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Eight arrested in protest against Georgian dam


Police special forces were deployed last Friday, 20 May to clear a blockade of an access road leading to the planned Nenskra dam site in Georgia’s northwest. The confrontation between police and dozens of locals resulted in the detention of eight residents of the Chuberi community.

Though later released, Chuberis see the police act as a gesture of provocation and intimidation. Fearing further police repression, the Chuberis have called off the road blockade but instead have set to organise a Svaneti regional coordination meeting, in line with Svan tradition.

The altercation is the most recent event in a series of protests by Chuberis, who in late April began blockades of the access roads to the Nenskra project. The community is protesting the negligence of investors to their demands to evaluate the threats of flooding of customary lands and the resettlement of an unknown number of households. Locals fear for their safety, as the dam is to be built in an area prone to landslides and mudflow.

Background: Nenskra dam


Background, images and updates on the Nenskra hydropower plant.

A recent attempt on 15 May by the investor, Korea’s K-Water, to meet with Chuberis failed to materialise, as it was organised without prior notification and it overlapped with local festivities. Locals claim that only 15 people of 320 families attended the meeting, and that participants were brought in from places that would not be affected by the dam. Participants at the meeting also allege that no meaningful discussions took place, and that the choice of mediator was decided without their consent.

Chuberis continue to demand from the Georgian government and international financiers that alternatives to the dam be assessed, ones that would fully account for the project’s social and environmental costs.

Earlier this month at the annual meetings of the European Bank for Reconstruction and Development and the Asian Development Bank, Bankwatch and Green Alternative asked the banks to follow carefully the situation and initiate open consultations over the Nenskra project.

While the EBRD has said in response to the community’s demands, a detailed assessment is under way and will be released in July, villagers are losing patience with a protracted process of more than a year that has yet to result in fruitful dialogue.

 

Success: Romanian government promises to respect property of villagers threatened by coal mine

After months of protests and the people in Runcurel, a small town in Romania that is to be swallowed by a lignite mine, have finally received positive news from the Romanian government. During a meeting with Bankwatch Romania and Greenpeace Romania, the Minister for Energy Vlad Grigorescu confirmed that the government will do more to protect locals and their houses.


Read more background in our photo story
A village disappearing – Romanian villagers fight for their homes against a coal giant and their own government


After many requests (seven, to be precise) since January, and a lawsuit filed against the government, the Energy Ministry finally agreed to grant a meeting to Bankwatch Romania and Greenpeace to discuss the planned expansion of the Jilț Nord lignite mine. The point of discussion was the Government Decision 960 (GD 960) from December 2015 which declared the expansion of the mine to be of overriding public interest. According to the decision, residents will receive a shameful 1 euro per square meter for their properties that are in the way of the mine. The amount is non-negotiable and no compensations for what is on the land, be it houses, farms or trees, are mentioned. Needless to say that this amount is not enough for locals, many older than 60, to rebuild their lives somewhere else.

Coal in the Balkans

Find out more

The meeting was facilitated by the Ministry for Public Consultation and Civic Dialogue, a new government body set up to increase the transparency of public administration. It took place during a week when international media, including the New York Times and Reuters wrote about the faith of the people from Runcurel. Energy Minister Vlad Grigorescu and Public Consultation Minister Violeta Alexandru both attended the meeting, which was also joined by Energy Secretary of State Corina Popescu, Energy Strategy Coordinator Radu Dudău and three senior advisers.

Since the beginning of the year, the two organisations have sent the Government a letter from Runcurel residents demanding that GD 960 is revoked, have requested in court the same, and have launched a petition in support of the villagers which was signed by almost 5000 people. The constant pressure Bankwatch and Greenpeace had been putting on the Government since the beginning of the year is finally paying off. Minister Vlad Grigorescu said that houses will be either rebuilt or relocated. He also agreed to send company representatives to the village to explain to locals how the expropriations are to be made. Until now, residents only received formal notifications from the company by post or displayed at the Mătăsari town hall, 7 kilometers from Runcurel.

Minister Violeta Alexandru described the situation as “frightening” and has invited the two organisations to collaborate for finding further solutions.

This uphill struggle is, however, not over. The only path for guaranteeing fair negotiations with locals is the revocation of GD 960. Otherwise, residents of Runcurel are dependent on the goodwill of Oltenia Energy Complex, the operator of the mine. The company is likely to attempt cutting its costs and spending as little as possible for the expropriations. The government decision is a legal instrument which allows the company to only use the money received from the state, removing any other obligation.

