Field of dreams

When I wrote earlier about the International Energy Agency’s 2018 world energy outlook (running to 661 pages) I focused on modelling contained in its “new policies” scenario – which one of my professorial friends defines as “aiming to provide a sense of where today’s policy ambitions seem likely to take the energy sector, incorporating not just the policies and measures that governments around the world have already put in place but also the likely effects of announced policies,” including those from the Paris agreement.

On the other hand, what has tended to capture the attention of green-boosting writers here and overseas is the IEA’s “sustainable development” scenario – modelling what energy supply might look like in 2025 and 2040 (it is not a prediction, something quite frequently ignored by the aforesaid scribblers) through pursuing concerted, world-wide action to meet long-term climate goals of the Paris agreement as well as to ensure universal energy access and reduce air pollution.

The agency self-advertises this scenario as a strategy to achieve these goals (a field of dreams, if you like) but, given the multitude of variables posed by potential technology changes as well as geo-political gyrations, it is surely fair to say that what will eventuate over two decades is pretty certain to be different.

In this respect, standing in 2000 and looking to the present, would one have foreseen a 47-fold rise in global electricity supply from wind and solar photovoltaics (32 terawatt hours to 1,519 TWh in calendar 2017) or the effective stagnation of nuclear supply (2,591 TWh then and now 2,637 TWh) or the more than doubling of gas-fuelled generation (from 2,747 TWh to 5,855 TWh)?

Is it likely, as the “sustainable development” scenario projects, that the contribution to global supply from wind and solar PV will treble between now and 2025 (reaching 4,647 TWh) while coal-fired generation slumps 27 per cent (falling from 9,858 TWh in 2017 to 7,193 TWh)? We’ll have to get there to find out, won’t we?

(Not without interest in this regard, given Australia’s strong role in LNG trade, the IEA modelling suggests gas-fired generation will hit 6,810 TWh in 2025 and then fall back to 5,358 TWh in 2040, a contrast with its “new policies” projection that global demand for the fuel will rise 40 per cent between now and 2040.)

The green boosters who rejoice as they focus just on the agency “ sustainable development” scenario, especially its 2040 outlook, seem reluctant, judging by what I see published, to acknowledge that the longer term is not just all about wind, solar, batteries and so forth.

The IEA modelling for the scenario does envisage a major decline in coal-based generation by 2040 (down to less than 2,000 TWh, a third of what it was in 2000 and a fifth of where the agency’s “new policies” perspective sees it going) but it also suggests that gas-fired power supply will be roughly the same then as today and there will be a near-doubling of nuclear power (rising to almost 5,000 TWh).

This version of the 2040 outlook, in fact, sees almost 12,500 TWh coming from fossil fuels and nuclear, the sources the activists love to hate, versus just over 14,000 TWh for wind and solar PV in a global supply that would be a smidgeon over 37,000 TWh. The balance would be made up of almost 7,000 TWh of hydro power (mostly from large dam systems, not a favorite of the greens) and almost 3,500 TWh from such other renewables as biomass (also not a favorite when in the form of woodchips).

Just getting to the desired level of less-emitting supply on this trajectory would require an average annual capital outlay of $US2 trillion between now and 2040, says the IEA, assuming the best path for wind and solar development. Racing beyond it towards 100 per cent renewables, as the radicals insist we should, would cost what?

Parochially, one can also ask what getting to 50 per cent renewables in Australia by 2030 and chasing well beyond that in the following decade would cost in terms of consumer bills, taking in to account all the system costs involved and not forgetting that the activists oppose a rising role for gas? We still have no independent analysis of this, something that becomes more important as federal Labor presents its climate and energy policies ahead of what it anticipates will be an election triumph.

(As a slight digression, I see an ABC report on the IEA publication, quoting the agency’s chief economist, Lazlo Varro: “If you ask the question ‘can you power 100 per cent of the Australian economy on wind and solar?’ with the current state of this technology, the answer is no.Rephrase the question as ‘can you increase the share of wind and solar if you do your homework in improving the system?’ and the answer is definitely yes.” Has it crossed the broadcaster’s mind to go off and get local independent, expert commentary on Varro’s second point, especially in the context of power affordability? Apparently not.)

More broadly, it needs to be borne in mind that what the rest of the world does is beyond just vaguely interesting from our perspective in Australia – it will impact on our exports of uranium, gas and coal plus imports of oil and refined petroleum products, vital components of this economy.

All in all, the IEA “sustainable development” scenario has a raft of implications for this country, both to 2025 and out to 2040, that at least deserve sober reflection.

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