mslgroup emea energy newsletter november 2012

7/30/2019 MSLGROUP EMEA Energy Newsletter November 2012

1/28

ENERGY

NEWSLETTERVolume 1 - Issue 2 | November 2012

INSIDE THIS ISSUE

PAGE

03Introduction

PAGE

07Flip-flopping on nuclear energybodes ill for Japans future

Popular opinion in Japan is rapidly turning anti-nuclear. The

Government tries to reflect this in its energy policy but has run into

major opposition inside and outside of Japan.

PAGE

04MSLGROUP canmake the difference

Poland heading fornuclear power will it work?

While Germany is implementing its phase out from the

nuclear program and Japan has just announced its decision

to close its reactors too, Poland is simultaneously preparing

to launch its first nuclear power plant by the end of 2023.

PAGE

21New Italian National Energy Strategy:its time to join the conversation

In a difficult and uncertain macroeconomic scenario,

all the countrys efforts must be geared towards

the resumption of sustainable growth.

PAGE

18

18 months on from Fukushima,what does Europes energy future look like?


2/28

EnergyNewsletter

Volume 1 issueNovember 20122

Contents

Introduction 03

MSLGROUP can make the difference 04

Where we are 06

Flip-flopping on nuclear energy bodes ill for Japans future 07

UKs energy future post-Fukushima 10

Turbines in troubled waters 12

Germanys Energy Shift:

Does less haste mean more speed? 14

Post-Fukushima issues for Frances energy transition 16

New Italian National Energy Strategy: its time to join

the conversation 18

Poland heading for nuclear power will it work? 21

How could Europe save more energy? 23

The Dutch energy landscape: towards a hybrid policy? 25


3/28

EnergyNewsletter


18 months on from Fukushima what does Europesenergy future look like?

As 2012 draws to a close, there is time to pause and reflect on how the tragic

events 18 months ago at Fukushima have changed the nature of the worlds

energy market and nowhere more so than in Europe. At a time of such profound

change, one might have expected a unanimity of approach particularly given

the dirigiste nature of the European Union but a quick review of the European

landscape reveals that, on this occasion, nothing could be further from the truth.

Almost every country in the European Union has a unilateral, seemingly

un-coordinated and often contrary position in respect of energy policy and their

reaction to Fukushima has only amplified this. For example, Germany, which

has always been sceptical of nuclear energy, boldly came out and committed to

closing its fleet of reactors in record time, pinning its hopes on developing its

leadership in renewables to plug the gap. With nuclear accounting for nearly 18%

of demand, that is a big gap to fill.

By contrast,there are countries like the UK and Poland, that remain quite bullish

on nuclear. Yet the UKs nuclear programme is faltering, due to the Governments

resistance to helping underwrite the associated costs and the reluctance of theprivate sector to commit to such huge and uncertain liabilities. You even have the

bizarre situation in Sweden where environmental pressures have called the future

of hydro power, hitherto the poster child of green energy, into question.

Welcome, therefore, to MSLGROUPs latest energy newsletter where some of my

learned colleagues have lifted the curtain on how Fukushima has shaken up the

European energy landscape. There are no easy solutions, especially in this era of

carbon reduction, and it is also clear that there is no single answer. Undoubtedly,

there needs to be some hard headed decision making at the highest level to

give direction and leadership in this critical area. Whatever happens, it is pretty

clear that communications professionals will be kept busy for decades to come,

explaining the impacts and outcomes to consumers and citizens alike.

Nick Bastin

Managing Director, Capital MSL,

Head of Energy, MSLGROUP EMEA

Introduction


4/28

EnergyNewsletter


MSLGROUP can make the difference

MSLGROUP is one of the worlds top five PR and events networks,employing more than 3,400 people in 22 countries around the world.

We are Publicis Groupes speciality communications and engagement

group, advisors in all aspects of communication strategy: from

corporate PR to employee communications, from public affairs to

reputation management and from crisis communications to event

management.

We work for a quarter of the top-100 most valuable brands globally.

Specialist expertise

MSLGROUPs EMEA Energy Practice is a leader in advising companies

from Europe and around the world on communications issues in the

energy sector. Across 15 countries and offices, our European network

supports clients that range from large publicly listed Fortune 500

organisations, to small, privately held companies. We currently advise a

third of the energy companies in the Eurotop 100.

We offer in-depth sector understanding

Ourteam

Anders KempeRegional president MSLGROUP EMEA

Chairman JKL Group

[email protected]

Nick BastinHead of MSLGROUP EMEA Energy Practice UK

[email protected]

Per Ola BossonSweden

[email protected]

Alessandro ChiarmassoItaly

[email protected]

George GodsalUK

[email protected]

Pierre-Samuel GuedjFrance

[email protected]

Fromwell head Towall socket

Fromnuclear Torenewable

Fromcrisis Totalent


5/28

EnergyNewsletter


SuperCritical

Carbon

Carbon

Emissions

BiodieselDrilling

Drilling

Fracking

Fracking

Wind

Renewable

Renewable

Sustain

ability

Sustainability

Sustainability

Sustainability

Regulation

Regulation

Responsibility

Water

Water

WaterTalent

Talent

Fukushima

Fukushima

Financing

Financing

Financing

FinancingFinancing

Coal

Coal

NIMBY

NIMBY

NIMBY

NIMBY

Deepwater

Deep water

Deep water

License to operate

Licensetooperate

Licenseto operate

License to operate

We can help to

manage the risks

Holistic communications solutions

With both breadth and depth of energy communications expertise in

Europes key markets, we share the belief that effective, best practice

communications can deliver value to stakeholders across the energy

value chain.

We also understand the key communications issues that keep energy

companies awake at night:

If you want to find out more about the work we do, or enquire as to how

we might be able to help, dont hesitate to contact a team member in

your market or contact Nick Bastin at [email protected]

Ourteam

Creativity Corporate

Brand

Digital/

Social media

Talent

Public affairs

and regulatory

relations

Investor

relations

M&A, IPO,

restructuring

Crisis

We look at the bigger

picture in the context of

energy market issues

We help energy

organisations to find

better ways of

communicatingcomplex messages to

multiple stakeholders

often across multiple

markets

We deliver creative

solutions that drive

greater engagement

with key audiences

Florian WastlGermany

[email protected]

Peter SteereBrussels/ Sweden

[email protected]

Pawel TomczukPoland

[email protected]

Erik MartensNetherlands

[email protected]

Lotte GladNorway

[email protected]

Helmut KranzmaierGermany

[email protected]


