FOSSIL FUELS WILL REMAIN TENABLE: STUDY
NEXT FOUR DECADES
Fossil fuels’ dominance will remain unchallenged for at least the next four decades even if countries pursue environment policies, according to a new report by the World Energy Council.
Tectonic shifts are taking place with China replacing the United States as the world’s leading crude importer, even as the U.S. reinvents itself as the world’s largest producer of oil liquids.
The WEC report, published Tuesday, envisions two scenarios for the future: “Jazz,” in which energy accessibility and affordability trumps sustainable development; and, “Symphony,” in which countries move toward a more harmonious and environment-friendly path. In both scenarios, fossil fuels remain dominant.
“The future primary energy mix in 2050 shows that growth rates will be highest for renewable energy sources. In absolute terms, fossil fuels (coal, oil, gas) will remain dominant, up to and including 2050. The share of fossil fuels will be 77% in the Jazz scenario and 59% in the Symphony scenario — compared to 79% in 2010.”
While renewable energies are making a dent, they will remain a periphery energy source. Their share of energy sources could increase from around 15% in 2010 to almost 20% in Jazz in 2050 and almost 30% in Symphony in 2050, the report noted.
“Renewables will play an important role in our future energy mix ... However, a number of challenges for renewables remain,” Christoph Frei, secretary general of the World Energy Council, said in a statement.
“There is huge unexploited hydropower potential especially in Africa, Asia and Latin America, but a number of large projects are facing local resistance. There is significant potential of biomass energy, particularly in Latin America, but concerns about the energy-water-food nexus have to be carefully managed. Other technologies, such as marine energy, still require a lot of effort in RD&D.”
Newly discovered reserves of oil will also keep the hydrocarbons industry chugging along. The WEC notes that crude oil reserves are 25% larger than 20 years ago, and production has gone up a fifth during that period.
“The oil reserves in the world could be quadrupled if unconventional resources such as oil shale, oil sands, extra heavy oil, and natural bitumen are taken into account,” the report said, noting that global oil reserves-to-production ratio of 56 years with total available reserves estimated at 223 billion tonnes.
Much to the dismay of environmental groups, coal will continue to play a key role in energy development.
The much-maligned energy source is the cheapest fuel to generate electricity and will remain an important source of energy for the foreseeable future, according to a separate report by the World Energy Council and Bloomberg New Energy Finance.
Globally, coal is still the king of electricity production, accounting for over 1.8 terawatts of installed generation capacity, or 46% of total capacity, the report noted.
“Electricity production from fossil fuels — coal, gas and oil — makes up roughly 65% of global power generation, but in 2012 net investment in renewable power capacity outpaced that of fossil fuel genera- tion for the second year in a row US$228-billion for renewables versus US$148-billion for additional fossil fuel generation.
“Despite new measures to discourage coal-fired plants in North America and Europe, coal will continue to find favour among emerging markets, especially China and India where accessibility and abundance will trump environment considerations. Fossil fuels are used in 66% of electricity generation, while new renewables supply around 5%. Over the past decade, coal and natural gas have increased their share of electricity generation and account for 51% of all electricity generation.
But there is some good news for renewable energy, especially in electricity generation. While coal and natural gas electricity plants are currently cheaper than wind, solar and other renewables the trend is slowly changing, the report notes.
“Our study finds that although fossil fuels continue to dominate, renewable energy and the investment appetite for them are growing from strength to strength,” said Guy Turner, chief economist at Bloomberg New Energy Finance. “With wider deployment, the price of renewables will fall, reducing the risk for investors, and we expect to see greater uptake over the years.”
Renewable technologies contributed 23% to global electricity capacity and is said to grow to 34% by 2030.
“Clean energy investment grew seven-fold between 2004 and 2011, with wind and solar continuing to dominate. Wind is expected to rise from 5% of installed capacity to 17% in 2030, and solar photovoltaic [PV] from 2% to 16% in 2030, with the relative contribution of fossil fuel falling from 67% in 2012 to 40-45% in 2030 (though capacity will grow in absolute terms).”