Gregory Kats, Capital E 15 the future of fossils Wim Thomas, Royal Dutch Shell 6 overcoming the energy trilemma Joan MacNaughton, World Energy Council 13 new Policies for new energy dem
Trang 1to 2050
Trang 2contents 2 Preface
Alex Laskey, Opower
11 what role for biofuels?
Allan Kardec Duailibe, Brazilian National Agency of Oil, Natural Gas and Biofuels
4 energy solutions to 2050 by the numbers
Findings from a worldwide EIU survey on energy solutions
12 why economic growth is the new Priority for energy
Reg Platt, Institute for Public Policy Research
16 the case for Power storage
Tim Weiss and Ed Whittingham, Pembina Institute
From the Economist Intelligence Unit
10 how can we use energy more efficiently?
Gregory Kats, Capital E
15 the future of fossils
Wim Thomas, Royal Dutch Shell
6 overcoming the energy trilemma
Joan MacNaughton, World Energy Council
13 new Policies for new energy demands
John Norris, Federal Energy Regulatory Commission
17 the nuclear oPtion
José Goldemberg, University of São Paulo
Survey results
Trang 3Panelist articles
energy solutions to 2050
online contributions
A selection of the experts who participated
in this debate have written articles for the follow-up report These articles are highlighted by
a green bar in the text.
To support the event, the Economist
Intelligence Unit conducted a survey of
790 people around the world The survey
was carried out between September and
October 2011 and respondents were drawn
from the Americas (41%), Europe (20%),
the Middle East and Africa (20%)
and Asia-Pacific (19%).
Where points made by panelists during the event are relevant to articles written for the follow-up
report, these are noted in the text.
More than 1,600 people registered
to watch the event live online and more than 400 contributions were received via the event’s live feed Where online contributions are particularly relevant to the topic being addressed
in an article, these are noted in the text
this report, edited by the economist intelligence unit and supported by shell, follows an event held in november 2011 that brought together energy experts based in london, washington and são Paulo for a live global conversation on the future of energy
It invites the same group of experts who participated in the debate to explain their views on the most challenging questions that came up during their discussion, and
it also highlights some of the best contributions made in the online debate that
surrounded their conversation.
We would like to thank all of those who participated in the research
If you would like to view the event, you can access it online by registering at
http://live.economistconferences.co.uk
Preface
Trang 4the world faces two major energy challenges over the next 40 years the first is to meet rapidly rising demand for energy,
particularly in developing countries, by dramatically increasing supply the second is to realise this goal while also achieving substantial reductions in carbon emissions failure to meet the first objective will constrain economic growth failure to meet the second will exacerbate climate change
Research carried out for this report underlines how difficult it will be to achieve these two objectives The latest figures show
that nearly 90% of global energy comes from fossil fuels and that renewables (including hydro, solar, wind and others) still only
account for a combined 8% of the total The clear problem with this is that, while it might be possible to meet the world’s
long-term energy supply challenge with this kind of energy mix, large-scale emissions reductions will not be achievable with such
heavy use of fossil fuels
To achieve both of its energy objectives, therefore, the world needs to switch to low-carbon sources of energy According to an
Economist Intelligence Unit poll of 790 business executives, however, that will be a slow process Nearly two-thirds of respondents (65%) stated that they believe fossil fuels will still be the world’s primary energy source in 2030 If true, that will be a major source
of concern for those wishing to prevent or at least limit the extent of dangerous climate change because it will see emissions
continue to rise over the next couple of decades
Against this difficult backdrop, the experts contributing to this report have been set the task of articulating their “energy
solutions to 2050” For the World Energy Council’s Joan MacNaughton (p 6) the answer lies in a combination of innovation,
partnership working between the public and private sectors and robust monitoring of impacts so that practitioners have
“more reliable evidence on what works and what pitfalls to avoid”
Alex Laskey (p 8), president of Opower, a US firm which helps utility companies engage with their consumers to manage energy
use, highlights how much energy is wasted by users and argues for the adoption of information tools that can support behaviour change and improve energy efficiency Gregory Kats (p 10) a clean energy advisor and investor, agrees with the need to boost
energy efficiency, suggesting that “it is the largest, most cost-effective way we have of meeting energy needs and reducing
carbon emissions”
Moving on to other possible solutions, Allan Kardec Duailibe (p.11), Director of the Brazilian National Agency of Oil, Natural Gas
and Biofuels, explains how Brazil has become a world leader in biofuels Wim Thomas (p.15), Shell’s Chief Energy Advisor, argues that fossil fuels will remain a key part of the energy mix and makes the point that states can reduce emissions by switching from
coal to gas and investing in carbon capture and storage José Goldemberg (p.17), Brazil’s former secretary of state for science
and technology, argues that the expected revitalisation of nuclear energy over the next few decades is now unlikely to happen
in the wake of the Fukushima disaster in Japan last year and rising concerns about both the safety and cost of nuclear energy
Meanwhile, Tim Weiss and Ed Whittingham (p.16) of the Pembina Institute, a Canadian think-tank, suggest that power storage is a
“key technological innovation that requires development and deployment to allow renewable energy to become the backbone of energy systems”
On policy, Reg Platt (p.12), research fellow at the Institute for Public Policy Research, a British think-tank, argues that
governments should start making low carbon energy investments “on the basis of the growth and jobs potential that these
investments offer, not merely on account of which is cheapest” Finally, John Norris (p.13), Commissioner at the Federal Energy
Regulatory Commission in the US, explains that one of the biggest roles for government is to regulate energy markets more
effectively by taking action to “eliminate unnecessary barriers and level the playing field for participation by different players and technologies in the market”
As Joan McNaughton rightly points out in her article, there is no “silver bullet” for dealing with the world’s energy challenges,
so on its own none of these individual ideas would be capable of meeting the world’s need for both more energy and reduced
emissions If states are to deliver on the demands being placed on them, therefore, an intelligent and pragmatic mixture of
policies and investments will be required This report helps decision-makers and other interested parties understand more about what this policy mix might look like
introduction
Trang 5international air travel increased by
over the same period
0 25 50 75 100
Which energy sources will allow us to increase supply
and reduce carbon emissions between 2031 and 2050?
