Survey of Energy Resources 2007
“Energy is essential for development, yet two billion people currently go without, condemning them to remain in the poverty trap. We need to make clean energy supplies accessible and affordable. We need to increase the use of renewable energy sources and improve energy efficiency. And we must not flinch from addressing the issue of over consumption - the fact that people in the developed countries use far more energy per capita than those in the developing world” (Kofi Annan, Secretary General, United Nations.)
The availability of energy resources is of paramount importance to society. This new World Energy Council Survey of Energy Resources addresses the question of future availability at a critical time in the development of global economies and the people who depend on them. The fundamental dilemma facing us is that energy is a vital ingredient for growth and sustainable development, and for the vast majority of economic activities, but that energy production and use contribute to global warming. The greatest challenge facing the energy sector today is how to meet rising demand for energy, whilst at the same time reducing our emissions of greenhouse gases. Climate change is undoubtedly an imperative which must be addressed with a sense of urgency. We need to find new and innovative ways of addressing mitigation of greenhouse gases as well as adapting to changes in the climate. Given that the energy sector is critical to the functioning of most economies, is long term in nature and is very vulnerable to the negative impacts of climate change, this issue should be at the top of everyone’s agenda.
Resources are the backbone of every economy. In using resources and transforming them, capital stocks are built up which add to the wealth of present and future generations. However, the dimensions of our current resource use are such that the chances of future generations having access to their fair share of scarce resources are endangered. We therefore need to ensure the sustainable use of our natural resources through the creation of a longterm sustainable base and much greater focus throughout the energy value chain.
Access to energy and security of supply Lack of access to energy hampers economic and social development in many regions and is an obstacle to the achievement of social, environmental and economic progress worldwide. Access to reliable, affordable commercial energy provides the basis for heat, light, mobility, communications and agricultural and industrial capacity in modern society. Energy is important for development as is demonstrated in consumption trends – notably, the increase foreseen in energy demand, for example the International Energy Agency estimates an increase of 60% by 2030, (World Energy Outlook, 2002). This increasing demand will have to be met by a complex mix of energy resources in order to meet a wide variety of energy needs, whilst considering environmental and other constraints. Meeting society’s needs, aspirations and expectations for a better life will require growing supplies of reliable, affordable and lower-carbon energy.
We need to continue to keep all energy options open and to develop, as appropriate, all primary energy supplies. Keeping all energy options available will enable every nation to tailor its approach to addressing energy needs and climate change in the most efficient way, in alignment with their respective resource base and long-term strategic development objectives. One critical tool in the arsenal is energy efficiency, as it is a critical component of any comprehensive sustainable energy strategy and can make a significant and short-term impact on emissions of greenhouse gases. Energy efficiency needs to be promoted among producers and consumers of energy through the establishment of appropriate fiscal and regulatory frameworks. However more action is needed to turn ideas into action. Globally everyone needs to identify opportunities to reduce their consumption of energy and improve efficiency. Many countries and companies are doing exactly that – and some will be left behind if they do not also rise to the occasion.
At the same time it does not help to address only one element of the energy sector. Energy supply and use pose political and economic issues related to economic growth, security, employment, investment, climate change, environmental impacts and trade. Consequently, energy challenges should be addressed through integrated policies reflecting a broad range of issues including development priorities and needs; social conditions and aspirations; trade rules; environmental policies; and the promotion of innovation, together with technology development and transfer policies and energy efficiency. Climate change is a multifaceted and broad-based issue and thus it is particularly important that climate change issues are integrated into all relevant policies.
The long road ahead
Let us not fail to fully understand the magnitude of the challenge facing us. The challenge that we face is bigger than one country or company and the evolution of energy systems will require considerable time and expense in order to alter energy and raw material inputs, operations and products and to develop and introduce technological innovations, as well as to establish the infrastructure to support them. Companies and governments should take these long-term considerations and realities into account, and strive for consistency and predictability over the corresponding time span.
