Europe: ‘The first economy of the low-carbon age’

Michael Baab -- Control Engineering, 3/5/2008

It’s a new era in the fight against climate change, says European Commission president José Manuel Barroso. The 27 countries of the European Union have proclaimed far-reaching mandates to reduce carbon emissions and boost renewable energy use. He called on the rest of the world to join the EU in “the great project of our generation.

“I believe that this will be an important moment for Europe,” he said, adding that he hoped the bloc’s actions will spur change in other parts of the world. “If we want a global agreement it is absolutely indispensable that Europe leads the way to get others to follow.”

20-20-20 vision
The plan delivers on a decision by European national governments in March 2007 that in overall averages, they should by 2020 reduce greenhouse gas emissions by 20% from their 1990 levels, and ensure that 20% of energy use comes from renewable sources, such as wind and solar power. In Europe it’s the “20-20-20 vision.”

In the unlikely event that the international community (read: U.S., China, and India) should agree on the Kyoto targets for emission levels, Europe will raise the bar and commit to 30% greenhouse gas cuts.

And the EU can boast it is on track: By 2005 the bloc had cut greenhouse gas by 6% from 1990 levels and was relying on renewable sources for 8.5% of its energy.

But that’s not enough and the percentages, of course, vary widely from country to country. Small countries such as Malta and Luxembourg have practically no renewable energy sources; while in Sweden, almost 40% of energy consumed is renewable—and this nation of 9m people has a goal to be 100% oil-free by 2020. Most countries fall well into the middle-to-lower end; Germany has 5.8% and must go to 18%; Britain had 1.3% renewable in 2005, and is mandated to reach 15% by 2020.

France, in particular, will have some negotiating to do. Its highly successful 58 nuclear power plants produce nearly 80% of the electricity, and the country is looking to build more. Its preferred source of energy is low-carbon—but uranium is not considered a renewable source by the EU.

How much will Kyoto cost?
Reaching the targets won’t be cheap. It will cost taxpayers about €60bn ($87bn) a year, or 0.45% of Europe’s GDP. This amounts to about €3 a week for every European; a family of four would be obliged to pay €600 per year, most likely in increased energy costs. Germany has already started charging on household utility bills and Britain is preparing to do so as well.

To offset these projected costs, EU politicians like to point to the Stern Review, a chilling report prepared for the UK government by Sir Nicholas Stern, former chief economist of the World Bank who says the “costs of inaction” on environmental issues will be ten times greater. It outlines a number of extreme environmental changes that could happen, such as the displacement of 200 million people from rising sea levels and a decrease in global GDP by 3 per cent. Such findings are deeply controversial but add fuel to the rhetoric for climate change.

Automation’s answer
These measures, as painful as they seem, have the potential to change the way Europeans live and do business. If properly enforced, say the bureaucrats, the various targets and mechanisms will drive investment to low carbon technologies and business models. They see attractive “clean technology” companies arising, with thousands of smart “green collar” jobs, hopefully in time to counter the decline of the older carbon intensive industries.

There are two ways automation suppliers will benefit from these changes. First, renewable energy construction projects call for vast amounts of instrumentation and computer control, because the energy is usually acquired in relatively small amounts across large areas—such as wind farms or solar panels—and must be properly channelled to a central resource for conditioning and transfer to the electricity grid.

Secondly, automation suppliers already profit from the growing realisation that using energy more efficiently may in itself have a major role to play in carbon reduction. This is an option that remains hidden to many companies, who have reduced engineering staff to a minimum in order to become “lean and mean.” They do not have the means to measure energy consumption and make engineering decisions on where to cut back. For them, energy efficiency may be an important concept, but it’s a non-core activity.

Energy Insights, a consulting firm that works closely with Honeywell, believes that a major barrier to energy conservation in industry is the poor measurement and diagnosis of the problem, and consequently a lack of awareness and information regarding the achievable benefits.

“Energy management is a full-time job,” says Roberta Bigliani. “It requires dedicated processes, people, and tools. There are significant benefits, and in many cases the payback period of investments is less than three years and energy-efficient projects can save from 15% to 50% of energy use.” She suggests that companies lacking the manpower outsource the activity to the likes of Honeywell, who offers an energy performance contract that includes financing and guaranteed results. The company has worked on over 5,000 such contracts around the globe.

Schneider Electric is another automation company that believes the most effective approach to energy consumption is through better control, and the key to controlling energy is making good use of the latest technology.

A big target for energy reduction is the ac motor. Industry consumes over 40% of all electricity and more than two-thirds of this huge amount is for electric motors. Most of these can be made more efficient by controlling their switching on or off or by controlling their speed, which is a relatively simple task of equipment retrofitting.

Yet, as Schneider Electric points out, most manufacturing and process plants fail to take this step because those in control of the operations costs (the “overhead”) fail to communicate with those in charge of the management of production processes. The engineers directly running the process are concerned with improving productivity and output. Higher management is concerned only with paying the overhead costs, and are often unaware of savings that could be made because it is never on the agenda in engineering meetings.

“In no other sector is the communication gap wider than between those charged with making energy decisions in industry, and those who actually know how energy can be saved,” says Schneider Electric’s Paul Hamilton.

Europe wants to lead the rest of the world in energy conservation. Whether or not industrially-produced carbon dioxide has made, or will make an impact on the global environment remains conjecture, but there is one certainty we all have to accept: that the supply of fossil fuels is rapidly diminishing, and won’t last forever. The sooner we shift to alternative energy strategies, the better off we will be.