There is a global energy war happening in front of our eyes. The battle is being waged in energy and finance ministries around the world, and in the boardrooms of energy companies and their bankers. It is the battle between a high-carbon and a low-carbon energy future. And the outcome is unclear..
On one side, we have global investment in renewable technologies (particularly wind and solar) leading the charge – for the last 3 years it has exceeded investment in generation from fossil fuels. Last year, fully 70% of European investment was in renewables.
Leading this charge is Germany, whose national “energy transition” will reduce emissions by 40% by 2020 and by 80% by 2050 without use of nuclear power – using renewables and energy efficiency alone. Meanwhile, China has become the world’s largest producer of both wind and solar power. In California, South Korea and Australia new emissions-trading schemes have recently put a price on carbon.
But on the other side of the trench, we still are fighting an enemy. More coal – the dirtiest fossil fuel – was used to produce electricity last year than for 40 years. As the International Energy Agency warned this month, this is driving up global carbon emissions, which rose by an alarming 3% in 2011. Coal burning now represents almost a third of all power generation; it is rising even in Europe, as the economic slump slashes the carbon price. And there is more to come: the World Resources Institute reports that globally no fewer than 1,200 new coal plants are currently proposed, two-thirds of them in India and China. Meanwhile, Canada leads the countries exploiting highly carbon-polluting tar sands, and the oil majors eye up the Arctic for new oil.
Whats the cost of this battle? – If the world is to limit global warming to 2C, it must keep greenhouse gases in the atmosphere to under 450 parts per million. We are currently at 392, and rising fast. To have a good (80%) chance of staying within the 2C limit, that means the world can emit only another 565 gigatonnes of carbon dioxide. But global fossil fuel reserves are much bigger than that, equivalent to 2,795 gigatonnes, or five times the safe amount. In other words, we can only avoid devastating climate change if we keep most of the world’s fossil fuels, including almost all of its coal, in the ground.
Can this battle be won? – The stone age did not end because we ran out of stone. We know how to produce energy without carbon emissions – through renewables, geothermal and nuclear power and much greater energy efficiency. The variable supply of renewables needs to be overcome through interconnected smart grids that ensure that electricity can flow from wherever it is being generated to wherever it is needed, with demand adjusted to supply. Gas (the least emitting fossil fuel) can provide baseload capacity, as long as it is located where carbon capture and storage technology can in due course be applied.
Creating a decarbonised energy system of this kind will not be cheap. But there is no energy future that is cheap. And war will always have a high price tag.