Source: Atomic Energy Authority Culham/ Brooks, Krikler Research
INTRODUCTION |
The activities related to energy use may be analysed in three stages; the production of primary energy, its conversion to derived energy, and the sector in which fuels are finally consumed, or end use (see Box 19A for energy related definitions). Primary energy resources are unevenly distributed across the countries of Europe and this leads to different levels of production activity. The main factors which determine the quantity of energy consumed in any particular country include the number of people, their income level, the level and structure of production in the economy, the technology in place, energy efficiency, and energy prices. High levels of energy consumption are particularly associated with the countries of Central and Eastern Europe where energy prices have been very low in the past (see Box 19B for an explanation of data sources and country groupings used in this chapter).
Big gains in energy efficiency since the early 1970s have resulted in a weakening of the links between growth in population, GDP and energy consumption. This demonstrates that, through greater energy efficiency, it is possible to obtain the same amount of energy services (that is, the practical end use to which energy is put) using less energy input. Improvements in energy efficiency can reduce all the main environmental impacts from energy use, and are especially important for reducing carbon dioxide emissions (for which no cost-effective control technologies are currently available). This can be economically profitable at the same time by avoiding the investment in new capacity (eg, building new power stations and energy distribution systems). Improvements in efficiency of a few per cent per year can go a considerable way towards reducing the demand for energy when an economy is growing at, say, 2 to 3 per cent per year. Further improvements in energy efficiency are possible for existing generating installations in Europe, and also for specific end-use sectors, for instance, tighter control over heating levels and/or improved insulation in European homes.
The mix of fuels consumed (ie, energy derived from solid fuels, gas, oil, nuclear, renewables and derived energy sources such as electricity) is subject to many influences, including energy and environmental regulation and policy, prices of various fuels (influenced either by the market or government intervention), technological developments, and the need for security of supply. Depending on the relative influence of these factors in the various parts of Europe, some quite different patterns of fuel mix have emerged, which in turn lead to varying contributions to environmental impacts from the generation of energy from different sources.
In 1990, the world gross energy consumption was about 8250 million tonnes of oil equivalent (Mtoe), an increase of 2.2 per cent per year since 1985, of which the EU accounted for some 15 per cent, Central Europe approximately 4 per cent, the former USSR around 16.5 per cent and EFTA countries 1.8 per cent (CEC, 1993b).
Each region in Europe consumes a mix of primary energy containing all three fossil fuels: oil, gas and solid fuels (coal, lignite), in different proportions. In the EU oil is the main fuel consumed, in Central Europe it is solid fuels, while in the former USSR gas and oil are the most important. In EFTA the main fuel is also oil, but significant proportions of hydropower and biomass are used (CEC, 1993b). In all country groups gas is likely to take an increasing share of energy consumption in the future, because of both increased availability and lower environmental impact relative to other fossil fuels.
ENVIRONMENTAL IMPACTS |
All energy types have potential environmental impacts, to varying degrees, at all stages in their cycle of use from extraction through processing to end use. The environmental impacts caused by energy sources that have attracted most attention from policy makers in recent years are atmospheric acid rain and global warming both of which stem largely from the combustion of fossil fuels. Impacts on water, soil and land may also occur but are more localised.
Specific impacts vary considerably depending on the type of energy, but also on the efficiency of the technologies employed (eg, in power stations) and the use of pollution control technologies (eg, emissions control). The construction of any energy installation (including those based on renewable sources) involves energy consumption, and full life-cycle analysis is required to assess the overall environmental effects of generating energy using a particular source. A summary of the environmental impacts caused by the main energy sources is given in Table 19.1.
Impacts from fossil fuels |
Producing energy from fossil fuels is the most obvious source of environmental pressure, because several or all of the following steps are required, each having their own impacts: mining or extraction, processing, transportation, conversion, further transportation, combustion and waste disposal.
Combustion of fossil fuels results in emissions to the atmosphere of carbon dioxide (CO2), sulphur dioxide (SO2), nitrogen oxides (NOx) and particulate matter (and dust), as well as metals and radionuclides. CO2 is the major contributor to global warming, while SO2 and NOx cause acid rain, and together with particulate matter contribute to bad air quality. NOx emissions also contribute to the formation of tropospheric photochemical oxidants (see Chapter 32). Methane (CH4), another potent greenhouse gas is emitted during the extraction and processing of all fossil fuels (including coal), from leaks in the gas transportation system, and during combustion. The amount of CO2 produced per unit of energy from coal, oil and gas is in the approximate proportion of 2 to 1.5 to 1 (IEA, 1991).
