Global Challenge 13

Global Challenge 13: How can growing energy demands be met safely and efficiently?

Brief Overview

The Paris Agreement is expected to reduce fossil fuel consumption and increase renewable sources of energy, even though the Trump Administration has withdrawn. Solar and wind energy are cost-competitive with coal (especially when the cost externalities are considered), and massive lithium-ion battery production plants are in construction to help renewables’ ability to provide baseload electricity. Renewable power generation added a record 138.5GW or 55.3% of all new power generation in 2016. According to the OECD, nearly 70% of planned additions to the power capacity in G20 countries are for renewable sources, compared with 22% from coal. In 2015 China passed Germany to become the biggest producer of solar energy, and it plans to invest 2.5 trillion yuan ($361 billion) in renewable power generation between 2016 and 2020. Meanwhile, 1 billion people (15% of the world) do not have access to electricity.

Coal saw a dramatic reduction in 2016. The amount of coal power capacity in pre-construction planning fell 48%, from 1,090 GW in January 2016 to 570 GW in January 2017. In 2016, 13 provinces in China were ordered to halt new approvals of coal plants due to capacity redundancy, resulting in an 85% drop in new permits. Furthermore, 15 provinces were ordered to halt construction of already approved coal plants. In China and India, 68 GW of construction is now frozen at over 100 project sites. Worldwide, more construction is now frozen than entered construction in the past year. Coal plant closings are taking place at an unprecedented pace, with 64 GW of retirements in the past two years, mainly in the European Union and the United States.

The price of fossil fuels does not include what governments pay to address health costs, environmental damages, and other externalities from the fossil fuel industries; when included, the IMF estimates that the fossil fuel industries receive $5.3 trillion in subsidies per year. And the world still depends on fossil sources for 80% of its primary energy. Nuclear power produces about 10% of the world’s electricity, with 449 plants in 30 countries (If Taiwan is counted as a country, then it would be 31 and the number under construction would be 16) of which nearly 60% are past their 30-year lifetime and store their nuclear waste onsite. About 50 plants are in some stage of decommissioning and only 17 plants have ever been fully decommissioned. Hackers have begun penetrating nuclear power companies’ computer networks, rising security questions. Nevertheless, about 60 plants are under construction in 15 countries.

The future of oil is also in question, with advances in electric self-driving and plug-in hybrid cars and cars that run on hydrogen and natural gas. Energy companies are racing to make enough safe energy by 2050 for an additional 3.4 billion people (1.2 billion who do not have access now, plus 2.2 billion in population growth). The 100% renewable energy movement is rapidly emerging around the world. Interesting ideas in R&D include spay-on solar cells for windows, making skyscrapers net energy producers; small batteries recharged by body heat and motion; retrofitting coal plants for CO2 capture and reuse; solar panel roads and roof tiles; AI to dramatically improve efficiency (of the electric grid, IoT, transportation, etc.); producing hydrogen from plants instead of CO2 via synthetic biology; solar farms focused on Stirling engines; high-altitude (500–2000 meters) wind energy; drilled hot rock enhanced geothermal systems; and energy storage systems from liquid air. Longer-range options that could supply abundant GHG-free energy for all, such as hot and/or cold fusion and solar power satellites to beam energy anywhere on Earth or near-space, are being pursued.

Actions to Address Global Challenge 13:

  • Commit to a US-China Apollo-like 10-year energy goal with a NASA-like R&D system to achieve it (if the U.S. falters, then a China-EU-India goal).
  • Increase subsidies for renewables and reduce subsidies for fossil fuels.
  • Periodically publicize country progress on the Paris Agreement.
  • Increase investments into interesting ideas in R&D listed above.
  • Work with International Renewable Energy Agency to harmonize regulations and standards for more predictable investment conditions.
  • Establish a globally accessible collective intelligence system for energy.