6/28

EnergyNewsletter


Where we are

MSLGROUP Oce

Aliate Oce

VENEZUELA

COLOMBIA

MEXICO

PUERTO RICO

ECUADOR

PERU

PARAGUAY

BOLIVIA

URUGUAY

ARGENTINA

CHILE

BRAZIL

UNITED STATES

OFAMERICA

CANADA

INDIA

NEPAL

BANGLADESH

BURMA

LAOS

VIETNAM

CAMBODIA

SHRILANKA

MALAYSIABRUNEI

INDONESIA

AUSTRALIA

NEW

ZEALAND

PAPUANEW

GUINEA

PHILIPPINES

SOUTH

KOREA

NORTH

KOREA

JAPAN

CHINA

MONGOLIA

KAZAKHSTAN

IRAN

KYRGYZSTAN

TAJIKISTAN

AFGHANISTAN

PAKISTAN

TURKMENISTAN

UZBEKISTAN

DENMARK

SWEDEN

NORWAY

UNITED

KINGDOMIRELAND

FINLAND

ESTONIA

RUSSIAN

FEDERATION

LATVIA

LITHUANIA

BELARUS

POLAND

CZECH

REPUBLIC

AUSTRIAHUNGARY

ROMANIA

BULGARIA

GREECE

GEORGIA

BAKUALBANIA

MONTENEGRO

ITALY

SERBIA

MOLDOVA

GERMANY

FRANCE

SPAIN

PORTUGAL

UKRAINE

EGYPT

SAUDI

ARABIA

IRAQ

JORDANISRAEL

TURKEY

SYRIA

LEBANON

YAMEN

OMAN

MOROCCO

ALGERIALIBYA

CHAD

SUDAN

CENTRALAFRICAN

REPUBLIC

ETHIOPIA

SOMALIA

KENYAUGANDA

DEM.REP.

CONGO

ANGOLA

ZAMBIA

TANZANIA

MOZAMBIQUE

ZIMBABWE

BOTSWANA

NAMIBIA

SOUTHAFRICA

SWAZILAND

MADAGASCAR

CONGO

NIGERIABENIN

GHANAIVORY

COASTLIBERIA

GUINEA

SENEGAL MALI

BURKINA

NIGER

MAURITANIA

WESTERN

SAHARA

TOGO

GABON

Ahmedabad

Mumbai (2)

Pune (2)

New Delhi (4)

Bangalore (2)

Chennai (2)

Kolkata

Hyderabad (2)

Hong Kong (2)

Chengdu

Guangzhou (2)

Shanghai (4)

Tokyo (3)

Seoul (2)

Singapore

Kuala Lumpur

Beijing (4)

Chicago (2)

Seattle (2)

Toronto

New York (6)

Boston

San FranciscoLos Angeles (2)

Detroit

Washington DC

Atlanta

Helsinki

Warsaw

Stockholm (2)

Gothenburg

Oslo (2)

Copenhagen (2)

Breda

Amsterdam

London (5)

Brussels (2)

Geneva

Paris (8)

Monaco

Cologne

Frankfurt (2)

Hamburg

Milan (2)

Munich (2)

Rome

Berlin (2)

Johannesburg

Sao Paulo

Buenos Aires

Dubai

Abu Dhabi

Taipei

Latin America

50+ employees

ASIA

40 offices and

over 1,550

employees

EMEA

41 offices and

over 1,150

employees

AMERICAS

20 offices and

over 700

employees


7/28

EnergyNewsletter


Flip-flopping on nuclear energybodes ill for Japans futureJapan has gone back to the drawing board on whether to let nuclear power stay inits energy mix. Japan is in desperate need of a more serious debate on its energy

future. It must bring to the table representatives from all ends of society.

The Cabinet eventually approved

the new energy plan on Sept.

19. But it had dropped the core

reference to the 2040 deadline

in a separate document. In other

words, Japan has gone back to the

drawing board on whether to let

nuclear power stay in its energy

mix.

Popular opinion in Japan is rapidly

turning anti-nuclear. The Government

tries to reflect this in its energy policybut has run into major opposition inside

and outside of Japan. The result is a

zigzagging course, which is creating

huge unpredictability about Japans

future nuclear policy. This limbo

situation threatens to be even worse

than either switching off all nuclear

reactors or keeping them online.

On 14 September 2012, the Japanese

Government presented to the public a

new national energy strategy. This long-awaited plan included the objective of

eliminating nuclear power by 2040.

This came as no big surprise as recent

surveys are showing that a majority of

Japanese favor an exit from nuclear

energy in the long run. Each Friday, tens

of thousands of people demonstrate

against nuclear power in front of the

Prime Ministers residence and this

has been going on for several months.

Japan has not witnessed a larger public

movement than this since the student

riots in the 1960s.

Only one week after 14 September,

however, hopes for a nuclear-free

Japan were dashed. In the face of

strong opposition from the business

community, municipalities andprefectures that host nuclear reactors

and fuel reprocessing plants, and from

the United States, Great Britain and

France, the Japanese Government

decided to backtrack on its initial

aspirations.

The Cabinet eventually approved the

new energy plan on 19 September. But

it had dropped the core reference to the

2040 deadline in a separate document.

In other words, Japan has gone backto the drawing board on whether to let

nuclear power stay in its energy mix.

This zigzagging on policy has left many

in and outside Japan scratching their

heads. Both proponents and opponents

of nuclear energy are equally frustrated

because neither groups concerns

are being properly reflected by the

Governments wavering course. The

worst long-term damage, however, is

probably being caused by the shaken

belief that Japan has a predictablefuture in energy.

Jochen Legewie [email protected]


8/28

EnergyNewsletter


Japan needs to develop its own

approach in a political environment

that lacks a history of long-term

public discussion of nuclear

power as Germany had, and which

faces significant differences with

Germany in terms of geography,

geopolitics and other conditions.

The announcement of the new energy

strategy on 14 September was filled with

contradictions and ambiguities from the

beginning.

While aiming to close nuclear power

plants by the end of the 2030s, the

strategy allows work on plants already

under construction to continue. It also

calls for shutting down all reactors while

the reprocessing of spent fuel shall

continue. Likewise, the goal of tripling

electricity output from renewable

energy sources by 2030 sounds hollow

because the Government does not offer

any plans for generating the funding

required to do so.

In addition to these factual

contradictions, members of Prime

Minister Nodas Cabinet have been

making inconsistent remarks over

the past weeks. On 13 September the

Government announced its plan to shutdown the Monju fast-breeder reactor.

Five days later it insisted that research

and development activities at Monju

would continue.

On 17 September, Chief Cabinet

Secretary Fujimura even told a

news conference about plans to

decommission three nuclear reactors

in Fukui Prefecture only to retract the

remarks a few hours later on the same

day.

The ambiguity of the Government policy

is best shown by the following remarks

of Japans trade minister, Whether we

can become nuclear-free by the 2030s

is not something to be achieved only by

policymakers. It also depends on the

will of electricity users, technological

innovation, and the international

environment for energy in the next one

or two decades.

What remains for the time being is a

temporary victory by the formidable

coalition of pro-nuclear interest groups.

But as long as unpredictability and

immature communications continue

to shape energy policy and public

perception at home and abroad, there

will be no real winner.

Japan is in desperate need of a more

serious debate on its energy future.

The Government should take the lead

in creating a proper framework andtimeline for this debate. It must bring to

the table representatives from all ends

of society, including the growing group

of outspoken nuclear opponents.

