E.ON to split into two companies, one fossil fuel-based and one renewables-based
Germany’s largest utility, E.ON, has announced that it is to spin off its fossil-fuel firing power generation business into a separate company, so that the parent company E.ON can focus on renewable energies, distribution and energy efficiency technologies. Preparations for the split will take place over 2015, and come into effect after its 2016 annual general meeting. No job losses will take place, with around 40,000 employees staying with the parent company and around 20,000 being transferred into the new company. E.ON has explained the move as being necessitated by altered global energy markets, technical innovation and customer expectations, and it is also seen as aligned to the German government push for a higher proportion of renewable power generation in the domestic market.
Obama administration’s climate change plans split states and big businesses
The Financial Times has carried an article on the divisions amongst big businesses in regards to the Obama administration’s climate change plan, as evidenced by responses to the Environmental Protection Agency’s draft plan to reduce carbon emissions by 30% from 2005 levels by 2030, with each state able to decide how to meet its targets. The EPA received 1.6 million written comments on the rules, including from a group of 220 big businesses (including Kellogg, Levi-Strauss, Mars, Nike, Adidas, Ikea, Nestlé and Unilever), citing issues such as disruption to water supplies. On the other hand, heavier industry groups, including the National Association of Manufacturers, the American Petroleum Institute, the American Chemistry Council, and the American Iron and Steel Institute jointly submitted a response saying how the plan would make US industry uncompetitive. States are also split on the plan, with pro- and anti- groups making their own submissions. It is certain to be a hotly-contested issue for years to come.
V4 to use combined muscle to claim stake of EU infrastructure fund for energy spending
Another Financial Times article has reported on the push by the ‘V4’ – the grouping of Hungary, Poland, Slovakia and the Czech Republic founded in the town of Visegrád, Hungary – to secure a sizeable portion of the EC’s mooted €315 billion ($US 392 billion) infrastructure fund to upgrade power infrastructure in their countries. The fund, which is based around €21 billion from the EU budget and European Investment Bank guaranteeing funds from the private sector, which would make up the bulk of the funding, lies at the heart of EC president Claude Juncker’s plan to get the European economy back into solid growth. The V4, who recently used their collective power to win concessions regarding climate change targets, have been emboldened to continue to act as a bloc in relation to getting funding, which may be repeated in future European negotiations. The V4 are targeting LNG terminals and conversion infrastructure, cross-border gas pipelines and storage facilities and electricity interconnectors, amongst other things, and are arguing that the infrastructure will help reduce dependency on Russia for energy supplies.
Romania drafts new energy strategy that sees €100 billion investment over next 20 years
In energy news further east in Europe, Romania’s energy ministry has drafted a document estimating the country will require €100 billion ($US 123 billion) in investments in power generation, oil, gas, mining and associated infrastructure by 2035 to be more energy self-sufficient. Potential work may include an expansion of the country’s only nuclear plant, a new hydropower plant, and smart grid and metering infrastructure. The draft energy strategy 2015-2035 document, for which policy proposals will be drafted early next year, calls for a more stable regulatory environment within the country to encourage investors. Around 55% of Romania’s power plants are between 30-40 years old.
Saudi Arabia pushes for climate deal friendly to fossil-fuel exporting countries
A Reuters report from Lima, where climate change talks are taking place in advance of the major Paris meeting late next year, has looked at the position of Saudi Arabia. With an economy hugely dependent on oil (the price of which continues to drop, after OPEC decided last month against cutting production), the kingdom’s chief negotiator, Khalid AbuLeif, has said that any global deal should address the economic vulnerabilities of fossil-fuel extractive nations, helping them to diversify their economies to cope with the transition away from oil, by offering them new technologies and money. “Inevitably oil producers are going to be faced with huge liabilities if the implementation of the convention is advocating a move away from fossil fuels,” Mr AbuLeif said. “We know we are in a race with time. Climate change and economic diversification for us is hand in hand.” The Lima talks were in danger of finishing unsatisfactorily, according to reports.
Fracking found to emit high concentrations of toxic compounds; abandoned oil wells still emitting methane
A study by the Institute for Health and the Environment at the University at Albany-State University of New York, published in Environmental Health, has found highly elevated concentrations of eight poisonous and carcinogenic compounds near fracking sites in the US states of Arkansas, Colorado, Pennsylvania, Ohio and Wyoming. Concentrations of benzene were found between 35 and 770,000 times higher than normal concentrations, while concentrations of formaldehyde between 30 and 240 times normal, and concentrations of hydrogen sulphide 90-60,000 times higher than normal, were found. The method involved training people living in the vicinity of fracking sites to take air samples during times of heavy industrial activity or when they felt dizzy or nauseous, and having the samples analysed by laboratories. Dr David Carpenter, the director of the Institute for Health and the Environment, was quoted by US News as saying “Cancer has a long latency, so you’re not seeing an elevation in cancer in these communities. But five, 10, 15 years from now, elevation in cancer is almost certain to happen.” Dr Carpenter urged the states to enforce better regulation of fracking to prevent leakages of industrial chemicals. The study did not examine exposure to workers.
In a separate study by Princeton University released in early December, it was found that abandoned oil wells in Pennsylvania were continuing to emit methane, at an average of 0.27 kg/day per well, a previously unrecorded source of greenhouse gas emissions. The authors recommended further studies across the US to quantify the emissions.
Iberdrola Ingenieria to build replacement plant at Salem Harbor
Iberdrola Ingenieria, a subsidiary of Iberdrola, itself owned by Enel, has won a contract to build a 674 MW combined-cycle gas-fired power plant for Footprint Power, to be located at Salem Harbor, around 30 km from Boston, Massachusetts, USA. It is to replace the existing coal-fired Salem Harbor Station, which is now 63 years old, taking only a third of the space of the previous plant. It will be Iberdrola Ingenieria’s largest ever project, and utilise GE turbine technology, as well as deploying as a world-first GE’s Flex-efficiency design, which aims to increase operational flexibility, with an eye, presumably, to future operational in the context of higher shares of renewable energies in the power generation mix.
Eskom forced into power cuts
South Africa’s state utility Eskom has announced that it will reduce power output by 4 GW (or around 10% of total output), the biggest power cuts in the nation since March of this year. The cuts have been imposed, according to Reuters, to avoid a system collapse in the nation’s power infrastructure, which has been struggling with a lack of supply for years. Eskom is currently constructing two very large coal-fired power plants to boost supply, but one of the two, Medupi, is delayed two years. The announcement, coming in December when power demand is traditionally lower, affected the Rand, which fell slightly against the US dollar.