21st Century Energy Choices - How Best to Achieve Security and Sustainability

On 16th October 2012 Tony spoke at the 4th International Renewable Energy & Energy Efficiency Forum. 

21st century energy choices –

How best to achieve security and sustainability?

 

I realize that the title for my contribution this morning could be the subject of hundreds of doctorate theses, but I hope that I can in the short time available today at least give some headline reflections on the subject at hand based on my years of experience working with industry, government and as an environmental campaigner.

 

To begin with, perhaps I should set out what might be the scale of the challenges summed up in the ideas of security and sustainability?

 

When it comes to security, the questions at hand are really linked to where energy supplies are located, how geography relates to demand and the rate and state of depletion of energy resources. Abundant energy found close to where it is needed is more secure than energy supplied from far away, especially when that energy is subject to increasing demand.

 

On the matter of rising demand, it seems we are in the midst of truly seismic shifts. For example, the US Energy Information Administration suggests that compared with 1990 world energy demand in 2035 will grow by 117 per cent. Much of the growth is of course in developing countries and in 2035 it is anticipated that Chinese consumption will be more than two thirds bigger than the USA. The rates of growth in India, Indonesia, Brazil and Middle East are even faster. For example in India energy demand in 2035 is expected to be 459 per cent bigger than in 1990.

 

Energy security in the face of these challenging circumstances has for most countries rested on access to different fossil fuel resources – oil, gas and coal. Much of the recent growth in energy demand has been met through burning coal, with the bulk of that being used to fuel the power sector in developing countries.

 

There is a considerable remaining resource of fossil energy, and in relation to coal this country is of course richly endowed, with this fossil hydrocarbon fuel potentially able to power Ukraine for many decades to come. The same can be said for many other countries. But there is of course a problem, because what might work for security often does not work for sustainability.

 

The main problem is called climate change, and if left unaddressed and made worse through the burning of more fossil fuels, and different kinds of land use change, could later this century visit economic and social catastrophes on countries right around the world. A glimpse of what lies ahead is seen in extreme weather, in turn leading to loss of life, damage to infrastructure and food price volatility.

 

Of course, no one country on its own can solve this challenge, but every country that is burning fossil fuels on a large scale needs to be a part of the solution. This is because recent estimates looking at how much more coal, oil and gas can be used before pushing global temperature increase into a real danger zone tell us that most of the reserves we know about need to be left in the ground. Only about a fifth of known stocks can be used, and if we are to have a reasonable chance of remaining within safe climatic boundaries by 2050 at the global level emissions of carbon dioxide will need to be reduced by at least 80 per cent compared with emissions levels in 1990.

 

If serious climate change impacts are to be avoided, while at the same time as meeting increasing demand for energy, humankind needs to quickly break its habit of releasing carbon dioxide emissions into the atmosphere through the combustion of fossil fuels, and shift to low carbon alternatives, while at the same time as sustaining development.

 

But what choices do societies have in rising to this unprecedented challenge? Well there are basically four.

 

The first it to invest in efficiency. Nearly every country in the world has a huge opportunity in this regard. From more efficient housing and commercial properties to more efficient electric motors in factories, to cleaner and smaller vehicles and to smart building technologies that, for example, switch lights off when buildings are not in use. This is often the quickest and cheapest route to energy security and meeting environmental goals, and I know Ukraine has invested considerable effort in seeking the more efficient use of energy, including through the modernization of the electricity distribution network. I hear that some considerable success has been achieved with these, and that you are looking at ways to do more.

 

This is positive, but there are, unfortunately, limits to this approach, not least arising from the economic growth that is expected in the coming decades, and the fact that the increased demand coming with it will likely cancel the beneficial effects achieved by using power, heat and fuel more efficiently. If we are to achieve what is necessary in terms of carbon emissions reduction, then there is a need to switch to cleaner energy sources as well, including the much cleaner combustion of those energy sources already in large-scale use.

 

When it comes to coal and gas for power generation this would mean fitting carbon capture and storage (CCS) technology. This would be expensive, technically challenging and would take some considerable time to do.  Impetus in this direction could come from the real cost of carbon being reflected in different kinds of carbon taxes or trading schemes, but right now these are too modest and disconnected to make a sufficient difference, and in any event are hampered by the continuing absence of an international climate change agreement.

 

The leading European Union countries are yet to invest in workable CCS technology and it seems the economic and technological viability of this approach is still in doubt, at least for now. This is not to say that a price should not be placed on carbon, it should be. My point is that it doesn’t look like this is going to happen on a sufficiently large scale any time soon. This means coal will not receive the investment needed to reduce its impact.

 

Another route is to seek secure and low carbon power from nuclear technologies. Nuclear power has a very low carbon footprint compared to coal and gas, but there are a number of considerable disadvantages. Aside from the hazards linked to radioactive releases and to long-term waste management, nuclear power is proving more and more expensive with the historical problems of delays in construction schedules and cost overruns still apparent in the few places where new reactors are being commissioned.