Happy birthday, Khadija!


In one of 40 events across Europe, a graffiti has been inaugurated in Warsaw today, to celebrate the 40th birthday of Azeri journalist Khadija Ismayilova on May 27, who has been incarcerated for more than 500 days after a politically motivated trial in her home country. The actions across Europe are meant to highlight the dire situation of human rights in Azerbaijan and to criticise the European Union’s cosy relationship with the country’s dictatorship.

Khadija became famous by exposing corruption among the Azerbaijani ruling elite and human rights violations in Azerbaijan. Most recently her work was confirmed in the Panama Papers, a leak of confidential papers incriminating dozens of political figures, including Azerbaijan’s ruling family.


The birthday graffiti in Warsaw invites people to take a selfie with Khadija and send it to the Azeri embassy. (See a map of where the graffiti is located >>)

After being arrested under ridiculous charges, Khadija was sentenced in September 2015 to 7.5 years in prison. She has received numerous awards, including the Barbara Goldsmith Freedom to Write Award by PEN, Anna Politkovskaya Award and the UNESCO’s prestigious Guillermo Cano Press Freedom Prize in May this year.

Cosying with a dictatorship

In a bid to import gas from Azerbaijan to Europe, EU leaders and finance institutions are warming up to the Aliyev regime.

Find out more

But the story of Khadija is not an isolated case. Azerbaijan is the worst regime in Europe. Since the Aliyev family took over power in 1993 no free and transparent elections have taken place and independent media have experienced enormous pressure. More than 80 political prisoners are held in the country. Reporters Without Borders rank Azerbaijan 163 out of 180 countries in their press freedom index.

Azerbaijan’s regime heavily relies on money obtained from oil and gas exports to consolidate its power, while trying to hide the truth about human rights violations and corruption in Azerbaijan. For exposing this, Khadija Ismaylova was imprisoned.

In a bid to import Azeri gas to Europe, leading EU politicians overlook the relationship between the dictatorship’s power and hydrocarbon exports. The Southern Gas Corridor, a series of mega-pipelines meant to bring gas from the Caspian region to Europe, is being promoted by all means, even though a study has shown (pdf) that, considering the EU’s own data on gas demand, the gas is not even needed.

But the outlook for Azeri gas hasn’t put the conscience of ordinary Europeans to sleep who celebrate Khadija’s birthday today with the message: “We will not turn a blind eye to human rights abuses in Azerbaijan, the worst European dictatorship. Happy birthday Khadija – bütün yaxşı Khadija!”

You can send your own message of support by using the hashtag #FreeKhadija or sending an email to the Azeri embassy in your country (find a list of them here).

Images

More photos from the action can be found on Polish Green Network’s flickr account.

#FreeKhadija

 

Time for Europe to stop supporting Ukraine’s risky nuclear power sector


This article first appeared on Energy Post.

Three decades after the Chernobyl catastrophe and five years after the Fukushima disaster, Europe appears to be slowly coming to terms with the risk of keeping nuclear power as part of its energy mix. In Ukraine, however, the government is eager to maintain, even enhance, its reliance on nuclear energy as if neither Chernobyl nor Fukushima ever happened.

In fact, generous financial support from the EU now effectively enables prolonging the operation of Ukraine’s Soviet-era nuclear reactors well beyond their original expiry date.

The country’s ageing nuclear fleet has had a disturbing track record of mishaps and failures over the past few years. Yet, Ukrainian authorities only make minimum efforts to ensure due process when extending these nuclear units’ lifetimes, overlooking the risk to people in Ukraine and across Europe.

Since 2010 Ukraine has already approved lifetime extensions for four of its 15 nuclear units. Two more could be greenlighted later this year. (A decision was originally planned for this month, but this has been postponed due to the financial crisis of Energoatom, Ukraine’s national nuclear energy generating company.) Yet, time and again what followed cast serious doubts over the reliability of these power plants and the decision-making processes behind their continued operation.

Expiry dates

Here’s how this atomic debacle unfolded so far. In December 2010 the Ukrainian authorities approved the first lifetime extension. Unit 1 in the Rivne power plant, working since three decades, was allowed to continue operations for 20 more years. Barely a month later an accident happened, and the reactor’s output had to be reduced by half.

Unit 2 in the Rivne power plant was also granted a 20 years lifetime extension. Activists and civil society organisations criticised the decision-making process allowing these nuclear reactors’ expiry dates to be rewritten. In March 2013, the Espoo Convention‘s Implementation Committee ruled the decision indeed was in breach of the treaty, since Ukraine did not carry out assessments of the impacts the project can have on people and the environment in neighbouring countries.