TECHNOLOGIES AND RESOURCES
think fossil fuels will
be the world’s primary
are very concerned about the problem
0 25 50 75 100
POLICIES
think the world’s governments are committed to dealing with climate change
think democracy stands in the way of climate change
Who should taKe the most resPonsibility For dealing With climate change?
if the changes had no effect
on their real income
would agree that if these led
to a decline in their real income of more than 5%
THE UNITED NATIONS: 20%
INDIVIDUALS: 17%
BUSINESSES: 13%
OTHER/DON’T kNOw: 9%
Source: BP Statistical Review 2011
Due to rounding, the figures in this chart do not sum to 100%.
COAL
OIL
NUCLEAR
1%RENEwABLESHyDRO
NATURAL GAS
NATURAL GAS
Trang 6the global energy conversation
Until growth in energy demand can
be uncoupled from economic growth,
we will continue to see global energy
demand rising, especially in emerging
and developing countries In the latter,
a key priority will be expanding access
to electricity for the 1.3bn who lack
access today As the outcome of the 17th
Conference of the Parties (COP17) to the
UN Framework Convention on Climate
Change in Durban has shown, there
remains broad commitment to global
emissions reductions and indeed, 2012
has been declared the Year of Sustainable
Energy for All
The challenges are numerous Energy
must be accessible and affordable,
contribute to the well-being of people
and the environment, and enhance
economic growth now and for the future
Policymakers must accommodate these
multiple requirements while reducing the
carbon intensity of energy and addressing
this “trilemma of energy sustainability”
There is no silver bullet of policy that
addresses all needs simultaneously -
though carbon pricing is probably the
most important single measure and
more national or regional moves
to encourage low carbon investment by valuing carbon are needed This article addresses four key drivers of low carbon growth, applicable in both developed and developing countries
getting the policy framework right
Governments set the frameworks that enable markets to deliver and they also plan strategically for national or regional infrastructure needed to deliver it, and thereby keep costs lower than they would otherwise have been It is important for governments to bear in mind that their intervention may create uncertainty and unintended consequences—stable, long-term, transparent policymaking can help
to reduce this risk
As highlighted in the 2011 Assessment by the World Energy Council (WEC) of country energy and climate policies, policy must
be evidence-based and rooted in robust, independent analysis of the objectives of the policy intervention and the context
in which it is made Transparency is vital to help business and consumers to understand the trade-offs that may be involved in adopting specific policies and their broader implications
This should also imply high standards of consultation and public engagement
This is to ensure that draft policies are subjected to rigorous and broad-based assessment, as well as giving those who will be affected by them enough notice to prepare themselves to adapt and comply
Above all, implementation of the policy must be monitored to ensure that it is delivering as intended, including ensuring consistency across policy dossiers Here
it is vital that governments are able to balance the need to provide markets with long-term policy stability against the
necessary flexibility to adapt and change policies that may be failing
UN mechanisms - such as Nationally Appropriate Mitigation Activities , the Technology Mechanism and the Green Climate Fund, among others – will play vital roles in assisting developing countries to adopt the cleanest technologies and where possible to
“leap-frog” to lower-tech solutions
the importance of supporting innovation
Policy needs to be tailored to support the whole innovation chain, from education
in mathematics, science and engineering
in schools to the competitive environment for businesses This includes supporting invention through funding support for basic research in universities and the encouragement of international collaboration; supporting collaborative research by encouraging links between research organisations and the private sector to take inventions out of the lab and turn them into products and services; and supporting competition through protection of Intellectual Property Rights
overcoming the energy trilemma Joan macnaughton, executive chair of the 2011 energy Policies assessment report from the world energy council, reviews the options for driving low carbon growth.
