This week, BP has published its latest Energy Outlook 2035, which analyses likely global energy use in 20 years’ time. Also this week, a further element of the EU Ecodesign Directive brings in mandatory energy efficient standards for domestic ovens, cookers and cooker hoods (EU introduces new rule to make cooking greener). Further standards will be introduced and existing ones tightened over the coming years. They now apply to a range of appliances, but this time there has been no repeat of the media furore over the banning of the highest-powered vacuum cleaners.
The change would save the average consumer €50 a year or €230 over the lifetime of an oven (presumably only if they traded up from a less efficient appliance). This is fine as far as it goes: saving energy benefits us all in the form of lower utility bills. And, despite these modest savings of a few percent on bills, putting this together with other more efficient appliances (in particular, LED lighting as it becomes mainstream) will rack up the overall savings.
But we have to put this into context. In 20 years, there will be 1.6 billion more people on the planet, according to the latest predictions. That’s more than three times today’s total population of all 28 EU Member States. But the world economy is set to grow faster still, doubling in size, with GDP per capita being 75% higher than today. China and India are expected to be the world’s largest and third largest economies and together will account for about a third of both global population and GDP.
All this, of course, needs more energy. Despite the continuing trend towards lower energy intensity (less energy per unit of economic output) primary energy consumption is set to increase by 37%, growing by an average of 1.4% each year. 96% of this growth will be outside the OECD, with energy consumption up 2.2% annually.
But it is the energy sources which are really important. Oil’s share of the total is expected to continue declining, but it will still retain its overall number one position. Coal’s share should fall as the impact of abundant, cheap gas is felt, and gas itself will continue to grow in importance. The net result, though, is that in 2030, we will still rely on a combination of these three fossil fuels for 81% of our energy needs, a drop of only 5% from 2013.
And this is despite renewable energy (including biofuels) growing at 6.3%, driven by subsidies and climate change policies. Indeed, this projection shows that the primary goal of policy – to reduce global greenhouse gas emissions – will be very far from achieved. Carbon dioxide emissions look set to grow by 1% annually, to be 25% higher by 2035 than they were in 2013.
So, the question must be why is the EU dictating what kind of oven we can buy when, globally, any impact will swamped by what is happening in Asia? The obvious answer is that we have to meet our agreed emissions reduction targets, particularly in the UK where independently set carbon budgets carry a legal obligation. Another response is that Europeans have a moral obligation to reduce emissions because we were responsible for burning large amounts of fossil fuels and kicking off the rise in atmospheric levels of CO2. Another, less idealistic, answer is that we should be trying to establish a lead in low-carbon energy generation and energy efficiency technologies as part of our future industrial base.
Maybe, but the track record is mixed. Danish and German companies are strong in the wind turbine sector, but much manufacturing is done overseas. Solar panel manufacturing is essentially now centred on China. In the wind sector, there is still a significant element of engineering design, which favours established players, while photovoltaic cells are pretty standard pieces of kit. Any significant innovation will come from the design of the cells themselves, whether by increasing efficiency or using lower-cost raw materials. In neither case is there any European lead.
If we choose to ignore the global situation and focus simply on EU emissions, then a reduction of 30% envisaged by 2030 is probably quite feasible, at a cost. Beyond that, though, further reductions would become increasingly difficult and costly. And if this is so difficult in the mature European economy, which has enthusiastically taken a lead in emissions reduction, what does that say about the task in fast-growing China and India?
Not that this stops the continued expansion of current renewable energy technologies in the rich world. We learn, for example, that IKEA to make Polish operations ‘energy independent’ following wind farm deals and that Dogger Bank offshore wind farm wins government approval. Given the global situation, this looks increasingly like window dressing.
Setting clear targets can be a mixed blessing; there is something measurable to focus on, but this may actually be a distraction from a more important overarching goal. Organisations rediscover this time and time again when seemingly well-planned targets actually give perverse incentives to take a sub-optimal course of action.
The renewables target falls into this category. All things being equal, no-one would argue against emissions reduction if it could be done cost-effectively. But subsidising wind and solar farms and putting additional costs on to supply grids is not working. Two things which would make a lot more sense would be a redistribution of the burden of taxation towards emissions (a technology-neutral carbon tax) and a large investment in R&D to develop economic, large-scale energy storage systems and improved generation technologies.
Develop new technologies, and we may very well have a competitive advantage in tomorrow’s economy. And dictating what kind of oven we can buy would no longer be necessary.
Martin Livermore
The Scientific Alliance
St John’s Innovation Centre
Cowley Road
Cambridge CB4 0WS
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