Energy Demand and Planning: Report Number 31 (Watt Committee Report, No 31)

Energy Demand and Planning Watt Committee Report Number 31

Energy Demand and Planning Report Number 31 Edited by

J.C.McVeigh and J.G.Mordue Published on behalf of The Watt Committee on Energy

E & FN SPON An Imprint of Routledge London and New York

First published 1999 by E & FN Spon, an imprint of Routledge 11 New Fetter Lane, London EC4P 4EE This edition published in the Taylor & Francis e-Library, 2005. “To purchase your own copy of this or any of Taylor & Francis or Routledge's collection of thousand of eBook please go to www.eBookstore.tandf.co.uk.” Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 © 1999 The Watt Committee on Energy All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. The publisher makes no representation, express or implied, with regard to the accuracy of the information contained in this book and cannot accept any legal responsibility or liability for any errors or omissions that may be made. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Energy demand and planning/edited by J.C.McVeigh and J.G.Mordue. p. cm.—(Watt Committee on Energy report: no. 31) ISBN 0-419-22470-X 1. Power resources. 2. Energy policy. I. McVeigh, J.C. II. Mordue, J.G. (J.Graham) III. Series. TJ163.E545 1999 333.79–dc21 98–37920 CIP ISBN 0-203-22300-4 Master e-book ISBN

ISBN 0-203-27727-9 (Adobe e-Reader Format) ISBN 0-419-22470-X (Print Edition)

Contents

Contributors Preface

PART ONE Energy Now and the Next Fifty Years

1 2 3 4 5 6 7 8 9 10

Introduction: Energy policy—to be or not to be? ANTHONY CHALLIS Development of energy modelling COLIN HICKS Changing patterns of human need BRIAN BRINKWORTH Population levels and their implications for energy demand MICHAEL JEFFERSON Recent developments in the prediction of global warming SIR JOHN MASON Social attitudes and their place in energy policies JOHN WRIGHT Sustainable energy development ALAN WILLIAMS and MOHAMMAD ASLAM UQAILI The chemical industry—future energy requirements of a large user BRYAN BULLOCH Energy markets and the role of governments IAN GLENDENNING Electricity—the common energy currency MICHAEL COOPER-READE Future energy supply and demand—steps towards their reconciliation SIR ALAN MUIR WOOD Postscript GRAHAM MORDUE

PART TWO Background and Discussion Social changes and energy markets BRIAN BRINKWORTH

vii x

1 3 5 10 17 31 48 53 71 79 86 97 102

106 108

Seminar I—Energy resources and scenarios for the next half century Seminar II—The impact of possible changes in living and working patterns on energy markets and demands Discussion: Seminar III—Energy policies Consultative Conference—Discussion report

111 121

Index

139

130 134

Contributors Professor Brian Brinkworth Department of Mechanical Engineering and Energy University College Cardiff PO Box 925 Newport Road Cardiff CF2 1XH Mr Bryan Bulloch ICI Chemicals and Polymers P.O. Box 14 The Heath Runcorn WA7 4QG Professor Anthony Challis CBE (deceased; correspondence c/o J.G. Mordue) Mr Michael Cooper-Reade Town Farm Little Stonham Stowmarket Suffolk IP14 5JP Mr Ian Glendenning 6 Georgian Close Abbeydale Gloucester GL4 5DG Dr Colin Hicks Environment and Technology Section Department of Trade and Industry

151 Buckingham Palace Road London SW1W 9SS Mr Michael Jefferson Deputy Secretary General World Energy Council 34 St. James’s Street London SW1A 1HD Professor J. Cleland McVeigh 11 Montpelier Terrace Brighton Sussex BNl 3DF Sir John Mason FRS ICCET Imperial College 40 Prince’s Gardens London SW7 2PE Mr Graham Mordue Gresham House 53 Clarendon Road Watford WD1 1LA Sir Alan Muir Wood FRS FEng Franklands Pangbourne Berkshire RG8 8JY Mr Mohammad Aslam Uqaili Department of Fuel and Energy University of Leeds Leeds LS2 9JT Professor Alan Williams Department of Fuel and Energy University of Leeds

Leeds LS2 9JT Dr John Wright OBE Leithacre Woodpecker Way Mayford Woking Surrey GU22 0SG

Preface Origin of this report

As Professor Challis points out in the Introduction to this volume, the topics studied by the Watt Committee on Energy encompassed virtually every question that might be regarded as a major energy issue (sadly, neither Tony Challis nor the Watt Committee now survives). This note summarises the events that have preceded the publication of this, the last Watt Committee Report. The Watt Committee published the results of its work in a series of reports. At the start, in the mid-1970s, public concern was directed mainly to the expected adequacy or otherwise of energy resources. In the early 1980s, we took up the environmental concerns, not then so prominent in the public mind, that have since become an intrinsic part of virtually all responsible thinking about social, technical and economic development—now generally expressed by the term ‘sustainable development’. More recently, economic and social issues have seemed likely to present the main challenges of energy policy as we enter the new century. The members of the Watt Committee, who originally defined the purpose of this Report, and the authors of the papers now presented here, gave much thought to the length of the perspective that they could sensibly contemplate. They do not claim to foresee the future, but they have something useful to say about the background to the decisions that could or should be made in the next generation or so, even perhaps as much as 50 years ahead. Their thoughts and views are a sign that the Watt Committee was always more concerned with wise action for the future than with re-examining the past, and are offered as a starting point for energy over that period.

Objectives

The papers that make up the bulk of this volume originate from a consultative conference with the title ‘Energy Now and the Next Fifty Years’, organised by the Watt Committee. The theme that unites them is neatly stated in the introduction by Tony Challis, deputy chairman of the Watt Committee who, sadly and unexpectedly, died shortly after writing it. In the strict sense of the word, it may be claimed that the concluding words are prophetic, so I quote them here:

Further consultations should determine what is needed and how it might be supplied. Funding of these consultations, so that proposals can be submitted and then implemented, should ideally be undertaken jointly by Government and a broad sweep of industry—energy producers, yes, and above all energy users. These words summarise the approach that the Watt Committee had adopted since its foundation in 1976, when it was widely thought in the energy professions that an interdisciplinary, authoritative and impartial body could play a valuable part in public discussion of questions concerning energy. In the 20 years that followed, funds for the small Secretariat, necessary for the conduct of these activities, were indeed contributed by the Government, a wide range of industrial and commercial companies, charitable sources, the professional institutions themselves and the Commission of the European Communities.

History of the Watt Committee

Although the Watt Committee was established and, through a representative executive, controlled by the professional institutions, it was characteristic that it was not governed exclusively by members of the main energy professions. The founder chairman, the late Jack Chesters, had worked in the steel industry all his life and was known mainly for his standard works on refractories. His successor, the late Geoffrey Pardoe, was an aeronautical engineer, and the small company that he founded was known for the breadth of advanced technological work that it undertook. Not surprisingly, such men were as concerned with the use of energy as with resources. In fact, after its initial work on energy policy, specifically requested by the then Department of Energy, the first study undertaken by the Watt Committee on its own initiative was entitled The Rational Use of Energy, and this expression was subsequently the basis of further studies of energy demand in various sectors. As Government policies developed in the 1980s and 1990s, the framework of public and industrial support on which the Watt Committee depended for survival changed radically. Increasingly, Government policy was driven by its belief in the operation of market forces within a regulatory framework designed to ensure effective competition. Energy planning became almost unmentionable. As to the levels of energy demand, safety rather than scarcity became the perceived constraintthe Watt Committee’s surveys of the prospects for nuclear power and especially its work on the Chernobyl accident have worn well. By the 1990s, people with the necessary qualifications could spare less time for discussion of the issues that must underlie this or any other policy in a forum such as the Watt Committee. In the energy industries, the new commercially driven utilities were concerned with their immediate obligations to their shareholders, which tended to outweigh their responsibilities for the long-term social implications of energy generation, transmission and use.

Both the voluntary support of enthusiastic but busy professional people and the financial support given by industry to the Watt Committee declined. As income fell, it became increasingly difficult to maintain the quality and effectiveness of the Watt Committee’s activities. The member institutions were appealed to on a number of occasions, but were unable or unwilling to fill the void.

Closure

These are personal recollections from the period that I served as secretary of the Watt Committee. They are a much compressed interpretation of the circumstances by which the executive was faced in 1996. By then, we relied on a much reduced core of very enthusiastic people; I shared their hope that the importance of our objectives and the goodwill acquired over the years could achieve a revival. Then, in quick succession, Geoffrey Pardoe (Chairman) and Tony Challis (Deputy Chairman) died unexpectedly. With the loss of their commitment and knowledge, it became clear to the executive that the only responsible course was to take the necessary steps for the closure of the Watt Committee, which became effective on 5 September 1996. There is a well known maxim, ‘Never apologise, never explain’. I have departed from it here only enough to show why there have been special difficulties in assembling the material for this volume. It was usual for the papers presented at the Watt Committee’s consultative conferences to go through a process of internal discussion and revision before they were approved for publication as a Watt Committee Report; in the present case, this process was not complete when the Watt Committee closed. I am personally grateful for the contributors’ tolerance of the consequences, and especially for the editorial labours of Professor Cleland McVeigh (a very long-standing supporter of the Watt Committee) and for the dedication and friendship of those, far too numerous to mention, who were associated with the Watt Committee in any way.

Acknowledgements

I have referred above to the roles of Geoffrey Pardoe and Tony Challis (who both died in 1996), as chairman and deputy chairman, respectively, of the Watt Committee. They took the lead in the planning of the consultative conference which provided the basis for this Report and in the series of activities which preceded it, and the latter played a major part both in the conference itself and in the process of revision afterwards. Cleland McVeigh also played a large part and, as stated above, undertook the editorial task of assessing the papers for publication. Much of the detailed work of producing revised versions of the papers in a usable form was done by Claire Edwards, assistant secretary of the Watt Committee at the time.

Thanks are also due to Jim Smith, who stepped into the vacant position of chairman for the last few months in the difficult circumstances described above, and to the editorial staff of E & FN Spon who, as publishers, coped with the interruptions and problems that arose. Graham Mordue

Part One Energy now and the next fifty years

Introduction: Energy policy—to be or not to be? Anthony Challis*

Our Conference entitled ‘Energy Now and the Next Fifty Years’Z came at a very appropriate time, but at a critical time in the evolution of the Watt Committee on Energy. Over almost 20 years, the Watt Committee reviewed virtually the whole energy scene piece by piece, but what was to come next? More of the same? Or a new and different pattern of activity? What better at that juncture than a review of the energy scene as a unified whole and an attempt to look ahead on a long-term basis to what might be? From this we should be able to determine what we could do to be useful and to be effective. The papers presented at the conference, published here, indulge in remarkably little technological forecasting. Often they postulate, by default, a steady evolution of present sources of energy. The main discussion is on the demographic, political, geopolitical and economic forces that will determine the form and extent of the use of these sources. Inevitably a large increase in world population, and hence in energy use, is foreseen and roughly quantified. Also of great importance is the movement of nations to fuller development. The greenhouse effect of the additional carbon dioxide (CO2) so generated is discussed. As yet, there is no solid evidence that the effect of the increase to date can be distinguished from other climatic effects. It is also clear that the size of the effects predicted from models grows smaller, as the models take more facts into account. Nevertheless, the world-scale effects could be so major that limitation of CO2 emissions must become and remain a necessity. In this regard, the enormous influence of the projected increase in the use of Chinese coal is noted. European help to China—to enable her to use coal efficiently—could have much more influence on CO2 production than even the most rigorous measures within Europe and the USA. * Died 5 March 1996.

Against this broad background, attention is focused on the UK and Europe, and inevitably on energy policy. Should there be a policy of greater or lesser definition—or a policy of no policy? Government is seen by all as the main determinant of policy. Caution reigns on highly delineated policies—there have been too many examples of apparently sensible policies doing more harm than good over time. Equally, the difficulty of economic forecasting hangs over these papers. Who, in 1965, would have forecast that a small war in the Middle East would treble the price of crude oil overnight, or who, in 1975, after this price was held by an Arab cartel, would have forecast that by 1995 the cost/price ratio of Middle East oil would be within a few per cent of that of 1965?

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There is considerable discussion on the working of the pool price system for electricity in England and Wales. One major user expresses dissatisfaction, but other organisations within the system support it. The vertical structure of the privatised industry in Scotland seems to generate a more smooth-running system compared with the result from the horizontal producer-grid-distributor system in England and Wales as originally established. Not surprisingly, the conference did not resolve the policy issues, but views did settle into an area that was small compared to the gulf between full-blooded dirigisme and the ‘Adam Smith’ free market. This area is essentially based on the free market and market forces, but tempered, tampered, or tinkered with by Government. The words illustrate the gulf of view. The papers on this subject are well and sharply argued. There is little difference on the desirability of diversity of sources and a recognition that some energy matters are very long term, whereas others are short—a planning nightmare. What, I believe, emerges, but would require a more ambitious report, is the need for an ongoing effort on forecasting and scenario planning. Of course all forecasts are wrong, the only question being how much by and why—hence the need to update continually and not to generate simply the plan, but plans. Planning and forecasting effort does not get it right, but it does reduce the surprise and confusion of the actual events. Steering a supertanker with a chart with errors and an inadequate lookout is hazardous, but with neither it is disastrous. I would argue that the necessary effort is not one to be conducted by Government; there is too much possibility, let alone suspicion, of political interference, too much requirement for the plan to be generated and strictly adhered to—no U-turns, no defeats—rather than the flexible empiricism that is needed. It seems to me that this is an ideal activity for a body such as the Watt Committee. Further consultations should determine what is needed and how it might be supplied. Funding of these consultations, so that proposals can be submitted and then implemented, should ideally be undertaken jointly by Government and a broad sweep of industry—energy producers, yes, and above all, energy users.

Chapter 1 Development of energy modelling Colin Hicks Department of Trade and Industry, London

Synopsis What can energy modelling contribute to identifying and responding to the challenges and opportunities that will arise? How should the policy maker exploit the forecasts that are available, and yet cope with an inevitable degree of uncertainty? The situation calls for an approach which relies less on refining the accuracy of the various energy modelling methodologies and more on the Government setting a stable, long-term set of signals for increasingly liberalised and competitive energy markets. In some instances this means simply setting the framework to which consumers and producers alike can respond—opening up the electricity and gas supply markets to wider competition is an example and, more recently, the Department of the Environment considered publishing a consultation paper on the introduction of a system of tradable permits for sulphur emissions in the UK. This system would set a limit on the total of UK emissions but would allow their exact distribution to be determined by considerations of cost and efficiency through trading in the market place. In other circumstances the Government may have a more active role, for example through long-term subsidies to renewable forms of generation but, even here, the intention is to encourage a range of technologies to move towards market viability, rather than to pick one or two winners in advance.

1.1 Introduction This chapter examines the role of energy modelling in identifying and responding to the challenges and opportunities that will arise over the next 50 years. Modelling is risky and heroic work, even in well-defined systems. Modelling which depends on projecting assumptions about human behaviour into the future ventures beyond the heroic; nevertheless, it yields valuable insights into what is sensible and what is not.

1.2 Need for energy modelling Having some idea of what the future will be like allows us to begin to respond earlier, more cheaply and more successfully. Commercial organisations know this already— looking into the future and developing successful new products and new markets is one

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of the central aims of any company. Individuals also do it routinely in their homes, when they decide whether to replace their existing light bulbs with new energyefficient ones or to install gas central heating rather than electric. But for the most part, these decisions do not involve looking fifty years ahead. Looking that far ahead is difficult, and generally not necessary. Experience shows that the unexpected can prove costly. Energy modelling, in preparing us for what might come about, provides opportunities for the preparation and financing of measures such as the identification and development of necessary natural resources, for developing new technologies and for bringing them to the market, for the turnover of existing stock of energy-producing and energy-using assets; for firms and individuals to respond to the energy environment in which they operate.

1.3 Background to energy modelling In the early 1970s, following the oil-supply crisis, more widespread concerns began to be expressed about resource constraints—with implications for world energy prices and the perceived need to develop long-term technical solutions like renewables, nuclear fusion and energysaving options. More recently, in the late 1980s, the emphasis was increasingly on sustainable development. Questions about air and water quality, and climate change, have given impetus to this work.

1.4 Main reasons for concern for the distant future Some of the problems associated with energy use, such as the possibility of global warming, have such long-term implications that any strategy to deal with them is unlikely to be successful unless it views both the problem and the solutions in a long-term context. The IPCC (Intergovernmental Panel on Climate Change) examination of future global energy demands and CO2 emissions is an example of this approach. It can be seen that it is necessary to understand the longer-term impacts of current actions. Technologies do not always take many decades to come to fruition, but experience shows that most do, such as biotechnology, nuclear fusion and artificial intelligence. Decisions by governments or by companies to plough funds into such technologies can only be taken sensibly if viewed against the sort of future world in which they will finally emerge. Investment and policy priorities require some understanding of what the future might be like.

1.5 Predicting the future energy scene Three broad approaches can be distinguished, although they overlap and complement one another. The first is the construction of economic models of energy demand. A fairly well-

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established set of methodologies that concentrate on future energy demand has emerged as a side product of efforts by economists to model the economy in general. They attempt to explain that demand by means of statistical relationships between it and, for example, incomes or fuel prices. Models on that basis are quite good for identifying such relationships in the short run, but the further you push into the future the more problematic such modelling becomes. In its cruder forms, that approach does not give a good indication of the role which particular energy-using or energy-producing technologies might play. Admittedly, much of the work on energy modelling in Government has been of this sort. As a tool for helping to anticipate the future, it has not always been successful. Modelling might reduce uncertainty about the future, but its record as a means of longterm forecasting is not good. This is shown by analysis of official government projections of total energy demand since 1960. These projections provide a framework for the development of future policy scenarios, but it is necessary to proceed with caution. In Figure 1.1, the history of official total energy demand projection since 1960 is shown. Although only a single line is shown for each project, in reality a range of projections was usually published. Historically, therefore, this summary may not be entirely fair. Nevertheless, there is a clear message. The DTI’s new energy projections, which have been published as Energy Paper 65, are an attempt to tackle head-on some of the difficulties mentioned above. Second, there is a similarly well-established body of work which focuses not on energy demand trends, but on establishing how to satisfy demand by choosing optimally between a variety of energy-producing and -using technologies. These look at energy supply by analysing technology development. An example of this is the DTI’s Energy Paper 61: Energy Technologies for the UK—An appraisal of the UK energy research, development, demonstration and dissemination. The appeal and strength of this approach is that, because it is not based on historical relationships, it is better able to allow explicitly for the new and unestablished technologies which will doubtless play a major role in the future. On the other hand, it is still only as good as the information fed into it. It does not, by itself, tell us what will happen to the costs of different technologies as they progress from the research and development stage to market exploitation. It cannot predict whether, or at what rate, the market will take up new technology. Nor, obviously, can it anticipate technologies not yet invented. It has to be emphasised that, in trying to look ahead 50 years, a substantial degree of caution has to be exercised in looking at the results. Finally, the limitations of both of these essentially quantitative methods have led some practitioners to adopt the view that we are too ignorant about the distant future to attempt, with any reliability, to identify how things are most likely to turn out. In this view, it is better to plan to cope with uncertainty than to expend huge effort on crystal-ball gazing. One way of approaching uncertainty is to develop a set of descriptive scenarios, designed to capture the sort of qualitative factors which are so difficult to embody in more quantitative approaches. Such an approach does not suit all needs but, in circumstances where one is trying to identify a robust general strategy, it may be sufficient to concentrate on a range of largely qualitative scenarios. Shell have been one of the earliest exponents of this approach in the UK. In a modified form it is also used by the

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Figure 1.1 History of Government projections of total energy demand.

Directorate General for Energy of the European Commission. Despite the blurring of the edges between these different approaches, each has a distinct contribution to make. Nevertheless, it is doubtful how much can usefully be said now about the world in 50 years’ time, whatever modelling method is used. Looking forward from 1945 to 1995, who could have foreseen the features of the modern world which today dominate our patterns of energy consumption and production? Nor was Government’s record at picking the winners of the future particularly good. The chequered history of nuclear power—once hailed as a source of energy that would be too cheap to be worth metering—is a case in point. The historic overoptimism about the time-scale on which fusion would generate energy is another. The point here is not that we cannot take long-term strategic decisions about the future but that it is easier to identify the problems—global warming, increasing congestion and pollution from transport, possible depletion of the world’s fossil fuel resources—than for Government to

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identify the best technological responses.

1.6 Dilemma of the policymaker How should the policymaker exploit the forecasts that are available, and yet cope with an inevitable degree of uncertainty? The situation calls for an approach which relies less on refining the accuracy of the various energy modelling methodologies and more on the Government setting a stable, long-term set of signals for increasingly liberalised and competitive energy markets. In some instances, this means simply setting the framework to which consumers and producers alike can respond. Examples of this strategy are the opening up of the electricity and gas supply markets to wider competition. Governments can replace the rigidities of strict regulation with mechanisms which use the market to ration resources that are in demand. A good example of this is the recent moves by the Department of the Environment to consider publishing a consultation paper on the introduction of a system of tradable permits for sulphur emissions in the UK. This system would set a limit on the total of UK emissions, but would allow their exact distribution to be determined by considerations of cost and efficiency through trading in the market place. In other circumstances the Government may have a more active role -for example, through long-term subsidies to renewable forms of generation—by supporting R&D and by using the Non-Fossil Fuel Obligation (NFFO) levy on electricity bills. But even there, the strategic intention is to encourage a range of technologies to move towards market viability, rather than to pick one or two winners in advance. This emphasis on using markets is sometimes criticised because of the alleged tendency of both companies and individuals to take decisions based mainly on short-term considerations—although it has to be acknowledged that short-run survival is a prerequisite of long-run success. Large companies routinely plan strategically two or three decades into the future, and even small companies—such as those currently investing in renewable electricity generation—are prepared to invest in assets that have lives stretching well into the next century, provided the market conditions are right. Criticisms often levelled at modelling are: that it is sometimes too removed from the real world; that it proceeds by assuming either that things in the future will go on much as they have done in the past; or that it ignores the real costs and market imperfections which create a gap between what appear to be least-cost, or even no-cost, technologies and the prospects for such technologies in the real world. Many people appreciate these difficulties and are determined to tackle them. Progress towards reconciling the different approaches is being made by academics, government researchers and in the business world.

Chapter 2 Changing patterns of human need Brian Brinkworth Department of Mechanical Engineering and Energy Studies, University of Wales, Cardiff

Synopsis Growth of populations and expectations of rising living standards indicate that, within the period under consideration, the use of energy in the currentlydeveloping world will pass and rapidly outstrip that of the industrial world of today. Source depletion and environmental impact will depend on the way the energy ratio of the rising economies develops. It will be strongly in the interests of the present industrial countries to assist the developing ones to move rapidly to the falling part of the energy ratio curve. Education and skills will need to be transferred as well as technologies. Different sources and processes will be required to serve the needs of new cities and to stabilise rural populations. Renewable energy sources will have to feature strongly. There will be a place for these also in reining back the growth of transport in countries such as the UK, and in obtaining a balance between the changing patterns of the work, transport and domestic sectors. Overall, a 50-year period will have to be marked by a transition from capital energy resources to renewable ones.

2.1 Global dimension Energy must be considered to be one of the basic human needs. World history has shown that the purposeful use of energy resources has been the principal means of obtaining economic advancement and improvement in the quality of life. One of the changes that is hoped to be seen over the period in question must be the appearance of these benefits in areas where they have not yet arisen. Since the needs vary widely with location, it is appropriate to begin with a global viewpoint. This is necessary also because the main energy sources currently used are internationally traded commodities and the effects of their use are seen nowadays to have global dimensions. A very noticeable change currently in progress is the continuing growth of the human population. It now takes only 4 days to add another million potential energy users to the total. The increase is taking place almost entirely in the countries in which economic advancement has been least. It is accompanied by a drift of people away from rural areas, at a rate such that to cater for it properly would require the construction of a new city the

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size of Paris every month. Universal global communications nowadays show to people everywhere what living standards can be like through economic advancement. It is natural that all should expect a share in prosperity. But it will be a formidable challenge to meet these legitimate needs. The periodical UN population survey is usually a sober recital of facts, but the 1992 edition said of the period being considered that: ‘The scale of adjustment required over the next three or four decades is perhaps the most formidable challenge humans have ever faced.’ The provision of energy cannot be isolated from this challenge—in fact, it is likely to be the key to coping with it. Forecasting the accompanying changes in the pattern of energy use is a matter being addressed elsewhere. Here it is sufficient to note that most studies show that, well within the 50-year period, the bulk of energy use will move to countries now called the developing world. One factor to be considered, then, is how the resources for this massive change are to be provided. In addressing this question, it will be vital to have good assessments, not only of the magnitude of future energy requirements, but of the rates of change that will have to be accommodated.

2.2 Energy ratio as indicator Forecasting is sometimes done by disaggregating economic activity to low levels and then totalling the contributions from the various sectors. Alternatively, gross macroeconomic measures may be established. Economists are well practised at estimating levels of economic activity. To determine from these the required further estimates of associated energy needs, the energy ratio is employed (this is the ratio of national primary energy consumption to the GDP figure). In the UK, the energy ratio has fallen by a factor of two over the past 40 years. The trend has been steady and almost linear, although it is evident that in a developed society it must become progressively more difficult to lower the ratio, and the general shape of the falling part of the curve will be that of a negative exponential. In the early stages of development, however, there is a tendency for the energy ratio to rise. As a new consumer becomes active, he cannot make a contribution to economic activity commensurate with his needs for energy. This will at least be due to the absence of necessary education skills and of resources and infrastructure. However, the opportunity is there in principle for those in a developing economy to benefit from the experiences of those who have preceded them. We see this, for example, in the changes in energy ratio which have taken place in Europe (Figure 2.1). In those countries which entered later into industrial development, the energy ratio did not rise so high, and after the peak it fell more rapidly towards convergence with those of the earlier ones. Attention is needed to the development of a more robust model of this process than we have at the present time, for this changing pattern could be a vital measure of success in this area. It can be said plainly that it is in our best interests, in the presently developed world, to assist the newly developing countries to move quickly to the falling part of the energy ratio curve. This would help to limit the rise in energy use and the consequential rate of exhaustion of the fossil fuels and effects on the environment. But it would also help to counter

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disorderly pressures arising from envy and frustration or, on the other hand, apathy and hopeless resignation. It will require more deliberate action than at present to promote education, acquisition of skills and technology transfer. In a world now committed to market economics, it is to be considered how this process can be seen in terms of business opportunities, and in particular how the massive financial needs can be met at the necessary rates of flow. It could succeed only if companies in the developing countries act in partnership, based on clearly perceived benefits for both.

Figure 2.1 Development of the energy ratio in Europe.

2.3 Meeting the changing pattern of need For dwellers in the new cities, it appears that the only available resource capable of providing energy on a sufficient scale, without submerging international efforts to contain environmental pollution and greenhouse gas emission, is nuclear-generated electricity. However slow and halting its rehabilitation in the social democracies, this source cannot be set aside in consideration of the changing world patterns. But in addition, disseminated energy sources will be essential to provide work and amenity in rural areas if the drift to the towns is to be checked. Analysts such as Meredith Thring have pointed out the great influence of the first available energy, and potential programmes have focused on ways of providing even a few watts, or tens of watts, per head. For this, sources have to be as widely distributed as the users and must inevitably be renewable. The appearance of photovoltaic arrays and aerogenerators now in evidence across the world seems bound to feature increasingly in this changing pattern. Examples are solar-powered refrigerators for vaccines, photovoltaic water-pumping facilities and biogas generators. As the major use of energy is about to shift away from the presently industrialised

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world, it is being asked whether there is any point, in the UK for example, in continuing to devote our time and resources to the limitations of energy use and consequential environmental impacts. The environmental aspects have, however, become institutionalised within a relatively short time, and whether or not they will be swamped by expanded use of energy elsewhere, there is not likely to be any withdrawal by the UK from the national objectives, the regional directives and the international agreements which are already in place. Moreover, the objectives set by the Watt Committee pre-date these commitments and rest just as firmly on considerations such as economy in the use of limited resources and combating unwelcome social consequences of unmanaged energy use.