Maybe, Japan should borrow a

page from the book of the German

Government. Right after the Fukushima

disaster, the German Government

installed the so-called Ethics

Commission, made up of famous

and highly respected individuals


9/28

EnergyNewsletter


from academia, the church and other

parts of society, including a business

representative, to discuss the nations

future nuclear policy. It later provided

chancellor Merkel with the perfect

blueprint legitimising Germanys

nuclear exit.

Japan needs to develop its own

approach in a political environment

that lacks a history of long-term public

discussion of nuclear power as Germany

had, and which faces significant

differences with Germany in terms

of geography, geopolitics and other

conditions.

But it is clear that Japan cannot afford to

keep zigzagging on energy policy much

longer. If it continues, the fears of both

sides in the nuclear debate might come

true.

On the one hand, the continuedunpredictability in policy will likely make

energy-intensive businesses leave

Japan. It will effectively dampen any

further exports of nuclear technology

while preventing the development of a

strong new industry around renewable

energies at the same time. It will even

worsen relations with the U.S. and

other Western allies that want Japan to

stick with nuclear power but most of all

request planning security.

On the other hand, if nuclear energy

stays, it might lead to another major

accident in earthquake prone Japan and

thus combined with above result in

the worst possible overall scenario.

Facts and perceptions need to be taken

into the equation as well. There are

many ways to do so. One would be to

start an annual international summit to

discuss the challenges and solutions

to the energy questions of today and

tomorrow. The obvious annual date

would be 11 March, with a venue in

Fukushima prefecture.

The Japanese Government owes it to

its people, and also to the international

community, to take the lead in

addressing nuclear and other energy

issues in a proactive and sustainable

way. And it must communicate its course

in a consistent and responsible way. If it

did so, Japan might even be perceivedas leading in a responsible way at

home as well as abroad.


10/28

EnergyNewsletter


UKs energy future post - Fukushima?The Tsunami off the coast of Japan that led to the Fukushima disaster hashad a powerful and long reaching effect on global energy policy and itsimpact has circumnavigated the world including reaching the UK

and affecting its energy policy choices.Even prior to Fukushima,the UK was

facing some very difficult decisions;

how could its ageing fleet of nuclear

reactors be phased out and replaced

with enough new capacity to keep the

lights on? Should nuclear remain a

core component of the UK electricity

supply? What mix of fuel gave the

best blend of security of supply, cost

efficiency and would help to lower the

UKs carbon footprint; how could pricesbe kept affordable; and what was the

right balance between intermittent and

base load solutions?

Perhaps, unsurprisingly, the role of

nuclear power has been questioned as

never before, with an added irony being

that this came at a time that the UK

seemed to have unblocked a log jam in

its development of new nuclear power

stations and was well advanced in the

planning for the construction of a fleet

of up to eight new plants.

However, unlike in other countries,

like Germany and Japan, the desire to

withdraw from nuclear power has not

come from Government wilting under

popular protest, but from private sector

reluctance to commit to the projects

under the proposed terms. The swift

action taken by Angela Merkels

Government to shut down nuclear

power in Germany, was followed rapidly

by E.On and RWEs withdrawal frombidding for the Horizon consortium that

was hoping to build two new plants at

Wylfa and Oldbury on Severn.

The Government was presented

with an awkward conundrum, as the

subsequent bids from a variety of

consortiums to take over the project

have been less palatable and had

potentially included two Chinese State-

owned bidders - China Guangdong

Nuclear Power Group and Nuclear

Power Technology Corp. Although

neither of these ultimately participated

The Government was presented

with an awkward conundrum, as

the subsequent bids from a variety

of consortiums to take over the

project have been less palatable

and had potentially included two

Chinese State-owned bidders

- China Guangdong Nuclear

Power Group and Nuclear Power

Technology Corp.

in submitting a bid, it did raise the

controversial prospect of the Chinese

State being a significant shareholder in

the privatised UK nuclear industry.

This would have brought its own

communications challenges, as it

seems unlikely that the British general

public would have readily accepted

Chinese ownership in such a sensitive

area particularly when there is noprospect for reciprocity in China.

The problem is that if trusted partners,

like E.On, RWE and Areva pull out,

there is not much choice of other

suppliers who have the technical or

financial ability, or willingness, to bid,

particularly if you exclude Chinese or

Russian bidders for political reasons.

In this case, Hitachi have ridden to the

rescue by agreeing to buy Horizon

from E.On and RWE, but there is still

a complex negotiation to be had over

pricing and the financial return, with

Hitachi seemingly having to trust the

UK Government to do the right thing.

It seems unlikely that more nuclear

power stations can realistically be built

without a greater level of Government

involvement, due to the extremely long

term liabilities and costs, which are

increasingly hard for private companies

to stomach.

But the ripples of Fukushima aremore subtle than just whether the

UK should build more nuclear power

stations. The question is also, if not

nuclear, then what? With a reluctance

to be more dependent on Russian

gas and with declining production in

the UK North Sea, the options for a

robust alternative are limited. Despite

theoretical support for renewables like

wind, there is increasing push back

from communities on the impact these

have. Recent proposals for a huge wind

farm along the banks of Loch Ness

in Scotland have galvanised intense

Nick Bastin

[email protected]


11/28

EnergyNewsletter


opposition and it is clear that thedifficult choices people need to make

about their power sources are not going

to go away.

All of these challenges will require

effective communications to help

people make the right decisions with

consumers struggling under ever

increasing energy bills, and a growing

number enduring fuel poverty, the

correlation between those choices and

politics will become ever narrower. The

Government is trapped between the

rock of deficit reduction and the need

for long term planning / financing of

these projects, if you throw in carbon

reduction targets and the hornets nest

of opposition from special interest

groups, then you can see why decision

making is often glacial.

But there is no easy way out,consumers need to be informed

about the reality that we face; with

most renewables currently unable to

meet baseload power requirements,

and requiring huge Government

subsidies to get off the ground, all of

the alternatives remain unpalatable

on one level or another. It is inevitable

that ultimately we will need a mix of

energy sources to meet our needs, and

nuclear will need to be part of that mix.

I am sure nuclear power operators, and

the British public for that matter, would

value more open and transparent

communications from the Government

on how these plans will affect them,

and they will need to fully understand

the costs and ramifications that those

choices will have, both in the present

but also in the future, 20 years hence.


12/28

EnergyNewsletter


Turbines in troubled watersWhat will the impact be of Swedens plans to revise

the environmental permits of the countrys 2,000 hydro plants

I cant understand why Sweden is

doing this! Hydropower is necessary,

as we all know. Not only because it

is renewable - it is also needed to

regulate fluctuations in wind power

production.

These words were spoken by a

German electrical engineer, who was

astonished by Swedens plans to cut

hydropower production. Or moreprecisely, Swedens plans to revise

the environmental permits of the

countrys 2,000 hydroelectric plants.

