Energy companies are not denying that there is a climate change, but they are in denial over their own role in it. What we need is a paradigm shift.
Don't go dirty, don't go nuclear
An interview with Jan Haverkamp, Greenpeace EU policy campaigner, by Rita Rudusa
You are planning to visit Latvia regularly and a part of your agenda is meeting Kārlis Miķelsons, head of Latvenergo [Latvian energy company]. What is your message to him?
If we want to tackle climate change we need a paradigm shift within utilities and energy planning authorities. In the scientific community, since the IPCC Report there is a clear consensus that in order to avoid large and irreparable damage to ecosystems we have to remain under 2 degrees [temperature increase] this century. There is also a very broad consensus that if we want to do that then the European Union will have to play its role and the nearest that we come to a figure, which makes sense, is 30% emissions reduction by 2020. Last year, the European Commission adopted a new policy, which said that 30% is the scientific target and we are happy with that, but if some countries do not join then we will still do our beast. However, we cannot fight against the world that is not taking its responsibility and then our target will be 20%. One of the things that is really worrying us at the moment is that the EU is talking about 20% all the time. With 20% cut the chance of keeping it under 2 degrees is only about 40%.
How big has the temperature increase been so far?
Since the beginning of the industrial revolution the increase has been 0.7%. And we can already see changes in the everyday life. You can notice the trends; this year was not the first warm winter in Northern Europe. Eight out of the last nine years have been the warmest years on record in Northern hemisphere. And that is a very definite, very clear trend; we are steadily breaking records. With 2-degree increase there will be more records. But if we exceed the two then we will be in a real trouble. For example, if the Siberian frozen peat bog would melt, and it will release extra CO2 into the air. So, I want utilities to take responsibility and, instead of steadily fighting every meter of the road for their own short-term interests, they should be planning and implementing plans that are focused on reality.
Are utility companies still in denial?
They are not denying that there is a climate change, but they are in denial over their own role in it. One very clear example: there are plans for building large wind turbines in Latvia. But the company cannot get an agreement with Latvenergo on how to connect those to the grid. What I would like Latvenergo to do is take any initiative as an opportunity and not as a threat from a competitor. Seeing them as competitors is a short-term vision. They do everything they can to make it impossible for those people to connect to the grid.
Do you see it as a deliberate policy of obstruction?
Yes, definitely. They think if we let other producers in we are going to lose our market share.
Unlikely to be a reason to worry in Latvia, where Latvenergo controls the market.
Yes, but they will have 0.03% or so of external generation and they probably think that once you make a small hole the floodgates will open, or something along these lines. I do not know what they are scared of. The current European Commission [climate] package states how much renewable energy Latvia is supposed to have by 2020. And, instead of saying, well, it looks challenging but climate change is important so we will take the challenge, the government — in this case the Economy Ministry, which is under the pressure from Latvenergo — is saying, we cannot do that, that is impossible. They have found some calculation mistake, or so they claim. The European Commission took its data from the Eurostat office, which normally collects it from the Economy Ministry, so I do not know where the mistake has been made. The document states that, at the moment, Latvia has about 35% renewable energy, mainly hydro. The Ministry says, no, that is not true, we only have 31.4%. So, with the target for 2020 being 42%, we cannot make it. I say, see it just as a lead target and try to get there. If it is more then you can be proud to your children, goddammit.
The problem is not that it is not possible, it is very well possible, but it does require another way of thinking. What they are thinking about is how to prevent shortages of electricity when Ignalina [nuclear power station] goes off. Having done precisely nothing since 1992…Suddenly there is panic. The Ministry says, yes, there can even be blackouts. How can that be? You have been sitting in your chair, seeing it coming and not doing anything? Those people are saying, OK, we need to do something fast so we are going to build a gas cogeneration plant in Riga. A very good idea indeed and very efficient. But they also want to build a coal power plant. Why coal?
A familiar territory perhaps?
Yes, it is something they know. It is also big and they do not need to bother with different small projects, and it is easy to implement. Moreover, coal prices are still relatively low. But there is no reason for Latvia to go for a coal power plant! Except that it is familiar and simple. But for the same money and investment they could look at the offshore wind, ordinary wind. There are lots of options, more small cogeneration stations, biomethane, etc. We are not living in a world anymore, where we could go "the simple and we-know-it" way. Climate change is all-encompassing. When we talk to Latvenergo we tell them, please take this seriously.
How do you talk to bosses of big utility companies? You enter an office with expensive furniture and latest gadgets, and there is a man in his designer clothes who has been there for years and has influential friends. How do you make him change his view?
