The interaction between wholesale and retail energy markets is hindering development of green energy in much of Europe. The increasing demand from end users for green electricity is not assisting the development of renewable generation, but resulting in an unnecessary premium. Consumers are only adopting green labeled electricity if they can exploit the subsidies that drive green generation.
Renewable generation is now providing significant volumes of wholesale power across Europe, and is capable of supplying a significant proportion of customer volume with ’green’ labeled electricity. It is therefore surprising that the majority of markets have a surplus of renewable production against demand for renewable electricity from consumers, energy-business-review.com reported.
For instance, Iberdrola [IBE.MA] expects to have renewable capacity capable of producing at least 2-3TWh by the end of 2005, yet had only 0.25TWh of I&C volume and 20,800 SME and residential customers on a renewable tariff in 2004. In the UK, green I&C contracts are becoming increasingly important, yet renewable electricity is not always supplied to consumers on a green tariff.
The exception to this rule is the Netherlands, where demand for green electricity exceeds that of supply. In 2003, the Netherlands imported two-thirds of its renewable power to meet demand from consumers which had switched from the ’grey’ to the ’green’ tariff. The key reason for this is that suppliers were not able to use a green tariff premium, but rather the opposite where a retail tax incentive was a driver for renewable generation and customer switching.
In the majority of EU markets, only favorable regulatory systems, such as the renewable obligation, have encouraged the development of renewable energy sources. Where renewable electricity remains scarce, such as in the UK, it is in the supplier’s interest to market green power at a premium, where the price results in low consumer demand in volume terms. If consumers demand more green electricity, the retail price will go up, rather than more green generation being commissioned. This has resulted in renewable generation competing against the decision to build conventional thermal stations, rather than on the basis of consumer choice and demand.
Residential consumers therefore do not believe paying a premium will encourage more renewable generation, and I&C consumers are buying green labeled electricity to exploit subsidized available renewable capacity. This is an odd fashion for the retail and wholesale markets to interact, and this discord is hindering consumers’ adoption of green energy.

Soaring demand for crude oil in China, India and other developing nations has set off a scramble to secure future energy supplies that could undermine the economic and national security of the United States.
The United States, Europe and Japan increasingly will be forced to compete with developing nations, especially China and India, the world’s two fastest growing major economies, which comprise more than a third of the world’s population.
“The center of gravity in world oil is shifting,“ said Daniel Yergin, the chairman of Cambridge Energy Research Associates and an author of “The Prize,“ an award-winning history of oil.
“Last year, Asia consumed more oil than North America,“ Yergin said. He predicts an oil supply shift, too, as Africa, Russia and former Soviet republics compete with the Middle East to fill the growing demand for oil.
The developing world’s growing appetite for oil is one reason gasoline prices have shot up for Americans. Over time, these emerging economies will also shape not just global oil flows and prices but also world events, said Anne Korin, the co-director of the Washington-based Institute for the Analysis of Global Security, an energy security think tank, yahoo.com reported.
“A third of humanity doesn’t want to ride bikes anymore,“ she said. “That has profound geopolitical implications.“
China and India already have moved aggressively to strengthen their relations with two oil-rich countries-- Sudan and Iran--undermining US sanctions against Sudan’s regime and undercutting US efforts to halt Iran’s nuclear ambitions.
“We are in a situation right now where the energy consumption of the developing world is having an impact on the foreign policy options of the United States,“ said Korin.
For now, the United States remains well positioned, at least when it comes to energy supplies. The proven reserves in the Middle East make it the expected primary global supplier of crude oil. Iraq, where the United States has forcefully established a beachhead, has proven oil reserves of between 78 and 112 billion barrels.
But political instability, increased terrorism and the spread of fundamentalist Islam make it unlikely that today’s oil-production map will look the same 20 years from now.
What’s clearly changing is demand. The Paris-based International Energy Agency, a research arm of the world’s most developed nations, projected last year that oil demand will grow by 45 million barrels a day to 120 million barrels a day by 2030. More than $3 trillion will be invested to find and produce that oil, and more than half of that investment will serve the needs of emerging economies.
The scramble to find and develop new oil fields and natural gas wells will occur in places such as eastern Siberia and West Africa, as hungry nations hedge their bets should leading producers such as Saudi Arabia or Iraq falter.
“You need energy to develop an economy, so there’s a great strategic value in securing energy assets,“ said Antoine Halff, an oil expert with the risk-management company Eurasia Group in New York.
One likely winner is Russia, along with some of the now independent states that formerly made up the Soviet Union. They have proven reserves of 78 billion barrels but the US Geological Survey estimates that there may be 171 billion barrels of estimated undiscovered oil in the region.
“Russia is virtually unexplored. Their potential is enormous,“ said Gary Swindell, an independent petroleum engineer in Dallas whose business is estimating reserves.
Africa is another winner. It’s got 87 billion barrels of proven reserves and estimated undiscovered reserves of 125 billion, mainly in West Africa. Central and South America have roughly the same, but, as in Russia, many are in prohibitively remote areas.
Elsewhere in the Western Hemisphere, Canada and Mexico are expected to remain the second and third largest US oil suppliers. But smaller oil players are courting Washington’s competitors.
In Venezuela, the fourth largest US oil supplier, President Hugo Chavez, a self-described protege of Cuban dictator Fidel Castro, is trying to rewrite concessions to US oil companies and has invited China and India to participate in oil exploration. Ecuador and Colombia are negotiating oil deals with China, too.
China, the world’s fastest-growing economy, is also making heavy diplomatic and energy investments in Africa. It needs to: China is projected to consume within 20 years what the US consumes today--21 million barrels a day.
Although China is the world’s second largest oil consumer after the United States, it’s only the fifth largest importer because of its own oil reserves. That’s changing, however, because China is rapidly exhausting wells in Manchuria and the South China Sea. Soon its reliance on foreign oil will rival America’s.
China’s President Hu Jintao in mid-April cemented a “strategic“ partnership with Nigeria during a state visit to Beijing by President Olusegun Obasanjo. Nigeria is West Africa’s biggest producer and a major US supplier. China’s already trading development loans for energy development participation in Chad, Gabon and Angola.
In Sudan, China ignored evidence of genocide in the country’s long-running civil war to entrench itself. It also effectively voided unilateral US sanctions imposed because Sudan sheltered Osama bin Laden before he moved on to Afghanistan.
Sudan’s widely reported human rights violations also sparked protests in Canada and Sweden that drove oil companies from those countries out of Sudan in 2002 and 2003. China, which now gets as much as 10 percent of its imported oil from Sudan, has repeatedly blocked UN efforts to impose anti-genocide sanctions against its trading partner.

