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Less is more: Romanian energy trajectory shows potential for low carbon economic growth – report

Romania could well be on path to a sustainable, prosperous economy if decision makers acknowledge growing GDP in tandem with dropping energy demand, a report released today by Bankwatch Romania argues.

See graphs below >>

An English version of the executive summary can be found at:
https://bankwatch.org/sites/default/files/decoupling-execsummary-05Jul2016.pdf

The full report in Romanian can be found at:
https://bankwatch.org/sites/default/files/decoupling-RO-05Jul2016.pdf

The EU has already committed to a long term transition into a decarbonised economy, primarily in light of the urgent need to tackle the climate crisis. Yet, some governments have not.

The report tackles the common assumption that continued economic growth necessarily entails a rise in energy consumption. In fact the new analysis shows that this is not what happens in reality, in Romania and in other EU countries.

Since the 2011 UN report that first introduced it, the concept of decoupling GDP growth from energy consumption is gradually being incorporated into more and more development policies.

In Romania, however, policy makers are yet to recognise this increasingly mainstream paradigm. Official estimates still see energy consumption in the country growing by 20%-100% by 2030. At the same time, the Romanian energy ministry acknowledges that since 2009 the country’s GDP has been growing while energy consumption has been falling, but it has so far failed to factor this trajectory in the ongoing development of a new national energy strategy.

Romania has one of the highest rates of economic growth in Europe. Nevertheless, given that energy intensity in the country is twice as high as the EU average, Romania also has a very high potential to cut its energy consumption, particularly in the housing and transport sectors, the report authors state.

Alexandru Mustață, campaign coordinator at Bankwatch Romania and coordinator of the report, says:

“That Romania has virtually already met its 2020 target for greenhouse gas emissions reduction with no special effort only shows there is still a vast potential to deepen these emissions cuts while ensuring prosperity for society now and in the future. Romanian decision makers need to recognise and embrace the trend of a lower carbon economic growth.”

Realising this potential would require a change of mindset in government ministries and a long term vision. The report lists a number of recommendations for ways to put the decoupling trend into motion including prioritising investments in energy efficiency, reducing transport sector emissions, and boosting the deployment of renewable energy sources.

For more information contact:

Alexandru Mustață
Campaign Coordinator, Bankwatch Romania
alexandru.mustata@bankwatch.org
+40 726 770 808

Graphs

Croatia to drop controversial coal plant project, confirms minister

The Croatian Minister for Economy, Tomislav Panenić, yesterday confirmed that the 500 MW Plomin C coal plant project has been stopped.

The announcement comes after months of media reports that the European Commission considers the project to involve incompatible state aid due to the involvement of heavily politicised state electricity company HEP (Hrvatska Elektroprivreda) [1]. This was confirmed by Panenić, who also cited low electricity prices as rendering the project uneconomic.

The news was welcomed by environmental campaigners who have led a five-year campaign against the project due to its expected climate and health impacts, as well as its high cost.

Coal in the Balkans

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“This project has proven to be a major distraction for HEP and the Croatian government and has diverted them away from developing a cost-effective and sustainable energy strategy”, said Bernard Ivčić from Zelena akcija/Friends of the Earth Croatia. “We now need to make up for lost time and ensure that Croatia develops a new strategy based on energy efficiency and sustainable renewables.”

“Croatia has excellent but under-used solar and wind potential and we hope to see a rapid turnaround in the fortunes of these resources during the next few years”, added Zoran Tomić of Greenpeace Croatia.

“Plomin C is the latest in a whole series of coal projects being cancelled across Europe and beyond, as renewables become more and more affordable,[2]“ said Pippa Gallop of CEE Bankwatch Network. “Governments across the Balkans who are largely ignoring this trend need to start paying attention if they are to avoid being left with a series of expensive mistakes on their hands.”

Contacts

Pippa Gallop
CEE Bankwatch Network
pippa.gallop@bankwatch.org

Bernard Ivčić
Zelena akcija
bernard@zelena-akcija.hr

Zoran Tomić
Greenpeace Croatia
zoran.tomic@greenpeace.org

Dušica Radojčić
Zelena Istra
dusica.radojcic@zelena-istra.hr

Notes for editors

1. No official EC decision has been published yet.

2. A recent report by Sierra Club and CoalSwarm found that the number of cancelled coal projects across the world has outstripped those completed at a rate of two to one since 2010. The highest failure rate has been in Europe at 7:1.

