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Guest post: Walking the line


This article first appeared on openDemocracy.net under a creative commons licence (CC BY-NC 4.0).

“Of course we need a different energy model,” Alberto Santoro states emphatically. “It is not enough to simply replace fossil fuels with renewable energy sources. Who controls the energy is just as important.” Alberto lives on his family’s farm in the heel of southern Italy. Olive trees are scattered over his land. He grows food, keeps a few animals and rents a couple of rooms to tourists who visit the beautiful Puglia coastline.

Alberto is a member of just one of three communities we spoke to for an interactive documentary that follows the projected route of a new pipeline from the capital of Azerbaijan to the coastline of Italy. He has more reasons than most to worry about our planet’s energy model.

In recent years, Alberto has found himself at the frontline of a fight against a huge piece of fossil fuel infrastructure – the Euro-Caspian Mega Pipeline. This gas pipeline will extend over 3,500km, from the coastline of the Caspian Sea to the beaches of Puglia through six countries. Despite falling gas demand in Europe, this new pipeline is planned to be built at a cost of $45 billion.

“This concerns our future”

The Euro-Caspian Mega Pipeline will create a giant construction site across Europe. Trucks and excavators will rip up farmland, thousands of villages, forests, deserts and the seabed of the Adriatic. In response, the community in Puglia have organised a tenacious campaign.

We met Alberto on his farm. He told me he was worried about the impact of the pipeline on tourism, fishing and agriculture, especially the cultivation of olive trees, which is a key source of income in the region. Alberto felt he had to act: “This concerns our future. As citizens we have to get involved, nobody will do it for us.”

Photo by Laure Cops, Wouter Vanmol and Berber Verpoest.

With a small group of concerned citizens, as well as technical and legal experts, Alberto started analysing the project in detail. They highlighted omissions and demanded additional studies to address the seismic risks, as the pipeline passes through one of the most active faults in Europe.

From this small group, the campaign spread across Puglia. Mayoral candidates stood on anti-pipeline platforms, and thousands of people attended a concert against the pipeline.

Photo by Laure Cops, Wouter Vanmol and Berber Verpoest.

“I felt we had to react, so I suggested organising our own festival,” says Treble, a reggae artist who lives in Melendugno. It was an instant success: “Over hundred artists registered to play for free and about 10,000 people came to party with us in August last year.”

At the other end of the pipeline lies Baku, the capital of Azerbaijan. The city looks out onto the Caspian Sea, where the Shah Deniz ii gas fields are being drilled to feed the Euro-Caspian Mega Pipeline.

Pipelines and prisoners

Last June, I attempted to visit Azerbaijan during the inaugural European Games held in the capital Baku. I was detained and put on a plane back to London, the first of several unwelcome guests — Amnesty International and the Guardian were also barred from entering the country.

Those I travelled with to shoot Walking the Line managed to enter the country. Brand new stadiums, posters and video walls awaited them on their way from the airport to the hotel. Billions of dollars of oil money have been spent building new roads and glass skyscrapers.

Yet my companions soon discovered another side to Azerbaijan. Just a few kilometres from the centre of Baku, the six lane boulevards turn to dirt roads; the shiny 4×4 jeeps are replaced by Ladas and donkeys.

There are almost 87 political prisoners in Azerbaijan. They are journalists, bloggers, peace activists, human rights defenders and lawyers who have been arrested for speaking out against the corrupt Aliyev regime.

We managed to speak to the families of those we know in jail. People like Elmira Ismayilova whose daughter, the investigative journalist Khadija Ismayilova, has been jailed for seven and a half years on false charges.

Ismayilova’s real crime was her journalism, which exposed the corruption reaching all the way to Azerbaijan’s president and his family. Elmira is proud of Khadija’s work, “I used to tell her to be careful, but never prohibited her from doing what she does. I think what she is doing is great and every citizen of this country should be doing this.”

