The GREAT Energy Summit

Two weeks ago I was fortunate enough to attend The GREAT Energy Summit in Prague, organised by UK Trade & Investment and the British Embassy in the Czech Republic to catalyse collaboration between British and Central & Eastern European (CEE) companies. The event was largely a showcase of the major energy projects taking place in the region, and was advertised to include all energy sectors, insinuating a roughly equal spread between hydrocarbons, nuclear and renewables. I was there representing my company, Town Rock Energy, with the goal of scoping out the export potential for our geothermal energy consultancy services, whilst also educating myself about the current state of the CEE energy market and adding some new valuable contacts to my network. The conference was sponsored by a number of multinational construction companies and legal firms, which meant I only had to purchase my flights over and the British taxpayer did not have to bear the brunt of the hotel bill. Perfect.

The conference opened with keynote speeches from Baroness Verma, the Parliamentary Under Secretary of State for Energy and Climate Change UK, and Jan Mladek, Czech Minister of Industry and Trade, to mention a few. The Baroness stressed that a single energy market for Europe, with a real focus of investment in nuclear and carbon capture and storage (CCS) infrastructure, are critical in reducing emissions to a sustainable level. Her closing point has great significance to the current state of climate change mitigation: “As the world shrinks, knowledge sharing is vital”. A minor jab at the IP obsessed world of business.

The Minister stressed the importance of diversifying the energy mix of Europe, and stated that he was increasingly nervous that “winter is coming and most CEE countries still rely heavily on Russian gas for heating”. The highest point on his energy agenda is to encourage massive investment in gas pipeline infrastructure and liquid natural gas (LNG) terminals, to allow import of gas from anywhere but Russia.

The keynote speeches were followed by two discussion panels, one for nuclear and one for gas, each with about ten delegates representing their companies from each sector. Each panel began with each delegate having 5-10 minutes to introduce themselves, the services of their company, and the major projects they are currently involved in. This left very little time for discussion, with only two audience questions allowed per panel. The first question that came up was “how can Europe plan to implement a single energy market with nuclear supplying the baseload, when major European countries like Germany have stated they will not be deploying any new nuclear stations?” The delegate for a company who are large developers of nuclear power plants accepted the question and very smoothly danced around it for 5 minutes. The gas panel involved several frustrated statements about Russia, with one delegate opening with “now that a democratic system, if you can call it that, prevails, Russia is fighting [the West] with gas and energy instead of weapons”. The title of “discussion panel” was somewhat misleading.

The afternoon was filled with parallel round table discussion sessions, with two for nuclear, one for gas, and one for the 2030 European Framework. I attended the latter as it was the only hope of having a true discussion about the role of renewable energy. It was an excellent session passionately lead by Sandrine Dixson-Declève, Director of the EU Office of the University of Cambridge Institute for Sustainable Leadership in Brussels. Some great practical pieces of advice for the renewable energy sector emerged from a variety of contributing industry and political leaders:

renewable energy developers cannot expect quick returns, but must focus on impact and longevity – and the markets need to value this over short termism;
a focus on innovation in business models, investment structures, policy and technology is integral to success;
the narrative promoting deployment of renewable energy and energy efficiency projects needs to be broadened far beyond carbon reductions and climate change mitigation, to focus more on positive societal impacts;
renewables cannot rely on feed in tariffs and subsidies, as it has been demonstrated that most governments that have implemented feed-in tariffs have been burned due to bad tariff structuring and pricing;
there needs to be increased state intervention;
and risk for investors in renewable energy projects needs to be decreased as much as possible, which requires stable and transparent long term legislative frameworks across the European Union (a break-away of the UK from the EU will cause detrimental increase to investment risk – UKIP voters be warned).

The final item in the 2030 European Framework round table discussions was raised by Timothy Abraham, Head of European Policy for the UK Department of Energy and Climate Change (DECC). He explained that early stage plans were being put forward by the European Commission for a €300 billion fund to promote jobs and growth across the EU, and invited all delegates around the table to propose how they think the money should be spent so he could feed that back to the European Commission. My hand shot straight up, and I proposed that the best use of the funds would be to invest in promoting community driven local circular economies, with an initial focus of decarbonising the largest globally polluting sector, agriculture. This would of course require a lot of consultation on the ground at a community level, and significant restructuring of the economy, but it would certainly create an enormous number of jobs, and surely with €300 billion at your disposal anything should be possible, right? I will be distraught if the funds go to a small number of large centralised projects.

In summary, the summit was a great insight into the current state of the European energy sector. It looks like, unless you are in Germany, you will have to embrace nuclear as the only low-carbon option for industrial-scale baseload electricity production. Coal and gas CCS is even more expensive than nuclear and is not even close to providing a long term solution due to limited reliable geological storage capacity. Wind and solar are too intermittent, and industrial scale storage solutions are not far enough developed to replace a baseload supply in the near future. Investment in oil and gas production and infrastructure is going to continue on into the future at the same astronomical present-day proportions, supported by politicians who generally value energy security and affordability over emission reductions. Geothermal, the most promising energy source of the future, had only one advocate at the summit, and that was me… Fortunately, I did meet an investment banker who was very interested in geothermal and is currently seeking funding for five large geothermal district-heating projects across CEE. We will be in touch.

My final point (and I know this has been quite a lengthy blog and it’s time to get back to work, but this is important) is that if all the investment into new gas pipelines and gas network upgrades was instead used to de-centralise the energy sector and focus on localised renewable energy production and storage for localised consumption, energy security and independence of Russian gas would still be achieved and carbon emissions would be reduced to sustainable levels. The entire focus of large companies and governments is currently on centralised nuclear and gas energy production because it is what they know and trust. Leaders and decision makers need to think outside the box, focus investment on local community driven development, and only then will we start to extinguish our addiction to fossil fuels and live sustainably.

That’s it for now, thanks for reading.