gas is the dominant
direction right now
because of lower prices
and the emerging shale
gas industry, but in the
long term we’re going to
see more intermittent resources
and a need for intelligent grid
uK, we’re investing in a diverse energy supply but i’m concerned that there has been a drop in the funding of carbon capture and storage
Reg Platt
Research Fellow
IPPR
Trang 7(IPR), and through putting in place the
right regulatory frameworks to drive
product development and lower costs
IPR is important because it enables
companies to place a value on innovation
This is critical not just for companies, but
for emerging and developing economies,
as they build knowledge-driven, high
value-added economies and industries
It is also critical to achieving climate
change and energy security goals,
which cannot be accomplished without
massive private-sector engagement and
continuing innovation
For example, the WEC policy assessment
report highlighted the role of energy
efficiency programmes, including labelling
schemes such as the US Energy Star
programme This voluntary labelling
scheme for household products and
commercial building equipment is widely
considered to be a success Not only does
it deliver substantial energy savings
and emissions reductions, but it is also
a considerable driving force behind
important technological innovations, such
as efficient fluorescent lighting, power
management systems for office equipment,
and low standby energy use
enabling transformational technologies
Innovation can help us deliver both lower
emissions and broader access, specifically
via two transformational technologies:
carbon capture and storage (CCS) and
smart grid technology
The World Energy Outlook 2011 of the
International Energy Agency (IEA) places
heavy reliance on CCS, which it estimates
could deliver 18% of the emissions
savings needed to stay within the 450ppm
atmospheric limit The IEA’s CCS Roadmap
projects that 3,400 CCS plants will be
needed globally by 2050 and expects that,
by that time, developing countries will
account for 64% of all captured carbon
dioxide emissions If these nations are
not encouraged and assisted to adopt the
cleanest technologies at this crucial stage
of their development, they will “lock-in”
sources of carbon dioxide emissions for
decades to come To avoid this requires developing supportive policy frameworks and providing capital funding support as well as ongoing support through feed-in tariffs
or similar measures
Good energy policy should also enhance and increase mechanisms that incentivise energy efficiency in the power generation, transmission, and distribution context
In particular, regulators should consider the substantial capabilities of smart-grid technologies for achieving these objectives
Smart grids help to manage electricity supply reliably and efficiently
Without them we will neither be able
to maximise the use of renewable power nor achieve effective demand management Smart grids can also support action to reduce CO2 emissions They help to manage intermittency and can facilitate connection in remote areas and for smaller generation sources Through their enhanced data and information flows to end-users and network operators, they also offer greater flexibility in balancing electricity demand and supply – maximising efficiency in dispatching generation, and minimising network losses
When applied together with smart generation, electricity interconnectors, back-up capacity, storage options and demand-side response, smart grids can open up new possibilities in managing power supply and demand
imperative to engage business
These solutions will only be delivered through unprecedented levels of public-private partnership, based
on clear commitments, transparent policies, agreed outcomes and, crucially, efficient and effective deployment of financial resources
This means engaging business in the policy discussion to gather feedback and benchmark against global policy best practice It also means collaborating to deliver, using public-private partnerships (PPPs) to attract private investment in major public infrastructure projects PPPs offer the benefits of flexibility in securing diverse sources of up-front finance and funding, and help mitigate risk through sharing it between those partners best able to bear it PPPs help most where projects are hard to finance on purely commercial terms, for example where technology is deployed for the first time in
a country (especially where it can support capacity building), or where a government faces the challenge of simultaneously developing infrastructure, policy frameworks and supply chains
The important thing is that governments should be active participants, co-funding projects, ensuring that they are aligned with national development priorities and implementation plans and encouraging early dialogue with private-sector partners
any new energy technology needs a few years, sometimes decades, before
it can take off and reach a substantial market share.