2.4 UK dimension The changing pattern of energy use in the UK is shown in Figure 2.2. Over a period less than that now under review, energy use in industry has fallen by half. Domestic uses continue to represent a very high proportion of the total - about 30 per cent - while that due to transport has doubled. The recent analysis by the Royal Commission on Environmental Pollution states plainly that the situation concerning transport in the UK is not sustainable. This is understandable when seen against projections by the Department of Transport, showing a further doubling of vehicle mileage within 35 years. It must be recognised that the availability of personal means of mobility has been immensely liberating, while the movement of goods, particularly foodstuffs, has contributed notably towards our quality of life. Vehicle ownership in other countries has reached levels of nearly twice the UK per-head figure without reaching saturation. Problems of pollution, noise, congestion, road encroachment and others suggest that the pattern here will have to be different. One thing that makes forecasting unreliable is the infinite inventiveness and resourcefulness of people, which cannot be modelled. At a given point, we can only project potential solutions based on current knowledge, and not those which have yet to be conceived. No doubt vehicles can become smaller and more fuel-efficient. Disincentives for the use of personal vehicles and incentives for the use of public transport can be envisaged. The California example might be followed, requiring a statutory proportion of zero-emission vehicles to be provided. Work in these and many other areas is in progress. At Cardiff, examples studied have been an experimental solarpowered car, driven across Europe on ordinary roads from Athens to Lisbon in 1985, and a more recent electric city car with batteries charged from a hybrid wind/solar station using charge-transfer technology. A complementary development is that the need to travel will be reduced as the use of advanced communications and information technology progresses. Experience is growing (see the Department of Transport reports given in the bibliography) with employment of teleworkers, working mostly or exclusively from home. Others work from telecottages, where IT facilities are made available for hire, the terminology emphasising the distributed nature of the potential workplaces of the future. Some might take the form of

Energy demand and planning

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Figure 2.2 UK energy consumption by final users.

service centres located at railway stations, motorway services, post offices and hotels. The loss of social contacts, which are seen to be an important element in the work situation, was to be mitigated by teleconferencing and use of virtual reality. Some personal contact might have to be continued deliberately by rostering personnel for periods at a much-diminished headquarters, where any one of a series of identical workstations would be available for allocation on arrival, rather than continuing the practice of assigning designated offices for occupation over long periods. Experience is growing with teleshopping and distance learning, which would further contribute to a reduction in the need to travel. A growth in working, shopping and learning from home could produce a countervailing increase in the proportion of energy used in the domestic sector, which has remained high and steady among the changing energy patterns of recent decades. One

Changing patterns of human need

15

estimate puts this rise at no more than 10 per cent. However, this is likely to be overtaken in any case by other developments in building energy control. Low-energy technologies for buildings, based on new understanding of insulation, ventilation, active and passive solar heating and daylighting, indicate that for the UK climate it should be possible to have comfortable habitation with virtually no conventional energy use at all. This derives in part from significant development in advanced glazing systems; this will allow the controlled input of solar heat and daylight into buildings while offering the same resistance to outward heat loss at the surrounding walls and roofs. Other contributors will enlarge on our growing appetite for electricity in the home. Current developments point towards self-generation of electricity by the use of photovoltaic devices incorporated into wall and roof structures, capable of meeting most of the needs of the domestic sector. At Cardiff, we have designed the first two solar-electric roof installations in the UK, employing polyvinyl-glass sandwich construction, mounted in alloy extrusions, each of about 4 kW rating, one on a domestic dwelling, the other on a small office building.

2.5 General pattern As to changes to the general pattern of energy sourcing around the world in 50 years’ time, speculation is likely to be no better than would have been possible about today’s situation from a viewpoint in the 1940s. One pattern that would seem to be essential is a gradual shift from the use of finite sources to those that are indefinitely renewable. Although the magnitude of available renewable energy resources is adequate to provide for the changing needs envisaged, it does not follow that the transition will be simple and straightforward. It is not without significance that the most serious energy shortage occurring currently concerns a renewable resource—fuel wood. The UN population survey for 1992 remarks, with an air of dismay and disappointment, that Renewable resources in some parts of the world are being used faster than they can be replaced and they are fast becoming non-renewable; we are discovering the limits of unlimited resources. Clearly, the transition is not going to be plain sailing. Elsewhere in this report Professor David Hall sets out a strong case for the belief that all foreseeable energy needs could be met through the systematic management of the biomass and various methods of energy conversion employing biological materials. By this route, solid, liquid and gaseous fuels can be provided that recycle carbon rapidly, so as not to contribute significantly to global warming. Extensive and effective management of land use would be required. This would indeed involve a changing pattern relative to the situation today, when current marketdriven policies require that land be taken out of productive use. A reversal of this trends towards energy cropping would be facilitated if the processes were more efficient. If speculation were permitted, it might be conjectured that it could be in this area that the next 50 years will produce a decisive step, matched to the problems of the time—a full understanding of the natural processes of photosynthesis, to the point at which they can be mimicked within technical processes and made more efficient.

Energy demand and planning

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Bibliography Department of Transport (1989) National Road Traffic Forecasts (Great Britain) 1989, London: HMSO. Department of Transport (1989) Transport Statistics of Great Britain 1993, London: HMSO. Department of Trade and Industry (1994) Digest of United Kingdom Energy Statistics 1993, London: HMSO. Department of Trade and Industry (1994) Energy Paper 62. New and Renewable Energy: Future Prospects in the UK, London: HMSO. International Energy Agency (1994) World Energy Outlook 1994, Paris: OECD. Policy Studies Institute (1991) Britain in 2010, London: Policy Studies Institute. Royal Commission on Environmental Pollution (1994) 18th Report—Transport and the Environment, Cm 674, London: HMSO. United Nations Population Fund (1992) The State of World Population 1992, New York: United Nations. The Watt Committee on Energy, Seminar 1994.

Chapter 3 Population levels and their implications for energy demand Michael Jefferson

Synopsis Population predictions made at any time are unreliable. Nevertheless, global population prospects are a key issue for future energy supply and demand. For consideration of the important issues, anthropogenic emissions and especially greenhouse gases, reference should be made to the work of the Intergovernmental Panel on Climate Change and the United Nations, which suggests that, for the year 2150, the possible population range is from under 5 billion to about 28 billion, compared with the current 5.8 billion. Todayְ’s figures for China and India, for example, are uncertain. Over the period in question, notwithstanding the differential population growth rates in the countryside and in urban areas, the present high-income countries are expected to represent a declining share of world population. Nobody knows how these changes will relate to energy supply and demand, which are subject to many factors, but there is a wide range of possibilities for energy requirements per head. The World Energy Council suggested that the contribution by fossil fuels could fall; new forms of renewable energy might contribute 25–50 per cent of global primary energy supply, and non-fossil sources (including large hydro) in total up to 80 per cent of global primary energy supply. Climate change is not yet a primary issue for most people and countries; waste collection, sanitation, housing and childhood deaths, among other concerns, are likely to exert upward pressure on emissions. Nevertheless, greenhouse gas emissions are sure to become a global responsibility, the increases being related to the aspirations and growth of the developing countries. Energy policies constitute what could be a common agenda for the necessary action.

3.1 Introduction In this paper, the subject is population levels and their implications for energy demand. It was the late Professor John Jewkes, one-time colleague and friend of the author, who long ago warned that those who have been courageous enough to embark upon longdistance forecasts of changes in population and of their economic consequences have been notoriously unfortunate in the past. Sixty years ago, the work of Dr Enid Charles would have been fresh in mind. The author of The Twilight of Parenthood, Dr Charles was not pessimistic for her time in comparing the UK’s population in 1935 of some 40.6 million with the prospect for 2035 of under 35 million, and perhaps as few as 19 million.

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Some academic work done at that time suggested that the figure might have fallen to as little as 14 million by 1970. Sir Roy Harrod (as he later became) and many others bewailed the prospect and consequences of a declining population. Dr Charles came in for particular criticism for saying that the UK population might ‘only’ have declined to 33,585,000 in 2035 (from 43 million in 1975)—the cognoscenti much preferred her projection to 19 million. Reference made in other papers to scenarios in general, to the Royal/ Dutch Shell Group’s Scenarios in particular, and to the relevance of scenarios for decision making are not referred to here. Suffice it to say that, having spent about 14 years of his life in generating and communicating scenarios (10 of those years in Shell) and 6 years taking business decisions on the back of scenarios and other information, it is a temptation not easily resisted by the author! These cautionary comments are offered to anyone who embarks on estimates of the future level of world population and its economic implications, especially the demand for energy services.

3.2 Key issues Global population prospects are nevertheless a key issue in considering future energy supply and demand. It would appear at the top of most lists of relevant key issues or scenario building blocks: • world population growth • rising demand for energy services • transport a particular problem • continuing dependence on fossil fuels for many decades • expansion of renewable energy provision • all energy forms have environmental impacts • global CO2 emissions will rise for many decades • accelerating energy efficiency and conservation. All these issues are clearly of importance for the energy sector.

3.3 Population projections The United Nations (UN) produces various high-, medium- and lowpopulation projections out to the year 2150. This report concentrates on the next 50 years, but in this paper the next 100 years are considered, in part because the author wishes to comment on some broader issues, particularly anthropogenic emissions and atmospheric concentrations of greenhouse gases (GHGs). In the latter context the paper comments on the current (IS92) scenarios of the Intergovernmental Panel on Climate Change (IPCC), as well as remarking upon the priority attached to climate change by comparison with pressing local basic needs and pollution issues. Figure 3.1 provides the UN’s projections. For the year 2150 the range is from under 5

Population levels and their implications for energy demand

19

billion up to about 28 billion, compared with the current 5.8 billion. For the year 2100 the range is 6.4 billion up to 17.6 billion, whereas the medium projection is 11.3 billion. Those figures are important, because the IPCC’s scenario IS92f is based on a 2100 world population of 17.6 billion; scenarios IS92a, IS92b and IS92e are based on 11.3 billion, and IS92c and IS92d are based on 6.4 billion. When it is stated that the IPCC’s scenarios cover the range of alternative scenarios in terms of GHG emissions, it is necessary to be aware that the IPCC is unique—so far as the author is aware—in using three widely different population projections, and then comparing all their scenarios together. The UN projections are, in any event, rather more widely dispersed than others. The medium projections of the leading ‘population arithmeticians’ for 2100 are, however, in broad agreement at around the 11.5–12.5 billion mark. Recalling the earlier warning, mortality rates and fertility rates are and will remain uncertain and open to fluctuations in either direction. Projections currently assume declining birth rates and

Figure 3.1 UN world population projections.

family sizes almost everywhere. China has recently been caught by surprise at having officially reached a population of 1.2 billion. Shortly before, official projections of China’s population had been adjusted downwards. In fact, so great is population movement in China and so heavy the official constraints on larger families that it is hardly surprising that China’s population is not known with complete accuracy; it is probably understated. India’s population may also not be known with the greatest precision, but it is officially believed that the birth rate has recently declined. There are other problems which are not yet incorporated into most official population projections— such as the effects of ethnic and religious conflicts. The numbers in Table 3.1 (which contain the UN’s projections) have to be taken with these factors in mind. After all, a

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very slight ‘error’ in a projection at an annual rate against an actual outcome 100 years ahead can have major implications.

Table 3.1 Comparison of world population projections for 2100 (billion)

UN

World Bank

High

19.2

Medium

11.2

Low

6.0

IIASA 16.1 11.7

12.6 9.1

There is a further complication, however. Population growth is not expected to be evenly distributed around the globe. Over 90 per cent of the increase is thought likely to occur in what we now term the developing countries—although, of course, that term is used to encompass a wide variety of economies from ‘Asian tigers’ to the more somnolent (Figure 3.2)

Figure 3.2 World population with median projection.

High-income countries (currently defined), which represented 15.5 per cent of the world’s population in 1990, are expected to account for only 8.2 per cent in the year

Population levels and their implications for energy demand

21

2100. One of the more interesting questions in this area is: given the large numbers of rural dwellers now in developing countries, how far and how fast will it be feasible to provide locally appropriate forms of renewable energy to meet their requirements and slow down the drift from the countryside to the cities? At present, most projections assume that urban communities will grow significantly faster than the world’s population in general. It is perhaps salutary to look at how the world’s population is likely to be distributed in the year 2100 by comparison with 1990 (Figure 3.3).

Figure 3.3 Distribution of world population by continent—1990 and 2100.

It is noticeable, and a fact to be carefully considered by any wouldbe policymaker based in London or Brussels thinking of strutting across the world’s political stage, that the share of world population accounted for by Western and Eastern Europe combined is expected to decline from 13.7 per cent in 1990 to 6.5 per cent in 2100. Western Europe’s population, now about 378 million, is expected to rise a little before falling to about 340 million in 2100. Asia’s population in the meantime is expected to more than double to over 6 billion. Africa’s population could more than quadruple—to around 2.8 billion. The UK’s population is expected to rise from its present 57.4 million to around 61 million, before falling to about 59 million in 2100.

3.4 Energy demand The availability of energy services per head is still very unevenly spread around the world. There are, of course, wide differences within regions and between people. But, as Figure 3.4 shows, there are also great differences between regions. South Asia lies at 25 per cent of the world average and 5 per cent of the North American figure. These figures for developing countries and regions can be expected to rise, both in per capita terms and—because of population increasein total by comparison with the present industrialised countries. Nobody knows how far—the availability of finance, technology diffusion, ‘capacity building’ (the new buzz-phrase) maintenance skills and other factors will all play their part. Moreover, any estimates of per capita energy availability need to take proper and realistic account of improvements in energy efficiency. By the year 2100 energy efficiency could have improved fourfold from 1990 levels. A figure of 1.2 tonnes

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oil equivalent per capita in the year 2100 might indicate a level of energy service equivalent to 4.8 in 1990. Table 3.2 gives the outcome of the World Energy Council (WEC) publication Energy for Tomorrow’s World (1993), but the figures are only broadly indicative.

Figure 3.4 Energy demand per head in 1994 by geographic region.

Table 3.2 Indicative energy per capita possibilities (tonnes oil equivalent). These values incorporate assumptions on economic growth, ability to finance and pay, and improved efficiency in provision and use.

Year 1990

OECD statesa

CISb

DCc

World

4.73

4.47

0.73

1.66

A

4.82

5.42

1.33

1.98

B

4.8

4.06

1.03

1.65

C

3.72

3.37

0.92

1.39

A

5.04

5.98

3.15

3.43

B

4.65

4.69

2.42

2.70

C

2.48

2.39

1.52

1.64

2020

2100

aOECD = Organisation for Economic Cooperation and Independent States; cDC = Developing countries.

Development; bCIS = Commonwealth of

Population levels and their implications for energy demand

23

Such figures also need to take account of population growth uncertainties, the use of traditional fuels and possible expansion of locally appropriate renewable energy provision, domestic fossil fuel resources and their likely exploitation, and the big differences which now exist in energy/GDP ratios. Whatever way we look at these things, it seems probable that the presently categorised developing countries (which accounted for 36 per cent of global primary energy demand in 1990) could account for over 50 per cent of the world total in 2020 and around 80 per cent by 2100 (Table 3.3). In the very long term, considerable uncertainty is introduced by what could happen to global primary energy demand in general and nonfossil fuel supply in particular. In Energy for Tomorrow’s World it is suggested that the share of global primary energy supply accounted for by fossil fuels (77 per cent in 1990) could fall to between 15 per cent and 40 per cent by the year 2100, dependent on various assumptions. New forms of renewable energy (i.e. excluding traditional fuels—such as fuel-wood, crop wastes, and animal dung—and large hydro—over 10 MW) might account for anything between 25 per cent and 50 per cent of global primary energy supply (Table 3.4).

Table 3.3 Percentage shares of global primary energy demand—reference case

Region

1990

2020

2050

2100

OECD states

44

35

23

15

CIS

20

14

10

7

DC

36

51

67

78

Table 3.4 Long-term global energy demand. Cases A-C are three scenarios: A shows greatest demand, C the least

Parameter

1990

Case A

Case B

Case C

2050 2100 2050 2100 2050 2100 Energy demand (Gtoe)a

8.8

27

42

23

33

15

20

Fossil fuels (% of primary energy)

77

58

40

57

33

58

15

Nuclear (% of primary energy)

5

14

29

28

28

8

11

New renewables (% of primary energy)

2

15

24

14

26

20

50

aGtoe=Gigatonnes oil equivalent.

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3.5 Priorities It is important to be clear about what people’s priorities are around the world. From the work of the Intergovernmental Panel on Climate Change (IPCC), a fair and objective view of potential climate change issues, reflecting the WEC’s own work, may be taken— however as the WEC’s Commission discovered, climate change is simply not, currently, a key issue or priority for most people and countries (Table 3.5).

Table 3.5 WEC Commission: regional key issues and priorities

Energy Technology Financing Institutional Efficiency Climate need and deficiencies and change population conservation growth North America

4

4

4

3

3

3

Latin America

1

1

1

2

1

3

Western Europe

4

3

4

3

1

2

Central and 4 Eastern Europe CIS

2

1

1

1

4

SubSaharan Africa

1

1

1

2

2

4

South 1 Asia/Pacific

1

1

2

2

4

of which China

1

1

2

2

4

1

1 = Very important; 2 = important; 3 = of concern; 4 = no concern.

Factors accorded high priority and which reflect local needs are regional and local pollution and a number of basic needs issues: • uncollected solid waste • contaminated water • lack of sanitation/sewage treatment • substandard housing

Population levels and their implications for energy demand

25

• chronic sickness/higher mortality • domestic fuels • city smogs (particulates, SO2 and Nox emissions) • land and water pollution • lead pollution • acid rain. These regional and local issues should not occasion surprise. If we consider, for instance, that 50 per cent of the world’s urban population does not have its waste collected—the rural population is even higher—we can begin to appreciate the problems. Similarly, over 1.1 billion people are dependent on contaminated water. Over 1.8 billion people lack sanitation and sewage treatment. Over 0.5 billion suffer chronically substandard housing. Also, over 35,000 children die daily—75 per cent of them from pneumonia. Over 6 million die annually in India from respiratory problems—most of them probably as a result of the burning of domestic fuels in the home. Over 0.5 billion people in the world suffer severe particulate pollution. Traffic congestion and its consequences are not confined to the industrialised countries. Traffic congestion in Bangkok, according to UNEP (United Nations Environment Programme) estimates, costs in excess of US$1 billion annually in direct costs, and a further US$1 billion in indirect costs, such as impacts on health. The WEC’s work suggests that, despite reductions in sulphur emissions in the OECD area over the past 15–20 years, global sulphur and nitrogen oxides emissions are expected to rise significantly over the next few decades.

3.6 Potential climate change Even if local and regional issues are accorded higher immediate priority, potential climate change cannot be ignored. Within 25 years the current developing countries can be expected to account for over 50 per cent of the world’s annual anthropogenic greenhouse gas (GHG) emissions. Thus, even if the industrialised countries of the Northern Hemisphere are responsible for most past and present GHG emissions, this will shortly become an incontrovertible global responsibility. The WEC advocates precautionary measures of a minimum regret kind in response to the concerns about potential climate change, and the need for appropriate action to commence without delay. There remain considerable uncertainties surrounding the future climatic consequences of rising atmospheric CO2 and other GHG concentrations. However, the uncertainties are compounded if one compares, without noting the reasons, emissions scenarios built upon widely different global population assumptions. For example, Figure 3.5 is distorted by IPCC scenarios IS92c and IS92d being based on a world population of only 6.4 billion in 2100. The scenarios are normative in several respects, such as fuel mix assumptions which include rather modest anticipated contributions from renewable forms of energy. Atmospheric CO2 concentrations are believed to be even more important than annual emissions, given the hypotheses underpinning enhanced global warming—although the IPCC nowadays emphasises the key role which accumulated emissions are thought to play. The underlying population assumptions have a significant impact here as well (Figure 3.6). Rational analysis is not helped by the quiet way in which, for instance, the

Energy demand and planning

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implied atmospheric CO2 concentration of IS92a had slipped from about 800 ppmv (parts per million by volume) in 1992 to under 700 ppmv in 1994 in the IPCC’s scientific assessments.

Figure 3.5 IPCC 1992 CO2 emissions scenarios.

Figure 3.6 Atmospheric CO2 concentrations derived from the IPCC emissions scenarios of 1992 (Fig. 3.5) by the use of the Wigley model of 1994.

Population levels and their implications for energy demand

27

Again, however, it is the current developing countries which are expected to account for the major part of the growth in anthropogenic CO2 emissions (Figure 3.7).

Figure 3.7 CO2 emissions for 1990 and 2020.

In Figure 3.8 A-C represent the WEC Commission’s cases from high growth (A) to ecologically driven (C). Owing to the growth of population and economic activity in the present developing countries, annual CO2 emissions from fossil fuel combustion are expected to rise in all cases to at least 2050. Figure 3.9 compares the profiles of implied atmospheric CO2 concentration for the WEC Commission’s cases with the IPCC best guess scenario IS92a. The IPCC’s best estimate within the IS92a range has a rather similar 2100 outcome to the WEC Commission’s highest case, A. However, from 2060 or so the IS92a scenario exhibits sharply rising atmospheric concentration because of an extremely heavy reliance on coal. The WEC Commission’s case A has a more moderate rise. This paper does not deal with the forecasting of climatic change, especially as Sir John Mason’s paper also appears in this Report. But from comments confined to energyrelated CO2 emissions and implied atmospheric CO2 concentrations, using one of the best general circulation models currently available, it is difficult to keep accumulated emissions within the bounds regarded as satisfactory by the IPCC’s work (Figure 3.10 and Table 3.6)

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Figure 3.8 Annual CO2 emissions from fossil fuel combustion (Gt of carbon), 1990–2100.

Figure 3.9 Atmospheric CO2 concentrations.

Population levels and their implications for energy demand

29

Figure 3.10 IPCC illustrative CO2 emissions to achieve stabilisation concentration levels (ppmv), 1994.

Table 3.6 IPCC estimates of CO2 emissions and requirements for atmospheric concentration to stabilise (Gt carbon), 1994

1592 emissions scenarios

Accumulated emissions from 1990 to 2100 (GtC)

e

2190

f

1830

a

1500

b

1430

d

980

c

770

Stabilisation case 350 ppmv

300–430

450 ppmv

640–800

550 ppmv

880–1060

650 ppmv

1000–1240

750 ppmv

1220–1420

Energy demand and planning

30

3.7 Conclusions There are several reasons for this state of affairs, but attention inevitably focuses on population levels and their implications for the global demand for energy services. Here the spotlight is bound to fall on the current developing countries, which will probably account for 90 per cent of the world’s population growth over the next few decades and at least 85 per cent of the increased demand for energy services; and yet many are still expected to be unable to satisfy basic needs. In these last circumstances, who can gainsay their aspirations? Yet there are other elements which need to be addressed as a matter of urgency: raising efficiency in energy provision and use; encouraging conservation; stimulating the accelerated diffusion of locally appropriate forms of renewable energy provision; taking considered steps towards cleaner fossil fuel conversion and use; accounting effectively for externalities in general and environmental impacts in particular; and improving our scientific understanding of climatic forces and change. Many of these items can be seen to form a common agenda for tackling local and regional concerns which are not accorded high priority, while incidentally assisting with mitigation of or adaptation to GHG emissions.

Reference World Energy Council (1993) Energy for Tomorrow’s World, London: Kogan Page.

Chapter 4 Recent developments in the prediction of global warming* Sir John Mason

Synopsis Since 1958, the atmospheric concentration of carbon dioxide has been increasing, though with some levelling-off recently. If the upward trend continues, it will eventually lead to significant climate change, and it will become necessary either to choose immediate remedial action or to adapt. Carbon dioxide and water are the two main gases contributing to this greenhouse effect. The rate of increase is uncertain, but the CO2 concentration might double during the next century. The effects of the increase can be simulated by climate models developed in the last 20 years, especially that in the UK Meteorological Office, taking account of many variables. The oceans have an important role; the models simulate the incoming solar radiation and the coupling of the atmosphere and the deep ocean. Possible climate changes caused by the doubling of CO2 levels can be predicted: if radiative properties are fixed, greater atmospheric warming is suggested, whereas, when the radiative properties are varied, cloud cover is increased and warming is reduced. A gradual increase in CO2 levels leads to global warming of about 0.3K per decade after a slow start. The changes in precipitation are unevenly distributed; when Western Europe alone was considered, warmer wetter winters and warmer drier summers were predicted, though with limited confidence in the estimated levels. The effects of aerosols on the Earth’s radiation balance were studied. Local sources such as forest fires and volcanoes may have significant influence. Climate may be affected directly by aerosols at a level comparable to that due to CO2, and indirectly by enhancing cloud formation; thus global warming may be reduced. Further observational data are awaited in this and other respects. Seaice and ice sheets on land may be melted by greenhouse warming, but again data are still limited and there are many uncertainties. The possible global temperature rise seems to be in the range 1–2.5°C, but the timing is uncertain.

4.1 Introduction The possibility that man-made emissions of carbon dioxide and other infrared-absorbing gases may enhance the natural greenhouse effect and

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* This paper was written early in 1996.

lead to a warming of the atmosphere and attendant changes in other climate parameters, such as precipitation, snow and ice cover, soil moisture and sea-level rise, constitutes perhaps the most complex and controversial of all environmental issues and one that is likely to remain high on both the scientific and political agenda for a decade or more. The issues have been obscured by a good deal of exaggeration and distortion by the media, and by some scientists, so governments, the public, and scientists in other disciplines are confused and sceptical about the evidence for global warming and the credibility of the predictions for the future. Until very recently, the atmospheric concentrations of CO2 had been increasing and accelerating since regular measurements began in 1958. Only in the mid-1990s has there been a levelling-off, probably because of the world-wide recession, the run-down of industry in the former Soviet bloc and the substitution of gas for coal. This pause is likely to be only temporary; if the concentrations resume their upward trend, they will eventually lead to significant climate changes. The important questions concern the likely magnitude and timing of these events. Are they likely to be so large and imminent as to warrant immediate remedial action, or to be sufficiently small and delayed, so that we can live with them or adapt to them? Although careful reconstruction of historical records of near-surface air temperatures and sea-surface temperatures has revealed that globally averaged annual mean temperatures have risen about 0.5°C since 1850 (Figure 4.1), there is general consensus among climatologists that this cannot confidently be ascribed to enhanced greenhouse warming (GHW) rather than to natural fluctuations. For example, although the last decade has been the warmest this century, its rise of 0.3°C was preceded by a rise of 0.4°C between 1910 and 1942, when greenhouse gas emissions and concentrations were a good deal lower than now. However, as described later, any temperature rise due to accumulated concentrations of these gases may well have been partially masked by a concomitant increase in concentrations of aerosols and by the delaying effect of the oceans.