Combustion of fossil fuels (including that for transport and industry) contributes around 80 per cent to total worldwide anthropogenic CO2 emissions. Emissions in Europe are about 30 per cent of this total. In Europe, solid fuels and oil each contributed similar amounts to total CO2 emissions in 1987 (IEA, 1991). Coal production and gas leakage contribute significant amounts to methane emissions. (See Chapters 4 and 14.)
Eula Saxe open air coal mine near Leipzig |
Consumption of fossil fuels provides the major contribution to anthropogenic atmospheric emissions of SO2 and NOx. In 20 European countries, for 1990, around 95 per cent of SO2 emissions and 97 per cent of nitrogen oxides arose from the combustion of fossil fuels. The highest emissions come from those sectors, electricity generation and industry, which use the most energy and the highest sulphur-content fuels, that is, solid fuels and high sulphur heavy fuel oil. Energy efficiency has increased in Western countries, meaning fewer pollutants are emitted per unit of energy consumed. In Central and Eastern Europe, however, emissions are still very high per unit energy consumed (see also Chapter 20). This is caused by the high share of solid fuels in the total fuel mix, the poorer quality and high sulphur content of these (lignites), the low quality of power generation installations, and the lack of effective emissions control technology. For instance, pollution from the combustion of coal, in terms of kilogrammes of pollutants per toe used in the energy sector, is consistently worse in Poland than in OECD nations. Sulphur dioxide emissions in 1989 were estimated at 32 kg per toe of coal in Poland, well ahead of most OECD countries, where typical values are in the range 2 to 4 kg per toe (Financial Times, 1993). Solid fuels are the most polluting fossil fuels locally and globally. Solid fuels range from hard, 'clean-burning' bituminous coals to soft brown coals and lignites, which have high proportions of combustion waste and pollutants such as sulphur, heavy metals, moisture and ash content. The mining of solid fuels may have major local impacts on water quality and the landscape (for example, in Poland: see Box 19C). Impacts from coal mining differ substantially between deep underground mining (which is visually less intrusive but expensive) and surface or opencast mining (which is cheaper but results in major local impacts, both visually and on air quality).
Compared with solid fossil fuels, gas and oil are less polluting. Gas is the least polluting fossil fuel. The major impacts from oil are associated with accidental spillages during transportation both at sea and on land. The resultant damage to coastal areas and marine life can be dramatic in the short term and may also have long-term consequences; clean-up is very expensive. The majority of major marine environmental accidents in the last ten years have involved oil tankers. Data stretching back over 20 years are available on oil spills from pipelines in Western Europe. Out of a total of 50 spillage incidents between 1987 and 1991, only three caused no environmental pollution (CONCAWE, 1992). (See also Chapters 18 and 30.)
Nuclear power |
Normal operation of nuclear power stations does not result in serious environmental impacts, although nuclear power does present the problem of storage and disposal of radioactive waste, particularly from spent fuel or waste processing (see Chapter 15), and the risks of major environmental impacts from nuclear accidents such as Chernobyl (see Chapter 18).
Long-term storage of radioactive waste is a major source of concern for which there is not yet a clear solution. The earlier interest in the reprocessing of spent fuel has diminished in favour of the search for safe methods of long-term dry storage of spent fuel or waste (with the notable exception of THORP in the UK). There is also concern about the risks and problems of waste storage associated with decommissioning of reactors at the end of their lifetime (see Chapters 16, 18 and 30 for further discussion of this topic).
Renewable energies |
Generating energy from renewable sources also has some environmental impacts. With the exception of large hydropower schemes, these are generally small and localised. The environmental impacts of hydro schemes are closely related to their scale and siting. The social and environmental impacts in upstream areas include resettlement of people living in the areas to be submerged, loss of valuable fertile land and forest, alteration or destruction of the landscape by the infrastructure required to support such schemes, effects on wildlife and fish, and loss of livelihood for people relying on fishing, farming and related activities. These impacts are frequently found to be unacceptably high, and prevent the development of large-scale hydropower schemes. In addition, the re-routing of rivers to supply dams may lead to conflicts between competing uses for water (such as those over the construction of the Gabcikovo dam on the Danube on the Slovak/Hungarian border). The ecological consequences of such schemes are difficult to predict and may be very complex (see Chapter 5).