Wim Thomas
Chief Energy Advisor
Royal Dutch Shell
As we discuss the world in
2050, it is important to remember where we will see the biggest population and demographic changes Policies must therefore
be designed with the appropriate degrees of flexibility taking into consideration some insights about population, water, and other resources that are required to secure universal access to energy
Lawrence Jones, Alstom Grid Inc, UNITED STATES
Trang 8Most people spend less time thinking
about their energy use every year than it
will take you to read this article – about
six minutes for an average consumer in
the industrialised world.1
Those six minutes largely go towards
checking and paying utility bills
As a result, consumers are completely
in the dark about their inefficient
energy use, leading to massive amounts
being wasted every year According to
a recent McKinsey and Company study,
this waste amounts to an estimated
£260bn (or US$400bn) a year globally,
which equates to enough energy to
power more than 330m homes McKinsey
also estimated that the US alone could
reduce energy consumption by 23% and
save families and businesses more than
£130bn (or US$260bn) on their energy
bills in the next ten years through
increased energy efficiency.2
There is an immediate, cost-effective
solution to this wastefulness: behaviour
change It can not only have a drastic
impact on our environment, but can
also accelerate the adoption of other
impactful energy improvements such
as deriving more power from renewable
resources or making structural changes
to peoples’ homes Still, behaviour
change is often overlooked for several reasons
Energy is relatively inexpensive In the
US, only 1.7% of an average household income is spent on energy bills Most consumers aren’t motivated to make changes to save enough for an extra fast-food meal once a month Even
in the environmentally progressive
US cities of Berkeley, California and Boulder, Colorado, a recent study found that only 0.18% and 0.64% of the population, respectively, participated
in available energy efficiency programmes.3
Energy data generally aren’t interesting
Research shows that 90% of people say saving energy is important to them4, yet it’s a subject that most people spend very little time thinking about
Presenting an overwhelming amount
of numbers and charts on energy usage won’t inspire change
Energy is confusing and ambiguous
Most average consumers don’t know what a kilowatt hour (or therm) is, such that when they receive their bill, they don’t have the context to determine whether using 200 kwh per month is a high or low amount
There are a lot of misconceptions about using energy For example, research also shows that 81% of people leave their heating or cooling system running when they aren’t at home They believe
it takes more energy to turn the systems off and power them on again than it does to leave the systems running for
an extended period of time, which simply isn’t true for most households Similarly, 48% leave their lights on, thinking that the same phenomenon applies there as well.5
So the question is, how do we get consumers to think more about their energy usage and motivate them to make changes in their everyday lives?
In 2005 the world-renowned behavioural economist Dr Robert Cialdini, who is also the author of
Influence, set out to answer this
question Dr Cialdini and his students
at San Diego State University ran field tests during a hot summer in California, going door to door and putting notices
on households’ door handles The households received notices with one
of four different messages printed on them One group of homes received a notice that said: “Turn off your AC [air conditioning system] and turn on a fan
new behaviours behaviour change is an immediate and cost-effective solution to inefficient energy use, argues alex laskey, president of opower.
As mentioned earlier, there are no
single “silver bullet” instruments But
there are opportunities to learn from
“best practice” policy In order to do
so, we need more rigorous evaluations
of energy-policy instruments to bring
to light more reliable evidence on what
works and what pitfalls to avoid It is
necessary to translate global findings
about successful policy instruments into
local arrangements and settings that
work This translation works best as a
dialogue between international policy experts, industry executives, and stakeholders and policymakers from relevant jurisdictions The 2012 WEC Assessment of countries’ energy and climate policies will aim to contribute further to the better understanding of what constitutes successful policy and to deepen the policy dialogue between business and policymakers
energy-author biograPhy
Joan MacNaughton is Executive Chair of the 2011 Energy Policies Assessment Report from the World Energy Council She is an influential figure in the energy and climate policy debate and holds a variety of UK, EU and international roles
Trang 9– you can save money.” Another group of
homes received a notice that said: “Turn
off your AC and turn on a fan – you can
save the environment.” The third group
of homes received a notice that said:
“Turn off your AC and turn on a fan – it’s
your civic duty.”
After three weeks, Dr Cialdini and
his team analysed the homes’ energy
consumption and found there was zero
impact on any of the three groups’
consumption from receiving these
notices However, there was a fourth
group Their notice said: “4 in 10 of
your neighbours turned off their AC and
turned on a fan.” Homes that received
this message used on average 6% less
electricity than the control group
This discovery of the impact of social
norms was a catalyst for the creation of
Opower Since then, our work – now with
more than 60 utilities, including nine
of the ten largest in the US, and 10m
homes across the country and in the
UK – has led us to have a much deeper
understanding of the mechanisms
needed to harness the power of
behaviour change to have a profound
impact on energy usage, and therefore,
the environment
As Dr Cialdini’s study identified,
normative comparisons (like the
fourth example above) work well, as
do other tools such as goal setting,
usage ranking, and historical usage
comparisons that tap into humans’
innate competitive nature But
it is the insights and actionable
recommendations – not just the data –
that must be presented
While this is a relatively new concept
in the utility industry, the general
concept is not completely foreign
Personal finance tools like Mint.com
provide users with reports on their
spending and investments that are
beyond the numbers The service has
evolved into personalised insights and
recommendations on services and steps
that people can take to save money
