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19 September 1994
Doc. 7122
REPORT
on the energy/environment interface
(Rapporteur: Mr CACCIA, Switzerland,
Group of the European People's Party)
Summary
The problems linked to the energy/environment interface call for an approach operating at world-wide level, given that the Third World will account for 85% of the over 8 thousand million strong world population by the year 2025. The consequences of this interdependence can also be seen in a change of mentalities, in that the notion of "environment" is now being incorporated into energy policies. Although the priorities are not the same in countries of western Europe and those of central and eastern Europe, the new energy policies which have to be devised must focus on three common objectives: supporting the economy, reducing the impact on the environment, and ensuring security of supplies.
It is not easy to alter the balance between the different sources of energy in the short term. In western Europe, the use of coal is now stable (around 25%), while the demand for oil (42%) and gas (16%) is going up and up. The relatively low prices of fossil fuels discourage more advanced research into renewable sources of energy, which according to the most optimistic forecasts will not account for more than 10% by the year 2020.
Given that the greenhouse effect threatens the environment and the well-being of the public, it is essential that a more realistic price policy be pursued, which takes account of the environmental cost of fossil fuels. Implementing such a policy will have a bearing on transport, energy savings and improvements in conventional technologies.
Nuclear energy, which currently accounts for 14% of supply, should be regarded as potentially dangerous. Countries which opted for nuclear energy should intensify research in order to improve reactor quality and produce less radioactive waste. R and D work on nuclear fusion has to be continued. Better inter-state co-operation could include and improve the oil and gas pipeline networks in the central and east European countries, thereby working towards a balanced use of greater Europe's energy potential. Increased participation by regional and local authorities in projects to diversify energy sources could play a part in protecting the environment.
I. Draft resolution
1. The Parliamentary Assembly is aware of the scale of the problems linked to the energy-environment interface, particularly in the present historical context. It views devising an energy policy that shows due regard for the environment of the whole continent as one of the keystones of future European integration.
2. Energy and environment are two major themes that are closely intertwined and go beyond the frontiers of Europe. The Third World will account for 85% of the over 8 thousand million strong world population in the year 2025. Efforts by the industrialised world to strike a balance between energy needs and the environment would be doomed to failure by a soaring increase in the needs of the Third World. There will have to be fairer relations between north and south before the economic and demographic situation in these countries can be stabilised and the conditions for sustainable development met.
3. This precondition of increased global interdependence should not dishearten European leaders. A great number of steps can be taken at European level pending more harmonious and effective global co-operation. What is more, a change in mentalities is under way as attested to by the inclusion of the notion of "environment" in energy policies and by greater multidisciplinarity in researching various developments.
4. In this respect, the Assembly notes that recent work enables the external costs of various energy projects to be internalised, thereby opening up new prospects for a more accurate assessment of their effects on the ecosystem as well as on the socio-economic situation of a region (for example, population movements) and health (such as serious illnesses, psychological effects).
5. The new policies which have to be devised cannot disregard the fact that current priorities are not the same in countries of western Europe and countries of central and eastern Europe. In the west, concern for security in the energy supply goes hand in hand with the desire for greater energy efficiency and a reduction in CO2 emissions, while countries of central and eastern Europe are in a hurry to catch up economically and consequently lay greater emphasis on financing new technologies, using and marketing energy more rationally and certain immediate environmental problems (waste, etc.).
6. Before new energy policies can be drawn up, a broad consensus must be reached on common denominators which need to be carefully pinpointed. The Assembly firmly believes that the following three objectives might form a common basis for dialogue:
i. supporting the economy;
ii. reducing the impact on the environment, in particular by promoting a new technological strategy;
iii. ensuring security of supplies.
That certainly seems to be the thinking behind the European Energy Charter signed in December 1991 by over forty countries. Initial implementation in the form of an agreement for the opening up of energy markets was approved by fifty countries in Brussels at the beginning of June 1994. This should simplify and make for closer co-operation between OECD countries and the countries of central and eastern Europe. On rational use of energy and realistic pricing policies, implementation of the charter remains to be negotiated.
7. The challenges are daunting. The greenhouse effect alone, attributable in particular to the use of fossil fuels, points to an impending disaster of sufficient proportions to warrant immediate action. Although there is still some scientific disagreement as to its scale, average global warming of the planet is liable to affect sea levels, the socio-economic situation in coastal areas, soil fertility and the availability of fresh water.
8. In addition to this global challenge there are phenomena such as acid rain and particulate emission which may cause problems at continental or regional level.
9. We do not have much room for manoeuvre at the present time as there is unlikely to be any far-reaching change in energy production this decade. This being the case, the most reasonable approach would be to keep all options open and weigh up a variety of avenues without categorically rejecting any of them out of hand.
10. Changes in the relative share of different sources of energy will inevitably be slow and gradual. The use of coal in western Europe is now relatively stable (25%), while demand for oil (42%) and gas (16%) is going up and up. In countries of central and eastern Europe coal and gas continue to be the major energy sources. The share of renewable energies barely exceeds 3%. The relatively low prices of fossil fuels discourage more advanced research into new energies. According to the most optimistic forecasts the share of renewable sources of energy will not exceed 10% in the year 2020.
11. Nuclear energy, which accounts for some 14% of supply, is currently going through a period of reappraisal, even crisis. Its future is bound up with three conditions, namely significant technological progress, progress in management of and compliance with security regulations, particularly in countries of central and eastern Europe, and better supply of information so that the public can form more enlightened judgments.