In a few countries renewables provide a high proportion of total energy requirements (for instance, Iceland has pioneered use of geothermal energy). Exploitation of sources of renewable energy in the future would require commitment of significant areas of land (which, for biomass, may become possible with the reforms under way in agricultural policy ­ see Chapter 22) and would inevitably have some environmental consequences: visual impacts (from wind, and solar), noise impacts (wind), and small quantities of air emissions (geothermal, forest residues, biomass conversion). However, these alternative sources appear to have at least the potential to ease emissions from the energy sector of greenhouse gases and other pollutants (such as SO2, NOx and particulate matter).
TRENDS IN ENERGY PRODUCTION AND CONSUMPTION |
There is no direct link between consumption and production of energy in a region or country, since production depends on the availability of primary (principally fossil fuel) resources and export markets, while consumption is linked to the energy intensity and structure of economic activity. In this section the trends in the production of primary fuels and derived fuels, gross inland consumption and final energy consumption are presented.
Since 1970, the overall trends in energy production and consumption in Europe have moved in parallel, but with production growing slightly faster. In 1970, primary production of energy in Europe (excluding the former USSR) was half of gross inland consumption; by 1990 it was 62 per cent, as the demand for energy stimulated greater production after the oil shocks of the 1970s.
From 1970 to 1990 the total gross inland consumption in Europe (excluding the former USSR) grew from almost 1300 Mtoe to 1670 Mtoe, an average annual growth rate of 1.3 per cent, while primary production grew from just over 635 Mtoe to 1040 Mtoe, 2.5 per cent per year on average (excluding the former USSR). Both production and consumption grew much faster in the 1970s than during the 1980s. From 1970 to 1980, consumption growth averaged 2.2 per cent per year (production grew by 3.6 per cent per year) while in the 1980s the annual growth rate averaged 0.4 per cent (production 1.4 per cent), in all cases excluding the former USSR. There, total gross inland consumption increased by 74 per cent from 770 Mtoe in 1971 to about 1340 Mtoe in 1990. Over the same period primary production increased by 82 per cent, from 884 Mtoe in 1971 to around 1600 Mtoe in 1990. Figure 19.1 shows the markedly different trends between the two decades.
Production trends |
Primary energy refers mainly to oil, gas, solid fuels and nuclear energy. The distribution and production network in Europe of oil and gas is shown in Map 19.1. The sites and capacities of nuclear power plants are illustrated in Map 19.2.
The 1970s was a period of very rapid growth of total primary energy production after the oil price shocks, followed by a period of much more limited growth in the 1980s. Nuclear power production continued to grow throughout the two decades while solid fuels production declined; the trends for oil and gas were more mixed.
Changes in total primary production reflect changes in demand for energy both domestically and worldwide (since fossil fuels are internationally traded commodities), and new discoveries and exploitation of reserves. Between 1970 and 1980, in the EU, total primary energy production rose by over 40 per cent, reflecting mainly the exploitation of North Sea oil and gas by the UK and The Netherlands. Nuclear power also increased significantly. The increase of primary energy production over the same period in the former USSR was higher, at over 50 per cent (due to a greater exploitation of large natural gas reserves). A different pattern emerged in the period 1980 to 1990, when, in the EU and the former USSR, total primary energy production increased by around 20 per cent. In EFTA countries, primary production increased during the 1970s more than threefold (230 per cent), but in the 1980s this fell to around 90 per cent. Central Europe shows the biggest contrast between decades, with a 22 per cent increase between 1970 and 1980, but a 13 per cent fall in primary production between 1980 and 1990.
Figures 19.2a and b show the changes in production of different fossil fuels in Europe by country group since 1970. From 1970 to 1980, the major increase in oil production in Europe (outside the former USSR) was due to rapid increases in North Sea oil production. There were also increases in the production of gas, but an overall stagnation in the production of solid fuels. Increases in gas production were due to a desire to diversify the supply of energy away from oil (to limit the impact of any future oil price rises), to shift production away from solid fuel for environmental reasons, and to enable cheap gas to penetrate new markets. In the former USSR, production rose for every fuel, particularly gas, of which the country has vast reserves.