Figure 1.12 Electricity production from renewable sources, excluding hydroelectric (% of total)
Source: World Bank indicators, with Millennium Project compilation and forecast

Short Overview and Regional Considerations

The world is in a race to make enough safe energy fast enough to meet the growing needs of an expanding and wealthier population. The UN secretary-general has set the goal for universal access to electricity by2030, which is estimated to cost $50 billion per year. By 2050, the world needs to create enough electrical production capacity for an additional 3.5 billion people (1.2 billion who do not have access now, plus the 2.3 billion population growth). However, IEA projects that more than half a billion people are still without access to electricity in 2040. About 2.7 billion people still rely on traditional biomass for cooking and heating, and WHO estimates indoor air pollution causes 4.3 million deaths annually.There is also the requirement to decommission aging nuclear power plants and to replace or retrofit fossil fuel plants. The new energy sources could well come from a combination of green renewable sources, energy efficiencies, and improved network distribution, storage systems, and distributed generation. Engineering advances have cut the costs of renewable energy systems so that they are now matching or outperforming fossil fuels costs, particularly when accounting for externalities such as the costs of environmental damage and health. Although the majority of all new installed energy capacity now comes from renewables, the vast majority of base load electricity still comes from fossil carbon systems.

Innovations are accelerating:

  • Drilled hot rock geothermal (several kilometers down) makes geothermal energy available where conventional geothermal has not been possible, assuming sufficient water is available (The U.S. Department of Energy’s Lawrence Berkeley National Laboratory will lead a $9 million project to remove technical barriers to commercialization of enhanced geothermal systems (EGS) for electricity generation).
  • Solar farms can focus sunlight atop towers with Stirling engines and other generators
  • Concentrator photovoltaics dramatically reduce costs and desalinate water by pumping sea water through micro-channels on the surface of the solar panel
  • Waste heat from power plants, human bodies, and microchips can generate electricity
  • Buildings designed to produce more energy than they consume and other architectural designs for energy conservation and efficiencies
  • Solar energy to separate hydrogen from water
  • Microbial fuel cells to generate electricity
  • Compact fluorescent light bulbs and light-emitting diodes to significantly conserve energy, which can also be done by nanotubes that conduct electricity
  • Metal-air batteries
  • Halophytes, algae for food and liquid fuels production
  • Improved efficiency and maintenance of wind energy generation on land, oceans, and high altitude
  • Plastic nanotech photovoltaics printed on buildings and other surfaces could cut costs and increase efficiency
  • Aquaculture using Cyanobacteria for direct conversion of CO 2 to ethanol and diesel-range alkanes
  • Unused nighttime power production to supply electric and plug-in hybrid cars

Looking into the future:

  • Use of genomics to create plants that produce hydrogen instead of CO 2
  • Low-Energy Nuclear Reactions (LENR is related to cold fusion)
  • High altitude wind generators
  • Japan plans to have a working space solar power system in orbit by 2030 and China plans the same by 2040

Shell forecasts global energy demand to triple by 2050 from 2000 levels, assuming that the major socioeconomic trends continue. This, they assert, will require “some combination of extraordinary demand moderation and extraordinary production acceleration.” BP forecasts a 37% increase in world energy demand from 2013 to 2035 of which 96% will come from emerging economies. IEA calculates it will take $44 trillion in the global energy supply, and another $23 trillion in energy efficiency to meet all energy needs for the world between now and 2040, of which 90% of new demand will be in non-OECD economies. By 2035, China is expected to consume nearly 70% more energy than the U.S. although China’s per capita consumption remains less than half that of the U.S today.

Growth in energy-related CO2 emissions stalled in 2015, but still too high to achieve the 2°C target. Without major breakthroughs in technologies and behavioral changes, the majority of the world’s energy in 2050 will still come from fossil fuels. IEA estimates the fossil-fuel consumption subsidies dropped in 2015 to $325 billion. Taking into account environmental damages due to consumption of subsidized energy, IMF projects that the “true costs” of energy subsidies to be $5.3 trillion. Eliminating these subsidies could reduce deaths related to fossil-fuel emissions by over 50% with the economic gain of $2.9 trillion. Assuming that countries fulfill their existing commitments to reduce emissions and cut fuel subsidies, IEA estimates that the world primary energy demand will grow by 30% from 2015 to 2040, with fossil fuels accounting for over half of the increase. Emissions associated with this scenario correspond to a long-term average global temperature increase of 3.6°C. Scenarios developed by the World Energy Council also assume fossil fuels remain dominant in 2050. Assuming no major breakthroughs affecting oil production and demand, IEA expects output could reach 103 million barrels per day by 2040 from 97 million in 2015. Non-OECD countries consume more oil than OECD countries since April 2013. The average cost of bringing a new oil well online increased 100% over the past decade. Natural gas is considered cleaner than coal, but the natural gas industry globally was leaking between 2 and 4% of the gas produced between 2006 and 2011. Leakage above 3% is enough to negate the climate benefits of natural gas over coal. Therefore, large-scale carbon capture and reuse has to become a top priority to reduce climate change, such as using waste CO2 from coal plants to grow algae for biofuels and food or to produce carbonate for cement. Carbon capture and sequestration could reduce CO2 emissions in industrial applications by 4Gt if 20–40% of facilities are equipped with CCS by 2050. IPCC estimates that the cost of climate mitigation would increase by 138% without CCS.