12. In the light of these considerations, the Assembly invites member states to implement the following measures:
i. Pursue a more realistic price policy which takes account of the social and environmental cost of any form of energy. Technological innovation can only lead to appreciable progress in an economic climate that favours its development. Subsidies and "political prices" should therefore be abolished;
ii. Honour the undertakings made at the Rio Conference on sustainable development with regard to the gradual reduction in CO2 emissions. Until it has been proved otherwise, the greenhouse effect should be viewed as one of the main threats to the environment and the well-being of the public. It may be tackled by:
a. carbon tax: carbon tax should be harmonised at European level and graduated according to the carbon content of energy sources. International agreements should be reached to ensure that the carbon tax does not distort world trade;
b. transport policies: forward-looking planning is becoming increasingly urgent at national level and within the ECMT (European Conference of Ministers of Transport). Priority must be given to high-speed rail networks over road transport. Cleaner, more energy efficient cars are needed in towns. In addition, the river transport network (for example the Rhine-Main-Danube Canal) might help alleviate road traffic congestion. For long-distance freight transport the solutions are a restructured, standardised European rail network and use of containers;
c. more rational use of energy: gas emissions could be reduced by energy savings in households and services but above all in industry and transport. Standard setting here (insulation of buildings, etc.) must go hand in hand with an upgrading of collective installations and household appliances. Thought also needs giving to the introduction of district-heating systems;
d. improvements in conventional technologies: new fossil fuel techniques (such as clean coal), new power plant design and the use of technologies such as the combined cycle are likely to reduce CO2 emissions. Improved techniques for recovering energy from industrial waste used as fuel should become standard;
e. perfecting and using renewable sources of energy: this sector can only be developed with public support, which would be justified in the medium and long term by both increased competitiveness of European technology on world markets and an improvement in the environmental impact of energy production. Increased co-operation on research is necessary together with an adequate strategy to publicise unfamiliar but promising techniques;
iii. View nuclear energy as potentially dangerous and its use as necessitating a high standard of scientific and technological infrastructure. States which use nuclear energy must step up research with a view to making reactors safer and radioactive waste less harmful. As regards central and eastern Europe the suggestions contained in Assembly Recommendation 1209 must be implemented;
iv. Work towards inter-state co-operation with respect to trans-European energy networks by including the countries of central and eastern Europe and improving their oil and gas pipeline networks;
v. Encourage implementation of the agreement on the opening up of energy markets, which was signed in Brussels in June 1994 under the European Energy Charter, and promote negotiations towards meeting the other requirements set out in the charter;
vi. Diversify energy sources at local level and ensure that there is increased participation by regional and local authorities in major energy projects which might have an environmental impact;
vii. Continue discussions with a view to establishing internationally negotiable emission rights.
II. Explanatory memorandum
by Mr Fulvio CACCIA
Contents
Page
I. Introduction 7
II. Present situation 8
A. Brief analysis of energy-environment interactions 8
B. European energy outlook 9
III. Research and development 12
A. Renewable energy sources 12
B. Nuclear energy 14
C. More rational use of energy 14
1. Efficiency of energy production 15
2. Efficiency of energy consumption 15
a. households, the commercial sector and services 15
b. industry 16
c. transport 16
D. Technological development in coal utilisation 20
1. Improvements in conventional technologies 20
a. precombustion 20
b. combustion proper 20
c. postcombustion 20
2. Innovative technologies 20
a. gasification 20
b. combined cycles 21
c. other technologies 21
IV. Incentive measures 21
Possible instruments for introducing
environment-minded energy policies 21
A. The social cost of energy 23
B. Economic instruments to promote the development of new
technologies and reduce the harmful effects of polluting
energy sources 24
1. Subsidies 24
2. Taxes 24
V. European and international co-operation 25
VI. Controversial points 26
VII. Conclusions 27
I. Introduction
In recent years we have seen far-reaching changes, not only on the geopolitical and macro-economic levels, but also in the way in which environmental problems are perceived. The cold war has come to an end, the Soviet Union no longer exists and OPEC's dominance is a thing of the past. Overall energy efficiency has increased as the result of the decline of heavy industries and the development of high-tech industries. Environmental concerns have shifted and the emphasis is now not so much on acid emissions as on global warming due to the emission of greenhouse gases. The real problem is perhaps the uncertainty as to the actual scale of the greenhouse effect and its consequences. Our responsibilities to future generations require a policy of safety first — that is, that we regard emissions as dangerous until we have proof to the contrary and that we take measures accordingly.
The European energy market is now quite healthy and oil prices have returned to the levels obtaining before the oil shocks of the 1970s. However, the uncertainty of oil supplies for Europe was brought to the fore by the Gulf war and gas supplies are also uncertain because the world's biggest reserves belong to Russia. European coal production (Germany and Spain) survives thanks to subsidies, but United Kingdom production, not subsidised, is declining fast. Nuclear power is no longer expanding and research on nuclear fusion seems unlikely to produce concrete results in the immediate future.
It is therefore now a matter of trying to find guidelines for future European energy policies which can meet the environmental requirements while at the same time satisfying the economic, political and social needs. However, a word of warning is called for at the outset: the energy/environment interface is global, and problems cannot be solved wholly satisfactorily on a regional basis. For instance, it is already clear that by the year 2020 the developing countries, which at present consume some 30% of world primary energy, will be consuming over 55%, and this has tremendous implications.
When the Committee on Science and Technology, for which I now have the honour to be Rapporteur, presented its report on "Energy and the environment" in April 19781 the impact of the big oil shock was still very much felt. The major concern then was therefore Europe's "energy survival".
Since then a great deal of water has flowed under the bridge! There have been changes in attitudes and policies. The recent parliamentary hearing on energy and the environment, jointly organised by the Committee on Science and Technology and the Committee on the Environment, Regional Planning and Local Authorities, was a natural consequence of these changes, which call for a certain refocusing of effort. It also symbolises a new approach to the major problems confronting us: greater "multidisciplinarity".
