By Kalina Oroschakoff and Anca Gurzu | @MaKaOro and @AncaGurzu | send tips to koroschakoff@politico.eu and agurzu@politico.eu | subscribe for this daily column http://politico.eu/registration | if you prefer to read this on your desktop click here
Good morning POLITICO Pro Morning Energy readers. It’s energy policy question time in Poland today, the Scottish Greens opt for nationalizing oil, Australian gas may (eventually) hit the EU’s shores, and Brussels meets with business to tap Algeria and Iran’s energy markets.
— WHAT’S HAPPENING:
QUESTION TIME: That’s more or less what’s on the menu as Poland works through its plans for its long-term energy future. Today Deputy Prime Minister Janusz Piechociński answers questions about the draft document “Polish Energy Policy until 2050” during a press breakfast (in Warsaw). The project still needs to be fleshed out, but at the moment it’s remarkably broad.
— ALL OF THE ABOVE: It calls for Poland to develop nuclear power, expand renewables, set up a diffused power grid, support electric cars, intelligent networks and liberalize the gas market. Of course, all of this goes together with the controversial idea of keeping coal (which now accounts for almost 90 percent of electricity generation) as one of Poland’s main energy sources. There are even plans to increase the exploitation of hard coal and lignite — albeit with the hope that a clean coal technology can be developed to save the environment. While the coal idea is likely to annoy many of Poland’s EU partners, the energy program still has a long way to go before being adopted.
— THE PATH: Consultations last until September 18, then ministries and departments get their say. Looming over the project are parliamentary elections on October 25. If current trends hold, Piechociński and the rest of the government will be replaced by the right-wing Law and Justice party, which is even more pro-coal than the current administration. This means that the future of the energy strategy is still up in the air. Here’s more (for our Polish readers). The press release: http://bit.ly/1KK9IL1, a draft version of the program: http://bit.ly/1JwHwyN, and a story: http://bit.ly/1MKS1Q3.
OIL FOR THE PEOPLE: Scotland should nationalize its oil industry to break its dependence on multinational companies and cut down on drilling, according to a report commissioned by the Scottish Greens. The report proposes a comprehensive change to U.K. economic policy, away from giving tax incentives to foreign oil companies and towards an economy based on renewable energy, the Scotsman reports. The report argues that such a policy could create more jobs than the current fossil fuel extraction industry. http://bit.ly/1MR8t2O.
LIGHT THAT BULB: Having more efficient products to save energy would seem uncontroversial, but not everyone is on board with implementing new stricter rules. Lighting companies look set to try to delay the Commission’s plan to phase out inefficient halogen spotlights by September 2016 by a further two years. The industry lobby, LightingEurope, pushed the Commission in a press release to hold off on the new measures for two additional years to “keep the situation clean and convenient for the end consumers and distribution channels who should be the beneficiaries instead of the victims of EU regulations.” But Coolproducts, an advocacy group for ecodesign and energy labeling, estimates that consumers would actually lose out. It calculates that such a two-year delay could see each European home lose out on €101.35 in electricity savings annually. Press release http://bit.ly/1NGFON9 and blog post from Coolproducts here http://bit.ly/1Pwvtlp.
FIGHTING FOR THE LNG CROWN: Qatar — the world’s top supplier of liquefied natural gas (LNG) — is stepping up its commercial game as it tries to hold on to its share in the prized Asian market, Reuters reports. With Australia is getting ready to join the LNG market in the next five years, potentially becoming the world’s largest supplier, Qatar’s dominance in Asia is under threat. Asia accounts for almost three quarters of the global LNG market. Qatar has been supplying LNG to some of the newest importers including Egypt, Jordan and Pakistan. The country’s largest customers are Japan, South Korea and India.http://reut.rs/1hEaUJc
— AUSTRALIA ON THE RADAR: As the Commission readies its LNG and storage strategy, we hear that LNG was a topic when climate action and energy commissioner Miguel Arias Cañete last saw his Australian peers. It’ll also feature on the agenda of the upcoming G20 energy ministerial, we’re told, with Japan among others keen to discuss market developments.
UZBEKISTAN AIMS FOR THE SUN: Uzbekistan launched its first-ever solar power plants this week, part of a Central Asia move towards green energy, India’s Economic Times reports. The three power plants are worth $700 million (€609 million) and are partly funded by the Asian Development Bank and Uzbekistan’s Fund for Reconstruction and Development. The plants are set to produce 300 megawatts of energy, said Uzbekenergo, the country’s state power utility. That is just a tiny fraction of the country’s yearly 10 gigawatts of energy needs. But there’s potential, observers say, as the country gets 320 days of sunshine per year. http://bit.ly/1IbWULv.
