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Over recent decades, the energy sector has witnessed an unstoppable convergence of costs between the old, dirty and dangerous fossil and nuclear fuel model and the renewable energy model, which is intrinsically clean. The former has become more and more expensive, both in terms of direct costs such as increasingly less accessible sources and the need for greater investment in security, and indirect costs such as pollution, climate change, geo-strategic tensions and armed conflicts. While the latter, thanks to economies of scale, constantly improving production systems and being based on free solar energy, have seen costs fall, and in many cases almost in geometric progression.1
We find ourselves therefore in a very different reality to that of recent years and that perceived by public opinion in terms of energy issues. Then, it was said that clean energy was “the desired option” but was not viable due to high costs, a stereotype that has been disproved. A truer affirmation nowadays would be that it is precisely the wasteful and polluting energy model that is not viable.
The priority for the New Energy Model (NEM) is to change the perception held by many members of the public about our current energy system. For the public to be aware of, among other things, why electricity rates have increased almost 80% since 2004, impoverishing domestic consumers and endangering the survival of many companies. Only with an informed and critical public opinion is it possible to break the steel bonds of government and the big power companies, whose huge profits and power depend on a centralized and polluting model based on maximizing the dependence of the public and the people. We must convince governments that an alliance with the public and the environment benefits them more, that sustainability is intrinsically linked to the common good and not to the interests of a minority beyond all democratic controls.
The new energy model rests on four pillars:
The urgent need to change our current energy model, as well as the magnificent opportunity it represents, are summarized in the following points:
We also have to honour the commitments undertaken in the European arena regarding the reduction of greenhouse gasses under the Kyoto Protocol. Climate change is already a reality, as demonstrated by the series of extreme climate phenomena that have been happening ever faster in recent years. The NEM constitutes the best means for complying with the international agreements we have endorsed, as well as (and this is truly important) accepting our responsibility for the planet.4
The reasons noted in the preceding section, in and of themselves, would explain the need for a change in our energy model. Nevertheless, it turns out that many of the renewable technologies are already competitive in price, even before taking into account a single one of the indirect benefits cited. And the same can be said of many of the intelligent energy use and energy-savings measures, whose investment is recovered in the space of only a few years of their useful lives. So moving to the NEM makes sense in and of itself, and it makes ever more sense thanks to the economies that result from its development.
But in order for the transition to be successful, for it to be achieved with the urgency imposed on us by the ever continuing deterioration of the environment and the growing social divide, it is absolutely essential to redesign the energy system around a clean and sustainable model. We must abandon the politically correct discourse that says that all technologies are needed in the mix, even for the long term, in order to state emphatically and with no turning back that we are heading toward a model in which there is only room for energy savings and renewables, and that it is necessary to introduce all the changes that the system needs in order to implement the NEM in the most efficient way possible.
Similarly there will be no NEM, or it will come about too late, without decisive action to place energy topics in the place they belong in the social debate. Economic arguments take time to have an effect when one must struggle against powerful prevailing ideas.
More specifically, what will be needed, among other things, are:
A transformation of the energy system as profound as the one proposed here requires the political impetus of the Spanish government. Its role is to lead initiatives that would make up the backbone of a true state policy in energy matters. Specifically:
Group 1: Thorough reform of the energy sector
Although it is true that electricity is not the entire world of energy (It represents only 37 per cent of the primary energy consumption 7), we believe that it is completely justified to start with it in this section dedicated to action proposals for two reasons:
Consequently, offering a well-reasoned and reasonable solution to the problem of the rate deficit and the price of electricity in our country is fundamental to tackling a strategy to change our energy model successfully.
To do this one must start with a meticulous economic and social audit of all the costs that are ascribed to the electric rate, as well as the criteria that determine the prices per kWh for each electric rate currently in force. The audit should start with a complete analysis of all the types of income the electric power companies have been receiving since at least the 1997 reform of the electricity sector.
As a complement to the economic audit, whose primary objective would be to know the reason for the current deficit situation, there is a clear need for a thorough reform of the electricity market itself based on the following principles:
Group 2: Specific measures to implement the change in energy model
As far as the specific measures for promoting the new energy model, we will focus on three:
1. The establishment of a public, transparent negotiating group led by the Spanish government and made up of the political parties, consumers, representatives from companies in the sector, workers and environmental organizations. This group would have as its goal the approval of a National Energy Plan that offers the stable energy model that our country needs with the greatest social and political consensus possible.
This committee would deal objectively and thoroughly with the most efficient and economic ways to bring about a transition to the NEM, starting from the shared conviction that no energy model makes sense if it is not based on savings, efficiency, intelligent management, clean and renewable energies and energy
2. However, we cannot just leave things as they are while we wait for the findings of that group. Emergency measures are urgently needed to mitigate the dire straits in which the renewable energy sector currently finds itself, as we watch the investment that we have made in a leading-edge, future-oriented sector being destroyed in a few months.
In particular, we propose two specific measures related to the promotion of self-supply and the restoration of the legal protection of renewables.
