Practical approach of ENERGY MANAGEMENT to sustain profitability
A Sustainability Perspective on the Asian Energy Highway · •Challenge 1: Allocation of energy...
Transcript of A Sustainability Perspective on the Asian Energy Highway · •Challenge 1: Allocation of energy...
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A Sustainability Perspective on the Asian Energy Highway
Eric Kemp-BenedictAsia Centre Director, Stockholm Environment Institute
Policy Dialogue on E4SD in Asia & PacificPullman King Power Hotel, Bangkok
17-19 December 2013
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Energy for Development• Providing a clean, affordable, reliable supply of energy to
poor households for lighting, cooking and heating is a prerequisite to successfully fight poverty and improve human well-being
• Challenge 1: Allocation of energy supplies– Basic energy access is difficult to sustain unless incomes rise– Income generation requires energy for productive uses
• Challenge 2: The environment– Energy-related greenhouse gas emissions are about 75% of the
global total– Hydropower and bioenergy could appropriate significant shares
of available land and water resources– Energy production and use results in dangerous pollutant
emissions
Nilsson et al. 2012
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An Energy “Highway”
Benefits
• A useful arena for regional cooperation
• An extended value chain with opportunity for income generation
• A way to smooth intermittent supply from renewables
Challenges
• A vulnerability if relations deteriorate
• An extended distribution network with potentially many weak links
• A technologically complex and potentially vulnerable energy infrastructure
• …and will it be affordable for SIDS?
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Some Contrasts
Urban Rural
Grid Decentralized
High GHGs Low GHGs
Steady Intermittent
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Some Contrasts
Urban Rural
Grid Decentralized
High GHGs Low GHGs
Steady Intermittent
Long-term centers for development
Immediate focus for development
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Some Contrasts
Urban Rural
Grid Decentralized
High GHGs Low GHGs
Steady Intermittent
Long-term centers for development
Immediate focus for development
(Relatively) cheap and well-tested technology
(Currently) more expensive and new technology
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Perspectives on an AEH
1. Global
2. National
3. Local
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GLOBAL:DEVELOPMENT WITHIN BOUNDS
“A 4 degree warmer world can, and must be, avoided – we need to hold warming below 2 degrees,” said World Bank Group President Jim Yong Kim. “…Climate change is one of the single biggest challenges facing development, and we need to assume the moral responsibility to take action on behalf of future generations, especially the poorest.”
World Bank Press Release 20 November 2012
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Global Challenges: Planetary Boundaries
Rockström et al. 2009.Image from nature.com
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Connections to Energy
• Energy use is the main source of GHG emissions
• Energy-water-food nexus
– Energy for water: pumping, desalination
– Water for energy: hydropower, thermal cooling
– Land for energy: biofuels, wood stoves, charcoal, modern biomass combustion
– Energy for food: machinery for land preparation, harvest, and land conversion; processing and transportation; fertilizers
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Global Challenges: Planetary Boundaries
Rockström et al. 2009.Image from nature.com
Focus on climate change
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http://www.climateactiontracker.org/
Inaction on Climate
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Source:IPCC
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Approximate income (PPP$/yr ) at year of peaking
$- $10,000 $20,000 $30,000 $40,000
United States
Canada
Australia
EU27
Russia
South Africa
Iran
Brazil
China
Indonesia
India
LDCs
Income in 2010 (Annex 1 countries)
Income range in 2015-2025 (non-Annex 1 countries)
Sources: World Development Indicators Databank (World Bank, April 2012); Incomes in 2005 PPP US$
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Development will be Different
• If we address climate change globally:– Consumption in high-income countries, and tourism, could fall– Demand for mitigation and adaptation technologies should rise– Value of fossil fuels could fall as demand declines, although it
could also rise, depending on rates of decarbonization– Value of renewable energy sources should rise– Electricity is likely to be given new uses, especially for transport
• If we do not:– Impacts on agriculture, coastal zones, and islands will become
increasingly severe– Intense rain events and extreme heat are likely to be more
frequent– Costs of climate impacts will rise (along with demand for
adaptation technology)
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Electricity Generation
Quantitiesavailable
Use forelectricity
Energy density
Transport intra-
structure
Carbon intensity
CoalVery large but finite
Baseload High Generic Extremely high
OilShrinking but finite
Baseload High Generic Very high
Natural gasLarge but
finitePeaking High Special-
purposeHigh
RenewablesIndefinitesupply w/
annual limit
Somebaseload,
mostly intermittent
Low to moderate
Must be close to
generation
Zero to moderate
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Electricity Generation
Quantitiesavailable
Use forelectricity
Energy density
Transport intra-
structure
Carbon intensity
CoalVery large but finite
Baseload High GenericExtremely
high
OilShrinking but finite
Baseload High Generic Very high
Natural gasLarge but
finitePeaking High Special-
purposeHigh
RenewablesIndefinitesupply w/
annual limit
Somebaseload,
mostly intermittent
Low to moderate
Must be close to
generation
Zero to moderate
A low-carbon transition
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Electricity Generation
Quantitiesavailable
Use forelectricity
Energy density
Transport intra-
structure
Carbon intensity
CoalVery large but finite
Baseload High GenericExtremely
high
OilShrinking but finite
Baseload High Generic Very high
Natural gasLarge but
finitePeaking High Special-
purposeHigh
RenewablesIndefinitesupply w/
annual limit
Somebaseload,
mostly intermittent
Low to moderate
Must be close to
generation
Zero to moderate
A low-carbon transition
Energy highway
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Electricity Generation
Quantitiesavailable
Use forelectricity
Energy density
Transport intra-
structure
Carbon intensity
CoalVery large but finite
Baseload High GenericExtremely
high
OilShrinking but finite
