Challenges to Energy Security - Is a demonization of conventional energy production under current global trends beneficial?

Introduction

Globalisation is the worldwide disappearance of ideological, political, scientifical and technological boundaries. It is not an entirely new event but a historical process, which however has gained enormous momentum in the last decades. Within this process peoples and nations come closer together, enabling a free flow of capital and economic exchange. Billions of people around the world can profit from this with the chances of improved working and living conditions. Emerging countries like India, China and Brazil are made into economic centers of gravity as a consequence, relinquishing their old image as cheap producers and transforming it into that of serious industrial providers.

The free flow of capital and an absence of an economic „global order“, however, makes problems inevitable as the current economic crisis is showing clearly. Also the old economic giants in Europe and the US are challenged by an additional and ever more skilled and educated workforce of 2 billion people that before had lived beside the world economy, creating a „War for Talents“ and defying the shrinking populations of the western world.

The inevitable interdependence and cause of severe concern created by the process of globalisation, however, becomes highly apparent in the field of energy supply. The International Energy Agency (IEA) suggests that with a world population of then 8,5 million people energy demand will double by 2030. In 2005 the Hamburger Weltwirtschaftsinstitut (HWI) presented a study by which the future demand for oil grows by 1.7 % annually and the demand for gas by a whopping 2.4% a year should global economies retain their growth rates. Whether or not the reserve ranges in that study (42 and 63 years respectively) are accurate it is probable that both will lose their profitability within this century.

This presents the world with wide ranging questions and challenges on which paths are to be taken in order to guarantee a secure and cheap energy supply.

Recent Developments

The current political trend of giving precedence to environmental and climate issues over that of a coherent energy policy, however, is not helping to provide any answers of how those challenges will be met.

Especially in Germany, where in 2002 the government decided to phase out its nuclear power plants in the 2020s (which in 2007 contributed 27% of electricity production) , conventional methods of power generation are increasingly under fire from environmental NGO's and political parties with the staunch belief that the sole solution to meeting world energy demand will rest upon renewable energies.

Only recently have environmentalists been successful in temporarily halting the construction of one of the most advanced coal power plants in the world at Datteln, Germany. It is, however, highly questionable whether such actions will have any effect on the environment other than seriously hampering that countries performance as one of the leading industrial nations, while at the same time China launches new plants with similar power but much less energy efficiency every week on the average. This comes at a time where the demand for modernization and replacement of electricity production capacities amounts to about 350 Billion Euros in Europe alone. In fact the only result of blocking new coal power plants is that the lifetimes of older plants are extended. In the case of the old blocks of the giant coal power plant and Niederaußem, Germany the utility RWE has already announced should their attempts at replacing them with new blocks fail then they would simply resume operations regardless of the implications concerning CO2-emissions. The economic equation behind this looks similar at all the other many places where there is demand for modernization.

Despite the positive growth rates in renewable energy production it is unlikely that before 2050 a transition to a renewable and low-carbon economy will be realized. Even a study by Greenpeace suggests that for such a transition to happen in Germany it would still take a 40% share of coal power plants for base load capacity by 2030. In fact the IEA World Energy Outlook scenarios suggest that with growing energy demand such a transition will be an illusion at best.

The "Nuclear Renaissance" and the Perspective of Coal

Both the negative image of coal due to environmental awareness and the unclear situation in the energy sector in general have therefore caused a recent revitalization of nuclear construction. However, there are institutional and financial difficulties involved which limit the rapid development and deployment of nuclear facilities. The European Pressurized Reactor currently under construction in Finland is largely exceeding its preliminary budget and if it will ever be finished is unclear at the moment. Additionally the building of nuclear reactors in most western countries involves activities and proceedings by numerous government agencies and institutions which does not necessarily limit large scale nuclear programs but requires a broad consensus in society. While the outlook of the nuclear industry is still bright, with EU-supported Generation-IV-reactors in development and Thorium as a replacement for the conventionally Uranium-fueled nuclear reactors there still remains the issue of waste disposal, which ultimately makes today's nuclear power a flawed concept both as a vehicle towards an economy based on renewable energies or if standards of intergenerational justice are applied.

