Writing you from Prague means the summit has started, this year we see the wind turning in another direction. The financial crisis has not been really central but of course it has resulted in a slow down and delay of large scale generation projects. More importantly however is the clear vision on the future mix of our power production. It is clear, nuclear is back. To achieve the reduction of carbon emissions all experts confirm that nuclear will play a larger role and replace old coal technologies. That does not mean that coal is out, in all statistics it is assumed to have CCS(carbon storage) by 2025. Of course this is a gamble as nobody knows yet if it will work on a large scale. One of the things that became clear that carrying carbon over a long distance is not possible. As the carbon price is still very low today it is interesting to see if the price will go up to the range of 50 tot 60 Euro per ton, experts say that this is the number needed to make CCS possible. Renewable energy is still very much based on the generally known goal of 20/20/20 by 2020, meaning that we will have to build roughly 20% green production capacity.
For a small country as Belgium the target is almost 19% by 2020 of build production to achieve 13% output of green power. The yearly cost of this will rise to 2 billion Euro per year on top of the actual energy price we pay today. This means that we will get a drastic rise in price(more than double) for all of us in order to achieve these goals. We can only hope that our future governments are committed enough to resist when public awareness becomes bigger about the future cost of our electricity.
Also important is the reduction of carbon and the financials coming with that, only for Europe it is estimated we will spend more than 2 trillion dollar on new generation to reduce the carbon targets that our leaders are setting in Copenhagen. Of course we are talking of a period between 30 to 50 years. When taking into account the whole world we are talking about 13 trillion dollars, however this stays within certain limits. When looking at the numbers it means doubling the cost for energy in general, for Europe for example we can go from 1 to almost 3% of the GDP. More important is how to estimate if there will be an impact on the annual growth? As far as investments are concerned this can have a positive effect but it will depend on the future oil and gas price.
More to come from Prague..