Baseload High Generic Very high
Natural gasLarge but
finitePeaking High Special-
purposeHigh
RenewablesIndefinitesupply w/
annual limit
Somebaseload,
mostly intermittent
Low to moderate
Must be close to
generation
Zero to moderate
A low-carbon transition
But relying on an extended network is a challenge for SIDS
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Energy Return on Energy Invested
0
15
30
45>100
historical fossilrecent fossilrenewables
"civilizational minimum"
EROI values Hammerschlag 2006; Goldemberg 2007; Murphy and Hall 2010Civilizational minimum: Hall et al. 2009
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Energy Return on Energy Invested
0
15
30
45>100
historical fossilrecent fossilrenewables
"civilizational minimum"
EROI values Hammerschlag 2006; Goldemberg 2007; Murphy and Hall 2010Civilizational minimum: Hall et al. 2009
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Energy Return on Energy Invested
0
15
30
45>100
historical fossilrecent fossilrenewables
"civilizational minimum"
EROI values Hammerschlag 2006; Goldemberg 2007; Murphy and Hall 2010Civilizational minimum: Hall et al. 2009
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Energy Return on Energy Invested
0
15
30
45>100
historical fossilrecent fossilrenewables
"civilizational minimum"
EROI values Hammerschlag 2006; Goldemberg 2007; Murphy and Hall 2010Civilizational minimum: Hall et al. 2009
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Energy Return on Energy Invested
0
15
30
45>100
historical fossilrecent fossilrenewables
"civilizational minimum"
EROI values Hammerschlag 2006; Goldemberg 2007; Murphy and Hall 2010Civilizational minimum: Hall et al. 2009
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Energy Return on Energy Invested
0
15
30
45>100
historical fossilrecent fossilrenewables
"civilizational minimum"
EROI values Hammerschlag 2006; Goldemberg 2007; Murphy and Hall 2010Civilizational minimum: Hall et al. 2009
Renewable EROI can increase
Fossil EROI declines over time
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NATIONAL:SUSTAINABLE MACROECONOMICS
“International conferences on poverty and the environment…are concerned with themes crucial for the survival of humankind… Sometimes their recommendations involve sweeping changes that would require deep economy-wide reforms. And yet, macroeconomic policy has been conspicuously absent from their deliberations.”
Alejandro Nadal, Rethinking Macroeconomics for Sustainability
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Macroeconomic Analysis• Short-run behavioral responses to policy
– Fiscal– Monetary– Trade
• Structural constraints– Fiscal– Savings and financial– Foreign exchange
• Distributional impacts of interventions• Long-term impacts of short-term interventions• A new task: Explore the implications of relying on
indefinitely renewable but intermittent energy sources with a limited annual supply
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Building Green• It is much more cost-effective in the long run to build a
green infrastructure from the start than to postpone it until later (Ha-Duong et al. 2007, den Elzen et al. 2010)
• However, green infrastructure can be more costly in the short run– The technologies are not sufficiently developed to benefit
from learning-by-doing (the “cost curve”)– It is not the most cost-effective when combined with
existing technologies (lock-in)
• Classic problem of positive externalities– Private investment will require incentives– Suggests a role for public finance
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Political Economies of Scale
• Large-scale infrastructure
– Typically a few well-connected beneficiaries
– So, relatively easy to get buy-in for public provision
• Distributed small-scale infrastructure
– Typically dispersed beneficiaries with little influence
– So, relatively harder to get buy-in for public provision
Not an impassible barrier: look at examples from agriculture (e.g., large-scale vs. small-scale irrigation) and micro-credit
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LOCAL:LIVING WITH INFRASTRUCTURE
“[C]landestine connections are found at many different social levels…[I]t is necessary to distinguish the reasons behind these clandestine connections…[M]ost of these clandestine connections are found in low-income communities, used as the only possible way of ensuring access to this asset, which is acknowledged as necessary for well-being in the home.”
Fidelis da Silva and Rosa, Irregular Access to the Power Distribution Network in Brazil’s Residential Sector: A Delinquent Payment Problem, or the Quest for a Right beyond the
Law?
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Infrastructure ImpactsPositive
• Dams: predictable water supply; irrigation; fish (in reservoir); flood control
• Thermal*: construction, operation, and feedstock jobs; roads; markets
• Wind: independence and/or local revenue
• Distribution**: roads, construction and maintenance jobs
Negative
• Dams: displacement; downstream ecosystem impacts (esp. fish); flooding
• Thermal: land, air, water pollution; visual impact; heat; habitat fragmentation
• Wind: visual impact, noise, interfere with birds
• Distribution: visual impact, land for right-of-way
*Burning coal, oil, natural gas, and biomass for electricity** Power lines and pipelines
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Distribution, Access, and Equity
• If power lines and pipelines pass through populations who do not get the benefits, it can create resentment
• If those populations also lack basic services then it is common to see distribution infrastructure tapped, often by local entrepreneurs who sell the stolen energy at inflated prices
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Dilemmas of Being Inclusive
• Essential for acceptance, aside from ethical considerations– But costly and time consuming, and the plan might be
rejected
• Requires equitable provision of benefits– But that is rarely the most cost-effective way to build out
• Requires a reasonable understanding of potential costs and benefits, to self and others– But that is extremely challenging for a large, complex,
inter-connected system
…and this still does not include those without a voice: ecosystems and future generations
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Summary
• Global– Development in the future is unlikely to look like the past– An AEH would happen in a world already outside of a “safe
operating space” for humanity– An AEH should look at EROI as an engineering figure of
merit, including trends in EROI
• National– The macroeconomic impacts and opportunities of an AEH
should be carefully thought through
• Local– Infrastructure is not neutral– An AEH will affect different people and the ecosystems
they value in different ways