At Opower, we have first-hand experience of the results this type of energy reporting can achieve In the mid-western state
of Minnesota, we work with ten regional utilities, and our home energy efficiency reports have saved individual customers more than £4m (or US$6m) on their energy bills and more than 110 gigawatts of electricity since 2009
Providing contextualised and actionable energy usage information stimulates behaviour change, but must be coupled with continuous engagement strategies
Similarly to how speed limit notices are strategically placed every few miles on the roadway, the best way to sustain changes in energy behaviour is to use regular and subtle feedback loops
The new smart metering technologies being deployed now allow utilities the opportunity to prompt action when it counts; not at the end of the billing cycle, but in real time Like the low balance account notice you might receive from your bank or the over use alerts you might receive from your
mobile service provider, utilities can now alert a customer if the home is
on track for an irregularly high charge for that billing period and offer tips to avoid that outcome
Energy-related behaviour change is a complex challenge and a global problem that creates an opportunity to activate energy users of all ages, interests and demographics by delivering the right messages at the right time across all communication channels Social media are a particularly interesting medium
to harness the power of networking and stimulate a global dialogue about energy consumption While people spend six minutes a year thinking about their energy use, they spend one
in every six minutes online accessing social media to share, comment, and engage with others If even seconds
of that minute were spent on related topics, the impact would be tremendous
energy-As the international community continues to grapple with sustainability, energy security and concerns over global warming, enabling and empowering consumers to make simple behavioural changes can result
in a windfall of savings The impact
on the economy and the environment
is truly exciting – now, and for future generations to come
1 Accenture “ Engaging the New Energy Consumer.” 2010
2 McKinsey & Company “Unlocking Energy Efficiency in the US Economy.” July 2009
3 Bailey, Mark and Johnson, Claire B “Innovative Energy Efficiency Financing Approaches.” 1 June 2009
4 Research conducted by Opower Summer 2010
5 Research conducted by Opower Summer 2010
The issue of
inefficient energy use is a critical one in developing countries, particularly where grid supplies are intermittent, unreliable and often very expensive The answer requires a mixture
of consumer behavioural change, improvement of the quality of grid supply and a more developed off- grid response, particularly for the poorest and most isolated consumers.
Neil JefferyRenewable WorldUNITED KINGDOM
author biograPhy
Alex Laskey is president of Opower and responsible for engaging utility and government partners with Opower’s purpose and products He was invited to the White House to meet with President Obama to discuss innovation and job creation in the green economy
Trang 10How big a role do you think energy
efficiency can play in helping the world
reduce carbon emissions and meet the
growing demand for energy?
Energy efficiency is the largest, most
cost-effective way we have of meeting
energy needs and reducing carbon
emissions It decarbonises the energy
system in that it allows us to switch
to lower energy intensity and reduce
the amount of waste The explosion
in energy efficiency funded by venture
capital, in green building, smart grid
and renewables technologies means that
we can cut energy use/CO2 by half
cost-effectively today in most buildings
Many questions have been raised
about the cost-effectiveness and
merit of investing in energy efficiency
Corporations, cities and states that
have adopted energy-efficiency
funding strategies have had a positive
return from a cost-effectiveness and
job-creation perspective For example,
California’s sustained
energy-efficiency strategy over the last three
decades has allowed households
to save US$56bn in energy over
1972-2006, thus reducing the state’s energy import dependence
Where are we making the most progress in being more efficient and which areas do we need to pay most attention to?
The industry and owner-occupied buildings tend to be more energy efficient but we should be doing a lot more in terms of cogeneration and on-site generation to build energy-efficient buildings We need
to design our buildings better by harvesting daylight and reducing the artificial amount of lighting, through
an integrated design approach
Energy efficiency provides building owners with the opportunity to lower operating costs, increase occupancy, enhance building quality and increase financial returns The very rapid growth of green design standards that address health as well
as energy and water are making green energy an important branding issue and a differentiation strategy for corporations, cities and universities
What are the obstacles to fully realising the benefits of energy efficiency?
We need to be a lot more transparent
on the cost of energy An individual who rents space and doesn’t pay the energy bill has no incentive in investing in energy efficiency There are currently 15 to 20 American states that have no energy efficiency requirements, whereas we need to adopt standards for buildings and meter energy use more effectively We are switching more to renewables – and their limits in terms of reliability and availability can be offset by
intelligent building monitoring and management systems such as Tendril and Building IQ
Which measures, if any, should countries adopt to encourage energy efficiency?
Countries should adopt deeper efficiency standards, both for new constructions and retrofits Companies should harness the power of social media by going through social media contacts and sharing information about energy use Banks should structure large energy-efficiency funding that enables large-scale funding Increasing energy-efficiency financing represents one of the largest and most important opportunities not only to meet our energy needs and reduce carbon emissions, but also to expand economic growth and job creation
energy-what has been really neglected by policymakers
is the supply side of energy efficiency in the commercial sector you need mandatory standards to drive progress
in this area.
Joan MacNaughton
Executive Chair of the 2011 Energy Policies Assessment Report
World Energy Council
how can we use energy more efficiently?
gregory Kats, President of capital e, answers questions about energy efficiency improvements and explains why countries should adopt deeper energy standards.