Coal-fired power generation then remains one of the most risk-free and profitable ways of providing large industries and households with electricity. The downturn of coal power is of course the fact that about 100 Kilograms of Carbon-Dioxide per Gigajoule is emitted. The IEA however suggests that worldwide developments will make coal to have the fastest growing share in worldwide energy consumption by 2030. Also Germany has the second largest reserves of lignite coal, amounting almost to one-fifth of world production and in a wider perspective it is the 30 member states of the OECD that combine 50% of world coal reserves, while they only possess 8% of worlds crude oil and 10,6% of the worlds gas. These obvious advantages in both energy security and availability make coal a viable resource for power generation. If the currently planned process of capturing and storing the emitted Carbon-Dioxide is realized then coal power could pave the way for an economy fully based on renewable without resorting to large-scale nuclear technology or endangering energy security for the sake of CO2 reduction targets. The IEA World Energy Outlook 2009 identifies Carbon Capture and Storage (CCS) for coal power plants as an integral component in reducing emissions in the energy sector and meeting the Intergovernmental Panel on Climate Change’s (IPCC) demands of a maximum cap on greenhouse gases in the atmosphere.

Conclusion

In summing it up both Globalisation and the challenges to the environment on this planet are much too complex phenomena where logical answers should not be blockaded by ideological barriers. Because a secure and affordable energy supply is the cornerstone of any industrial nation it is also necessary to use a pragmatic approach to decision making. With a growing world population and a huge demand for energy in the coming decades it would be unwise to brush viable options aside. The way for the G20 nations towards an economic state fully based and fuelled by renewable, if ever realized, is a stony road. For Europe, faced with demographic change and slow economic growth unparalleled in the world, it is imperative to remain leader in the fields of research and industry, because only with economic power also comes the political influence to shape world politics in a favorable way. The Copenhagen Climate Conference of 2009 has clearly shown that China is viewing the western world as having reached its zenith and that the romantic CO2-reduction agenda of a recession-ridden Europe is not enough to sway a Chinese nation boasting an impressive 8% economic growth-rate. If European nations wish to retain their historical position on this planet and use it to counter climate change and resource depletion then it is not enough to mourn at the sight of an SUV or the building of a coal-fired power plant and resort to buying battery-powered cars or install solar panels instead, both of dubious environmental quality. What is a prudent way to face the challenges of the 21st century (keeping in mind lessons learnt from Copenhagen) is for Europe to initiate a technological and industrial offensive, explicitly investing a fixed part of national income into research and development. Similar to what the Danish researcher Björn Lomborg in his book „Cool It“ suggests, I am convinced that the industrial nations will be able to shape the world in a much more ecologically friendly way by spending more resources on innovations and refinements of existing and new technologies of power generation than any solar panel in Germany ever will. After all it is both the status and efficiency of novel technologies and long-standing technologies as a key factor determining the world’s energy demand, fuel use, CO2-emissions and investment choices in the years to come. It is therefore in the interest of Europe to support an energy mix that promotes technological progress in both conventional and renewable power generation as an incentive for other nations on Earth and to guarantee a secure and affordable energy supply which does not endanger the competitiveness of energy-intensive products (steel, machinery, cars among them) for the export-oriented European economy, the very framework of European wealth and importance in the world.

References

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• Greenpeace e.V., Klimaschutz: Plan B – Nationales Energiekonzept bis 2020. Hamburg 2007.
• International Energy Agency. World Energy Outlook 2007. Paris 2007.
• International Energy Agency. World Energy Outlook 2008. Paris 2008.
• International Energy Agency. World Energy Outlook 2009. Paris 2009.
• Lomborg, Björn. Cool It. Singapore: Marshall Cavendish Ltd., 2009. ISBN 978-0462099262.
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