Photo by Laure Cops, Wouter Vanmol and Berber Verpoest.

Khadija is an outspoken critic of the Aliyev regime and BP, the oil company they have worked hand in hand with since 1994. The British oil company has been the biggest foreign investor in Azerbaijan for over two decades after it became the operator of the largest oil field in the country. Today it is leading the consortium of oil companies involved in the Euro-Caspian Mega Pipeline.

Despite the deteriorating human rights situation, cooperation between BP and the Aliyev family has intensified over the years. The Aliyevs depend upon BP to maintain the flow of oil revenues to the state and the personal finances of the “first family”.

Khadija was clear about BP’s responsibility for human rights in Azerbaijan: “The Aliyev regime is good for BP. It allows their operations and they can sort out issues with the regime. Political influence is part of the bargain. BP is blamed for bringing Aliyev senior to power but it’s not just historic — the UK government is silent about problems with democracy in Azerbaijan. BP’s interests are dictating the agenda.”

BP are involved in every stage of the Euro-Caspian Mega Pipeline, they are determined that the gas they are extracting should reach a European market. In the process, they are ensuring the continuation of their successful relationship with the Aliyevs, and making the dynasty richer and more powerful.

Yet it is a rocky time for the BP-Aliyev alliance. The low oil price has seen both suffering economic misfortune — with half of Azerbaijan’s reserves being spent in one year, forcing the government into discussions with IMF to secure a $4 billion emergency loan package. BP hasn’t fared much better – reporting its biggest ever annual losses last month.

Such economic instability would throw an ambitious and expensive project like the Euro-Caspian Mega Pipeline into doubt if European public money wasn’t being used to underwrite the pipeline.

The western portion of the route, known as the Trans-Adriatic Pipeline, is slated to receive €2 billion from the European Investment Bank (EIB), the largest loan by the EU bank in its 57-year history. Another loan of €1 billion for the eastern part of the corridor through Turkey, the Trans-Anatolian Pipeline (TANAP), is soon to be announced by the EIB.

Locked in

Gas is being sold to us as a clean fuel. But the reality is different: this pipeline will lock us into fossil fuels for the next fifty years and ensure our politicians continue working with repressive regimes like Azerbaijan.

The final place we visited for Walking the Line was a London estate. We went to Bannister house in Homerton where we met a community who, like the people of Puglia, want to take back control of their energy system. This community has put solar panels on top of every roof on the estate and set up a co-op. They collectively own the energy they produce, selling on what they don’t use and putting the money back into their community.

Photo by Laure Cops, Wouter Vanmol and Berber Verpoest.

The recent growth in community energy shows that we don’t need yet more import pipelines. Groups like Switched on London are calling for publicly controlled, renewable energy companies that can offer community energy co-ops secure contracts and sell electricity onto people at an affordable rate.

Whether it’s in Italy, Azerbaijan or the UK, people are fighting against the devastating impacts of import pipelines and wrestling back control over their energy system. By following the pipeline, we have been able to connect these stories — just as the extraction, pumping and burning of fossil fuels links us to places and people we know almost nothing of.

The European Investment Bank will be meeting this Thursday 10 March. You can tell the directors you don’t want our money spent on the Euro-Caspian Mega Pipeline.

Walking the Line is produced by Global Motion, Counter Balance, Platform and Re:common.

[Campaign update] Key costs still missing in Montenegro coal power plant debate


It was never likely that this week’s roundtable in Podgorica on the planned 254 MW Pljevlja II lignite power plant would end in agreement between NGOs and the representatives of Montenegrin electricity company Elektroprivreda Crna Gora (EPCG). Even the main two shareholders in EPCG – the Montenegrin government and Italy’s A2A – don’t agree about the project, with the Montenegrin government pushing it like their lives depended on it and A2A trying to stay as far away from it as possible.

The high profile roundtable, organised by MANS and Green Home, came hot on the heels of a revealing report by MANS [pdf] that shows just how shaky the foundations of this controversial project are.