In the period 1980 to 1990 production of solid fuels continued to stagnate in both groups and, while gas production passed its peak and fell in Western Europe, it continued to rise in the former USSR. Liquid fuels production grew in Western Europe but fell in the former USSR due to production difficulties.
The use of electricity in Europe is highest in Western Europe. In 1990, the proportion of electricity in final energy consumption was 18 per cent in the EU, 29 per cent in EFTA, 14 per cent in Central Europe, and 12 per cent in the former USSR (see Statistical Compendium). Electricity intensity of an economy tends to increase as it develops, since electricity is the principal fuel used in commercial and service activities. This explains the high and growing proportion of electricity consumption in Western Europe. Electricity consumption in Central Europe and the former USSR, while lower than in Western Europe, has been encouraged by very low electricity prices.
The use of district heating is highest in the Central and Eastern European countries, but also has significant use in EFTA countries. In 1990, the percentage contributed by heat to final energy consumption in the EU was negligible at 0.6 per cent, while it was 17 per cent in Central Europe, 12 per cent in the former USSR and 4 per cent in EFTA (see Statistical Compendium). Outside the EU, district heating, sometimes also involving the cogeneration of electricity(ie, combined heat and power), has long been established as a principal means of delivering heat to the urban domestic sector. The energy saving potential of this approach has, in Nordic countries, been shown to be substantial. However, the very poor standards and maintenance of heat distribution systems sometimes found in Central and Eastern Europe means that it is possible, in some cases, that as much as 50 per cent of the heat sent out of district heating boilers is lost (ERM Energy, personal communication, 1993).
Figure 19.3 shows the relative contributions of different sources to electricity production in 1990. Some key features are:
In the future, the share of gas in power generation is expected to grow in all country groups, and this will help to reduce emissions from the sector.
The contribution of nuclear power in meeting Europe's demand for electricity has expanded rapidly in recent years, but the rate of expansion is slowing down. Not all countries have nuclear power programmes and several countries have moratoria on the development of future nuclear power stations. Only six EU countries currently operate nuclear power stations, and the share of nuclear power in electricity generation varies considerably between European countries. For example, there is a very high proportion of electricity generated by nuclear power in France (84 per cent), Belgium (62 per cent) and Switzerland (66 per cent), but in other countries where nuclear power is used the share is less than half.
The use of nuclear power to generate electricity has increased in all country groups during the 1970s and through much of the 1980s, with big increases, particularly in the EU and former USSR, between 1980 and 1985 (see Figure 19.4). This shows the energy inputs from nuclear power, which is about three times the output in terms of electricity generation, due to inefficiencies in the energy transformation process. The EU has by far the highest growth rate in electricity generation from nuclear power. After 1985 the growth rate slowed in all country groups, but in the EU, use of nuclear power to generate electricity has still grown faster than in the former USSR, Central Europe, or EFTA.
Both fossil fuels and the uranium used in nuclear plants are, ultimately, finite resources, and this has contributed to interest in the potential of exploiting renewable sources of energy. These include hydropower, solar, wind, biogas, biomass and geothermal energy.
Renewable energies in the EU accounted for about 3 per cent of gross inland consumption, of which 61 per cent was accounted for by biomass, and 31 per cent by hydropower (EP, 1992). The European Commission has developed programmes to encourage the penetration of renewable energy sources in the EU, and increase trade in products, equipment and services within and outside the EU (see 'Policy' below).
The Nordic countries have been leaders in exploiting renewable sources of energy in Europe, with Sweden, Finland, Iceland and, particularly, Norway producing large quantities of hydropower (in Norway, hydropower provides nearly all the electricity); Bernes (1993) reports that Denmark produced some 2 per cent of its total electricity output from wind power over half of all Europe's wind-power capacity; Iceland generated 31 per cent of its gross inland consumption from geothermal (the main countries exploiting geothermal energy in the EU are Italy and, to a lesser extent, France). Iceland additionally generated about 37 per cent of its gross inland consumption in 1990 from hydropower, so that a total of 68 per cent of its gross inland consumption (and 99.9 per cent of its electricity generation) is generated from renewable sources (Icelandic Ministry for the Environment, 1992).
