Blog entry

Guest post: Ombla must be protected, not flooded!

Jagoda Munic is co-ordinator of the Nature Protection Programme at Zelena akcija/Friends of the Earth Croatia and chairperson of Friends of the Earth International.

Yesterday the consultancy firms Oikon and Geonatura presented a new nature impact assessment study for the environmentally and economically risky Ombla hydropower plant in Dubrovnik, Croatia. The study had been commissioned by project promoter HEP at the request of the Ministry of Environmental and Nature Protection and was met with a full hall of members of the public.

Despite the fact that a contract for financing from the European Bank for Reconstruction and Development was cancelled in May 2013 due to findings that the project would have serious impacts on the Ombla caves’ unique biodiversity, HEP is still stubbornly pushing the project forward.

In the two years since the last study was carried out, no additional research has been carried out in the Vilina Cave-Ombla spring complex. Instead, other nearby caves have been visited in an attempt to prove that Ombla does not contain anything that other nearby cave systems do not, and that it would therefore be acceptable to flood it.

In spite of the fact that the presentation lasted for a full six hours, members of the public were yesterday once again left without answers to a range of outstanding questions on the Ombla project, such as the economic feasibility of the project, impacts on local inhabitants, and the cultural aspects of Ombla, as these have not been covered in any publicly available document since the outdated and low quality 1999 environmental impact assessment study.

Along with local civil society organisations Srdj is ours, the Save Ombla and its inhabitants initiative, Eko-Omblici and Eco-Centre Green Sun, Zelena akcija/Friends of the Earth Croatia believes that it is high time for HEP to finally withdraw from the Ombla hydropower plant and invest in improving the capacity and efficiency of existing hydropower plants, as well as in solar and wind plants, and that the Ombla river basin should be declared as a transboundary protected area with Bosnia and Herzegovina, not only because it is a biodiversity focal point on the European and global level but also due to the need to protect Dubrovnik’s drinking water.

The Dubrovnik-Neretva County must also protect this area as a Protected Landscape (which has already been declared but not implemented) and as a Special Nature Reserve, for which the State Institute of Nature Protection would need to carry out an expert assessment.

Once again we’re calling on the Croatian government to prevent the Ombla hydropower project from going ahead because:

it is based on an environmental acceptability decision from 1999
– the data used for the environmental assessment date from the ’80s and ’90s of last century,
additional research of the biodiversity showed that the site is a unique habitat of exceptionally rich fauna which would be compromised or destroyed if the project goes ahead,
independent experts judged the 1999 environmental impact assessment study as low quality in an independent evaluation,
the project is risky and experimental, and considering the experience with HEP’s previous investments it is justified to expect costs 30%-40% more than planned,
the energy that would be generated by Ombla hydropower plant could be ensured by investing in solar,
mistakes made by HEP would be covered by customers through higher electricity prices.

Unpaid coal bill: Romanian coal exports to Serbia marred by corruption

The signing of an agreement in November 2014 to export 1.2 million tons of coal from Romania to Serbia was seen as one of those win-win contracts for both countries. Half a year later, the deal, tarnished by corruption allegations and a dodgy tender process (Bankwatch reported), seems to be going from bad to worse.

Last week, reports in Romanian national media revealed that the contract between the Romanian state-owned Oltenia Energy Complex (OEC) and a consortium of three Serbian and Romanian firms was suspended and is likely to be cancelled soon, because the Serbian part has failed to pay for the imported coal. In line with the contract, Oltenia Energy Complex has so far delivered more than half of the 1.2 million tons of lignite to Coal BVA, the Romanian company that is part of the consortium. Yet, as Romanian media reported last week, OEC cashed in only 500 000 euros until now. With a price of EUR 13.5/ton [1], this means a little over six percent recovery. Representatives of OEC stated that the Serbian company Virom groupa doesn’t even return their calls, let alone pay for the delivered coal. (No comment was available from BVA Coal so far.)

Almost half of the planned new power capacity in the Western Balkans comes from coal.

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The contract was designed to be profitable for the 3 companies making up the consortium, hardly for OEC, which is selling the lignite at a lower price than that of production.[2] Still, in November OEC’s manager, was reported saying that he “would sign another contract unconditionally at a price of EUR 13/ton, if he had the opportunity to export coal to Serbia for another 20 years.” He also claimed in February that this was the best contract ever signed by his company, although now it only seems to add to OEC’s unrecovered claims which stood at EUR 220 million in 2014.