4.2 Role of carbon dioxide in climate Carbon dioxide and water vapour are together the two main greenhouse gases which regulate the temperature of the Earth and its atmosphere. In the absence of these gases, the average surface temperature would be -19°C instead of the present value of +15°C, and the Earth would be a frozen, lifeless planet. The greenhouse gases act by absorbing much of the infrared radiation emitted by the Earth that would otherwise escape to outer space, and re-radiate it back to the Earth to keep it warm. This total net absorption over the whole globe is about 75 PW, an average of 150 W/m2, roughly one-third by CO2 and two-thirds by water vapour.

Recent developments in the prediction of global warming*

33

Figure 4.1 Observed changes in the annually averaged global mean surface temperatures from 1860 to 1991 relative to the 1951–1980 mean.

There is now concern that atmospheric and surface temperatures will rise further, owing to the steadily increasing concentration of CO2 resulting largely from the burning of fossil fuels. The concentration is now 356 ppmv, 27 per cent higher than the 280 ppm which prevailed before the Industrial Revolution and, until very recently, was increasing at 0.5 per cent per year. If this were to continue, it would double its pre-industrial value by AD 2085 and double its present value by 2135. However, if the world’s population continues to increase at the present rate, the concentration of CO2 may well reach double the present value in the second half of the twentyfirst century. Future concentrations of atmospheric CO2 will be determined not only by future rates of emissions, which can only be guessed at, but also by how the added CO2 is partitioned between the atmosphere, oceans and biosphere. During the decade 1980–89, the rate of emission from the burning of fossil fuels and wood is estimated at 5.5 ± 0.5 GtC/yr (gigatonnes of carbon per year) and the net emission due to deforestation and changes in land use at 1.1 ± 1.0 GtC/yr. The atmosphere retained 3.2 GtC (about half of that emitted), leaving 3.4 GtC/yr to be taken up by the oceans and terrestrial biosphere. Models of the ocean carbon balance suggest that it can take up only 2.0 ± 0.8 GtC/yr, so there is an apparent imbalance of 1.4 ± 1.5 GtC/yr. Some scientists believe that this difference can be accounted for by additional uptake by newly growing forests and the soil, but this is doubtful, and the gap is a measure of the uncertainty in current understanding of the complete carbon cycle. Reliable quantitative estimates of the combined effects of the physical, chemical and biological processes involved, and hence of the magnitude and timing of enhanced greenhouse warming, await further research.

Energy demand and planning

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Nevertheless, very large and complex computer models of the climate system have been developed to simulate the present climate and to predict the likely effects of, say, doubling the atmospheric concentration of CO2, or of increasing it at an arbitrary rate. This approach bypasses the uncertainties in future emissions and the natural regulation of atmospheric concentrations and is therefore unable to predict when the climate changes are likely to happen.

4.3 Model simulations and predictions of climate change 4.3.1 Introduction As changes in global and regional climates due to anthropogenic emissions of greenhouse gases will be small, slow and difficult to detect above natural fluctuations during the next 10–20 years, we have to rely heavily on model predictions of changes in temperature, rainfall, soil moisture, ice cover, sea level etc. Indeed, in the absence of any convincing direct evidence, concern over an enhanced greenhouse effect is based almost entirely on model predictions, the credibility of which must be largely judged on the ability of the models to simulate the present observed climate and its variability on seasonal, interannual, decadal and longer times-scales. Climate models, ranging from simple one-dimensional energy-balance models to enormously complex three-dimensional global models requiring years of scientific development and vast computing power, have been developed during the last 20 years, the most advanced at three centres in the USA and at the Meteorological Office in the UK and, recently, at centres in Canada, France and Germany. Until very recently, effort was concentrated on developing models (evolved from weather prediction models) of the global atmosphere coupled to the oceans and cryosphere (sea and land ice) only through prescribing and updating surface parameters such as temperature and albedo, from observations. However, realistic predictions of long-term changes in climate, natural or man-made, must involve the atmosphere, oceans, cryosphere and, eventually, the biosphere, treated as a single, strongly coupled and interactive system. The oceans play a major stabilising role in global climate because of their inertia and heat storage capacity. They transport nearly as much heat between the equator and the poles as does the atmosphere. The oceans absorb about half of the CO2 emitted by fossil fuels and also absorb and transport a good deal of the associated additional heat flux and hence will delay warming of the atmosphere. During the 1980s, the UK Meteorological Office (UKMO) developed one of the most advanced models of the global atmosphere coupled to a shallow mixed-layer ocean, and used this to simulate the present climate and to study the effects of nearly doubling the present level of CO2 to 600 ppmv. A general description of the physical bases, structure and operation of the model, of its simulations and predictions may be found in Mason (1989).

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4.3.2 Simulation of the present climate In models of the type just mentioned, the most important computed variables are: • E-W and N-S components of the wind • vertical motion • air temperatures and humidity • heights of the eleven specified pressure surfaces • short-and long-wave radiation fluxes • cloud amount, height and liquid-water content • precipitation—rain/snow • atmospheric pressure at the Earth’s surface • land surface temperature • soil moisture content • snow cover and depth • sea-ice cover and depth • ice-surface temperature • sea-surface temperature. Such models are remarkably successful in simulating the main features of the present global climate—the distribution of temperature, rainfall, winds etc. and their seasonal and regional variations. They do, however, contain systematic errors, some different in different models, and some common to most. Identification of these errors and biases by comparison with the observed climate is important since these must be taken into account when evaluating predictions. These may not appear to be too serious in making predictions of the effects of a prescribed (e.g. manmade) perturbation, as these involve computation of the differences between a perturbed and a control (unperturbed) simulation in which the systematic errors may largely cancel. However, this linear reasoning may not necessarily be valid for such complex non-linear systems even if the perturbations are small, and the predictions will carry greater credibility if the control runs realistically simulate the observed climate and its variability. The main errors in model simulations of the present climate are discussed in IPCC (1990, 1992) and by Mason (1995). Simulations with the best models are close to reality despite the rather low model spatial resolution. 4.3.3 Model simulations of ocean climate The role of the oceans in influencing climate and climate change is discussed in some detail in Mason (1993). Only the salient facts are summarised here. The oceans influence climate change on seasonal, decadal and longer times-scales in several important ways. The large-scale transports of heat and fresh water by ocean currents are important climate parameters and affect the overall magnitude, timing and regional pattern of response of the climate system to external forcing. The circulation and thermal structure of the upper ocean control the penetration of heat into the deeper ocean, and hence the time delay which the ocean imposes on the atmospheric response to

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increases of CO2 and other greenhouse gases. The vertical and horizontal motions also control the uptake of CO2 through the sea surface and thus influence the radiative forcing of the atmosphere. If ocean models are to play an effective role in the prediction of climate change, they must simulate realistically the present circulation and water mass distribution and temperature fields and their seasonal variability. Ocean modelling and validation are less advanced than atmospheric modelling, reflecting the greater difficulty of observing the interior of the ocean and of inadequate computer power. They suffer from inadequate spatial resolution, problems in parameterising subgrid scale motions, and in estimating the fluxes of heat, moisture and momentum across the air-sea interface. When forced with observed surface temperatures, salinities and wind stresses, ocean models have been moderately successful in simulating the observed large-scale circulation and mass distribution, but most models underestimate the meridional heat flux and make the thermocline too deep and diffuse, and too warm. The deeper ocean is also driven, in part, by fluxes of radiant heat, momentum, and fresh water derived from precipitation, river run-off and melting ice, but measurements of all these are difficult and very sparse at the present time. Different models show considerable differences in their simulations of the deep ocean circulation, but identification of systemic errors is hardly possible because of the paucity of observations. The distribution of temperature and salinity are the primary sources of information for checking model simulations, but it is very difficult to simulate the salinity field because the distribution of sources and sinks of fresh water at the surface is so complex. Perhaps the most effective way of checking ocean models on decadal time-scales is to see how well they simulate the horizontal spread and vertical diffusion of transient tracers such as tritium and 14C produced in nuclear bomb tests. Current models simulate quite well their shallow penetration in the equatorial ocean and deep penetration in high latitudes but fail to reproduce the deep penetration at 30–50°N, probably because of inadequate resolution of the Gulf Stream and its interaction with the North Atlantic current. The computed poleward transport of heat and the transport across other designated vertical sections can be checked against hydrographic measurements being made from research ships as part of the World Ocean Circulation Experiment, as described in Mason (1993). Some detailed measurements are also being made on the seasonal variation in the depth of the mixed ocean layer and the thermocline that can be compared with the model simulations. 4.3.4 Coupled atmosphere-deep ocean models The UKMO has developed a deep global ocean model coupled to its global atmospheric model to carry out long-period climate simulations and to make realistic predictions of climate changes produced by gradual increases of atmospheric CO2 until it reaches double the present value. The results of the first of these enhanced CO2 experiments, and of similar ones conducted elsewhere, are described in Section 4.4.3. Here we summarise the structure and operation of the coupled model, its problems and deficiencies, and the research in progress to overcome them. A more detailed analysis of the first version is given by Murphy (1995). In the latest version, the model atmosphere is

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divided into 19 layers (20 pressure levels) between the surface and 50 km with five levels in the surface boundary layer (lowest 1 km) to allow calculation of the surface fluxes of heat, moisture and momentum. There are also four levels in the soil to calculate the heat flux and hence the surface temperature. The variables listed in Section 4.3.2 are calculated on a spherical grid with mesh 2.5° Lat by 3.75° Long, about 7000 points at each level. The incoming solar radiation is calculated as a function of latitude and season, and diurnal variations are included. Calculations of radiative fluxes at each model level use four wavebands in the solar radiation and six bands in the long-wave infrared, allowing for absorption and emission by water vapour, CO2, ozone and clouds. Subgrid-scale convection is represented by a simple cloud model that treats the compensating subsidence and detrainment of air and the evaporation of precipitation. Precipitation is calculated in terms of the water and ice content of the cloud; cooling of the atmosphere by evaporation of precipitation is allowed for. Reduction in wind speed caused by the aerodynamic drag of mountains, ocean waves and the breaking of orographically induced gravity waves is computed. In calculating changes in the extent and thickness of sea ice, drifting of the ice by winddriven ocean currents is taken into account. In the land surface model the different soil types and their differing albedos are specified, as are the different types of vegetation, their seasonal changes and their effects on evaporation, albedo and aerodynamic drag. The ocean model computes the current, potential temperature, salinity, density and the transports of heat and salt at 20 unequally spaced levels (depths) in the ocean, eight of these being in the top 120 m in order to simulate better the physics and dynamics in the active, well mixed layer, its seasonal variation, and the surface exchanges of heat, moisture and momentum with the atmosphere. The vertical velocity at the sea floor is computed assuming flow parallel to the slope of the bottom topography specified on a 1° × 1° data set. The horizontal grid, 2.5° × 3.75°, the same as that of the atmospheric model, is too coarse to resolve oceanic mesoscale eddies, of scale about 100 km, which contain much of the total kinetic energy, but are crudely represented by subgrid scale turbulent diffusion and viscosity. The latter has to be kept artificially high to preserve computational stability with the penalty that the simulated currents, such as the Gulf Stream, are too weak. Lateral diffusion of heat and salt takes place along ispycnal (constant density) surfaces using diffusion coefficients that decrease exponentially with increasing depth. The coefficients of vertical diffusion are specified as functions of the local Richardson number, which allows for increasing mixing when the local current shear is large. Coupling with the atmosphere is accomplished in three stages. The atmospheric model, starting from an initial state based on observations, is run on its own until it reaches an equilibrium climate. The ocean model, starting from rest and uniform temperature and salinity, is also run separately, driven by the wind stresses, heat and fresh-water fluxes provided by the atmospheric model. This spin-up phase of the oceans takes place over 150 years (restricted by available computer time) during which a steady state is achieved in the upper layers of the ocean as they come into equilibrium with the atmospheric forcing. Finally, the ocean is coupled to the atmosphere, sea-ice and land-surface

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components and run in tandem with two-way feedbacks between ocean and atmosphere transmitted at intervals of 5 days. Thus the atmospheric model is run separately for 5 days with unchanged sea-surface temperatures and seaice extents, accumulating relevant timeaveraged surface fluxes, which are then used to drive the corresponding time step of the ocean model, following which the updated sea-surface temperatures and sea-ice cover are fed back to the atmosphere for the next iteration. When an internally consistent balance is obtained between all four main components of the climate system, the final state may be taken as the starting point for perturbation experiments such as the doubling of CO2. Computation of one annual cycle involving 300,000 grid points and 2 × 1014 floatingpoint operations takes about 3 hours on the C90 supercomputer if all 16 processors are used.

4.4 Model predictions of climate changes caused by doubling present concentrations of carbon dioxide 4.4.1 Introduction We recall that atmospheric concentrations of CO2 are likely to double by the second half of the next century and that simple radiative calculations, allowing only for feedback from the accompanying increases in water vapour, indicate that this might cause the globally and annually averaged surface air temperature to rise by about 1.5°C. Because, as discussed by Mason (1995), many other feedback processes, both positive and negative, operate within the complex climate system, and because their effects are likely to vary with season, latitude and geographical location, firmer estimates can come only from model experiments in which the climate simulated by a model perturbed by the doubling of CO2 is compared with that from an unperturbed (control) model, the differences being attributed to the enhanced CO2 We now compare and discuss the results of two types of experiment produced by different models. In one set, involving a global atmosphere coupled to only a shallow ocean, the CO2 concentration is doubled in one step and the climatic effects are assessed after the system has reached a new equilibrium. In the second set, in which the atmosphere is coupled to a multilayered deep ocean, the CO2 is allowed to increase at 1 per cent per year compound and so doubles after 70 years. Only a very few of these nonequilibrium, or transient, experiments have been carried out so far, and in only three centres. 4.4.2 Prediction of global mean changes in the equilibrium experiments All six models cited in Table 4.1 comprise a global atmosphere with 9–12 levels in the vertical, coupled to a shallow (50 m deep) ocean with prescribed heat transport. The input solar radiation to all models follows a seasonal cycle, but only those marked with an asterisk (*) include a

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Table 4.1 Global mean changes in temperature and precipitation caused by doubling CO2 in various models in equilibrium

Model†

Temperature (°C)

Precipitation (%) Remarks

UKMO (1987)*

5.2

15

GDFL (1989)

4.0

8

GISS (1984)*

4.8

SUNY (1991)

4.2

8

CSIRO (1991)

4.8

10

NCAR (1991)

4.5

5

13 Very low (8° × 10°) resolution

Models with computed cloud water/ice UKMO (1989)

3.2

8 Fixed radiative properties

1.9

3 Variable radiative properties

*See text †GDFL = Geophysical Fluid Dynamics Laboratory, Princeton, USA. GISS = Goddard Institute of Space Studies. SUNY = State University of New York. CSIRO = Commonwealth Scientific and Industrial Research Organisation, Australia. NCAR = National Center for Atmospheric Research, Boulder, USA.

diurnal cycle. All the models have a rather low horizontal resolution and all the experiments were run for less than 50 years. Furthermore, all of them prescribe the cloud amount and height by empirical formulae that relate cloud to relative humidity and are based on satellite observations of cloud. The radiative properties of the clouds (classified into low-, medium- and high-level categories) are also prescribed and remain fixed during the model solution. The predicted globally and annually averaged increases in surface air temperatures due to doubling of CO2 are remarkably similar, ranging from 4.2°C to 5.2°C with an average of 4.6°C. This is probably because the seasurface temperatures and sea-ice cover are constrained to be near observed values by adjusting the advective heat fluxes in the shallow ocean. The predicted increases in precipitation, not surprisingly, show a greater spread, from 5 per cent to 15 per cent with an average of 10 per cent. These predictions were not much affected by doubling the horizontal resolution (halving the grid spacing). However, they were much more sensitive to the formulation of physical processes, in particular the representation of clouds and their interactions with solar and terrestrial radiation. Model simulations in which the cloud water was computed from the model variables and their radiative properties (emissivity, absorptivity and reflectivity) were allowed to vary with the liquid water and ice content produced significantly different results, as summarised in Table 4.1. The UKMO model, using three progressively more sophisticated and realistic

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cloud/radiation schemes, has progressively reduced the predicted global warming from 5.2K to 1.9K and the corresponding precipitation increase from 15 per cent to 3 per cent. It is important to identify and understand the underlying physical reasons for these results which, if confirmed, are likely to have an important influence on the whole GHW debate. In the first version of the model, in which cloud cover was related empirically only to relative humidity, and the radiative properties were fixed during the whole simulation, enhanced CO2 produced unrealistic decreases in high-, medium- and low-level clouds, except at very high latitudes and, consequently, an exaggerated warming of the atmosphere. Decrease in cloud amount seems inconsistent with the predicted increase in precipitation and suggests that the empirically derived cloud cover was incompatible with the internal dynamics of the model. In the most sophisticated treatment, the cloud water is computed from the dynamical and physical equations; it is transformed progressively from liquid water to ice as the temperature falls below -15°C; rapidly growing ice crystals are allowed to fall out of the cloud; and the radiative properties are varied as a function of the cloud water path and the solar angle for the incoming solar radiation and as a function of the water/ice path for terrestrial long-wave radiation. In this case, enhanced CO2 leads to a marked increase in the extent and optical depth of all clouds, and especially of low clouds in middle and high latitudes, which reflect more of the solar radiation to space and therefore reduce the GHW of the atmosphere to only 1.9K. The small 3 per cent increase in precipitation is consistent with a 2–3 per cent increase in low cloud cover and a 2 per cent increase in medium-level cloud in the Northern Hemisphere. A more detailed account is given by Senior and Mitchell (1993). 4.4.3 Transient experiments in which CO2 increases at 1 per cent per year The fact that we now have fully three-dimensional models of the global oceans coupled interactively to the atmosphere, land-surface and sea-ice components of the climate model enables more realistic simulations in which the CO2, instead of being doubled in one step, is increased gradually at 1 per cent compound to double after 70 years. On this time-scale, the atmospheric response will be influenced by changes occurring at depth in the oceans, and especially in the top 1 km. The first results of such an experiment were published by Manabe et al. (1990) from GDFL. The globally and annually averaged increase in surface air temperature was 2.3K, lower than in earlier models with a shallow ocean. The reduced warming was especially marked in the Southern Hemisphere, which showed little amplification in the Antarctic compared with the Arctic. This is explained by the ocean circulation in the southern oceans having a downward branch at about 65°S, which carries much of the additional greenhouse flux of heat from the surface to depths greater than 3 km, where it remains for many decades. Very similar results were produced with the earlier version of the UKMO model by Murphy (1990) and Murphy and Mitchell (1995). The annually averaged response in global mean surface temperature to CO2 increasing at 1 per cent per year over 75 years is shown in Figure 4.2, which also shows the results for the hemispheres separately. Averaged over the years 1966–77, the global mean warming was l.7K. The corresponding increase for the Northern Hemisphere was 2.6K, with warming of above

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4K over large areas of the Arctic. The UKMO model, like the GDFL model, shows that the much smaller response of the Southern Hemisphere is due to the transport of heat from the surface to depth in a strong down-welling circulation near 60°S. A similar vertical circulation, caused by melting ice and penetrating to about 1.5 km depth, occurs at about 60°N in the North Atlantic. After a slow start, the enhanced global warming settles down at about 0.3K per decade. Moreover, the model exhibits variability on interannual and decadal time-scales; the peak-to-peak variation on the decadal scale being about 0.3K—of the same magnitude as the predicted signal due to greenhouse warming.

Figure 4.2 Predictions of the UKMO coupled atmosphere-deep ocean model of global warming caused by increasing the concentration of atmospheric CO2 by 1 per cent per year compound over 75 years.

A similar long-term run with a coupled atmosphere-deep ocean model has been carried out at the Max Planck Institute in Hamburg by Cusbasch et al. (1992). Carbon dioxide is allowed to increase rather more rapidly, to double after 60 years, and produces a global mean warming of 1.3K, the lowest value so far reported. The transient responses to the doubling of CO2 by all three models, ranging from 1.3K to 2.3K, correspond to about 60 per cent of the expected equilibrium response. This implies a lag of about 30 years, due largely to the delaying effect of the oceans. The predicted changes in precipitation, though small on average, are far from uniformly distributed. The UKMO model indicates increases in high latitudes of the Northern Hemisphere throughout the year, in middle latitudes in winter, and during the South-west Asian monsoon. In the Southern Hemisphere, precipitation increases in the middlelatitude storm tracks throughout the year. Soil moisture is enhanced over the middle-latitude continents of the Northern Hemisphere in winter but, in summer, many

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areas show a deficit, mainly because of the earlier retreat of the snow cover under the enhanced temperatures. Although the four models show broadly similar global patterns of response to double CO2 concentrations, they show marked differences on regional and subregional scales, especially in precipitation and soil moisture. Predictions of globally averaged changes in temperature, precipitation and soil moisture are of little value in assessing their political, economic and social impact. Although current global models with rather low spatial resolution cannot be expected to provide reliable scenarios in regional and subregional scales, the UKMO has been asked to make deductions from its transient CO2 experiment for Western Europe. The results, which should be treated with caution, may be summarised as follows. Summer temperatures rise throughout the 70 year experiment, stabilising at about 0.3K per decade after year 20. There is a similar but less steady warming in winter, most pronounced over land. Winter precipitation increases rapidly during the first 30 years (possibly an artefact of an inadequate spin-up period) but thereafter remains rather steady at an average increase of about 0.3 mm/day, the main increases occurring over northern Europe and reductions in southern Europe and the Mediterranean. In summer the precipitation decreases by about 0.2 mm/ day. The warmer wetter winters and the slightly warmer drier summers are reflected in the changes of soil moisture. Since the decadal changes are comparable in magnitude to the decadal variability, the confidence in these estimates is low, especially in respect of precipitation and soil moisture changes, which are only marginally significant relative to the variability of the control model, for any single decade.

4.5 Effect of aerosols Aerosol particles influence the Earth’s radiation balance directly by their scattering and absorption of solar radiation. They also absorb and emit long-wave radiation, but usually with small effect because their opacity decreases at longer wavelengths and they are most abundant in the lower troposphere where the air temperature, which governs emissions, is close to the surface temperature. Aerosols also serve as cloud condensation nuclei and therefore have the potential to alter the microphysical, optical and radiative properties of clouds. The larger aerosol particles of diameter greater than 0.1 µm, if produced in large quantities from local sources such as forest fires, volcanoes and desert storms, may significantly influence the radiation balance on local and regional scales, both by scattering and by absorption and emission, especially if they contain carbon particles. However, such particles are rapidly removed from the troposphere by precipitation and are not normally carried long distances. On the global scale, smaller particles of diameter less than 0.01 µm are more important, their dominant effect being to cool the atmosphere by scattering solar radiation to space. Some recent calculations by Charlson et al. (1992) of the impact of anthropogenic sulphate particles on the short-wave radiation balance in cloud-free regions conclude that, at current levels, they reduce the radiative forcing over the Northern Hemisphere by

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about 1 W/m2 with an uncertainty factor of two. A rather more sophisticated treatment by Kiehl and Briegel (1993) calculated the annually averaged reductions in radiative forcing due to back-scattering of solar radiation by both natural and anthropogenic sulphate aerosols to be 0.72 W/m2 in the Northern Hemisphere, 0.38 W/m2 in the Southern Hemisphere, the global value of 0.54 W/m2 being about half of that calculated by Charlson. However, the high aerosol concentrations over the heavily industrialised regions of eastern USA, Central Europe and South-east Asia produce reductions of over 2 W/m2 that are comparable to the cumulative increases produced by greenhouse gases emitted since the industrial revolution. In addition to the direct effect on climate, anthropogenic sulphate aerosols may exert an indirect influence by acting as an additional source of effective cloud condensation nuclei, thereby producing higher concentrations of smaller cloud droplets leading to increased reflectivity (albedo) of clouds—especially of low clouds—for solar radiation, which is sensitive to the effective droplet radius. The first calculations of this indirect effect on climate have been made at UKMO by Jones et al. (1994), using their climate model that predicts cloud liquid water and ice content and parameterises reff, linking it to cloud type, water content and aerosol concentration:

where W is the total volume of water, and N the total number of drops per unit volume. The concentration and size distribution of the aerosol and its spatial distribution are calculated in the same manner as in Kiehl and Briegel, but the particles are assumed to consist of ammonium sulphateas being characteristic of aerosol produced in industrially polluted air. The calculations indicate that the enhanced back-scatter of solar radiation, mainly from low-level clouds in the atmospheric boundary layer, produces an annually averaged global cooling of 1.3 W/m2 but that over the highly industrialised regions, where reff may be reduced by as much as 3 µm, the cooling may exceed 3 W/m2. However, it must again be emphasised that these calculations contain major uncertainties, probably even larger than those for the direct effect. Taking them at face value, the calculations of the direct and indirect effects combined suggest an average global negative forcing of 1.5–2 W/m2 by greenhouse gases to date, and this may be at least part of the reasons for the failure to detect a greenhouse signal. The first results of introducing sulphate aerosols into a coupled atmosphere-ocean model come from the UKMO (Mitchell et al., in press). The model, starting from an initial state determined by surface observations in 1860, was run forward to 1990 with no man-made greenhouse gases or aerosols as a control experiment. The model’s average global surface temperatures showed realistic interannual variations but no overall rise over this period. In the perturbation experiment, greenhouse gases were gradually increased from 1860 to reach a 39 per cent equivalent increase in CO2 by 1990; this resulted in a temperature rise of 1°C compared with an observed rise of only 0.5°C

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(Figure 4.3). The next step was to compute the effects of sulphate aerosols with best estimates of concentration and geographical distribution. The direct effect of increasing the back-scatter of solar radiation was to reduce the warming between 1860 and 1990 to only 0.5°C, very close to the observed, but over and downwind of the highly industrialised regions of North America, Europe and Southern Asia, the aerosols largely nullify the warming caused by the greenhouse gases. When the coupled model runs were carried forwards from 1990 to 2050, increasing the CO2 by 1 per cent per year compound, the effect of aerosols was to reduce the global greenhouse warming from 0.3°C per decade shown in Figure 4.2 to only 0.2°C per decade, and largely to offset it in highly polluted regions. More reliable estimates of the effects of aerosols on climate must await much better observational data on the sources, concentration, size,

Figure 4.3 Changes in globally averaged mean surface temperature relative to the 1860–1920 mean. Dotted curve = observed; dashed curve = model computations of the effect of increasing greenhouse gases from 1855 to 1990; solid curve = the effects of greenhouse gases and sulphate aerosols combined.

chemical composition and spatial distribution of both natural and anthropogenic aerosols, including strongly absorbing carbonaceous particles, and dusts, and on the difference between droplet concentrations and sizes in clean maritime and polluted continental clouds. These data will be difficult and expensive to acquire; meanwhile, we are likely to have too many theories and computations chasing too few observations. When aerosol particles are injected into the stratosphere, they remain there for much longer periods and become much more uniformly distributed than in the troposphere.

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Concentrations remained consistently high in the 1980s relative to earlier decades, largely due to the El Chichon volcanic eruption in 1982. Recently they were much enhanced by the Mount Pinatubo eruption which injected about 20,000,000 tons of SO2 directly into the stratosphere. The consequent reduction in radiative forcing at the top of the atmosphere, estimated at 4 W/m2, would have required the surface to cool by about 1°C in order to restore equilibrium. The fact that the temperature fell by only 0.3–0.5°C during the following 2 years may be due partly to absorption of radiation and infrared emission by the aerosols, to the thermal lag of the oceans and to other negative feedbacks in the system.

