A report published by Citibank, a major international bank, has found that the future of shale gas in Europe is shrouded in uncertainties and the energy technology may not be as viable as had been previously claimed.

The same report found that renewables will cost the same as conventional fuels (including gas) in many parts of the world in the very near term. “The cost of renewables is falling fast,” it said.

The Citibank report, first published in September 2012, says that in Europe shale is likely to be particularly challenging to extract, leading to a higher than predicted level of uncertainty surrounding the industry’s future. “Even if shale gas resources are as large as initially reported, it is unknown to what extent shale gas will be recoverable in practice,” it said.

Poland – a country which rushed to develop its shale gas reserves in 2007 – proves this point, as “producers have so far failed to establish a viable shale gas industry, despite 112 exploration licences having been issued,” the report says.

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Yesterday the European Parliament voted against a proposal to delay the auctioning of 900 million tonnes of carbon allowances in the EU’s Emissions Trading System (ETS) – a move proposed by the European Commission to rescue the ailing ‘cornerstone’ system of Europe’s climate legislation which puts a price on carbon emissions.

As a result, the European Voice reported that the price of carbon plummeted 45% to a record low of €2.63. The ETS system was designed around a carbon price of approximately €20, but an over-allocation of allowances and the economic crisis has meant the price of carbon has been around €7 per tonne in recent years – not expensive enough to make it a disincentive to invest in carbon polluting industries like fossil fuels.

“MEPs have voted against the polluter pays principle: the carbon price will continue having no impact on investment decisions in the power sector,” Rémi Gruet, Senior Climate Advisor at EWEA, said.

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Poland is the biggest wind energy market in the EU’s newer Member States, but wobbles in government support have made investors nervous. We spoke to Ewa Kurdyła, Director of the Polish Wind Energy Association, to find out what’s going on…

 Poland’s National Renewable Energy Action Plan indicates that cumulative wind capacity should increase by an average of 500 MW per year to reach 6,650 MW in 2020 – do you think this will happen?

Despite significant growth of the wind energy sector in the recent years it may be very difficult to meet our targets – in particular for 2020. This is caused by the lack of regulations enabling a stable development of the sector. In recent months the mood among the investors has been very bad. However, we mustn’t forget that the true market potential of wind energy in Poland by 2020 is approximately 11.5 GW onshore and 1.5 GW offshore, according to the independent Renewable Energy Institute.

These figures are much higher than those in the Polish National Renewable Energy Action Plan. Therefore, I think that in the long term the industry may substantially increase its share in the national energy mix. This is primarily due to technological development. The climate of political will, which today determines the development of renewables, may also be of key importance.

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Continuing with the series of “wind energy stories” from around the world, in association with Global Wind Day, Robert van Waarden travels to Nepal to meet Amrit Singh Thapa in Kathmandu.

Amrit points it out as we zoom past on his motorbike.  If you look closely, past the Nokia sign, past the other motorbikes, over the jumble of electric wires, and let your eyes drift upward, you might see it. It is a solution to the energy problems of Nepal, turning in the wind. Amrit turns a corner, jokes with a security guard and drives into the grounds of the Kathmandu Engineering College. A few minutes later we are on the roof, listening to the whirling of his homemade wind turbine and looking out over this crowded and noisy city called Kathmandu.

Amrit Singh Thapa, owner of Eenergys.com, lives and breathes wind energy. When he was still a student at the Engineering College, he began researching sustainable technology and felt deeply that his path was entwined with wind energy. He hasn’t looked back since.

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