Rhein on Energy and Climate

The recent deal agreement between EON, the biggest European power utility and Abengoa Solar, a the leading Spanish solar solar power companypower generator, for the to jointly construction and operation of build and operate two 50 MW solar thermal (CST) power plants stations in Seville underlinessymbolises important the major changes under way in European power generation.

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All major utilities, with the exception of ENEL, have progressively established their subsidiaries for renewable energy:, starting with wind, and most recently entering also the areas of Photovoltaic Power (PV), and Concentrated Solar power generation (CST), biomass and, of course, hydro. .

They all intend want to generate an increasing share of their electricity from renewable sources, in particular wind and solar, and to progressively replace their fossil – and in some countries like Germany even also their nuclear – power capacities.

Thus EON intends plansto generateing 36 percent of its electricity from renewable sources by 2030 compared to 13 percent today.

This drive into renewable electricity generation is being driven by due to two major forces:

· The expectation of rising costs of fossil and nuclear power generation, due to rising world market prices.

· The EU-wide C02 emission caps and targets for the share of renewable energies, , which will make electricity generation from fossil sources it impossible or increasingly expensive or even impossibleto generate electricity from fossil sources.

This trend is fast becoming e a global oneuniversal. American and Chinese utilities are driven by similar motivations and regulatory constraints.

The question is if the changes are occurring fast enough.

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For the EU to reduce its C02 emissions by more than 80 percent until 2050 will require a 100 percent fossil-free electricity supply. Considering a 40 year life-time of power plants the EU will very rapidly have to put an end to commissioning new fossil power plants. This will be hard to swallow for Poland, which fears having to lay off thousands of coal miners.

Whatever these legitimate concerns, the Commission need to rapidly trace the time frame by which the EU will be able to decarbonise its power sector by the middle of the century.

Brussels 30.11.09 Eberhard Rhein

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