|Eco-restructuring: Implications for Sustainable Development (UNU, 1998, 417 pages)|
|Part I: Restructuring resource use|
|5. Global energy futures: The long-term perspective for eco-restructuring|
Planning for the future is a routine activity in the energy industry. Given present blueprint-to-operation lead-times for new-capacity additions of a decade and more, the inherent longevity of energy infrastructures, and the large up-front capital requirements, the temporal scope of the energy sector planning process is among the longest in private sector business planning.
At the level of government policy, planning has focused on national energy resource management, energy supply security, geopolitics, and issues of national and regional monopoly control. Because of the huge capital requirements of many energy projects, which often exceed private sector financial capabilities, governments have also been involved in energy project financing through subsidies, loans, or loan guarantees.
Yet, on the whole, it is fair to say that there has been a lot of planning but no plan. Clearly, there was never a private or public sector master plan to become reliant on fossil energy sources. This reliance is the result of an evolutionary optimization process within the energy system driven by the human needs for energy services. It has so happened that fossil-sourced carbon fuels have been best suited to meet past and present service demand. Moreover, fossil resources are plentiful and extraction costs are low. The summation of millions of individual choices has been a vote in favour of fossil energy.
Environmental imperatives are about to change the energy industry planning process fundamentally. Utility regulators increasingly enact system oriented planning approaches. Public policies for the protection of the environment are spreading fast. Yet present public policy has been primarily of the command and control type, with a focus on improving specific local environmental conditions such as urban smog or acid deposition. To that extent, it has been adaptive.
Adaptive policy- and decision-making are inadequate tools for combating the potential threat of global climatic change. Given the long residence times of most GHGs in the atmosphere, and the fact that the energy system does not lend itself to quick fixes, policy must become anticipatory and deal with uncertainty.
Anticipatory policy needs a target, a plan, and contingencies. Regarding the policy response to the threat of climatic change, the target is a sustainable energy system, the plan is the accelerated transition to low-carbon energy sources, i.e. natural gas, and the contingencies centre around technology change and innovation.
The target - an energy system designed around the currencies hydrogen and electricity - is consistent with the target of sustainability and is open to innovation and technical change. In particular, such a target system does not require an early decision on the nature of its eventual no-carbon sources. What is important, however, is the build-up of an adequate and highly efficient energy service supply infrastructure suitable for the effective use of hydrogen-rich fuels and ultimately hydrogen.
It is key to recognize that the hydrogen network is likely to grow out of today's natural gas network, just as the ancestors of today's natural gas network originally moved town gas. In future, this includes not only the pipeline but also the cryo fuel/LNG infrastructure. As much as gaseous hydrogen can use the natural gas transport and distribution grid, liquid hydrogen can piggyback on the LNG experience and infrastructure. Similar to the transition from town gas to natural gas, adjustments to the infrastructure will become necessary that account for the unique properties and safety requirements of hydrogen. The important point is, however, that this adjustment occurs at a mature point of the infrastructure's learning curve, leading to a transition that is technologically straightforward and socio-politically acceptable.
The plan - a larger reliance on natural gas - is therefore consistent with the target of sustainability. Indeed, the greater the dominance of natural gas in the evolving energy system - a Methane Age - the easier will be the eventual transition to hydrogen. The transition towards a Hydrogen Age is unlikely to be established much before the end of the twenty-first century and the actual time-frame will depend on many factors, particularly on the probability of occurrence of climate instability. More important is that natural gas paves the way towards hydrogen, potentially minimizing blunders and thus providing a least-regret cost strategy.
The contingency - that the "target" energy system cannot be cast in stone is essential in a world of continuous technical change. Over a period of 50 years and more, technology forecasting based on current knowledge will certainly fail to anticipate the actual inventions and the rate of innovation. The target energy system and the plan, therefore, must incorporate least-regret cost strategies where future innovation enhances the system's performance rather than making previous infrastructure investment obsolete. The most important contingencies relate to the commercialization and market introduction of renewable technologies, the eventual resolution of the nuclear controversy, and the balance between eco-restructuring of the economic production consumption process, in general, and the energy system, in particular.
Even if the greenhouse effect becomes a non-issue, we end up with an energy system that is better in all respects: less polluting on all counts, more efficient, more resilient to surprise, and closer to sustainability. In summary, many of the prudent things to do about the greenhouse effect may well turn out prudent things to do anyway.