Most hydro plants operate under

permits that are 50-100 years old and

were granted under old legislation. A

revision of the permits in accordance

with new legislation would compel

the hydro plants to meet more

stringent requirements and comply

with new environmental law principles,

including the Duty of Care, BestAvailable Technology and Polluter Pays

Principles.

The few cases in which new

environmental legislation has been

applied to hydropower have always

entailed a decrease in production.

This is due to the requirement that

a greater share of flowing water be

released alongside the turbine into

new or existing fish streams, which is

expected to improve the chance of

survival for migrating fish and mussels.

Each additional cubic metre of water

released past the turbine means lost

electricity production.

The few cases in which new

environmental legislation has

been applied to hydropower have

always entailed a decrease in

production.

A power plant required to release

a certain minimum flow alongside

its turbine has an impact on up and

downstream power plants. The ability

to use hydropower as energy storage is

restricted when flow cannot be freely

regulated.

Rewriting permits for all power

plants under todays environmental

legislation is expected to reduceproduction by 5 TWh, according to

industry body Swedenergy. Regulating

capacity the ability to store energy

in regulated rivers will also be

reduced. Others estimate that the

production decrease may be as much

as 10 TWh. Today, 65 TWh is produced

by hydropower. A crucial question will

be how environmental regulations

should be applied to the largest hydro

plants. Most hydroelectric production

is generated by the 200 largest plants;this is also where the regulating

capacity lies.

The parliamentary majority that has

pushed the plans does not care to

provide a forecast as to the size of

the production decrease it wants

the issue to be analysed by the

Government investigator who was

commissioned last June to draw up a

legislative proposal. The proposal will

be finalised by the summer of 2013.

Meanwhile, Sweden is preparing a plan

for making the entire energy supply

climate neutral by 2050. With less

Per Ola Bosson

[email protected]


13/28

EnergyNewsletter


A further expansion of hydropower

in Sweden is also inconceivable,even in the long term. There are

unused watercourses, but they are

clearly protected by law.

hydropower, Sweden will need more

wind power. This in turn increases

the demand for regulating power

i.e., hydropower. The upshot is that

Europe can hardly count on Swedish

hydropower in any significant way to

regulate expanded wind power and

solar energy, as Sweden will need the

hydropower for its own regulation of

supply and demand. A salient point

is that Sweden has no natural gasnetwork and thus lacks the option of

using electric power generated by

natural gas as a regulating power.

The political game behind hydropower

is complicated, as it always is with

Swedish energy policy. Due to high

per capita electricity consumption,

energy is an important issue. In the

battle between various stakeholders,

certain types of energy (e.g., natural

gas) have been rejected on less

than objective grounds. It is hardly a

coincidence that the most nuclear-

friendly party the Liberal Party is

also critical of hydropower. But even

the environmental movement criticises

hydro, which it views as large-scale

and a threat to biological diversity (as if

global warming doesnt also threaten

biodiversity). Most people recognise

hydropowers great importance to

Swedens economic welfare, but

no party or group of voters actually

likes hydropower. For people livingnear the plants, its hard to like

hydro. Hydroelectric plants today do

not employ local staff but control

operations remotely from national

operations rooms. Hydropowers

advantages become evident far from

the people who live near the plants,

and this distance would be even greater

if electric power were exported.

Taken together, this all means that

the decision making process on

hydroelectric plant environmental

permits that is now underway will

most likely carry severe consequences

and entail a significant decrease in

production for existing hydro plants. It

is inconceivable that a parliamentary

majority will have a sudden attack of

remorse and admit that it forgot about

climate change.

A further expansion of hydropower in

Sweden is also inconceivable, even

in the long term. There are unused

watercourses, but they are clearly

protected by law. For safetys sake, theremaining Swedish rivers (including

four large, entirely undeveloped

Norrland rivers) are protected by both

Swedish law and the EUs Natura

2000, and the major rivers have also

been classified as National Rivers.

Watercourses are thus triply protected

from expansion. Angry opinions

are immediately heard at the mere

mention of hydropower expansion.

Neither is it possible to increase

electricity production in existing

hydroelectric plants, since production

there will be reduced by the release of

more water into fish streams alongside

the turbines.

The German electrical engineer cited

above points out that Europe will

need Swedish hydropower to regulate

all the future wind power and solar

energy. But references to Germanys or

Europes need for Swedish hydropower

fail to resonate with Swedish public

opinion in fact, such referenceshave the opposite effect. Swedes do

not want fish migration blocked by

hydropower plants just so electricity

can be exported. Neither do they

think more hydropower is needed in

Sweden hydropower already provides

nearly 50 per cent of the electricity

consumed in Sweden. So its more

enjoyable to fish for trout in Swedish

rivers, and canoeists wont have to haul

their canoes past hydropower plants.

And after all, electricity on the Nordic

market is cheaper this year than its

been in a very long time.


14/28

EnergyNewsletter


Germanys Energy Shift:Does less haste mean more speed?Germanys energy shift is not only lagging severely behind schedule,it is also about to slow down even further. Ultimately, this could be a virtue

for German energy policy.

In the early summer of last year, only

three months after the Fukushima

nuclear disaster, Angela Merkels

Government dramatically overturned

its original decision to slow Germanys

exit from nuclear power, bringing the

date for the final decommissioning of

all German nuclear reactors forward

to 2022. Alongside the faster nuclear

phase-out, the Government embarked

on a hugely ambitious plan to replaceGermanys nuclear capacity with power

from renewable energy sources.

Since then, progress in Germanys so-

called Energiewende (Energy Shift)

has been painstakingly slow, with

many projects lagging severely behind

schedule. This is best exemplified

by the status quo of one of the key

pillars of the Energy Shift, i.e. the

building of offshore wind parks in

the North Sea. More than a year into

the Energiewende, decision-makers

have still not created the regulatory

environment to give investors the

financial security they require (although

a law to do this is about to be passed

at the time of writing). Meanwhile,

the state-owned Dutch grid operator

TenneT, tasked with connecting the

proposed offshore wind parks to

mainland grids, is in severe financial

difficulty. Separate deals between

TenneT and investors to secure

funding for individual projects are nowbeginning to get underway but no

overall solution to TenneTs financial

troubles appears to be in sight. As a

result of these problems, only two

small offshore wind parks have so far

been built, with a joint capacity of a

meagre 0.5 Gigawatts. According to the

Governments plans, however, offshore

wind power will have to generate a

whopping ten Gigawatts by 2020.

Whats more, the pace of the Energy

Shift is set to slow down even further

in the months ahead. This is for tworeasons: First, the strongest proponent

within the Government of a speedy

transition to renewables, environment

minister Norbert Rttgen (CDU),

lost his ministerial post in May 2012,

following a poor showing as CDU front-

runner in a key regional election. The

new man in charge of the environment

brief, Peter Altmaier (also CDU), is

determined to focus less on speed

than on feasibility. This is likely to

include a temporary strengthening of

fossil energy production. Secondly,

Germany is facing a general election in

September 2013. With energy issues

likely to dominate the election, political

parties are already beginning to stake

out their positions. As the election

draws nearer, the policy window will

close in the spring and is unlikely to

reopen until early 2014.

