Page 59 - bne IntelliNews magazine February 2025

bne February 2025
Opinion 59
lakes. However, pumped storage is not an option for all the countries between Paris and Moscow on the Great Northern Plain, which is as flat as a pancake.
For all these reasons, Europe remains hooked on Russian gas as the best alternative energy source and the least harmful for the climate. Despite its best efforts to wean itself off Russian gas in the last two years, Russian gas increased its share in the EU energy mix over 2024 from 14% at the start of the year to 21.2% in December.
The 8th Monitoring Report of the Energiewende report
that tracks Germany’s progress in the national energy transition program presented to former Chancellor Angela Merkel concluded that Germany cannot produce sufficient renewables on its own territory to satisfy its own demand for power. It will always have to import power, putting increased strain on other EU members that are also struggling to reduce fossil fuel use.
In lieu of sufficient renewable generating capacity last year Robert Habeck, a leader of the Green Party, got emergency parliament funding to install 25GW of new natural gas generation (he actually wanted 36-39GW), roughly equal
to 25 big coal plants or 25 big nuclear plants and a de facto abandonment of the “renewables only” policy that has driven German energy transition policy until now.
In desperation, the Merkel government launched a “hydrogen strategy” as an alternative to gas, but as bne IntelliNews reported hydrogen won’t work due to numerous technical problems. To name only one, it can’t be transported as to liquify it, hydrogen needs to be cooled to just 20C over absolute zero, needing an extraordinarily amount of energy to make it that cold. Only helium has a lower liquification point. And as hydrogen atoms are so small, they simply leak through the walls of conventional pipelines, posing a major explosion threat.
The only realistic scalable alternative to natural gas or renewables is nuclear power following France’s Messmer model, argues O’Donnell.
The EU has reversed its policy on nuclear power and now has the political will to develop nuclear power infrastructure after years of favouring renewable energy investments, government and industry officials said during an industry conference
in Brussels December 17, S&P Global reports. As part of the changes provoked by the Draghi report, a new business model for EU nuclear energy investments will be rolled out from 2025, including the development of small modular reactors and a potential competitiveness fund, are urgently needed
to capitalize on this momentum, the officials added.
Barking up the wrong tree
Since these early days, the mini-grid idea has been abandoned and replaced with the idea of a as large a grid as possible to
smooth out the local variants in supply and so smooth supply. Germany’s decision to switch off its six nuclear power plants and becoming a net importer was made possible as EU rules forced its neighbours to export Germany the missing power. Now this winter, countries like Sweden, Norway and the Baltic states have begun to complain heavily after the cost of power in their countries has soared.
"The idea was that you could get rid of all of what Lovins called 'hard energy paths,' that is fossil fuels and nuclear, and replace this with so-called 'soft energy paths,' meaning renewables," Donnell.
O'Donnell warned that the EU's steadfast commitment to an all-renewables strategy, without addressing these technological gaps, is leading to deindustrialisation and undermining energy security.
He cited Germany's recent closure of its last three nuclear power plants during a wartime energy crisis as an example of policy decisions that exacerbate the problem.
"The stance that the new Commission is taking, while focusing on energy and industrial policy, is simply doubling down on old policies, wrong policies which are dangerous," O'Donnell asserted.
He criticised the appointment of Teresa Ribera, a proponent of all-renewable energy systems, as the European Commission's Executive Vice-President in charge of both the Green Deal and industrialisation.
"The fact that [European Commission President Ursula] von der Leyen fought hard to appoint Ribera and then put her in charge... shows that Von der Leyen... has no interest in reform of the renewables model despite its suffering technological failures on several key aspects," O'Donnell remarked. “The problem is, Ms. Ribera is a true believer in all-renewable energy systems, I would say a career-long renewable fundamentalist”
“She’s said to be so good at negotiating that she managed to get the Spanish nuclear industry and civil society to agree on a timetable to close all the Spanish nuclear power plants, and she’s very proud of this,” O’Donnell added.
This misguided policy is condemning Germany and the rest of Europe to deindustrialisation, a process that already started long before the war in Ukraine catalysed it with the 2022 energy crisis. The point was rammed home in great detail by the report by former Italian Prime Minister and ex-European Central Bank boss Mario Draghi that warned Europe has lost its competitive edge and needs to spend €800bn a year to just stand still, or about 4% of Europe’s collective GDP. Finding this amount of money is a daunting prospect for budgets that have already been depleted first by the 2020 pandemic and now by the €100bn a year sent to
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