In twenty years the Committee for Science and Technology has presented no less than twenty-one reports on energy problems. It will continue in the future, as in the past, to monitor European energy policies, taking account of the new dimension resulting from Europe's encompassment of eastern Europe.
This report appears in the context of a turning point in history characterised by radical changes in sociopolitical priorities and by geostrategic upheaval.
II. Present situation
A. Brief analysis of energy-environment interactions
The main energy-environment interactions are determined by the primary fuel used for energy production. In this section we therefore review the main environmental effects resulting from energy production and use, stating the primary fuels responsible for each type of effect.
Climatic change is the severest challenge facing the planet. If emission of greenhouse gases, particularly CO2, by human activity continues at the present rate, average world temperature will rise 2°C in forty years and 4°C before the end of the next century2 (from 1,5 to 4,5°C by the year 2050 according to other estimates3). The results would include a rise in sea level, increasing desertification, and the extinction of many species. Reducing emission of greenhouse gases would help solve other environment problems such as acid rain, particulate emission and depletion of the ozone layer.
The "greenhouse gases" are: carbon dioxide, methane, nitrogen oxides, ozone and the CFCs (chlorofluorocarbons). Carbon dioxide results mainly from the use of fossil fuels. Methane is the main component of natural gas. Carbon dioxide results from the process of thermal combustion (hence, among other things, from the use of oil products).
Acid rains result from the emission of sulphur and nitrogen oxides (SO2, NOx). SO2 emissions come from the use of coal and heavy fuel oil (which is the primary energy source from approximately 11% of electricity production), while NOx emissions are produced, as stated above, by all thermal combustion processes.
Particulates are small solid emissions resulting from the incomplete combustion of wood, coal and oil. Some 40 million tonnes of particulates are released into the atmosphere every year.
The environmental impact of nuclear energy involves several aspects: reactor safety, routine radioactive emissions, the problem of nuclear wastes and the decommissioning of nuclear power stations.
Renewable energy, contrary to common belief, can also have an adverse environmental impact, although a limited one. In hydro-electricity generation, for instance, there are two aspects to be borne in mind: the local environmental impact of building a dam, and dam safety. Excessive and unchecked use of biomass can affect biodiversity. Sites for wind farms need to be carefully chosen in order to reduce noise. And so on.
B. European energy outlook
Europe (excluding Russia) accounts for some 11% of the world population and uses 22% of world energy production. As it has only 13% of world coal reserves and 8% of world oil and natural gas reserves, it will continue to import energy for the foreseeable future.
According to the IEA,4 expected primary energy demand in Europe to 2010 is expected to be as follows:
—in the European OECD countries (OECD Europe), demand will increase by 1,2% a year between 1990 and 2010 (a slightly slower rate of growth than the average between 1971 and 1990: 1,4% a year);—
—in central and eastern Europe (CEE) and the New Independent States (NIS), average annual growth will be 0,2% a year between 1990 and 2010, this being the resultant of two distinct phases:—
—a rapid fall in energy demand during the early 1990s; —
—re sumed growth in demand in the second half of the decade as a result of the economy picking up again.As
As regards supply and demand for main individual energy sources for the same period, the forecasts are as follows:
— oil: demand will increase (above all due to the transport sector);
supply will decrease in the OECD countries (above all in the United States) and the Middle Eastern countries will account for an even greater share of world production;
— coal: demand will hold up in absolute terms in OECD Europe, being increasingly focusing on the power generation market; it will fall in the CEE/NIS region;
— gas: demand will increase rapidly in OECD Europe, in particular for electricity generation; total gas demand could almost double by 2010, and gas for electricity generation could increase fivefold;
supply should remain abundant, but it must not be forgotten that virtually all the gas required to meet additional demand will have to come from Russia; security of supply will thus be a major concern;
— electricity: demand will increase in OECD Europe. Among the fuels used for electricity generation, coal will remain dominant, despite a rapidly rising gas share. The oil share will decline further. The amount of hydroelectricity will increase. Nuclear generation will increase to about 2000 (as power stations under construction come on stream), then decline (as plants are decommissioned). Renewables (other than hydroelectricity) will grow fast but will still only account for a very small share of the market in 2010, (0,9% as against 0,2% in 1990).
Demand will also increase in the CEE/NIS region. Generation will become even more oriented towards the use of gas, at the expense of coal and oil, and hydropower could be further developed too (there is considerable unexploited potential in Russia, beyond the Urals). There is still great uncertainty as to the future of nuclear energy: will reactors now planned or under construction be completed; will power stations be closed down for safety reasons? (See Appendices I and II.)
These forecasts5 are based on the following assumptions:
a. current policy measures remain in place unchanged;
b. the IEA imported crude oil price rises gradually to $30/barrel (1990 $) by 2005, and then remains constant.
Regarding the forecast demand for oil, coal and gas, certain commentators point out that it should not be forgotten that between 1973 and 1989 world consumption increased by 15%, 50% and 69% respectively, which means that although consumption of each fuel as a proportion of total consumption has changed, in absolute terms consumption of each fuel is up (see Figure 1).
If these trends were to continue in the future, there could be an increase in demand for coal (contrary to the IEA forecasts), all the more so because coal reserves are much greater than oil and gas reserves. For electricity generation in particular it will be necessary to turn increasingly towards nuclear power and coal, while oil is reserved for transport, and gas for heating and industrial use.
III. Research and development6
A. Renewable energy sources
Given the present state of energy production, it is impossible to suddenly replace the existing system by another based on renewable, non-polluting energy sources. The more pragmatic proponents of renewables envisage a fairly long period of transition towards such a system.
Here we review the present state of research into renewable energy sources and the most realistic prospects for them.