More coal plants are being cancelled than built

 

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The EU house bank is holding back Europe’s shift to sustainable energy

On the occasion of the EU Sustainable Energy Week, a new Bankwatch analysis shows that the European Investment Bank (EIB) has been effectively hindering Europe’s energy transition.

The full briefing can be found here >>

The EIB has so far followed through most of the priorities set in its 2013 energy strategy, but a closer look at the European investments of the world’s largest public bank in energy efficiency, renewable energy vis-a-vis fossil fuels reveals that its contribution to the global effort to tackle the climate crisis remains insufficient at best.

Most notably, during 2013-2015, EIB lending to renewables in Europe has dropped whereas its lending to fossil fuels has modestly but consistently increased.

Moreover, while EU leaders have repeatedly emphasised the ‘energy efficiency first’ principle, the EIB has been lagging behind with only 3.6% of its lending across sectors going to energy conservation projects.

According to EIB data, in the years 2013-2015, electricity transmission and distribution projects were the main benefactors of the bank’s loans to Europe’s energy sector, receiving approximately 40 percent of the bank’s total EUR 27 billion energy lending.

At the same time, the EIB’s financing for renewables from its energy portfolio has been just slightly higher than for hydrocarbons – EUR 8 billion compared to EUR 7 billion, respectively.

Among renewable energy projects, the EIB has prioritized support for wind power, allocating a total of EUR 4.5 billion to this sector, compared with less than half a billion euros for solar energy.

Yet, by 2015 EIB investments in wind energy have fallen sharply, even though industry data show this was a record year for investments in new wind energy projects.

These trends are even more pronounced in the EU’s newer member states. Over this three year period, the EIB has extended only six loans to renewable energy projects in EU-13 countries. So far, only three countries – Sweden, Bulgaria and Estonia – have met their 2020 renewable energy targets.

Anna Roggenbuck, EIB Policy Officer at CEE Bankwatch Network, says:

“The EIB appears to have failed to grasp the magnitude of climate crisis and the opportunity for Europe to take a truly sustainable energy path. Bankwatch’s analyses have repeatedly shown that if Europe is to meet its climate and energy objectives, as part of the global effort to stem climate change, the EU’s bank has to up its game.”

For more information contact:

Anna Roggenbuck
EIB Policy Officer, CEE Bankwatch Network
annar AT bankwatch.org
Mobile: +48 509970424
Office: +48 91 831 5392
Twitter: @RoggenbuckA

Response to statements regarding CEKOR in the Serbian media

CEKOR, as a non-governmental watchdog organisation, has since 1999 strived to promote sustainable development in Serbia and has a strong track record in supporting local communities harmed by development projects to advocate for their rights.

Both CEKOR and CEE Bankwatch Network, of which CEKOR is a member, are non-profit, non-partisan organisations who work to prevent negative consequences of international public development financing. As part of this work, CEKOR and CEE Bankwatch has assisted communities affected by the Gazela Bridge reconstruction in Belgrade and the operations of the Kolubara coal mine to use their rights guaranteed by either the Serbian consititution or international treaties or policies.

These experiences have shown that even the involvement of experienced international institutions such as the European Bank for Reconstruction and Development is no guarantee that projects will not cause harm to local people and the environment, and CEKOR and CEE Bankwatch have acted as a bridge between local communities and the international financial institutions to bring public grievances to light and seek satisfactory solutions.

Within the last year or so, it has become clear that many people in Drmno are in danger of suffering a similar fate to those in Vreoci and other villages in the Kolubara basin. Some of these people have for years been promised resettlement while others have received no assurances at all that action will be taken to ensure that they no longer have to endure a constantly noisy, dusty and dangerous environment. A number of people from Drmno have therefore requested assistance from CEKOR in asserting their right to a healthy and safe environment.

People from Drmno have every right to organise themselves to achieve their goals, with or without CEKOR’s help, and through formal channels or informal channels. This is called Freedom of Expression and Freedom of Assembly, and it is enshrined in the UN Convention on Human Rights.

CEKOR, as any other civil society organisation, has every right to raise its concerns about the situation in Drmno. This is the whole point of civil society: to draw attention to the issues left behind by governments and companies and work towards adequate solutions. Only through accepting that every process has flaws and that inclusion of more points of view leads to better decision-making will our countries become more pleasant and sustainable places to live.