Maintaining and growing the energy supplies required to provide access to those lacking it and to meet future demand with reduced environmental impacts will require significant investment in the long term in every element of the supply and use chain. This investment is estimated by the IEA to be US$ 20 trillion by 2030. Mobilising the required energy investments will be a key challenge. In countries with limited capital, and specifically for the least developed countries, the role of Foreign Direct Investment should be complemented by Inter-Governmental Organisation funds, Official Development Assistance (ODA), and local private funds. Through such innovative financing solutions, project creation and implementation benefit from a variety of sources of funds, which are mutually reinforcing, each fund being adapted to the type of investment and risks it covers.
The challenge of climate change adds an additional dimension to this issue and historical paradigms of investment in infrastructure must be challenged if we are to meet the challenges of ridding the world of energy starvation through a cleaner and lower carbon-emitting path. In adopting a holistic approach to this value chain there is a significant opportunity for the public and private sector to work together to build lower carbon-emitting energy infrastructure and then use it for economic, social and environmental development. The challenge of climate change adds an additional dimension to this issue and historical paradigms of investment in infrastructure must be challenged if we are to meet the challenges of ridding the world of energy starvation through a cleaner and lower carbon-emitting path. In adopting a holistic approach to this value chain there is a significant opportunity for the public and private sector to work together to build lower carbon-emitting energy infrastructure and then use it for economic, social and environmental development.
Energy for sustainable development will depend on the more widespread use of existing efficient technologies as well as the development, commercialisation and deployment of innovative and lower-carbon technologies. To expand and take advantage of the full potential of energy options, all relevant stakeholders should allocate resources to research and development of new technologies all along the energy chain. The energy sector dedicates substantial resources to
technology advancement and the development of innovation but we also need to be a partner in defining mechanisms to identify, develop, commercialise and transfer technologies on a global scale. In order to accelerate the development and deployment of technologies, large demonstration or pilot activities should be considered in order to develop capacity and to increase the rate of uptake of key technologies. While fossil fuels will continue to play an important role in energy supply in the decades to come, every effort must be made to diversify the energy mix. Urgent action is required to further diversify energy supply by developing advanced, cleaner, more efficient, affordable and costeffective energy technologies such as renewables (including large-scale hydropower) and nuclear power. In addition, quantum leaps need to be made in the implementation of energy efficiency measures. Further, in areas were water is scarce, the application of technologies such as dry cooling, needs to be employed. The publication of the data in this report can provide the foundation for sustainable energy planning as we move forward.
This transformation, as well as meeting the need for skills to build and operate plant is critical. Education is essential to supporting research and facilitating efficient deployment and operation of energy technologies. Furthermore, education is important for helping users to make informed energy choices.
We know that the energy sector is a major contributor to global greenhouse gas emissions and in order to meet the challenges of meeting the rising demand for energy whilst reducing greenhouse gas emissions and adapting to the impacts of a changing climate, global efforts will be required. This has been the subject of the recently released WEC report on Energy and Climate Change. The efforts in this area require
concerted action which replicates successes around the world and through public-private partnerships which leverage resources and channel international effort. The energy sector
will not only be a key implementer of global policy, but will also contribute through innovation and the development and deployment of new technologies. It is recognised that there is no
technological “silver bullet” but that all technologies are important to assess, including renewables and clean-coal technologies. In addition, technologies that result in significant
cuts in greenhouse gases, such as nuclear power, have a crucial role to play. Carbon markets also have an important role to play and should be encouraged and normalised as far as
In conclusion, I am a firm believer in the words of an eighteenth century British MP Edmund Burke, who said “Nobody made a greater mistake than he who did nothing because he could only do a little”. We all play a vital role in contributing towards global imperatives and we need to define novel ways in which to leverage resources in meeting the challenges we collectively face.
Chairman of Eskom Holdings Limited