Back in November, OEC withdrew its bid for supplying coal to Serbia in the last minute, referring to a EUR 1,5/ton custom tax too high to pay and inability to ensure the transport of coal across the border into Serbia. Instead, it agreed to supply the 1.2 tons of lignite to an apartment company set-up only one month before the contract was signed, part of the controversial consortium involving oil and customs mafia companies in Serbia.

The contract is currently being investigated by the internal control body within the Ministry of Energy and the findings may throw the OEC into yet another corruption scandal, adding to the ones involving former Minster of Large Infrastructure Projects Dan Sova and current OEC general manager, Laurentiu Ciurel.

While this all sounds like a drama whose victims don’t deserve our sympathy (from the energy mammoth to suspicious trading companies) the real cost of coal goes way beyond these unpaid bills of a dodgy deal.

The lignite open-pit mines in the Oltenia region are planned to expand over an area of 700 hectares of forests and require the expropriation of approximately 70 households. In the last 25 years, in addition to forests, expanding lignite pits wiped out at least three villages and many others suffer from the proximity to the pits.

Because of legislative loopholes, Oltenia Energy Complex is slicing the total area it needs to destroy into fragments of up to one hectare, enough for a few weeks of mining operations. Thus it avoids going through a procedure to identify the social and environmental impact of mining expansions and the measures to reduce it. As a glimmer of hope, 211 of the 700 hectares have been saved from deforestation after positive court decisions in petitions filed by Bankwatch Romania and Greenpeace Romania.

How does all this make coal “a cheap, clean and reliable source of energy” that is worth putting our money in as most governments in the region are portraying it? I am hoping I will not have to repeat this point much longer.

Notes:

1. Representatives of Oltenia Energy Complex are quoted with different prices for the coal in the same report. While OEC’s general manager speaks of EUR 13/ton, its mining operations director mentions EUR 13.5/ton.

2. According to the same local media reports, financial reports of OEC showed a cost of production of RON 65/ton of coal at the time the contract was signed. The contract however used an anticipated price of production for 2015 of RON 58/ton. In addition, the coal produced by OEC apparently comes at a granulation too big to serve the Serbian power plants, which required OEC to purchase extra equipment to make the pieces smaller.

Local initiatives champion sustainability and resilience in central and eastern Europe

Environmentally friendly and people-centred economic activities at a local level are enjoying increasing popularity as a sustainable alternative in an ever more urbanised and globalised world. Various initiatives – from local energy production to community supported agriculture – show how local, small-scale projects usually have a much smaller environmental footprint while providing high quality goods and services that are often more conducive to well-being than their industrialised and centralised substitutes.

While already fairly well-known in western Europe and the United States, the explicit reorientation towards local economies is still in its infancy in central and eastern Europe. (Just take a look at Transition Network’s Big Transition map for instance.)

On the one hand this is consistent with the generally lower civic engagement in the region. Yet on the other hand, community-based solutions should almost be a no-brainer considering the lack of social security and safety nets provided by central and eastern European countries and an infrastructure still in desperate need of modernisation.

Whichever way we want to look at it, the local economy sector has started to pick up speed in central and eastern Europe over the last few years and – if all goes well – community projects will become a force to reckon with in the region.

Zooming in on local ingenuity

Whether it is a village becoming energy self-sufficient by using local waste for heat and electricity production, a group of urban food enthusiasts working directly with farmers or a cooperative grocery store, several initiatives have sprung up in central and eastern Europe over the last five to ten years.

At least as interesting as the wide range of activities and sectors, however, are the stories of the people and communities who have been driving these local economy projects. It is their stories, their motivations and their struggles and imagination that we tried to capture in full size for our new Local Economies website.

The stories we tell on the website are a true showcase for local ingenuity. They remind us of the power of communities and illustrate how local and small-scale solutions are often exactly what best serves the needs of people.

For example, one of the better known cases is the Czech village Kněžice which switched its heating from coal to locally sourced biomass, significantly reducing local air pollution. As if that wasn’t enough, the town also installed a biogas plant that covers most of the village’s electricity needs.

Or take Rudolf Miklós, a farmer in a poor region in Hungary who combined his idea to restore the local natural landscape with a scheme that allows locals to borrow cows to produce milk products for themselves and the local market.

While the characters and motivations of the people behind these and the other local economy projects couldn’t be more diverse, they are all rooted in their local communities and they produce very real benefits, including lower prices (e.g. for food or heating), healthier products (e.g. organic vegetables), employment for locals, reduced pollution and more.

The next steps – reproducing local success

Rather than just collecting a few feel-good stories, our hope is that the website inspires others in our region to make their ideas become a reality. Each story also contains some useful tips for local activists, social entrepreneurs, municipalities or organisations.