4.6 Sea-level rise A potentially important consequence of greenhouse warming is the melting of sea-ice and ice sheets on land, only the latter resulting in a rise in sea level. The sea level will also rise as the ocean waters expand in response to the additional warming. Estimates of these consequences involve large uncertainties because of the lack of observations and understanding of the mass balance and dynamics of glaciers and ice sheets. These uncertainties are compounded by the uncertainty in the predicted increases in surface temperature due to GHW. Over the past 100 years, the sea level is estimated to have risen about 10 cm. Thermal expansion of the ocean waters has probably been responsible for 4 cm of this rise, melting of mountain glaciers for 4 cm, and melting of the Greenland ice sheet for 2.5 cm. Glaciologists believe that there has been little, if any, overall melting of the Antarctic ice sheet because the air temperatures are too low. If air and surface temperatures were to increase because of greenhouse warming, thermal expansion of the oceans and melting of mountain glaciers would be likely to continue to make the largest contribution to sea-level rise. We have seen that globally coupled atmosphere-deep ocean models predict that, when the atmospheric concentration of CO2 approaches double the present value, the average surface air temperature will increase by 0.3°C per decade. The best estimate of the corresponding rise in sea level is 4 cm per decade, about half resulting from expansion of ocean waters and half from melting of land-based ice. These estimates, which may conceivably be in error by a factor of two either way, imply serious consequences for low lying, highly populated areas such as Bangladesh, but they are very much smaller than the wildly exaggerated values that have appeared in the media.

4.7 Uncertainties in model predictions In summarising the current state of knowledge and understanding of the likely magnitude, timing and impacts of enhanced greenhouse warming, it is virtually certain that the troposphere is warming very slowly in response to the continually increasing concentrations of CO2 and other greenhouse gases, but the signal is as yet too small to detect above the large natural climate variations, probably because it is being delayed by

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the large thermal inertia of the oceans and has also been masked by the cooling effect of man-made aerosols. Predictions of the increase in the globally averaged temperature that may result from a doubling of CO2 have recently converged towards lower values ranging from 1.3°C to 2.3°C, based on coupled models with a deep ocean. However, this trend may be deceptive because only a small number of 70–100 year simulations have been published and considerable problems and uncertainties remain, both in the atmospheric physics and in the ocean dynamics. These arise largely from the sensitivity of the models to the simulation of clouds and their interaction with the radiation fields, the uncertainty as to how well they simulate the ocean circulation, and the necessity to adjust the ocean surface fluxes in order to ensure that the ocean temperature and salinity remain close to present-day climatology and that the control model climate does not drift during long runs. Long-term drift in the climate of the Southern Hemisphere arises from the imbalance in the heat budget of the Antarctic leading to a spurious slow-melting of the ice. This has now been corrected and changes in the pack ice are now included. Another important defect of current low-resolution ocean models is that they do not capture narrow features such as the Gulf Stream and Kuroshio currents and the regions of strong upwelling off South Africa and South America, all of which play an important role in heat transport. Some tests with higher resolution (1.25° × 1.25°) in the UKMO model improved this situation, but only partially. The fact that current models have only limited success in simulating and predicting such a spectacular event as the El Nino is also evidence of defects in the treatment of atmosphere-ocean interactions. There is also a need for an improved representation of the atmospheric boundary layer. Even if the various models agree quite well on the globally averaged effects, they show larger differences on regional and subregional scales, which are politically and economically more relevant. Further improvements in model development will require higher spatial resolution (especially in the oceans), better model physics, much faster computers, and, above all, an adequate supply of global observations from both the atmosphere and the oceans, to feed and validate the models, and to monitor the actual changes in climate that may eventually become evident. The need for observations from both the surface and the interior of the oceans, and how they might be provided by new and advanced technology, are discussed by Mason (1993).

4.8 Conclusions Despite these uncertainties, and despite the fact that a doubling of CO2 will cause an increase of only about 3 per cent in the downward flux of infrared radiation from the greenhouse gases, future predictions of the globally averaged temperature rise are unlikely to lie outside the range 1–2.5°C. However, the models provide little guidance as to when these events are likely to occur. Their timing will be determined largely by the very uncertain future global emissions of greenhouse gases and their retention in the atmosphere. We must also realise that no existing climate model incorporates the carbon cycle in which exchanges of CO2 between the Earth’s surface and the atmosphere are

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dominated by terrestrial and especially by marine biology, man-made emissions being only about 3 per cent of the natural two-way exchanges. We are always faced with having to compute small differences between large quantities whose magnitudes are uncertain. Given this and the complexity of the models, it is remarkable that they simulate the climate and its variability as well as they do, but there is a tendency to infer more from model predictions than their input data, spatial resolution and simplified physics can justify.

References Charlson, R.J. et al. (1991) Tellus 43AB: 152. Charlson, R.J. et al. (1992) Science 255:423. Cusbasch, U. et al. (1992) Climate Dynamics 8:545. IPCC (1990) Climate Change, Report of Intergovernmental Panel on Climate Change. Cambridge: Cambridge University Press. IPCC (1992) Supplementary Report of Intergovernmental Panel on Climate Change. Cambridge: Cambridge University Press. Jones, A. et al. (1994) Nature 370:450. Kiehl, J.T. and Briegel, P.B. (1993) Science, 260:311. Manabe, S. et al.(1990) J. Phys. Oceanography, 20:722. Mason, B.J. (1989) Contemporary Physics, 30:417. Mason, B.J. (1993) Contemporary Physics, 34:19. Mason, B.J. (1995) Contemporary Physics, 36:299. Murphy, J.M. (1990) World Met. Org. Report No. 14. Murphy, J.M. (1995) J. Climate, 8:36. Murphy, J.M. and Mitchell, J.F.B. (1995) J. Climate. Senior, C.A. and Mitchell, J.F.B. (1993) J. Climate, 6:700.

Chapter 5 Social attitudes and their place in energy policies John Wright

Synopsis The options for energy policy and their relation to social attitudes are reviewed. For some 15 years, Government thinking was to rely mainly on market forces; but even Adam Smith recognised that Governments must take account of longerterm public objectives, of which current examples are the outcome of the nuclear review and the future of the coal industry. Because there are many uncertainties, a scenario approach may be adopted. Among major issues are the desirability of national self-sufficiency, job creation and global environmental concerns; attitudes to these lead to differing emphases in energy policy. With other issues, particularly the potential for renewable energy sources and for energy conservation measures, these might be part of a national consensus. Policy should be based on market forces tempered by long-term, environmental, self-sufficiency and employment factors and should be evolutionary in nature, perhaps requiring a Royal Commission.

5.1 Introduction It is frequently said that the UK lacks an energy policy. The implication is that there is a simple choice to be made between having one and not having one and, if there were to be an energy policy, the content would be obvious and have universal support. The reality is much more complex. A person’s view of the optimum policy will be determined to a large extent by his or her social and political attitudes. Obtaining a consensus on a particular policy will not be easy. This issue is discussed at the end of the paper. Let us look, then, at some possible motivations and examine the advantages and disadvantages of the resulting policies.

5.2 Market forces The assumption that market forces alone will lead to an optimum energy strategy for the UK has formed the basis of much Government thinking over the last decade and a half. In practice, it has been tempered by recognition of the need to take environmental concerns into account and to give incentives to the use of non-fossil fuels in electricity generation. There has also continued to be some research and development funding.

Social attitudes and their place in energy policies

49

The basic argument for relying on market forces to determine the energy mix in the UK is that the energy sector is extremely complex and previous attempts to devise national energy plans have been unsuccessful. It is asserted that, as with other sectors of the economy, competition will identify which energy industries are the ones favoured by society and therefore succeed. The Government can stand back and watch Adam Smith’s hidden hand sort it all out. The fundamental argument against this approach is that it leads only to a short-term optimisation. However, many of the important timescales in the energy sector are measured in decades, and to rely on market forces alone does not give sufficient weight to perceived longterm changes that are likely to occur on both a national and global scale. Even Adam Smith recognised this. He wrote in The Wealth of Nations: The sovereign [government] has the duty of erecting and maintaining certain publick works which it can never be for the interest of any small number of individuals to erect and maintain; because the profit could never repay the expence to any small number of individuals though it may frequently do much more than repay it to a great society. The current review of nuclear policy provides a good example of this. It is clear that future pressurised water reactors (PWRs) such as Sizewell C (the proposals for which were abandoned after this chapter was submitted) could either be a very good or a very poor investment, depending on factors such as the future price and availability of natural gas and the possible introduction of a carbon tax. But these factors are outside the nuclear industry’s control, and the way they develop will not be known for a very long time; under these circumstances, it is unlikely that private industry would wish to risk its own money in building nuclear plant. Some Government intervention will be required. Furthermore, it is clear from the privatisation of the electricity supply industry that the very form that it took has led to unfortunate, and probably unforeseen, consequences to the coal industry. Providing the conditions for market forces to operate freely and fairly is not as straightforward as it might, at first sight, appear.

5.3 National planning The converse approach to letting market forces determine policy is to attempt to provide detailed plans. But this is not easy. The classic attempt by the Wilson government in the 1960s is generally accepted to have been a failure. The planner is presented with persuasive but conflicting arguments from powerful advocates of industrial and environmental interests. It is not easy to foresee the future. So, although long-term planning is highly desirable in that it recognises that the results of our actions now will be having an effect many decades ahead, an important feature of such plans must be their robustness to possible changes that could arise. The scenario approach adopted, for example by the ETSU (Energy Technology Support Unit, Department of Trade and Industry), is one way of illuminating this issue. But it has its limitations and must not be taken too far. For example, not every scenario is equally probable.

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5.4 National self-sufficiency The UK has been fortunate in having had abundant indigenous energy resources. Although we are increasingly becoming economically an integral part of Europe, there are many who would see future UK energy self-sufficiency as an important policy objective. It was this view of the importance of self-sufficiency that led the French to embark on their massive nuclear programme. If self-sufficiency (or reliability of supply) were seen to be important, it would give emphasis to energy conservation, renewable energy and the maintenance of and development of the potential for resurgence of a national coal industry. There would be a desire to conserve gas. It would lend support to the nuclear industry.

5.5 Global environmental concerns If global environmental effects, such as the greenhouse effect, are to be taken seriously, then the world is faced with an almost insuperable problem. Carbon dioxide levels in the atmosphere are continuing to increase, even at the present level of fossil-fuel consumption. It is hard to see how even a major world-wide programme of energy conservation, renewables and nuclear energy could offset the increased global demand for fossil fuel as the world population increases and the energy use per head grows in the developing world with increasing living standards. The technical facts are not in doubt. What is not clear is how far a small nation like the UK should take this into account in determining its own energy policy. The issue is one concerning social attitudespolitical and moral. Conservation, renewables and nuclear energy have environmental problems of their own. For example, a successful programme of draughtproofing of dwellings could increase the collective radiation dose to the UK population by around 50 per cent. There is considerable opposition on visual and noise grounds to clusters of wind generators, and even with well-run nuclear power there is a very small but finite probability of a major accident somewhere in the world. Nevertheless, these disbenefits seem small compared with the potential problems associated with global warming. Finally, it should be noted that the greenhouse effect is a global one. Derek Davis has posed the question as to whether money spent in the technically advanced regions of the world in reducing their own emissions would in fact be better spent in providing advanced combustion systems to the developing world—where most of the growth in CO2 emissions is likely to occur. It would require considerable statesmanship to get such a proposal internationally accepted. Nevertheless, there are signs that the international community is beginning to work on these issues, for example the Rio Summit a few years ago and the policy steps that follow from it.

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5.6 Job creation in the UK The level of unemployment is likely to remain one of the most significant political, economic and social issues for many years to come. Although UK industry has made great gains in efficiency by cutting staff, these benefits do not accrue to the nation as a whole if the surplus manpower cannot be gainfully employed. UK energy policy could be slanted to benefit UK employment in two ways—first, by emphasis on the exploitation of indigenous resources wherever possible (for example, coal) and, second, by encouraging UK industry to meet our national demand as well as exporting energy technology and plant.

5.7 Discussion Each of the different social attitudes leads to differing, sometimes conflicting, emphases on energy mix; this is set out in Table 5.1. The ‘National plan’ column is empty because, until an agreed strategy has been formulated, it is not clear what such a plan would contain. It will be seen that there are significant differences in emphasis between energy balance based on market forces alone and the other approaches. Although there are differences in detail between the policies based on national self-sufficiency, global environment and job creation, the outcomes are sufficiently close to suggest that a consensus could emerge between those advocating each of these social approaches. Such a consensus might consist of the following: • UK coal should not be permitted to die completely; the potential for a resurgence of the coal industry at some date in the future should be explored, along with some continuing work on improved combustion techniques. • The present approach—allowing the commercial potential of renewable energy to be established by modest subsidies through the non-fossil fuel obligation (NFFO; i.e. the Government requirement that the electricity generation industry must use a proportion of pollution-free fuel—renewables and nuclear)—should be encouraged to continue. • The Government should encourage new construction to replace the capacity of the ageing Magnox plant, thereby retaining a viable UK nuclear construction industry. • The encouragement currently being given to energy conservation should be maintained and possibly increased. Market forces are likely to deliver the lowest costs in the short-term, even though they may lead to large long-term problems and costs. But the additional costs to the public sector of following the above four strategies need not be prohibitive. For example, the subsidy to renewables through the NFFO was around £30 million per annum in 1993 and is expected to build up over the next few years to a maximum of around £150 million per annum and then decline. (The NFFO does not come into the public sector—it is a levy on the electricity producers. At peak it will raise electricity prices by about 1 per cent.)

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Table 5.1 Social attitudes and energy in the UK

Parameter

Market forces

Coal UK

National plan

National selfsufficiency

Global environment

//

Coal imports

/

Oil

/

Gas

//

job creation //

/ /

/

/

Renewables

//

//

/

Conventional nuclear

//

//

/

Fast reactor/ fusion research

/

/

/

//

//

/

Conservation

/

It may be concluded that UK energy policy should continue to be largely determined by market forces but should also be tempered to take long-term, environmental, national self-sufficiency and UK employment factors into account. This policy will need to be fleshed out in some form of national plan, which would need to be reviewed from time to time as the future unfolds. It would be important that any changes should be of an evolutionary nature. Radical and sudden changes can easily result in destroying a UK industry which would be difficult, if not impossible, to start up again. One of the difficulties of getting such an approach implemented will be to obtain a consensus between political parties. An impartial body (such as the Watt Committee on Energy) is in a position to give an authoritative professional view on these matters, but it may require something of the stature of a Royal Commission to provide a strategy that both main political parties could accept—even if they would approach the problem from different starting points. A Royal Commission would take several years to come to its conclusions but this should not be used as an excuse to defer decisions that need to be taken now.

Chapter 6 Sustainable energy development Alan Williams and Mohammad Aslam Uqaili

Synopsis There is a consensus that the pace of technological change, and especially the growth of energy requirements, should be compatible with increasing concern for environmental damage. Historically, although the rate of increase of world energy consumption has been affected by technological and political changes, it has suffered few major fluctuations. The industrialised countries are the largest energy consumers, but the growth in energy consumption is much faster in the developing countries. Forecasts of continued rapid growth are accompanied by concern for sustainable development and global warming. In the twentieth century, crude oil has been the most important fuel: further resources may be discovered, but will ultimately be exhausted. Coal is still abundant. Natural gas has environmental and other advantages, but some major fields will soon pass their peak production levels. The contribution made by nuclear power is likely to remain important, but the earlier expectations have not been met. Renewable energy sources include biomass, hydro power, solar, wind, geothermal and several ocean technologies, but it is not yet clear whether, as a whole, their future contribution to world energy supply will be very significant. Important factors for sustainability arise from the environmental aspects (including pollutants, atmospheric CO2, other greenhouse gases and climatic change) of oil, natural gas, coal, renewables and nuclear power. It seems, therefore, that any radical early change in the world's present overall energy system is unlikely.

6.1 Introduction We are living at a time when our energy requirements are causing a more rapid rate of depletion of energy resources and more damage to the environment than ever before, but we continue to operate as if there were infinite resources available and little environmental damage. The pace of technological change has reached a stage where, although we have many technical and political options available, it is difficult to make policy decisions to ensure a sustainable future. Energy policies are thus required to answer vital questions about the compatibility of energy systems, resources and the environment. The importance of energy in determining the quality of life has been widely recognised. The great increase in living standards achieved by most nations over the last few decades has been accompanied by a corresponding growth in the demand for energy. The strong correlation between the use of energy and the creation of wealth (International

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Energy Agency, 1994a; United Nations, 1992a) applies to countries with widely differing income per head as shown in Table 6.1. The provision of energy is widely effected by means of the multisource or mixed energy economy of the type shown in Figure 6.1. The contribution from each energy source varies from country to country. The factors involved are the nature and quantity of indigenous resources, the sophistication or otherwise of energy technology and geographical positions in relation to oil and gas supplies, although energy transportation between countries is increasingly available. There is a consensus among the general public, decision makers and specialists that the most pressing concerns in today’s world include sustainable development and sustainable protection of the environment (Pearce et al., 1990). The principle of sustainable development is to ensure secure supplies of energy at competitive prices with minimum adverse environmental impact. It should not mean reducing economic development; on

Table 6.1(a) Some values of world energy, energy/capita and GDP/capita primary energy supply of world in 1992 (IEA)

Region

Mtoe

toe/capita

World

7,932.45

1.42

OECD

4, 196.27 96.27

4.84

USA

1,984.12

7.78

Western Europe

1,441.35

3.28

UK

216.23

3.74

Germany

340.27

4.22

France

231.2

4.03

Africa

217.26

0.31

Algeria

25.52

0.97

Ethiopia

1.19

0.02

Latin America

411.14

0.84

Asia*

633.84

0.38

Japan

451.08

3.63

China

709.57

0.61

26.48

0.22

205.63

0.23

Pakistan India *Excluding Pacific and Middle East.

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Table 6.1(b) GDP per capita of different regions of the world in 1992 (UN)

Region

GDP per capita (US$ 1988)

World

3,812

OECD

18,085

USA

20,034

Western Europe

15,146

Economies in transition

4,210

Eastern Europe

4,357

Former Soviet Union

4,160

Developing countries

877

Latin America Africa

2,037 564

West Asia South and East Asia Mediterranean China

3,487 717 1,482 488

Figure 6.1 Mixed energy economy.

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the contrary, a healthy economy is better able to generate the resources to meet people’s needs. New investment and environmental improvement often go hand-in-hand. However, the principle does not entail the preservation at all costs of every aspect of the present environment—much depends on the interpretation of ‘quality of life’. Thus optimised energy strategies and methods of pollution control are increasingly important.

6.2 Historical pattern of consumption Energy use changes with time but exhibits certain patterns which can be represented by mathematical models, although often only approximately. Economic development causes a gradual change; first, in the domestic context, from the use of traditional fuels to that of commercial fuels; then, progressive dependence on commercial fuels for industry and transportation. This has been seen in Western countries and is currently taking place in many developing countries. In the past hundred years, there have been a number of changes in the pattern of fuel usage and world energy consumption as shown in Figure 6.2. (However, owing to the change in the methodology of the databases, some comparisons are not completely accurate even though the error is relatively small). A hundred years ago, wood was the major energy source; then coal become dominant until the early 1960’s, when oil become the major world energy source. Quite recently, natural gas, because of a perceived environmental advantage and low cost, has become popular. The factors that have determined their role have been availability, cost and ability to match energy source with particular application. Growth in each of the individual energy sources has not been sustained over the years, but the total growth of world energy consumption has been sustained at an approximately exponential rate with only a few minor perturbations. However, it is noted that world energy consumption has slowed down over the last two decades following the OPEC oil shocks of 1973 and 1979. Oil and coal usage has levelled, while nuclear and renewables are growing slowly; natural gas use is rapidly expanding. This arises partly from various technological developments and partly from political decisions.

6.3 Global energy demand and future trends The average consumption per head of the world in 1993, in both high energy-consuming countries such as the USA and Europe and the lowenergy developing countries, was about 1.4 toe (tonnes oil equivalent). This figure has remained largely unchanged over the last decade. Estimates of world population over the next 30 years (United Nations, 1992b) show a marked increase as shown in Figure 6.3. If the present energy consumption per head is maintained, some 30 per cent more energy will be required in 30 years’ time, without allowing for any increase of consumption per head in developing countries. There are wide divergencies in energy use. By far the largest energy consumers are the industrialised countries—OECD, central Eastern Europe and the former Soviet Union. In

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Figure 6.2 Changes in pattern of fuel usage (upper) and graph of world energy consumption (lower) since 1860.

1990, these countries accounted for some 66 per cent of the world’s energy consumption. Energy use per head is even more varied. At present, the majority of the world’s population uses less than 1.2 toe of energy per head, while industrial countries use more than 3 toe per head. The growth of energy demand in response to industrialisation, urbanisation and societal affluence has led to an extremely uneven global distribution of primary energy consumption. Figure 6.4 illustrates the development of regional energy requirements in the last three decades (World Energy Council, 1993).

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Figure 6.3 Predicted future world population.

Energy demand in the developing countries is clearly growing at much higher rates than in the developed industrialised nations. In 1993, the developed countries accounted for some 71 per cent of the world’s energy consumption. The share of the world population of these countries was 20 per cent in 1993. In the past

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59

Figure 6.4 Energy consumption in different regions of the world.

decade, the growth in energy demand in the developed countries was only 14 per cent compared with 49 per cent in the developing countries. Over the past 30 years, the world’s energy requirement has risen considerably. In 1960, the world used 3.3 Gtoe of energy, in 1990, 8.7 Gtoean increase of 164 per cent or an average increase of 3.3 per cent per year (World Energy Council, 1993). It is well known that correctly assessing and predicting future energy demand is difficult. Estimates over the last decade have often been revised downward, as shown in Figure 6.5. Current data show that energy consumption is rising more slowly than over the past

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three decades; thus, for example from 1990 to 1991, the world demand for primary energy declined by 0.2 per cent, as illustrated in Figures 6.2 and 6.5. The rise in world population, and therefore in energy requirement, is expected to lead to an increased production of energy-related pollutants, despite more stringent emission regulations.

Figure 6.5 World energy consumption trends: (×) 1972 predictions (Fells et al., 1986); (+) 1986 predictions (Fells et al., 1986); ( ) 1993 predictions (BP, 1980); actual (BP, 1994).

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Although large population increases are generally expected within the developing countries over the next 30 years, there is some evidence that the rates of increase are being reduced, possibly leading to population estimates below those shown in Figure 6.3. However, these countries, which represent some 80 per cent of the world's population, are currently using only a small amount of energy per head. A number of scenarios produced by different organisations and institutions attempt to forecast future energy demand. According to the International Energy Agency (1994b), world energy demand will reach 9,129 Mtoe in 2000 and 11,476 Mtoe in 2020. The World Energy Council (1993) has estimated that in the year 2020 global energy demand for their reference case will be 13,330 Mtoe, as shown in Figure 6.6. The accuracy of these predictions remains to be seen, however. Associated with these factors is the concern about global warming issues and the concept of sustainable energy development. In the next section of this paper, the special features of the major energy sources are considered. 6.3.1 Crude oil Oil has been the most important fuel of the twentieth century, rising from a small market share at the turn of the century to supplying 45 per cent of world primary energy demand in 1979 (BP, 1980). The spur to this growth was its low production cost, ease of handling and distribution, and being easy to utilise. However, the two oil shocks of the 1970s forced the world to take a closer look at the future of oil as a fuel. The industrialised countries have since become more sensitive to developments in oil pricing and energy security. World oil demand fell sharply from 3,000 Mtoe in 1979 to 2,749.7 Mtoe in 1985. It then started rising again and reached about 3,059.4 Mtoe in 1990. The figures show that, in 1993, the world consumed 3,121.4 Mtoe in oil. The increase in oil demand arises mainly from the fast growing transport sector. Oil consumption in 1993 amounted to 3,121.4 Mtoe—the biggest share (39.8 per cent) in the world fuel mix. North America and Western Europe are the major oil consumers. Oil, natural gas and coal reserves at the end of 1993 are shown in Table 6.2 (BP, 1994). BP’s data for 1993 show that proven oil reserves in 1993 were 136.7 Gt. The reserves to production ratio (R/P) for the world is 43, having risen from 28 in 1980. OPEC countries account currently for 76.7 per cent of the world’s oil reserves with a life span of 87 years (BP statistics) or 92 years (OPEC statistics). Proven recoverable crude oil reserves have increased markedly during the past three decades, particularly during the decade of the 1980s. Total world proven crude

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Figure 6.6 World future energy demand: ( ) WEC enhanced economic development case; WEC reference case; ( ) WEC ecologically driven case; actual world energy demand.

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Table 6.2 Proved reserves of fossil fuels at end 1993

Region

Oil

Natural gas

Reserves Share (Gt) (%)

Coal

R/P Reserves Share R/P Reserves Share R/P ratio (109 cu (%) ratio (Gt) (%) ratio (years) ft) (years) (years)

North America

4.9

3.8

9.7

259.8

5.2

11.2

249.2

24.0

26

Latin America

17.7

12.5

43.5

268.5

5.4

75.2

11.4

l.l

24

OECD Europe

2.2

1.7

9.1

191. 1

3.8

25.8

96.9

9.3

19

NonOECD Europe

8.1

5.8

19.9

2,017.8

40.2

68.9

315.5

30.4

32

Middle East

89.6

65.8

95.1

1,581.0

31.6

>100

0.2

<0.05

Africa

8.2

6.2

25.1

343.5

6.9

>100

62.1

6.0

32

Asia and Australasia

6.0

4.4

17.6

354.5

7.2

53.0

303.9

29.2

17

136.7

100

43.1

5,016.2

100

64.9

1,039.2

100

23

OECD

7.3

5.7

9.5

474.8

9.5

14.9

438.0

42.1

26

OPEC

104.9

76.5

79.6

2,020.4

40.3

>100

Total world

oil reserves grew from 39.4 Gt in 1960 to 74.5, 90.1 and 137 Gt in 1970, 1980 and 1990, respectively. OPEC’s share of the total world proven crude oil reserves was registered at 75 per cent in 1960, falling to 66 per cent in 1980 before rising to 77 per cent in 1990. Further crude oil resources may be discovered in areas such as Siberia, many offshore areas and also Saudi Arabia. It is estimated that total world undiscovered resources could be more than 66.64 Gt of which about 22.44 Gt, or 34 per cent of total world, are in the OPEC area. This puts the remaining ultimate resources (i.e. proven crude oil reserves plus undiscovered resources) for OPEC at 127.7 Gt or 63 per cent share of total world and non-OPEC remaining ultimate resources at 76 Gt or 37 per cent of total world. 6.3.2 Coal, both black and brown Coal currently provides approximately 27.4 per cent of the world primary energy demand and some 40 per cent of the world’s electricity generation. In 1960, coal consumption was about 1,470 Mtoe (United Nations, 1950–74). In 1990 the total demand was 2,288

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Mtoe. Coal production (according to 1993 data) totals 2,133.1 Mtoe. The production of hard coal in 1993 amounted to 3.1 Gt. Brown coal (including lignite) production was 1.3 Gt. The major coal producing areas in the world are given in Table 6.3 (BP, 1994). Coal is still the most abundant fuel in the world. It is a widely distributed resource. Many of the world’s coal resources can be recovered at acceptable cost, both in terms of capital investment and operating costs. The world’s proven coal reserves at the end of 1993 were 1,039,182 Mt. Proven reserves of coal are generally taken to be those quantities which geological and engineering information indicate with reasonable certainty can be recovered in the future from known deposits under existing economic and operating conditions. The R/P ratio for 1993 was 236. The ratio is much greater if both proven and recoverable reserves are taken into account.

Table 6.3 Coal production

Country

World coal production (%)

USA

24.0

Former USSR

12.0

China

26.0

Australia

5.6

India

5.8

6.3.3 Natural gas A few years ago, concern about the world’s growing dependence on diminishing supplies of oil led to natural gas being viewed as an alternative fuel. More recently, reduction in gas costs and increase in availability coupled with international moves towards cleaner combustion have again led to the greater use of natural gas. The combustion of natural gas normally emits fewer pollutants per unit of energy than the combustion of other fossil fuels. In addition, the efficiency of converting to end-use energy is higher than that of oil and coal at 52–58 per cent. Proven resources of natural gas (i.e. those amounts that are reasonably well known, based upon drilling information), are estimated to be about 142 × 109 m3. This is the energy equivalent of about 128 Gtoe, and at the current rate of consumption this gives an R/P ratio of 65 years. World gas consumption in 1993 was 1,787.1 Mtoe or about 23 per cent of total energy consumption. On the basis of proven reserves plus estimated remaining undiscovered gas (i.e. the ultimate resource), the lifetime of gas is 212 years. Continued growth, on the basis of the proved reserves, would give peak production soon after the year 2000 and a lifetime of 35 years. However, although some fields are being discovered and enlarged, some are fully matured and will decline in the not too distant future. This may be the case in North America and in the North Sea, where it is estimated that the output will decline in about 2010.

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6.3.4 Nuclear energy In the years following the Second World War, the nuclear knowledge, developed for military purposes, was re-deployed for peaceful energy generation. Among the benefits thought to be obvious was an unlimited supply of low-cost and clean energy. After four decades of immense technological effort to support nuclear development, nuclear energy has become widely used. Some 30 governments produce from nuclear generators a total of about 15 per cent of all the electricity used globally. Yet nuclear energy has not met earlier expectations that it would be the key to ensuring an unlimited supply of low-cost energy, because of costs of decontamination of nuclear reactors coupled with a series of accidents, e.g. TMI and Chernobyl. Current nuclear reactors, using uranium as a fuel, are based on the use of nuclear fission. Attempts to develop nuclear fusion have not yet succeeded. In these thermal reactors, only the 235U isotope is used, and this results in the use of less than 1 per cent of the potential energy, the remaining material being left as a depleted fuel. The form of the fuel varies with the type of the reactor. The distribution of resources among

Table 6.4 Nuclear resources

Country

World Uranium resources (%)

USA

30.03

Former USSR

26.06

South Africa

11.43

Canada

8.03

Australia

7.09

Denmark

3.19

France and associated countries

2.00

the major uranium producing countries are given in Table 6.4 (United Nations, 1992c). In addition, considerable amounts of low-grade ore are available. There is an estimated 10 Mt in sea water. A reasonable assumption of world resources is 2.2 Mt, which, at a constant consumption rate of 30 Mt per year, implies a lifetime of 70 years; this is increased to 140 years if estimated additional resources are included. Until recently, estimates of world production were of the order of 50–60 Mt, but now there is a worldwide over-abundance. The world consumption of 1993 was 557.2 Mtoe, which gives it a share of 7.14 per cent of total primary commercial energy. Recent world events will almost certainly cause a reduction in nuclear energy production over a number of years. However, it is interesting to note that world nuclear energy doubled from 1981 (205 Mtoe) to 1991 (514 Mtoe).

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6.3.5 Renewable energy Renewable energy sources provide about 1,200 Mtoe annually. This represents about 14 per cent of the total commercial recorded (as well as non-commercial, unrecorded) energy consumed world-wide. Thus in 1990, the world used 1,262 Mtoe of renewable energy, of which 1,050 Mtoe was biomass (includes modern biomass), 186 Mtoe was produced from hydro sources and 25 Mtoe came from other forms (solar, geothermal, wind) as shown in Table 6.5 (World Energy Council, 1994). The major sources are as follows. Biomoss Biomass encompasses a range of products derived from photosynthesis, and consists of organic compounds based on carbon, hydrogen and oxygen. The diverse forms of biomass include fuel wood, energy crops, agricultural and forestry residues, food and timber processing residues, municipal solid wastes, sewage and aquatic flora. Each has its own

Table 6.5 World renewable energy consumption in 1990

Source

Mtoe

Percentage of global total

Solar

12

0.14

Wind

1

0.02

12

0.14

121

1.38

0

0.00

Traditional biomass

930

10.55

Hydro

186

2.2

1262

14.63

Geothermal Modern biomass Ocean

Renewable total

related utilisation technologies, but most forms have a lower energy density compared to most fossil fuels and are high in water content, and thus are relatively costly to gather and transport. They are also used in other contexts, such as fertilizers. Biomass is distributed world-wide, and is available in some form to every country on earth, although varying significantly in yield per hectare. It is often collected by individuals outside the commercial markets and this is known as traditional biomass. Biomass can also be converted into various carbon-based fuels parallel to petroleumderived products known as hi-tech biomass. In 1990, biomass, mostly traditional, contributed an estimated 12 per cent of the total global energy supply, with major use in countries such as India, China and Brazil. The major contributor of biomass, fuel wood, can no longer be thought of as a renewable source in many areas, because consumption

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rates have overtaken sustainable yields, and the problems of desertification and deforestation are quite common in the developing countries in particular. Hydro power Hydro power is a well known well established application, and currently contributes about 2.2 per cent of the total world energy consumption. It has been growing linearly in the last 25 years: the average annual growth during this period is about 4 per cent. The remaining potential for expansion is limited. The best sites in the developed world are already exploited, but there are some sites in the developing countries which can be considered. Solar energy The earth receives solar energy as radiation from the sun, and the amount greatly exceeds mankind’s use. According to WEC, the total solar resource is over 10,000 times the current energy use of mankind; but it has a relatively very low intensity, with a peak of about 1 kW/m2 at sea level, and is significantly affected by the weather and, of course, the time of the day. Solar energy use is small globally, so although millions of lowtemperature thermal collectors have been installed and over 350 MWe (megawatt electrical) of thermal power is operational, it makes up only about 0.14 per cent of global energy consumption. Wind power Wind power has been used for centuries, mainly for pumping water. It is significantly affected by topography and weather, with seasonal, daily and hourly variations. Recently its use had been growing rapidly in regions such as California and Scandinavia. In these cases, the wind turbines are used to generate electricity for the local electricity grid. Some recent expansion has taken place in the UK because of the ‘non-fossil fuel obligation’, which provides that wind power schemes are financially subsidised. According to the WEC, the potential of wind capacity is around 10,450 GWe; but at the end of 1990, about 2,000 MWe wind power for grid-connected electricity production was in operation worldwide, producing 3,200 GWh of electricity (2.67 Mtoe) per year. In terms of global energy, consumption (at about 0.01 per cent) is small. Geothermal energy The use of geothermal energy from natural underground heat sources has been increasing at more than 15 per cent per year in both industrial and developed countries. The experience gained during the past decades could provide the basis for a considerable expansion of geothermal capacity. The resources are substantial, but the intensity is low: thus, in particular, hot dry rock sources are limited in applicability. It is renewable if the heat extracted is not greater than the rate of replenishment from the centre of the earth, and if the water that brings the heat to the surface is re-injected. At present its contribution is insignificant, being only 0.14 per cent of global energy consumption. Ocean energy Ocean energy includes several diverse, low-intensity phenomena that can be tapped for useful purposes, including thermal gradients, tides and waves. In each case the energy

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flux is large: about 2 TW for tidal and salt gradient energy; of the same order for waves; and at least two orders of magnitude larger for ocean thermal energy. These resources are located in a wide number of coastal areas; such resources have very different characteristics, but they all have in common the engineering design challenges of ocean conditions. Technologies for tapping ocean energy are generally immature, being still in a research and demonstration stage. There are few tidal electric power plans in the world: of these, first and largest is the 240 MWe plant as La Rance, built for commercial electricity production. This has apparently been subject to environmental impact problems.

6.4 Conclusions In 1993, of the total world demand for primary energy, conventional fossil fuels, oil, natural gas and coal accounted for 8.5 per cent and the remainder was mostly supplied by nuclear energy and hydro power. The approximate shares of different fuels in the world by energy consumption in 1993 are given in Table 6.6 (BP, 1994; World Energy Council, 1994).

Table 6.6 World energy consumption in 1993

Fuel

Gtoe

Fossil fuels

7.05

Nuclear

0.56

Hydro-electricity

0.20

Biomass (includes modern)

1.00

Others (solar, wind and geothermal)

0.03

Essentially it is still a combustion process-dominated world. Recent concerns about possible shortages of fossil fuel have been replaced by more immediate concerns about their environmental impact. The environmental aspects of energy supply and consumption, including both more conventional and better known pollutants, the growing atmospheric concentration of CO2 and other greenhouse gases, and the long-term consequences for climate change, are a driving force in many countries, often leading to increased environmental regulation. On the energy-supply side, the important factors determining sustainability are: • Oil Oil is still the most used fossil fuel, but it has an R/P ratio of only 43 years, although this is likely to extend considerably. In recent years, there has been substantial investment in non-OPEC areas; in addition, oil companies have gained access to acreage in countries previously closed to them, such as Siberia in the former Soviet Union (FSU), China, Vietnam and certain South American and African

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countries. There is a focus on offshore exploration (about a quarter of the world’s oil lies offshore), re-exploration of known areas and the economic development of smaller or marginal fields. All this could only delay exhaustion; there is clearly a need to find a substitute for oil in the transport sector. The use of heavy fuel oil and orimulsion for power generation is also currently restricted because of sulphur contents. • Natural gas Natural gas has a very high growth rate at present. This is set to continue, as current estimates of proven reserves do not take into account discoveries, especially in the FSU and Iran, which have not yet been fully appraised so are therefore not classified as proven. The environmental benefits and current low costs of using natural gas for electricity generation make its growth rate very high, but there will be supply difficulties in time and, as with all fossil fuels, the global climate-change problem. • Coal Coal is the most abundant fossil fuel in the world, but it can be unpopular because of environmental concerns. The only option at present is to deploy clean-coal technologies, but these are not yet fully developed in terms of efficiency and low costs. • Renewables Biomass is the most used fuel amongst the renewables, but it is mostly noncommercial, and its use is gradually decreasing. In many areas, it can no longer be thought of as a renewable source because consumption rates have overtaken sustainable yields. Hydro-electricity has been locally important, but in most industrial nations nearly all the best sites have been exploited. Other renewable energy sources, such as solar-, wind- and wave-power, show promise for the long-term, but all require lengthy development programmes before they could be brought into use with any degree of confidence. Indeed, for the foreseeable future, they cannot make any significant contribution. • Nuclear power Nuclear energy is seemingly the only viable option for long-term energy supply. There is no imminent physical shortage of nuclear fuel. The reserves are evenly distributed in all the regions of the world. But, of course, there are the well-known problems of high costs associated with radiation safety, de-commissioning costs, and the non-proliferation question. In the future, with increasing population density and ever-increasing demand for energy, it is utopian to assume any reduction to a significant degree in the burden—by reducing traffic density, for example, or by using local renewable energies. Fossil-based energy sources will have to continue to provide the bulk of the world’s energy requirements for several decades. It is unrealistic, and therefore unlikely, that the world’s present overall energy system will soon shift radically, and it would be unwise to plan for any dramatic infrastructure change. It is probable, however, that within the second quarter of the next century the extent of climate effects and of the depletion of certain oil and gas resources will begin to reflect on energy prices, so major action will become necessary.

Acknowledgements M.A. Uqaili thanks the government of Pakistan for financial support for his PhD studies. The authors also thank Maria Argiri for her valuable assistance.

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References BP (1980) Statistical Review of World Oil Industry. BP (1994, June) Statistical Review of World Energy. Fells, I., Warner, P. and Williams, A. (1986) Energy for the Future, London: Institute of Energy. International Energy Agency (1994a) Energy Statistics and Balances of OECD and nonOECD Countries, Paris: IEA. International Energy Agency (1994b) World Energy Outlook, Paris: IEA. Pearce, D., Barbier, E. and Markandyo, A. (1990) Sustainable Development, Economics and Environment in the Third World, London: Environmental Economics Centre. United Nations (1950–1974) World Energy Suppliers, New York: UN. United Nations (1992a) World Economic Survey, New York: UN. United Nations (1992b) World Population Prospects, New York: UN. United Nations (1992c) Energy Statistics Year Book, New York: UN. World Energy Council (1993) Energy for Tomorrow’s World—the Realities, the Real Options and the Agenda for Achievement, London: Kogan Page. World Energy Council (1994) New Renewable Energy Resources, A Guide to the Future, London: Kogan Page.

Chapter 7 The chemical industry—future energy requirements of a large user Bryan Bulloch

Synopsis The British chemical industry is a large energy user; a single ICI plant requires 1 per cent of the national energy consumption. Reduced energy costs, rationalisation and technical improvement will be among its responses to world competitive pressures, although longer-term energy needs are difficult to predict. Privatisation has brought many benefits to the electricity industry but by 1997 it had also brought a 60 per cent increase in the energy price to ICI. The national electricity generating companies and the regional distribution companies have been able to benefit from the pool system, but large consumers suffer from the relatively weak regulatory regime. For the necessary restructuring of the market, the relevant bodies, especially the Government, should be responsible.

7.1 Introduction Within the UK chemical industry there have been dramatic improvements over the last few decades in the energy efficiency of transformation processes. Nitrogen fixation to produce synthetic ammonia provides a particularly striking example. Figure 7.1 shows how, as improved processes have been developed and implemented since the early 1900s, the specific energy required has fallen towards the theoretical minimum (it has been necessary to plot specific energy usage on a logarithmic scale). If we consider the period from the 1940s to the 1960s, an ammonia plant producing 300,000 tonnes per year would then have occupied a plot size of 60 acres, would have employed 3,000 people, and would have had a specific energy requirement of around 80 gigajoules per utilising sophisticated process integration techniques and also manufactonne. Today (1997) ICI’s Leading Concept Ammonia process, designed turing 300,000 tonnes of ammonia per year, occupies a 3 acre site, employs 30 people, and has a specific energy usage of less than 40 gigajoules per tonne. ‘Dramatic’ is clearly not too strong a word to describe this degree of improvement.

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Figure 7.1 Efficiency of nitrogen fixation. LCA process = leading concept ammonia process.

7.2 The next decade Looking forward, correspondingly large improvements in energy efficiency in most established processes within the chemical industry no longer appear to be available. We can, however, discern a number of broad-brush trends: • The limited scope for large improvement in energy efficiency will limit the extent of replacement of existing commodity manufacturing capacity by more efficient modern assets solely in order to achieve lower energy costs. However, society’s demand for ever higher environmental standards may tip the balance in some marginal cases. • It has to be appreciated that, within the intensely competitive world of commodity chemicals manufacture, the fundamental drive for survival is the lowest possible cost to market, to be achieved by a complex interplay between plant size and capital cost, process efficiency, feedstock costs, plant location and shipping costs, and necessitating the consideration of any barriers that may exist inhibiting free trade. Thus, for example, as one aspect of this complex optimisation process, we would expect to see a gradual migration of existing established commodity chemical manufacture to areas with low feedstock costs—such as the Middle East and the US Gulf—in addition to a growth in manufacturing capacity in expanding markets, such as those around the Pacific rim. • There will be more rationalisations between companies, such as those that have recently taken place between ICI and Du Pont and ICI and Union Carbide on Teesside, that will have the effect of increasing the intensity of plant use, and thereby generally

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marginally reducing specific energy consumption. • There remains scope for improving energy efficiency and cost-effectiveness by upgrading existing processes through the application of process integration techniques. This will tend to increase the power to heat ratio in the utilities required to drive these processes, and so there will be consequential upgrading of utilities plant, typically from steam turbine combined heat and power (CHP) to the much higher power to heat ratios of gas turbine CHP plant. There is an example of the last of these trends in my own area, where we need to replace life-expired boiler and steam turbine plant at our major site in Runcorn. We will begin by conducting a broad-scale process integration study of the site’s steam-consuming plant with the objective of identifying any scope to obtain a cost-effective reduction in the demand for heat. Taken together with improved energy efficiency through improved house-keeping and process control, we would expect to see year-on-year improvements in energy efficiency on the site, but these improvements will be of the order of 1 per cent per annum rather than 10 per cent per annum. It is likely that, in taking account of these factors, we will conclude that gas turbine CHP is the appropriate technology for the next utilities’ plant life cycle on the site.

7.3 Longer term In the longer term, the world’s vast reserves of natural gas must have an impact on plant location, choice of feedstock and design of plant. These reserves lie predominantly in Siberia (in the former Soviet Union) and in the Middle East. Data from BP are used in Table 7.1 showing proven

Table 7.1 Proved reserves of natural gas, end 1993

Region

Reserves (trillion cubic metres)

R/P (years)

USA and Canada

7.4

11

Central and South America

7.6

75

Europe

5.3

25

FSU

57.1

80

Middle East

44.9

364

9.7

126

10.0

54

Africa Asia/Australasia Source: BP.

reserves of natural gas at the end of 1993, and the number of years these reserves will last at current rates of production. It should be noted that figures for proven reserves generally

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understate actual reserves. Further drivers encouraging the increased use of natural gas are the appreciation of the damage done by acid rain, the intrinsic reduction in greenhouse gas emissions through the use of natural gas rather than coal, and the much higher efficiency—and therefore costeffectiveness—that can be achieved in utilising natural gas for electricity generation. Thus, for example, the most recently developed gas turbine technology promises up to 58 per cent electricity generation efficiency in combined cycle configuration, compared with, say, 40 per cent from coal-fired steam turbine plant. Returning to chemical plant, we would expect to see a continuing driving down of energy consumption in commodity processes over the coming decades, as exemplified by Figure 7.1. However, results are dependent upon the gap currently to be found between actual energy consumption and the theoretical minimum. We know that society will demand a much greater recycling of products, but in cases such as the recycling of high-bulk lightweight plastics, the necessary transport, cleaning and preparation may actually lead to more energy being used than if new products were manufactured. Over the coming decades it would be reasonable to expect more hitech tailored consumer goods that are more energy intensive to appear on the market (one measure of standard of living, for example, is the number of electric motors in a household). But it would be a brave man who would express a dogmatic view about the development of energy consumption over the next 50 years within a reasonably developed society such as the UK, although such projections are an essential part, for example, of any review of global warming scenarios, and must therefore be hazarded.

7.4 Electricity privatisation Electricity privatisation has given rise to a major issue in energy consumption for ICI. The chlor-alkali business in Runcorn, within which the author works, is responsible for around 1 per cent of total national electrical demand. Electricity is used for the electrolytic decomposition of brine into chlorine, caustic soda and hydrogen. Chlorine is on-supplied for the manufacture of PVC, solvents, plasticisers, disinfectants and other commodities, and electricity accounts for over 70 per cent of feedstock costs. In the international market in which ICI competes it is therefore essential that electricity cost is internationally competitive. Electricity privatisation has been excellent news for its shareholders. Among the regional electricity companies (RECs), shareholders in Northern Electric, for example, in five short years more or less quadrupled their money, and stood a chance of receiving a special dividend equivalent to twice their initial investment as one of Northern’s tactics to try to avoid a hostile takeover. In a predominantly regulated business this can only be the result of lax regulation. Pre-tax profits delivered by National Power and PowerGen have soared (Figure 7.2) Electricity privatisation has been excellent for executive directors of the companies: there is much press comment about share options, for instance. It has generated massive fees for the City. It has been very good for Nuclear Electric, which benefited from the

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£1.3 billion annual subsidy extracted from electricity consumers in the form of the nuclear levy. Privatisation has also been good for the independent power producers, with 7GW of capacity and more on the way. However, much of the initial wave of new CCGT (combined-cycle gas turbine) capacity built during the dash for gas has costs in the range 2.6–2.8 pence per kWh, and only operates because take-or-pay gas contracts are backed by takeor-pay electricity sales contracts. New capacity of this type may well provide diversity in the market, and loss of market share for National Power and PowerGen (the generators), but it most certainly does not represent competition to the generators. It has been wonderful news for Electricité de France (EdF) who, surely, must regularly pinch themselves to check that all these pound notes (together with a share of the nuclear levy) really are draining across the

Figure 7.2 Pre-tax profits delivered by National Power (NP) and PowerGen (PG).

Channel interconnector while efficient much lower-cost coal plant stands idle in the UK. Based on the difference between the marginal cost of generation on idle UK capacity, and the costs of the early CCGT capacity together with the price plus nuclear levy being paid to EdF, it is estimated that electricity consumers in England and Wales unnecessarily incur premium costs of around £0.5 billion per annum on account of these two factors alone. Privatisation has been good for the gas industry and very good for the equipment suppliers and the construction industry. However, it has been less good for electricity consumers, and in particular for large industrial consumers like ICI. Since electricity was privatised, the electricity price for ICI has risen by 60 per cent. Finally, electricity privatisation has also been disastrous for the UK coal-mining industry where, since privatisation, 40,000–50,000 miners have lost their

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jobs. Whole communities have been destroyed, marriages have failed, and worse.

7.5 How has this happened? Many blame lack of competition between the generators. Certainly there have been well documented examples of the ways in which the generators have manipulated pool prices to their own advantage. The following are some of the pool price manipulations that have been observed: • withdrawal and re-declaration of capacity • action to maximise the proportion of Table ‘A’ periods • constrained-on, constrained-off bidding • tighten the supply-demand balance (LOLP payments) • devise low pool prices when over-contracted and vice versa. However, the behaviour of the generators may be likened to the behaviour of a schoolboy, placed in a chocolate factory and told that he can have whatever he can reach. We should not be surprised in due course to find him using his belt, shoe-laces, rulers and other tools in creative manners to extend his reach. While the generators are unreservedly to be commended for the way in which they have cut costs and improved efficiency since privatisation, they have undoubtedly used their metaphorical belts, shoe-laces and rulers to manipulate pool prices to optimum levels for themselves, on a spectrum where, at one extreme, low pool prices deliver low income and profit but protect market share, and, at the other extreme, high pool prices deliver high income and profit today, but lead to faster loss of market-share in due course as new entrant generators justify their investments against the higher level of pool prices that the market is apparently able to bear. Electricity is a commodity. As manufacturers of commodity chemicals, ICI looks with envy at an oversupplied commodity market where a manufacturer can lose 30 per cent of his market share and yet increase his profit by 60 per cent, as National Power did in the 5 years after privatisation. Clearly this is not a competitive market. Having said all of this, the author would not blame the generators for simply testing the boundaries of the overliberal freedoms with which they were endowed at vesting. Many blame Professor Littlechild for an excessively light hand on the regulatory tiller. There is at least anecdotal evidence to support this contention in the share price increases achieved by the regional electricity companys (RECs) since vesting. With the RECs estimated as likely to turn in profits of £2.2 billion in fiscal year 1994/95, there is scope for a step reduction in charging by £0.5 billion per annum. As regards the generators, Professor Littlechild concluded in his February 1994 report, Decision on a Monopolies and Mergers Commission Reference, that there was insufficient competition in generation to restrain National Power and PowerGen from increasing prices at will. The report stated: ‘Experience to date suggests that the present extent of competition is not sufficient to restrain National Power and PowerGen if they wish to increase prices. Nor is it certain that the additional baseload capacity under construction will provide an adequate check.’ As a consequence, Professor Littlechild

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imposed a 2 year cap on pool prices, the time-weighted pool purchase price cap for fiscal year 1994/95 being 2.46 pence per kWh, to be permitted to escalate with RPI for fiscal year 1995/96. There are two objections to these price caps: • In a truly competitive market in oversupply, the market price could not be higher than the entry cost for new generation capacity. Based on falling gas prices, improving generation efficiency and reducing capital costs, we assess the market entry cost as within the range 2.1–2.3 pence per kWh and falling. Thus an appropriate price cap would be at or below these levels. • When the generators have consistently cut their costs in real terms, and the entry cost of new generation capacity is falling, it is difficult to understand how Professor Littlechild (architect of the RPI—X regulatory formula) can justify a price cap which escalates with RPI. In ICI, it is estimated that, at the level of the cap, electricity consumers are being required to pay £0.5 billion per annum more than would be the case in a fully competitive market, where prices would be constrained by the entry cost for new capacity.

7.6 Responsibility for policy If, as we believe, these examples are valid, Professor Littlechild must take his share of the blame for the consequences of weak regulation; but in ICI we believe that the fundamental responsibility lies with Government, which pressed ahead with a privatisation with an untried and byzantine market structure, with too few players and already compromised by the withdrawal of the CEGB’s nuclear capacity. These are generalised criticisms that some would seek to dismiss as mere rhetoric. However, if the costs, estimated above, which electricity consumers have to bear as a result of the inefficiencies of the market structure are drawn together, they amount to a premium of £2.8 billion per annum. As has already been noted, ICI’s site in Runcorn accounts for roughly 1 per cent of total national electrical demand. It is obviously simplistic to associate 1 per cent of these premium costs with ICI’s demand (we are, for example, exposed to a lower than average proportion of REC charges on our high-voltage, high-intensity supplies), but there is a remarkable similarity between 1 per cent of the estimated cost premium and the £20 million per annum by which our costs have risen since privatisation. Five years into electricity privatisation, we see no indication of the emergence of a competitive market. We cannot survive indefinitely waiting for competition and realistic pricing to emerge. Unless a solution is quickly found, we shall have to choose between the lingering demise of our chlor-alkali and derivative manufacturing activities—which currently make a major contribution to the trade balance—and more intensive representations to OFFER, Whitehall, Westminster and the MMC (Monopolies and Mergers Commission) to seek the radical restructuring of the market that is manifestly necessary.

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Acknowledgement The author acknowledges the use of data provided by BP in Table 7.1. ICI is the source of other data.

Chapter 8 Energy markets and the role of governments Ian Glendenning*

Synopsis In meeting a growing world-wide demand for energy, opinion is divided between those who rely solely on free markets and those who believe that planning is required. Historically, there have been examples of both good and bad political intervention in energy planning. Notwithstanding political good will, no part of the publicly owned energy power industries in the UK approached world best standards of efficiency and cost. Privatisation and reliance on energy markets have been successful in driving down costs, though benefits to customers have relied too much on regulatory intervention. In the UK, different market structures are being tried in different parts of the country, with different outcomes. Much of fossil-fuel electricity generation in England and Wales has been replaced by gas-fired generating plants and imported nuclear power, but this has not been repeated in Scotland. There are some with concerns about market trends: the current switch to gas-powered generation, succeeding the earlier switch from town gas to natural gas, is convenient, but there are risks in dependence on oil and gas; developments of alternatives (from renewables to clean coal) are dependent on inducements but these are limited; environmental factors are not reflected in the market. Even in a market economy, governments have a role, at least to maintain a consistent policy framework to guide market regulation. The alternative is to risk market failure and a return to interventionist controls.

8.1 Introduction It has been observed (Jefferson, Chapter 2 above) how the world-wide demand for energy will continue to grow as nations strive to achieve even minimum standards of living, let alone approach the levels of economic prosperity achieved in the developed world. The underlying link between access to energy and economic activity is fundamental to the World Energy Council's analysis and beyond dispute. * Ian Glendenning retired from Magnox Electric on 30 November 1997 and became a parttime strategy consultant.

Over the next 50 years and beyond, the ‘have nots’ will strive to have while the ‘haves’ will be even more strongly motivated to sustain what they have and even to develop further. The issue is how these aspirations may be realised efficiently, sustainably and

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with due regard to the environment. Here lies the philosophical divide between those who know that only free markets can provide the framework for success and those who are convinced that markets are inevitably flawed and that only planning at Government level can secure the solutions required for the longer term. This chapter addresses the following themes: • the experience of political involvement in energy planning • the effectiveness of energy markets as a substitute for central planning • the inevitability of continued Governmental involvement and what form this may take.