But this did not deter the Ukrainian government. In December 2013 it approved another lifetime extension, this time for unit 1 in the South Ukraine power station. Energoatom, Ukraine’s national energy operator, conducted technical checks of the nuclear reactor prior to the decision, but these might not have been thorough enough. An independent expert assessment released in March 2015 criticised the re-licensing process that led to the approval of the lifetime extension, and warned that the reactor is suffering critical vulnerabilities.

South Ukraine‘s unit 2 was suspended in May 2015 when it reached its original expiry date. But this was only temporary, to allow necessary safety improvements. Seven months later, in December 2015, Ukraine’s nuclear regulator decided the reactor can be brought back online and continue working for ten more years, even though 11 safety measures of the highest priority had not been implemented.

Reckless adventure

Ukraine’s neighbours are also concerned. Romania, Slovakia, Hungary and Austria have sent multiple questions for clarification and requests for participation in trans-boundary consultations. But Kiev, in response, denied its obligation to conduct any.

One might think that this experience, or perhaps civil society’s repeated warnings, would make decision makers reconsider this reckless adventure. But not the Ukrainian government.

The 30 years’ old reactor in unit 1 of the Zaporizhia nuclear power plant has reached the end of its design lifespan just before last Christmas and was taken off the grid. Unit 2 in the same power plant, Europe’s largest, was also switched off once it exceeded its original lifetime in February.

The Ukrainian nuclear regulator will be deciding on lifetime extensions for both units this year. But a series of incidents in late 2014 were Zaporizhia’s latest signs of instability. Blackouts in large parts of Ukraine in November have been aggravated by an emergency shutdown of unit 3 of Zaporizhia following an accident, Prime Minister Arseny Yatsenyuk revealed only several days later. The following month unit 6 in the same power station was briefly taken off the grid after one more incident.

These might sound like minor hiccups, but they should be seen as warning signs of these reactors’ precarious state. In fact, Energoatom is currently in dire financial straits and it is unclear whether the implementation of all necessary safety upgrades in the Zaporizhia nuclear units will be completed any time soon.

Frontlines

Even people working in the Zaporizhia power plant, located just 250 kilometers from the frontlines of the ongoing conflict in eastern Ukraine, are worried. In April last year the chief specialist on the ground told a Bankwatch team that nuclear power plants were simply not designed to withstand an armed conflict.

Yet, Ukraine’s addiction to nuclear energy would not have been possible without the EU’s support. The European Bank for Reconstruction and Development (EBRD) and Euratom have each contributed €300 million to a so-called safety upgrades programme, which effectively enables these lifetime extensions.

Acknowledging the risks involved, Germany, Switzerland and Italy have already decided to end their nuclear energy programmes without waiting for an accident, small or large, to happen. But taxpayer money from the very same countries is still being used to fuel the Ukrainian government’s nuclear energy fixation.

We reached out to the European Commission’s Directorate General for Economic and Financial Affairs which oversees half of the EU’s financial support to the safety revamp of Ukraine’s nuclear power plants. They argued there is no connection between the safety upgrade programme’s timeline and that of the lifetime extensions project.

Sustainable solution

Ahead of the decision on prolonging the operations of the two nuclear units in the Zaporizhia power plant, the EBRD and the European Commission should reflect on the experience from previous reactors which have been granted lifetime extensions. It is high time for the EU to acknowledge its responsibility and suspend its support until Kiev starts taking into account the safety of both Ukrainians and Europeans beyond its borders.

Ultimately, patching up these ailing nuclear reactors is no sustainable solution. The experience so far shows that the Ukrainian government’s stubborn attempts to keep its nuclear fleet on EU-funded life support are futile at best, and outright dangerous at worst.

If Europe truly wants to stand with Ukraine, both should recognise the urgency in exploring a better, safer energy path. In 2014 nuclear made up less than 30 percent of total installed capacity, and even now, when the share of nuclear power is over 50 percent due to a drop in overall demand and a shrinking share of coal in the energy mix, reactors are not working to full capacity. Materialising the country’s vast wind and solar potential and investing in energy efficiency, particularly to cut losses in distribution grids, could effectively make Ukraine’s outdated nuclear energy array completely redundant.

The alternative might be history repeating itself.