STORE IT: Technology to store excess wind and solar power as hydrogen and methane could be the key to a 100 percent renewable power supply by 2050, according to a study by the Research Center for Power Networks and Energy Storage (FENES). While hydrogen storage technology would initially increase costs by the 2030s, it would be cheaper and could generate savings of €12-€18 billion by 2050, says Greenpeace Energy, which commissioned the study. Hydrogen can be turned into methane, which could be added to Germany’s existing natural gas storage and pipeline-system, securing power supply in times of little wind and sun. Read the press release (in German): http://bit.ly/1fDQSN3. And the study: http://bit.ly/1hEjmrQ. And for the green technology solution fans out there, cleanenergywire put together a handy fact sheet: http://bit.ly/1EhK2ZH.
GREEN CASH: Investment consultants have a key role to play in tackling global warming if they consider the long-term gains of investing green rather than in (possibly overvalued) fossil fuel assets. According to research by Oxford University, existing incentives mean financial advisers aren’t rewarded for considering long-term risks like climate change but for short-term gains. Ben Caldecott, director of the university’s stranded assets program, said: “Even when longer-term perspectives are clearly superior, they may be compelled to press for alternatives that perform ‘better’ in the short-term. Pension funds should alter mandates to avoid this.” The report: http://bit.ly/1Nzq1At. RTCC reports: http://bit.ly/1hZlXwv.
GREEN REVOLUTION VS RENT SEEKING: President Barack Obama bashed green energy critics, saying they were desperately clinging to the past as a renewable energy future approaches, our colleagues in D.C. report. “Folks whose interests or ideologies run counter to where we need to go, we’ve got to be able to politely but firmly say we’re moving forward,” Obama said. The president lit into fossil fuel interests, pointedly calling out industrial heavyweights (and Republican Party stalwarts) , the Koch brothers. “When you start seeing massive lobbying efforts backed by fossil fuel interests or conservative think tanks or the Koch brothers pushing for new laws to roll back renewable energy standards or prevent new clean energy businesses from succeeding, that’s not the American way. That’s not progress. That’s not innovation,” he said. “That’s rent-seeking. That’s trying to protect old ways of doing business.” http://politi.co/1ETKhVz.
ROSNEFT GETS SNUBBED: The Russian government has decided not to fund four out of five Rosneft projects, for which the oil company had requested financing from the country’s sovereign wealth fund, the FT reports. The decision reflects the growing pressure on Russian government resources as oil prices slide to six-year lows. One of the problems is that lots of other Russian companies want access to the $75 billion (€65 billion) fund because they have been battered by a fall in the ruble and face growing difficulties in accessing western markets. The government’s decision is a blow to Rosneft’s ambitious plans of doubling its oil and gas production within 20 years. http://on.ft.com/1hE7K8e.
MORE OIL IS COMING: Iran plans to ramp up its crude oil production and reclaim its lost share of exports after current international sanctions are lifted, said the country’s oil minister, Bijan Zanganeh, according to Reuters. The market share it lost thanks to sanctions? More than 1 million barrels a day, the minister said. The plan is to initially increase production by 500,000 barrels a day in the first days after sanctions are lifted. http://reut.rs/1WPKnIQ.
— SOON ENOUGH: And those sanctions might start disappearing as early as next spring, U.K. Foreign Secretary Philip Hammond said during a visit to Teheran yesterday. The message comes as Iran and the West work to rebuild ties. Six world powers agreed in July to lift sanctions in return for Iran accepting long-term curbs on its nuclear program. http://reut.rs/1hYI3iG.
— WHAT’S COMING:
ALGERIA’S BUSINESS CASE: We hear energy majors, including companies like Engie, Statoil, Shell, Eni, Repsol and Total, are due to meet with Arias Cañete on September 17 to talk about doing business in Algeria. The Commission has been investing political and rhetorical capital into the country and the Mediterranean neighborhood more broadly, keen on tapping energy sources as it seeks to diversify away from Russian gas. While access to gas tops the agenda, there’s more business to be had: exporting and cooperating on innovative solar technology for instance, we’re told.
— REALITY BITES: While the Commission’s efforts are generally welcome, a political push will only bring results when conditions on the ground spur investments. Think security, stability, legal framework, among others — factors that don’t always play in the country’s favor. Algeria has a long border with increasingly chaotic Libya, which creates problems for security of supply. Tapping conventional resources will require investments, too, but we’re told any joint venture must see the incumbent Sonatrach take a 51 percent share. The hope is that Brussels can help with regulation, making sure the Algerians fix things up for European business to tap the market.
ON TO IRAN: The same group of businesses is also set to meet with Arias Cañete next week to discuss Iran. Although the nuclear deal struck in July still requires approval from the U.S. Congress, the potential of tapping Iran’s market has caused a travel frenzy among EU countries. Delegations from Germany, France, The Netherlands and even Poland have already made trips to get the foot in the door and rebuild business relations in the energy, trade and technology sectors among others. And we hear that a high level EU-Iran meeting to discuss opportunities in these fields, as well as research and development is also in the pipeline.