Germany’s $132 Billion Green Energy Lead Is Fortified by EON’s Split With Fossil Fuels

Photographer: Hannelore Foerster/Bloomberg

A crane operates inside the coal storage hall at the EON AG Staudinger coal-powered power plant in Grosskrotzenburg, Germany.

EON SE (EOAN)’s plan to spin off its fossil-fuel plants marks a watershed moment in Germany’s renewables effort that will likely bolster the country’s already leading position in clean energy.

EON’s announcement is the culmination of a push to wind, solar and other alternative energy forms that the German government began 14 years ago with subsidies to reduce the country’s reliance on fossil fuels for power production. That plan gained added momentum in 2011 with a decision to close the country’s nuclear reactors following the Fukushima accident.

Chancellor Angela Merkel’s bold move is already beginning to pay off, with Europe’s largest economy for the first time getting more electricity from renewables this year than any other source. About a quarter of Germany’s power now comes from green energy, compared with 6.2 percent in the U.S. and 4.8 percent in France.

“We are in the midst of a giant transformation process of our energy system,” Deputy Environment Minister Jochen Flasbarth told reporters yesterday in Berlin. “Renewables are the increasingly dominant factor in the German energy mix. EON’s decision is a piece of the puzzle.”

The government intends to go further, setting goals to increase the use of alternative energy sources to as much as 45 percent of all power generated by 2035 and boost that figure to 80 percent by 2050. Germany, where the eastern countryside is already dotted with thousands ofwind turbines, plans to do that in part by expanding large-scale offshore wind plants that can produce more reliably because the breeze is steadier at sea.

Photographer: Krisztian Bocsi/Bloomberg

Germany this year for the first time got more electricity from renewables than any… Read More

Closing Reactors

Merkel decided after the Fukushima accident in Japan to close the country’s eight oldest nuclear reactors and shutter the remainder by 2022. To reach stricter climate protection targets, Germany tomorrow will unveil details of a plan demanding additional emissions cuts from electricity produced using fossil fuel.

“Germany has some of the most ambitious climate protection targets and is radically rebuilding its energy system,” said Sven Diermeier, an analyst at Independent Research GmbH inFrankfurt who follows EON and rival RWE AG. “And now EON is attempting the most radical rebuilding so far of any large European utility.”

Germany’s push has come at a cost for the country’s utilities, energy-intensive industries and consumers. The influx of renewable power on the grid has undermined wholesale prices and decimated the profitability of coal and gas plants. At the same time, the taxes on electricity that subsidize renewable energy production has led to Germany having the second-highest household power prices in the European Union, according to Eurostat.


German consumers have paid a total of 106 billion euros ($132 billion) through the surcharge on their power bills to finance the clean-energy expansion. The annual cost may peak this year and drop slightly to 22 billion euros in 2015 as the government begins reducing subsidies for the industry.

Despite the expense, the shift has broad public support. A poll earlier this year showed 71 percent of Germans back the decision to close the nuclear reactors and 67 percent think the country isn’t doing enough to move to renewables, according to the Allensbach polling company.

Against this general backdrop, power companies in Germany are increasingly staking their future on green energy. EON after the split in 2016 will concentrate on renewables, distribution and marketing to households and consumers. The spun-off entity will include conventional power generation, global energy trading, exploration and production.

Renewables Focus

“There’s a new world becoming reality that’s driven by customers,” EON Chief Executive Officer Johannes Teyssen said today in Berlin of the plan to split the utility.

Vattenfall AB, owned by the Swedish state, wants to get rid of its German coal operations to focus on renewables, while ENBW Energie Baden-Wuerttemberg AG (EBK) last year doubled its asset sales goal to 3 billion euros to free up cash to invest in clean energy. RWE, Europe’s biggest corporate emitter of greenhouse gases, said yesterday it didn’t plan to follow EON’s lead. RWE last year generated more than half of its power in Germany with lignite, the dirtiest fossil fuel.

“Spinning off coal, gas and oil from the core business is a smart strategy for a future-oriented company,” said Patrick Graichen, head of Agora Energiewende. “I’m sure additional utilities will follow suit — not just in Germany, but worldwide.”

Electric Cars

Merkel is also trying to reduce the country’s emissions by pushing Germany’s auto industry to build more electric cars after French, Japanese and American carmakers got off to an early lead. Including vehicles like Bayerische Motoren Werke AG’s i3 city car and an electric version of Daimler AG’s Smart two-seater, German auto manufacturers will offer 17 electric-powered models by the end of 2014, and another 12 will be going on sale next year, according to the country’s VDA automotive industry group.