No security for Europe from the Southern Gas Corridor


Proponents of the Southern Gas Corridor, a system of pipelines meant to bring gas from the Caspian region to Europe, have one more reason to celebrate at tomorrow’s ground-breaking ceremony of the Trans-Adriatic Pipeline (TAP), the Corridor’s end piece, in Greece after the European Bank for Reconstruction and Development (EBRD) announced that it considers a record loan of EUR 1.5 billion for the project, increasing the possible public funding for the Southern Gas Corridor to at least EUR 7 billion.

The Southern Gas Corridor has been promoted by the European Commission as a key infrastructure project to secure the European Union’s energy supply and reduce its dependence on particular gas suppliers, most notably Russia.

With a planned volume of initially 10 billion cubic meters (10 bcm) annually and up to a fanciful 80-100 bcm in the future, the pipeline system indeed opens up a new supply route. But with an ownership structure heavily influenced by Azerbaijan, it may end up not increasing Europe’s energy security but becoming a costly and useless infrastructure that might even put a tool for political leverage in the hands of the authoritarian Aliyev regime.

Unprecedented public finance support

The four puzzle pieces of the Southern Gas Corridor (SGC) – the Shah Deniz stage 2 gas field in Azerbaijan, the South Caucasus Pipeline extension (Azerbaijan-Georgia), the Trans-Anatolian Pipeline through Turkey (TANAP) and the Trans-Adriatic Pipeline (TAP) through Greece-Albania-Italy – are not only prioritised in the EU’s foreign and energy policies, but also slated for extensive EU public finance support and favourable legal and tax rules.

The European Investment Bank (EIB) is considering loans worth EUR 1 billion for TANAP and another mind-boggling EUR 2 billion for TAP, which would be the biggest single investment by the EIB. In addition to the announced EUR 1.5 billion for TAP, the EBRD is involved in a range of loans (in cooperation with other lenders) over almost USD 1.2 billion for Shah Deniz (here and here) and is also rumoured to consider support for TANAP. The World Bank is expected to decide in July over a USD 1 billion loan for TANAP.

In addition to public loans, TAP was also granted a favourable 25 years tax deal for the Greek section which, as a state aid measure, has been recently approved by the European Commission.

Read more

Background, campaign news, publications on the Southern Gas Corridor.

See our campaign page

Azerbaijan’s strong grip on the infrastructure

With such massive taxpayer-backed support, Europeans should expect (and are made to believe) that the Southern Gas Corridor will provide Europe with secure control over a large portion of its gas needs. Yet none of it is the case.

So far, only gas from Azerbaijan’s Shah Deniz gas field is slated to come to Europe through the Southern Gas Corridor. To add gas from other countries in the Caspian Region and beyond requires more pipelines and further negotiations with potential suppliers (Turkmenistan and Iraq have been mentioned among others). Even the energy agreement between the European Union, Azerbaijan and Turkmenistan is currently stuck.

But while the Southern Gas Corridor’s initial 10 bcm from Azerbaijan can only cover 2-3% of Europe’s gas import needs, Azerbaijan will also have strong influence on the Southern Gas Corridor via its state energy company SOCAR.

In 2013, TAP has been granted an exemption from third party access – an EU rule to avoid monopolies and improve competition which requires energy infrastructure to be accessible for other suppliers to access the infrastructure. For 25 years, the owner of the TAP pipeline – the TAP AG, of which SOCAR owns 20% – will have exclusive rights to use the initial capacity of 10 bcm of the pipeline. In practice this means that the only gas delivered to Europe through TAP until roughly 2045 will come from Azerbaijan, unless the pipeline capacity will be increased before then, which so far is still written in the stars.

According to the EIB’s project summary, also TANAP has been granted special or exclusive rights while operating in a non-liberalised market. Both TANAP and TAP are considered public sector projects, subject to EU procurement procedures. Yet, not a single public EU entity will be able to control the infrastructure and its availability to other gas suppliers.

In addition to owning 20% of shares in the private Swiss based consortium TAP-AG (the rest belongs to BP (20%), the Italian Snam S.p.A. (20%), Belgian Fluxys (19%), Spanish Enagás (16%) and Swiss Axpo (5%), SOCAR also has a majority share of 58% in TANAP (the rest is owned by Turkey’s national energy company BOTAS (30%) and British Petroleum (12%)).

At the same time, SOCAR is still set to purchase a 49% share of the Greek national gas transmission and distribution operator DESFA, who will be responsible for the day-to-day operation of the Greek TAP section, ensuring the reliability of gas transmission and maintenance. (The size of the share had been reduced from the initial 66% for which SOCAR won a tender in 2013 after the European Commission intervened, demanding 17% to be sold to European operators.)