8.2 Past political involvement There are many examples of both good and bad political intervention in energy planning. Successive governments in the UK and elsewhere have pursued policies driven by a wide range of factors: the desire for a high degree of energy self-sufficiency; freedom from the threat of one dominant supplier like OPEC or key groups of organised labour like the coal-miners; the maintenance of an established industry and the employment it provides; protection from the possible economic consequences of some anticipated shortfall in resource availability; even flagship demonstrations of a nation’s status. These have all played their part. At various times coal, oil, gas, nuclear power and renewables have all benefited: • The development of nuclear power in France was motivated by a desire for selfsufficiency; by this measure it has certainly been a success. In the UK, however, the basis for support has been less constant—initially there was a mix of national pride, a natural and open linkage to defence needs and a genuine concern about the ability of the post-war coal industry to meet the needs of a rapidly growing electricity industry. Later, it was seen as the defence against the expected rapid depletion of oil and gas reserves and valued as a source of diversity to limit the power of unionised miners. • In the UK, coal was protected from competition from oil long before the 1973 oil crisis. Yet its planned pivotal role in energy supply eventually became a threat and contributed to the rapid decline of this once vast industry. • The development of North Sea oil and gas was greatly encouraged by a very favourable fiscal environment, PRT, for the exploration and development of fields and for offsetting the considerable costs of rig abandonment. In the case of natural gas, the establishment of the national infrastructure was undertaken entirely within the public sector. • Today it is investment in renewable energy, energy efficiency and conservation that receive support. In its time every support measure was defensible and received widespread public support. Yet, to a greater or lesser extent, in each case events have conspired to confound the original forecasts and planning assumptions, and today governments are less willing to assume the role of positive intervenor. Were governments misguided in the past? Or are they wrong now to limit the scope of policy to exclude specific planning objectives? The nations of the Pacific Rim continue to

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plan for rapid growth; Germany has sought political consensus on a balanced energy policy, to include nuclear power for the price of a continued massive subsidy for coal. Are they misguided or right?

8.3 Legacy of past plans Past plans may have been too harshly judged both by politicians and by society at large. The UK’s coal, oil and gas have been and still are immensely valuable assets. Today, the uniquely British legacy of 40 years of nuclear power developments is also fulfilling its promise as the major source of low-price electricity. Surely, too, it is inevitable that successful countermeasures (the planned avoidance of a perceived threat) will have the effect of confounding the ‘business as usual’ forecast threat that led to the plan? However, the evidence of newly privatised utilities’ performance causes us to seriously question the efficiency with which these plans were implemented. Could it be that public ownership or the pursuit of Government policy at public expense is bound to be inefficient? Public ownership and public finance bring with them a peculiar force, born of an inevitable high level of public scrutiny. This seems to lead to over-specification, diffuse accountability, lack of transparency in decision making, too great a focus on secondary issues and excessive cost. Anecdotal evidence from the author’s experience concerns the civil construction industry. A company built houses for both private and local authority clients. The local authority houses, with their rigid specifications for space, materials and features such as ventilated larder cupboards, were more expensive as well as being the most profitable for the construction industry, whereas the lower cost and less profitable, yet more desirable, properties were those built for the private market where customers choose for themselves. How much is this a model of public procurement generally? Has it contributed to the relative uncompetitiveness of the UK’s mining and nuclear industries and even conventional fossil power plants? Where else would the architecture of a major power station be such that after closure its shell would be considered for conversion to a great national art gallery? No American fossil power station nor a modern gas-fired combinedcycle gas turbine (CCGT) plant anywhere could find such an alternative use—indeed, many are barely housed at all! It has been demonstrated that, while the public-sector utilities were technically innovative and satisfied the political will for the highest standards of supply security, well balanced portfolios of plants and fuel sources and world-class research and development, no part of the publicly owned electricity, coal or gas industries was working anywhere near to world standards of efficiency and cost.

8.4 Energy markets There are firm arguments for the belief that privately owned companies operating in competitive markets, dependent upon the support of their customers, at risk of commercial failure rather than political censure, is the best way to ensure efficiency in

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production and the services that customers require. In this context privatisation, the creation of market structures that promote competition and the liberalisation of markets, would each appear to be a good thing. This revolution is spreading to utilities across the globe -from South America, across Europe and on to the East. Does the establishment of a market and the appointment of a regulator signal the end of the Government’s role? In the report following the Coal Review, the DTI appeared to suggest that this might be the case—to the disappointment of the coal industry—a clear warning to those in the nuclear industry who hoped that the Government would find no alternative but to resume public investment in new nuclear power stations following the Nuclear Review. There are criticisms of the newly privatised markets—many of which relate to the transition arrangements that are ensuring that all parties have time to accommodate the massive changes that have to take place. In general, however, the architects of the new markets and their regulators seem pleased. There is some envy of the rewards flowing to shareholders and some executives, but precious little evidence that either the customers or the taxpayers have been disadvantaged relative to what might have been under continued public ownership. However, there are areas of more widely shared concern. Many final customers do not have a choice of suppliers and the prospect of marketdriven price reductions. By and large, the main benefits to customers have resulted from regulatory intervention. Many observers of the electricity supply industry in England and Wales have been dismayed by the rapid replacement of perfectly serviceable coal-fired plant by gasfired CCGTs—with the consequent impact on the coal industry and rapid rundown of economically accessible reserves. There has been a number of instances of regulatory interventions that have contributed to market instability. Even the understanding reached between OFFER, National Power and PowerGen, designed to cap prices and increase competition through the divestment of some 6 GW of fossil generation, has further destabilised the market— and the major costs of this intervention fell wide of their target. The resulting market uncertainty has merely reinforced short-termism in investment decisions in the electricity supply industry (ESI)—another area of widespread concern. So are privatised markets a full substitute for central planning? Those companies that are profiting from the present arrangements will, of course, say yes. Others, like the coal industry, take the opposite view. There are winners and losers in all markets, it is inevitable—but are they necessarily the rights ones? In the UK, interestingly, two experiments are running in parallel. Electricity industry privatisation in England and Wales took a different form from that in Scotland. In both cases there was a reflection of the previous public arrangements. In Scotland, Scottish Power and Scottish Hydroelectric were created as vertically integrated power companies, responsible for everything from generation and distribution to the supply of individual customers of all types. In England and Wales, the separation of generation and distribution was retained, with the only major structural change being the break-up of CEGB into three generating companies and the National Grid—same commodity, two structures, two different markets. It is interesting to see the differences in decisions taken in these two markets. In England and Wales the so called dash for gas has been experienced. Regional

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electricity companies (RECs) and other independent generators have constructed around 7 GW of CCGT capacity with long-term contracts for gas supply and for the bulk of the electricity generated. The two fossil generators, National Power and PowerGen, have also invested in 3.4 GW of CCGT plants but, it would seem, without the benefit of long-term off-take contracts and therefore destined for a more probable high mid-merit role alongside their other plant. The England and Wales market was already oversupplied in 1990, so the effect of the new investments, coupled with the greatly improved performance of the nuclear plants and electricity imports from France, has been to reduce the utilisation of coal and oil-fired plants. In England and Wales there has been an economic (but premature) closure of 8.9 GW of coal plant and a mothballing of a further 4.9 GW of oil. None of this has happened in Scotland, where the vertically integrated utility operates in a different decision framework. In England and Wales, RECs were able to justify contracting to purchase the output from independent CCGT plants under the economic purchasing rules against the prices offered to them for alternative supplies. However, the plants, when built, displaced power stations belonging to either National Power or PowerGen. In Scotland, the vertically integrated companies would have considered the cost of purchasing from an independent against the avoidable cost of continued operation of their existing assets—no contest and no Scottish dash for gas. If they built or purchased output from a CCGT, it would be other plant they owned that would have to be closed. The only reason for the difference is the market structure. England and Wales clearly has the greater degree of competition, in generation and increasingly in supply (and eventually in distribution), but this seems not to have resulted in the most efficient use of resources—or so, it can be imagined, the Scots would say, and probably so would anyone from the CEGB (whichever of the four successor companies they now find themselves in).

8.5 Role of Government The evidence is convincing for the benefits of competitive markets. Nevertheless, the two competitive markets which the Government has created are behaving very differently for market structural reasons alone. They cannot both be right! If either has to be changed it would seem reasonable to assume that this should be the responsibility of their creator, the Government. With nuclear power still in Government ownership, decisions on its future remain entirely in the hands of Government. Nuclear Electric, the publicly owned nuclear generator, volunteered a solution by making early flotation its primary objective from the Nuclear Review—another decision for Government. (Since this paper was written, legislation has been implemented by which, in 1996, the Magnox nuclear power plants previously operated by Nuclear Electric plc and Scottish Nuclear plc were transferred to Magnox Electric plc. Other nuclear generating capacity was transferred to British Energy plc. Shortly before the date of publication of this paper, Magnox Electric and BNFL (the former British Nuclear Fuels) were expected to be merged.) There is no evidence yet that any renewable plant would be built without the benefit of

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generous support from the NFFO levy. This too remains dependent on the continued support of Government. There seem to be three or even four good reasons why Government cannot simply rely on market forces. There are, in addition, the perceived risks of short-termism and all the external factors which are not reflected in the market place. These are raised by John Wright in Chapter 5. Under today’s market conditions, investment decisions by the privatised and independent generators inevitably continue to favour gas-fired CCGT. PowerGen have on occasions suggested that they would wish to diversify their risks but, within their home market, this seems unlikely. After all, it is a characteristic of perfect competition, the declared goal of the present Director General of Electricity Supply, that each player moves quickly to emulate the market leader and both products and the means of production will tend to be undiversified. It is also the case that price competition leads to reduced profits and lower achieved rates of return. With or without further intervention by the Regulator, it seems more likely that the diversification of corporate risk will be achieved in other markets or other products. Unless there is a new non-gas technology about to displace CCGTs, today’s undoubted diversity of electrical supply will be transient, and technologies with export potential—which Government would otherwise be pleased to encourage—will simply disappear from the UK scene. It seems reasonable to expect, within the decade, a further major shift to gas. Of course this is the second dash for gas. The first took place during the 1970s when natural gas replaced towns gas, coal and oil in domestic and commercial heating. Apart from transport, which is 99 per cent dependent upon petroleum products, there is the very real prospect of dependence on gas on both sides of the meter! In the short term this may confer major competitive advantages, but there is the likelihood that the only real switching opportunity for the domestic consumer may be changing from gas-fired to electrical heating—which of course is also dependent on gas. The prospect of such dependence on oil and gas may be seen to represent an unacceptable risk to the economy. Gas may be better than coal, oil and orimulsion, but it is not the perfect fuel for protecting the environment and there is nothing in the marketplace to reflect the potential harm of climate change. Other externalities will similarly fail to be taken into account unless there is specific recognition of the costs and benefits in the rewards available in the market. Governments surely have no option but to accept responsibility for the working of the market and the consequences of the decisions of the players which follow directly from their design of the market and its regulation. The creation of markets may achieve greater efficiency in the use of resources but not a perfect walk-away solution. How should a Government intervene? The day’s winners will suggest ways that maintain or increase their competitive advantage. Others will seek overt support for their solution—in today’s terms translating to support for coal, nuclear and renewables. However, this route, even via a system of quotas, seemed not to the taste of the Conservative administration, and in any case it risks losing the benefits of competition and a return to central planning. The following alternative, and no easy solution, is presented for careful consideration. The Government should be helped to:

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• Clearly define market outcomes that are undesirable. These will clearly include the failure to deliver competitively and predictably priced energy, failure to sustain acceptable levels of security, failure to achieve sustainability into the long term, failure to meet in full internal plant and fuel-cycle costs and failure to protect the environment from further harm. • Reach an initial consensus on the risk and cost or value relating to each and the mechanisms for reflecting these in the market. • Define the basis upon which the developing market will be measured in terms of the continuing risk of undesirable outcomes. • Make clear the intention to review the market against these measures and to make further changes to externality costs or values or the mechanisms by which they are applied if it should prove necessary. Above all, there should be as consistent a framework of policy and market regulation as possible. Only in this way will companies and their shareholders gain the confidence to engage in the long-term planning that the energy sector requires. One thing should be clear: if this cannot be achieved, there is perhaps no alternative but to reconsider more interventionist controls such as quota arrangements. If the lower-intervention solutions prove too hard, to do nothing is not an acceptable alternative.

Chapter 9 Electricity—the common energy currency Michael Cooper-Reade

Synopsis Society needs electricity and its infrastructure for essential purposes. The more dominant use of electricity as the common energy currency for all forms of energy has many advantages in reduced infrastructure costs, flexibility of energy source and conversion, environmental pollution control and end-use technology, particularly for developing countries. Indeed, it may be the only way many developing countries can meet the demands of rapid population and energy growth and match their expectations for an increased share of the world's prosperity. The benefits of such an approach are examined, covering the assessment of environmental impact, energy efficiency, the role of regulation, financial and institutional issues and the potential of the experience, expertise and technology from the UK electricity and manufacturing industries.

9.1 Introduction The theme of this chapter is to consider the environmental and other benefits of electricity taking a more dominant role in the future as the common energy currency for all forms of energy, particularly in developing countries, by making the best use of the essential electricity infrastructure and drawing on the experience of the UK electricity industry.

9.2 Electricity as the common energy currency Society needs electricity for: • lighting • motive power • water—including irrigation, pumping, purification and sanitation • communications and information technology • medical care • improving the quality of life. Yet 50 per cent of the world’s population does not have electricity. Developing countries expect and have a right to an increased share of the world’s

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prosperity, with electricity readily available for essentials and sufficient energy to support economic growth. Using electricity as the common energy currency and concentrating on developing the electricity infrastructure may be the only way many developing countries will be able to meet the demands of ever increasing population and energy growth. This may well be the optimum solution and has many benefits such as: • flexibility of energy source and conversion • a variety of infrastructure options • improved pollution control • end-use technology benefits • technology transfer opportunities for the UK and other industrialised countries. These are discussed in greater detail below.

9.3 Energy resources Using electricity as the main energy source provides flexibility in the method of fuel conversion, the choice of indigenous or other available fuels, and the most suitable or best technologies, including combined heat and power (CHP), clean technology, renewables or nuclear energy, where these are options.

9.4 Infrastructure options The choice of infrastructure may depend on what arrangements already exist in a developing country. Where there is no infrastructure, local generation schemes, which could include microhydro and CHP schemes or whatever is most appropriate, could be developed with local distribution networks. These satellites or infrastructure hubs could then eventually be extended or linked into a national grid system. On the other hand, where an infrastructure is already available, it may need to be improved, but it would allow for a choice of location, generation and fuel to suit environmental and commercial needs (Figure 9.1). With increasing world-wide liberalisation of the electricity markets, there is also scope for intercontinental links with the electricity infrastructures of individual countries.

9.5 Environmental pollution control One of the exclusive benefits of electricity is that there is no pollution at the point of use. This can be an overriding consideration for health, compared with the use of open fires for lighting, heating and cooking in confined spaces or in congested city centres. Electricity also allows for central emission control, better management and the use of the latest and most efficient technology for energy conversion. As is argued below, depending on the generation and efficiency of end use, an overall reduction in pollution may result.

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Figure 9.1 Electricity generation and distribution infrastructures.

9.6 End-use technology The diversity of electrical techniques, including direct resistance, infrared, induction, microwave and dielectric heating and many others, frequently results in more precise control and higher end-use efficiency than the direct use of fossil fuels, particularly for industrial purposes. There are also many other benefits that can be associated with electricity end use, such as improved working and living conditions, increased productivity, better quality, less wastage and reduced CO2 emissions. Just two examples of industrial case histories that illustrate some of these benefits are the following. Induction heating of drums of additives for blending lubricating oils was adopted by Esso at Purfleet to replace heating in steam ovens using oil-fired boilers. The result was a saving in energy of 99 per cent, in energy cost of 93 per cent and a reduction of 97 per cent in CO2 emissions. Other benefits were a reduction of heating time from 8 hours to 2 hours, more flexibility of operation and more consistent oil mixture quality with better temperature control, a 50 per cent reduction in additive wastage, reduced drum corrosion and hence fewer rejects and a saving of 25 m2 of floor space. Simplegrow at Chedburgh replaced the traditional method of glazing terracotta pots for plants, on a batch basis requiring two firings in a gas oven by a continuous electric infrared powder coating process. The normal procedure was reversed; the pots were heated first under close control, followed by electrostatic powder coating and curing, which took place during cooling. There were resulting savings of 85 per cent on energy, 44 per cent on cost and 54 per cent on CO2 emissions (80 per cent per pot taking account of the productivity increase in excess of 200 per cent). The other benefits were: better quality, and hence fewer rejects; a larger range of colours, eliminating the need to import some items; a 25–30 per cent cost saving on bought-in items; and the avoidance of toxic

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wastes. Carbon dioxide (CO2) and other environmental burdens and impacts are discussed in Section 9.9

9.7 Technology transfer There is considerable scope for transferring the engineering and management skills and the technology expertise built up by the UK electricity industry over many decades, particularly through privatisation, to the developing countries. Expertise will also be more easily gained in dealing with a common utilisation of electricity. In addition, there is potential for manufacturing industry to develop and supply the increased demand for electrical equipment and appliances. All this adds up to an exportable commodity.

9.8 Energy efficiency and regulation There is an overriding need for energy efficiency, whatever the form of energy. It is not, however, just a question of how much, i.e. the conservation of energy; other main issues are the type of fuel and how efficiently it is converted. The public, Government and pressure groups have tended to concentrate on the former, and until recently the electricity companies have emphasised the latter when competing with other fuels to increase their sales. This strategy, adopted by the industry, of selling energy efficiency by replacing, in many cases, the less efficient use of fossil fuels by electricity has resulted in significant reductions in overall energy use. As part of the strategy, major advances have also been encouraged in the efficiency of electrical equipment and appliances. However, it is recognised that more priority needs to be given to improving the efficiency of the captive uses of electricity. The environmental impact of energy use does not, of course, depend on both conservation and the efficiency of fuel conversion and use. In the privatised energy industries, regulation plays an important role. In the UK the regulatory regime is aimed at keeping electricity prices down, and there is limited incentive for energy efficiency. The regional electricity companies (RECs) have standards of performance including advice on energy efficiency. There is a modest allowance of £1 per franchise customer for expenditure on energy efficiency projects in the revised supply formula, but this is not considered adequate by the Energy Saving Trust to meet their needs and CO2 reduction target. Reducing the sales volume incentive to 50 per cent in the recently revised distribution formula has virtually neutralised it, giving little incentive to reduce electricity sales or to increase them by replacing fossil fuels more efficiently. Despite this, RECs are taking many initiatives on energy efficiently. In the USA least cost planning (LCP) is required to ensure conservation measures are taken to reduce demand and the need for new generating capacity before rate increases are allowed. Avoiding new generating capacity as a result of LCP can apply only where there is vertical integration of supply and generation. In the UK, even if the 15 per cent

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limit on RECs' own generating capacity is waived, this will not affect the situation. Traditional plant margins no longer apply, and companies install generating plant on the criteria of competing on merit order for base load. However, there are three factors in favour of more emphasis being placed on energy efficiency by the electricity companies. First, they are competing in a liberalised market, not just on price but also on providing the best energy service - which includes the most efficient use. Second, most RECs are energy companies with the ability of supplying electricity, gas, CHP and many other associated services. They are therefore in a position to provide the most efficient, effective and appropriate energy service. Lastly, they have an awareness of the environmental issues related to the use of energy. The position of most RECs is summed up in Figure 9.2.

9.9 Environmental impact of energy use In assessing the environmental impact of electricity and energy use we need to be more sophisticated. It is not just a question of assessing the life cycle or cradle-to-grave environmental burdens (Figure 9.3) but also of comparing their impact on the environment by applying some relevant weighting. The tendency has been to consider single issues rather than total environmental impact. If one considers acid rain, the burdens are NOx and SO2; the change this induces is increased acidification and the impact of this is damage to forests and fauna (Figure 9.4). However, NOx has other impacts on health and climate change (Figure 9.5).

Figure 9.2 Regional electricity companies—the rationale.

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Figure 9.3 Environmental impact of energy life cycle.

Figure 9.4 Environmental burdens and impact of acid rain.

Figure 9.5 Other environmental burdens and impact of NOx.

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In assessing environmental damage on a broader basis, a complex matrix emerges, with a number of different burdens contributing to the same change and a number of changes producing the same or more impacts (Figure 9.6). In considering the overall impact, each impact has to be weighed in some way. We therefore have a long way to go before we can attempt to internalise the external costs of these impacts—otherwise there is a danger that the wrong cost messages could be given. One approach suggested (Edge, 1996) is that of round-table analysis, whereby a consensus would be obtained from a cross-section of involved parties (similar to the principle of the government round table on sustainable development). Analysis of the relevant environmental burdens would be the basis, but the main task would be to give some form of weighting to the impacts, taking account of social, health and environmental issues. Different weightings would apply to individual organisations, countries, regions or, on an international or global basis, to reflect the main concerns of those involved. As it seems likely that the effects of global warming and climate change will vary widely on a country or

Figure 9.6 Matrix of burdens and impacts. NMHC = non-methane hydrocarbons.

regional basis, the weightings for this impact would also vary widely. Other issues, such as local pollution or the effect of acid rain on forests and fauna, may well be more important to other communities. Much more work is needed, perhaps using decision analysis techniques to progress this promising concept further. Burden analysis has, however, progressed well on a complete fuelcycle basis (Figure 9.7), particularly for CO2 and other greenhouse gases (Eyre and Michaelis, 1991), that is, the assessment of emissions and energy use at each stage of the cycle from extraction of raw materials, distribution and essentially including end use for specific applications. For the assessment of the burdens from electricity, the mix of fuels and plant is crucial. In the UK there has been a significant improvement in mix over the last 5 years, which is still continuing with the increase in combined-cycle gas turbine plant (Figure 9.8). For example, CO2 emissions have fallen considerably, and are expected to be down to around

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Figure 9.7 Complete fuel cycle for electricity and oil or gas production and distribution.

Figure 9.8 The changing fuel mix of electricity generation.

0.5 kg/kWh in the next year or so. A what-if assessment of energy and generation mix is useful for predicting future burdens (Edge, 1996). Two electricity-growth assumptions have been taken: first, the present level of growth to continue until 1999, with thereafter no further increase in consumption through until 2014, as a low-growth scenario; and second, for high growth, a 2 per cent per annum increase. Figure 9.9 shows, for the high-growth case, extreme scenarios of generation mix for 2004 and 2014 compared with 1999. The concept is that any new generating capacity would be provided by one fuel only. In the case of coal, this would be through clean-coal technology. By 2014 this results in the main fuel or energy

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Figure 9.9 Future generation-mix scenarios (all new generation post-1999 by one fuel only).

form taking up to 60–70 per cent of the generating mix. The results are encouraging for electricity in the UK. For example, for CO2 emissions it is for the coal high-growth case only that emissions are higher than present levels (Figure 9.10). Similarly, for CH4 and N2O it is in the coal high-growth only case that emissions are higher. For NOx and SO2 all cases are lower—SO2 considerably so (Figure 9.11). It is only for CO that both the gas high and low cases come out higher. This illustrates the importance of extending the analysis to include end use. If we take a powder-paint curing industrial process as an example (similar to the case history detailed earlier), Figure 9.12 shows the overall

Figure 9.10 Future CO2 emissions (all scenarios; C-H = coal high-growth).

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emissions for the electrical process compared with various efficiencies for a gas oven. Although the CO emissions increase from 1994 to 1999, they are still well below those from the gas process (likely to have an efficiency of 50–60 per cent). This shows that the generation mix and the end-use applications have to be considered fully in any assessment of the overall impact of electricity use.

Figure 9.11 Other emissions from electricity (all scenarios).

Figure 9.12 Comparison of CO emissions using electricity or gas for a powderpaint curing process.

9.10 Some financial and institutional issues

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A high level of capital investment is needed in developing countries, whatever the energy infrastructure, and this can present formidable barriers to progress. Political uncertainty can be overcome to some extent by securing local support for projects. Financial risk can also be limited by obtaining funds and grants from a number of sources including the World Bank. Again, local support for projects is essential. In most developing countries there is considerable scope for improving the operating and management of the existing electricity network. Frequently the electricity is undercharged, resulting in lack of maintenance, low security of supply, low efficiency, theft and hence high system losses. On any new projects it is essential that: • prices reflect costs (on this score the UK regulatory regime is probably appropriate) • energy users, investors and local government benefit from the project.

9.11 Conclusion In taking all these factors into account, it can be seen that there is a strong case, and many benefits follow if electricity plays a more dominant role as the common energy currency, particularly in developing countries. There is also considerable potential for transferring engineering and management skills and technology from the UK to help the developing countries meet their expectations.

References and bibliography Edge, G. (1996) Environmental Information in Energy Decisions, Norwich: University of East Anglia. Electricity Association (1993) The Benefits of Electricity—An Overview, London: Electricity Association. Eyre, N.J. and Michaelis, L.A. (1991) The Impact of UK Electricity, Gas and Oil Use on Global Warming, Harwell: Energy Technology Support Unit. World Energy Council (1993) Energy for Tomorrow’s World, London: WEC.

Chapter 10 Future energy supply and demand—steps towards their reconciliation Sir Alan Muir Wood

Synopsis The theme of other papers in the volume is summarised as concern for energy policy in various dimensions and on different timescales. Social and economic considerations include education and energy efficiency, with particular benefits for developing countries as well as the advanced countries. Policy should not rely solely on either central planning or market forces, and needs to keep national and economic predictions under continuous review, with a rolling system of planning in Britain; it should apply statesmanship and restraint to the concern for quick returns on investment. A policy for longer-term sustainability will face the opportunities and unsolved problems of new power sources, atmospheric pollution, economic change and urbanisation.

10.1 Introduction The main theme of the papers assembled in this report may be defined as concern that energy policy and planning are needed to meet future challenges on many different scales, ranging from the immediate domestic situation to the immensely complex international scene. Market forces alone are seen to be inadequate to provide acceptable solutions: one reason is that energy interacts strongly with other social and economic factors to a degree which defies any attempt at unravelling. In consequence, energy decisions cannot be taken in isolation.

10.2 Social and economic considerations Many examples are discussed in other papers. Notable among them is the planned reduction in the capacity for deep mining of coal in Britain. This reduction could have been achieved in a manner that would have caused far less social disruption or personal affront and would have required less compensation—the costs of which will be apparent for a long time to come. Certain factors affecting energy demand and supply can be identified. Those relating to population and cosmic (as opposed to man-induced) evolution of climate, for example, are beyond direct influence by an energy policy. Several features of a general nature are susceptible to being modified. Of these, perhaps education is the most important

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determinant, with potential power to influence acceptability of a rational energy policy: it facilitates understanding in preference to prejudice, which is otherwise so readily fuelled by single-issue agents provocateurs. Present profligacy with energy would be understood as incompatible with future expectations for prosperity and comfort. Nowhere is education more necessary than in relation to issues of nuclear power: the association between economy and safety should be demonstrated, with the national interest promoted in the international context.