The main problem with wind power is that it requires considerable space to set up the generating capacity. For instance, it would be technically possible to build a 1000 MW wind farm near Pori on the west coast of Finland, but this would require 2500 generators in a 100 km2 area (EDC-MEF, 1993). However, conventional sources of energy also need large areas of land, which is, if all stages in the energy cycle from mining through processing to final waste disposal are counted, at least as much as the area required for wind power. For countries with large areas of open, sparsely populated land, therefore, wind power may be a realistic option for meeting a part of the demand for energy.
There has been increasing interest, from both environmental and agricultural perspectives, for greater use to be made of biomass to generate electricity and heat, usually in combined heat and power (CHP) plants, or in district heating plants. Biomass fuels include ethanol from agricultural products, vegetable oils as diesel fuel, wood and wood waste, and other wastes. Wood is a common fuel for heating in many European households, although well-established sources of data on the amounts involved are not generally available (see Chapter 26). Use of biomass is CO2 neutral, and is also viewed in some quarters as a possible solution to the problem of agricultural surpluses (see Chapter 22).
Biogas recovered from sewage, landfill sites and agricultural wastes is a potential energy source at the local level. As these gases are mostly methane (a potent greenhouse gas see Chapter 27), capturing and burning them is in any case environmentally worthwhile, and deriving energy is an added bonus. Biogas contributed over 50 ktoe to primary energy production in 1989 in the UK, The Netherlands and Italy (EP, 1992).
Over the last decade significant progress has been made in all basic applications of active solar energy: production of domestic energy, space heating, heating of swimming pools, and heat for commercial, agricultural and craft end uses. For the EU, the annual production of solar energy is about 200 ktoe, mostly in Greece, France, Spain and Portugal, although the growing markets are in more northerly countries. There is also increasing interest in photovoltaic systems, but the generation of electricity on this basis is not at present competitive, being about ten times more expensive than other forms of generation (EP, 1992), except in remote locations.
Consumption trends by fuel type and by end-use sectors |
The gross inland consumption shown in Figure 19.1 masks significantly different trends between the European country groups. Figure 19.5 compares the trends between these groups.
In the EU, EFTA, Central Europe and the former USSR, the average annual increases in consumption between 1970 and 1980 were 1.8, 2.2, 3.5 and 3.8 per cent respectively. In the EU, the increase in consumption in the 1970s was much lower than the rise in production, resulting in an increase in exports and a reduction in imports of oil. This was a deliberate response to the oil price shocks of the 1970s and the desire to decrease import dependency. In the former USSR, consumption rose by an amount roughly matching its own production. The former USSR, being self-sufficient in energy and a net exporter of oil and gas, was insulated from fluctuations in world energy prices and therefore did not respond to the 1970s oil price increases in the same way as Western European countries. In the 1980s consumption growth rates fell substantially in all groups, but particularly in Central Europe. Between 1980 and 1990, the average annual growth rates for energy consumption in the EU, EFTA, Central Europe and the former USSR were respectively 0.8, 1.4, 0.9 and 1.9 per cent per year.
The divergence of trends was even more marked in the second half of the decade. From 1985 to 1990, energy consumption in the EU rose by 8 per cent, in EFTA by 6 per cent and in the former USSR by 7 per cent, while in Central Europe it fell by 13 per cent. The markedly different trends in the former USSR and Central Europe reflect the changing economic and political situations in the two areas. By 1990 economic reform had already started to have a major impact on Central Europe, but not on the former USSR.
Western as well as Central and Eastern Europe have tried to substitute their consumption away from imported fuels and reduce their import dependency by developing their own resources, diversifying supply and improving energy efficiency. In Western Europe, this trend began in the 1970s. Central and Eastern Europe were not exposed to world energy prices until the late 1980s with the start of the economic reform process and independence from the former USSR. The latter has more recently moved from a barter trade system to one in which the aim is to sell its energy at or near to world prices for hard currency. Before these reforms, Central and Eastern European countries became accustomed to plentiful energy supplies at heavily subsidised prices. This led to large inefficiencies in the use of energy, since there was no incentive to invest in energy efficiency. Also, a concentration of manufacturing production in the energy intensive industrial sectors had developed, since low energy prices gave these sectors a comparative economic advantage in world markets.
