30. 01. 2017

The Future Lies not in our Stars, but in our Sun (part 1)

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For me, the annual World Future Energy Summit in Abu Dhabi is the best possible place for trying to get my head around the global energy sector. And a strange and surprising place it is too.

WFES has grown massively since I first attended it back in 2008, with 11,000 attendees, to more than 36,000 this year. And the contradictions at the heart of it have become more and more pronounced, with the incumbent energy world (in terms of both fossil fuels and powerful energy nations) still dominant, but challenged more and more tellingly by the emergent world of renewables, storage, smart grids and so on.

The Saudi Arabian Energy Minister, Khalid Al-Falih, epitomises these contradictions. His speech at the Summit was impressive, laying out a programme ambitiously embracing new opportunities in renewables, committing investment of between $30bn and $50bn over the next 15 years to generate around 10,000 megawatts of renewable power – predominantly from wind and solar. Combined with two nuclear reactors, that will represent around 30% of its electricity requirement by 2030. Given how slow Saudi Arabia has been on renewables before now (it got its first ever turbine in June last year!), that’s BIG.

But don’t get too excited. The Minister then went on to explain that this would simply free up more of Saudi’s oil for export, which he anticipated would be flowing as freely as it does today ‘for at least the next five decades’.

And that kind of ‘co-existence shtick’ was all the rage at this year’s WFES. Given the growth in energy demand, regionally and globally, most people there subscribed to the view that they would need all the renewables they can get on top of all the oil they still need.

That growth in energy demand is driven principally by population growth – something we hear very little about in Europe despite all our concerns about regional volatility, religious fundamentalism, and terrorism. For instance, Saudi Arabia’s population is around 31.5 million, still growing at an astonishing 2.4% per annum, with an average fertility (number of children per woman) of around five.

The population of the Middle East and North Africa region is increasing at around 2% per annum – the second highest rate in the world after sub-Saharan Africa. And what that means is that the region’s population (around 420 million today) is expected to double in the next 50 years.

What we do hear about is that this is a region already profoundly affected by climate change – but you’d never get any indication of that stuck inside the WFES bubble! Indeed, climate change is like Banquo’s ghost at this feast of fossil fuel junkies. It’s as if Paris never happened, as if the debate about the difference between temperature thresholds of either 2 degrees C and 1.5 degrees C by the end of the century was just so much hot air. Both in the formal sessions and more informally, I heard only the occasional reference to any country’s Nationally Determined Contributions (which they theoretically signed up to in Paris in 2015), and there was not a single climate scientist to present the latest evidence of change on the ground. (Though, to be fair, the North Pole does seem a very long way away when one is in Abu Dhabi!)

All of which makes the general sensation somewhat surreal. And it’s clear to me that these contradictions are never going to be resolved by international negotiation, or even by political will. It’s only the market that can sort out this kind of chronic cognitive dissonance – and on that front, at least, there was much to celebrate at WFES.

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