 

For example the Olkiluoto 3 reactor that is under construction in Finland by French state owned company Areva, is four years behind schedule and more than Euro 2 Billion over budget. And while some pro-nuclear commentators have sought to give the impression that a nuclear power renaissance is under way, reality tells a different story.

 

In 2011 and in 2012 up to July, worldwide only seven new reactors were started up, while 19 were shut down. At the same time as just one country has embarked on a new nuclear power programme (Iran) four others (Belgium, Germany, Switzerland and Taiwan) have recently said they are going to end theirs. At least five others (Egypt, Italy, Jordan, Kuwait, and Thailand) have decided not to engage or re-engage in nuclear programs, although they had previously planned to do so.

 

In Brazil, France, India and the United States, new build projects were officially cancelled. In the Netherlands, the U.K. and the U.S. key utilities have recently withdrawn, leaving projects in jeopardy. Overall the nuclear share of world power generation has declined steadily, from a historic peak of 17 percent in 1993 to about 11 percent in 2011. I think this situation speaks for itself as to the likely future for nuclear power.

 

The fourth approach, after efficiency, making fossil power cleaner and nuclear technologies, is the fast-growing renewable energy sector. The family of technologies from solar to wind and from hydro-generation to geothermal, it seems to me, offers the greatest potential to meet the twin aims of security and sustainability. And unlike nuclear power, which has failed to achieve levels of projected growth, renewable energy is in a period of rapid expansion.

 

Global investment in renewables totaled US$260 billion in 2011, up five percent from the previous year and almost five times the amount in 2004. In 2011 wind power capacity increased by 20 per cent to about 238 GW installed capacity. In the same year almost 30 GW of solar photovoltaic (PV) was added, increasing total global capacity by 74 per cent to almost 70 GW. In 2011 solar PV for the first time accounted for more capacity additions in the EU then any other technology, led by Italy and Germany.

 

These and other clean renewable technologies work, and that is why they have grown. While in common with all other sources of energy they have pros and cons, from the broad perspective of sustainability and security, these emerging energy sources do have many advantages.

 

As well as being low carbon, renewable generation technologies do not need fuel, and therefore help to insulate their users from energy price volatility and from the geopolitical tensions that will come with increased demand for energy in the years ahead. Considering the scale of the climate change challenge, and the rate of rising demand for energy, it seems to me that the rapid proliferation of renewable technologies, linked to their very efficient use, is the only realistic way that we will be able to keep climate changes caused by human activities to within manageable proportions, while ensuring security of supply.

 

Like nearly every other country in the world, Ukraine is in a challenging position when it comes to this basic conclusion. Primary energy consumption in recent years has been dominated by natural gas, standing at about 41 per cent of the total, 19 per cent comes from oil and about the same from coal, 17 per cent is from nuclear, while hydro and other renewable sources contribute about 4 per cent.

 

The good news is that there is a huge potential opportunity for the expansion of renewable energy installation, with wind, solar, geothermal, biomass and hydropower technologies all showing huge potential. As well as enabling greener growth, expanding the contribution from these sources would reduce Ukraine’s dependence on imported energy (presently about half the total consumed).

 

But what is the best route toward the more rapid uptake of clean and renewable technologies? It seems to me that the first step is to make the strategic case from the centre of Government. Once renewable and clean energy expansion is owned as a political priority, then things can happen so much more easily and quickly. In the UK the expansion of renewable power is happening most quickly in Scotland, and that is not least because the First Minister there who leads the Scottish Government has decided, for reasons of sustainability, security, jobs and economic benefit, that renewable power is the way forward.

 

This has sent a clear signal to which developers, investors and planning authorities are responding. As a result, the proportion of renewable energy powering Scotland is rapidly increasing. Investment is being mobilsed and the country is emerging as a leader in the clean energy sector. Making the political case is also about joining the dots with other parts of the economy.

 

Like most other countries, Ukraine is looking to improve national energy security, maintain stable supply and to reduce the environmental impact of energy generation. The country is looking to use energy more efficiently and to make positive connections with nearby countries through stable market relations. In meeting these goals with clean and renewable energy, Ukraine has a number of advantages. These are seen not least in the abundance of sunshine and wind, advanced infrastructure and skilled workforce.

 

But even with these advantages, how does a country convert a high-level political commitment into a significant increase in renewable energy generation? The answer is, of course, through policies, laws and incentives. From new planning rules to feed in tariffs and from grants to tax incentives, there is a range of tools to encourage investment in clean energy sources. The best mix of tools varies from country to country, but everywhere will have an optimum blend of measures to encourage things to happen.

 

This is not to say that there will not be controversy. From claims that vested interests are being favoured to the visual impact of different technologies, there is no such thing as a perfect solution. But if the case is clearly made, from sustainability, security, social and economic perspectives, then progress can be rapidly made.

 

We know that most of the coal, oil and gas will need to remain in the ground and that nuclear is in decline. It seems to me that the most desirable route forward is the efficient use of renewable energy sources. This would not only advance the cause of sustainability, but also energy security and economic development. The changes needed to make this happen appear daunting, but in different places the transition is already underway. It could happen here too, if that is what you choose to do.