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Investment in coal ‘vital for energy security’

Refusing to invest in fossil fuels could hamper energy supply, says energy chief

gas flame burning Continued investment in coal is essential if energy companies are to guarantee the security of their customers’ fuel supplies, one major energy chief has claimed.

Governments risk jeopardising energy security by refusing to invest in fossil fuels, according to Riccardo Puliti, energy chief at the European Bank for Reconstruction and Development (EBRD).

Although reducing the amount of carbon being released into the atmosphere is important, an approach that completely ignores the use of coal and other fossil fuels and focuses solely on renewables could risk hampering supply to people’s homes, he suggested.

Weighing things up

Mr Puliti stated that the introduction of an “ideological” policy on carbon intensity could be ultimately detrimental, and instead warned big businesses and governments alike to weigh up all possible considerations when making decisions about energy security.

Recently, the International Energy Agency added its voice to those calling for fossil fuel investment programmes to be phased out, but the EBRD, which recently invested £85 million in a new coal-burning plant at Sostanj in Slovenia, says a sense of perspective is required.

“We strongly believe in a transition to a low-carbon economy and that is what we want to do as an active citizen. But other pillars need to be addressed,” Mr Puliti told the Guardian.

“Affordability is a problem, even in developed countries, and security of supply is a problem. These pillars need to be addressed and analysed in a proper way so we find the best optimum solution. So I can’t say yes or no [to coal].”

Sense of perspective

Those criticising the EBRD’s investment in coal plants such as the one in Sostanj (which will burn lignite – a particularly polluting type of fuel) argue that an organisation owned by more than 60 countries, including the UK, should be setting an example, but Mr Puliti says that its track record speaks for itself.

Between 2006 and 2012, only two of the 200 projects funded by the EBRD were related to coal and both were designed to improve efficiency, while a significant proportion of the other investments were directly related to energy efficiency and renewables.

“The issue must be seen in the context of different countries. Energy is used not just for power but for heating too,” he explained.

With the global population expanding and the same true in the UK, tapping the resources currently available may be necessary to ensure that consumers’ energy supplies are not jeopardised in the years ahead, and this may mean the continued use of fossil fuels, at least for the time being.

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