that should also accompany a strategy in favour of a sustainable and secure coal for Europe. We need to work notably in favour of a truly internal energy market, in support of the diversification of energy sources, including further commitments for renewable energy and the application of a coherent external energy policy.
Through the regular Strategic Energy Reviews, the first of which should be prepared later this year, the European Commission will be undertaking a comprehensive assessment of the advantages and disadvantages of all of Europe’s energy sources. This will require input from across the European constituency and we thoroughly support events like this one that prioritise debate on these issues. I am confident that today’s conference will be fruitful. I look forward to hearing these highly relevant discussions.
Thank you for your attention.