Financial Times: Ukraine Stand-off Aids Case for Renewables

April 4, 2014

Financial Times:

But the idea that Russia could threaten to turn off Europe’s gas is likely to change the way people think about the cost of renewable energy, some analysts say.

“It creates a different mindset about renewables,” says offshore wind analyst, Sophia von Waldow, of the Bloomberg New Energy Finance research group. “People no longer think, ‘This is very expensive and it’s affecting our energy bills’.” Instead, they start to see the benefits of having an independent source of electricity, she adds

Offshore wind power companies are among the most likely beneficiaries of such a shift in opinion, if it lasts.

Offshore wind is newer and more expensive than the two leading renewable technologies, onshore wind or solar power, meaning it will rely on subsidies for longer than its older counterparts.

Green power pioneer, Germany, is already looking at scaling back its support for offshore wind. The market leader, Britain, which has more offshore wind power than the rest of the world combined, wants to retain its dominance but is nervous about the costs.

That may be one reason offshore wind proponents such as UK energy secretary, Ed Davey, has seized on tensions with Russia.

Wind farms are not just a way of getting the green energy needed for a low carbon future, he told reporters as he welcomed the news in late March that German industrial group Siemens will build an offshore wind turbine blade factory in Yorkshire.

They also “play an important role at a time of international uncertainty that we see with now Russia and Crimea”, Mr Davey said.

Siemens has installed most of the 1,000-odd turbines in the 22 wind farms off the UK coastline and would clearly benefit from a Russian-inspired resurgence of support for the sector. Denmark’s Vestas, and France’s Areva would also be beneficiaries.

A plethora of other companies in the offshore wind supply chain would also welcome such a move.


In a climate of political, military and economic upheaval, the idea of self-sufficiency through renewables is fast gaining traction. The European Commission has set ambitious targets for the continent, proposing that the EU reduce carbon emissions, to 40 percent below 1990 levels by 2030, while at the same time seeking to increase the proportion of energy produced by renewables to 20 percent by 2020.

And whilst such ambition is admirable, for some utility companies more clarity is needed.

(Read more: Trouble with trash? Try turning it into fuel)

“First of all, we don’t know what to invest in,” Peter Terium, CEO of RWE, one of Europe’s leading gas and electricity companies, said in a report for CNBC’s Energy Future.

“How… [many] renewables do we need? How much CO2 reduction do we want to achieve? What about coal, what about gas? That’s not clear, so we don’t know what to invest in. Secondly, we don’t have the money to invest in those things,” he added.



11 Responses to “Financial Times: Ukraine Stand-off Aids Case for Renewables”

  1. dumboldguy Says:

    Ray Duray and I know that this is just window dressing for what is REALLY going on. Obama has promised $1 billion to Ukraine to help them avoid bankruptcy. Ukraine is going to turn right around and give that money to Russia to pay for gas. It’s really a US down payment to Putin for Russia helping us boost our natural gas exports by threatening to turn off the Russian gas or make it much more expensive.

    This may give renewables a boost somewhere down the line, but in the meantime it’s going to provide a growing market for all that LNG that we in the US and Canada want to export to Europe (and everywhere else on the planet). Why have we not seen much news about repurposing all the old LNG import terminals for exports? Canada wants to build 10 new export terminals in BC alone. Has Keystone XL distracted us?

    The real “boost” will be to the bank accounts of the fossil fuel folks like the Kochs, and secondarily to the politicians that they can now give virtually unlimited amounts of “campaign contribution” money (read “bribe”) because of the McCutcheon decision.

    Obama and Putin are in a “one hand washes the other” game here, and right out front where everyone can see it, no less. Turmoil in the natural gas world means higher prices and bigger profits. Ray was nattering on about “geopolitics” on another thread—there’s some of that here because Russia and Ukraine ARE “geopolitically” coupled, but the real story is the $$$$ and the run-amok “free-marketers”.

  2. redskylite Says:

    Empowerment used to be a highly (maybe overused) phrase in human resource circles (used to be called personnel departments) – the sooner Ukraine weans itself off reliance on gas from it’s ex K.G.B soviet overlords the better off they will be.

  3. cyhalothrin Says:

    Renewables or not, this political crisis should emphasize the importance of keeping nuclear power as an option for Europe (and elsewhere). I seem to recall a lot of you anti-nuke folks arguing that renewables backed up by gas turbines are the way forward.

    If the gas gets cut off for any reason, what will be the source of backup for wind – coal turbines?

    • If Europe wasn’t in thrall to the Romantic vision of “back to the land” (which supported a much smaller population than today’s, at a miserable standard of living) they would be much more amenable to nuclear energy.  Even the spent steam from nuclear plants could supply space heat, if plants weren’t located so far from populations out of fear of radiation.  (The 40-odd megawatts of heat coming out of the EBR-II’s steam turbine exhaust heated much of the Idaho National Laboratory complex.)

  4. Cy-coal is used for load following also. Nuclear does not load follow well. Your argument is all wrong.

  5. […] 2014/04/04: PSinclair: Financial Times: Ukraine Stand-off Aids Case for Renewables […]

  6. daryan12 Says:

    Actually I do a review of the different energy options for Europe in my blog recently

    Ultimately, there are no easier answers, no quick fixes. Renewables are certainly useful, but its worth remembering that the bulk of renewables output in the form of electricity, while natural gas is used for heating or electricity for peaking power. Similarly nuclear is little use, as its used for baseload (or some load following in France), not heating or peaking power.

    LNG imports from the US, or further afield would not be easy when you start calculating the scale of the tankers and plants you’d need to transfer all of that gas.

    My guess is that the solution will probably be renewables yes, but more immediately more energy conservation and probably a diversification with pipelines to Africa or the Middle East.

  7. Ilia Manev Says:

    The renewables hit the gas power generation in Europe in a very bad way.
    The biggest players at that market like Italy, UK and Spain generate now 30 to 40% less power from gas then in 2010

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