It is generally accepted that there are ten principal technologies which of global interest since they have reached the technical and economic demonstration stage and are able to meet significant needs in many parts of the world.7 These technologies are listed below:
solar energy:
—wa ter heating (for domestic and other uses not requiring temperatures greater than 70°C to 80°C);—
—de centralised photovoltaic electricity (low-power applications in remote areas);—
—gr id-connected solar electricity (produced by thermodynamic or photovoltaic power plants supplying an existing conventional network).wi
wind electricity:
—de centralised wind electricity (produced by low-power wind turbines in remote areas);—
—gr id-connected wind electricity (produced by high power machines — 50 kW to several MW — supplying an existing conventional network).hy
hydroelectricity
biomass:
—en ergy from wood (all energy uses of forestry products for heating or electricity);—
—en ergy from urban waste (produced by gasification or combustion of organic domestic waste);—
—en ergy from rural waste (plant and animal);—
—en ergy from biomass and energy crops (such as sugar cane or beet used to obtain fuel alcohols, or short-rotation coppices harvested every seven years and used in wood-fired boilers).Th
The potentials still insufficiently exploited are thought to be as follows:
—hy droelectricity: 75 Mtoe available;—
—wa ste: 30 Mtoe available;—
—wo od and energy crops: 50 Mtoe available;—
—so lar and wind electricity: 30 Mtoe available.By
By horizon 2020 the annual world potential will have increased from 3365 Mtoe in the 1990s to 4860 Mtoe. Europe will increase its annual renewable energy potential from 300 to 450 Mtoe, or 25% of its present energy consumption (see Appendix V).
A further point is that renewable-energy statistics for the whole continent need relativising. For reasons of geography, the situation is different in each country. In Iceland, for example, 88% to 90% of the houses have a geothermal energy supply. Geothermal energy is also often used in the Azores. Clearly, that particular energy source can scarcely be developed to the same extent in most other countries. Whole-continent figures for a particular type of renewable energy need the qualification that it may be highly exploited in one country and non-existent in another.
These figures are very optimistic; other estimates are more reserved: 6% to 7% of Europe's energy supplies covered by renewables in 1991, with the possibility of increasing this proportion to 15%, or perhaps less, by 2010.8 The World Energy Council gives minimum and maximum forecasts according to the policy approach (see Appendix VI).
Renewable energy's share of world energy production is not going to grow rapidly unless some unexpected technological invention transforms the situation. For example, even if solar energy develops very quickly (50% a year), it would take it fifty to sixty years to provide the amount of energy that nuclear power is already providing.
The transition towards an energy future based on renewables implies the use of natural gas as the transitional energy source (according to Barry Commoner: Faire la paix avec la planète, 1990). Another variant implies employing coal to the same extent as now, but using new technologies (see III. C below, on technological development in coal utilisation).
B. Nuclear energy
It is generally accepted that electricity generation by nuclear power still has a promising future, even though fewer nuclear power stations are being built as a result of two main factors, firstly the hostility aroused by the accidents at Three Mile Island and more especially Chernobyl and secondly the marked fall, since the mid-1980s, in oil and coal prices. In the west, therefore, nuclear programmes are at a standstill, while in east Europe there is great uncertainty about construction programmes and the fate of existing power stations.9
As far as the technological future is concerned, nuclear fusion would not appear to be a profitable commercial proposition in the short term. A noteworthy recent development has been the discovery by Carlo Rubbia, Director of Cern and a winner of the Nobel Prize for physics, of the possibility of fuelling power stations with thorium, which produces much less radioactive waste and offers improved safety, instead of uranium. However, the possibility is not yet being experimentally tested.
Also, it is questionable whether public perception of nuclear energy as one of the riskiest and environmentally least desirable ways of producing electricity is going to change overnight. Public and political opinion has to be won over, and this means continuing to improve the technology, bringing the costs under control, achieving an exemplary standard of safety, and satisfactory long-term management of waste. In any event, there has to be a drive to inform public opinion and make people realise that whatever the type of energy there is a price to be paid and that the only difference between energies is the form which that price takes.
Ultimately, nuclear energy based on conventional ission is not to be regarded as a technology of the future, but rather as a transition technology pending more promising developments.
C. Rational use of energy
Although the link between energy conservation and the environment is not obvious at first sight, it is nonetheless important: if we succeed in consuming less energy (through applying measures to increase energy efficiency) we eliminate the effects that the production, transport and use of the amount of energy saved would have had on the environment.
1. Efficiency of energy production
Enhancing the efficiency of energy production would mean that the same quantity of final energy would be produced with the use of less primary energy thanks to reduced losses in the production process.
In the thermal power stations it is necessary to consume approximately three units of primary energy in order to produce one unit of electrical energy. The efficiency of a traditional electricity generating system in the order of 30%. Through using advanced coal technologies it is possible to improve this figure to about 40%, and through using combined cycles10 to about 50%. The laws of thermodynamics prevent any improvement on this limit.
But this is only the energy efficiency of electricity generation. If we take account of all the energy produced by combustion, it is possible to increase the overall energy efficiency by using the "lost" heat (approximately two-thirds) to supply industrial users or households who require precisely thermal energy. This is the principle on which combined heat and power generators work.
2. Efficiency of energy consumption
This concerns the way in which energy is used by consumers. We can divide consumers into three categories of consumer: households, the commercial and services sector, and industry and transport.
a. The household, the commercial sector and services
The main uses of energy in the household sector are space heating and hot water. In these two fields there are three factors which influence energy efficiency. First the efficiency of the heating appliances; second, control over the heating process (which implies avoiding any wastage of heat through heating unoccupied rooms or reheating water which does not need it); third, the insulation of walls and windows on the one hand and pipework on the other. The energy efficiency of the household sector can thus be improved by taking action on these three fronts, which also have their counterparts in other fields of this same sector: lighting, cooking, household appliances, etc.
