Friday, 4 January 2013

British increase in coal generation is much bigger than Germany's

The latest energy statistics suggests that Germany is doing much better in restraining coal used to generate electricity compared to the UK. Yet, to read the British press you would automatically assume that the exact opposite was true and that coal use was increasing dramatically in Germany compared to the UK - All, allegedly, because of the German policy of switching away from nuclear power and towards renewable energy and energy efficiency.

According to this week's Economist magazine 'In Germany, RWE, the biggest user of coal in Europe, generated 72% of its electricity from coal and lignite (a dirtier, low-grade form of coal) in the first nine months of 2012, compared with 66% over the same period in 2011'. The article also comments 'By displacing conventional forms of energy this way renewables have undermined utilities’ finances. Moody’s, a ratings agency, recently said the whole sector’s creditworthiness is under threat. In response, companies are switching from gas to coal as fast as they can, so renewables are in fact displacing gas but not coal.'

What the Economist does not mention is that the shift from coal to gas is independent of whether, like Germany, the country has a policy of phasing out nuclear power. This has to do with relative energy prices. Indeed, in the the UK, despite the fact that its pro-nuclear establishment has ordered the extension of the life of existing nukes and wants (wishfully!) to build more nuclear power, the shift from gas to coal is even bigger than the figures quoted in the Economist! As is stated on page 37 of the latest statistical digest produced by the Department of Energy and Climate Change:
'Gas’s share of generation fell from 46.3 per cent in the third quarter of 2011 to 28.2 per cent  in the third quarter of 2012 due to high gas prices. It was gas’s lowest share of generation  for the third quarter in at least 14 years. Coal’s share increased from 22.9 per cent to 35.4 per cent over this same period'. See

It does seem clear that the Economist published its piece in a context where a lot of British public opinion seems to live in some dreamworld where everything is always worse once you step onto the continent. In this case people may want to hear stories about how the Germans are foolish green idealists while the Brits are sensible followers of a sustainable energy path. The story also seems to suggest that a policy which weakens the hold of German utilities on energy markets is a bad thing. Is it really? So who is the Economist writing to please exactly?  The Economist claims to be able to give people sound business information, but in publishing an alarmingly selective set of statistics it seems to be grossly failing in this case.

Of course, as this blog has suggested, the policies in Britain are designed to safeguard and strengthen the grip of the major utilities on the energy business. This strategy is very damaging to a sustainable energy strategy. The truth is that the Germans are much nearer to getting things right than we are.

1 comment: