Energy White Paper’s underlying assumptions
I meant to make a quick comment on the Energy White Paper before I went away. The White Paper’s been extensively covered in the press, and there’s no point in my adding to the media noise. But White Papers are, effectively futures documents, which therefore have embedded in them a set of future assumptions, and it is worth looking at it from that point of view.
Most of the relevant evidence is in Chapter 1, “Energy and climate
security: a global challenge“. In particular, it is dominated by a single point “business as usual” projection from the International Energy Authority that “between 2004 and 2030, global primary energy demand will rise by 53%, leading to a 55% increase in global carbon dioxide emissions related to energy”. It also asserts the connection between energy use and economic growth, although this connection weakens rapidly in richer economies.
One of the precepts of futures work is that scenarios (and the world of the White Paper is a scenario) should be plausible and coherent future worlds. The White Paper assumptions lack in coherence: the desire for open liberalised markets only supports carbon reduction if the full carbon price is factored in from the outset.
And even then, liberalised markets are likely to under-invest in new energy sources because of the weight of existing infrastructure. (So if ‘open liberalised markets’ is your first policy preference, the others are likely to go by the board).
One other assumption is striking: the rise of ‘national champions’ in oil rich countries is an issue that’s identified by the transnational oil companies like Shell and BP. The White Paper observes that they may be inefficient and choose not to invest in extraction. But from an oil producing nation perspective, looking long-term at a market where prices are far more likely to rise than fall, leaving oil in the ground for a while is a completely rational response.
No doubt energy economists or policy-makers will tell me that I’m missing some subtleties, but reading the chapter it’s hard to avoid the impression that they’ve started from the IEA projection and moved directly to a set of traditional assumptions about energy security and supply, which might be thought of as the metaphor of the ‘hard state’. And one of the features of the ‘hard state’ world view is that it leans quickly towards large scale producers and big centralised infrastructure.
The Tyndall Centre, on the other hand, notes in its comments on the White Paper – well summarised in the viewpoint by Dr Kevin Anderson on the BBC site – the extent of what it calls the ‘low hanging fruit’ of energy reduction measures, which it reckons could reduce energy demand by almost half by 2050, by concentrating on high consuming areas such as road use and improving household energy efficiency. The government, it argues, continues to see energy as a matter of “supply”, rather than looking at the whole “energy system”.
The other problem with looking at the energy system as a centralised supply model is that it misses a huge opportunity for modernisation. A paper commissioned by the DTI in 2006, “Future Network Technologies” by Goran Strbac, Nick Jenkins, and Tim Green (opens as pdf) argued that an ageing centralised electricity infrastructure provided a once in a a half century opportunity to migrate the energy system to a more decentralised, distributed model – with significant increases in efficiency.