Towards 2050: the energy transition

Business Standard , Thursday, August 15, 2013
Correspondent : Nitin Desai
The global energy system in 2050 will be radically different from what it is today. The change will be driven by the growing shortage of cheap liquid fuels and the pressures to reduce carbon emissions to contain the risks of climate change. These factors are subject to qualification; but the chances are that these will drive technologies for energy production and use, energy politics, and the organisation of the energy business from the local to the global level.

Some idea of the scale of transition can be seen in the increase in carbon productivity required to keep the world on track for the agreed two-degree goal. By 2050 the world's carbon emissions will have to roughly halve, even though GDP will be about five times higher - which implies a tenfold increase in carbon productivity. Existing technologies and business models cannot do this; a radical change in both areas is the only way to attain this goal or anything near it.

Petroleum-based liquid fuels and natural gas constitute over 50 per cent of global primary energy supply. They are the foundation of the motorised, urban economy. Some analysts argue that world crude oil production is near its peak and will decline. A part of the pressure will be relieved by gas, particularly shale gas, as a transitional fuel. But by 2050 this will have played out.

Petroleum-based transport is also the source of about a quarter of global carbon emissions, and a radical restructuring of urban mobility patterns by 2050 is extremely necessary to cope with potential oil shortages and climate concerns. Some of the potential changes we may see are more compact cities to reduce travel distances; telecommuting; electric or fuel cell-based vehicles; and personalised public transport.

Assuming that petroleum use is constrained, what could take its place? Coal cannot replace it, unless there are major breakthroughs in clean coal technology as well as carbon capture and storage. Natural gas may continue, particularly if the environmental issues with shale gas are resolved. Nuclear power will surely play a major role - particularly in India and China, where climate concerns will constrain coal usage. But the big change will have to come from a growing contribution from renewables, mainly wind and solar power.

These changes in primary energy mix will come from a major change in the form in which energy is used by the final consumer. A much larger proportion of energy use will be mediated through electricity. The most dramatic example of this could be the replacement of liquid fuel-based vehicles by electric or fuel cell-based cars. The growing role of nuclear and renewables also means an increased role for electricity, since that is how these forms of energy are supplied.

But the electricity system of 2050 will have to be very different from the centralised monolithic systems of today. Smart grids that involve two-way communication between end-users' appliances and electricity supply sources, so that adjustments to cope with demand and supply balances can take place at both ends, will be essential. Thus, if a few million electric vehicles are put in for charging at night, a smart grid can ensure some automatic rostering so that the grid can cope with the huge simultaneous load. Smart grids will also make it easier to utilise renewables with their episodic supply of power.

The other thing that will be different is energy politics, which is dominated today by the desire to control oil supplies. Energy technologies, particularly for energy efficiency, nuclear power, renewables and clean coal, may be far more important than control over oil in determining a country's place in the world power structure.

How well placed is India for coping with these challenges of the energy transition?

The plans made public so far for lower carbon growth are modest: they are aimed more at the weak target of a 25 per cent improvement in carbon productivity by 2020, some mild acceleration in renewables and nuclear power by 2030, and a stronger focus on energy efficiency. The projections continue to show a heavy dependence on fossil fuels, much of which will have to be imported. The Integrated Energy Policy, approved by the government, projects import dependence by 2030 in excess of 90 per cent for crude oil, up to 50 per cent for natural gas and up to 45 per cent for coal. Clearly, we are not on a viable low-carbon or energy security growth path right now.

Demand-side management schemes, such as India's energy trading mechanism PAT (or perform, achieve and trade), focus largely on modest incremental improvements in productivity that are far from the order of magnitude change that will be required by 2050. There is little evidence of serious basic research on reducing costs of renewables, storage technologies to make renewables more useable, smart grids, decentralised energy supply systems, carbon capture, and storage and clean coal technologies. There is even less evidence of radical rethinking on the design of cities and urban transport.

Our electricity systems remain large public sector monoliths, though some attempt to introduce competition has begun. But the way private involvement is being organised makes these private players virtually agents of the public sector with little room for service innovations that could focus on efficiency. The grid remains centralised and constrains the use of renewables. Decentralised supply of renewable energy, which could play a major role in remote rural areas, receives stepmotherly treatment in official schemes for promoting renewables.

Globally, we remain staunch defenders of entrenched developing country positions on climate action. Our pursuit of energy security focuses largely on competing with China to tie up concessions. Our presence in the global technological space in this area is pathetic.

Frankly, our energy policy is living in the past and is not preparing the country for the huge challenges of energy transition that lie ahead. Much more action is needed on promoting research in energy innovations across the board, experimenting with new models for power system management, rethinking urban design, aiming at order of magnitude rather than just incremental improvements in carbon productivity, and learning how to use global climate action to leverage new opportunities for growth and energy security.

In many ways the energy transition is the most difficult of the many transitions to 2050 that lie ahead. It involves long lead times. The sooner we start, the better.


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