There is no question that renewable sources of energy such as combinations of photovoltaics, solar thermal, biomass, wind, and drilled geothermal can replace fossil fuels. The issue is to agree on focused strategy to make the changes. Over half of the new energy generation capacity comes from renewable sources today; however, coal met 47% of new electricity demand over the past decade. IPCC’s best-case scenario estimates that renewable sources could meet 77% of global energy demand by 2050, while the World Wildlife Fund claims 100% is possible. The costs of geothermal, wind, solar, and biomass are falling. Setting a price for carbon emissions could increase investments into non-fossil sources. If the full financial and environmental costs for fossil fuels were considered—mining, transportation, protecting supply lines, water for cooling, cleanups, waste storage, and so on—then renewables will be seen as far more cost-effective than they are today. Previously, economies of scale lead to concentrated power production; however, decentralized systems with smart grid may become more cost effective. However, changing energy regulations will be needed to encourage local decentralized power production. The cost of fossil fuels are likely go up with increased usage, while the cost of renewables are going down with increased use.

Global investment in renewables excluding large hydro dropped by 23% to $241.6 billion, the lowest since 2013. Thanks to the cost reduction, however, 2016 also marked the record installation of renewable power capacity – 138.5GW or 55.3% of all new power generation added worldwide.In seven countries (Costa Rica, El Salvador, Iceland, Kenya, New Zealand, Nicaragua, and the Philippines), geothermal represents more than 10% of electricity generation. IRENA estimates the renewable energy sector employed 8.1 million people in 2015, and doubling the share of renewables in the global energy mix would create 24 million jobs by 2030. However, relying on wind (surface not high altitude) and solar (ground not orbital) sources for base-load electricity in mega-cities would require massive storage systems, while other sources like geothermal, nuclear, and solar power satellites would not. Space-based solar energy systems could meet the world’s electricity requirements indefinitely without nuclear waste or GHG emissions. Eventually, such a system of satellites could manage base-load electricity on a global basis, yet some say this costs too much and is not necessary, given all the other innovations coming up.

As of July 2017, 446 reactors with a total capacity of 390.4 GW supply about 12% of global electricity demand. 61 reactors are under construction, including 20 in China, but IAEA expects nuclear power capacity to fall between 4.5% to 6.2% by 2030. 58% of existing reactors are past the 30-year lifetime and should be decommissioned; however, less than a hundred plants are scheduled to be closed by 2020. Because there are still no good solutions for the nuclear waste problem, most waste is still stored on site at nuclear plants today. Not including military or research reactors, 138 nuclear plants have been closed, but only 17 of these have been fully decommissioned. The Next Generation Nuclear Plant Industry Alliance selected a high-temperature gas-cooled nuclear concept as ensuring no internal or external event could lead to a release of radioactive material.