But what surprised me most was that after almost four hours of debate, and at least 3-4 years of project preparation, the representatives of Elektroprivreda Crne Gore (EPCG) and the Pljevlja coal mine did not come up with answers to the crucial questions of how much the electricity generation cost from the new unit will be and what the sales price projections are.

These questions are particularly salient given that even the existing unit at Pljevlja is currently turned off, partly due to low electricity prices on the market. Whatever a new plant might gain from greater efficiency would be more than offset by higher costs due to loan repayments, so how it would be more economic to run is far from clear.

What EPCG did disclose is that together with the costs of financing, the costs of Pljevlja II could go up to around EUR 450 million, rather than the EUR 338-366 million figure solely for construction that is usually used in public.

Apparently a new feasibility study is due to be carried out soon, after a consultant has been selected, to update the project on the basis of the preferred bid by the Czech Republic’s Skoda Praha. Let’s hope the public will be able to see it once it is done.

Tens of questions remain unanswered about costs related to the new unit and plans for state aid, and there are serious unexplained discrepancies between different official sources for costs of opening new mines, rehabilitating old ones, the cost of coal, and the cost and location of a new ash dump. With the Prime Minister’s brother being the third largest single shareholder in the Pljevlja coal mine, the risk of corruption and data manipulation in this project is extremely high.

Sostanj 6 in Slovenia has shown us where the route of secrecy, shaky data and corruption can lead, so it’s encouraging that Pljevlja II is attracting a high level of public scrutiny before the contracts are signed. It might be the only way to prevent Montenegro from making an expensive mistake.

Expert analysis confirms Croatian Plomin C coal plant is economically unfeasible


The Plomin C coal power plant would bring higher social costs than benefits and is highly sensitive to changes in operational costs, so it is not recommended to continue with the project, according to a new economic analysis [hr, pdf] commissioned by Zelena akcija/Friends of the Earth Croatia and carried out by the Society for Sustainable Development Design (DOOR) using European Commission methodology.[*]

In spite of the fact that the project has been promoted by publicly owned company Hrvatska Elektroprivreda (HEP) for at least five years already, there is a remarkable lack of official economic data about the project and its risks in the public sphere and the analysis’ authors hope that it will open up the debate.

From the point of view of potential strategic partner Marubeni, the project would be made financially feasible by guaranteeing that HEP would buy off a certain percentage of the electricity at a guaranteed price. This is likely to be in conflict with EU state aid rules and it remains to be seen how this will be addressed.

Coal in the Balkans

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Looking from the point of view of the wider society, the economic analysis shows that even if not including external costs such as health costs, the project is highly risky and is unfeasible in the following cases:

  • an increase in operational costs by 35% compared to the basic scenario,
  • a 2-year delay in construction along with an increase in the price of emissions allowances as foreseen in the PRIMES energy model used in the European Commission’s Energy Roadmap 2050 [pdf, pg 37],
  • including external costs as defined by the ExternE project.

    • The risk of an increase in operating costs of at least 35% compared to the base scenario is very real, as the analysis used the fixed operational costs from the EU’s Strategic Energy Technologies Information System (SETIS), while the EIB’s estimates are considerably higher. Also, the current CO2 price was used, whereas a significant increase is expected over the lifetime of the project. Coal costs likewise vary significantly over time.

    Plomin C and energy policy more widely are a test for Croatia’s new government, which will show whether it is able to recognise the trends playing out across the EU and ensure the transformation of Croatia’s energy system. Zelena akcija has welcomed the new Croatian government’s “temporary moratorium” on building Plomin C, but believes this analysis shows that it is necessary to permanently withdraw from the idea.

    The analysis is available (in Croatian) here [pdf].