Mention should be made here of district-heating systems, as used in Sweden, Finland and Denmark. In business and services in recent years, large-scale use of modern equipment computers, photocopiers, telexes and so on has resulted in greatly increased electricity demand.
b. Industry
The two most important ways of improving the efficiency of energy use in industry are the use of what has in the past been lost heat and the improvement of combustion efficiency in industrial processes.11
An enormous amount of heat is lost in the metallurgical, food processing, cellulose and paper, non-metalliferous minerals and chemical industries. The overall energy efficiency of these industries could be improved by saving 36% to 67% of the heat now lost, through the use of heat exchangers, heat pumps and combined heat and power generators.
Combustion efficiency is the resultant of the efficiency of converting the fuel to heat and the efficiency of the system within which this heat is used. Work therefore needs to be done on improving the combustion process itself and the transfer of the heat of the combustion gases to the working fluids.
Industrial separation processes also consume a great deal of energy, above all in chemicals, food processing and cellulose and paper. The most energy-hungry processes are distillation, drying and evaporation. The use of new technologies such as membranes, the extraction of supercritical fluids and solvents, and filtering, can save up to 40% on energy consumption.
The use of electrical energy in industry is divided between electric motors, heating and electrolytic processes, and lighting. The main ways of achieving savings here are: the use of efficient, variable speed electric motors, heat conversion, improved electrolytic processes (in aluminium smelting, for example) and the use of more efficient lighting technologies.
c. Transport
Transport developed appreciably in the early 1970s. By 1988 it accounted for 30,5% (25,8% in 1973) of total energy demand in the IEA countries and the trend has continued.12 Energy demand from the transport sector is now greater than that from the household, commercial and services sectors taken together and comes a close second to demand from industry (see Appendix VII).
Assuming a non-interventionist scenario together with a fairly favourable economic climate, further rapid expansion in road transport is to be expected, and this is already the mode which has the greatest environmental impact: 75% of the total CO2 emissions in the transport sector are caused by road transport.13 To offset that expansion, particular attention needs paying to the possibilities for saving energy in road transport (which accounts for over 80% of final energy consumption in the transport sector (see Figures 2 and 3)).
A vehicle used normally in town, on the open road and on motorways uses only 18% of the energy content of the fuel as propulsive energy, the rest being dissipated as mechanical energy (in internal friction) and thermodynamic energy (in the engine).
Where can action be taken? First, the total weight of the vehicle can be reduced by using lighter materials (light alloys, plastics, ceramics). According to IEA and OECD evaluations, the proportion of steel and cast iron in road vehicles is going to fall from approximately 60% (in 1986) to 50% (in the year 2000). A reduction of 10% in total vehicle weight could bring a fuel saving of 2,5% at 140 kph and 6% in urban use.14
Action can also be taken on vehicle aerodynamics: in 1973 the aerodynamic coefficient was 0,45; it is now 0,3 and a value of 0,2 is envisaged for the future. A reduction of 10% would lead to fuel savings of 3% to 4% on the typical European vehicle.
Action can also be taken on tyres, steering, transmission, the engine electronics and the engine itself.
Such improvements will have direct positive effects on the environment. CO2 emissions are proportional to the quantity of fuel consumed. Even for polluting gases such as NOx, CO2 and the HCs, it has been found that reducing emissions and enhancing efficiency can be compatible. For example, with petrol engines NOx emissions have been reduced by the introduction of catalytic converters.
Despite the greater technical problems, catalytic converters for diesel engines could be available shortly.
On the continental level a reduction in fuel consumption of 15% (with respect to 1990) is expected by the year 2000.
In addition to technological measures concerning road transport generally, public transport needs developing and the number of private vehicles gradually reducing. This would have beneficial side effects such as easing road congestion and saving time and effort (less time wasted looking for parking spaces, for example) (see Figure 4).
Rail transport is cleaner and uses less energy than road transport and air transport, its main competitors. In addition, it does not use a petroleum derivative. It was regularly losing market share, to air transport especially, but high-speed trains have made it competitive again. It is fair to say its prospects have been revolutionised. Thinking is now in terms of a Europe-wide high-speed rail network (see Figure 5).
D. Technological development in coal utilisation
Most of the energy scenarios for the next ten years have coal playing at least as important a role as gas, above all in power generation.
The conventional technologies used with coal cause excessive emissions of greenhouse gases. For this reason it is planned to strongly pursue technological development of two types: on the one hand improved conventional technologies, reserved solely for use with high-quality coals, and on the other innovative technologies such as coal gasification or liquefaction. The main components of the new approach are15
1. Improvements in conventional technologies
It is possible to reduce polluting emissions in all three stages of the combustion process: precombustion, combustion proper and postcombustion.
a. Precombustion
Research is being carried out into the improvement of existing coal enrichment techniques and the development of new systems for eliminating pollutants (sulphur and ash) by means of physical, chemical and biological treatment.
b. Combustion proper
Clean combustion systems are based on techniques for separating out pollutants during the combustion process. In this way, for example, CO2 emissions can be reduced by about 70% to 80% and sulphur by up to 90%.
Another technology used is fluidised bed combustion, which makes it possible to achieve high energy efficiency and a high degree of elimination of gaseous pollutants.
c. Postcombustion
Research is aimed at perfecting the methods of treating emissions downstream of the process: SO2, NOx, particulates, etc.
2. Innovative technologies
a. Gasification
"Lean" coals (those with a limited calorific value and a high sulphur content) can be improved by transforming them into gas. The intermediate product thus obtained contains less pollutants and also has the advantage of the flexibility of use characteristic of gas.
Coal gasification is the new coal technology which has reached the highest level of maturity and commercial reliability.