Figure 19.6 compares energy intensity and gross inland consumption per capita for selected European countries. Consumption per capita is similar in Western and Central European countries, but higher in the Russian Federation. Higher energy intensity illustrates greater inefficiency in the use of energy and higher energy demand for a given level of output. Due to the distorting effect of unstable exchange rates, it is not possible to calculate energy intensity with GDP for Central and Eastern Europe and thus make an accurate quantitative comparision of the high energy intensity of the countries of the former USSR with the countries of the rest of Europe.
Low energy prices in Central and Eastern Europe have been a major influence on energy consumption. In Hungary, for example, where reform started relatively early, energy prices rose between two and four times between 1987 and 1991, but were still well below world prices and below their costs of production. In Lithuania, energy prices in 1991 at current exchange rates were about ten times too low in relation to their economic costs (and 15 to 20 times too low in the case of diesel and fuel oil) (ERM energy estimates, personal communication, 1993).
The problem of low energy prices in Central and Eastern Europe was compounded by the absence of effective price signals, and of any means to control energy consumption. Consumers are charged a flat monthly amount for their gas and heat (and sometimes also electricity) consumption, irrespective of how much energy they use. The lack of metering or effective pricing perpetuates a very poor understanding of the quantities, and costs, of energy consumed. This problem can extend right up to the national level; for example, in Lithuania even the bulk delivery of gas by pipeline from Russia is not currently metered at the border.
However, the non-metering and absence of control over consumption of energy is not unique to Central and Eastern Europe, since in many European countries, consumers in domestic (households) and commercial (small business/service) sectors unlike most large industrial consumers have little control over their heating systems, or are not aware of how much energy they use.
Trends in final energy consumption by fuel type are shown in Figure 19.7. In the EU, about half of (1990) final energy consumption is of oil, and almost all the remaining consumption is of gas, electricity and solid fuels. In Central Europe in 1990, oil and solid fuels each accounted for around one quarter of final energy consumption, with heat (here meaning CHP), electricity and gas accounting for the remainder. Overall there is small use of renewables (about 2 per cent) (DG XVII, CEC, personal communication). In EFTA countries oil still provides some 45 per cent of final energy consumption. In the former USSR, oil and gas each account for about 30 per cent of final energy consumption, with solid fuels, electricity and heat together accounting for the remaining 40 per cent. Renewable energy is not shown in Figure 19.7, but the EFTA countries have the greatest contribution to final energy consumption (mainly biomass and hydropower).
The mix of fuels is influenced by the levels of activity in different sectors of an economy. The use of energy by economic sectors (mainly industry, transport, and domestic/commerce) is examined in the other chapters of this report covering those activities. The advanced economies of the EU have a relatively high share of activity in the commercial/services sector (where electricity is the dominant fuel) and the transport sector (where fuel consumption is almost entirely of petroleum products). The economies of Central and Eastern Europe have a much greater dependence on the industrial sector, where the demand for boiler fuels (solid fuels, oil or gas, depending on supply and cost) is a large proportion of total demand. In Central and Eastern Europe there is also a considerable dependence on solid fuels as household heating fuel. This is particularly the case in those countries with a large indigenous solid fuel resource, such as the Czech Republic, Poland and the Slovak Republic, and it is often the poorer qualities of fuel which are supplied to the domestic market. These low-level sources of air pollution are, in many urban areas, a greater contributory factor to poor urban air quality than the emissions from the high stacks of solid fuel (coal)-burning power stations (see Chapters 4 and 10).
The variable percentage breakdown of energy use between sectors in different country groups is illustrated in Figure 19.8 for 197090. A higher proportion of energy is consumed by industry in the former USSR and Central Europe, and in the EU the share on transport is higher.
There has been little incentive for increasing energy efficiency or implementing conservation measures in energy-intensive industries in Central and Eastern Europe because of the subsidised energy made available to the industrial sector. The use of energy by the industrial sector in these countries is therefore expected to fall as prices increase under market influences (see Chapter 20). The transport sector accounts for a relatively high percentage of final energy use in the EU. This is related to large increases in road transportation (see Chapter 21).
