Myths and facts: energy in Europe

With this new series of energy factsheets Counter Balance wants to introduce EU citizens to the basics of different EU energy developments. We take a look at where and how Europe and its public banks mobilise their money to finance and develop the energy infrastructure of the future.

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There are plenty types of energy, all with their own potential and impact. Has nuclear energy still a future inEurope? Why is investing in new coal-fired power plants not only detrimental to the environment and your health but also a costly option? And what are the differences between various types of renewable energy sources?

Not only what we finance matters, but also how we do it. What are the consequences of the next generation of Public Private Partnerships such as project bonds on our infrastructure? Is building and financing more infrastructure projects the easiest way out of the crisis? And who will eventually own all these things we build?

In the factsheets we look into these questions because energy is a key and crosscutting issue that affects us in many different ways. It closely relates to other crucial questions of our time such as climate change, security and the economic crisis. What energy sources we use and how we finance them will influence how our societies will look like in the decades to come. 

With several billions of investments in the sector every year the two European public banks, the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), are key players. As they are currently in the middle of revising their energy policies, the framework for investments in the sector is being set for years to come.

The factsheets we’ve put together aim to inform and involve citizens who are often sidelined in major debates and policy decisions. Since it affects us all – as citizens, consumers, etc – it is important that a wide range of voices are heard. Let’s start with debunking some myths and presenting you some facts.

 

The factsheets

#      The Netherlands as a gas roundabout and EIB investments in excess capacity

The European Investment Bank finances energy infrastructure in the Netherlands as it does in other EU member states. Securing gas supply is a top priority for the EU, both through the construction of new gas pipelines as well as liquefied natural gas (LNG) terminals.

 

#       The good the bad and the uncertain: The new energy policies of Europe’s public banks

In 2013 we saw almost simultaneous reviews to the energy lending policies of several international public development banks – the World Bank, the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), three institutions that since 1994 have collectively provided 37.5 billion dollars in financing to the coal industry, along with additional multi-billion dollar support to the oil and gas sectors. This fact sheet provides an overview of the Good, the Bad and the Uncertain energy policy developments that emerged and are now in force at Europe’s two major public banks – the EIB and the EBRD.

 

#       Myths & facts: Europe & coal

Coal power plants may seem cheaper to construct when compared to renewables, but because of the very high temperatures in the burning chambers they require expensive and frequent maintenance – the yearly costs to maintain a coal power plant may be as high as 10% of the initial investment to build the plant.
→ Also available in French
→ Also available in German


#       Myths & facts: Energy infrastructure investments for economic recovery

In the last decades the EU has to a considerable extent externalised its “polluting” industrial production to countries outsideEurope, giving a push to fossil fuels-based energy generation in these countries.
→ Also available in French
→ Also available in Polish


#       Myths & facts: EIB energy lending

While the EIB is an EU institution and is required to lend for projects in line withEurope’s policies on energy and climate change, the bank at times takes a schizophrenic approach to the energy sector because of the diverse EU policies and strategies related to energy.
→ Also available in French


#       Myths & facts: Renewable energy sources

In 2010, only 71.5 percent of energy produced in the EU was used by the end consumer. 23.5 percent of this energy was lost, with 5 percent used by the energy sector itself. The strength of renewable sources of energy does not lie in the possibility to produce large amounts of energy in one place as is the case with fossil fuels or nuclear power plants. With renewable sources of energy, people can take control of their energy supply and support the independence of communities and regions.
→ Also available in Polish


#       Myths & facts: Project bonds in times of crisis

With the Project Bond Initiative and the Project Bonds Credit Enhancement, the Commission and the EIB have chosen to incentivise the expansion of financial markets and to use public funds – derived from European taxpayers’ money – to transform infrastructure into an asset class
→ Also available in German
→ Also available in Spanish


#       Myths & facts: Europe and energy security

The EU recognises that to solve global environmental problems, a drastic reduction in its own use of fossil fuels is needed. At the same time, the EU is part of a global resource and energy race with other countries and its energy policy centres around the construction of a series of oil, gas, electricity and solar projects in neighbouring countries in order to diversifyEurope’s energy supply.
→ Also available in French
→ Also available in Polish
→ Also available in German


#       Myths & facts: EU policy and nuclear energy

Plans for new nuclear build face the challenge of finding investors and the large amounts of money needed for construction, making nuclear an economic liability for the project promoters. The 2012 World nuclear industry status report finds that five of eleven nuclear companies were downgraded by Standard & Poor’s in the past five years. Moody’s also assigns a higher risk profile to companies that pursue new nuclear generation plans. Nuclear power and renewables are not complementary to another and cannot be used in parallel to reduce carbon emissions.
→ Also available in German 


#       Myths & facts: Shale gas

Together with other necessary equipment and storage ponds, fracking infrastructure can cover large areas. InEurope, such land use might potentially lead to problems because of population density. Shale gas is still a fossil fuel and thus carbon-intensive. A study by the Commission confirmed that shale gas activities – including the process of fracking itself and burning of shale gas – release greenhouse gas emissions and are more carbon-intensive than conventional gas. Every drilling process (for shale gas) requires as much as 15 million litres of water. In addition, every drilling operation uses several tonnes of highly toxic chemicals.
→ Also available in Polish

 

#       Myths & facts: EU carbon trading

Rather than enabling the transition away from a fossil fuel economy, the ETS has acted as a subsidy for major polluters inEurope. Even conservative estimates suggest that between one- and two-thirds of carbon credits bought into the ETS “do not represent real carbon reductions”.
→ Also available in German

 

These factsheets will be translated in different languages and used for trainings all over Europe by our member groups. Additional translations will soon be available on line.

 

This activity is taking place with the financial assistance of the European Union and the Education, Audiovisual and Culture Executive Agency (EACEA)

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