Canadian Manufacturing

Renewable energy not as viable as carbon capture: energy vet

Former Shell Canada CEO said subsidies for clean energy are too high for the returns

EDMONTON—Investments in renewable energy would have been better spent on carbon capture and storage solutions to reduce greenhouse gas emissions, said Clive Mather, former president and CEO of Shell Canada Ltd.

Speaking at the Zero2014 conference in Edmonton last week, Mather noted the massive subsidies provided to the renewable energy markets in Germany and the broader European Union are far out of proportion with the return.

“I don’t think renewables are doing terribly well,” Mather said. “If we had a little more honesty and less political posturing in Europe, we would have avoided wasting an enormous amount of taxpayer money.”

Clean energy projects such as wind and solar require huge incentives and subsidies—billions of Euros to date, he said. Plus, the ‘not-in-my-backyard’ objections to wind turbine farms is a big problem in Europe due to population density.

Those billions could have gone into carbon capture and storage technologies, which seek to reuse carbon or sequester it in buildings and other products; along with projects to reduce energy use.

“Energy efficiency in particular, remains one of the best investments anybody can make. It saves money, it saves energy, reduces greenhouse gases and the cumulative gain over time is extraordinary,” Mather said.

Grid constraints
The theme was echoed by Bjorn Stigson, a consultant and visiting professor at the University of Gothenburg in Sweden. Stigson pointed to grid and delivery constraints curtailing clean energy in Europe.

“Last year Germany burned more coal than they have over the last 20 years,” said Stigson, adding coal is needed to provide base energy load. “In 2013 in Germany, the investment in renewables fell 42 per cent compared to 2012.”

Even so, Germany has set an ambitious goal to generate 50 per cent of its electricity from renewables by 2030. Stigson isn’t sure the grid can keep pace.

“I don’t know anyone who can tell me how you operate an energy grid with 50 per cent renewables … This is really complicated. There are an awful lot of unintended consequences.”

In the end though, the markets will decide, added Tom Rand, managing partner with the MaRS Cleantech Fund in Toronto. Rand said the cost of renewable energy, such as solar, is rapidly decreasing—a trend catching the attention of investors.

Morgan Solar is coming on to the market this year with the lowest cost of energy on the planet … solar power for five cents a kilowatt hour,” Rand said.

“Enbridge has invested in Morgan Solar. I believe the reason … is they want a front row seat in projects that have that kind of a [return].”

Traditional energy utilities are seeing their business model come under threat from the brisk expansion of solar power, said Rand. They risk losing investors if they don’t start to “seriously dabble” in renewables, he concluded.

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