Demand-side management is
key to increasing energy efficiency
Clear incentives and policy decisions
towards higher effciency, will help
bring about the convergence of
introducing clean technologies and
reducing waste This is true in the
residential as well as the commercial,
services and transport sector, which
will be the main areas of energy
Gregory Kats is President of Capital
E, a national clean energy advisory firm, and is also Venture Partner
at Good Energies, a billion-dollar global clean energy investor, where
he leads investments in energy efficiency and high performance buildings
Trang 11The world faces a double challenge
of guaranteeing energy supply to its
population and providing a clean and
sustainable environment for generations
to come To reach these objectives, the
world’s energy mix must be diversified
Countries such as Brazil have applied
technology to biofuels to address
this challenge
In the 1970’s, after the first oil price
shock, Brazil strategically invested
not only in exploring oil in the deep
sea water, but also in clean energies
After three decades, the pre-salt oil
reservoirs turned the country into a
major oil exporter However, investments
in hydraulic energy and biofuels have
positioned Brazil as a reference
in clean energy In the biofuels
area, sugarcane mills have been turned into bioenergy complexes, producing ethanol, sugar, electricity, carbon credits and, in some cases, biodiesel and green diesel fuel
How did Brazil reach this point? The answer is an agenda that combines economic, energy, social, environment and technology policies, along with regulatory transparency and political leadership According to Empresa de Planejamento Energético – EPE (a state-controlled enterprise that subsidises the planning of the energy sector), 43.9% of Brazilian domestic energy is generated from renewables, compared with the world and OECD average of respectively 14% and 6% Currently, according
to EPE, biomass-derived electrical energy accounts for 4.7% of electricity consumed in the country
In this context, an important innovation
in Brazil was the flex fuel – or dual fuel – vehicle in 2003, which is capable
of running on ethanol, gasoline or any mixture of the two fuels in any proportion This innovation, which let the consumer rather than
the state decide which type of fuel the car consumes, has boosted ethanol consumption in Brazil enough to balance the domestic consumption of gasoline and ethanol In 2009 Brazilian vehicles consumed more ethanol than gasoline, and it is estimated that more than 50%
of the entire automobile fleet in Brazil is made up of flex fuel vehicles
Two significant results of the development of the biofuel industry in Brazil must be emphasised First, the significant reduction of the country’s dependency on foreign oil Ethanol production has saved over US$60bn
in the foreign trade balance, without considering the earnings from ethanol exports Second, the decrease of greenhouse gas emissions (specifically
CO2), since a great part of the carbon emitted when ethanol is burned is captured from the atmosphere during sugarcane photosynthesis
Biofuels (ethanol, biodiesel and biomass) have the competitive advantage of being produced in various regions in Brazil, meeting local needs and reducing transport and distribution costs
These strengths are key to a country of continental dimensions like Brazil But although it is possible to grow sugarcane and oleaginous plants almost anywhere
in Brazil, the Ecological Zoning Law approved by the National Congress prohibits agricultural and industry-related activities in protected areas such as forests and marshlands Meeting the demand for ethanol by 2017 will require the use of only 2.56% of Brazil’s arable land
The investment in research and development of new technologies is another important issue for biofuel policies in Brazil, which include the
what role for biofuels?
biofuels have been a key component to diversify brazil’s energy mix, argues allan Kardec duailibe, director of the brazilian national agency of oil, natural gas and biofuels
brazil turned to
biofuels to reduce its
dependence on oil but it will
need to diversify its energy
supply further to meet
growing energy demand.
the productivity of
sugar cane is much higher than
that of corn and wheat, and
countries should encourage
mandates to blend ethanol
into gasoline.
brazil lacks an adequate
strategy to address structural
factors that have reduced the
competitiveness of ethanol.
