Transforming Energy System Needs More Policy Attention On Demand Side, Expert Says
Posted January 16th, 2012 in Energy
By Elona Malterre
Policy makers should encourage more energy-efficient technologies and end use rather than costly carbon-management schemes in moving to sustainable energy systems, says an international expert and author.
“We need new more efficient energy end-use applications much more than costly add-on carbon management solutions,” says Arnulf Grubler, a professor in energy and technology at Yale University and a senior research scholar at the International Institute for Applied Systems Analysis in Austria.
Energy decision makers and analysts are driven by a mistaken bias to always look at energy system transitions from the supply side rather than the demand side, Grubler told the Institute for Sustainable Energy, Environment and Economy’s Conference on the Assessment of Future Energy Systems (CAFES), held in Calgary in early November 2011.
They do so because it is on the supply side where the data and investment are, he said, adding “that’s where the sexy projects are, that’s where the profits are.”
Although Grubler didn’t mention Alberta specifically, the provincial government has committed $2-billion on the ‘supply side’ of the energy system equation, to help kick start four commercial-scale carbon capture and storage (CCS) projects in the province.
Saskatchewan and other jurisdictions are also looking to CCS as a key technology to reduce greenhouse gas emissions.
However, the Pembina Institute, in its recent report, Responsible Action? An assessment of Alberta’s greenhouse gas policies, says that Alberta’s CCS plan is expensive for a near-term, relatively modest reduction of emissions.
Alberta plans to use reduce carbon dioxide emissions to the atmosphere by 50 megatonnes (Mt) by 2020, and cut emissions by 200 Mt by 2050 – equivalent to a 14-per cent reduction from 2005 levels. (See http://www.environment.alberta.ca/0909.html).
However, the Pembina Institute’s report says that the emissions reduction to be achieved through the four CCS projects is predicted to be about five Mt, “a small number compared to the more than 30 Mt reduction in annual emissions that Alberta’s 2008 climate plan aims to obtain from CCS by 2020 . . . On that basis, given that this is Alberta’s main policy for implementing CCS, its near-term effectiveness must be considered poor. (See page 16 at http://www.pembina.org/pub/2295).
Pembina says its assessment shows that Alberta will only cut greenhouse gas emissions by up to 14 Mt below ‘business as usual’ by 2020, unless the province implements significantly stronger measures.
Pembina’s report outlines six key recommendations to strengthen Alberta’s current climate policies. The most important recommendations are to require a levy on all emissions from industry, not just on12 per cent of emissions which is the case now, the environmental policy research group says.
Grubler, in his talk to the CAFES conference, pointed out that in the history of energy system transitions, large system transformations have been driven by innovations in end use of energy as opposed to the supply side.
The development of the internal combustion engine drove the use of fossil fuels – “not oil wells” – much like the invention of the steam engine fueled the use of coal, he said.
Discussions about energy transitions also need to focus on “quality” and not always on “quantity,” Grubler said. The quantity of the energy resource available is important, but the “structuring of quality (of the energy resource) is always more important,” he said, particularly in an increasingly urban global society.
Future energy innovations will be driven by the increasing urbanization of vast numbers of people who currently live in rural areas with low-quality, high-polluting fuel sources such as wood, he predicted.
According to the Population Reference Bureau, “It is expected that 70 per cent of the world population will be urban by 2050, and that most urban growth will occur in less developed countries.” (See http://www.prb.org/Educators/TeachersGuides/HumanPopulation/Urbanization.aspx).
Cities will be required to deliver large amounts of clean, convenient energy, Grubler said. “Energy wise, what has to be one of the most important energy drivers is urbanization.”
Urban centres out of necessity place strong constraints on energy sources in terms of quality issues such as density and cleanliness, he said, although these centres are also major hubs of innovation. “Innovations happen where many people, bright minds congregate and exchange ideas.”