However, it is not all gloom: While

Peter Altmaier may be putting his

foot on the brake with regard torenewables, he has also begun to

frame the debate towards a more

pragmatic, results-oriented approach

Florian Wastl

[email protected]


15/28

EnergyNewsletter


to the Energy Shift. As the Government

has just had to raise its green energy

levy to cover the increasing cost of

the Energy Shift, Altmaiers key focus

will be on keeping overall costs down

or, rather, of spreading them out

over a greater period of time. While

Altmaiers CDU (and, to some extent,

also the Social Democrats) will be

arguing in their election campaigns

that energy must remain affordable to

consumers, the CDUs coalition partner

FDP will emphasise the importance

of cheap energy for the continuedcompetitiveness of Germanys export-

driven economy. Only the Green Party

are likely to step out of line: They will

insist that costs are not being pushed

up by the effort to extend renewable

energy production but by a rebate for

industry which should be scrapped.

With a Grand Coalition between

Christian Democrats and Social

Democrats the most likely outcome

of the election, Altmaiers approach is

set to prevail. It is therefore likely that

Germany will experience a significant

slowing-down in the shift to renewable

energy production, but that targets,

timings and the cost of the Energy Shift

will become more realistic. Given the

inevitable extension of fossil energyproduction, however, one target will

hang in the balance more than ever

before: Germanys commitment to cut

CO2 emissions.

Only the Green Party are likely to

step out of line: They will insist

that costs are not being pushed up

by the effort to extend renewable

energy production but by a rebate

for industry which should bescrapped.


16/28

EnergyNewsletter


Post-Fukushima issuesfor Frances energy transitionWe are more and more aware that we are living in a resourcelimited world. While 80% of our energy currently comes from

fossil fuels, this cannot be sustained in the future.Indeed, in a world where the need for

energy is constantly growing, fossil

energy resources are slowly being

depleted and the scrutiny of their

environmental impact dramatically

increasing, an energy transition is

necessary.

In light of these issues, the accident

at Fukushima could have been an

accelerating factor for the transition.However, in France nuclear energy is

too important and too competitive

to be replaced. Hence, its role has

not really been questioned following

the Fukushima event. Nevertheless,

for political reasons, the French

Government has had to get involved

in the development of renewable

energies. This is what lies behind

the recent announcement, during

the Environmental Conference, that

a national debate will be organised

around the energy transition and the

associated issues and that this will lead

to a new planning law before summer

2013. Seemingly, the idea behind this

declaration is to hide nuclear energy

under a carbon-free layer, forbidding

for example shale gas, to make it more

acceptable.

Whatever will be decided later this

year, the lives of companies will

undoubtedly be affected. For some

sectors, like the public constructionsector, or the renewable energy sector,

this transition will be an opportunity to

expand their activities, thanks to new

public projects and new invitations to

tender in the photovoltaic sector for

instance. For some others, such as in

the hydrocarbon sector, it will require

major changes to their activities.

All these changes lead to numerous

questions for those companies linked

to the energy transition. How will the

debate be organised and led? Who

and how will it be financed? What

regulatory framework will be used?

Companies are both the agents of

the transition and key to it. If we

want it to be successful, it must

take into account their worries and

expectations.

These are some of the questions

for which those companies that are

affected seek answers.

Companies required toenter the debate

Companies are both the agents of

the transition and key to it. If we want

it to be successful, its must take into

account their worries and expectations.

After having being left out in the latest

Environmental Conference, companies

have to be reintegrated into the

debate. Hence, the governance of the

energy transition debate to date has

to be questioned. Companies want abalanced and coherent discussion, in

particular in the debate on shale gas

and this will need to be re-examined

and involve all stakeholders.

A need for clearerinformation about funding

Once the direction has been settled,

companies expect clearer information

on whom will pay for the transition and

how it will be organised. Indeed, theGovernment has already announced

strong measures, in particular in the

automobile and public construction

Pierre-Samuel Guedj

pierre-samuel.guedj@consultants.

publicis.fr


17/28

EnergyNewsletter


sectors. For example, the Governmenthas requested that in ten years time

cars should consume two litres per 100

kilometres and that one million houses

should comply with modern standards

every year. These measures have a cost

and this has led to the Government

studying the creation of a Public

Investment Bank, to support this.

Necessity of a simplifiedregulatory, tariff and fiscalframework

Finally, French companies need a

simplified and stable regulatory, tariff

and fiscal framework in order to be

competitive. Laws must make the

transition simpler. For example, in

the wind power sector, companies are

glad that the Government decided

to open a new tender, but they want

the administrative procedures to be

simplified and the tariff situation to be

fixed. In respect of energy efficiency,

companies want the publication of

decrees under development and the

Grenelle Building Plan to become

perennial.


18/28

EnergyNewsletter


New Italian National Energy Strategy:its time to join the conversationIndeed, the renewal of the Italian energy sector, in theGovernments vision of things, can and must play a key role

in improving the overall competitiveness of the country system.

In a difficult and uncertain

macroeconomic scenario, all the

countrys efforts must be geared

towards the resumption of sustainable

growth.

This can only happen if there is

substantial enhancement of the Italian

economic systems competitiveness.This is the opening statement of a

public consultation document with

which the Italian Government presents

its new national energy strategy.

Its no coincidence that the energy

plan was included in the countrys

growth agenda. Indeed, the renewal

of the Italian energy sector, in the

Governments vision, can and must

play a key role in improving the overall

competitiveness of the country.

The document includes more than

100 pages of industry development

guidelines, from now to 2020, outlining

core decisions, defining objectives,

and identifying priority actions to

be implemented. Reading between

the lines, theres a determination to

assure coherence for a course of action

that will lead the country towards a

reduction of its overall energy bill as a

medium-term response to the current

state of economic crisis and leading,

and in the long run, to a secure futureof growth and development.

The plan identifies four main

objectives:

Closing the energy costs gap for

consumers and businesses, aligning

with European energy prices and

costs, including the reduction of a

price differential of over 25% for

electricity, which has a decisive

impact on the competitivenessof enterprise and on household

budgets.

Achieving and surpassing the

environmental objectives defined

by the EU Climate and Energy

Package 2020 (known as20-20-

20), decreasing greenhouse gas

emissions by 19% compared to the

18% target.

Continuing to enhance the reliability

of supply, especially in the gas

sector, and reducing dependence

on foreign countries, lowering

it from the current 84% to 67%,

saving 14 billion euros per year on

the countrys energy bills, which

currently amount to around 62

billion euros each year.

To achieve these goals, investments

of 180 billion euros are planned

in the green and white economies

(renewable energy and energy

efficiency), as well as in traditional

sectors (mains, LNG terminals,

storage, hydrocarbon production).Italy is already a virtuous country in

terms of energy efficiency:

David Sevali

[email protected]

and

Alessandro Chiarmasso

[email protected]

A key step for the implementation

of the strategy will be the

modernization of the governance

system, aiming to enhance the

effectiveness and efficiency of

decision-making processes.