Geothermal powerplant at The Geysers near the city of Santa Rosa in northern California.

In the next 35 to 45 years, the world may become faced with desperate energy shortages leading to a possibly deadly economic crisis that is forecast by some experts to begin at around the year 2040 to 2050. This will be the effect caused by huge shortfalls in fossil fuel production and availability. Petroleum, natural gas and even naturally fissile nuclear fuel resources will be nearly exhausted. Also our old standby, coal, is expected to disappear sometime within the next one to two centuries.
Energy shortages will have a profound effect on the operation of our military establishment and our ability to produce and deliver food and other essential resources that are necessary to sustain life. Our transportation systems will begin to falter. Even the ability to stay warm will become an issue. In addition, world population will be 50 percent greater than it is now, straining demand for resources beyond even our current production capabilities, townonline.com said.
Is there a solution for the long term? The answer to that is yes, provided we start building the necessary infrastructure now. The small country of Iceland is leading the way with an ongoing construction of an all hydrogen society based on their abundant hydroelectric and geothermal energy sources. They will become a model for producing hydrogen electrolytically from water using clean, infinitely renewable energy without the need for any fossil fuel resources.
Clean, renewable energy sources include hydroelectric energy from flowing rivers with dams, wind turbine energy, solar energy from the sun’s radiant heat, and also geothermal energy from deep within the earth near the earth’s volcanic regions. The energy from these sources requires no consumption of fuel and produces no significant pollution.
Electricity from these sources will provide the means to decompose water into hydrogen which can then be distributed worldwide to provide energy for our mobile transportation and military systems. The hydrogen can even be used as a feed stock to make liquid fuel for aircraft from oil shale and eventually from organic waste.
The US has huge resources of underground or geothermal energy arising from the earth’s volcanic core. The Pacific coastal and adjoining states have some of the largest geothermal hot spots on earth. The Aleutian Islands and Hawaii also have vast potential. The largest geothermal power plant facilities in the world exist at the Geysers in California and on Hawaii’s main island near the volcano of Kilauea. However, that only represents about 0.6 percent of our current electrical production.
Geothermal heat is typically extracted from natural ground water that resides in the hot zones. The existing aquifers provide a simple means of obtaining steam to drive the turbines that motivate the electricity-producing generators. However not all the hot zones have the necessary ground water available to create a thermal well. In fact, most may not have this.
In order to extract heat from dry hot rock, it first must be drilled with two or more deep holes, then explosively and pneumatically fractured for permeability. A fluid must be pumped into the permeable ground to pick up the heat. That fluid will most likely be water or even air from the surface which then becomes superheated as it circulates back to the surface. The hot discharge fluid can then exchange heat with a binary fluid that will drive a closed cycle gas turbine.
It is currently estimated that world’s known geothermal energy reserves are 15,000 times greater than known world oil reserves That is a staggering number, and can easily solve the world’s energy problems for the foreseeable future.