FUTURE ENERGY USE: UNDERLYING DRIVING FORCES |
The main factors influencing future growth of gross inland consumption and final energy consumption will be the rate of growth of the economy and its structural development, the scope for energy efficiency improvements and conservation measures, technological improvements and energy prices. The major change in fuel mix is expected to be a significantly growing share for gas in all areas of Europe.
Recent projections suggest that final energy consumption will grow across Europe between 1990 and 2005, with growth fastest in the EU (1.2 per cent) and slowest in Central Europe (0.6 per cent) (CEC, 1992). However, future trends in Central and Eastern Europe are highly dependent on the pace of economic recovery in those areas; final energy consumption is expected to fall over the next few years as economic output declines, before starting to grow again. The assumption underlying the projections given below is that the economies will grow at around 2 per cent per year, averaged over the whole period, in Western and Central Europe, but at less than 1 per cent in the former USSR (these CEC projections differ from the more recent UNESC projections given in Chapter 2). This implies an improving trend in energy intensity in most of Europe but a worsening situation in the former USSR, where final energy consumption is expected to grow by about 1 per cent per year, somewhat faster than GDP (CEC, 1992).
Factors which will influence the future mix of fuels consumed include the end use sectoral share of demand, relative fuel prices, technological developments, security of supply, environmental pressures and government commitment to supporting certain fuel industries (see the next sub-section). In the scenario presented in Table 19.2 the projected changes in fuel mix are considerable; these changes are clearly shown in Figure 19.9. Consumption of solid fuels is projected to decrease in all areas. Oil's share will fall a little everywhere, but fastest in the former USSR. In all areas gas is expected to increase its share substantially.
Resources and technological developments |
Tighter environmental standards in EFTA and the EU, together with increasing attempts by Central and Eastern Europe to attain similar standards eventually, will lead to wider use of pollution control technology, in energy generation and consumption. The heavy use of solid fuels in Central and Eastern Europe, without the use of desulphurisation, has led to significant air pollution and acid rain problems in the region (see Chapters 4 and 31). With increasing use of flue-gas desulphurisation (FGD), filtering and various other technologies, and a trend towards the use of cleaner solid fuels and gas, these problems will be alleviated. Typical performance data and costs of control technologies for reducing SO2 and NOx emissions from stationary combustion sources are given in Chapter 31. The former USSR is showing an increasing tendency to use gas and this will significantly lessen the emissions of greenhouse and acidic gases (provided the gas leaks from gas processing and pipeline systems are kept low), relative to the heavier use of solid fuels and oil in previous years. Western Europe will tend to turn more to gas and this will also help diminish emissions of greenhouse and acidic gases relative to the previous emissions from an energy sector dominated by oil and solid fuel.
The choice of fuel type and conversion technologies is strongly influenced by cost, and any new technologies which had a significant impact on relative fuel costs would also alter the fuel mix and overall demand. The exploitation of pollution control technology and scope for efficiency improvements on the demand side varies considerably between end-use sectors, with, for instance, households and small business activities sluggish to adapt compared with the more vigorous transport sector (see Chapters 21 and 26). Interest in new technologies on the supply side has focused on the so-called advanced or clean coal technologies, improvements in emission control, renewable energy technologies and fuel cells. Research may also bring environmental benefits in the long term:
The current trend is to increase the exploitation of gas and its penetration into new markets. Significant resources exist in the non-European part of the former USSR but their pace of exploitation will be dependent on the establishment of a stable political framework and legal and commercial basis for the encouragement of overseas investment. At current production rates the proven gas resources in the Russian Federation will last about 60 years (BP, 1992). Norwegian gas reserves have an expected life of 44 years from 1990, and oil reserves of 13 years. Proven reserves probably underestimate the ultimately recoverable resource and continuing exploration activity will possibly extend the lifetime of the reserves by one or more decades (Statistical Compendium).
The limitation of an energy source and depletion is, however, only a matter of concern if there are no alternatives to depleting energy sources, or where knowledge does not improve to harness the alternatives, or to use existing resources more efficiently. Present limitations to energy use are therefore linked more to the tolerating capacity of the atmosphere (ie, with respect to greenhouse gases see Chapters 4 and 27) and ecosystems (with respect to pollutants such as NOx and SO2 see Chapter 31).
