|  26.06.2013

The worst crossroad: when Romania’s energy future and needs bleed alike

As a child, I grew up in a house in Bucharest. Unlike the central heating systems used for blocks of flats in most parts of the Romanian capital city, we used natural gas coming through underground pipes to our house to heat the beautiful ceramic stoves, one in each room. This system still works today in a few mansions, although most houses have central heating. Those too, use natural gas, whose price rose almost four times in the past 15 years.

One of my favorite memories from childhood was my grandparents’ house in rural Romania. They too, used stoves, but burned wood instead of gas. We all enjoy a romantic touch to the way logs glitter in stoves. I still remember today how my grandmother used to wake up at night to put another log on the fire during winter. That is still happening in today’s rural Romania, as too few can afford to burn natural gas because in many cases one monthly wage would not suffice to pay the gas bill during winter. But woods get depleted, too often illegally, and the price of fire wood also rose several times. That has started prompting too many to actually steal wood to either heat themselves or sell it, illegally, of course. 


But I also have gruesome memories from my childhood and adolescence in communist Romania related to heating. They have to do with a drop in the pressure of natural gas in households, which prompted dwellers in entire cities to go to sleep dressed in thick clothes. That was part of Ceausescu’s plan to use most of the gas for industrial purposes, while import less. And there are also the memories of poorly lit streets both in urban and rural areas, despite the fact that Romania had enough gas, fuel oil and coal-fired power plants, hydroelectric ones and at a certain point, Eastern Europe’s safest nuclear plant. 


In present days though, some of the most unpleasant moments occur when utility bills, mostly heating, knock on our doors especially at winter time. It’s the same all across the eastern European countries where prices have skyrocketed, while wages rose to a much lesser extent. Yes, it’s true: there are many families in Romania that sleep in the same tiny room at low temperatures, because they cannot afford to pay bills at winter. And heating and electricity bills are only getting higher each year, while wages don’t anymore since the global financial crisis.


This is how people out there in our cities and villages, who don’t know the nuts and bolts of energy, see things. They don’t know that much about the depletion of hydrocarbon reserves, or the thinning ozone layer and huge amounts or carbon dioxide. They don’t know how large a chunk of the final gas or power bills actually goes to the distribution companies leading to prices that are already at the level of Western Europe, where wages are several times higher than over here. They need to survive. They only have just one life to live. Their country joined the European Union and they accept there is a price to pay. Just that the price is sometimes unbearable and that governments make promises but always pay with public money.


Old power plants, more money. New ones, even more money. 


When it comes about introducing new taxes, governments are extremely innovative. Take the first registration tax on cars, or the tax on car engines capacity in Romania, that are higher even than those in Germany. The older the car is, or the more powerful its engine, the higher are the taxes one has to pay. It is said to discourage pollution and to encourage newer, less-polluting cars. But I never heard of any tax any government has imposed on state-owned power plants that have long exceeded their lifespan, whose yields are unbelievably low and pollution levels unacceptable. Of course not; if any government did that it would have to take the money from all taxpayers, including the many earning just the average wage whose votes they rely on in elections. And they would have to kill the non-competitive business schemes that all these entities have developed, which over time proved to be extremely difficult… 


Instead, energy bills go higher each year because each of these plants burn much more gas or coal to produce the same amount of power as other similar installations with new technologies do in more developed countries.

There is not even one state-of-the-art gas-fired power plant that any government has completed in Romania in the past almost 24 years since the country broke with communism. There’s just one, though built by a Romanian company that went private, under an extremely advantageous legislative incentive related to preferential gas prices from internal production.


It’s always been clear to all governments that Romania needs to replace its obsolete power-generating capacities. And yet, nothing much happened. Studies show that Romania will need to find ways to secure as much as 40 billion euros over the next 20 years to build new power plants. Those power plants though, if fired with natural gas, will likely be the last ones if current estimates saying natural gas will suffice only for the next 30 years prove to be true.


Of course, we have a new story, about shale gas, which some say may be enough for the next 100 years here. But not even one cubic meter of that was pumped out yet in Romania.


Never mind natural gas, traditional or shale, some may say. We’ll always have the nuclear and renewables option. Really? But investors seem not to be that hot on nuclear after Fukushima, at least for now, while renewables got the biggest possible blow in Romania just this month, when the government dramatically changed the rules during the game, likely losing some 3 billion euros in planned investments.


The truth is there’s no long-term strategy on energy in Romania. Ah, well, there is one, until 2020, that is still to be found on the Economy Ministry’s website, left over from the previous government, which the current government hasn’t yet found the time to deny or change.


What Romania needs more than ever before is indeed a sound mid- and long-term strategy on energy. It has actually needed it for some 15-20 years, and some people even wrote a few of them. But nothing has yet been implemented in a responsible, sound manner.


The future of Energy belongs to no party or government 


Energy and ways of producing it will no longer be a matter of choice 20 years from today as it is now. By that time hydrocarbon and other fossil reserves simply will not suffice to produce the amount of energy needed, while pollution levels would become unbearable. That’s precisely why governments are not the ones to choose what type of fuels a country should use, but just make sure responsible debates result in sound strategies that get implemented.


It’s clear the problem is that replacing the conventional energy-production capacities on a large scale with new, less-polluting ones takes time and it also takes using even more power to produce the more environment-friendly sources of energy production such as concrete for water dams, steel for windmills, plus other materials for the solar panels. Assuming that the world would develop safer technologies to resume building nuclear plants on an even larger scale than thus far, such constructions would also take considerable time and require massive use of conventional energy sources until they are completed.


So, the problem, or more exactly the dilemma, is what primary resources of energy can the world use to both protect the environment and “buy time” until it manages to achieve a real diversification of energy production capacities that would warrant for an improved environment and more energy security? One of the very few answers to these questions is, obviously, natural gas. It clearly isn’t an endless resource, but can be just about enough to help the world preserve lower carbon emissions and “buy time” in a safer way than any other type of fossil fuel until our children and grandchildren will diversify to a new era of energy resources and security. (Natural gas is a fossil fuel too, like oil or coal, but its carbon footprint is considerably lower when burned in power plants or used by vehicles.)


Meanwhile though, the race for renewable energy must not be delayed or postponed. The more advanced a country will be with such capacities, the brighter its future will look.


True enough, Romania’s original support scheme for renewable energy was somewhat overcompensated. While I won’t discuss the reasons and interests why that happened during the time of the previous government, let me just mention that the latest action of changing it on grounds that it has caused unbearably high power bills to the population is false. In fact, the case that the market is not encouraged to work properly is causing bills to increase. At the end of the day, making old power plants a priority again is going to create even higher costs, not to mention that replacing those plants would also bear giant costs to the population in the absence of a clever strategy that could transfer them to properly incentivized investors. 


If I were to live for another 40 years, my infant son will probably tell me that that he finds it unbelievable that we polluted the Earth to the extent we did and built so many steel plants just to lay pipelines over thousands of kilometers while other sources of energy were so handy. It’s similar to how I used to listen to my grandfather’s stories about using pigeons to send messages back home during World War I. The problem is some of us still use pigeons despite the evidence that cell phones and the Internet have been around for a while already…  


There can be no human future without energy, as there can be no human life without air, food and water. It’s an axiom. The facts are there and everyone knows them. Buying another year or two of postponing strategic decisions for certain political or populist interests is going to cost us a lot more just around the corner. And it’s going to cost the generations to come immensely. They shall not pardon us for our lack of action today.


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