The gas obtained by this process can be used to produce SNG (synthetic natural gas) or can be used directly in integrated gasification combined cycle (IGCC) plants and thus make electricity generation more economic.
b. Combined cycles
Coal is ideal for use in a gas or steam turbine combined cycle plant. It is an economic and (compared with conventional power stations) environment-friendly solution which can achieve about 45% efficiency (as against a maximum of about 37% for a conventional power station fitted with fume desulphurisation and denitrification systems).
The main projects for integrated gasification combined cycle plants (in the European Union) are being implemented in the Netherlands, Spain, Germany and Denmark. The Puertollano project in Spain (construction of a power station to be completed by mid-1996) will supply 305 MW on the basis of local coal and give a level of environmental protection never achieved before.
c. Other technologies: liquefaction, fuel cells, the magnetohydrodynamic system, coking.
IV. Incentive measures
Possible instruments for introducing
environment-minded energy policies
The energy sector is part of the economic system, which itself fits into the global ecological system of the biosphere. The relationship between the economic subsystem and the global ecological system changed spectacularly over time (see Figure 6).
Figure 6: The size of the world economy and the global ecological system: development over time16
Because of its increasing importance the energy field is no longer the preserve of energy experts alone. Several types of instruments need to be used to promote three broad categories of effort: improving our knowledge of the energy-environment interface problem, orchestrating the actions of a coherent policy, and implementing and managing viable energy policies. As regards the instruments, they are above all economic, but are also social, political and even legal.17
The uncertainty which still remains concerning the real impacts of energy use on the environment make it all the more necessary to understand energy-environment interactions. Thus in several countries studies of new energy projects have to be accompanied by environmental impact studies and supported by cost-benefit analyses supplemented by multiple criteria analysis which can take account of aspects which cannot be expressed in monetary terms and a heritage approach which treats natural resources as a common heritage.
Techno-economic models have been developed for purposes of least-cost planning and work is now under way on integrated resources planning. Service supply curves permit direct comparison between different energy sources or the technologies which can provide the services for which the energy destined.
In order to know the total cost and acceptability of an energy project it is necessary to draw up an energy balance sheet including an ecological evaluation and a socio-economic analysis. There are those who prefer to term this the internalisation of external costs, for deciding the optimum solution from the standpoint of the national economy.
A. The social cost of energy
The implications of energy projects are often wider than foreseen. There are effects on health (ranging from injury to cancer) and indeed germplasm damage; the environmental impact; long-term costs resulting from depletion of resources; structural macro-economic effects, on employment for instance; costs arising from the greater likelihood of conflict or war (energy sources need protecting, civilian nuclear technology has to be transferred to the military sphere) ; the possibility of radioactive contamination of production plant and habitations by nuclear disaster; the psychosocial cost of serious illness and death; and population displacement necessitated by construction work or accidents. It is worth noting that these costs, to which many more could be added, are usually excluded from the price of energy but that they need to be taken into consideration if a proper comparison is to be made between the different energy sources.
In long-term planning, that is covering at least two or three generations, the method is to take a chosen future goal as the starting point and to organise the requisite measures, gradually working back towards the present. It has also to be assumed that some problems will worsen (the population problem, differences between north and south, etc.). All these factors argue for using all available forms of energy and not relying totally on any one of them.
The necessary measures may be classified in four categories:
1. measures concerned with information, education and public consultation;
2. economic instruments (the most important of which are discussed below);
3. incentive measures: R&D in the field of renewables (demonstration that they are energy efficient and "clean"):
—cr eation of institutions better suited for channelling information, training staff, administering policies and monitoring the quality of the action taken;—
—es tablishment of an energy services industry;—
—pu blic procurement policy;—
—vo luntary agreements with industry;—
—re ward and incentive systems;4.
4. establishment by common accord of standards to be applied ruthlessly.
B. Economic instruments to promote the development of new technologies and reduce the harmful effects of polluting energy sources
1. Subsidies and taxes are the most important type of economic instruments which are used to try to reverse the ratio between conventional and new technologies. Subsidies are granted by states to environment-friendly process and products in order to promote their use.
This solution has it disadvantages however: first, it is difficult to determine the amount of the subsidy, and a wrong calculation could have far-reaching negative economic consequences as well as undesirable ecological consequences; second, there is a risk of increasing bureaucracy in decisions concerning the beneficiaries of subsidies.
2. Taxes on conventional energies appear easier to apply in practice, even though there are still doubts with regard to their efficacy in the longer term, particularly if they are not high enough to have any effect.
The energy/CO2 tax envisaged by the European Union (10% of the energy cost) should according to the Community experts) reduce the total volume of CO2 emissions in member countries by 3,5% by the year 2000 (as compared to the volume which would be reached if the tax were not introduced). Half of the tax will be on the energy content of the fuel and the other half on the carbon content. Thus fossil fuels would be subject to both halves of the tax, while fuels with a low carbon content (gas, for example) would be subject to a lower amount of tax than those with a high carbon content (such as coal). Nuclear energy would be subject only to the energy part of the tax, while renewables would be exempt from both.
These figures can of course be contested, as can the effectiveness of the tax itself. If we consider two main aspects of this solution however there is no doubt that it deserves to be taken into account as a guideline for future European energy policy.
These two aspects are: i. the use/uses for which the tax revenue is earmarked and, most importantly, ii. the need to introduce the tax over a fairly large geographical and economic area.
i. The special tax would be perceived by the public as just one more fiscal imposition and would meet with predictable hostility. The problem can be overcome by reducing the tax burden elsewhere so that the CO2 tax does not produce an overall increase in taxation. In addition, revenue from the tax should be used solely for replacing pollution-causing technologies and the improvement of energy efficiency. This can be regarded as paying the tax back to the community and enterprises in a different form.
ii. The second prerequisite is that taxes would have to be harmonised internationally since otherwise there would be distortion of international competition. Governments would be tempted to introduce special taxes on certain imported products in order to protect national energy-intensive industries.