Marcos Sawaya Jank,
President and Chief
Executive Officer,
UNICA
Affordable and sustainable energy solutions for emerging markets hold the key to elevating the standard of living for billions
This can reduce their dependence on fossil fuel imports, provide greater economic independence, and show
a path to the developed world on how to move towards a sustainable energy infrastructure
Prof Deepak Divan, Georgia Institute of Technology, UNITED STATES
Trang 12training of professionals working in the
biofuel industry The Science Growth
Acceleration Programme (PAC) launched
by the federal government has a budget
of around US$22bn funded by public and
private resources The objective is to
invest more than 1.4% of the country’s
GDP in R&D, compared with current
investment of 1.1% of GDP
Biofuels have been a key component to diversify Brazil’s energy mix, and the country is widely recognised as a biofuel industry leader However, Brazilian biofuel companies have suffered in 2011 from poor margins owing to rising prices for corn and sugarcane and will need to scale back their growth ambitions for the coming years
Last year closed on the back of two
unusually optimistic pieces of news:
first, the surprising, albeit limited,
progress made at the international
climate negotiations in Durban; second,
the growth of clean energy investment
beyond US$1trn worldwide The low
carbon transition has stepped up a
gear, and with it the international
race to develop and deploy low-carbon
technologies is well and truly under way
Given the perilous state of the global
economy, this timely shift provides huge
opportunities for jobs and growth
Clean energy sectors are already growing
fast In November 2011 Bloomberg New
Energy Finance1 recorded the trillionth
dollar of investment by governments,
corporate and private investors into
renewable energy, energy efficiency
and smart energy technologies
since its records started in 2004
Annual clean energy investment has risen nearly five-fold, from US$52bn in
2004 to US$243bn in 2010, a compound annual growth rate of 29% However, as recent experiences in the solar sector show, countries wishing to benefit from these growth industries will need to be both strategic and bullish This means identifying sectors where they have a comparative advantage and entering these sectors with bold ambitions
In recent years, as governments worldwide have piled support into their domestic solar industries, the price
of panels has plummeted The price of polysilicon, a core material, fell by 63%
in 2011 While such transformational cost reductions are welcome, they mask how over, supply of panels has caused havoc
in the sector - many companies have gone bust as a result The most high-profile of these was Solyndra, whose bankruptcy involved defaulting on a US$528m loan from the US government2
At the end of 2011 a number of US-based solar firms lodged a complaint with the
US International Trade Commission (ITC) alleging that China was driving down prices by subsidising its solar exports and dumping panels on the US market (i.e selling at prices below the costs
of making and marketing panels) In December the ITC found a “reasonable
indication that a US industry is materially injured” by the import of solar panels from China “that are allegedly subsidised and sold in the United States at less than fair value”3 The vote clears the way for additional steps by the commission and the Commerce Department that could result in heavy tariffs on Chinese imports4 The Ministry of Commerce
in China has launched a retaliatory investigation into whether American subsidies and other policies in the solar, wind and hydroelectric sectors have unfairly hurt the industrial development
of China’s renewable energy industries
Putting potential breaches of World Trade Organisation (WTO) rules to one side, these events show the significance with which clean energy markets are increasingly viewed and how hard
An international deal
could provide a global economic
stimulus by providing green
business with a clear commitment
to emission reduction for the
foreseeable future, helping boost
the green economy.
Juliet Davenport,
Good Energy,
UNITED KINGDOM
Re Durban, the danger is that policy is moving too slowly We have political consensus on a 2° temp rise (above pre-industrial levels) limit but continue to move further along a 4-6° degree pathway.
Brian Ó Gallachóir, University College Cork, IRELAND
why economic growth is the new Priority for energy reg Platt, research fellow at the institute for Public Policy research (iPPr), explains why governments that adopt ambitious and strategic energy policies with growth at their heart are likely to end up on top
author biograPhy
Allan Kardec Duailibe is currently Director of the Brazilian National Agency of Oil, Natural Gas and Biofuels He is a researcher and Professor of Electrical Engineering
at the Federal University of Maranhão (UFMA)
Trang 13countries are going to fight for the
spoils However, governments that
are bound by outdated views of the
energy sector may fail to capitalise on
the opportunities
Energy policy is regularly seen through
the prism of a “trilemma” - that is, how to
balance the needs for an energy system
that is at once low-cost, low-carbon and
secure A new approach to this problem
is required Governments should make
investments to create a low-carbon and
secure energy system on the basis of the
growth and jobs potential that these
investments offer, not merely on account
of which is the cheapest
Forthcoming research from the IPPR will
argue the case for countries like the UK
to develop modern sectoral industrial
policies These policies should include
the public and private sectors working
together to identify opportunities in
sectors where the UK has a comparative
advantage and overcoming barriers to
development The report argues that, in
the new global economy, characterised
by the rise of Asia and decline of a single
paradigm to organise our economic
thinking, an activist government is
essential for returning the economy
to a period of sustained growth
What this means for energy policy is that governments, working with private-sector partners, must first identify sectors in which their country
is likely to have a comparative advantage and then put in place the appropriate support This could include investing in skills, training and R&D, providing tax credits and low-interest loans to support start-ups and the commercialisation and market breakthrough of new technologies Comparative advantage will arise from a mixture of factors, including resource availability and the nature of the technologies It will vary between countries - hence, while offshore wind is likely to be a key opportunity for the UK, concentrated solar power may be more appropriate in Spain China with its cheap labour force has clear advantages in manufacturing but for emerging technologies which require high level engineering and scientific expertise, such as carbon capture and storage, the UK may be better placed A complementary strategy for the UK would also be to play to its current strengths in
carbon finance, services and project management
Prospects for the global economy in
2012 look bleak, but clean energy offers countries worldwide major opportunities Not all countries can
be winners from clean energy, but governments that adopt ambitious and strategic policies with growth at their heart are likely to end up on top
1 http://bnef.com/PressReleases/view/176
2 solyndra-mess.html
http://www.nytimes.com/2011/11/25/opinion/the-3 http://www.usitc.gov/press_room/news_
release/2011/er1202jj1.htm
4 http://www.nytimes.com/2011/11/26/business/
policies-in-renewable-energy-trade.html?_
energy-environment/china-looking-into-us-r=1&scp=3&sq=solarworld&st=cse
The energy industry is facing
unprecedented and rapid change
From a US and international perspective,
two of the most marked challenges
that are driving this change stem from
the need to expand our energy supply
and the need to grapple with climate
change Meeting these challenges will
increase costs to consumers as we look
to replace cheap but carbon-intensive
energy sources and also modernise
ageing infrastructure that was designed
to transport and utilise these old
energy sources, all within the context
of meeting the energy needs for more people in the world than ever before
And so a key question becomes, how do we spend money wisely? How do we ensure that increases in energy costs are no more than necessary to establish a clean and reliable supply of energy?