Energy system transformations also historically have taken a long time, which is both good and bad news, Grubler said. “If one acknowledges that the (global energy) system turns over in a period of 70 to 100 years, that’s actually already too late for the climate change challenge.”
However, by learning from past transformations, we could accelerate the rate of change of these massive energy systems, he added.
Referring to various data from the past 12,000 years, Grubler said that the use of energy does not happen in a linear progression, although it appears to do so. For example, in rural India, people are using energy exactly the same way that people there did 10,000 years ago – using low-value biomass (wood and manure) to cook their foods.
Reliance on conventional fossil fuel energy systems is still “unfinished business” in much of the rural world, he said. He expects that these are the areas where more efficient, sophisticated new energy systems will take root and expand faster, compared with the far more resistant Western world where fossil fuel systems are entrenched.
Using a “simple mathematical model” and historical data from Great Britain and elsewhere in Europe, Grubler showed his audience the rate at which coal replaced traditional fuel sources of whale oil and wood, and how coal was in turn replaced by oil.
Coal development started in Britain and became dominant in the 1820s, followed by fractional amounts of coal use elsewhere in Europe. “The early pioneer (in a new energy system) develops very early on, very slowly, and very massively,” he said.
“We then have a second group of countries . . . Germany, France and the Netherlands . . . which are basically the first countries to catch up to this industrialization paradigm of Britain.”
What Grubler called “the periphery” – countries such as Spain, Italy, Sweden and Portugal – much later embrace steam technology and start mining coal to fuel steam engines.
However, Britain, which was the “lock-in” steam innovator in the world, became a “laggard” in the next energy transition to oil, in what Grubler called the “first in, last out” phenomenon. “It means if you’re the first to develop a new energy system, if you’re the first to embark on a new energy transition, you’re most likely to stay locked in that transition for the longest period of time.”
The main reason for the delay in embracing a new energy system is the “sunk capital-intensive investments,” he noted. Society has invested huge dollars into the existing energy system and is reluctant to leave those investments stranded.
"[It is] a very simplistic historical rule which we could document for many, many individual cases,” Grubler said.
The time it takes to transition to a new energy system is also a “hopelessly slow dynamic,” he said.
For example, the global trend toward “decarbonization” – removing carbon as carbon or CO2 either before or after fossil fuel combustion – is about 0.3 per cent per year, Grubler noted. “Now if you look at the growth of an economy [being]three per cent per year, that [amount of decarbonization] is ten times too slow to compensate effectively. So it’s a big challenge.”
“What is required is not a reversal from historical trends. What is required is just an acceleration from historical trends, because the movement [toward decarbonization] suggests societies are headed in the right direction,” he said.
It took about 160 years for coal to displace 80 per cent of the previous traditional biomass fuel sources used previously, and another 160 years for coal’s share in the energy system market to drop to 10 per cent in the wake of increasing oil use, Grubler said.
However, that scenario unfolded very differently across Europe. Britain, the pioneer in coal-fired power, became locked into coal for a much longer time than other countries that had the “advantage of late comers.”
Being late in transitioning to a new energy system means a country can catch up and learn from a pioneer’s mistakes. Being late also means a country can leave early, because it is less locked in and entrenched in the new system, he said.
Still, the process of energy systems transformation is “frustratingly slow for those people who . . . aspire for rapid development, bringing the poor into the energy system or rapid improvement in the environmental compatibility of energy systems,” Grubler said.
To accelerate the process, “we have to massively intervene into the system through policy initiatives,” he said.
The challenge, he added, is that current global energy systems are subject to political influence and special interests. Governments subsidize coal-fired power in some jurisdictions and try to get rid of it in other places, or subsidize nuclear power in some areas and abandon it completely elsewhere.
The result, Grubler said, is a cacophony of various interest groups that has led to a stalemate in global energy system transformation. EnviroLine
Video and audio of Grubler’s presentation, as well as other keynote speaker presentations at the CAFES conference, are available at: http://www.iseee.ca/cafes/