Bankwatch and Counter Balance statement on the mid-term review of the Investment Plan for Europe

Brussels, Prague – European Commission Vice President Jyrki Katainen presented today the mid-term result of the Investment Plan for Europe. The European Fund for Strategic Investments (EFSI), the financial arm of this investment strategy, was established by the European Commission and the European Investment Bank (EIB) in 2015 with the aim of mobilising private investments to stimulate the European economy.

Nevertheless, one year on, the EFSI portfolio is still far from kickstarting the energy transition that Europe needs.

“So far EFSI guarantees have not catalysed any new finance on top of the EIB’s normal investments in energy efficiency and renewable energy sources. In fact, EIB lending to renewable energy has decreased in 2015, and the higher share of clean energy investments in the EFSI is the result of EIB simply shifting the few clean energy projects from its normal portfolio to the EFSI,” says Markus Trilling, EU Funds Policy Officer at CEE Bankwatch Network.

“Despite the praise from the European Commission and the EIB, the main beneficiaries of EFSI support have so far been the same countries, primarily richer ones, that have seen the largest EIB investments in sustainable energy [1]. As a result, the EFSI is not the effective de-risking mechanism it was meant to be. The EFSI was intended to help the EIB extend its financing to sectors and markets it has so far not been active in – for example, research and development to support the clean energy transition in central and eastern Europe – but this has not happened,” says Anna Roggenbuck. EIB Policy Officer at CEE Bankwatch Network.

“To date the information available on projects financed under EFSI is not sufficient to understand how the fund really delivers on its stated objectives. Given the EU guarantee awarded to the bank, it is now up to EU institutions to ensure a much higher level of transparency. Therefore, the European Parliament and European Court of Auditors will have a key role in coming months to hold the EFSI to account” says Xavier Sol, Director of Counter Balance.

 

Graphs


EIB renewables lending dropped significantly even including EFSI lending. (Source: EIB energy lending database 2015 – signed loans)

 


Climate action within the EFSI was limited to richer countries which already see larger EIB investments in sustainable energy. (For more details, see Bankwatch’s briefing on the EIB’ climate action lending in 2013-2015.)

 


At the same time, the EFSI overall only marginally contributed to the EIB’s climate action lending. (For more details, see Bankwatch’s briefing on the EIB’ climate action lending in 2013-2015.)

 

For more information contact:

Markus Trilling
EU Funds Policy Officer, CEE Bankwatch Network
markus@bankwatch.org
+32 484 056 636
Twitter: @SustEUfunds

Anna Roggenbuck
EIB Policy Officer, CEE Bankwatch Network
annar@bankwatch.org
Office: +48 91 831 5392
Twitter: @RoggenbuckA

Xavier Sol
Director, Counter Balance
xavier.sol@counter-balance.org
+32 2 893 08 61
Twitter: @xavier_sol

Notes:

[1] According to an EIB evaluation, 70 per cent of the bank’s EUR 75 billion in climate finance in 2010-2014 was limited to just five countries: Germany, France, UK, Italy and Spain. Except for Germany, these are also among the few recipient countries of EFSI finance.

For more see Bankwatch’s blog post from December 2015 on the EIB’s climate finance: https://bankwatch.org/news-media/blog/9-reasons-why-eus-bank-no-climate-leader

Western Balkan countries invest more than twice as much in coal as in wind power: new Bankwatch analysis


Prague, Subotica, Banja Luka, Tuzla, Sarajevo, Skopje – Western Balkan countries are planning investments in wind power, but these are being heavily outweighed by their investments in coal plants, according to a CEE Bankwatch Network analysis launched today. The region’s governments are actively planning 2800 MW of new coal plants [1] but allowing only around 1166 MW of wind power plants to be built [2].

The analysis and background data are available at:
https://bankwatch.org/publications/western-balkans-countries-invest-least-24-times-much-coal-wind-power

The new coal plants will cost a minimum of EUR 4.5 billion, mostly from public sources. The wind plants would cost around EUR 1.89 billion [3], and are mainly planned by private sector investors.

In 2012, countries in the region committed to increase their share of renewable energy by 2020 under the Energy Community Treaty [4]. Yet, their governments continue to prioritise coal projects. Currently, Serbia and Macedonia only have one wind farm each in operation – Kula (9.9 MW) and Bogdanci 1 (36.8 MW) and Bosnia and Herzegovina, Montenegro and Albania have none [5]. Solar electricity generation is even more scarce.

In addition to conflicting with the Paris Agreement’s aim to limit global temperature rise to 1.5-2 degrees, the Balkan coal plans contrast sharply with the situation in the EU. Most EU countries have given up building new coal plants and seven states are already coal-free [6]. 12.8 GW of wind capacity was installed in the EU last year – more than for any other electricity generation source – meaning that wind can now generate 11.4% of the EU electricity consumption in a normal wind year.

