A recurring word in debates about climate change is “Energy Transition”. The International Renewable Energy Agency defines energy transition as “a pathway toward transformation of the global energy sector from fossil-based to zero-carbon by the second half of this century. At its heart is the need to reduce energy-related CO2 emissions to limit climate change”.
So, energy transition is not, as some believe, a revolution changing our life overnight, eliminating fossil fuels and completely replacing them with renewables. The energy transition is a gradual modification of our sources of energy which already started in the past, at different rates in different regions and in all sectors of our economies.
By looking at past energy transitions we can understand current transitions and have an insight on possible future developments.
In the 1850s, whale hunting was a very successful business. Whales were hunted for their oil, used as a fuel in illuminating lamps. In 1859, after the discovery of oil by Colonel Drake in Pennsylvania, a better fuel for illuminating lamps became available and literally destroyed the whale hunting business. In 1879, Thomas Edison started the first power station to provide electricity in New York City. In the following years, electricity progressively displaced kerosene used as an illuminating fuel in big cities and the oil business was broken. This was the first time that the “funeral” of the oil business was celebrated. In 1908, Henry Ford produced the Ford T. By 1912, one million cars were circulating in the USA and the oil business resurrected. To illustrate the penetration of cars in the USA, a photo of Wall Street in 1908 would show hundreds of horses and a few cars. A decade later a photo in the same place, would show hundreds of cars and a few horses.
Nevertheless, such revolutionary changes cannot be generalised since some energy sources could take several decades to be commercially deployed on a global scale.
In 1769, James Watt invented the steam engine but coal displaced wood decades later.
Today, billions of vehicles circulate around the globe but in some parts of the world various quadrupeds are still used to move goods and people. There are regions where populations still use basic biomasses for cooking and almost a billion people do not yet have access to electricity.
All in all, energy transitions occur at very different rates for various technologies and in different regions around the world.
Clean energy transitions and greenhouse gas emissions
One way to quantify greenhouse gas emission related to energy use is the following identity proposed in 1997 by a Japanese economist, Yoichi Kaya.
The first term “Population” is the number of inhabitants of the globe, a factor often neglected in debates about climate change. Indeed, scenarios show that by 2050, global population will reach 9 billion. This will generate a huge increase in energy demand and emissions since they both are affected by the number of people that our planet sustains.
The second item of the equation “GDP/Person” indicates how much gross domestic product (GDP) an average person produces. This ratio is generally associated with wealth and social progress. The more goods and services citizens can produce and consume, the wealthier they are.
The first two items of the Kaya identity, population and GDP per person, have been steadily increasing in the past century except during wars, famines, financial crises and lately Covid-19. Therefore, with some limited exceptions, population and GDP will continue to increase. If we want to reduce emissions, we need radical reductions in the third and fourth items of the Kaya identity.
The third item “Energy/GDP” is the energy needed to generate a unit of GDP and quantifies the energy intensity of an economy. The lower the intensity, the more efficient the economy is. In past decades, our economies have become more and more efficient. The average consumption of new cars and buildings has been decreasing, industry has become more efficient and we have been progressively shrinking the Energy/GDP ratio.
Decreasing the energy intensity is the best way to reduce or at least mitigate emissions and must be the cornerstone of our energy policies.
However, while it is true that in the developed world there has been a decoupling between GDP growth and energy consumption, in the developing countries more and more people have increased their wealth and consequently their energy consumption. Improved standards of living in developing countries has resulted in a huge increase in energy consumption and greenhouse gas emissions. Between 2018 and 2019, China increased its CO2 emissions by approximately 300 million tonnes. This was more than the total emissions of France in the same period.
The fourth item in the equation is Emissions/Energy. This ratio gives the relative importance of low carbon sources in our energy mix. If our energy needs were satisfied by low carbon technology such as renewables, nuclear and, to a certain extent, natural gas, the emissions per each energy unit consumed would be minimised.
To reduce the fourth item, we must replace fossil fuels, and particularly coal, with low carbon sources. Renewables and nuclear (if a country decide to use nuclear) will have a key role but the role of natural gas should not be dismissed. If we burned gas to produce electricity rather than coal, we would halve the associated CO2 emissions. In the 1990s, the UK progressively shifted from coal to gas for power generation and Germany replaced inefficient lignite and coal plants with gas. This energy transition, the so called “dash for gas”, substantially reduced the greenhouse gas emissions of both countries.
Looking at the past 70 years we see another transition. At the end of the Second World War, coal provided more than half of the global energy needs but, since then, it has been replaced by other fuels. In 2018, coal’s share of global energy needs fell to 27%, the lowest level in the past decade. Still, coal remains the second source of energy at global level. If we had a magic stick which would allow us to replace all coal in the world with natural gas, global emissions would be reduced drastically, at least by a two-digit number.
Moreover, if gas is burned in conjunction with Carbon Capture and Storage, a technique which collects the CO2 emitted by gas power plants and safely stores it in underground reservoirs, this fossil fuel could be considered, in all respect, a low carbon technology.
Nothing stands still and in the future energy transitions will continue. However, the clean energy transition is not a revolution which will turn the world green overnight but, a process which will require decades.
The first two items of the Kaya identity, population and energy consumption associated with increase in GDP, will continue to grow.
Today almost a billion people live with less than two USD per day and they rightly aspire to increase their living standards. The challenge would therefore be to provide these people with affordable and low carbon energy.
Efforts should be on the third and fourth items of the Kaya identity - namely the increase of energy efficiency and further penetration of low carbon sources.
Energy efficiency should be the cornerstone of any strategy of decarbonisation.
Renewables will be key but will not be able to provide energy to some sectors, sea and air transport, as well as some industries (cement and steel production).
There is also a role for natural gas, the cleanest of the fossil fuels, particularly if used in conjunction with Carbon Capture and Storage.
The European Union set laudable and ambitious targets for reduction of greenhouse gas emissions but it represents less than 10% of the global emissions. Any strategy for climate change therefore needs to be agreed on a global scale involving developed and developing countries, industries, research entities and other relevant stakeholders.