The global passenger car fleet is expected to double (reaching almost 1.7 billion) by 2035; however, new developments in car sharing and self-driving cars may alter this forecast. Will synthetic fuels produced from natural gas, oil shale, and/or biomass be the bridge to fully electric cars? Mass production of fuel-flexible plug-in hybrid electric cars at competitive prices could be a breakthrough. A six-year U.S. study to test hydrogen fuel cell electric vehicles released in 2012 exceeded expectations for fuel economy and efficiency, driving range, and durability. Manufacturers are expected to begin sales by 2016. Some argue that the transition to a hydrogen infrastructure may be too expensive and too late to affect climate change. Options like flex-fuel plug-in hybrids, and electric and compressed air vehicles could provide alternatives to petroleum-only vehicles sooner. National unique all-electric car programs are being implemented in Denmark and Israel, with discussions being held in 30 other countries. The global share of biofuel in total transport fuel could grow from 3% today to 27% in 2050. Massive saltwater irrigation along the deserted coastlines of the world can produce 7,600 liters/hectare-year of biofuels via halophyte plants and 200,000 liters/hectare-year via algae and cyanobacteria, instead of using less-efficient freshwater biofuel production from corn that has catastrophic effects on food supply and prices. Nearly two-thirds of incremental gas supply to 2035 could come from unconventional gas, primarily shale gas. However, the process of “fracking” to get the gas may release methane to the atmosphere, pollute groundwater from underground wells to dispose of wastewater and trigger earthquakes. As a result, political pressure to improve standards and insure implementation is increasing.

Japan plans to have a working space solar power system in orbit by 2030, and succeeded in wirelessly sending 10 kilowatts of power over a distance of 500 meters. China plans to do the same by 2040. The LUNA RING project of Shimizu, a Japanese construction company, aims to install solar cells around the lunar equator and transmit electricity to the Earth. Such space-based solar energy systems could meet the world’s electricity requirements indefinitely without nuclear waste or GHG emissions. Eventually, such a system of satellites could manage base-load electricity on a global basis, yet some say this costs too much and is not necessary, given all the other innovations coming up.

Challenge 13 will have been addressed seriously when the total energy production from environmentally benign processes surpasses other sources for five years in a row and when atmospheric CO 2 additions drop for at least five years.

Regional Considerations

Asia and Oceania: The enormous population and economic growth is leading to the higher energy prices and shortages. According to the ADB, the Asia Pacific regional energy demand could double by 2030, by 2035 the region will consume 56% of the world’s annual energy output, and today there are about a billion people without electricity. India alone has 289 million people without electricity. Nearly 2 billion people in Asia rely on biomass for cooking. By 2030, Japan solar could reach 100GW of installed PV generation capacity, or 11.2% of electricity demand. Japan is building a large offshore wind farm off the coast of Fukushima. Meanwhile, Japan plans to use nuclear power to supply about one-fifth of its electricity demand by 2030 despite public opposition since the nuclear crisis in Fukushima. Corruption in the South Korean nuclear industry is reducing that countries long-range forces for nuclear power. China plans to expand nuclear capacity threefold by 2020 and is expected to start building at least five nuclear reactors in 2015. Wind is China’s third largest source of electricity behind coal and hydropower. Renewable energy sources can meet 57% of China’s electricity demand in 2030, and 86% by 2050. China’s coal production decreased 2.5% in 2014, the first annual drop in more than a decade. Yet, China’s annual coal consumption, at about 3.7 billion tonnes, accounts for roughly 66% of its energy demand. To curb pollution and emissions, China plans to cut coal consumption by over 80 million tonnes by 2017 and more than 160 million tonnes by 2020. India will invest $37 billion in renewable energy to add 17,000 MW of capacity by 2017. Solar lighting is already a cost-effective option in off-grid India, even with government subsidies on kerosene. Lao PDR aims to supply 30% of its energy consumption from renewable sources by 2025. Oil and gas production in the Caspian region will grow substantially by 2030; Kazakhstan and Turkmenistan lead the growth in oil and gas respectively. India had 20 operating nuclear reactors and 7 in construction. Singapore plans to increase the energy efficiency of buildings by 80% by 2030.

Middle East and North Africa: Chaotic geopolitics in the region and oil price fluctuations represent serious challenges for the oil and gas producers, as they struggle to maintaining incomes from exports and to continue fostering investment from international energy companies to sustain national economic goals. Additionally, decreased demand from the global markets and competition from unconventional hydrocarbon production change the oil demand order. The share solar and other renewable energy sources in the region is also growing, as countries are looking for more effective and cleaner ways to meet energy demands. In 2014, Egypt, Jordan, Kuwait, and Qatar joined Morocco, Algeria, and the UAE with several solar projects, for a total of 788 MW. With new projects in 2015, the solar market is expected to grow to over 1,500 MW over the coming year.Egypt’s Ministry of Electricity program launched in November 2014 plans to introduce 2,000 MW large-scale solar PV power projects and 300 MW of rooftop solar power projects; 700 MW solar projects are to be awarded in 2015, making the country the year’s largest solar market in the region. Algeria will invest $60 billion in renewable energy projects by 2030. By 2050, some 10–25% of Europe’s electricity needs could be met by North African solar thermal plants.

