Nuon

	Ludo van Halderen, Chairman of Nuon’s board

For years, scientists and environmental organisations have all in turn claimed to have found the fuel of the future. One week they announce that nuclear energy is the best way forward and the next fuel cells are the key to climate change. Could ethanol be the answer to all energy-related problems or will cleaner coal technologies rule the world’s fuel mix within 20 years?

Nuon, a leading Dutch energy utility with over 4 million customers in the Netherlands as well as in Germany and Belgium, does not believe that there is such a thing as one fuel of the future. Instead, the company works on continuously developing its portfolio based on a mix of fuels. While actively contributing to technological research in order to develop cleaner types of fuels, Nuon does not want to rule out any options when building tomorrow’s fuel mix.

"Policymakers find it difficult to accept the concept of regional differences when it comes to fuel mixes"

The technological developments for Nuon’s fuel mix for the next 50 years are geared towards a balance, a balance between technologies, fuel sources and their availability, as well as understanding the geographical distribution of the sources and having the knowledge and expertise on how to best turn those sources into energy. This balance is something however governments are struggling with.

Legislation: a stumbling block

While the mechanisms of a single European market are well understood and widely adopted in the agricultural sector, policymakers find it difficult to apply the same concept of making optimal use of each country’s natural resources when it comes to fuel mixes. Europe is still dragging its feet on adopting a single energy market for renewables, in which wind energy would be developed where it makes sense instead of seeing wind farms receiving substantial national subsidies in countries where they run for barely a fifth of the year. Anticipating a change of minds and hearts which would lead to a European approach to stimulating renewable production capacity, Nuon very successfully developed from 1996-2005 a portfolio of wind assets in Spain and Norway. Realising that the much-awaited change to the current renewables Directive would take longer than Nuon had hoped, the company reluctantly sold those assets to national players.

This illustrates the need for rapid changes being brought to European legislation if Europe wants its businesses to keep on track in their fight against climate change.

Conventional fuel sources still have a role to play

Natural resources, whether in terms of geology or meteorological conditions, are vitally important, even in the case of exploiting conventional fuel sources. The Netherlands depends on the necessary water resources of the nearby North Sea for the cooling of its coal power plants. It is also fortunate in having the very flexible Groningen gas field, the largest of its kind in Europe. The combination of empty gas fields and the right coal capacity and potential provides the country with a headstart when it comes to clean coal. To this end Nuon is investing in a 1200 MW multi-fuel coal gassification project fully capture-ready, to be operational by 2011. It is further proposing to install actual capture and storage infrastructure when financially viable before 2015.

Building a new coal plant for Nuon’s Dutch fuel mix is part of the solution that provides the sought-after balance of a fuel mix for Europe’s future. Since there will be new coal plants in Europe, they should be built.

While plans for new coal are not always well understood by environmental organisations, Nuon feels that its multi-fuel plant is not a compromise away from the company’s environmental ambitions. Since there will be new coal plants in Europe, in the Netherlands where carbon capture is economically feasible and by a company, such as Nuon, that has sufficient knowledge of the clean coal technology, through the existing 250 MW coal gasification plant in Buggenum. Building a new coal plant for Nuon’s Dutch fuel mix is indeed part of the solution that provides the sought-after balance of a fuel mix for Europe’s future.

The same reasoning applies in our view to nuclear power to which Nuon has a realistic approach. Nuon has to date no experience in operating a nuclear power plant and the Netherlands as a whole remains far behind its European neighbours Belgian, Germany and France in terms of nuclear expertise. The new generation of nuclear reactors is about to make its world debut and Nuon is logically understands such debut should be made by those companies that know all the ins and outs of the nuclear technology.

And as to technological expertise, the Netherlands might fall behind on the nuclear chapter but it definitely runs in front when it comes to high tech research in fuel sources such as solar energy. Recognising this potential, Nuon recently acquired the thin-film technology developed by Akzo Nobel which will allow solar power to become available at prevailing retail prices within five years. And Nuon is well aware that most of the Helianthos solar panels will go and be sold on sunnier shores instead of being used in the Netherlands! But as the AER (Advisory Council to the Dutch Government) stated last spring in an advice to the Ministry of Economic Affairs, technology should not only be supported when it can be used for the national fuel mix, the approach should be at least European, aiming at an optimal and efficient use of each country’s economical and technological potential.

W: www.nuon.com