Euroheat and Power

Ladies and gentlemen, dear friends,

Brevity is the soul of wit says Shakespeare. So I want to be as brief as possible and as long as necessary.

I always loved the combination of the two words „Euroheat and Power“. What a strong combination of words! It sounds metallic and you hear the steam driving the turbine. A great brand name. It sound good to me, strong and self confident. It is a serious and dynamic association, with a clear message which calls a spade a spade.

Euroheat and Power deals with energy efficiency. It therefore has a bright future. It is like human beings. The more we become more efficient, in other words the healthier we live, the older we become. So I am sure we will meet again in 50 years time. At least those of us who are still alive.

Looking around in this unique Belgian comic strip museum of Tintin and his friends, you might well wonder what Tintin would have thought to be the energy of the future. His optimism might perhaps have drawn our attention to some magic substance called uranium which could provide us with inexhaustible and cheap energy. Or he would have recommended oil because it is abundant and easy to handle. Energy efficiency would be out of character.

But Tintin is an invention. He is a virtual personality although better known to a wider public than most politicians. We might ask him but we would not get an answer. Or he would say: ask no questions and you’ll be told no lies.

That is by the way a very familiar experience in energy politics. You ask what will happen in the future and you get the answer you expect. Because the wish is the father of our thoughts. The only certainty is that the answer is wrong, simply because we do not know the future. Or as Socrates put it: „I know that I don’t know.“

Recently a German journalist wrote a book with the surprising title: „History of the future“. It is a book on the Kondratieff cycles. Nicolai Kondratieff, a Russian economist, believed that the economy is mainly driven by innovation. If you develop successful innovations you thereby create an economic boom. Shareholders simply have to study physics or chemistry so they can recognise when a great innovation is put on the market. And then they make a lot of money. So far, so good. But unfortunately we do not know beforehand what is a successful innovation. In other words you can only write history when the future becomes the past. Therefore, the title of the book is an affront to our common sense.

Some years ago we discussed the issue of security of supply in the European Parliament after the Commission had published a communication with the bitter message that in a business-as- usual scenario our energy imports would rise from 50 to 70% in the next decades - the same percentage as in 1973 when the first energy crisis broke out.

The public reaction was practically zero. Oil prices were acceptable and gas cheap. Who wanted to speak about security of supply? Now, after oil, gas and coal prices have soared, after a dramatic scarcity of coke, people are getting nervous and particularly journalists ask us what the EU can do to prevent prices rising. And then they ask us to take immediate action.

In medicine we use the word prophylaxis. We avoid a health problem by prevention, by correct behaviour. In principle, politics should do the same. Avoid problems by prophylaxis. In energy the right answer would be: save as much energy as possible and rely as much as possible on your own energy. Then our economy will be less vulnerable to price shocks or supply interruptions elsewhere in the world.

But unfortunately people do not always behave rationally. We resist everything except temptation. Our perception of risks is very personal. After September 11 many Americans refused to fly. They thought it was too risky and they drove instead. As a consequence the number of road accidents rose dramatically and the resulting death toll was much larger than that of September 11th.

Some years ago I read an article in an American magazine claiming that the US spends some 200 Billion $ per year to guarantee the political and military stability of the Gulf region. The author recommended saving that money and using it to make the US less energy-dependent. Whether this figure is correct or not is not so important. What counts is that our oil supply depends heavily on the American presence in the world’s most oil-rich region. What would happen if the Americans withdrew from the gulf or if Islamic fundamentalists overthrew the fragile governments there? Would we send our fire-brigades to Saudi Arabia? Or our armies? Or would we simply pay the higher price for oil?

These are not academic questions. They need not, but they could become a reality.

This observation still sounds like mere speculation. But there are two highly probable events that have to be taken into account.

According to a new American forecast world population will rise in the next 40 years by some 3 billion people. There will then be more than nine billion people on the globe. As their oil and gas sources are the same as ours we do not have to be experts to understand the problem. Will we face new conflicts?

Another big issue is climate change. With a high degree of certainty we know that human activities contribute to climate change. Therefore we Europeans are committed to reducing the emission of greenhouse gases.