Through the website individuals can get in touch with our local economy experts in the Czech Republic, Hungary, Latvia, Poland and Slovakia. We may be able to help with finding funding opportunities and navigating national regulations, or we can put them in touch with other initiatives.

EU funds for local economies

Our aim in Bankwatch and our member groups for the next few years is to make sure that sustainable initiatives like these have a real chance to receive EU funding.

To some extent we already succeeded by making sure communities and municipalities have more say in how EU funding is allocated in our countries. We have also seen increasing recognition of local economy development at EU, national and regional level.

Money has been set aside in the EU budget for sustainable urban development, sustainable local agriculture and low-carbon energy strategies on local level. Several central and eastern European countries have included support for local economy as an anti-crisis measure into their national Operational Programmes for EU funds.

But there is still a lot to do to make sure that sustainable community projects really get a piece of the pie. The development plans of municipalities as well as the specific calls for proposals need to recognise and be tailored to local economy projects. At the same time communities and local leaders themselves need to become active in local advocacy.

This kind of advocacy is often technical, abstract and seems far away from the real world. The Local Economies website will also help us remembering why and for whom we are doing it.

Exhibition brings coal-affected communities in Colombia and Croatia a step closer together

From 13 – 30 March a ground-breaking photo exhibition is running in Labin, Croatia, aimed at making a link between communities impacted by coal extraction in Colombia and those affected by the combustion of coal at the Plomin power plant on Croatia’s Istrian coast.

The photos and testimonies are the outcome of a visit to the world’s largest coalmine, El Cerrejon, by Luka Tomac of Zelena akcija/Friends of the Earth Croatia, which took place last December.

Local people report that the mine has led to a lack of water for drinking and crops, forced resettlement and physical violence against those who complain.

Image: The photographer Luka Tomac at the opening ceremony.[*]

According to a presentation by electricity company HEP, around 25 percent of the coal used at Plomin comes from Colombia, making it one of the largest sources of coal for the plant. Yet hardly anyone in Croatia is aware of this, and still less are they aware of the impacts on communities living near the mines.

Use of Colombian coal is likely to further increase if the planned 500 MW Plomin C unit is built.

The plans are unpopular, with 64% of Croatians opposing the construction of the plant according to a survey commissioned by Greenpeace in 2014. In addition, a one month long public consulation in Istria County that ended on March 15 resulted in 92 per cent of the over 9000 respondents stating they were against Plomin C using coal as a fuel.

Image: A visitor at the exhibition’s opening ceremony.

Local people in the Labin area feel the negative effects of pollution from the existing plant and do not see sufficient benefits to outweigh the disadvantages. The existing plant already strikes a very visual blow to the local tourist industry, and sets the town of Labin into competition with the power plant for good quality drinking water – an issue which would be worsened with the new unit.

The impacts in Colombia are without doubt on a much larger scale and more dramatic, but at both ends of the coal chain they are linked by failure to take into account the needs and opinions of local people and by steamrolling ahead in the name of ‘development’.

Image: Portraits of people in Colombia affected by the coal mine El Cerrejon

Here in Croatia we cannot stop everything which is happening to the communities at El Cerrejon, but we can at least do our bit. Stopping Plomin C would be a good first step.

For more about the El Cerrejón mine see also this article by Friends of the Earth International Chair Jagoda Munić.

[*] All images by Tomislav Turkovic

[Campaign update] 92 percent of public consultation respondents against Plomin C coal power plant

Already back in 2002 Istria County included in its spatial plan a provision stipulating that any third unit at the Plomin coal power plant must be run on gas (not coal) and that the total capacity of the plant (new unit plus existing units) must not exceed 335 MW. This should have closed the case for Plomin C before it even opened, but here we are thirteen years later still wondering what part of ‘No!’ the Croatian government didn’t understand.

In 2011 the public hearings on the environmental impact assessment study showed that the majority of people were still very much against constructing a coal plant at the location, especially one which is four times larger than the one it is replacing.

Since then numerous legal challenges have been made towards the project by NGOs, local people and the Istria County authorities, but the government has continued pushing the project forward, albeit much slower than anticipated.

In response to this, the Istria County authorities held a public consultation from 16 February – 15 March with the question:

Are you for or against the Plomin C power plant using coal as a fuel?

The results of the consultation, in which 9085 members of the public and 183 clubs and associations participated, is that 92 percent of respondents stated that they are against a new power plant using coal at Plomin.

Will the Croatian government now take the hint and stop the negotiations with potential Marubeni while it still can?

Western Balkans electricity plans: where will all that power go?

