Scene-setting

To state the bleeding obvious, it is not becoming any easier to have a satisfactory conversation about where energy demand and supply is heading, still more so when cutting carbon emissions is thrown in, whether one is talking about Australia or the world as a whole.

The noises coming from Bonn, where the latest United Nations gabfest on climate change is winding towards an end, illustrates this in any number of ways.

Here, for example, is Angela Merkel, still wrestling as I write this with the challenge of forming a new German government 54 days after the national poll, talking to the CoP23 audience about the Energiewende. “Now, at the end of 2017, we know that we’re still lagging quite a bit,” she said, acknowledging the country’s abatement ambitions are playing a significant role in the talks to form the next governing coalition.

“These talks,” she said, “are about fulfilling the existing pledges, but also about social questions and jobs – for example when talking about reducing [the role of] coal – and about profitability and the affordability of energy.

“Even in a rich country like ours, there are significant conflicts about this in society – and we have to solve them.”

Coal, she said, has to “significantly contribute” to reaching the German emissions target – “but how exactly; that’s what we will have to discuss very precisely in coming days.”

Goodness, and here were we thinking (because the activists constantly tell us so) that all we have to do is follow the German approach and our own “Energiekrise” will be over.

I referred in my previous post on this site to the International Energy Agency’s latest Outlook publication – which, contrary to what can be read in various bits of the media, is not a set of predictions but of scenarios – and overnight I have been looking at an IEA table that seeks to encapsulate our possible global futures out to 2025 and 2040 using millions of tonnes of oil equivalent as a common denominator.

The agency splits its current scenarios in to three: one extrapolates from existing national policies, a second takes up the pledges the world’s governments took to Paris and which form the backdrop for the Bonn discussions and a third is based on what IEA analysts suggest could be the picture if a far more major effort should be made to pursue the goal of limiting climate change.

To continue as we are at present, the IEA suggests will see oil usage at 4,815 mtoe in 2025 and 5,477 mtoe in 2040 – staying ahead of coal (4,165 and 5,045 mtoe) and gas (3,514 and 4,682 mtoe). In this scenario, nuclear’s share of demand is 839 mtoe in 2025 and 997 mtoe in 2040. The renewable segments are hydro power, bio-energy (both traditional and modern usage) and non-hydro resources, mostly wind and solar power. The IEA postulates these at 409 and 511 mtoe for hydro, 1,507 and 1,728 mtoe for bio-energy and 441 and 856 mtoe for wind, solar and so forth.

In this context, we can expect (says the agency) around a 23 per cent rise in energy demand between 2025 and 2040 and the dominance of fossil fuels (coal, oil and gas) to continue – amounting to some 79 per cent of the total a quarter century from now.

Of course, we have the word of governments at Paris that business as usual is just not on, so the outcome of pursuit of their announced commitments is important.

Under “new policies,” which the IEA puts forward as its “main scenario,” the agency projects a situation in 2025 where the coal share is 3,642 mtoe, oil is 4,633 and gas 3,436 mtoe. The nuclear share is 839 mtoe and hydro 411 mtoe – with bio-energy at 1,530 mtoe and wind, solar etcetera at 490 mtoe.

Looking out to 2040 in this scenario, the agency suggests the breakdown could look like this: coal 3,929, oil 4,830, gas 4,356 (overtaking coal), nuclear 1,002 and hydro 511 – with bio-energy up to 3,801 mtoe and wind, solar etcetera surging to 1,133 mtoe (nearly triple what it was in 2025). The fossil fuels share of this outlook is 75 per cent.

The critical factor is the global output of carbon dioxide emissions, which the agency sees falling from 42.7 gigatonnes annually in 2040 under business as usual to 35.7 Gt under “new policies.”

This, it points out, will not deliver a desirable outcome in managing climate change, which is why it postulates a “sustainable development” scenario in which coal plunges to 1,777 mtoe in 2040, oil is at 3,306 mtoe and gas at 3,458 mtoe while nuclear’s share rises to 1,393 mtoe, hydro power is at 595 mtoe, bio-energy is 1,551 mtoe and wind, solar etcetera soars to 1,955 mtoe.

In this scenario, global energy demand has fallen to 14,084 mtoe (on the back of a major energy efficiency drive) and global annual carbon dioxide emissions are down to 18.3 gigatonnes.

However, even this is still a world in which fossil fuels deliver 61 per cent of energy needs to a population now pushing towards 10 billion people.

Green activists claim to like this scenario (which they treat as a prediction) because, as one local booster put it this week, it shows coal to be “dead and buried” as a source for electricity – which it doesn’t. But the big issue (in terms of managing greenhouse gas emissions) is the whole global energy scene and, even after what would need to be a Herculean investment effort, coal, oil and gas would be a significant part of meeting the needs of the world’s community if this scenario came to fruition.

It’s worth noting also that this “sustainable” model sees nuclear and hydro power together – both technologies the darker greens strongly oppose – making a contribution bigger than bio-energy and roughly as big as wind, solar etcetera.

Earlier this month I saw a major newspaper here headlining our “torturous” path to the energy future. “Torturous” is characterized by pain and suffering; but, perhaps inadvertently, the paper has it right, I think. Our local debate would be a tad less torturing if more of it could focus on real analysis rather than guff, emotion and wishful thinking. As one of my distinguished (and exasperated) colleagues put it in an email exchange this afternoon “sound energy policy has become perverted by unfiltered tripe,” calling for more sagacity in assessing the situation.

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