Transcript Towards a Energy Technology Strategy

The questions
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Is economic growth leading to excessive exploitation of natural
resources and to degradation of the ecosystem?
Are increases in welfare, as measured by GDP, providing adequate
employment opportunities, and are the benefits widely shared?
What is the right balance between public interventions and market
solutions in responding to these issues?
Are governments taking a long-term view of their responsibility
towards the current and next generations?
How can OECD governments show leadership and commitment to
address pressures on the global commons?
And how can they help developing countries, many of which lack
economic resources and local capacities, to move towards
comprehensive sustainable development?
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Sustainable development
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Sustainable development brings a new perspective to concerns
over the use of natural resources.
A central policy question is whether the earth’s ecosystem could
sustain the high pressure on natural resources that would result if
all countries were to adopt lifestyles similar to those now
prevailing in the most economically developed countries
Given the considerable scope for substitution among resources,
what matters more than absolute scarcity is whether human
ingenuity can keep combining man-made, natural and human
capital in ways that enable human needs to be met.
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Externalities
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The importance of externalities - the costs and benefits to society
of economic activities that are not reflected in the market prices is not limited to natural resources.
A major obstacle in achieving sustainable economic development
arises from the presence of external environmental costs and the
lack of well-defined property rights for many environmental
resources
Open access to such resources free of charge means that producers
and users lack the economic incentives to take the full costs of
environmental degradation into account
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Damage Cost Estimates for Energy Fuel Cycles
(UK Specific Results)
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Global warming
Noise
Materials
Crops
Occup. Health
Public health
ECUcent
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Source DG XII
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Coal
Oil
Gas
Nuclear
Wind
Biomass
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RES vs Conventional Power Plants
Production Cost
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BM
WE
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ECUcent/kWh
HY
1 0
GE
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Gas
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Coal
Average Cost in 98 :
PV :
30
HY : 8.25
GE : 7.00
WE : 5.33
BM : 5.30 Coal: 3.7
Gas:4.0
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Gas vs RES Power Plants Production cost
Including External cost
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Coal vs RES Power Plants Production cost
Including External cost
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Technology
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Technology will be critical in meeting the needs of current and
future generations and de-linking economic growth from
environmental degradation.
But appropriate technological change is not automatic, and
technologies may also lead to pressures on natural resources,
create health hazards, and raise difficult ethical considerations.
Governments must improve framework conditions so as to provide
the right incentives and price signals to firms and influence
consumer’s awareness and behaviour.
They often have a direct role in the financing of the basic research
underlying innovation in clean technologies and support for the
development of markets for the substantial stock of more energyefficient technologies that are close to being competitive.
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The impact of Kyoto
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Emission reduction targets are legally binding under the Protocol
whereas under the United Nations Framework Convention on
Climate Change (UNFCCC) there was no legal obligation.
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Inclusion of sinks, which would in principle allow the inclusion of
the intake of carbon by forests and agricultural soils.
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Energy
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Energy use and production is by far the most important source of
total greenhouse gas emissions, representing around 80% of 1990
EU emissions.
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The most important gas is CO2 coming from fossil fuel production
and use. Around a third of total EU emissions of CO2 originates
from electricity and heat production.
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Transport
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Transport accounts for around 20% of total EU emissions in 1990.
Analysis shows that in the absence of new policy measures it is the
sector with the greatest potential for growth in CO2 emissions up
to 2010.
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Emissions of N2O due to catalytic converters and HFC emissions
from on-vehicle air conditioning are also expected to grow strongly
over this period.
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Strategy
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Greenhouse gas emissions are linked to a vast variety of economic
activities.
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A successful policy strategy will have to be comprehensive
involving the stakeholders belonging to different economic sectors:
 identifying
throughout the economy a range of cost-effective
policy measures.
 identifying indicative emission objectives for the sectors
mentioned above.
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Clean Coal Technologies
ADVANCED TECHNOLOGICAL PROCESSES
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Advanced pulverised coal-fired boilers (PCF)
Atmospheric fluidised-bed combustion (AFBC)
Pressurised fluidised-bed combustion (PFBC)
Integrated gasification combined-cycle systems (IGCC)
Pressurised pulverised coal combustion (PPCC)
Integrated gasification fuel cell systems (IGFC)
Magnetohydrodynamic electricity generation (MHD).
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Net Efficiency of Solid Fuel-Based Power and Heat
Generation Technologies
Advanced PCF
PFBC
IGCC
PPCC
IGFC
20 %
30 %
40 %
50 %
60 %
Net Efficiency
1992
2000
2015
Expectations
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Economics of decarbonisation
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5
1000 TWh/year (EU)
Click here
to type
division
name
Fossile fuels with CO2-deposition the only way to
bridge the gap to a sustainable future?
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New Renewable
Gap - CO2-deposition?
Natural gas
Oil
Coal
Nuclear
Hydro Power
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1990
2010
2000
2030
2020
2050
2040
Includes yearly growth in demand from 50 TWh/year
down to 20 TWh/year in 2050 (no exact figures - for illustration only!!)
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Conclusions
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Lowering the absolute consumption of energy in a growing
economy solely by way of technology improvements is close to
impossible, at least in the absence of massive technological
breakthroughs.
To fulfil Kyoto commitments in growing economies it will be
necessary to have a mix of technology policies, changes in relative
prices, and associated measures (dissemination) to enhance the
effectiveness of technology and price-related policies.
Competitive markets have to be enable by appropriate policies in
order to allow transparency of prices, rapid and flexible reactions
to changing structural conditions and the rapid diffusion of new
technologies.
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Conclusions (2)
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Regulations and standards can improve average efficiency and
provide long-term signals for resource allocation.
Relative prices have to reflect a society’s preferences. While public
goods as the prevention of global warming or the maintenance of
energy supply security have intrinsic value, their achievement comes
at an economic cost. Care has to be taken to minimise these costs.
Government policies to facilitate energy technology improvements
need to be strengthened. Efforts need to be concentrated in those
areas that are least likely to crowd out private efforts and maximise
positive spillovers.
None of these types of actions can deliver least-cost solutions on its
own. Together they might.
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