Monday, January 18, 2021
Home Climate 2020: an eventful year

2020: an eventful year

The coronavirus pandemic made the headlines of this past year. As many experts compared it to the SARS experience of 2003 and the financial crisis of 2008, the current pandemic hit very hard the energy industry.

However, we might say that Central and Eastern Europe, a region heavily reliant on gas, has responded very well to the crisis, with gas companies showing incredible resilience and others underlining once more their commitments to fighting climate change.

LNG: undisputed protagonist in CEE

Liquified Natural Gas (LNG) was the undisputed protagonist. Already at the end of 2019, LNG was for the first time the second source of gas to the European Union, covering 28 per cent of the total imports. According to Gas Infrastructure Europe (GIE), the association representing the interests of European gas infrastructure operators, the high demand of LNG  demonstrates its importance in the post-COVID-19 economic recovery and reaching Europe’s climate and energy objectives.

Not only LNG contributed to the security of supply, but it was also important for the continent’s energy diversification, with new routes and regasification facilities starting operations exactly in the CEE region.

In April, Polish oil and gas company PGNiG commenced commercial operations at the KN-operated Klaipėda LNG reloading station, strengthening the regional small-scale LNG market.

From the South, all the free terminal capacity at the LNG terminal in Krk, Croatia, has been booked for the next three gas years. First, MFGK Croatia, subsidiary of the Hungarian state-owned energy group MVM, had booked 6.75 billion cubic metres (bcm) from 2021 until 2027. In May, also MET Croatia Energy Trade, a 100 per cent subsidiary of Switzerland based MET Group, submitted a binding offer to book capacities for a three-year period, amounting to 1.3 billion cubic metres overall. Finally, an offer was also received by POWERGLOBE QATAR which will deliver LNG cargoes mainly from Qatar and the US.

On the eastern side, the Trans Adriatic Pipeline (TAP) began commercial operations in November, after four and a half years after the inauguration of construction works in Thessaloniki. Indeed, Azerbaijan’s supply is regarded as an important project that will improve the security and diversity of the EU’s energy supply. 

LNG is also important for a carbon-neutral future. Green forms of LNG could be a viable fuel for the shipping and aviation industries to meet their greenhouse gas emission reduction targets.

A couple of things we must point out: US Secretary of State Mike Pompeo announced additional sanctions against Nord Stream 2 and the second line of Turk Stream. Moreover, Turkey’s President Recep Tayyip Erdoğan announced the discovery of what he defined as the largest-ever natural gas reserve of its history in the Black Sea, which comes at a time of tensions between Turkey and Greece concerning oil and gas exploration in disputed waters in the eastern Mediterranean.

Words from Brussels

Also, the European Commission has worked endlessly to keep its climate commitments underlined in the European Green Deal.

In March, a new Circular Economy Action Plan was adopted, in order to make Europe’s economy fit for a green future, strengthen the continent’s competitiveness while, at the same time, protecting the environment and give new rights to consumers. Unfortunately, it seems to be a foreign concept in CEE and despite the number of small initiatives is increasing, most of them lack public visibility.

Energy Commissioner Kadri Simson presented several agreements and strategies, including the Clean Energy for EU Islands initiative, signed by 14 Member States including Croatia and Estonia, whose renewable energy potential is important for Europe’s successful transition to clean energy.

In July, the Commission adopted the long-awaited hydrogen strategy which addresses how to transform this potential into reality, through investments, regulation, market creation and research and innovation. Among the most recent ones, we recall the offshore wind strategy, the plan to reduce methane emission and the sustainable and smart mobility strategy.

And while the EU has decided to increase the 2030 emission reduction target from 40 to 55 per cent, many CEE countries are considering it unrealistic and fear a not-so-just transition.

Solar can become the largest power source

Eventually, the current crisis is just another proof of why all European countries need an energy transition. In April, many feared that governments might have put a brake on needed reforms to address climate change while focusing on handling the coronavirus pandemic. However, company leaders from various segments of the economy shared their experiences and laid out their agenda to reduce carbon emissions.

Renewables showed a growth already in 2019, with the International Energy Agency (IEA) forecasting that solar energy can become the largest power source in Europe by 2025. And, although the final National Energy and Climate Plans (NECPs) show that EU States are moving in the right direction to meet renewable energy targets, they still have to overcome some boundaries to boost solar capacities.

Renewables, especially in CEE, can play an important role in transforming coal regions. Poland, for example, appears among the leading countries when it comes to offshore wind potential. At the same time, it is also the most coal-dependent country in the region. Although coal must die, coal regions don’t need to. On the contrary, they can play an active role in the energy transition.

And while achieving energy security is at the top of the authorities’ agenda for many countries in the region, the Black Sea untapped energy potential could actually serve as a bridge between today’s use of resources and a future based on renewables.

Hydrogen: the Holy Grail of the power industry

Surely, the word that was on everyone’s lips was hydrogen. At the end of November, Europe’s top renewable energy organisations SolarPower Europe and WindEurope, supported by Breakthrough Energy, launched the Renewable Hydrogen Coalition to give voice to businesses and thought leaders that will be decisive in positioning Europe as the world leader in renewable hydrogen, produced via electrolysis and based on 100 per cent renewable electricity.

Poland’s dominant gas firm PGNiG announced the launch of a comprehensive hydrogen program and the country as a whole is taking some important steps regarding its own hydrogen agenda, by signing a letter of intent with the major energy and transport companies on the Polish market. But is hydrogen really the Holy Grail of the power industry?

So, a year full of events. And 2021 promises to be eventful as well, with the new US administration coming up and an EU recovery fund targeting climate-change related projects, Central and Eastern Europe will be an interesting region to read about next year.

Most Popular

TGE and PGNiG set up cooperation to create a biomethane market in Poland

The Polish Power Exchange and PGNiG signed a cooperation agreement with an aim to develop together a biomethane market, which offers considerable potential for the energy transformation of the Polish economy.

MAN Truck & Bus Slovenia partners with Petrol to develop sustainable logistics transport

MAN Truck & Bus Slovenia has signed a letter of intent with Petrol for the development of sustainable logistics and urban transport, to help achieve the goal of reducing CO2 emissions in urban centres.

Innogy signs an agreement with Czech Ministry of Industry to introduce new energy-saving measures

Innogy has signed an agreement with the Ministry of Industry and Trade to improve the country’s energy efficiency and introduce energy-saving measures. Thus, the country is aligning with the EU Directive that obliges countries to save 0.8% of their yearly energy consumption by 2030.

A hundred efficient solutions to reverse global warming

Not only one book, but a hundred efficient solutions to stop the climate catastrophe. The New York Times bestseller edited by Paul Hawken, Drawdown, offers many ways to save our planet. And avoiding food waste is only one of them.