19/28

EnergyNewsletter


The Government intends to use

the national energy strategy

document as the basis for

extensive public consultation,

which will start with the main

players involved directly and

indirectly in the energy sector.

by reinforcing its commitment, its

aim is to achieve a reduction of 4%

compared to 2010 (-24% compared

to inertial trend for 2020). For

renewables, on the other hand, the

goal is to impact by 23% on primary

consumption with a reduction from

86% to 76% of fossil fuels, to bring

down utility bill fees. The strategy

provides for a reduction of incentive

costs, to align with European levels,a shift from renewable electricity

to renewable thermal energy and

a preference for technologies with

greater impact on the national

economic supply chain.

But what are the prioritiesfor implementing thesegoals?

The development of a competitive gas

and electricity market, fully integrated

with Europe and with aligned prices;

in particular, the aim to make Italy

the main southern European gas

hub through the construction of

LNG terminals and storage centres,

expanding import pipeline networks.

The restructuring of refining and of

the fuel distribution network, with

the aim of realising more sustainable

structures, with European levels of

competitiveness and service qualitythrough liberalization measures.

Sustainable development of domestic

hydrocarbon production, to free the

country from its dependency on

foreign suppliers, which today stands

at just under 90%.The goal would be

to increase from 8% to 16% of national

energy requirements, with investments

of 15 billion euros and about 25,000

new jobs, saving 5 billion euros on

annual energy bills. In twelve years,

Italys extraction of oil and gas has

halved, dropping approximately from

the equivalent of 24 to 12 million

tons of oil annually. Yet Italy is one of

the leading countries in continental

Europe for the reserves it has available:

The potential amount is 700 MTOE,

corresponding to the current annual

quota of 12 MTOE for a period of over

50 years. Excluding Nordic countries

with significant offshore assets, proven

Italian reserves are the largest in

continental Europe.

A key step for the implementation of

the strategy will be the modernization

of the governance system, aiming

to enhance the effectiveness and

efficiency of the decision-making

processes. Consequently, bureaucracy

will be addressed, introducing a single

authorisation, offshore protection

limits will be reformulated, and the

advisability of changing Article 117 of

the Constitution will be evaluated for

restoring the States energy expertise,

at least with regard to strategic

infrastructure.

These are the cornerstones of the draft

submitted to the Ministry for Economic

Development. The publication of

the document immediately raised

a series of criticisms, especially

from environmentalists. On the one

hand they criticise the time frame of

2012 to 2020, which they say is too

limited considering the time required

for approving and implementingmeasures, and the time that elapses

from the decision to invest to the

commissioning of works. On the other

hand, they criticise an approach that

seems to look primarily at traditional

sources (hydrocarbons) while

penalising renewables where incentives

are cut back.

The Government intends to use the

national energy strategy document

as the basis for extensive publicconsultation, which will start with the

main players involved directly and

indirectly in the energy sector. All


20/28

EnergyNewsletter


Moreover, the environmentalists,

who have already spoken out

against the documents strategic

guidelines, might attempt to

leverage public opinion to delay

Government action, hoping for a

change of direction on the part of

the political forces that win the

elections.

points will be the subject of political

debate, involving regional authorities,

industries and unions concerned,thus arriving at the definition of a new

energy strategy for Italy.

This phase of public consultation

provides a key moment for anyone

who wants to play an active part in

defining the final document, bringing

their experiences to the heart of the

discussion. The communication role

will thus peak in this initial stage, when

there is still time to redefine some of

the vital steps. The duration of this

exploratory phase is yet to be decided.

Since the current Government still

has six months in office, there may

not be enough time to complete the

definition of the plan before election

campaigning begins and energy issues

start being manipulated for political

confrontation.

Moreover, the environmentalists, who

have already spoken out against the

documents strategic guidelines, might

attempt to leverage public opinion todelay Government action, hoping for a

change of direction on the part of the

political forces that win the elections.

Some key points of the draft strategy

and in particular the implementation

of a gas hub underpinning thedevelopment of a transport and

storage infrastructure network, and

increased exploitation of hydrocarbon

resources, with what this implies in

terms of exploration and development

of mining and processing plants, will

be easy weapons to field for those who

want to take advantage of increasingly

widespread and heated NIMBY

sentiments, especially as a result of

international (BP in the Gulf of Mexico)

and domestic (environmental impact

of Tarantos ILVA steel plant) pollution

scandals, which recently alarmed in the

Italian population.

If the Government wants to push

through key points of the draft under

discussion today and implement

its projects in the future, it must

engage across the board in an intense

communication campaign designed to

educate and inform local institutions

and citizens, actively involving them

in decision-making processes, whilepreventing the paralysing stand offs

that occur time and again.


21/28

EnergyNewsletter


Poland heading fornuclear power will it work?While Germany is implementing its phase out from the nuclear program and Japanhas just announced its decision to close its reactors too, Poland is simultaneously

preparing to launch its first nuclear power plant by the end of 2023.That is despite huge costs and

European public opinion negatively

positioned towards any nuclear

investments.

A fast developing countrythat lacks energy

Behind every country lies a different

energy story. Polands annual demandfor energy is over 35,000 MW, and 90%

of it is fulfilled by coal power plants.

At the moment, renewable energy

sources, including theoretical shale

gas production, cant be seriously taken

into consideration in Poland for the

next two or three decades. The real

problem for the Polish energy sector

is not the dependence on coal and

the perspective of high prices for CO2

emission rights, but the modernisation

process for the old coal power units.

In May, the Polish Energy Regulatory

Office advised that after 2015 the

country may experience blackouts

due to growing energy demand. The

reason is that older power units are

being closed, rather than modernised

or replaced, and the Polish power

system may not be able to produce

enough energy to meet the increase

in demand. Furthermore, despite

Polands location, the countrys power

grids are insufficient to transit large

amount of energy from neighboringstates.

Why we need nuclear rational arguments

The Polish Government plans to build

two nuclear power plants (3,000 MW

each) for ca. Euro 20-30 billion. The

first one should be completed in

2023 and the second one connected

to the network by the end of 2035.

Simultaneously, the Government

expects to develop new power capacity

from renewable energy sources, as

The Polish Government plans to

build two nuclear power plants

(3,000 MW each) for ca. Euro

20-30 billion. The first one should

be completed in 2023 and the

second one connected to the

network by the end of 2035.

well as new coal and natural gas powerunits. The mix of those energy sources

should secure Polish demand for the

next decades. However, it is obvious

that the sudden disappearance of

6,000 MW of nuclear capacity would be

hard to replace.

Public attitudes

At the beginning of 2012 the

Government launched an information

campaign to present nuclear energyand to open the public debate about

the project. Its goal was to present

nuclear energy as a safe and efficient

technology which, despite high

initial cost of investment, will provide

inexpensive energy in the future.

