At the moment, the risk of creating “stranded assets” in the energy sector is “enormous”, European Commission Executive Vice-President for the European Green Deal Frans Timmermans said on Monday 27 July in an interview for Columbia University’s Center on Global Energy Policy.
With that, the Vice-President assured that he understood environmentalists’ concerns regarding the risk that the public funds mobilised for post-Covid-19 economic recovery would be “squandered” to support “entire economies without a future” such as the coal industry.
According to him, this risk is “enormous”, because when unemployment rises – the Commission’s Spring economic forecasts anticipate a rise in unemployment to 9% by 2020 (see EUROPE 12481/1-12522/1) – it is “tempting for policy-makers” to settle for short-term solutions to get the economic machine moving again, without worrying about the longer-term impacts, especially on the environment.
Unlike environmentalists, however, Mr Timmermans remains convinced that natural gas has a role to play in the transition of the EU’s energy system and that it is possible to invest in this fossil fuel without creating stranded assets.
In his view, gas infrastructure may be “relatively easy” to re-fit for the transport of cleaner gases such as renewable hydrogen in the future, so that they do not become stranded assets.
Furthermore, the Dutchman is of the opinion that, in the case of countries such as Poland, the switch from coal to natural gas for heating, as a provisional phase before switching to renewables, is the only realistic option.
“I simply cannot deny the fact that in some of our Member States the transition to renewable energy [...] cannot be made all at once”, he said.
The Vice-President of the Commission furthermore estimated that such a transition from coal to gas will already result in an “enormous gain” in terms of greenhouse gas (GHG) emissions.
This assertion does not meet with unanimous approval. According to a study by the think tank Energy Watch Group (EWG) published in 2019 (http://bit.ly/2mlIyuN ), if methane emissions throughout the gas industry chain are taken into account, the shift from coal and oil to natural gas in power plants and heating systems would increase GHG emissions from energy use by about 40%.
Finally, Mr Timmermans considers that gas also has a role to play in producing hydrogen in combination with carbon capture and storage (CCS) technologies, thus making it possible to obtain what the Commission calls “low-carbon hydrogen”.
Also known as ‘blue hydrogen’, this form of hydrogen will make it possible to release the volumes needed to establish a genuine hydrogen market, thus encouraging further development of renewable hydrogen, or ‘green hydrogen’, the Vice-President said. (Original version in French by Damien Genicot)