Other economic instruments which could be used include a system of negotiable emission permits or, preferably, national emission quotas. The procedure would be as follows: an emission level would be set for a certain period and each country would have a quota, which it would be entitled to renegotiate subsequently (at national level there could also be a system of quotas for firms). Here again, of course, the system would have to be implemented over a huge geographical area in order to be effective.
V. European and international co-operation
The problems posed by energy-environment interrelations cannot be resolved unless they are approached from the global standpoint; in fact these problems have points in common, which indicates that their solutions may have too.
Countries differ however: they use different energy sources (for example, 75% of the electricity generated in France comes from nuclear power stations, whereas the average for OECD Europe is 31%, and certain countries have rejected the nuclear option altogether); institutional and market structures differ (for example, France is centralised and its public services are nationalised; Norway is decentralised and public services are still for the most part state-owned; Germany has developed a private sector, but competition limited in the fields of gas and electricity; in the United Kingdom the energy industry is no longer state-owned nor is it subsidised); the biggest environmental problems differ (in OECD Europe the main concern is to reduce CO2 emissions; in the CEE/NIS region it is to reduce the pollution caused by the combustion of coal and oil in the towns), etc.
It is therefore necessary to approach the subject from the global standpoint and establish guidelines which take account of the local particularities.
Up to now the most important European initiatives seem to be the Community programmes which fit into a fairly well-defined energy strategy. These include among others the SAVE programme (aimed at limiting CO2 emissions through improving energy efficiency), the ALTENER programme (which pursues the same objective, but by another method, that of promoting renewables) and the THERMIE programme (aimed at creating a sound energy base for the European Union through the use of leading-edge technologies). THERMIE has been extended to 1998 in the shape of THERMIE-II.
The European Energy Charter (adopted at The Hague in December 1991) has fifty signatories, including the European Union, all the other OECD countries (except New Zealand), the central and eastern European countries and the CIS (except Turkmenistan). Although not yet in force it provides pan-European co-operation framework based on market principles intended to encourage western energy investment in central and eastern Europe and the CIS. However is also seeks to improve security of energy supply continent-wide. An incidental point is that the large environmental implications of transferring skills and new technologies to those countries warrant taking into account.
The north/south energy/environment interface is beyond the scope of this report. However, it is vital that international bodies like the World Bank be used to the full to support energy/environment projects in the developing countries. Which leaves the question of the technologies most appropriate to those countries.
VI. Controversial points
The uncertainties associated with energy-environment interdependence have given rise to a number of controversies, concerning among other things:
a. the validity of the forecasts in general: energy demand forecasts made some twenty years ago turned out to be very wide of the mark. Most experts then expected energy demand to go on expanding rapidly and simply extrapolated from past growth rates — they were wrong;
b. the validity of certain forecasts in particular: the forecasts concerning the energy sources which will be used in the future are the subject of considerable controversy: will we see the large-scale use of renewables or will coal again become dominant? There is no lack of arguments on either side;
c. the scale of the environmental problems caused by energy: it is difficult to prove beyond doubt that the consequences of the greenhouse effect will be catastrophic; but is it really wise to delay action until we are certain?
d. the contribution of individual energy sources to the degradation of the environment. In his plea in favour of coal, Mr van der Stichelen Rogier18 pointed out that it was necessary to consider the whole of the chain from energy production and transport to final consumption in order to grasp that, in any comparison of gas and oil with coal, the environmental pluses by no means all lie with the former.
For example, the territories of the former USSR annually leak into the atmosphere a quantity of methane equal to annual methane consumption for the whole of Germany because piping is in such disrepair,19 and methane is one of the most active greenhouse gases.
e. efficacy of certain economic instruments: the main debate concerns the energy/CO2 tax, which would have to be very high to have any significant effects. It is above all in the field of road transport (the most polluting mode) that its effectiveness is questioned.
VII. Conclusions
For over a decade the western world has become increasingly aware of the production system's impact on energy use on the one hand and the environment on the other. Recent political developments in central and eastern Europe alter the picture in a region which long-term European strategies need to take into account. In addition, there have been occurrences (such as the oil crises and Chernobyl) and discoveries (such as the greenhouse effect and depletion of the ozone layer) which have dealt a blow to "classical" theory by highlighting the worldwide nature of the problems.
Without claiming to be exhaustive, this report has endeavoured to review the position as regards interconnections between energy and the environment, placing the emphasis on areas in which improvements can be made in the near future: energy conservation, new types of energy, modern energy technologies, possible approaches to environmentally aware energy policies, international co-operation, and so on.
There is often talk of "common energy policy". But as the energy position in Europe varies radically from country to country, such a policy can be built only around fairly general principles, though that does not necessarily mean it would be ineffective. Without being interventionist, it might achieve positive results if it endeavoured to set priority objectives such as reducing emission of greenhouse gases, long-term conservation of the fuel supply, and keeping energy costs at competitive levels. The risks, social costs and advantages also need evaluating so that influence can be brought to bear on market mechanisms where necessary.
Obviously, tax or financial measures will often be an adjunct rather than an alternative to standard setting. For instance, an energy tax like the CO2 tax needs to be supplemented by direct measures such as raising the thermal isolation standards for buildings. The fact that higher fuel prices do not have the effect of reducing road transport, which is the main culprit in transport emission of CO2, is indicative of the political nature of the problem. There has to be public acceptance of the need for a radical change in behaviour: if present road-use trends were to continue the consequences would be disastrous.
Energy forecasts predict greater demand for natural gas, particularly in the OECD countries and more especially for electricity generation. It has to be borne in mind, though, that most natural gas is Russian, and furthermore that clean use of coal is now possible and that it is premature to abandon it as being dirtier than other fuels.