Investment in Nigeria’s largest natural gas exploitation project, Nigeria Liquiefied Natatural Gas Limited (NLNG), will by 2007 reach $12 billion from its present value of $9 billion.
This was disclosed yesterday in a paper presented by the company’s Managing Director, Mr. Chris Haynes, at the fifth edition of Nigeria Oil and Gas Conference taking place in Abuja. He said by 2007, “the venture would comprise $12 billion of investment in processing facilities and ships and will be fed by an established and diverse pipeline system delivering gas from the Niger Delta - offshore and onshore.“
According to him, the gas company will also be constructing additional two new LNG trains by 2010 to bring its gas production facility to eight trains in an effort to further increase Nigeria’s gas supply potentials, allafrica.com said.
“The projects cumulative capital expenditure of $12 billion will make it not only the one of the most important economic projects in Nigeria but the largest single privately undertaken project in Africa,“ Haynes noted.
He said the attraction to expand NLNG capacity stems from the fact of projected growth in demand for gas in Atlantic Basin markets which NLNG is keen on cashing in on to enable further value to added to Nigeria’s abundant gas resources.
Another factor is that the country is both strategically and geographically well situated in Atlantic Basin to supply LNG competitively and reliably to both United States and European markets, he said.
He said that Nigeria LNG is currently supplying gas on a long-term contracts to Europe and through the spot sale to the US and even into Asia-Pacific and has acquired a reputation of reliable gas supplier.
Haynes said the future portfolio of sales for LNG lies the availability of diverse customer, markets, contract terms and shipping arrangements which the company has to its advantage. He said on completion of the company’s 5th and 6th trains by the end of the 2007.

Workmen repair an electricity pylon in Beijing.

China’s years-long power shortages are expected to be alleviated by 2007, according to Sun Jiaping, director of Energy and Information Committee of Chinese Society of Electrical Engineering.
Sun said that electricity is a necessity for the development of a modern society and its sustainable development depends on the coordinated growth of electricity supplies with the economy as a whole. The experience of other countries demonstrates that in the industrialization phase of economic development, the rate of electricity supply growth should surpass that of GDP growth, he added, atimes.com reported.
In accordance with its energy and resources conditions, China attaches great importance to the restructuring of the electric power infrastructure, its efficiency, pollution reduction, and safe operation, according to Sun. Based on extensive investigation and calculation, the installed power generation capacity of the country should increase by an average of 6% over the next 20 years to reach 950 million to one billion kW by 2020. Electricity production and per capita electricity consumption should also reach 430 million-480 million kWh and 3,000 kWh, respectively, by then.
Sun said that the dominant position of thermal power would remain unchanged before 2020, when its production would reach more than 600 million kW. Meanwhile, China will optimize the operation of its thermal power facilities and increase their efficiency. At the same time, the country will develop LNG power and clean coal technology.
The exploitation of hydropower, nuclear power and renewable energy is also on the agenda. Sun said that China has 370 million kWh of hydropower reserves, of which 100 million kWh has been developed. By 2020, 245 million kWh are expected to have been developed. There are also good prospects for the development of wind power in Inner Mongolia and the Xinjiang Uygur Autonomous Region. However, the wind power currently developed is only 570,000 kW, less than one third that of India, ranking ninth in the world. The exploitation of renewable energy sources including wind power, solar and biomass energy, should reach 20 million kW by 2020 and installed nuclear power capacity should amount to 40 million kW.
In addition, power grid construction is regarded as a project of strategic importance. The national power grids, transnational power grids and the transmission of electricity from the west to the east could transmit 120-million kW of electricity, while supply exchanges between north and south China could reach 12 million kW.
China’s electricity utilization ratio--i.e., the fraction of generated power that actually reaches end users--is quite low, said Sun. If better management practices were adopted to reduce waste, about 200 billion kWh of electricity could be saved annually.