Allow me to do a short calculation. The International Panel on Climate Change warns us that if we exceed 550 ppm of CO2 in the atmosphere we will increase the temperature by more than 2 degrees. Let us suppose that they are right and we should strain every nerve to stop emissions beyond that value. 550 ppm corresponds to 30 billion t CO2 per year. Currently the world emits 24 billion t and in a business-as-usual scenario we shall reach the 30 billion threshold by 2015. Divide 30 billion tonnes by 6 billion people. The result is 5. So in 2015 we shall not be allowed to emit more CO2 than 5 t per person and per year. In Germany we emit 10 t, in France between 6 and 7. We are confronted with a Herculean task.

So what we have to do to be on the safe side is to switch from processes which emit greenhouse gases to those with no or fewer emissions.

None of this is news to you. But do we have a European strategy for complying with these constraints? Do we have the support of public opinion? And in the end, are we willing to implement such a strategy over the lifetime of generations? And the most blasphemous of all questions, what would happen if nothing happens? If the oil continues to flow at reasonable prices? And if one day the climatologists tell us, sorry but we were wrong? Or if new – still unknown – problems were to arise from new discoveries?

I don’t want to complicate the picture of energy politics but my recommendation is: try to be on the safe side whatever might happen.

That brings me back to Euroheat and Power. Cogeneration, District heating and Cooling is useful under all scenarios. Whatever happens, to make the transformation of energy more efficient is never wrong. Therefore Frau Froning and her team do a good job and I hope very much that the excellent relations you have with the European Institutions will continue with the newly elected Parliament and the new Commission. And as I am still President of the European Energy Foundation may I express my deep wishes that your participation in our debates and seminars will continue.

We are certain about the uncertainty of the future. You may complain about that. But it gives you on the other hand a large margin of manoeuvre. This is what we call freedom. It is the freedom to choose the right measures to prevent a predicted disaster. Because the future is open, because it depends on us, we are free to act. It is the freedom of a strategist. You know you have to follow some rules, you have to respect natural laws, you have to take into account human psychology, but in the end you make a choice. Strategy is an art like politics. It is not an exact science. But if you neglect science you are lost.

Do we have such artists in the energy sector? Sometimes I cannot resist the feeling that we behave more like accountants than strategists. You are not asked for your results, people ask only whether private or public money was spent correctly. We behave like the general who reports to his king: Your Majesty, unfortunately we lost the battle, but the accounts are in order.

Fortunately Europe is becoming more and more conscious of energy efficiency. We are learning that less is more. Who knows, in 50 years time we may perhaps need no more than 2000 Watt per person and still have the same standard of living? We might invent new ways to use the sun or our raw materials or both. Two hundred years ago 90 per cent of our population worked on the land as peasants. Although there were many of them they couldn’t produce enough food for everybody. Famines occurred frequently. Today 2% of our population produces more than we can eat or drink. Why is a similar revolution in energy efficiency impossible?

You do not have to be like Mr. Micawber, the incorrigible optimist in Charles Dickens' novel David Copperfield. It is enough to be reasonable. Or as Albert Schweitzer put it once: an optimist sees a green light everywhere; a pessimist is always stopped by the red light, whereas a wise man is colour blind.

Unfortunately there are great differences between science and technology on the one hand and politics on the other. First of all, as Harold Wilson said, a week is a long time in politics. I would add, it is a short time in technology. Second, in technology reality can be measured. In politics it is a result of the elections. And thirdly, a risk is a mathematically calculable entity. For humans, a risk is perceived very individually. Sometimes people even like incurring risk. Imagine an engineer who deliberately developed a device with an inbuilt risk! He would be fired immediately.

Politicians and engineers live in two worlds. Engineers rely on exact thinking and on experience. They are also not infallible. Experience is sometimes the name engineers give to their mistakes. But we have to bring politicians and engineers together in order to solve our problems. You might be the right people to do that. You can build a bridge between cogeneration plants and parliaments.

A politician is like an acrobat. He keeps his balance by doing the opposite of what he is saying. But he does it not because he is bad by nature but because many people behave in exactly the same way. And as he wants to be elected, as he wants to be popular, he has to stick to this schizophrenic behaviour.

Politicians are often criticised for that. Their reputation is poor. People talk about politicians as if they were thieves. Politicians are unpopular but still needed. But it doesn’t matter that they talk about you. As Oscar Wilde said rightly: „There is only one thing in the world worse than being talked about, and that is not being talked about“.

But do not imitate the politicians. Remain what you are. And try to convince with sound arguments.

I wish you- I wish us- not only a pleasant and agreeable evening. I wish your association a bright future.