In the R and D sector it may be wondered whether funding is always balanced and well directed. An important point here is that the amount of R and D will depend largely on economic growth, so that there is something of a vicious circle. Less energy means less growth, which in turn means less research on and development of new forms of energy.
The wise move would be to break out of the vicious circle by conceiving of energy policy as part of a strategy to revitalise the economy. That objective will be achieved when "new" energy policies start producing large scale investment in new technologies and job creation in areas such as more rational energy use.
Statistically the right solution tends to be applied only after all others have been exhausted. Europe is now at a historical and political crossroads: the way it sees the future in energy terms may be crucial to the development of a continent whose political boundaries seem increasingly insubstantial.
APPENDIX III
APPENDIX V
APPENDIX VI
APPENDIX VII
APPENDIX VIII
List of recommendations and resolutions
of the Parliamentary Assembly of the Council of Europe
on the relations between energy and the environment
i. Resolution 876 (1987) on a European high-speed train network.
ii. Resolution 926 (1989) on the danger of climatic changes and the protection of the ozone layer.
iii. Recommendation 1130 (1990) on the formulation of a European charter and a European convention on environmental protection and sustainable development.
iv. Resolution 956 (1991) on transfer of technology to countries of central and eastern Europe.
v. Resolution 974 (1991) on renewable energy sources and solar hydrogen.
vi. Recommendation 1140 (1991) on global environmental change and the role of science and democracy.
vii. Resolution 977 (1992) on European transport problems.
viii. Resolution 979 (1992) on agriculture's contribution to enhancing energy security and saving the global environment.
ix. Resolution 987 (1992) on climate change.
x. Resolution 1007 (1993) on north-south technology transfer.
xi. Recommendation 1209 (1993) on nuclear power plants in central and eastern Europe.
Reporting committee: Committee on Science and Technology.
Budgetary implications for the Assembly: none.
Reference to committee: Doc. 6389 and Reference No 1933 of 28 February 1994
Draft resolution unanimously adopted by the committee on 12 September 1994.
Members of the committee: Mr Roseta (Chairman), Mr Meszáros, Mrs Terborg (Vice-chairpersons), Mr Alemyr, Mrs Arnold, MM. Bartodziej, Bauer, Berger, Birraux, Borderas (Alternate: Palacios), Mrs Brenden (Alternate: Mr Lie), MM. Fulvio Caccia, Cunliffe, De Decker, Del Gaudio, Dees, Dumont, Galley (Alternate: Decagny), Golu, Hurta, Inönü, Ivanov, Mrs Kaliska, MM. Konecny, Konstandinidis, Leers, Lenzer, López Valdivielso, Lotz, Luczak, Metelko, Mitchell, Mitolo, Mocioi, Moran, Panov, Pécriaux, Poças Santos, Požela, Probst, Mrs Ragnarsdóttir, Mr Theis (Alternate: Regenwetter), Mrs Saint Cyr (Alternate: Mrs Fleetwood), Mrs Stiborova, MM. Tabladini (Alternate: Lorenzi), Sir Donald Thompson, Mr Jack Thompson (Alternate: Lord Newall), MM. Tiuri, Vrettos, Yürür.
N.B. The names of the members present at the meeting are printed in italics.
Secretary to the committee: Mr Perin
1 1Recommendation 846 (1978) of the Parliamentary Assembly of the Council of Europe on energy and the environment (Doc. 4215), Rapporteur: Mr Lenzer.
2 1 Resolution 987 (1992) of the Council of Europe Parliamentary Assembly on climate change.
3 2 Resolution 926 (1989) of the Council of Europe Parliamentary Assembly on the danger of climatic changes and the protection of the ozone layer.
4 1Note by the OECD International Energy Agency (IEA) on the European energy outlook presented to the parliamentary hearing on "Energy and environment: towards sustainable development" — Paris, 25 and 26 November 1993.
5 1 These are not firm predictions but just some of the possible trends.
6 1 See Appendix IV.
7 2 Benjamin Dessus, Director of the CNRS ECOTECH Programme, France: information document on "Renewable energies: Reasonably accessible regional potential for the nineties", presented to the parliamentary hearing on "Energy and environment: towards sustainable development" — Paris, 25 and 26 November 1993.
8 1Report by the Parliamentary Assembly of the Council of Europe on renewable energy sources and solar hydrogen (Doc. 6546 — 1991); Rapporteur: Mr Scheer.
9 1 On 14 January 1993 the "International Herald Tribune" reported that the Russian Government, in a decision which had been hushed up, had given the go ahead for the construction of thirty or more nuclear power stations by the year 2000.
10 1Policy Studies Institute, in association with Neighbourhood Energy Action: "Energy efficiency", 1992.
11 1IEA, OECD: "Energy efficiency and the environment", 1991.
12 2 IEA, OECD, opus cit.
13 3Communication of the Commission of the European Communities to the Council of the European Communities, 16 September 1993.
14 1IEA, OECD — op. cit.
15 1Report by the Committee for Energy, Research and Technology of the European Parliament on new coal technologies (21 December 1993). Rapporteur: Mr Mario Melis.
16 1Olav Hohmeyer: information document on "Economic thinking, sustainable development and the role of solar energy in the 21st century" presented to the parliamentary hearing on "Energy and environment: towards sustainable development" — Paris, 25 and 26 November 1993.
17 2Hélène Connor-Lajambe: "Measures for introducing environment-minded energy policies", document presented to the parliamentary hearing on "Energy and environment: towards sustainable development" — Paris, 25 and 26 November 1993.
18 1J. van der Stichelen Roger, Secretary General of the Association of the Coal Producers of the European Community. Information document presented to the parliamentary hearing on "Energy and environment: towards sustainable development" — Paris, 25 and 26 November 1993.
19 2 Speech by European Commissioner Sir Leon Brittan to the Petroleum Institute, London, 17 February 1993.