Sub-Saharan Africa:
At current trends, Word Bank expects 1 billion more sub-Saharan Africans will get electricity access by 2040, which would still leave an estimated 530 million without access due to population growth. A new $500 million “Access Infra Africa” was launched to fund renewable energy projects across the continent. There are vast oil and gas reserves in Africa; however, issues of governance and corruption are slowing investments. Nigeria and Angola produce over two million barrels of oil per day now, and six West African countries, plus Mozambique and South Africa are expect to develop reserves as well. South Africa has the fifth-largest—485 trillion cubic feet—technically recoverable shale gas and Nigeria produces the most natural gas today (23 billion cubic meters per year). It is estimated that 66% of land deals are intended for biofuel production, versus 15% for food crops. Over 70% of Sub-Saharan Africa does not have access to electricity. South Africa plans to more than double its renewable energy program. Kenya plans to increase its geothermal capacity to 5,000 megawatts by 2030. The World Bank estimates that geothermal in East Africa’s Rift Valley could power 150 million homes. New oil fields have been established in Ghana and Kenya. The $80 billion Grand Inga dam could generate 40,000 MW of electricity, but the project is progressing slowly. South Africa’s economic growth is hampered by regular power outages. Medupi Power Station, the first new power station South Africa constructs in two decades, was scheduled to come online in 2011, but it is now expected to be completed in 2018 or 2019. The U.S. Power Africa initiative to double access to energy across sub-Saharan Africa by 2018 might be in jeopardy, as of the $7 billion five-year pledge, some $5 billion is slated to come from the Ex-Im bank, whose future is not sure.

Europe: The EU announced it plans to cut its greenhouse gas emissions by 40% by 2030 from 1990 levels, increase both is efficiency and renewable energy sources by 27% from 1990 levels by 2030. Currently it has reduced emissions by 18.3% since 1990, and is likely to be 25% below 1990 levels by 2020. Renewable sources account for about 13% of the EU’s overall energy consumption today and plans to increase that to 20% by 2020. Sweden has the highest share of renewable energy in total consumption at 46.8% (non-EU Norway has the share of 65%). The EU also will improve energy efficiency 30% by 2030. The new climate and green energy targets, however, do not include legally binding national targets. Instead, member states will have “indicative” target of improving energy efficiency by 25% by 2030. Conservation and efficiencies could reduce EU’s energy consumption about 30% below 2005 levels by 2050. Low-carbon technologies could provide 60% of energy by 2020 and 100% by 2050, according to the EU’s low carbon road map. Northern Europe is expected to focus on wind while southern Europe will focus on solar energy. The EU plans to have 10–12 carbon capture and storage demonstration plants in operation by 2015. Germany and Switzerland plan to phase out nuclear energy, but but shutting down Germany’s nuclear power plants and building a safe disposal site for nuclear waste could rise to 70 billion euros. Finland’s nuclear power plant estimated construction costs grew from $4.5 billion to $12 billion. Meanwhile, Germany opened its first coal-fired power plant since 2005, and plans to build 10 more totalling 7,985 megawatts by 2015. Poland imports more than 80% of its natural gas from Russia, but its shale gas reserves may provide Poland with enough gas for more than 50 years. However, there is some doubt about these numbers after test drillings and international companies withdrew from Poland. Meanwhile, France is opposed to the extraction of shale gas, and the Netherlands, Luxembourg, and Bulgaria have suspended drilling for shale gas. Oil extraction in the Arctic offshore territories in Russia might peak at 13.5 million tons a year over the next 20 years in the most optimistic forecasts, less than 3% of overall oil production of Russia todayRussia signed a 30-year agreement in 2014 worth $400 billion to deliver gas to China. Russia’s Ministry of Energy’s conservative 2020 scenario forecasts a decrease in Russia’s oil production by 5-10%. Due to the U.S. and EU sanctions against Russia and slumping oil prices, a number of joint Arctic shelf development projects have been blocked, high-tech equipment purchases to produce tight oil have been difficult, and Western service companies, which are difficult to replace, are abandoning the Russian market. Amsterdam plans to have 10,000 electric cars by 2015. Five geothermal power plants in Iceland meet 27% of the country’s electricity needs. In 2014, Denmark generated 39% of its electricity from wind power; it plans to have 50% of its power from renewable energy by 2050 and 100% by 2050. Wind is now Spain’s main energy source at 21.1%, just passing nuclear at 21%, while financial constraints have forced the government to cut back on renewable energy support resulting in renewable energy experts leaving the government. Shale gas in Central Europe is expected to lower energy prices there within 20 years.

