The world is changing — and changing fast — and so is the energy world. There are now growing signs, that in the fast changing environment, with stress on alternatives and renewable, for both political and environmental reasons, the dominance of fossil fuel in the overall global energy mix is under cloud. And this carries huge implications for this energy rich region.
And the message becomes all the more resolute, and indeed worth taking note of, when it comes from Fatih Birol, the principal author of the World Energy Outlook 2009. The much sought-after document was compiled by Fatih Birol, the chief economist at the Paris-based OECD (Organization for Economic Cooperation and Development) energy watchdog IEA (International Energy Agency) and his efficient team.
Only a couple of months ago Fatih was termed by Forbes as the fourth most influential person in the global energy supply chain. And as the International Energy Forum Secretariat (IEFS) Secretary General Noe van Hulst, the host of the day, rightly commented in his introductory remarks, “When Fatih speaks, the entire world listens.” And so it was.
The world is striving hard to move away, as much as possible, from fossil fuel. The IEA has already put forward — what is being termed as 450 scenario — to limit the global average temperature increase to 2 deg. Celsius. If it is allowed to continue as it is (the reference scenario), the IEA projections say, global temperatures could rise to 6 deg. Celsius. And that is going to be disastrous for mother earth — Fatih pushed forward in a rather grave tone.
And not every one is happy even with this target. There are countries — especially the small island states, wanting more to be done to control CO2 emission and the rising global temperatures.
In order to achieve even this target, the IEA document suggests urgent measures and all these carry long-term implications for the global energy dynamics — one has to concede. It says, “end-use efficiency is the largest contributor to CO2 emissions abatement in 2030, accounting for more than half of the total savings in the 450 Scenario, compared with the reference scenario.” So this has to be improved — rather drastically.
And the list of ramifications goes on. Fatih says by 2030 electricity generation from fossil fuel will go down and renewable such as nuclear, hydro and others would fill in the gap.
Car industry is to undergo massive and rapid changes in the years to come. Currently 99 percent of cars have internal combustible engines. Now that is undergoing revolutionary changes, with stark implications for fossil fuel markets. After all 75 percent of fossil fuel today is used by the transportation sector. As per the IEA 450 scenario, 60 percent of cars by 2020 would be based on advanced technology, mainly electrical.
Major countries have taken up the challenge of green energy. There is a growing emphasis on harnessing solar energy in various parts of the world. Already there is a project to generate energy from sun in Sahara deserts, and then connect it to a grid taking the energy to Germany and other parts of Europe.
The South Korean government is also committed to securing new sources of energy, and recently announced that they will be spending 50 trillion won ($38 billion) over the next four years in a “Green New Deal”.
Even in Saudi Arabia, as in rest of the Gulf, there is a growing emphasis on tapping the solar riches. The objective is to stay the energy supplier to the world. Under the Masdar initiative, Abu Dhabi is embarking on the first carbon neutral and zero waste city of the world. The $50 million project produces 17,500 megawatts of clean electricity and offsets 15,000 tons of carbon emissions per year. Qatar is also to build a $1 billion solar power plant. Last year, the World Bank announced plans to invest $5.5 billion into solar energy projects in the region. Two major energy deficient countries in the region, Pakistan and India also are serious in tapping their solar riches.
There is also a growing emphasis on nuclear energy too. While the Iranian nuclear program has assumed a political and belligerent route, countries of the Gulf are too embarking on projects to develop and generate nuclear industry so as to meet the growing electricity needs of the region.
But does that necessarily mean the end of fossil fuel industry? No, not at all. In fact, despite the growth of renewable and alternatives, the need of fossil fuel would stay for many, many more decades to come. And Fatih Birol, the chief economist at the OECD energy watchdog, has no problems in conceding that.
In fact the issue of energy poverty is still haunting the mankind. While many amongst us take electricity as granted, the IEA estimates that 1.5 billion people, all over the world, still lack access to electricity. And this is well over one-fifth of the total global population. Some 85 percent of these deprived ones today live in hinterlands, in rural areas, mainly in Sub Saharan Africa and South Asia. In the reference scenario, the total number drops to 1.3 billion by 2030, though the number in fact goes up in Africa.
And this rings to fore another very interesting dimension of the growing gap between the haves and the have-nots as far as access to electricity and energy is concerned. The IEA chief economist underlined that in the New York City alone, with its 8 million inhabitants the electricity consumption is almost the same as consumed in Sub-Saharan Africa, with a population of about 800 million people. And the consumption ratio is simply 100:1 when a New Yorker is compared to a sub-Saharan as the per capita electricity consumption in NYC is more than 6000 Kwh/ person (6024 Kwh/ person to be exact) while it is only 63 kwh/ person in sub-Saharan Africa. While large sections of the world simply cannot afford the basic necessities, whether this sort of life style is sustainable is for the economists, the humanists and the politicians to debate and argue.
The world definitely needs more fossil fuel, in absolute terms, yet the intensity is definitely to undergo a negative change — and whether one likes it or not — the fact remains — that politics too is playing a role in this transition.