10.3 Energy efficiency The papers by Professor Brinkworth and others clearly illustrate the pattern of energy demand related to gross domestic product (GDP) for an evolving economy, set into an historical scene. As GDP increases, the typical pattern of specific energy demand (in kWh per GDP, say) has an intermediate hump, which has tended to reduce with historical time, such that the earliest industrialised nations display the highest humps. While economics ‘has no law like the conservation of energy to prevent the creation of purchasing power’, nevertheless, the increasing competition for a wasting asset (hydrocarbons) presents an issue in which the encouragement of energy efficiency throughout the world will be to the greater benefit of all in limiting demand—hence restraining the rates of increase of the price of energy and of the associated environmental problems. Energy efficiency will be particularly beneficial to developing countries, whose energy needs will continue to increase as a proportion of world consumption. In simple terms, the greatest pay-off will derive from limiting the specific energy demand ‘hump’ in the early stages of industrialisation, rather than from reliance on oversimple notions of competition, with associated reduction in atmospheric pollution. The translation of this action into practical policies will test the ability of international diplomacy to embark on an imaginative course of enlightened self-interest.

10.4 Rolling system of planning Several authors emphasise that there is no question of sole reliance either on central planning or on market forces. There needs to be a national energy policy, as part of wider national and international policies, which keeps under constant review predictions concerning demand and potential problems which may need to be addressed. As part of such a policy, future supply options must also be reviewed and periodically updated, identifying the capabilities of different mixes to provide robust solutions against a pattern of possible uncertainties. Such a rolling system of planning identifies where research and development need to be conducted to ensure that the promising options are kept open for timely exploitation -on a timescale, however, which would not attract market-driven support. It addresses moving and constantly adjusted targets, so there should be no risk of the plan becoming fossilised. As with all engineering enterprise, energy policy should be aiming to minimise risk while maximising the potential opportunity. A notable UK defect is our short-term dominated habit of extracting revenue at the

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earliest moment when investing capital. This pervades much of Government and private finance. Current generosity of the rewards to those heading privatised organisations in the energy sector, linked to immediate profitability but unrelated to long-term planning, is characteristic of this national affliction which, unless stemmed by statesmanship and restraint, will encourage economic decline and discourage engineering innovation. Each sectional market has an overriding motivation for immediate profitability which denies not only long-term planning but also any regard for the well-being of the many interlocking market mechanisms found in an advanced industrial society. Do we leave to many suppliers the charge basis for energy-dependent industries, with the prospect of driving them to countries with lower energy costs, or do we find here a consideration for the national interest which should be superimposed as a constraint on the free market? The easy and dishonourable (and in present jargon ‘unsustainable’) way is to continue to distribute the assets and decrease taxation—and then expect the engineers and scientists who have been denied adequate support to come up with a quick fix. We appear to be living in an unreal world where economists of a certain hue, lacking perception of the capabilities and limits of technology, command influence comparable to that of Reagan’s astrologers!

10.5 Sustainability What is sustainability? There are many answers to the question, depending on the timescale that we have in mind. One answer is certainly not that of continuous quantitative growth, as recognised by John Stuart Mill more than 150 years ago. A sustainable society needs to entail qualitative improvement, with moderation of consumer demand a feature of a longterm solution. One indicator of sustainability might be sought in the atmosphere. In Chapter 4, Sir John Mason explains the growing complexity of the effects of atmospheric pollutants. Some encouragement may be found in their conflicting influences, but there is little consolation in appreciating that the solar energy balance depends increasingly on such a celestial cocktail—since ice and albedo introduce nonlinear influences which may well overtax James Lovelock’s stabilising notion of Gaia. Changes in all aspects of energy provision and usage need to be deliberate, gradual and planned, or we invite the disastrous consequences of over-rapid economic change as seen, for example, in Eastern Europe and in parts of Central and South America. Michael Cooper-Reade (Chapter 9) correctly draws attention to the vital importance of electricity to the developing countries. The fundamental problem is that it is far cheaper and simpler in the short term to base power supplies on the large cities, drawing an ever increasing population to the shack towns lacking other infrastructure or means for support, than to take supplies to the country where the power would enable the rural economy to be improved and diversified in a sustainable manner. Another problem stemming from over-rapid energy expansion is the risk that consequential nett energy output may be attenuated. From Figure 10.1 (Muir Wood, 1982) it is seen how the nett contribution of a new power source rapidly declines as the rate of annual increase is enhanced. The figure illustrates how the annual rate of growth, N, affects the nett energy return. With approximations described in the original paper

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Figure 10.1 Acceptable rate of growth of new systems of energy generation.

(Muir Wood, 1982), the equation plotted as Figure 10.1 may be expressed as

where: ρ = O/I where I is total energy input required to construct a generator, O nett annual energy output per generator in operation R = ∑(O)/∑ (I/per annum) in a year, i.e. the ratio of the annual nett energy output from the generators in commission to the annual energy required by generators under construction in the same year x = delay in years between centroid of energy input I and first year’s output O N = annual (geometrical) rate of growth of commissioning new generators.

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10.6 Conclusions The technologies and physical resources for power generation and distribution, taking account of alternative energy and increased efficiency in use of energy, can meet the aggregate world demand for the foreseeable future, provided that the appropriate application of investment, particularly for distribution, is economically and politically achievable. The greatest proportionate increases in energy demand will come from some of the presently least developed countries, resulting from a product of population increase and increase in specific energy requirement. Many of these countries are not only poor but politically unstable. Part of the overall package for requiting international debts of such countries might well include measures for helping towards energy efficiency—a matter of enlightened self-interest for all concerned. Climate change results from many factors, cosmic in the long term, and from more rapid trends affected by man’s control of the carbon cycle and of other pollutants, while historically cataclysmic changes have resulted from major volcanic eruptions and meteorite collisions. The linkages between pollution and global warming are highly complex, with expectations of gradual increases in understanding of the consequences in terms of local climate and its instabilities. Examples from California show that even the most self-indulgent countries (in energy terms) can provide leads to the rest of the world on measures in energy saving, pollution control and carbon-fixing, for example by afforestation. Nearer to home, we can take encouragement from the fact that our present administration (October 1997) points to Scottish and Welsh devolution plans, and the proposed Regional Development Agencies, as providing vehicles for co-ordinating the several strands of infrastructure development. Energy planning needs to occur in such a context to counter the short-term bias of the market. Most of this commentary was prepared in 1995, when the UK Government of the time appeared content to rely unduly on private initiatives to provide balanced energy demand and supply into the future. Hence, the emphasis of the account was given to a policy which would restore the balance between planning and market forces. One feature is yet more relevant today, when major expansions in particular renewable sources of power are being proposed; these require high energy inputs in capital terms and Figure 10.1 indicates practical limits in rate of growth. Energy is as essential to human happiness and prosperity as food, education and housing. It is also an essential component of economic development. Energy, therefore, as frequently emphasised in this report, cannot be treated separately from other fundamental issues—it is a vital component of financial stability and social order.

Reference Muir Wood, A. (1982) Proc. Inst. Civil Engrs., Pt 1, 72, 285–305.

Postscript Graham Mordue

This volume is the last to be published by the Watt Committee on Energy in a series known as Watt Committee Reports. It had always been the Watt Committee's practice that, as far as reasonably possible, these documents should represent a consensus of opinion among those responsible for the policy and management of the organisation— essentially, the members of the Watt Committee Executive at any particular time.

Consultation As the name ‘Committee’ suggests, the high points of the Watt Committee’s activities were its conferences, of which there were usually two or three per year. Initially, they were called ‘Consultative Council’ meetings; later, as the organisation became better established and opened its events to a wider circle, they were described as ‘Consultative Conferences’. The intention always was that, when the consultative process was complete, the information that had been assembled and the views adopted were to be made known through publication as a Watt Committee Report, and any recommendations were drawn to the attention of the Government or other appropriate body if that was thought to be useful. During my years as secretary, I used to say that one of the few certainties about the Watt Committee was that I could not be certain about what it would be doing 6 months ahead. It was a voluntary body working in professional circles concerned with energy, and its executive would act in what seemed the right way at the time, not necessarily restricted by rules or precedents. Thus, if the executive thought that the results of a particular conference did not deserve publication, they were not published; there were several instances of this. On the other hand, if work had been done without going through the whole process of consultation (conference-consideration-publication), it might be published outside the report series; there were instances of this too.

Objectives of conferences What usually happened was that the executive would decide the topic of a conference about a year before it was due to be held. A working group would be appointed, with a suitably distinguished chairman. Neither the chairman nor the members of the working group need already be connected with the Watt Committee; they were selected for their qualifications. Responsibility for running the conference and for any subsequent publication was largely delegated to the working group; contact with the parent body was

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maintained by representation of each on the other. Naturally the secretariat provided an active link. The key decisions were reserved for the executive, especially those concerned with energy policy considerations and with finance and management. Given the strong views that were often held, it is a striking tribute to the original concept that discussion was almost always sensible and constructive, leading to a consensus. Invited speakers at a conference were advised that their presentations should be informal and seek to stimulate discussion; written texts would be required afterwards for publication. The executive used to review the outcome of the conference and give a steer to the editorial process, to be conducted by the working group, which would lead to the publication of a report. Sometimes, to present a consensus, the authors of papers making up the volume were not named (although anyone who looked at the conference programme could tell who was largely responsible for each paper).

Reports of discussion At any conference, especially when its consultative character is well established, discussion is as important as the invited contributions. In the usual manner, therefore, a full report of discussion at a Watt Committee conference was prepared by the secretariat in concert with the participants. Finally, the agreed version of the report was considered by the executive and approved for publication—even at that late stage, further changes might be called for. A disadvantage of this consultative process was that it took a long time. In the present case, the process was not complete when the Watt Committee ceased to exist. Thus the contents of this report represent the individual views of the named authors, who had been the invited speakers at the conference on 24 February 1995. It is still the case, however, that after the conference the papers were reviewed both by the authors individually and by the editors, acting in the place of the Watt Committee Executive. In some parts, the rewriting was extensive. The secretariat, before it was dispersed, had made good progress with the report of discussion, but there was no way of submitting it to a consultative process. I take responsibility for the errors which are likely to have survived the editorial process, with apologies to those affected.

Anniversary project The first meeting of the Watt Committee on Energy was held in 1976. As an anniversary project, with a view to publication when the Watt Committee reached the age of 21 years, the Executive decided that it would be valuable to undertake a fairly long-term study of energy policy, both because of the importance of the issues and because it would stimulate discussion of further topics for possible study by the Watt Committee. After much debate, the title chosen for this study was ‘Energy Now and the Next Fifty Years’. It was a sign of the importance of this decision that the Executive decided on a longer

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process of preparation than usual for the intended consultative conference and subsequent report. The sequence of events was: • Seminar I (1 July 1994)—Energy resources and scenarios for the next half century • Seminar II (23 September 1994)—The impact of possible changes in living and working patterns on energy markets and demands • Seminar III (11 November 1994)—Energy policies • Consultative conference (24 February 1995)—Energy Now and the Next Fifty Years. The seminars and the conference were held at the University of Westminster and the City Conference Centre (Institute of Marine Engineers, London), respectively. Thanks are due to both bodies. To recount the history of the project in more detail, including the effects of the closure of the Watt Committee in 1996, would be of little interest now; but the surviving documentation and other material enables this report to include a summary of the proceedings of the seminars, which appears below.

Contents of this report The texts of the papers presented at the consultative conference, as revised by the respective authors, make up Part One of this report. Unfortunately, the texts of the papers presented at the seminars are not readily available. In any case, perhaps they would not have warranted inclusion in such a volume as this. Summaries of the papers presented at Seminars I and II are included, with reports of discussion. In the case of Seminar III, whose contents anticipated the shape of the consultative conference more directly, the assessment which I wrote for the Executive at the time is reproduced here with some explanation and amendments. A somewhat longer report of the presentation made by Professor Brinkworth at Seminar II is also available and appears to deserve inclusion. All this material constitutes Part Two.

Agenda for energy policy As this outline history of the project shows, the Watt Committee Executive and all those involved and the invited speakers and authors themselves were writing in the policy context of 1994–96. Issues that had been repeatedly debated in the Watt Committee were again rehearsed. Since then, there has been a change of government in the UK, and presumably it will take time for any new attitudes to emerge. As I write (Autumn 1997), the Government has, in effect, given itself 6 months’ breathing space in which to review the future of the British coal mining industry, to which this report makes various references. Its decision will presumably be influenced by its commitment to action on climate change. When the Watt Committee project started, the Rio de Janeiro conference of 1992 was still in people’s minds, whereas now the Government must wrestle with the national and international implications of the more recent Kyoto conference.

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Study of the report will reveal a number of other topics of permanent interest. These could constitute a preliminary agenda for the evolution of British energy policy in the next few years. Starting with coal, but in no particular order of priority, here is a personal selection: • future of coal • the dash for gas • the nuclear option • nuclear fusion • the hydrogen economy • national energy research needs • responsibility for research—government, independent research organisations, industry • education—the research cadre • education—the National Curriculum and, generally, teaching standards and the level of technical competence in society • energy management (in industry, commerce and the home) • fuel poverty • combined heat and power (CHP) • biomass • other renewable energy sources, especially wind energy and solar energy/photovoltaics • structure of the utilities • climate change • protection of the environment (this encompasses a range of energyrelated issues, such as vehicle emissions and clean coal technology) • energy use for transport (this includes many issues such as the technology of the petrol motor-car, the potential for electric vehicles and the development of public transport, including the construction of urban mass-transport systems) • international energy regimes • export of surplus energy • export of energy technologies • population pressures (national and world-wide). Energy resources and use are key factors for modern economies, whether they are the specific responsibility of a separate government department (as they still are in the USA) or not. It will be interesting to see how far the decisions made by the Government in the near future will meet the objective that the Watt Committee had set itself in 1994, that is, to identify now decisions whose effects will be felt well into the next century.

Part Two Background and Discussion

Social changes and energy markets Brian Brinkworth

To look ahead 50 years is to put ourselves in the position of someone in 1944 trying to anticipate today’s advances in technology and the accompanying economic, social and environmental effects. However, this brief introduction will give an opportunity for a wide-ranging discussion amongst people who represent a wide range of expertise. From the previous seminar in this series, it is clear that certain crude divisions of the world scene are necessary, namely, developed and developing countries: • Developed countries tend to be characterised by democratic government, relatively secure energy sourcing and technical expertise. Reaching a consensus is slow, and long-term planning is affected by relatively frequent changes of government. • Developing countries tend to be run by dictatorships, have large national debt, and can call on less technical expertise. Decision making may be quicker, but resources are lacking. These are the two extremes, but there are other permutations. The prediction of energy use is subject to different methodologies and inexact data.

Impact on the UK The main effect of social change and the evolution of energy technologies, according to current data, will be the effects of increased use of personal transport. Saturation point is thought to be at least 700 car owners in every thousand; at 400 car owners in every thousand, we in the UK are behind other industrialised countries and can expect a large increase. We are already suffering the adverse effects, such as congestion on roads and pollution. Influences on the future of living and working patterns will be governed by personal decisions and government regulation, which can be categorised simply as follows: Personal action Possible choices available are: • change of location—either out of the congested towns and cities, or nearer to them (to avoid daily journeys) • smaller vehicles • different vehicles requiring less damaging fuels, such as electricity or compressed natural gas • use of public transport

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• reduced mobility—by teleworking, teleshopping and perhaps telelearning. Non-personal options Among these are: • road traffic management • directives by central Government and by the European Union • road pricing • penal taxes on vehicles • carbon/fuel taxation. The feasibility of these personal and government actions will have to be assessed.

Domestic sector This is the second-largest sector for energy in the UK. Personal action Possible choices are: • Preference for a particular type of building • Location of dwelling/business • Energy management—Energy management has become a bona fide role within many businesses. Home owners have options for insulation and glazing (the technology is continuing to improve); others are heat-recovery systems and a variety of energy sources (architects are starting to consider passive solar energy in their designs). CHP may infiltrate the domestic sector in its gas-powered form. Photovoltaics and management instruments which override personal choice are other advancing technologies. Non-personal action The issues include urban planning, building regulations, energy rating schemes, and perhaps demand management rather than sales management by energy utilities.

Using data to predict the next 50 years There are a number of ways of using data to predict the next 50 years. Broadly, the following can be distinguished: • to disaggregate energy requirements to one individual and then project to larger numbers and perhaps ultimately achieve a world figure • to chart energy ratios of primary energy consumption to GDP.

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Since 1950 there has been a robust relationship between energy ratio and year. It is difficult to see the effect of other influences, such as the ‘save it’ programme, strikes, recessions, recoveries, interruptions, disappearance of smoke-stack technology etc. Economists tend to be attracted to this sort of analysis; but if a forecast based on the energy ratio were projected forward a further 40 years, it would result in the appearance of nil energy use! However, it does indicate that there is a desire to reduce energy use, and much of the credit for the relative reduction in energy use must go to the engineering community.

World population Increases in human population tend to be outside Europe and the West, where in some instances there is even a decrease. Improved communications mean that the developing countries are more aware of the different (and higher) living standards enjoyed in the West. The United Nations Population Survey announced that, because of the estimated increase in world population and therefore the increase in demand on resources, ‘the scale of adjustment required over the next three or four decades is perhaps the most formidable that humans have ever faced.’ The West cannot ignore the world scene. The combined energy requirements of the developing countries will overtake those of the West in 50 years. The measures we take to counteract the effects of our own energy demand will be important locally, but will have decreasing impact on a world scale.

Seminar I—Energy resources and scenarios for the next half century The following spoke briefly to introduce discussion: Professor Anthony Challis (Institute of Materials; Watt Committee on Energy) Professor John Chesshire (Science Policy Research Unit, University of Sussex) Michael Cooper-Reade (Environmental consultant; formerly Eastern Electricity) Lord Ezra (AHS Emstar) Professor David Hall (King’s College, London) Professor Cleland McVeigh (University of Westminster) Dr Gary Staunton (Energy Technology Support Unit) Professor Alan Williams (University of Leeds) Dr John Wright (Consultant; formerly Nuclear Electric)

Summaries of presentations and discussions Introduction Lord Ezra, opening the seminar, remarked that reviewing the past 50 years was a basis from which problems in assessing future energy issues might be extrapolated. He had joined the Coal Board in 1947. Catalysts for government and national action were: 1 Supply. Of the total energy traded in the world, oil represents 78 per cent, natural gas represents 18 per cent and coal represents a very small percentage because it tends to be consumed by its producers. Energy producers tend to be in the most unstable parts of the world. For example, oil and natural gas reserves are plentiful in the Middle East, and there are also large natural gas reserves in Russia and the other CIS countries. There is a constant lack of certainty. 2 Demand. Demand has been shown to be static in the West but increasing in the developing countries, such as China. 3 Prices. Oil prices are the most significant in the field of energy resources. In the 1960s prices were stable, but the 1970s brought an oil crisis to the West and triggered recession. After a drop in prices, the Gulf War again threatened supply and prices increased 4 Environmental factors. Three phases of perceived importance of energy saving since the 1939–45 War has been linked to shortage or high prices. (a) Post-war period—a shortage of energy supply.

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(b) Oil crisis of 1973–81. (c) 1980s–90s: Environmental concerns based on attitudes of biggest users, i.e. in the developing world. The advanced countries have an obligation to help the Third World to deal with problems of increasing demand and sustaining a healthy environment. 5 Structural change. The energy market is becoming more liberal, as shown in the privatisation of the British energy industries, increasing the importance of the role of the regulators. Another important factor will be the EU single market for energy. Energy scenarios Dr Gary Staunton referred to the energy scenarios published by the ETSU and especially to the proofs of methodology for scenarios and the underlying principles of the models. Data on costs and burdens/emissions were collated and validated by experts both within ETSU and outside. The inaccuracy of previous projections led to this attempt at providing a number of different scenarios with equal probability by applying the following economic forecast criteria: return on investment

15–18 per cent

high oil price

$45 per barrel

low oil price

$15 per barrel

The main scenarios were: • high environmental concern with nuclear energy • high environmental concern without nuclear energy • shifting sands—mimics oil price shocks. Particular years, such as 2010 and 2020, were not categorised as a scenario. Factors such as the use of coal or gas in combined-cycle gas turbine plants or the use of coal were added. The scenarios produced unexpected results. When environmental concern was the governing factor, there was found to be a reduction in landfill gas as less waste was produced. When there was a high environmental concern without nuclear energy, there were implications for land use because of the increase in energy crops. Prices were a determinant of the mix of technologies. He recommended the DTI ENERGY Papers nos. 61 and 62. Nuclear power and energy issues Dr Wright pointed out that he was expressing a private opinion with the benefit of his wide experience in the nuclear industry. There was not at present a discernible government energy policy beyond an application of market forces, with some deviation to take into account the non-fossil fuel obligation as decided at the World Energy

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Conference at Rio de Janeiro. Although an adherence to market forces would weed out development in impossible technologies, it would not necessarily guarantee that the necessary funding would be forthcoming for such long-term concerns. An unfortunate and unforeseen effect of the privatisation of the electricity industry was the decimation of the British coal industry. A national plan was another alternative, but the Wilson government’s national plan in the 1960s was a disaster. Any such plan must be flexible. The ETSU scenarios might well be a good way of looking at possibilities. Self-sufficiency in energy might be seen as another national policy option. That would result in a greater emphasis on coal, renewables, conservation and nuclear power. Considering the global environment and the growth of world population, he suggested that the increase of living standards in the developing world would cause a great increase in demand. An increase in CO2 levels was already traceable. Increased use of renewables and massive nuclear energy programmes might not be enough to reduce the current CO2 level. That raised the moral issues: how far should we be trying, and how important was the UK contribution? Job creation could be a national objective. Whether the jobs would be profitable jobs was the main problem. That objective would emphasise British Coal, manufacturing industries and renewables. There was a number of possible energy policies from which to choose. A statesmanlike approach was needed in order to arrive at a crossparty consensus for such long-term decisions. When looking now at the hard figures, the question would arise of how much we would be prepared to invest today in order to achieve a long-term goal. Investment in nuclear power might not be seen as a good investment in purely economic terms. A benefit of nuclear energy was that the cost of uranium was a small factor with nuclear technology. It would be a clean technology, although further investment and research were needed. Other energy sources, especially the role of clean coal technology Professor Williams said that coal was the obvious means of creating energy in the UK, except that its high sulphur content had implications for pollution. The application of new technology to filter the emissions would be an expensive option because of the old infrastructure. Carbon dioxide was now seen to have proportionately less influence on the greenhouse effect, and methane was more significant. Between 1989 and 1993 there had been a 90 per cent decline in the British coal industry, with a corresponding 20 per cent increase in coal imports. The decline of the industry was partly due to the greater use of CCGT plants in power stations, which was likely to continue. The electricity industry would rely on gas and on imported lowsulphur coals to a greater extent. The domestic and industrial markets for coal had declined. In July 1994 there has been six collieries in operation in the UK, with an output of 30 million tonnes, as opposed to 70 million tonnes in 1987. There would be even fewer in the future. The dynamics of privatisation were a threat to research into clean coal technology. There might be a resurgence of the British coal industry by 2010; but there would need to

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be technological innovations to reduce further pollution from coal. The DTI had published its Energy report in June 1994 and had also announced the setting up of an advisory committee on energy. There would be a growth in natural gas consumption in Europe. Sources in the North Sea would need to be supplemented by imports from unstable countries (such as Nigeria). Developments in engineering in the large gas turbines for CCGTs would take place within defence technology. But nuclear energy would inevitably become the major power source if fossil fuels were to continue to be accepted as the causes of increased CO2 NOx and SOx levels. IGCC would still produce CO2, notwithstanding the reduced NOx and SOx emissions. However, that technology could not by itself meet the demand due to predicted world population increase. He referred to the decision, due to be made by the DTI by the end of March 1995, on the future of the British nuclear industry. To investigate the future of semiconductors and other advanced technologies, the Office of Technology had initiated the Technology Foresight Programme. Role of energy efficiency Professor Chesshire said that, currently, government energy policy was the clearest since 1967—it was a policy based on market forces. In any energy policy, the essential elements to consider would be the relative importance of: • consistency of supply; • sustainability/environment—the Rio summit had defined sustainability as ‘giving weight to the future’; • competition/market forces—competition brings with it a greater element of risk, but private enterprise runs away from risks and high discount rates. Energy efficiency, he said, involved key uncertainties. With regard to the constraints of cost-effectiveness, there was a case for maximising the take-up of cost-efficient options in order to boost both welfare and competitiveness. Power generation in the next 20 years would see the greater use of CCGT technology as current plant was replaced. The question would still remain: how would the total energy demand be reduced? Economical use of coal would not necessarily lead to less use of coal. Take a domestic example, he suggested: if you reduce the price of lighting (e.g. by introducing more efficient light bulbs), there is likely to be a corresponding increase in energy usage, either directly by increasing the number of lights or by producing a greater amount of disposable income for increased energy use elsewhere. Increased energy efficiency would not necessarily mean decreased energy use. Energy demand in the UK over the last 20 years had remained stable. During the period 1973–94, energy use had not increased in line with gross domestic product. Manufacturing over the same period had declined by 25 per cent. In the coming decades there would be an increase in the use of CCGTs with increases in structural and technological change. There had already been a massive modal shift in transport from public to private.

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The regulators were intended to encourage increased competition, leading to downward pressure on costs, i.e. to lower energy prices. It could be argued, therefore, that the UK was deliberately misusing scarce national resources by overinvesting in supply and underinvesting in consumption. Discussion Professor McVeigh, in the Chair, referred to scenarios and assumptions provided by ETSU, the Directorate General for Energy of the Commission of the European Communities and others. Professor Williams mentioned that the Institute of Energy had produced a scenario. Professor Chesshire said that there had been no real comparison of scenarios, but scenarios in general would tend to overshoot. There was little recognition of the capital stocks required to achieve results. The World Bank would presumably remain the primary lender to the Third World: currently as much as 50 per cent of its lending was to the energy sector and, according to the World Bank, that would be not sustainable—i.e. there would have to be more funding of social factors. Dr Staunton said that in 1979 the DTI had tried to identify constraints. New technologies were needed, but capital was scarce for such investment. Professor McVeigh said that the 200 years 1850–2050 had shown and would show waves of different energy technologies, with various social and environmental effects. In 1984 there had been a projection of 60 per cent gas input into energy supply; 2050 was likely to see a decline in the use of oil, coal, gas and hydro, with an unknown element of renewables and nuclear energy. The World Energy Council’s ecological scenario produced similar results, but with a different emphasis on the nuclear element. Mr Cooper-Reade, agreeing with Professor Chesshire that regulation was geared to keeping prices down, pointed out that that should not necessarily mean less efficient use of energy. Dr Wright thought that, taking a world view, current fossil burn would mean that the CO2 level in the atmosphere would increase, although that might not be the threat it was once thought to be. In 2030 the world population might well have grown to 8 billion people. Energy use per capita by the developing world could increase by 3 per cent per year, including a doubling of the present usage levels of fossil fuel. For energy efficiency, stable government was necessary; some countries, such as China, were not primarily interested in energy efficiency. Mr Kejun Dong (a research student) said that he expected to take part in energy planning in China. Global warming was not just a regional issue. In China, coal would be the main energy source. During 1980–90, GDP grew by 9.5 per cent each year; in 1986– 92, by 3.6 per cent. By the year 2000, there would be 724 Mt of energy consumption, rising to 1,780 Mt in 2025. Those predictions did not include new technologies, so China would need help from the West, especially from the UK, which had 200 years’ experience in coal technology.