    Notes

    * The analysis was carried out using official data and where this was not available, estimates by relevant international institutions were used. The methodology is that laid out in the European Commission’s Implementing Regulation 2015/207 from 20 January 2014 [pdf], the EC’s guide to cost-benefit analysis for investment projects [pdf] for the period 2014-2020 and 2013 EIB guidelines for the economic valuation of projects [pdf].

Do not fund Southern Gas Corridor with EU money


This article first appeared on Euractiv.com.

A leap year comes just twice in a decade, but the Southern Gas Corridor, the series of pipelines intended to feed Europe with gas from the Caspian Sea, is a once in a lifetime project. So maybe it is more than just coincidence that Azerbaijan – well versed in using the spotlight of international milestones to whitewash the crackdown on its citizens – chose 29 February to hold the second meeting of its Southern Gas Corridor Advisory Council and roll out the red carpet for a plethora of European ministers and presidents of development banks.

A massive financial investment entailing serious environmental and geopolitical risks (pdf), the Southern Gas Corridor has nonetheless been labelled a ‘Project of Common Interest’ by the European Commission and afforded streamlined regulatory and financing status. The western portion of the route alone, known as the Trans-Adriatic Pipeline, is slated to receive €2 billion from the European Investment Bank (EIB), the largest loan by the EU bank in its 57-year history. Another loan of €1 billion for the eastern part of the corridor through Turkey, the Trans-Anatolian Pipeline (TANAP), is soon to be announced by the EIB.

Intended as an alternative to reliance on Russian energy imports, the Southern Gas Corridor ties the EU to Azerbaijan – one of its most undesirable international partners – for decades to come.

The November 2015 elections in Azerbaijan again confirmed the government’s lack of transparency and accountability, as the ruling party secured 91% of the vote. In its World Report 2015, Human Rights Watch blasted Azerbaijan over its human rights record during the rule of President Ilham Aliyev. The country has seen a crackdown on dissenting opinion through the arrest and imprisonment of journalists, lawyers, civil society representatives and opposition leaders, which has drawn the attention of the European Parliament, the Council of Europe and the Organisation for Security and Cooperation in Europe (OSCE).

In December, the Council of Europe launched an investigation into Azerbaijan’s compliance with its commitments under the European Convention on Human Rights after “judgments from the European Court of Human Rights have highlighted an arbitrary application of the law in Azerbaijan, notably in order to silence critical voices and limit freedom of speech”. The unprecedented move was decided after Azerbaijan failed to meet even the minimal benchmarks the Council had set for it, leading the organisation to reconsider the country’s membership altogether.

Prior to that, in September 2015, the European Parliament had raised the alarm about the worsening human rights situation in Azerbaijan. In its resolution, the Parliament found the latest imprisonment of human rights defenders unacceptable and called for the suspension of any kind of EU funding for the country. Azerbaijan’s relationship with the OSCE has since further deteriorated, after the OSCE refused for the first time in its history to send a delegation to the last elections, following President Aliyev’s opposition to a number of proposed representatives.

And the situation in Azerbaijan is expected to become only more precarious, as oil prices plummet and the Aliyev regime continues to tap its diminishing reserves to address the economic crisis and quell more widespread discontent.

That the deteriorating political situation in Azerbaijan has not been more thoroughly addressed by the EU also reflects a failure of the European Neighbourhood Policy, which has until now turned a blind eye to Aliyev’s offences, his lack of willingness for meaningful political and economic reforms and his desire to cement political and economic privileges for his family and allies. It is in the EU’s interest to have a democratic Azerbaijan that respects the rule of law as a neighbour; but the Southern Gas Corridor will not help to achieve this. On the contrary, the project will strengthen the status quo, in exchange for which the EU might well receive just another song contest or sporting event.

A project of the Southern Gas Corridor’s stature is indeed a once-in-a-lifetime deal, and it is one that Europe’s leaders should consider passing up on as they head back to their capitals after the meeting in Baku. As warned by the European Parliament itself, the geopolitical significance of the Union’s actions inside and outside its borders cannot be underestimated, especially when human lives and freedoms are at stake.