In an industry as capital-intensive as energy, governments cannot meet these challenges alone This is particularly true in the current context of spiralling government deficits and mounting
new Policies for new energy demands government regulators and private investors should work together to establish
a clean and reliable supply of energy, argues commissioner John norris of the federal energy regulatory commission
author biograPhy
Reg Platt is a research fellow
at the Institute for Public Policy Research (IPPR) He has responsibility for developing policy positions across a wide range
of domestic climate and energy issues including micro-renewables, energy efficiency, behaviour change, community-led initiatives, clean tech and corporate sustainability
carbon has costs to allow the markets to work you need carbon pricing and companies should use it internally
to make more rational investment decisions
in energy.
Gregory Kats
President, Capital E Venture Partner, Good Energies
Trang 14calls for fiscal discipline While
government action will be one driver
of the coming change in our energy
industry, private investors, market
participants and technology developers
will also need to answer the call
Any basis for action must begin by
addressing climate change The science
surrounding climate change is not
going to suddenly change, nor will the
issue of climate change suddenly solve
itself The US and other governments
must address this issue head-on,
because market action alone will
not be able to stop or reverse climate
change Once governments establish
the ground rules that require everyone
to pay the full environmental cost of
their energy usage, markets can be
relied upon to make the extraordinary,
long-term investments needed to
reduce carbon emissions from the
energy sector
In the US, the lack of a national climate
change policy has created a great
deal of uncertainty and inefficiency, which ultimately leads to higher costs for consumers In some instances, policy uncertainty could lead entities
to continue running older and less efficient plants until they are certain cleaner and more efficient generators will be required While this could be cheaper in the short term and delay the investment in new infrastructure,
in the end it will result in dirtier and less efficient units running longer at a cost both to consumers and to human health While some are waiting until a national policy is established before acting to address the issue, other industry leaders are changing their practices in anticipation that Congress will eventually act to establish clean energy standards and a national climate change policy In the interim, the only clear requirements are various state renewable energy standards and climate change initiatives This has made states, rather than the federal government, a major driver of national energy policy While states should be applauded for their leadership, the different rules that each state develops prevent markets from investing in efficient and cost-effective solutions that only a national policy on climate change can support
While firm government action is needed to enable the markets to develop solutions to climate change, the appropriate role for government
in expanding energy supply may be more subtle, but no less important
Here, government action is needed to eliminate unnecessary barriers and level the playing field for participation
by different players and technologies
in the market
In the US, the Federal Energy Regulatory Commission is doing its part to remove barriers and ensure a level playing field in the electricity and natural gas wholesale markets and transmission networks that it regulates On the network side, we continually work to remove barriers
to infrastructure development and ensure open access to the networks
On the markets side, we regularly review the rules and regulations that govern participation to ensure robust competition For example, electricity market rules were largely designed with traditional thermal and hydroelectric generation units in mind These rules may need to be re-examined in order to accommodate new market entry from intermittent renewable resources, electric storage providers, energy efficiency and demand resources, among others, that will all be needed to help expand energy supply and replace ageing infrastructure Simply put, we need to modernise market rules to keep pace with the new realities of our expanding energy supply
It is important to emphasise that efforts
to expand energy supply will be all the more difficult in the absence of adequate action to address climate change Clearly
it is possible to expand energy supply
in a way that is at odds with addressing climate change – in fact, it is happening every day The investments needed to expand energy supply typically involve long-lived and capital-intensive assets that cannot be changed or replaced overnight We need to make
It is absolutely vital
that governments have a clear
policy on energy strategy and
this is communicated in a way
that allows industry and capital
to respond favourably and in
a way that does not prejudice
commitments already made
We recognise we are living in
a time of limited government
funding and concerns for the
cost of energy, but capital is
scarce and is subject to global
competition Those governments
which do not create a workable
policy framework that recognises
this will see their energy
it very hard for businesses to invest when policies change relatively frequently - and that’s happening or has happened recently in a number
of countries.
David Elmes, Warwick Business School, UNITED KINGDOM