Risks for Europe

If Azerbaijan’s regime decides to shut off supply or if political upheaval results in disruptions, the risks for Europe’s energy supply will be very limited. But without the gas from Azerbaijan, one of the most expensive pipelines ever will simply be useless.

In fact, even a look at the EU’s own gas demand data shows (pdf) that Europe will not need the gas and that building a pipeline of such proportions is a waste of money.

Which begs the question why supplying a maximum of 2-3% of the EU’s import needs with Azeri gas, through infrastructure under strong Azeri influence, becomes one of the EU’s biggest flagship projects ever?

Bosnia and Herzegovina signs deal for Tuzla 7 coal plant construction – but its economics are shrouded in mystery


Bosnia and Herzegovina and its neighbours are among the few European countries still planning to build new coal plants. Most EU countries are not only not building new ones, but are looking to phase out the ones they already have. Just recently, Belgium and Scotland closed their last coal-fired power plants and others including the UK, Austria and Portugal aim to phase out coal within the next ten years.

Such moves are certainly influenced by climate considerations, but let’s face it, economics plays a crucial role. I doubt we’d be witnessing such a fast decline of the coal industry if burning coal was highly profitable.

Yet here in southeast Europe, the myth that “coal is cheap” is proving hard to shift. The latest manifestation of regional governments’ refusal to believe that times have changed is today’s signing of an annex to the contract between Elektroprivreda Bosne i Herzegovine (EPBiH) and China’s Gezhouba Group for the latter to construct a new 450 MW lignite unit at the Tuzla power plant.

The original contract was signed in August 2014 between EPBiH and China Gezhouba Group for EUR 785.7 million, but it was later admitted that the project was not economically feasible in this form. This ought to have been clear before the contract was signed, not only afterwards. In July 2014 Bankwatch and our partner Ekotim warned that the EPBiH’s own figures showed that if the cost of construction rose by EUR 50 million – hardly a rare occurrence in large infrastructure projects – it would be tipped into economic unfeasibility, and an analysis by economist Vladimir Cvijanović published later in the year showed (pdf) that the price of coal from the nearby mines on which the project was relying was unrealistically low.

Coal in the Balkans

Find out more

Today’s annex is reported to bring the cost down to EUR 722 million, which is of course better than EUR 785.7 million, but important questions remain unanswered:

  • What technical compromises have been made in order to bring down the cost?
  • What future electricity prices are being assumed?
  • What coal price is being assumed? In the original calculations presented to the Federation of BiH Parliament, it was stated that:
  • “the price of coal should not rise above the current level which is already now above the price foreseen in the investment documentation for unit 7 (4.75 KM/GJ) […] In the event that it does, the competiveness of the current generation and feasibility of the realisation of the new units will be threatened.”

    Yet in 2014 the sales price for coal for power plants (pdf) was 4.90 KM/GJ. Moreover the sales price is nowhere near to reflecting the production costs in the Federation of BiH’s mines, which in 2014 – the latest year for which information is available – amounted to 6.58 KM. None of these prices include the investments that would need to be made into the mines to continue production for the new unit.

  • Have future costs of CO2 emissions been included in the calculations and if so, at what price?
  • Is the plant feasible if the planned 350 Banovići lignite plant, less than 30 km away, is also built?

Toolkit on Balkan coal finance


Visit the website

Bosnia and Herzegovina has apparently managed to persuade China to provide a loan in EUR rather than USD in order to mitigate exchange rate risks – the Bosnian Mark is pegged to the Euro – but negotiations are still ongoing about whether the period for paying off the loan can be extended to 15 years instead of 10.

The Federation of BiH government plans to provide a guarantee for the loan, but it is not clear under what conditions, which as well as concerns about debt, also raises issues of compliance with its state aid obligations under the Energy Community Treaty.

The latest changes to the project have taken place well away from the public eye so it is impossible to analyse them in more detail and come to clear conclusions about the project’s feasibility. This in itself raises a red flag, and if the Federation of BiH government wants to convince anyone that this project is going to be a success, it will need to be much more ready for open debate about it. Of course this should have happened before the signing, not afterwards, but it is still far from certain that the plant will be built: Tuzla 7 does not yet have an updated environmental permit, let alone a construction permit, and no financing contract has been signed.

Without these conditions fulfilled, the project’s future is just as uncertain as it has been for the last two years.

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