Abu Dhabi, UAETuesday 7 July 2020

Energy sector planning needs to be flexible enough to deal with an uncertain future

Underlying assumptions in long-range forecasts foresee little change in the status quo

A vertical farm in the UAE which produces fresh batches of crops every two weeks. Vertical farms and artifical, lab-grown meat cab reduce some of the strain on the environment caused by food production. Antonie Robertson / The National
A vertical farm in the UAE which produces fresh batches of crops every two weeks. Vertical farms and artifical, lab-grown meat cab reduce some of the strain on the environment caused by food production. Antonie Robertson / The National

As the chief executive of a big German utility told me, in the 1970s, the future of his country’s energy was going to be nuclear. In the 1980s, it was brown coal. Today it is renewables – solar and wind. Looking out on a new decade, as modellers confidently predict energy to 2050, do we really have a good idea what is coming?

International agencies, ministries, oil companies, banks, consultancies and environmental campaigners all put out their long-term forecasts, whether predictions or aspirations. Popular end dates seem to be 2030 or 2035, though 2030 is effectively tomorrow as far as major energy policies and infrastructure are concerned. Long-range forecasts mostly stop in 2050 – apart from the ones studying climate change effects, where 2100 is the horizon to show more of the damage we are inflicting on the environment. The next century may seem unimaginably far-off, yet it should be well within the lifespan of children born today, and certainly of our monuments.

The underlying assumptions in these models are fairly similar. Growth of the world population and economy will continue but slow down, with economic expansion in the range 2.5-3.5 percent annually at first before settling at 1.5-2.5 percent. Essentially, the same large countries and global political and economic system will remain. Emerging Asian economies will grow faster than the West and dominate in overall size, but remain poorer per capita, while Africa catches up only slowly. Energy efficiency and technology will improve steadily, but no dramatic new technologies will appear either in energy production or use.

So energy consumption rises, although in some cases of high efficiency it might peak in the 2030s and then fall slowly. The models more attuned to climate and environment phase out coal and oil in favour of renewable energy and battery vehicles, and petroleum consumption goes into decline somewhere in the 2030s. Some oil company forecasts show still-rising demand into the 2040s and beyond, but oil use becomes concentrated in aviation and petrochemicals. Nuclear generally shrinks a little.

Think if we could have made such confident predictions going back eight decades instead of forwards.

Eighty years ago, the world was descending into the full horrors of the Second World War. The US was barely emerging from the Great Depression, the Soviet Union was ruled by a totalitarian Communist state, and all of Africa and much of Asia were in the grip of colonial empires. Some 2.3 billion people, a third of today’s level, inhabited this world, and the economy was less than 4 percent the size it is now. The power of the atom, the jet engine and electronics were just emerging; the world was powered by coal supplemented by oil, wood and horses; steaming from England to Australia took a month; and space travel was science fiction.

New methods for producing and using energy, and entirely new political and social phenomena, will surely emerge up to 2050 and 2100. We can imagine five areas of development, which might overlap or might define entirely new paradigms.

In a world of virtualisation and miniaturisation, we might live much more within our minds and within computers. Three-dimensional printing and nanotechnology would produce highly efficient and tailored goods with a minimum of waste, while centralised industry and conventional bricks-and-mortar retail disappears. Vertical farms powered by low-carbon energy, and artificial meat grown without animals, would feed humanity.

Life extension would change demographics. Genetic engineering, manufactured and tailor-grown organs, and artificial intelligence could take life-spans regularly beyond 125 years. Birth-rates may drop but populations rise more as wealthy people live much longer, exacerbating inequality and generational divides.

Super-globalisation would see the hypercharging of our interconnected yet competitive world. The importance of nation states would diminish in favour of self-selecting personal networks, unanchored corporations and activist groups, and supranational unions.

Self-driving electric vehicles and ships, delivery drones and hypersonic planes usher in a new era of mobility. Space travel would be routine, and much industry would be located in orbit. A wealth of unimagined energy-using devices, including universal helper robots, would emerge. Energy consumption could rise much faster than anticipated, even if most of it comes from ubiquitous solar cells, super-compact batteries, hydrogen and small advanced nuclear or fusion reactors, instead of fossil fuels.

Planetary stewardship would demand the repair of our damaged and impoverished environment. Unprecedented global cooperation would see huge areas of land returned to the wild, extinct species and ecosystems resurrected. Biological and technological methods would remove carbon dioxide from the atmosphere while carefully calibrated geoengineering slows global warming.

Finally, there is the prospect of defeat by the forces of entropy and chaos. Ever-worsening climate change would combine toxically with other problems: a slowing and ageing world economy, growing inequality, the dystopian effects of social media and mass surveillance, the confrontation between China and the US, failed states in parts of the Middle East and Africa. Lands made uninhabitable by drought, sea-level rise, wildfires and heat waves, mass migration, militarised borders, conflict and new totalitarian systems would send the global economy into a permanent and deepening depression. Energy demand would fall but be very dirty as countries fall back on coal and oil.

Much that is familiar will remain alongside much that seems bizarre or inconceivable today. It’s hard for energy companies or energy-rich states to build a strategy in the face of such uncertainties. But it is a reminder that whatever we do today should be robust and flexible, not wedded to a single vision of the future – however seductive.

Robin M Mills is CEO of Qamar Energy, and author of The Myth of the Oil Crisis

Updated: December 30, 2019 07:49 AM

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