The chancellor today threw her support behind incentives to reach her goal of having 1 million electric cars on German roads by 2020. The country is behind on the effort in part because the government has previously balked at subsidies like those offered in France, where consumers receive as much as 6,300 euros to help cover the higher cost of low-emission vehicles. Electric car sales in Germany last year amounted to about 7,600 vehicles, while in France demand was almost double that at 14,400.

“There’s a lot to do,” Merkel said during a press conference in Berlin. “We see that further subsidies are necessary. We must speak with the German states about that.”


Source: Bloomberg

Adaptation, mitigation activities can control climate change – I.P.C.C. report

Climate change irreversible impacts to increase, however, there are options to adapt to climate change and stringent mitigation activities to manage it, finds new Intergovernmental Panel on Climate Change report.

The Synthesis Report, which sums and integrates the findings of the I.P.C.C. Fifth Assessment Report produced by 800 scientists (see related story), is the most comprehensive assessment of climate change.

“Our assessment finds that the atmosphere and oceans have warmed, the amount of snow and ice has diminished, sea level has risen and the concentration of carbon dioxide has increased to a level unprecedented in at least the last 800,000 years,” said Thomas Stocker, co-chair of I.P.C.C. Working Group I.

The document reports with great certainty than in previous assessment the fact that emissions of greenhouse gases and other man-made drivers have been the dominant cause of observed warming since the mid-20th century.

According to the report, the more human activity disrupts the climate, the greater the risks. Continued GHG emissions will further warm and create long-lasting changes in all components of the climate system, increasing the likelihood of widespread and profound impacts affecting all levels of society.

“Adaptation can play a key role in decreasing these risks. Adaptation is so important because it can be integrated with the pursuit of development, and can help prepare for the risks to which we are already committed by past emissions and existing infrastructure,” said Vicente Barros, co-chair of I.P.C.C. Working Group II.

But adaptation alone is not enough. Substantial and sustained reductions of GHG emissions are at the core of limiting the risks of climate change, as it will not only reduce the rate and magnitude of warming, but also increase the time available for adaptation.

According to experts, there are multiple mitigation pathways to achieve the substantial emissions reductions over the next few decades that will limit the warming to 2 degrees Celsius. But delaying mitigation to 2030 will severely increase the challenges associated with limiting the warming.

“It is technically feasible to transition to a low-carbon economy. But what is lacking are appropriate policies and institutions. The longer we wait to take action, the more it will cost to adapt and mitigate climate change,” said Youba Sokona, co-chair of I.P.C.C. Working Group III. – EcoSeed Staff

Source: Ecoseed

Island nation takes on the world’s polluters

By Jaspreet Kindra , IRIN

KOROR, PALAU, 3 February 2014 (IRIN) – A Russian film crew arrived in Palau at the end of 2013 to shoot the reality show ‘Octpob’ on one of the archipelago’s more than 500 islands. The show leaves contestants in isolated locales with limited water and food to test their survival skills. In 2004, the US version of the show, Survivor, was also shot in Palau.

Palauans welcomed the TV crew and its glittering cast of celebrities – it did, after all, bring in much-needed revenue. But the situation presented an uncomfortable irony: while Russian and American contestants have tested their survival abilities in Palau, Russia and the US have adopted strong positions at the UN Framework Convention for Climate Change (UNFCCC) talks, which could threaten Palau’s own chances of surviving as sea levels rise.

The UNFCCC talks aim to come up with a treaty that assigns responsibility for reducing greenhouse gas emissions and for the provision financial and technical support to vulnerable countries, like Palau, that have not contributed to global warming. The talks have met resistance from the developed world and emerging economies like China and India, which say they are not responsible for past emissions and should not be held accountable for emissions in the future.

Time is running out for low-lying islands like Palau. The Asian Development Bank (ADB) said in a recent assessment, “if the world were to stay on the current fossil-fuel intensive growth model” dealing with the impact of changing climate in 14 of the Pacific Ocean islands, including Palau, could cost them 12.7 percent of their collective annual GDP equivalent by 2100.

These include losses in the production of the region’s main crops, drops in catches of tuna, and declines in tourism revenue as the coral reefs die. It also covers increasing health expenses. ADB estimates that “most of the estimated health costs would arise from respiratory disorders, followed by malaria, and deaths from tropical storms”.

Palau’s President Tommy Remengesau and former president Johnson Toribiong offer insight into the threats their land and other countries in their region face:

A search for justice

Frustrated by the lack of progress he saw at the two UNFCCC conferences he attended during his tenure, in 2009 and 2010, Toribiong decided to seek legal clarity on the issue from the International Court of Justice (ICJ).

To do this, he had to raise the issue at the UN General Assembly as a resolution, and he had to obtain majority support from member countries to pose the question: “What are the obligations under international law of a State for ensuring that activities under its jurisdiction or control that emit greenhouse gases do not cause, or substantially contribute to, serious damage to another State or States?”