Hardly a week goes by without the media in the Western Balkans reporting on some progress with a coal or hydropower plant projects or reporting grand statements from politicians about their countries becoming regional energy hubs. In some cases this seems deeply improbable at first glance, with countries like Albania and Montenegro historically being electricity importers, but for others like Bosnia and Herzegovina and Serbia – already net exporters most years – it seems reasonably plausible.

But what will happen if everyone becomes a regional energy hub? Where will all the electricity go? Is there likely to be a market for it at all?

For a few years, the answer seemed to lay in Italy, which looked like it would have difficulty in reaching its obligatory 2020 renewable energy target. It planned in its National Renewable Energy Action Plan to import significant amounts of renewable electricity from the Balkans. Yet in recent years Italy has pulled ahead (pdf), managing to meet the electricity component of its target already. It also has a large generation capacity surplus with much of its fleet lying idle. This led Germany’s E.On to leave Italy earlier this year and sell its thermal power assets. Presumably it also contributed to ENEL’s welcome decision announced earlier this week, to stop constructing new coal plants. This does not necessarily mean that Italy will not import electricity, but that any imports must be cheap enough to compete with domestic production or other imports.

Since we had already been concerned that some of the planned Balkan electricity generation projects may be uneconomic, (see for example unit 7 at the Tuzla lignite-fired plant (BiH) and the Boskov Most hydropower plant, we decided to investigate with the University of Groningen and the Advisory House consultancy what will happen if the promised electricity generation capacity really materialises. We know what to expect on the environmental side from coal and poorly-sited hydropower plants. But what about the economic side? Could coal and gas plants in the Balkans end up lying idle like their counterparts in Italy?

Download the study:
Stranded assets in the Western Balkans – report on the long-term economic viability of new export capacities

Such significant electricity capacity expansions designed to meet export demand create the danger of becoming dependent upon the export market.

Read also

By the numbers: where will energy come from in the western Balkans?
Blog post | March 19, 2015

Electricity export ambitions may prove risky for Western Balkans, shows new study
Press release | March 19, 2015

Export dependence a real possibility

The first surprise was how difficult it was to find updated and realistic information on planned generation capacity investments. Some of the countries do not have any recent official energy strategy at all while others have but they do not contain sufficient information and/or are internally contradictory.

Not unexpectedly, we found a large gap between government wish-lists of electricity projects and reality.

Only one coal power plant (Stanari, BiH) is under construction in the region but up to 15 more are planned.
Albania has 10 wind farms planned, but none are under construction.
Small hydropower plants are being built – often in controversial locations – but still the number under construction is dwarfed by the number planned.
Only five larger hydropower projects (10 MW+) are under construction or near to starting, compared to 37 others planned.

If no new capacity is built except that which is already under construction or near construction, and nothing is closed except that which is already announced, then the region will need to import electricity starting somewhere between 2018-2023, depending on demand levels.

At the other end of the spectrum, if the countries realise all their planned capacity extensions and demand growth is low, the region will have a 56% electricity surplus in 2024.

In particular Bosnia and Herzegovina could turn into the largest exporter of electricity (up to 20 000 GWh), followed by Serbia (18 000 GWh). The other countries have a much lower potential contribution to the regional surplus, but measured in terms of their domestic demand, their export potential is substantial.

Such significant electricity capacity expansions designed to meet export demand create the danger of becoming dependent upon the export market. The export analysis shows that there will not only be competition within the Western Balkans but also from other nearby competitors such Bulgaria, Romania and the rest of the EU. Given an expected excess supply in Europe, increased competition may put pressure on export prices and increase the risk of incurring stranded assets – power plants that will become simply uneconomic to even operate. For this reason, the study suggests closely examining investments that are directed to serve export markets and to also consider the trade-off of producing or buying electricity. Taking measures to reduce electricity losses is also crucial.

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Better planning is crucial

No-one knows exactly what the future holds, but several things emerge for me from this study.

First, planning in the energy sector needs to be seriously improved in the region. Strategies need to be better justified, clearer and more coherent. They should avoid including old projects which have already practically failed and take serious note of public comments.

Second, less is more. Why have huge lists of projects that are proving difficult to implement, when with more rational planning and analysis, a much smaller amount of investments would suffice? Energy efficiency should come first, and governments should not be afraid to cancel projects which have been hanging around for decades but never proved worth building.

Third, cross-border co-operation in the region has great potential to save money and natural resources. Making increased use of regional co-operation to meet peak demand would increase stability and lower the overall amount of electricity needed. Peak demand in the Western Balkans for 2024 without cooperation is estimated at approximately 17630 MW in 2024 in the high growth scenario while with cooperation it is only around 15000 MW. So far most of the countries are thinking in very national terms and failing to take advantages of regional synergies.

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