As well as huge potential for energy efficiency, all Western Balkans countries have high potential for wind and rooftop solar photovoltaics. Together with existing hydropower, these could completely cover the region’s electricity demand by 2050.

There is significant investor interest in tapping the region’s wind potential, but they face regulatory hurdles. Governments have capped the amount of wind power capacity that can be connected to the grid and receive feed-in tariffs at a conservative level – eg. 500 MW until 2020 in Serbia and 350 MW until 2019 in Bosnia and Herzegovina – thus delaying numerous projects.

Despite governments’ overt preference for coal, however, it would be wrong to assume that the plans are a fait accompli. All of the seven actively planned coal plants [7] are seriously delayed.

Only one, Kostolac B3 in Serbia, has a financing contract signed – with China Exim Bank. Four do not have valid environmental permits, either because the environmental impact assessments have not been carried out yet (Pljevlja, Montenegro; Kosova e Re, Kosovo) or because the project preparations have taken so long that the EIA decisions have already expired (Tuzla 7, Bosnia and Herzegovina; Kostolac B3, Serbia). The environmental permits for Stanari, Banovići, Ugljevik III and the expired permit for Kostolac B3 are subject to court challenges by local civil society groups.

“The delays with the new coal plants open up an opportunity for the Western Balkan countries to turn around their energy systems. Governments need to stop seeing the electricity sector as a zero-sum choice between coal or imports. If they are really dedicated to using domestic resources, then they can show it by stepping up efforts to save energy and allowing more solar and wind power to be connected to the grid,” commented Igor Kalaba of Center for Environment, Bosnia and Herzegovina.

Ioana Ciuta, Energy Co-ordinator at Bankwatch, added: “Energy efficiency improvements, solar and wind projects can all be delivered more quickly than new coal power plants. They are also likely to turn out better value for money, as the costs of wind and solar are falling fast. Coal is no longer the economic option, as evidenced by Slovenia’s disastrous Šoštanj 6 project and the ongoing woes of EU utilities such as RWE and E.ON which failed to take account of the changing times and are paying a heavy price”.

Contacts:

Pippa Gallop
Research Co-ordinator, CEE Bankwatch Network
pippa.gallop@bankwatch.org

Ioana Ciuta
Energy Co-ordinator
CEE Bankwatch Network
ioana.ciuta@bankwatch.org
+40 724 020 281
@unaltuser

Notes for editors:

(1) This includes only plans which are being actively pursued and for which construction could start within the next few years. If projects are included which are mentioned from time to time in the media or government documents but do not appear to be advancing, the planned coal capacity rises to at least 5700 MW.

(2) Included in the calculation for wind are projects which we believe could go ahead before 2020. Some plants have not shown any obvious development for several years, particularly in Albania, while others are held back by feed-in tariff quotas or other administrative issues.

(3) The costs for the coal plants are for construction only and do not include the cost of mine expansion, financing, resettlement or ash dumps. The real cost is therefore much higher.

(4) The Energy Community brings together Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Moldova, Montenegro, Serbia and Ukraine with the goal of creating a common energy market between the EU and some of its neighbours. The Energy Community Treaty, among other things, includes binding obligations for member countries to implement certain pieces of EU environmental law and renewable energy targets.

(5) Kosovo has three 0.45 MW turbines at Golesh near Pristina which have been installed already since 2010 but were not operating until 2014 due to a dispute over feed-in tariffs. See
http://www.kostt.com/website/images/stories/dokumente/tjera/Generation_Adequacy_Plan_2011_-_2020.pdf
and
http://mzhe-ks.net/repository/docs/Balanca_e_energjise_2015_eng.pdf

(6) Cyprus, Luxemburg, Malta, Lithuania, Latvia, Estonia and Belgium. Several EU countries including the UK and Austria have also announced plans to phase out coal. See
http://www.greenpeace.org/eu-unit/en/blog/belgium-kicks-the-coal-habit/blog/56044/

(7) Ugljevik III, Banovići, Tuzla 7 and Kakanj 8 in Bosnia and Herzegovina, Kosova e Re in Kosovo; Pljevlja II in Montenegro; and Kostolac B3 in Serbia. The list does not include Stanari in Bosnia and Herzegovina, which is undergoing test operations.

 

Image by Roland Peschetz (CC BY 2.0)