Policy |
The role of governments in guiding the development of supply sources, technologies and demand is very important. Driving forces in policy issues include the need for security of supply and low energy prices (in Western Europe), the establishment of prices reflecting market realities (in Central and Eastern Europe), and the reduction of the environmental impacts of energy production and use. In respect of the last goal, it is necessary to progress steadily to an environmentally sustainable energy future.
Security of supply has been tackled largely by diversification of both energy sources and geographic origin of deliveries, and by improvements in energy efficiency. Security of supply can also be enhanced by improving the relationship and mutual understanding of consumers and producers, who respectively seek security of supply and demand. The European Energy Charter is a political declaration which aims to advance this understanding, and that of environmental aspects of the production, transport and consumption of energy, by committing its signatories to cooperate in trade, investment and policies in energy sectors at a pan-European level.
Key trends in energy are also linked to broad factors in economic development, environmental policy and resource development. For example, in Central and Eastern Europe, a major decline in gaseous emissions is occurring from their previously high levels through ongoing efforts to modernise industrial production and in reducing the dependence on solid fuels in the region. Efficiency improvements will also be required in other sectors, especially households, services and transport.
Energy and environment policies may also influence demand by affecting energy prices, which should take full account of all costs in the energy cycle. For instance, the aim of a tax on carbon/energy would be to reduce emissions of greenhouse gases by improving energy efficiency and fuel switching. Policies may also take the form of subsidies, accelerated depreciation for energy/environment investments, and cross-compliance measures. For example, the European Commission has a number of programmes designed to encourage a shift in the pattern of energy use to achieve environmental objectives. These include measures targeting promotion, research and development of 'cleaner' and renewable energy technologies, and improving energy efficiency (see Box 19D). The OPET network (Organisations for the Promotion of Energy Technology) was created by the European Commission to ensure effective application of available energy technologies, and to encourage implementation of new technologies. There are 12 European Commission Energy Centres in Central and Eastern Europe which carry out these roles.
Another policy direction is driven by the increasing efforts to bring private sector finance and competition into energy markets. This has resulted in some moves to privatisation (eg, in the UK), breaking up vertically integrated monopolies and allowing new entrants to compete with former monopolies. New market structures are leading towards different investment choices; for example, the move towards smaller power stations (typically 350 MW, rather than the 1000 plus MW power stations built in the past), gas-fired power stations, and CHP for large users. The integration of European gas and electricity networks is bringing opportunities for growing trade in energy products.
Prices, demand and energy efficiency |
Price changes affect overall demand, relative fuel shares and energy efficiency; the most obvious example of this was the impact of the two oil price rises in the 1970s. Prices of natural gas and solid fuels were also affected and a period of rising real prices stimulated changes in energy intensity in the short term, and long-term investment in research and development for improved technologies. In the last few years some energy prices have been falling in real terms and, furthermore, inflation has eroded at least some of the initial impact of efficiency gains.
Energy intensity trends reflect changes not only to efficiency improvements and technological developments, but also to changes in the structure of the economy, international trade, the fuel mix, and sectoral energy policies. Reducing the energy intensity of an economy, through any of these changes, will reduce the demand for energy and improve security of energy supply. In addition, without the decline in energy intensity since 1973 in Western Europe, CO2 emissions would have been much higher.
Establishing prices which reflect market realities in Central and Eastern Europe will play a crucial role in improving energy efficiency in those markets. Energy at competitive prices is essential for economic development. Any economy which has subsidised or distorted energy prices, as is the case in many countries of Central and Eastern Europe, is likely to be able to achieve substantial energy savings (and hence CO2 and other emission reductions) by raising their prices towards international energy price levels. Table 19.3, for example, shows the changes in emissions that are estimated could occur in Central and Eastern Europe if the price subsidies were to be removed. No such dramatic changes are expected in Western Europe, where energy prices already broadly reflect their costs of production, but throughout Europe the increasing interest in internalising the external environmental costs of the energy cycle into energy prices is likely to become a key influence on the demand for energy and in underlining the need for further improvements in energy efficiency in the future.
SUMMARY AND CONCLUSIONS |