Croatia, Italy and Colombia linked by harm from coal industry


Local residents near Plomin in Croatia’s Istria County have for years been concerned about the health impacts of air pollution from the existing Plomin 1 and 2 power plant units and the planned Plomin C.

However, it is much less known that around a quarter of Croatia’s coal comes from Colombia, where opencast coal mining directly endangers the local communities through resettlement, pollution and overuse of water resources.

For example, thousands of tonnes of coal burned in Plomin over the past 15 years came from the El Cerrejon mine in Colombia’s La Guajira region. At last week’s protest, Danilo Urrea from Colombian group CENSAT-Agua Viva/Friends of the Earth Colombia spoke about the dire consequences of coal extraction in the mine.

Under the guise of development, said Urrea, in less than 30 years the coal companies and industrial agriculture corporations have gained control of the main water resources in La Guajira, which they have polluted and depleted. The mining operations in El Cerrejon alone use 17 million litres of water daily for damping down dust on the roads where the coal trucks drive, while the average inhabitant of La Guajira drinks less than a litre of water daily.

Facing such water shortage, local communities can no longer grow their own food and people in the region have been dying due to lack of food and water.

Considering that the culture of the local communities is based on the region’s previously rich water resources, with traditional agriculture, livestock breeding and fishing, Urrea sees El Cerrejon as responsible for the crisis and the destruction of the local communities’ culture, and the conflict between the residents and the mining companies that has ensued. The countries importing the coal also share responsibility.

Along with Croatia, Italy is one of those countries. But in this case the story may have an inspiring ending. Talking at the event, Antonio Tricario of Re:Common told of the unique case of the Vado Ligure plant, owned by Tirreno Power, which was burning coal from Colombia until March 2014 when a judge ordered the temporary (but most likely to be made permanent) shut down of its two 330 MW coal-fired units.

After local groups filed a case with the public prosecutor, a painstaking investigation was opened against 86 people including the director of the power plant, as well as local officials. The investigation, which was completed recently, proved their responsibility for environmental disaster and manslaughter. Italian parliamentarians, also argued that in the Vado Ligure case, corporate pressure had influenced public officials’ decisions. The beginning of the trial is expected soon.

Mladen Bastijanic, an activistfrom Labin, emphasized that Istria also suffers from water scarcity. High quality water from the Bubic jama spring is used for the Plomin power plant and residents in the nearby town of Labin are supplied with water of much poorer quality from the springs in the Rasa valley, a situation he described as “criminal”.

Dusica Radojcic from Green Istria pointed out that Plomin C would create the need for even greater volumes of imported coal and that coal-based development is simply immoral. The new Croatian government has recently agreed a moratorium on the construction of new coal power plants, but to prove it is serious it must definitively withdraw from Plomin C, she concluded.

Slovakia’s EU funds spending plans: finance for the energy transition – where’s it at?


A new Bankwatch study, launched last week, looks at how nine central and eastern European countries are set to spend billions of EU funds until 2020 that are meant to transform the carbon-intensive, inefficient energy systems of their countries.

Today, in the last installement of a series of blogs, our Slovak campaigner Miroslav Mojzis comments on the findings from Slovakia. Take a look at the results for other countries too and find out more at bankwatch.org/enfants-terribles >>

Almost 90% of all public investments over the 2011–2013 period in Slovakia were mainly financed by European cohesion and structural funds, which was the highest share in the EU.

This makes the new Partnership Agreement for the period 2014-2020 the most important investment strategy of the country.

However, a Bankwatch study analysing the final setup of the Agreement and of the Operational Programmes concludes that any traces of energy transformation are hard to identify. Slovakia did not allocate resources to research and development of new energy technologies nor into the testing of intelligent energy management and distribution. Measures to tackle energy wastage and support for renewables receive only neglectable sums.

