Prodi: time for EU to embrace new era for energy and ‘hydrogen economy’

Date: 27/03/03

Our responsibility to future generations demands a commitment to renewables' research, writes the European Commission President

OIL, natural gas and hydrocarbons in general are the energy sources on which our industrial civilisation is based. They are great resources, but they also give rise to two grave dangers: serious deterioration of the environment and dependence for energy supply on politically unstable countries.

If the consumption of countries in the heavily populated developing world, such as China and India, was anything near that of the United States, Europe and Japan, those two risks would be sure to lead us rapidly to a global disaster.

The problem is no longer whether there will be enough oil and gas for everyone, as we used to ask ourselves in the 1970s, but whether we will have enough atmosphere, enough sea and rivers to absorb all the waste products from their combustion. And there is only one answer: no way.

We urgently need to start the transition to a new era and move away from our current dependence on fossil fuels. The solution now embraced by Europe, the US and Japan involves using hydrogen, an energy source whose storage, transportation and end use is completely pollution-free. Hydrogen is one of the constituents of water and is therefore available in vast quantities. Hydrogen can be used in the generators of clean energy which we call fuel cells. These produce electricity by combining hydrogen and oxygen; the only by-products of the process are water and heat.

Similar in their structure to traditional batteries, they cannot be discharged as long as they are supplied with hydrogen; they can be used equally in large fixed plants such as electricity generating stations and in smaller components that operate irregularly, such as vehicles and portable power units for lap-top computers, video cameras and mobile telephones.

In all applications the energy is extracted without combustion and without moving parts, in a silent, clean and highly efficient process. The cost of fuel cells is still high at present (some €4,000-4,500 per kilowatt), which means that they are reserved for the time being for "premium" uses (aerospace and military applications, providing backup for remote telecommunications installations).

It is expected, however, that costs can be brought down quite quickly and that, after 2010, synergies could emerge between fuel cells for residential and for automotive use.

But if hydrogen is to be used as a source of energy, it has to be extracted from water, natural gas or coal gas, thereby using primary energy sources. The primary sources which are ideal, because they eliminate environmental pollution and do away with strategic dependence on unstable regions of the world, are the renewables: solar, wind, hydro and geothermal. Electricity or heat produced from renewable sources can be used to extract hydrogen from water. Using the renewable sources to produce hydrogen not only offers environmental and strategic advantages but also solves the problem of their intermittence, since hydrogen can be produced when the sun is shining or the wind is blowing and stored for use when they are not.

In all these alternatives the cost factor plays a very important role, not least because we still need to learn how to account for the full costs of traditional energy supply systems in health and environmental damage. Technology is crucial, but we are confident that with a strong, focused effort in research and development the technological problems will eventually be solved.

Hydrogen can also be produced using electricity or heat from nuclear power, but the problem in that case lies not so much with the hydrogen as with the future of nuclear energy. Europe has centred its efforts on the largest possible use of renewable energies; a major item in our Sixth Research Framework Programme, in which it accounts for funds five times larger then in the Fifth. This choice was a major political decision proposed by the European Commission and approved by the European Parliament.

Our support for the Kyoto Agreement, aimed at curbing the greenhouse gas emissions that create climate change requires a consistent effort in research and development and public policies; this effort has strong political support.

However, the decade that we may still need before they can contribute significantly to the production of hydrogen makes it essential that the full spectrum of other technological options be considered to trigger the complex system of the "hydrogen economy".

In order to be realistic, we must be prepared to cooperate with different approaches, as long as the final result, the shift toward hydrogen produced via renewables, is fully shared.

If we properly account for the costs of the fossil fuel economy and trust the progress of technological development, we see that our effort makes a lot of sense. Therefore, while we are putting renewables and fuel cells in the front line of our research and development framework programme, we are not writing off technological options related to natural gas and coal gas.

The various aspects of the problem, (technology, financing research and development, distribution infrastructures, pilot transportation fleets, intelligent networks, incentives, public acceptance), are being analysed in order to define a credible road-map for government and market forces to work together. The results of this work, the "foresight report" prepared by the high-level group of top European scientists and industry representatives, will be presented in June.

Beside the EU, much of the potential for the hydrogen economy is driven by multinational corporations, not to mention the American and Japanese governments. This sets up a complicated matrix of relationships among companies and governments. We strongly believe in international cooperation and all the European research has strong connections worldwide. We are aware that the European strategy differs from America's in terms of timelines and priorities.

The focus of Europe on renewable energies is very clear; less so in the US.

The current energy bill that the Bush administration sent to Congress uses coal, natural gas and nuclear as primary energy sources of the industries with very little additional funds devoted to renewable energy and electrolysis; the White House has not set targets or timetables for increasing the use of renewable energy technologies. Only California has set a target of 20% of its electricity being generated by renewable energy by 2020.

This is a very different situation from the EU, where there is already a target of 22% of electricity being generated by renewables by 2010, and 12% of all energy being generated by renewables by the same date. Hydrogen plays a major role in reaching these targets.

Quality of the environment and climate change are felt as relevant factors in Europe and the reception for a clean, well diffused energy supply system is very positive. Beside this, the dependence of Europe on imported fossil fuels is higher then in the US (Japan is similar to us), and renewable energies may play a relevant role to decrease it.

We also have a long experience with high energy prices and gasoline taxation; this makes it easier for us to implement incentive fiscal policies to promote a new energy scenario related to hydrogen.

We must continue to push for tough standards for transport and energy production, in full support of the Kyoto Agreement. We strongly believe that managing this transition does not mean working against market forces, but rather accelerating them in the direction of a cleaner environment and lower dependence on oil-producing countries; however we must also emphasise a government-business-civil society partnership to help facilitate the transition to renewable sources of energy for the extraction of hydrogen.

Within this framework we can try to operate on parallel tracks with the US, toward a common goal; fully aware of our responsibility toward future generations, while moving along a demanding frontier in research and public policy.

Our responsibility to future generations demands a commitment to renewables' research, writes the European Commission President.