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Wishing Bonn environment

S. Gopikrishna Warrier

This week the Sixth Conference of Parties (COP-6) to the Climate Change Convention will begin at Bonn, Germany. Environment ministers from the member countries are expected to restart the negotiations on putting in place the Kyoto Protocol for controllin g the emissions of the greenhouse gases.

In the eight months since the negotiations were abandoned at The Hague over differences between the US and the European Union, the positions have driven further apart for the two major actors.

The US President, George Bush, who took office after the Hague meeting, had publicly declared his country's intention to move away from the Protocol in March this year. The member countries of the EU, on the other hand, have stated that they are committe d to the Protocol.

Presumably the decision to choose Bonn as the venue has been taken since it houses the Secretariat for the United Nations Convention on Climate Change (UNFCCC). This is one of the many international offices that have moved into the space created in the c ity with the seat of the German Federal Government being moved to Berlin.

However, the meeting comes at a time when the German society itself is going through energy policy reforms. The Federal Government is caught between two commitments -- to phase-out nuclear energy on the one hand, and reduce GHG emission from fossil-fuell ed power plants on the other.

With the Green Party -- whose origin itself was on a strong anti-nuclear platform -- becoming a ruling coalition partner in 1998 with the Social Democratic Party, the agenda for the phasing out of nuclear power became strong.

A senior Federal Government official told a team of visiting journalists, including this writer, that an agreement was signed between the Government and the power utility companies in June 2000. The agreement, which took one and a half years to negotiate , fixes a life of 32 years for nuclear power plants. As a result the last plant is expected to close by 2021.

Phasing out nuclear power is a rather difficult step since 12.8 per cent (1997 figure) of the power consumed in Germany comes from this sector. According to UNDP's Human Development Report for the year 2000 (HDR-2000), the total power consumed in Germany in 1997 was 544 billion units. This would mean that the German Government will have to find a different source of production for at least 70 billion units of power.

Combined with this is Germany's commitment to reducing carbon dioxide emissions as per the requirements of the Kyoto Protocol. Though the European Union's combined commitment is to reduce the eight per cent of carbon dioxide by 2008-2012, Germany on its own wants to reduce 25 per cent.

The aim is to decrease the share of power generation from coal from the present 14 per cent to 12 per cent in 2020, and lignite from 11 per cent to 10 per cent. In the same period, the aim is to increase production from natural gas is from the present 21 per cent to 28 per cent and oil from 38 per cent to 41 per cent. Renewable energy (RE) is expected to grow from the present three per cent to seven percent. This sector's growth is obvious from the fact that its contribution was only 0.5 per cent in 199 7. The installed capacity of wind energy itself is as high as 6,000 MW.

The two commitments have caught the entire German society in a pincer's grip. If the aim was only to reduce carbon dioxide emissions then it could have very easily be done by decreasing power generation using fossil fuel and replacing it by power from nu clear plants, which do not have any carbon dioxide emissions. However, that option has been removed, by choice, with their decision on the phase out.

Though lesser than the US, the energy-intensive German society has reasonably high carbon dioxide emissions. HDR-2000, using 1996 figures, states that country with a population around 80 million has a 3.6 per cent share of the global carbon dioxide emiss ions, with a per capita emission of 10.5 tonnes during that year.

A comparison with the figures of the US and India is necessary to put this in perspective. The US, in the same year, had 22.2 per cent of the global share, with a per capita emission of 19.7 tonnes. India, on the other hand, had a share of 4.2 per cent, with a per capita emission of a mere 1.1 tonne.

Obviously somebody has to pay for the transition. Much of the cost increase is being passed on to the consumer, and in the recent period there has been an increase in the price of power and petroleum fuels for the German consumers.

On the other side of the spectrum, the Government has decided to encourage RE production at decentralised level to encourage families to generate it. The Federal Government has introduced a programme to install solar photovoltaic (SPV) panels on one lakh roofs every year at a cost of DM 200 million. If the families generate surplus power then they can get as much as 99 pfennings per unit of power sold to the grid.

To supplement this all new or reconstructed Federal Ministry buildings will have SPV panels on their roofs. With many of the Federal Ministries moving over recently from Bonn to Berlin there is enough scope for this. Even the new Chancellory building, un der construction in Berlin, is supposed to have its own power plant.

There is of course a question of efficiency of these panels, considering that there are not many bright days in a year. Similarly, the wind farms that have proliferated on the northern coast of Germany have an average efficiency of 25 per cent. According to Heinz Otto, President of the Hamburg Branch of the Federal Association of Wind Energy Producers, in his region the turbines run for 1,500 hours in a year at full speed, and 2,000 hours a year at half speed.

However, the price at which power from renewable sources is picked up is rather attractive. Farmer Peter Stehr, who owns 25 per cent of a six-unit wind farm near Hamburg, gets a very good price for the power that he generates. At 27 pfennings a unit he g ets enough to make it a viable proposition.

The incentive policy for RE is interestingly different from that in India and may hold more promise in getting higher generation. In India the incentive is provided in terms of accelerated depreciation and subsidy for establishing RE generators, but ther e are no incentives for running them. In Germany there is no incentive for setting up the generators, but the utility companies give a higher price for purchasing this power.

The difference is critical. While the German company or family producing power from RE has an incentive to keep his equipment running to amortise his capital cost, his Indian counterpart's incentive is over once the equipment is installed. And if one RE equipment remains idle it has a multiplier effect in reducing the confidence of others who would have liked to install it.

German utility companies average out their cost of power from a basket of sources, mark up their margins and sell to consumers. At present the higher cost of procurement of RE means a higher average selling price for the utilities.

However, when the RE technologies and efficiencies grow the cost of power from them can reduce. This could mean that in the long run, despite the RE component of the basket growing, the consumer need not necessarily be paying a higher effective price. St ung by an increasing energy cost in the short run, the consumers may also be forced to look at ways of conserving energy.

It is these options for good energy housekeeping that the US missed out when President Bush stated his decision to move away from the emission reduction targets of the Kyoto Protocol. Perhaps the US delegation will take back a lesson or two during their stay in Bonn.

(Feedback can be sent to warrier@thehindu.co.in)

Picture by the author