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Climate action in EU Cohesion Policy funding for Slovakia, 2014-2020 (pdf)
Study chapter | January 26, 2016

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It is safe to say that Slovakia has missed the opportunity to bind the EUR 14 billion of Cohesion spending with decarbonising its energy sector.

Any systemic change would require liberalisation and decentralisation of Slovakia’s largely monopolistic, heavily state influenced energy economy with its high dependence on imported fossil fuels and high carbon intensity.

Energy investments: no ambition, no transition

Energy savings, energy efficiency and renewables receive EUR 1.35 billion (9,6%) of its almost EUR 14 billion in Cohesion Policy funds. This, however, includes heat and electricity cogeneration in fossil-fuelled installations as well as controversial energy efficiency measures in large enterprises which basically would mean supporting economically viable projects in businesses well equiped with capital.

In comparison, a Bankwatch research from 2012 estimated the investment needs in the energy sector with EUR 17.5 billion, almost 13 times as much. Considering, again, that almost 90% of public investments in Slovakia are made up of EU funds and national co-funding, it is clear that the current clean energy allocations get us nowhere.

Also the huge potential for reducing the energy consumption in residential buildings remains untapped. The Integrated Regional OP dedicates only EUR 111.3 million to energy efficiency in the housing sector which will be distributed through financial instruments within the Slovak Investment Holding. This instrument however fails to cover half of Slovak households living in single family houses even though only about 15% of these are to some extent renovated.

The lack of will to really deal with energy losses in the residential sector (with the help of both EU funds and revenues from the emission trading scheme) is plainly visible when comparing the scale of support with that in the Czech Republic where EUR 1 billion are allocated for the New Green Savings Scheme.

Renewable energy gets a meagre EUR 169 million, with EUR 65.7 million supporting micro PV installations in households and on public buildings. The rest is made up of EUR 55.2 million for biomass installations up to 20 MW and around EUR 47 million for other renewables, mostly thermal heatpumps in households.

A step in a good direction are the altogether EUR 112 million for renewables installations allocated through financial instruments. They open up the EU funds to households for the first time. Once first experiences are available Slovakia should seriously think about supporting household energy projects more substantially.

Firing up the old heating sector

Existing heat producers have tapped into EU funds quite effectively by claiming support for biomass and electricity/heat cogeneration and district heating within the ‘Quality of Environment’ Operational Programme.

The positive contribution of biomass support is questionable as existing fossil fuel-powered installations up to 20 MW will be reconstructed to co-fire biomass. This not only creates a lock-in effect into Slovakia’s old fassioned heating system.

It also pretends to offer solutions by ignoring the fact that heavily polluting fossil fuels, including coal, are being burned alongside the ‚renewable‘ biomass. If such compartmentalisation would not be allowed, no such installations would receive EU funds.

Another issue is the restoration of old heat distribution networks. While it will reduce heat loss it will also perpetuate the dependence on old systems instead of investing in new ones.

Allocations confirm this with heating restoration and cogeneration getting EUR 185 million and smart grids and intelligent energy management systems getting a clear zero for the next seven year period.

Much space for improvement

The next opportunity to improve the climate performance of Cohesion Policy will be during the mid term review in 2018. By then Slovakia will have ample chances to prove that its climate comittments are sound and serious.

The evidence from the relevant calls for proposals and from evaluations of operational programmes will be crucial.

Already in the coming months, when all managing authorities have to show how they want to measure their portfolios‘ climate performance, Slovakia should prove its efforts to really mainstream climate into the spending.

If there are gaps in methods and tools, the European Commission should play an active role and help member states to get the system running. It is up to the EC now how strong a pressure it will put on the implementation of Europe’s climate agenda.

So far, however, there is absolutely no hint that Slovakia intends to shift its economy towards a low-carbon development path. If that attitude prevails, Cohesion Policy in Slovakia will remain a potential unfulfilled.

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