Sustainable energy in a changing world

Fossil fuels will remain the main global energy source throughout the 21st century, and will still account for 70-80% of the total in 2100, according to most major studies. But most of these studies also agree that such a vision of the world’s energy future cannot be considered as sustainable. Whether the moment of so-called ‘peak oil’ has passed or not, new policies will continue to be required to meet the world’s increasing hunger for energy, which is forecast to reach at least 12,500m t of oil equivalent by 2030, according to the International Energy Agency (IEA)

 By 2030, however, there will be a gap in oil capacity of 45m bpd, or four times the current capacity of Saudi Arabia, according to Ugo Romano, chief scientific advisor for the Italian energy major, Eni. This gap in world oil production will be the result of demand growth from non-OECD countries, he said, with China contributing 43% of total demand growth, the Middle East and India generating around 20% and emerging Asian, Latin American and Eastern European economies accounting for most of the rest.

 ‘The peak of natural resources is real,’ said Romano, ‘but it will be later rather than sooner and the mix of resources will change before that.’ He believes that the peak may have been reached for ‘easy’ oil but there are other alternative sources of oil to be exploited. ‘The critical issue is that the investment needs to be made. With low fossil energy price, no-one will invest but if the economy restarts dramatically then there will be an energy crisis,’ he added.

 One possible alternative could be oil or tar sands, which as Thomas d’Aquino, chief executive and president of the Canadian Council of Chief Executives pointed out, are as large a resource as oil. But as he also noted: ‘$60/barrel oil makes entry very hard, although existing investors are doing OK and Canada is very bullish about the future as energy demand comes back strongly.’

 Current low fossil energy prices, together with the rising cost of credit due to the economic crisis, have also hit investment in renewable energy sources, said Romano, with investment in Q4 2008 24% lower than Q4 2007 and 20% lower than Q3 2008. But he also emphasised the drawbacks of renewables including their high generation costs, low energy density, discontinuation in generation processes and in many cases their long distance from final users.

 Solar photovoltaic (PV) power generation is by far the most expensive renewable, according to Romano, with costs that rise from just under $0.20/kWh, compared with wind, geothermal, small hydro and biomass all around $0.15/kWh and below. In terms of energy density, fossil and renewable energy conversions show differences of up to four orders of magnitude, with biomass having the lowest power density, under 10W/m², and PV around 10-100W/m², compared with coal and oil fields at 1000-10,000W/m².

 Romano presented a comparison of current and future costs for renewable ethanol and diesel that showed by 2030, ethanol wholesale costs will fall to under $0.65/L, from the current level of $0.85 $1.1/L. Biodiesel will still have higher costs around $0.70-$0.85/L, down from the current minimum of $0.90/L. For PV, Romano expects the price to fall from around the current level of around €3.50/W to €1/W by 2030 and €0.50/W by 2050.

 However, he did point out that the capital costs of renewables are expected to continue to fall in the future, with PV likely to see the greatest decline, despite being the most capital intensive. Current PV capital costs are just under $6000/kW, compared with around $2000/kW for offshore wind, hydro, geothermal and biomass. By 2030, he expects PV to have fallen to around $3000/kW, while hydro, geothermal and biomass capital costs will remain similar to the current levels.

 Despite these drawbacks, Enzo Gatta, president of Italy’s National Association of Electricity Enterprises (Assoelettrica), reminded delegates that the IEA expects renewable power generation to increase from 1050GW in 2007 to 1350GW in 2015, reaching 2050GW by 2030. In the EU-27, renewables accounted for 17% of total power generation in 2007. Spain has the highest usage of renewables at 21% of total power generation, followed by Italy, 18%; Germany, 16%; and France, 13%. The European Commission has set a renewables target of 20% of final energy consumption by 2020. Globally, the IEA is forecasting that renewables will account for around 15% of total primary energy demand by 2030, up slightly from just under 13% in 2006, although demand is expected to grow by 55% over the period to reach 17.7bn t of oil equivalent.

 In addition to increasing use of renewables, Gatta called for a return to nuclear energy and demonstrated its competitiveness by comparing costs for generating electricity with coal, gas and wind power using 2007 figures from the OECD. Wind power had the broadest cost range: €35- 90/MWh, compared with €22-48/MWh and €39- 56/MWh for coal and gas, respectively, while nuclear came in at €23-36/MWh.

Non-nuclear Italy
Interestingly, in the list of 435 nuclear reactors worldwide, generating 16% of overall electricity capacity, according to the World Energy Council figures presented by Gatta, Italy is not represented. Italy introduced nuclear phase-out legislation in 1987. The government decided in 1988 to phase out existing plants, with the last Italian nuclear reactor closing in 1990.

 As well as encouraging development of alternative energy resources, both Gatta and Romano emphasised the need to reduce energy consumption and improve energy efficiency. They also addressed one of the key drawbacks of renewables – that of distance from end users.

 They called for more infrastructure investment to improve energy security by linking resources both domestic and multinational, like the US Unified National Smart Grid proposed in the Repower America plan and Europe’s Super Smart Grid concept that would link solar energy generation in North Africa, the Middle East and Western Europe with geothermal power in Italy and Central Europe and wind power on the Atlantic and Baltic coats of Northern Europe and the west coast of Africa.

 In terms of potential energy savings from energy efficiency in end consumer uses, Gatta quoted figures from Italy’s employers’ federation Confindustria, which suggest that between 14.3m and 29.9m t/year of oil equivalent could be saved in Italy alone, with the largest savings coming from residential heating/cooling and heating water, 5.6-8m t, followed by lighting, including street lighting, 2.4-3.22m t.

 Despite the challenges that are involved with achieving a sustainable energy future, there was little pessimism and much more confidence expressed about meeting and overcoming the obstacles that declining fossil fuel use presents, but the emphasis was very much on greater international cooperation.