Public opinion polls show that Poles

are divided: 40% of respondents are in

favor of nuclear energy, 53% against

and 7% undecided. The real challenge

arises when it comes to the location

of the future nuclear plants nearspecific communities then 63% of

respondents refuse to have nuclear in

Poland.

Marcin Roszkowski

[email protected]


22/28

EnergyNewsletter


Will it work?

The Government and key experts are

confident in finalising the first stage

of the project by 2023 (when the first

power plant is scheduled to open).

The rational arguments in favor of

nuclear energy and stable State

financing are not the only drivers

fueling the program. The strongest

is Polands positive attitude towards

developing and modernising

the country and whats evenmore important - making it more

independent from its mighty neighbor

Russia. Every year, more and more

Poles care about the environment, but

only when it doesnt severely influence

their wallets. Nuclear energy has a

chance to be cheap while giving Poland

energy independence.

Polish nuclear energy is still in its

infancy, but all the necessary elements

seem to be in place. Recently,

Polands largest energy and energy-

related companies have signed a

partnership agreement to finance

the project, together with the State.

Also, the potential locations of power

plants have been chosen and the

Governments information campaign is

gaining momentum. So, lets hope thatfuture Governments will not waste the

huge amount of work that has already

been completed.

Photo by: ilm19 on flickr


23/28

EnergyNewsletter


The European (new) deal on energy efficiency:How could Europe save more energy?According to the European Commission, the new provisionsof the Directive would achieve 15% energy savings by 2020. Other

complementary measures are expected to deliver the remaining 5%.The objective of a Directive on energy

efficiency was to support the only non-

binding target of the EU climate and

energy package, but also to contribute

to the energy transition presented in

the 2050 Roadmap.

In June 2011, the European

Commission presented its proposal for

a Directive on energy efficiency on the

grounds that the target of 20% energysavings by 2020 would not be reached

without additional measures. More

than a year after the beginning of the

co-decision procedure, the Council of

the European Union and the European

Parliament found a compromise,

after an intense debate on the level of

ambition to adopt for the text. Member

States will now have 18 months to

transpose the Directive into national

law.

Political BackgroundThis Directive was the first major energy

legislative proposal of the Commission

Barroso II and a flagship project of

the Energy Commissioner, Gnther

Oettinger. The objective of a Directive

on energy efficiency was to support

the only non-binding target of the EU

climate and energy package, but also

to contribute to the energy transition

presented in the 2050 Roadmap.

During the negotiations, manyMember States, including the acceding

countries, argued that they would not

have the financial means to implement

the energy efficiency measures under

discussion. In this regard, the Danish

Presidency of the EU (January-June

2012) estimated that the provisions

of the Directive would cost 24 billion

Euros investment per year for Member

States, but would reduce annually

by 44 billion. The final compromise

eventually took into account national

budgetary constraints and set

obligations of energy savings for both

public and private sector.

An exemplary public sector

A national 2020 target for each

Member State

According to the new provisions,

Member States will have to set a

national energy efficiency target for

2020, with the possibility to take

into account, if they wish, national

circumstances affecting their primary

energy consumption, GDP, energymix or external energy balance.

They will have to communicate their

target through action plans for energy

efficiency submitted every three years

to the Commission.

In 2014, the European Commission will

assess the European coherence of all

national targets. It may subsequently

deliver recommendations to Member

States and submit, if necessary, new

proposals to ensure the achievement of

European objectives.

Renovation of central Government

buildings for public sector

Central Government will be obliged

to acquire products, services and

buildings with high performance in

terms of energy efficiency. Regions and

local authorities will be encouraged to

follow their example. Member States

will also have to renovate annually 3%

of the buildings owned and occupied

by the Central Government. Theobligation will firstly focus on buildings

with a floor area over 500m2, and from

July 2015 to those whose area exceeds

250m2. Each Member State may

establish a National Fund for Energy

Efficiency funded annually by energy

distributors and suppliers (at the level

of the investments needed for the

renovation of public buildings).

A responsible private sector

Energy audits for large companies

All large enterprises would be required

to undergo energy audits. These audits

Henrik Bernitz

[email protected]

According to the new provisions,

Member States will have to set a

national energy efficiency target

for 2020, with the possibility to

take into account, if they wish,

national circumstances affecting

their primary energy consumption,

GDP, energy mix or external

energy balance.


24/28

EnergyNewsletter


should begin within three years after

the entry into force of the Directive and

must be carried out every four years

by qualified and accredited experts.

Households and small and medium-

sized enterprises would be excluded

from this requirement.

Energy obligations schemes for

energy suppliers

After long negotiations in the Council,Member States agreed to establish

a mechanism requiring energy

distributors and suppliers to reach

a target of energy savings by 2020,

corresponding in volume to at least

1.5% of their average annual sales.

However, Member States get some

flexibility, regarding for example the

possibility to set incremental targets

every two years, to exclude from this

obligation industries already subject to

the EU Emission Trading System (ETS)

or to take into account energy efficiency

measures taken since 2009.

Smart meters for clients

The energy efficiency Directive

maintains the 3rd energy packages

objective to equip 80% of consumers

with smart meters by 2020, but

specifies the technical specifications

required for the use of future devices

(list of data to be available, privacy

protection, integration of consumers

production).The Directive also introduces the

obligation, subject to technical and

economic feasibility, to base the

consumer bill on actual consumption at

the latest by 1 January 2015. Billing and

information for consumers will have to

remain free of charge. This obligation

also includes access to historical

consumption.

High-efficiency in cogeneration and

heating and cooling for all

Member States shall encourage the

development of infrastructures for

district heating and cooling compatible

with high efficiency cogeneration.

They will have to carry out cost benefit

analysis to assess the possibility of

including a cogeneration unit for any

construction or renovation of thermal

power station with a power capacity

above 20MW.

The Directive also introduces a priority

or guaranteed access to the grid for

electricity produced from cogeneration.

As a previous Directive already provideda priority access to renewable energies,

Member States would have to publish

a ranking of priority sources for the

access to the network.

Next steps

According to the European

Commission, the new provisions of the

Directive would allow the achievement

of 15% of energy savings by 2020.

In the absence of a directive, theEuropean Union would have saved only

9% of energy over the same period.

Other complementary measures are

expected to deliver on the remaining

5%, such as a proposal for energy

labeling of household heating boilers,

currently under (intense) discussions.

In 2013, Heads of State and

Government will discuss the

implementation of EU energy

efficiency targets and may request the

Commission to prepare new proposals.

The Commission, on another hand,

will publish in 2014 after the deadline

for the transposition of the Directive in

national law in 2014, its first report on

the coherence of the national action

plans for energy efficiency and in 2016

another report on the implementation

of the energy obligation schemes

of 1.5% for energy distributors and

suppliers.

Finally, and outside the European

framework, the International EnergyAgency (IEA) will publish by the end

of the year its own report on energy

efficiency delivering complementary

policy recommendations.