Latin America: The region increased its share of the world’s clean energy investments from 5.7% in 2011 to 6% in 2012. Brazil has been the cheapest biofuel producer for years, but it is losing its competitiveness due to the real’s rise against the dollar and the high price of sugar. Brazil imported 70m liters of U.S. ethanol in 2010, up from just 1 million in 2009. Its first commercial-scale plant of second-generation biofuel (cellulosic ethanol) will start production in December 2013. Some 90% of the automobiles produced in Brazil are flex-fuel. Corruption and mismanagement have delayed Petrobras’ development of Brazil’s major off-shore “pre-salt” oil deposits. Argentina is the world’s second largest producer of biodiesel, with 13.1% of the market. Geothermal, solar, and wind are vast untapped resources for the region, as are gains from efficiencies. Ecuador announced that it would refrain from drilling for oil in the Amazon rainforest reserve in return for up to $3.6 billion in payments from industrial countries. Venezuela’s Orinoco heavy oil reserves (requiring advanced production technology) are larger than Saudi Arabia’s reserves. Cuba plans to increase its renewable energy production by 12% by 2020.The Spanish-owned electric grid company was nationalized in Bolivia. Peru is promoting the use of natural gas from its new reserves discovered in the Camisea field.

North America: Wind and solar now account for 10% of U.S. total electricity production, while total energy consumption has been slowly falling over the past five years.Google says it will run entirely on renewable energy in 2017. The world’s largest solar thermal power plant started operation in California’s Mojave Desert, and Tesla’s $3,500 lithium-ion storage battery to save surplus electricity can help expand the application of rooftop solar energy. U.S. EPA proposed the Clean Power Plan, which would require states to reduce carbon emissions from existing power plants to 30% below 2005 levels by 2030. Meanwhile, the U.S. oil usage fell 8.5% from 2005 to 20014 while its oil production increased by 16.2% during 2014 reaching 8.7 million barrels per day. U.S. natural gas passed coal as an energy source to produce electricity (DOE had forecast that this would not happen until 2035). Some 190 of 523 coal-fired power plants in the US have recently closed or are planned to close. U.S. Geological Survey says man-made earthquakes linked to fracking have been on the rise, leading to several states including New York to impose ban or moratorium on fracking. Meanwhile, Texas passed a bill that denies its cities the right to impose fracking bans. California oil producers used nearly 70 million gallons of water for fracking last year. Canada has the second largest oil reserves in the world but also among the most environmentally damaging. Lesser-known potential clean energy sources in the U.S. include high-altitude wind off the East Coast, Ocean Thermal Energy Conversion in the Gulf Stream, solar thermal in the Midwest (Four Corners CO), drilled hot rock geothermal, and nano-photovoltaics. Algae farms for biofuel may cost $46.2 billion per year to replace oil imports. California requires oil refineries and importers of motor fuels to reduce the carbon intensity of their products by 10% by 2020. San Francisco’s mayor called for the city to go 100% renewable by 2020. Pacific Gas & Electric Company of California agreed to buy 200 megawatts of space-based solar power from Solaren; the power was to be provided from space starting from 2016 according to the original contract in 2009, but lack of funding has delayed implementation. It is estimated that recycling waste heat from nuclear power plants to home air conditioners and recycling body heat to recharge batteries could reduce CO2 by 10–20% in the U.S.

Source: World Bank indicators, with Millennium Project compilation and forecast