In the first place the elimination of all kinds of barriers to self-supply of energy produced by consumers for themselves, whether it take the form of instant self-supply or that of net balance – that which allows the surplus energy to flow to the electrical grid in order to recover it later. We call for the rapid approval of a net balance mechanism free not only of subsidies, but also of limitations other than technical ones, under which consumers pay only for the services of the grid that they actually use. A mechanism like the one proposed will not generate any income transfers between those consumers and others, while at the same time offering enormous advantages for consumers who opt for it, as well as for employment and the society as a whole.
In the second place, the recovery of the legal protection of renewables, which has been heavily damaged in recent years and which affects its future development enormously must be begun immediately.
In particular the provisions in the Royal Law Decrees 14/2010 (retroactive funding cuts to photovoltaic projects) and 1/2012 (indefinite moratorium on renewables) that affect existing renewable energy projects must be repealed. The energy sector audit discussed in the prior point will be sufficient to bring to light the huge economic resources that will be freed up to support not-yet mature technologies.
The transition to more advanced models of development for renewables must be able to rely on a clear long-term strategy and adequate planning of energy infrastructures, without abrupt halts in activity or retroactive measures that affect either investments already made or future ones.
3. As a first step toward the NEM, the future of nuclear energy urgently needs to be dealt with. We understand that the only possible future for this technology is its complete dismantlement within time periods which are reasonable from the technological/economic point of view and which take into consideration the social implications that will result from this orderly shutdown as well. Nuclear energy is incompatible with the entry of new clean electric power plants, as the repeated disconnection of wind to allow the dumping of the electrical production of the plants. Likewise we do not feel that the construction of new radioactive waste storage sites (which, in addition, means the creation of new nuclear zones) is justified given that the production of additional waste must be clearly limited both in time and
Group 3: Cross-cutting measures
In addition to the measures in the two preceding parts that are centred on the electricity sector, general policies to manage energy demand, savings and efficiency must be implemented. In Spain these policies have been developed very hesitatingly and almost exclusively through sectorial energy efficiency and savings plans (industry, transport, building or agriculture). In addition, the budgets for these policies have virtually disappeared for 2012 and 2013. The European regulations in these areas (such as the energy certification of buildings) have not been fully taken up, nor have tax regulations been used to push them. If in recent years the measures have lacked ambition, depth and continuity, now it can simply be said that there are no measures. It is no surprise in this regard that we maintain an energy intensity differential 24 per cent higher than the EU-15.
In the first place, the approval of an energy efficiency and saving law is essential, one that fully incorporates the European directives and that develops the means for planning savings at different territorial levels, that defines the measures to manage the demand from the final energy consumption sectors, that regulates energy audits and energy service companies (ESCs), that establishes energy requirements in the design of products, that puts an expiry date on obsolete technologies and wasteful uses of energy in lighting and heating, and that establishes more advanced measures of energy efficiency for buildings, equipment and vehicles, as well as urban design.
In addition, a redefinition is needed of the Energy Efficiency and Savings Plan for 2011-2020 so that it includes measures to manage demand, support technological measures in the processes of transforming energy for its end use in all sectors, as well as measures to provide information and raise public awareness. The setting up of a national fund for energy efficiency as established by the new European directive must be explored. This is also an opportunity for the energy efficiency sector, which now accounts for more than 280,000 jobs, to develop even more.
In regards to the construction sector, an ambitious plan to promote the energy rehabilitation and modernization of dwelling units and buildings is needed to establish compulsory efficiency requirements for existing buildings, to regulate the energy certification of those buildings and to guarantee economic aid for this change. One way to finance energy rehabilitation work is the granting of qualified loans (loans from private financial entities whose terms have been set by the government) that can be paid for in a few years through the energy savings realized after rehabilitation.
As far as new construction is concerned, an ambitious overhaul of the Building Code (Código Técnico de la Edificación [CTE]) is needed that provides for the inclusion of all measures needed to reach the goal of having buildings with virtually zero energy consumption in a short period of time and covers every aspect of building from the integration if new with existing or projected buildings to the design itself.
The transport sector consumes a third of primary energy, basically in the form of petroleum products. For this reason it constitutes a key sector for achieving the economic, social and environmental objectives the NEM proposes. Because of this, and despite the fact that changing the energy trajectory presents more difficulties than in the case of the electricity sector, it is essential to authorize measures which allow it to move ahead quickly in its transformation. The following are among such measures:
2. The example of the resistance of the central government to the incorporation of the Savings Directives that come from Europe, directives which make complete sense ecologically and economically, into our legislation demonstrates just how powerful the non-democratic powers are.
4. All of which is contained in the Earth Charter, essential reading for an enlightened and responsible citizenry: http://www.earthcharterinaction.org/invent/images/uploads/echarter_english.pdf
6. Of course the risk premium, that is, the higher interest we must pay on our public debt compared to Germany, is directly related to the public deficit (because if the government continues increasing its debt, international lenders begin to doubt its ability to repay all that is owed), and the fragility of our financial position is increased by the need to go outside to borrow. Japanese public debt is infinitely greater than ours and yet the interest its government has to pay is one of the lowest in the world for the simple reason that it is the Japanese themselves who buy that public debt.
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