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The Global Energy Future: Daunting Challenges and "Game Changing" Innovations
March 25 2014

Event Presentations and Agenda

 

“One of the greatest transformations in the history of our species.”

 

That was the description for the transition to more sustainable sources of energy used by Amory Lovins, Co-Founder and Chief Scientist of the Rocky Mountain Institute.  The venue was “Rethinking the Future of energy,” a high-level seminar at the World Bank on March 4 focusing on trends in technology and financing that will have an impact on the global energy sector for years to come. 

 

Two main messages emerged from the event, which was organized by ESMAP:

 

  • Mitigating climate change will require countries and the international community to take a systems view – not just reducing the demand for fossil fuels, but also the supply.
     

  • Game-changing technological and business innovations will make electricity grids very different from what we have known over the past century.

 

Duncan Clark, consultant editor at The Guardian newspaper and author of the recent book The Burning Question, made the point that avoiding a 4 degree Celsius rise in global temperatures will require not exploiting most of the world’s known fossil fuel reserves.

 

Clark argued that to achieve this, the emphasis should be on the supply side, rather than the demand side.  “It will be much easier to focus on a thousand points of extraction than a billion households,” he said.

 

Speaking on developments in energy efficiency, Amory Lovins said that many countries are already in a position to build out an “efficient, connected and distributed energy system”.  Among the dramatic examples he cited:

 

  • In developing countries, starting up the manufacturing of simple components such as efficient light bulbs or window panes can be up to 1,000 times cheaper than producing and distributing the electricity these components would save.
     

  • The use of ultra-light materials in automobiles can revolutionize supply chains and make electric vehicles much more cost-competitive.
     

  • A combination of smart road pricing, car-sharing and carpooling incentives, and improved urban planning has the potential to reduce the total distance driven in personal cars by 46-84 percent.

 

Günther Bachmann, Secretary General of the German Council on Sustainable Development, made the case for the positive future-oriented results of the German Energiewende, or energy transitionwhich to date has been more known for its cost and the unintended consequences of renewable energy feed-in tariffs.

 

“We are moving from ‘Small is Beautiful’ to the full industrialization of renewables,” he said. He pointed out that Germany now has a policy goal of reaching 60 percent of its energy supply through renewables by 2035.

 

Some speakers cast doubt on whether developing countries could afford to scale down fossil fuels extraction or consumption, or move towards renewables as a primary energy source.

 

Ricardo Raineri, former Minister of Energy for Chile and Alternative World Bank Executive Director for Argentina, Boliva, Chile, Paraguay, Peru and Uruguay, pointed out that discoveries of new fossil fuel resources are often seen as economic liberators by developed and developing countries alike.  While there may be broad agreement on the need to draw down fossil fuel use, “the incentives are moving us in the oopposite direction,” he said.

 

“In the developing world, all projects have to be commercially feasible, and it will be difficult to push forward with a major expansion of renewable energy,” said Hector Olea, President and CEO of Gauss Energy. He cited the case of Mexico, where he said it would be a challenge to scale up renewables to more than 20 percent of the national energy mix.

 

At times during the day, the future of energy sounded like a series of paradoxes: the potential future earnings from fossil fuels for resource-rich, cash-poor countries; the need to keep fossil fuels in the ground to avoid the 4 degree warming that will threaten poor countries’ development.   The promise that major improvements in energy efficiency can drive long term low carbon development; the possibility that such efficiency gains will create new avenues for rising energy consumption. 

 

However, there was general agreement on some basic points: that each country’s future needs will be different, which should inform government actions and international support; and on the need to look globally for new ideas and innovations, that knowledge flows in every direction nownot just North-South and South-South, but also from the South to the North.

 

The day was split up into three sessions targeted at finding solutions to emerging energy challenges for the World Bank and its clients.  Session one focused on the productivity and investment impacts of a potential scale-down in fossil fuels and new innovations in energy efficiency.  The second session looked at the future of grids and the prospect of large-scale renewable electricity generation.  The final session provided views from the field, with a focus on new models for expanding access to energy.

 

Tri Mupuni, Executive Director of IBEKA, an Indonesia NGO focused on community-based hydropower, noted the importance of integrating social development with energy projects.  She cited the example of helping communities with household solar systems understand their opportunity to sell power back to the grid.  

 

Yashraj Khaitan, Co-Founder and CEO of Gram Power, based in India, argued that the problem in many countries is not so much a lack of financingoften the financing is therebut a lack of capacity and reliable data.

 

The “Rethinking the Future of Energy” event was held as part of ESMAP’s mandate from its donors to identify forward-looking ideas and innovations that will help its clients achieve sustainable energy solutions for long-term economic growth. 

 

 

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