President Remengesau told IRIN, “We made this request knowing fully well that the big countries of the world, who happen to be the big emitters, are actually the whole foundation of the United Nations.” The world’s biggest emitters are also the UN’s biggest donors, and all five permanent members of the UN Security Council are major greenhouse gas producers.

But Palauans realized the need “to have a heightened awareness and heightened discussion” on the issue, he said, which they hoped the resolution would bring.

Small island states and some developing countries supported the resolution, but the resolution did not receive majority support.

Then Toribiong says he was asked by the US to “tone down our push for the submission of this question.” The US and other countries argued that a legal process to deal with the issue – the UNFCCC – already existed.

Still, Palau pressed on.


Toribiong says that since he left office in early 2013, the request has “languished”. But Remengesau says that the country is still lobbying for support from member states, and Toribiong also reiterated his willingness to push for support.

Yet insiders say it would be hard for Palau to go against the wishes of the US, which administered the archipelago as a trust territory from the 1940s to 1994. Palau has signed a Compact of Free Association with US, under which the US provides it with substantial financial assistance.

IRIN contacted the US government for a response to Toribiong’s comments. A US Department of State official said: “Both the causes and impacts of climate change are global in nature. We believe that the correct avenue for solving the climate problem is through concerted international action achieved through negotiations among parties, not through the type of judicial procedures offered by the ICJ.

“We are now in the middle of negotiations, agreed to by all parties, toward a new climate agreement, and we believe that the world is most likely to achieve an effective and ambitious global agreement if the global community focuses on those negotiations. If we focus on achieving a good outcome in 2015, we should be able to produce more effective approaches for addressing this critical problem.”

Some countries expressed support for the idea of an ICJ approach, while standing by the role of the UNFCCC talks. A spokesperson for the German environmental ministry told IRIN, “Germany was generally open to the initiative and to exploring the idea of an advisory opinion by the International Court of Justice.” But the UNFCCC, and its Kyoto Protocol, “is the appropriate forum to negotiate a common understanding of questions related to this evolving area of international law. The concerns underlying Palau’s initiative are now being addressed within this framework in the context of the negotiations around loss and damage.”

Shaping laws through the ICJ

In 2012, Stuart Beck, Palau’s then-ambassador to the UN, and Aaron Korman, Palau’s legal adviser, taught a course at Yale Law School in the US on Palau’s effort to secure a legal opinion from the ICJ. In a report produced by the course in 2013, co-authored with Yale academics Douglas Kysar and Joseph Field, Beck and Korman maintained that an ICJ advisory opinion “would promote international efforts to come to an agreement within the UNFCCC negotiation process. Even though the nature of an Advisory Opinion is non-binding, it would entail moral authority and would establish a new legal baseline for the UNFCCC to build upon by articulating a ‘clear legal standard applicable to all states’.”

There is precedent for the ICJ providing advisory opinions to the UN General Assembly to help shape international law.

In 1996, in response to a question by the General Assembly on whether the threat or use of nuclear weapons could ever be permitted under international law, the ICJ determined in an advisory opinion that “the threat or use of nuclear weapons would generally be contrary to the rules of international law applicable in armed conflict”, but it could not conclusively rule whether the threat “would be lawful or unlawful in an extreme cases of self-defence”.

The ICJ also helped shape international law with its ruling on the 1996 expulsion of Ahmadou Sadio Diallo, a Guinean citizen, from the Democratic Republic of the Congo (DRC) [then known as Zaire]. In 2010, the ICJ ruled that DRC had violated Diallo’s rights; the court also ordered DRC to paycompensation. Some analysts feel the climate change question could lead the ICJ to assess loss and damage caused by climate change, which could eventually open the door to discussions on whether affected countries need to be compensated.

Cosmin Corendea, an associate academic officer with the UN University Institute for Environment and Human Security (UNU-EHS), says it would be worth the effort to get an ICJ opinion on climate change.

“The ICJ never denied rendering its opinion when asked by the UN General Assembly. More, it proved its determination in shaping new international law when issuing its opinion in the nuclear weapons case (one of the most relevant opinions in regards to climate change) or when judging on compensation [in the] Diallo case (first case on damages in a human rights case),” Corendea told IRIN in an email.

He added, “However, for ICJ in its advisory capacity to influence the new climate change agreement(s) and progressively determine new legal approaches towards this increasing phenomenon, there is a strong need of political will, which would eventually translate in[to] an official request by the UN General Assembly. Until then, many speculations and interrupted opportunities will arise, while ICJ judges are still waiting in their chambers [to express] their valuable opinions in regards to climate change.”