Well, I will be wearing designer clothes, too. But the only thing I can offer are the reports we have; they are very well researched. I will tell him, just read it and we are open for further discussion. For Greenpeace, these energy reports and an intensive dialogue with companies is a new territory. With the reports on possibilities for paradigm shift and also on commercial possibilities that open for utilities, which take this choice, we talk to companies much more.
Do you intend to keep a watchful eye on Latvenergo in the future?
Part of my duties is to monitor what is going on in the Baltic states. And, since I am focusing on the dirty energy — coal and especially nuclear power — the level of attention to the Baltic states is growing. You have not yet reached the level of Bulgaria and Slovakia, but Ignalina is following close behind. In other words, I will be coming back. Latvenergo is a former state company based in former centralized structures. We have a bit of experience dealing with similar companies and with turning around things like financing. Banks are moving more and more into the direction of more sustainable investment. They do that for several reasons. Reason number one is that it makes more money, reason number two it is better for their image. At some point, Latvenergo will have to finance its participation in Ignalina [new nuclear station] project. Latvenergo have a very low base of collateral to offer to banks, it is not a very big company by European standards. If you know that they want to borrow somewhere around one or two billion euros, that is a lot of money for such a small company.
There were similar situations in Slovakia and Bulgaria. Bulgaria had been preparing for the closure of its nuclear station and they also want to build a new one to replace it. They want it to be ready by 2014, but if we get our way it will not happen. This year is the last when the old station is allowed to produce energy. And already alternative generation projects are filling the gap, because the demand is there.
The difference between the old days and now is that, in the old days, when we had regulated markets the state decided this is what we are going to sell and this is what is going to get the prevalence in the grid and the other ones go off. Now they are entering a market where they have to offer a price. And the investors will want to get a return on their investment in fifteen years, not in fifty. Belene [Bulgarian nuclear power plant] is going to face a very tough market and banks know that. Today, Bulgaria cannot find financing for Belene. That is a reality.
Do you expect something similar to happen in Latvia?
Oh, I am sure of that. In the case of Belene, we talked to 13 banks. 12 of them we have been able to talk out of it. We gave them all the information that Bulgaria never gave them about problems with design, and long-term risks. Only one of 13 banks was willing to offer bridging finance and is very reluctant to give more. I do not think that the situation will be very different for Ignalina.
By the way, I do not think there will be blackouts here. This is an old game; it has been tried in Bulgaria, too. In Bulgaria there were no real blackouts, but there was an increased talk of blackouts and, because they could not sell this story to the population, they were saying that there were blackouts in Macedonia and Albania. I called the Macedonian regulator; I called Albania and asked if that was true. They said, no. In the case of Albania there were fewer blackouts because the elections were coming. There was no lack of capacity in Bulgaria and the same is true here. Actually, NGOs here have come up with a vision that Latvia can go 100% renewable . 100% is very ambitious and not even necessary, but it is doable. And it means that you have a lot of flexibility in the system!
I would like to end with an amateurish question. Why is nuclear energy bad? In terms of CO2 emissions it is not the most harmful one.
In terms of emissions it is at the same level as gas-powered cogeneration stations. Wind is a lot better, and biomass is slightly under nuclear. The only problem is that, overall, nuclear power can only deliver base-level electricity. It is not flexible; it can only deliver a part of all electricity production. If you then look at what you have to invest and how big CO2 reduction you will then get in the end, then you will come up with a very small amount. And then you will have ask yourself, could not we do that for the same amount of money in a more effective way? If you really want to be efficient, nuclear is not the way, because it is too expensive. So, the emissions argument is not strong enough. And then there are other drawbacks. Waste problem has no solution. Yes, we can tuck it away with all the technology we know for maybe 3000 years. I do not know what, in 30 000 years' time, people might want to do with granite, why they might go into the ground, how they might stumble over concentrated nuclear waste. It will still be deadly at that time! Technologically, there is no way how we can solve that problem.
The second problem is where the reactors are going to be built. Lithuania is relatively stable, but it borders two countries that are less stable. Other plants are popping up at the moment in Northern Africa, Middle East. Look at the history. Israel built its nuclear bomb using civil technology; Pakistan used civil technology, India, too. Brazil, Argentina stopped their military programs, but got their knowledge thanks to civil technology. The list is quite long. If we are going to double the number of reactors they are not all going to be built in the US or the EU and the chance of proliferation will get much bigger. In other words, the main problems with nuclear power are: it is too little, too late; there are problems with waste and proliferation. And, in a nuclear power station, something can always go wrong.