The Directive on energy efficiency

also presents in the appendix a

statement on the EU ETS. In a

context where the current price of

carbon is low (about 7 per tonne

CO2), the European Commission

will monitor the directives impact

on industry sectors, and particularly

those exposed to a significant risk

of carbon leakage, so as to ensure

that the directives provisions

promote, rather than impede, the

development of these sectors.


25/28

EnergyNewsletter


The Dutch energy landscape:Towards a hybrid policy?The current energy policy in the Netherlands is formulatedby the outgoing minority cabinet, formed by VVD (Liberals) and

CDA (Christian Democrats) and supported by the PVV (Nationalists).The energy policy has two main goals.

To curb the emission of CO2 and to

become less dependent on fossil fuels.

In order to achieve these goals, the

Netherlands have to switch gradually

to clean, renewable energy. The

Netherlands strive for a low carbon

society by 2050. This is consistent with

the energy goal of the European Union.

The EU aims to reduce CO2 emissions

by 80-95% in 2050 in comparison tothe situation in 1990. To face these

challenges, the cabinet aims to:

Work together with entrepreneurs

and researchers to develop new

energy techniques, such as bio

energy;

Reduce the use of fossil fuels by

raising the tax on energy products;

Ensure reliable and affordable

energy supply by taking care of a

balanced and cheap mix of green

and gray energy from domestic and

foreign suppliers;

Take into account nuclear energy as

a reliable energy source because it

always continues producing energy

while for example solar and wind

energy still fluctuate too much;

Stimulate innovative projects which

make energy techniques profitablein order to enlarge the opportunities

for renewable energy;

Revise existing laws and regulations

concerning the energy policy.

These laws are outdated as they are

not able to take into account new

developments.

Elections for the House ofRepresentatives

At this moment the Ministry of

Economic Affairs, Agriculture and

Take into account nuclear energys

reliability as an energy source

because it instantly produces

energy, while, for example, solar

and wind energy still fluctuate too

much;

Innovation is working on a legislative

proposal to revise the outdated laws. A

draft proposal is expected to appear in

the autumn of 2012. However, elections

for the House of Representatives have

taken place on 12 September, which are

likely to bring about a change of policy.

Beforehand, many were concerned

the results of the elections would

lead to a severely fragmented politicallandscape. In the last couple of weeks

though it turned into a close struggle

between the VVD (Liberals) and the

PvdA (Labour). This led to a result

where these parties were able to form

a majority cabinet together, while there

were few other combinations possible

with less than five parties involved.

In a way, both parties were forced to

successfully complete negotiation talks

on a new cabinet.

Negotiations on energypolicy

At this moment, the negotiations

between the PvdA and the VVD to form

a new cabinet are still proceeding.

Because of that, the shape of the

energy policy for the coming years

is not yet clear. Therefore, we sketch

a brief overview and analysis of the

energy policy chapters from the

election programmes of both parties.

VVD

The liberal VVD states in its programme

that it wants to pursue a responsible

energy policy. In order to achieve this,

the Netherlands should focus on new

energy sources, because the increasing

scarcity of fossil fuels will lead to

deteriorating competitiveness and

dependency on third countries. Besides

these considerations, a transition to

renewable energy sources will offer

opportunities to develop new economicactivities and to become a leader in the

area of knowledge and innovation.

Erik Martens

[email protected]

and

Timen van Haaster


26/28

EnergyNewsletter


This transition however should not

be enforced or be subsidised by the

Government. It has to come from

private initiatives. The VVD does not

want to get in the way of companies and

entrepreneurs and proposes to remove

as many legal obstacles as possible

to provide them with an incentive to

innovate. Prolonged subsidies in this

area are to be abolished. Apart from

renewable energy, attention is alsogiven to nuclear energy as a relatively

clean and reliable energy source.

This point of view is under pressure at

the moment, because of the recent

negative results in the investigation on

the safety of nuclear facilities by the

European Commission. Research on

the extraction of shale gas is also an

option.

On the international level the VVD

acts out of the polluter pays principle

to achieve sustainability and energy

efficiency. It wants to enforce this

principle by continuing the system of

emission trading and compliance of

the strict international agreements.

However, realistic pricing of emissions

and a level playing field within the

European Union should be guaranteed.

PvdA

The PvdA (Labour) on the other hand

puts the emphasis mainly on climate

change and the scarcity of fossil fuelswhen dealing with energy policy. But it

also acknowledges the opportunities

for economic growth flowing from

innovation and increasing sustainability.

The PvdA wants to achieve a 100%

sustainable production of energy

in 2050. It has several plans to

accomplish this goal.

The Government has an important

role in this process according to the

Social Democrats. For example,

energy companies should be legally

forced to comply with (an annually

increasing) compulsory share of

sustainable energy in their production.

Coal plants are obliged to use biomass

for their production and new ones willonly receive permits if they store CO2.

Building permits for new buildings

should include solar panels in order to

make all new buildings energy neutral

in 2020. Other laws and regulations

should be adapted to encourage the

recycling of heat and waste, while other

ones should be abolished to foster

local initiatives.

The PvdA opposes the use of nuclear

energy. It proposes to build a power

grid and wind farms in the North

Sea, while also adapting our power

grid to locally generated energy.

They also want to set up a European

super high voltage grid to create

jobs and to increase sustainability.

Consumers should be provided with

the opportunity to invest in sustainable

energy projects. They should also be

provided with full transparency on

product chains as they consciously

choose their products based on their

origins.


27/28

EnergyNewsletter


The PvdA however sees an

important role for the Government

in setting standards and

obligations for sustainability.

Another friction point is the use of

nuclear energy.

Analysis

Both parties are aiming for sustainable

energy in the future. The VVD mainly

worries about issues concerning

competitiveness and dependency,

while the PvdA focuses on climate

change and scarcity problems.

But, the ways in which the parties

want to achieve sustainability in the

future differ. The VVD is opposed

to Government involvement and

emphasises the role of companies and

entrepreneurs. The PvdA however sees

an important role for the Government

in setting standards and obligations for

sustainability. Another friction point is

the use of nuclear energy.

There are some points of agreement

too. Both parties want to get rid of

laws and regulations hindering private

initiatives. They also agree on the

opportunities for economic growth

that a transition to sustainable energy

will provide. Besides that the transition

could lead to a leading position for the

Netherlands in the area of innovation,

knowledge and sustainability.

It is uncertain how the future energy

policy in the Netherlands will look like.

One can assume that a fairly balanced

agreement based on a mutual quid

pro quo will be made because only

two parties are involved which are

approximately equal in size (VVD has

41 seats, PvdA has 38, out of a total

of 150). This may well lead to a mix of

both visions on energy policy, hence

the term hybrid policy in the title.


28/28

www.mslgroup.com

To find out more about MSLGROUPs services, please contact

Nick Bastin

+44 (0) 20 7255 5117

[email protected]

mslgroup emea energy newsletter november 2012

Documents