Written by: Green Growth Councilor and Execeutive Vice President of DNV, Bjørn Kj. Haugland
I have just returned to Norway after three exciting and fast-moving days at the World Future Energy Summit (WFES) in Abu Dhabi. It left me with many varied impressions. Key decision makers, such as China’s prime minister Wen Jiabao, the UN General Secretary Ban Ki-Moon and the chairman of the Intergovernmental Panel on Climate Change (IPCC) Rajendra Pachauri, as well as a number of business leaders, shared their thoughts on global challenges – including those linked to how we can transform today’s energy systems so that they are both sustainable and ensure access to energy for everyone. This is the fourth time I have attended this conference. What was new this time was the acknowledgement that renewable energy must to an even greater extent be looked at together with economic growth, climate changes and the combating of poverty.
The most interesting speeches were those given by Ban Ki-Moon and Wen Jiabao during the opening ceremony. The UN General Secretary is clear about the fact that reducing poverty and achieving access to clean energy go hand in hand, and took the opportunity in Abu Dhabi to launch 2012 as the international year for sustainable energy for everyone. The goal is to ensure universal access to modern energy; to double the rate of improvements in energy efficiency and double the percentage of renewable energy in the global energy supply. All this by 2030.
Wen Jiabao, on his part, referred to how China – by working in a targeted fashion and with a long-term view – is achieving impressive results when it comes to creating economic growth, ensuring access to energy, increasing the share of renewable energy, promoting energy efficiency and, not least, lifting its population out of poverty. And as if that is not enough – China’s industry is winning increasingly strong global positions in the renewable energy field.
The Chinese authorities and industry were absolutely present at WFES!
I took part in a panel debate on renewable energy and the challenges and opportunities currently facing this industry. Perhaps the greatest challenge is the price compared to that of conventional forms of energy. Renewable energy is still more expensive if you look at the price per kilowatt-hour.
However, that is an isolated way to look at reality.
If you look at the extra costs which the use of fossil fuels incurs for society in relation to the environment, climate adaptations and health, then the picture looks different – naturally in favour of renewable energy sources. If you add that fossil energy is subsidised by more than USD 400 billion each year, it can be seen that there are opportunities for accelerating the transformation – if you want to.
Another challenge facing the renewables industry is the financial crisis. The current economic climate has led to tighter reins – and governments worldwide are being forced to focus on ways of reducing their budgets. As a result, there is greater pressure on the incentive mechanisms and measures which are intended to pave the way for the development of renewable energy and low-carbon technology.
The truth is to be found in the whole
The atmosphere at the WFES was serious. We must act now! Even during a period when the economic framework conditions are forcing politicians and authorities to focus on short-term solutions and priorities. But the atmosphere was also one of hope that public and private players can together deal with a lot of the challenges facing the world, including in the renewable energy field. Compared to previous years, the discussion was more integrated – renewable energy was not discussed on its own but instead together with related issues, such as climate change, poverty and economic growth. That was very positive.
To put it briefly – renewable energy is a necessary part of the energy mix of the future. But in order for renewable energy to reach its potential, it must become more competitive.
So what is necessary?
- We must invest a lot more in research into, and the development of, renewable energy and associated low-carbon technologies and systems.
- In addition, we must acknowledge that the entire energy system must be transformed if we are to be able to arrange for a more sustainable energy mix.
- Renewable energy is still more expensive than fossil fuels if you look at the price per kilowatt-hour. But we must get better at seeing all of the costs which follow from the various energy sources. That means not just comparing prices – but also comparing the costs to society.
- We need robust, predictable, long-term incentive schemes and mechanisms that can pave the way for necessary investments and innovation. And the authorities must implement long-term policies when it comes to necessary infrastructure and transmission networks.
- Finally, public and private players must work together – at both a local and national level – to meet the challenges currently facing renewable energy. In addition, the politicians must invite industry to have greater contact in order to find good solutions.
Naturally all these elements are connected. And, in the same way as the debate in Abu Dhabi, they show that Gro Harlem Brundtland’s words that “everything is connected to everything else” really are true when it comes to transforming entire energy systems. I would contend that such integrated thinking is necessary to ensure sustainable energy systems for this and future generations.
However, integrated thinking is not enough. It must be supported by specific actions and measures now. In that sense, Wen Jiabao’s opening speech in Abu Dhabi was a breath of fresh air.