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Electricity—the common energy currency Mr Cooper-Reade said that Eastern Electricity was rapidly becoming an energy company, rather than an electricity company, as it moved into gas supply and combined heat and power. He could speak as a representative not only of an electricity company but also of a company with interests in other forms of power generation. Western society used electricity for basic needs such as light, heating, water and hospital services, so it was worth noting that only 50 per cent of the world’s population had access to electricity. The developing world would expect sufficient electricity for growth. Perhaps electricity would be the only means; electricity was a flexible and convenient way to convert indigenous energy sources, such as biomass, chicken manure and straw burning, into power. Electricity would be especially useful for this purpose in the developing countries, such as India, if there were a network for central generation or local generation (forming hubs), opening the way for combined heat and power plants and even intercontinental links. Pollution could be controlled by having centralised power generators where technology could be kept up to date. That would be especially important in places that must rely for resources on pollutants such as coal. Electricity could provide the conditions for improvement in living and working conditions, increased productivity and reduction of emissions; for its application to transport advanced batteries were being developed. Discussion Mr Cooper-Reade, in response to a question, added that fuel cells had been found to be either very efficient but also very expensive or inefficient and cheap. CCGT plants were a more effective way of using resources. There was a public perception of danger from power lines, but that had been proved to be insignificant. Professor Chesshire pointed out that, where two or more industries were in competition, more funds might become available for research and development; by contrast, where there was a captive market, research funds would be less. If electricity were to create a captive market in the developing world, therefore, there might be cause for concern. Professor Hall said that the use of biomass as an energy resource should be actively encouraged. At present, there was an unfavourable bias of subsidies to other energy forms. Subsidies should be given to farmers to encourage the 3–7 years’ investment needed for biomass; setaside land could be used for this. In the USA, the growth of biomass now contributed 8 MW to electricity supply. Mr Fraser Ferguson (Institute of Energy) saw a danger that the UK would drop behind the USA, Japan and even the European Union in initiating environmental programmes—in some instances, resisting targets set in Brussels. That could mean that the UK would miss the boat in the development of new energy technologies; that could be harmful for British Industry. Professor Williams replied that the Office of Science and Technology, hoping to improve the situation for industry, had set up a subgroup for the environment. The ‘key

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trends’ to be investigated were: • legislation and regulation • efficiency/conservation (fuel switching) • pollution (especially transport) • nuclear power. Thus the group would also monitor technological advances in terms of products that could be manufactured by UK industry. Examples might be intelligent meters, fuel cells, domestic air-conditioning, hydrogen transmission and superconductors. Mr David Milborrow (British Wind Energy Association) referred to the UK wind power industry. There was a potential for investment and development, but the attitude of government, he said, was unenthusiastic. There was a trend towards distributed generation—small local power sources—and the USA was funding studies of that technology. A speaker remarked that the amount of methane produced by two cows was equal to that produced by one car. Professor Challis, taking the Chair for the next session, described his interest in the field of polymer engineering. His career had continued as Government chief scientist. He now represented the Institute of Materials on the Watt Committee, of which he had become deputy chairman. Biomass as a modern fuel Professor Hall delivered a presentation on biomass energy, especially in developing countries. Biomass, he said, was CO2 neutral and produced no pollution. In Europe and the USA, where environmental issues were determining factors, the use of biomass energy was increasing—at present, it produced about 13 per cent of the world’s energy, making it the number 4 energy source for the world and by far the largest contributor of renewables. It had been reported in 1992 that, by 2050, some 60 per cent of electricity would be generated from renewable energy sources—wind 28 per cent, hydro 14 per cent and biomass 17 per cent. The demand for electricity would be likely to increase dramatically by then. Biomass energy would be produced by improved technology in the forests and plantations of North America, Latin America and Africa. Forests, increasing in temperate zones, would not only provide potential for fuel but also act as carbon sinks. New technologies would use biomass gasification to run CCGT plants. Ethanol could at present be produced from sugar cane in Brazil and corn maize in the USA, at the rate in Brazil of a quarter of a million barrels of oil equivalent per day, creating a million jobs at the same time. A World Bank analysis had shown that the costs of biomass production compared well with other renewable energy sources, such as wind. The cost using biomass in gasification and CCGT systems was between $2,500 and $3,000 per kilowatt electric. The driving factors for biomass in Europe were environmental considerations, employment and agricultural considerations, for example setaside land and subsidies. Biomass already supplied 3–4 per cent of all energy in Europe and a similar amount in

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the USA. In Western Europe, that was equivalent to a million barrels of oil per day. In Sweden, he said, biomass was used to fuel a new 15 MW CCGT system for $45 million; in total, 16 per cent of Swedish energy was supplied from biomass in combined heat and power plants with capacities ranging from 2 to 125 MW. In Denmark, fifteen CHP installations were fired by straw and wood chips. An increasing technology was combined coal and biomass. In Austria, over 10 per cent of energy came from biomass using 1200-MW plants. In OECD Europe, $142 billion was paid to farmers in subsidies (including EU subsidies and those from national governments). The potential for biomass production in OECD Europe by 2050 would be between 17 and 30 per cent of energy production, using 10 per cent of usable land or 33 million hectares (the whole area of the UK being 25 million hectares). As between one third and one half of agricultural land in Europe had become surplus to agricultural requirements, 5 million hectares of set-aside land was now available. In the USA, there were 35 million hectares of surplus land with a potential for biomass production. Evidence showed that biomass technology would create jobs. The costs involved tended to be in the harvesting, chipping and storage of biomass material. As to the environmental aspect, biomass need not depend on single plant species, such as wall-to-wall conifers or maize: it was possible to plant mixed species. For the continuing sustainable growth of biomass technologies, guidelines should be set out by regulatory bodies, with a policy of subsidies and a level playing field with other energy sources and with agriculture/forestry. Discussion Dr Staunton, in a short discussion about hot-rock technology, i.e. the recovery of heat from geothermal sources and aquifers, said that experiments in Cornwall had been inconclusive, but that technology might not be economically viable. Professor Hall maintained that small-scale biomass plants (2–50 MW capacity) would be more efficient and sensitive to local conditions. Professor Challis added that there were 40 or so landfill gas schemes in the UK; those were small schemes and could be viable because the National Grid provided a system that only required short feeders. The two means of using landfill for energy were incineration and anaerobic digestion. Professor Hall, in further discussion, argued that the NFU biomass committee could help farmers to find out more about biofuel technologies and the regulations related to set-aside. French farmers had lobbied the authorities for permission to use set-aside for ethanol-producing rapeseed oil. However, often the better option was woody biomass—a perennial crop. In Sweden, there were 18,000 hectares of short-rotation coppice. A water research centre in the UK was engaged in utilising sewage sludge for short-rotation coppice. Particulates were the biggest problem in biomass waste, herbicides being biodegradable within 3–6 weeks. Mr Cooper-Reade pointed out that, under the NFFO, subsidies were available at a fixed rate to support biomass. Mr Ferguson asked whether biomass technology was affected by advances in genetic engineering.

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Professor Hall replied that the production of one tonne of biomass now required the use of 300–600 t of water. Wheat yields had trebled since 1945. He added that, in Denmark, Sweden and the USA, there had been trials of the combined coal/biomass technology; but in the UK, only biomass residues were at present available. In developing countries also there was progress in the use of biomass. Professor Challis pointed out that climate change—i.e. the tendency to global warming—did not necessarily go along with the increase in agricultural productivity. Professor Hall added, in reply to a remark by Professor McVeigh about the use of a satellite link by farmers equipped with an ordinary personal computer, that satellite technology was now applied to a global fertiliser use system, increasing the efficiency of use and decreasing pollution. Technology Foresight Programme Professor Challis spoke briefly about the submission to be made by the Watt Committee to the Technology Foresight Programme of the DTI. The main points were: • to identify major issues • to identify markets resulting from these issues • to identify products that would be required • to develop optimum technologies. Yet, he said, in the UK, research and development (R&D) were being closed down in many traditional areas, making it more likely that opportunities for successful R&D would be lost. Professor Chesshire said that privately owned industry, including newly privatised companies, was cutting back on R&D as on other costs. The national governments of the OECD countries were also reducing their expenditure on R&D. At the same time, the EU was applying the principle of subsidiarity as a reason to cut back on its R&D budget. Mr Ferguson said that, inevitably, limited sums had to be earmarked for research programmes. With regard to coal-based power systems, an efficiency of 44–45 per cent could now be achieved. Turbines were now being built by Germany, Japan and the USA rather than in the UK. An area in which the UK had a contribution to make was retrofitting of generating plant. The Lurgi system developed by British Gas was a simple, clean, quick and cheap method of gasification without producing sulphur emissions: a plant of this type should be available to show the advantages. The Topping cycle, he said, showed a 2 per cent thermal advantage over CCGT. Mr Cooper-Reade thought it unlikely that the electricity industry would contribute to research on clean-coal technology. Development of electric vehicles would be more likely. Professor Challis thought that it was also unlikely that the privatised coal industry would meet the costs of research. Dr Wright believed that experience had shown that regular funding of research could produce solutions to problems as they arose, as well as producing new technologies and appliances. In the CEGB, that had been shown to create a cost benefit of around 10 times the amount invested.

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Professor McVeigh suggested that the reason why universities were unable to fund enough resources for research was that they were funded by the Government, but there were not enough scientifically trained people in positions of power. Other contributors pointed out that, in the UK, the Government provided less than 20 per cent of the funding for research. In some other countries—such as Denmark and Malta—even if they were comparatively small, there was more official encouragement. With a view to better understanding of the need for research, there were programmes of lectures to industry on scientific and technical subjects. Nevertheless, the fact was that, since privatisation, research levels had been reduced. Mr Ferguson said that, since as far back as 1964, he knew of evidence of difficulties in providing for technical competence in the training of government administrators. For that reason, it was less likely that scientific innovation would be encouraged. Mr Staunton pointed out that, on the other hand, there was now the benefit that the DTI had appointed the Energy Advisory Panel, on which science was well represented. Professor Challis from the Chair, stated that the Watt Committee, in its submission to the Technology Foresight Programme, would include representations regarding the need for support of R&D.

Seminar II—The impact of possible changes in living and working patterns on energy markets and demands The following spoke briefly to introduce discussion: Professor Brian Brinkworth (University of Wales, Cardiff) Michael Crabbe (University of the West of England) John Coppinger (BT—Corporate Energy) Sydney Fremantle (Department of Trade and Industry) Glyn Fullelove (Arthur Andersen) John Laker (London Buses Ltd) Mark Rigby (PowerGen plc) Michael Roberts (Past President, Institute of Energy)

Summaries of presentations Social changes and energy markets Professor Brinkworth made an introductory presentation (see papers included in this volume: Part One, Chapter 2, and Part Two, supplementary paper: Social changes and energy markets). European energy charter and possible consequences for Eurasia Sydney Fremantle (Department of Trade and Industry) described the steps that had led to the signing of the European Energy Charter by many countries, both in Europe and from other parts of the world, and the objectives that it should serve. The following is a summary of his presentation. The Charter was developed from ideas discussed at the Dublin summit of the European Community in 1990. It was intended to capitalise on the complementarity between the resources of the Soviet Union and the technology of the Western nations, and was largely developed by the UK, Germany and the Netherlands; the USA and other countries of the Organisation for Economic Co-operation and Development had also recognised its potential. In June 1991, proposals for the European Energy Charter were published. Five working groups were set up to consider: • politically (rather than legally) acceptable proposals • terms for a treaty • energy efficiency

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• nuclear energy • oil and gas. The former Soviet Union’s problems included inadequate accounting procedures, defective appreciation of costs and values (e.g. drilling wells which produced less energy in the form of oil than was needed to separate the oil from water) and, in district heating, the loss of more heat from the streets than was supplied to domestic consumers—the cost of energy was included in the basic rents. The European Energy Charter was seen as a way to introduce a market economy, to develop efficient production and to encourage entrepreneurship. The Charter has a governing body, with a secretary-general, whose duties are defined in the Charter. The costs have been provided for. Generally, the objectives of the Charter are to reconcile the Soviet Union’s resources with Western technology. In more detail, they are as follows: • The Charter should help economic recovery of the countries of the Soviet Union, whose economy was in decline in 1990, with a danger of civil war. For the West, the large stockpile of Soviet nuclear weapons presented a threat unless regulated. • Large-scale aid seemed inappropriate for a country with vast resources and an intelligent educated population. The aim, therefore, was to help Russia to help herself. • The rule of law was essential, especially for the operations of smaller companies—large multinational organisations (such as Exxon) could negotiate directly with the Russian decision makers. • The standards of a market economy should be introduced, and relations between the former Soviet Union, the West and Eastern countries should be improved. The adoption of the Western culture of enterprise hinges on the protection of investors. Foreign investors should receive the same treatment as domestic ones. Proper means must be provided for the settlement of disputes: this includes international arbitration. The Charter Treaty broke new ground. It was the first major agreement between Europe and the former Soviet Union, the first international trade agreement between them and the first multilateral treaty to provide international arbitration. In itself, however, the Treaty was not enough. Political stability is necessary if inward investment is to be encouraged. The totalitarian language of Russian statutes left much leeway for governments to behave as they please. Thus the West must be tolerant when, for example, there are occasional inadvertent breaches of the Treaty. The potential for the exploitation of resources can be summarised as follows: • Gas—there is little potential; more gas is likely to be produced by the Asian states. • Coal—the reserves (as is usually the case in coal-producing countries) will be largely used in Russia. There will be no new coal markets there. • Oil—this resource has been overexploited. Investment in technology may lead to reduced oil use. • Hydro-electricity—there is great potential for development, especially in the Asian republics, provided that there is adequate development of long-distance transmission technology. • Nuclear power—Russia is unlikely to close nuclear power stations, as at the moment

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they are responsible for a large proportion of energy production. There is, however, great potential for the development of energy efficiency and related industries. In time, this will enable Russian power prices to approach world levels. EU policies and the large electricity generators Mark Rigby (PowerGen plc) spoke on the energy policies of the European Union and the large British electricity generating companies. In 1993–94, he said, the pricing structure in the UK was based on the role of coal; by 1997–98, that is likely to be replaced by a fuel portfolio. Future reductions in the use of energy were likely to come about as a result of social reasons—such as low population growth—rather than increased energy efficiency. From a supplier’s point of view, therefore, there was little prospect of increased energy demand in the UK; suppliers would look to export their products. Overseas links would become more important. Electricité de France (EdF) currently operated as an energy monopoly in France and was also exporting energy to other countries, such as the UK—for which it received a substantial subsidy. The energy trade flow in Europe tended to emanate from France, which was the central node of any potential single European energy system. It could be that for some countries, such as the Netherlands, it would be more advantageous to import electricity than to produce it themselves. British energy companies faced a dual message from the Department of Trade and Industry. Open trade was advocated, but at the same time the DTI favoured trading arrangements which tended towards the opposite. Meanwhile, other European countries, such as Germany and France, were vigorously opposing moves towards competitive market rules they wanted a system of unique buyers that would keep their control of their nationalised industries. There was a market for excess energy produced by the UK, but the existing structure of energy supply within England and Wales did not allow for export. International trade in energy Mr Millborrow (BWEA) wondered whether the European Commission might take action regarding Electricité de France (EdF). As a corollary, perhaps Sizewell C should not be built. Mr Horn (consultant) pointed out that, in France, EdF had a monopoly on both import and export. It could block the sale of energy by say National Power to a French customer. It controlled the power links between the UK and Europe. The French minister for power had commissioned a study of this monopoly (in 1994), but it was a smoke-screen to prevent action by the European Commission and Germany. The UK should think in terms of a unified market. Mr Rigby thought that any model without EdF would be hypothetical. There was no automatic right of access to the cross-channel link. Mr Glendenning believed that there was nothing to stop any other supplier building its own link.

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Professor McVeigh said that the UK Government had opposed a link with Europe when the oil companies suggested the idea some time ago. Mr Horn added that there was an opportunity to provide management skills as well as technology to the former Soviet-bloc countries. Mr Roberts agreed; his case study (see pages 141–142) was an example. There was already German investment in the Czech Republic. Mr Fremantle remarked that, when capital was invested in the former Eastern bloc countries through the World Bank, it could end by being administered by the same officials who might have been those of the former regimes. Financial backing of the natural entrepreneurs in Eastern Europe could be a more effective way of encouraging a market economy. Tax allowances—help or hindrance? Glynne Fullelove (Arthur Anderson) referred to the introduction of the Petroleum Revenue Tax (PRT) in 1975 at 45 per cent. For some years it had proved to be an effective energy tax. PRT was applied to the profits from individual oil fields. In 1974–82 there was a rapid escalation in oil prices; by 1982 the rate had risen to 75 per cent, in addition to royalties etc. There had been a widespread debate. Was there a fair balance between government revenue and the encouragement of development of British oil reserves? In 1983 North Sea Exploration and Appraisal Relief was introduced to offset the large tax expenditure by the oil companies and to encourage further exploration and development. That balance of taxation and exploration was then affected by a drop in oil prices, however; the price reached a low of $8 per barrel in 1986, which resulted in a fall in government revenue. By 1992/93 the revenue balance was such that the Government was having to make repayments of PRT rather than collecting it. The Exploration and Appraisal Relief was therefore abolished, and PRT (now reduced to 50 per cent) was levied only on profits from new fields. The benefits of that example of tax and allowances were that there was a source of high government revenue and that exploration was encouraged; but evidently it was difficult to achieve the correct balance. Outlining the profile for investment, he pointed out that, in any major energy investment, such as a power station, the first stage was 3 years of payment with no return. Thereafter income would increase. Three patterns could be distinguished: • In the case of a foreign investor, the first 3 years would bring no tax relief, either in the UK or in the country of origin. Therefore 5–7 years would be needed to recover the initial expenditure. • In the case of home investors, such as power companies, at the point of commencement of trade tax losses would be crystallised; initial costs would be recouped after 3 years. • Major protected companies, such as PowerGen and National Power, would actually recoup their initial costs within the initial paying period of 3 years.

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Energy impact of teleworking in the twenty-first century John Coppinger (BT plc, Building Services) pointed to the great advances in telecommunications in the half-century up to the present. Future advances would be no less remarkable. For instance, advances in the technology of optical fibres would probably enable the information super-highway to be installed rapidly. Patterns of work would be affected; they would not necessarily conform to the sedentary image of working at home. A possible example would be software development. More dynamic methods of work would continue to evolve, he suggested. Possible examples were: • the telecottage as a high-capacity base, equipped with the latest technology • the car as a work-base • the sharing of office desks (the hot desk) • the provision of business facilities within hotels, garages etc. Some travel would still be required, but the new ways of working would be more economic if journeys were shorter and fewer. In recent years, with a background of recession, change had been brought about by the need to reduce costs rather than by environmental concerns. The trend had been towards convergence of information technology. Telecommunications, computing, television, video and consumer electronics would all become more accessible from a reduced number of units. The process had begun by 1990 and was well under way in 1995; by the year 2000 such facilities were likely to be increasingly fully merged into a broad-band network. He expected an increase in the clarity of visual communication systems. For example, improvement in the human factor would enable greater use of conferencing systems. As improving electronic communications would lead to their greater use, other elements would have to be considered. He argued that flying to New York and back was equivalent to 5 weeks of telephone communication; a 20 km car journey was equivalent to a telephone conversation of 21 hours, but people might prefer the journeys. It should be expected that commuter travel and logistical transport (i.e. moving stores and equipment) would be largely by rail. Business travel would be largely by car. Teleworking would reduce both commuting and business travel. Energy use in buildings was responsible for 40 per cent of CO2 emissions; only 8.5 per cent was due to travel. In BT, a response to these trends was a reduction in staffing levels. An initiative called Workstart 2000 was aimed at maximum usage of corporate buildings—60 per cent—and recent studies had shown that as a result energy use would increase by 10 per cent. It was expected, on balance, that BT would make considerable savings. Outlook for urban transport John Laker (London Buses Ltd) described the adoption of light railways (tramway systems) for urban mass transport. The private motor-car demanded a major system of public motorways. Instead, cities in both England and California, for example, were turning to light-railway systems.

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In the future, he thought that road pricing for vehicles would be likely. Meanwhile, in the short term, the best means of urban transport was the bus—the public motor-coach. Small buses, i.e. from 16-seaters to 30seaters, had become more widespread. Another change was to low-floor buses. In Essen, in Germany, guided buses (rather like trams) had been introduced. The trolley-bus (taking electricity from overhead wires but without rails), once widespread in the UK, was not now economic here because the initial cost of importing the vehicles was prohibitive. For the foreseeable future, therefore, most buses would have Diesel engines - although in the USA compressed natural gas had been tried (rape seed oil as a fuel had been largely discredited). The way forward for public transport, however, was the light-rail tramway system. Cities in California had shown the way (as well as many cities in Continental Europe). Manchester was introducing one; those in nearby Bury and Altrincham were set to expand. Sheffield’s super tram had proved popular, justifying the investment of £240 million. Other interested British cities and towns included Birmingham, Bristol, Croydon, Leeds and Nottingham. In the light-rail systems of Cardiff, Chester, Cleveland, Edinburgh and Glasgow, steel wheels would run on steel rails; they were to use electric traction with high-standard light vehicles. The popularity of these systems was based on convenience (with frequent stops); they were economical and more reliable than buses; they were compatible with pedestrianised areas; and they could be conveniently installed above or below the main railway system. They could carry 250 people in a single train—the equivalent of five double-decker buses. The ticketing system could be managed separately, so that tickets were purchased at stops and elsewhere, rather than on board. The comparatively modest cost was within the scope of local finance. Such systems could be found, for example, in Paris, Nantes, Melbourne and a number of German cities. But many further extensions to metro systems were unlikely, except for third-world cities such as Bangkok. There were one or two examples of monorail systems, but generally monorail was unsuccessful. Education and training for post-industrial society Michael Crabbe (University of the West of England—TEMOL Project) said that, for success, energy education must be relevant to careers and industrial development. It must include, for example, both technical functions and process management. Partnerships between industry and educational institutions were developing. It was essential to deliver the right information and to expose the sources to the right market. Satellite broadcasting across Europe was an example of the many ways in which information technology had become essential to education. He drew attention to the wide range of courses on energy management now available at many levels, including National Vocational Qualifications. Course development for the future would depend on the necessary resources. It was satisfactory, for instance, that the Commission of the European Communities—DG XVII (the Directorate General for Energy) would provide funds for developing an energy management course.

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Achieving change in Eastern Europe Michael Roberts (Past President—Institute of Energy) spoke on the prospects for achieving change in Eastern Europe. He provided a case study, carried out recently in Kromeritz, near Brno in the Czech Republic, which was famous for glass production. An important factory making motor components, mainly for Skoda, was Pal Magnaton. A district heating scheme was provided by the factory, and its 21 customers were each represented on the Board. The system was run from one large boiler house and was gasfired. For these customers the fuel was effectively free. As a result of recommendations by consultants, gas prices were introduced over the period of the study, i.e. 1991–92, at 10 p per therm. Even this modest sum caused a high shock. The average annual wage was less than £1,000 per head for skilled industrial workers. The consultancy recommended decentralisation of the energy system. The district heating infrastructure (which utilised steam) was old and inefficient; it was therefore decided that it be dismantled. The population was educated, enthusiastic and enterprising, but was plagued by primitive practices. Overmanning, and often oversupply of heat, were other problems. Amongst this inefficiency, there were pockets of excellence, such as a highly efficient paper-making factory, which could be favourably compared with any in the West. The managing director of the factory found it difficult to adjust to the concept of energy pricing and was even unable to ascertain who should be charged. For example, it was unclear who owned some of the blocks of flats to which energy was supplied: the tenants, the community or the State. It was decided to charge the factories first. This was accompanied by introducing basic energy management. A tariff structure was suggested - converting the losses involved in delivery to particular end-users into standing charges, heat being sold thereafter at a standard rate. The difficulties of introducing the new energy efficiency measures were shown at the launch of the scheme. Existing customers were invited and the scheme was explained. A few customers decided against joining the new scheme, but most were satisfied and the initiative was considered a success. A key aspect was the setting up of an energy steering group. The scheme was designed and implemented within 18 months and saved up to 2 tonnes of coal per head of population. There was great potential for similar energy management measures throughout Russia and the other Eastern European countries, argued Mr Roberts.

Discussion Education Mr Horn pointed out that, in England and Wales, Colleges of Education had been removed from the control of local education authorities and wondered whether they

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would still undertake energy studies. In his experience, the Energy Efficiency Office was not very helpful. Professor McVeigh said that, at Glasgow College, an energy audit had been provided by AHS Emstar, which had installed a new energy management system. Mr Crabbe said that the University of the South West was interested in energy saving, if not in comprehensive energy management. Dr Kotas mentioned the scheme funded by the DTI to handle enquiries from educational establishments. Professor McVeigh thought that, in energy surveys, it had been found that many educational establishments were overheated. Mr Ferguson said that performance contracting could be very effective, the contractor who improves energy management in an organisation being paid from the savings achieved. Biomass Professor Brinkworth, comparing a biomass scheme with the use of mains electricity, thought that, if the costs of a biomass fuel were below $40 per tonne, it could be competitive; but liquid biomass fuels were likely to be uncompetitive. Teleworking Mr Coppinger said that it was not easy to see whether BT would benefit overall from the adoption of teleworking. Professor McVeigh calculated that, bearing in mind the cost of public transport to work, the home worker would use 40 times less energy. Mr Ferguson wondered whether, in a future when so many processes were greatly speeded up by technology, there would be time for thinking. Transport Mr Laker added that, with the bus systems, energy consumption increased in urban areas. For example, the fuel consumption of the Routemaster bus was at the rate of 9 miles per gallon. Now that, on privatisation, the electricity supply industry had been divided into some dozen organisations, the prospects for research into increased fuel efficiency in urban transport were more limited. Electric vehicles Mr Cooper-Reade spoke briefly about electrically self-propelled vehicles, which were encouraged by Californian energy efficiency legislation. Peugeot had produced vehicles for city-centre use, but their performance was limited; of course, they produced zero emissions. Ford were conducting research on state-of-the-art battery-powered vehicles. There were anxieties, he said, including the environmental impacts of various types of fuel: a petrol- or Diesel-powered vehicle emitted significant amounts of pollutants,

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whereas an electric vehicle produced none. Electric vehicles would significantly reduce pollution and noise levels. The technology of batteries was advancing, but nickelcadmium batteries were still expensive, whereas sodium-sulphur batteries were somewhat cheaper. Mr Ferguson commented on the comparison between electric and hydrocarbon-fuel vehicles. For the generating plants on which electric vehicles ultimately depended, what fuel mix should be assumed? MrCooper-Reade replied that the average power station mix for the UK and Europe was 30 per cent gas, 25 per cent nuclear and 40 per cent coal. Mr Glendenning pointed out that increased efficiency was driven by costs. Should the policymaker intervene, and if so, how? Mr Fremantle thought that policymakers should not intervene. Environmental costs were very difficult to calculate. Eastern Europe Mr Glendenning referred to Mr Roberts’ talk about Eastern Europe. Good management was necessary to implement energy efficiency. Professor Challis remarked that the concept of ‘the polluter pays’ would have a real impact on costs. Summing-up Professor Hall said that it was sometimes predicted that electricity demand would go up threefold by the middle of the twenty-first century, but the demand for heat and liquid fuels would level off. Professor Challis, summing up, detected two main threads in the discussion. First, over the period of 50 years, which the Watt Committee had decided to look at, the pressures for change would be enormous. Several important factors had been touched on, but it had not been easy to make forecasts. The presentations and discussion had expressed a general view, however, that to think about the possibility and the consequences of change was vital, even though forecasting would tend to be wrong. Secondly, from what had been said, it was apparent that, in the energy professions, not enough thought had been given to human behaviour and motivation. Public perception would be important to the implementation of any fundamental changes to the use of power systems. There was a distinct role for education in energy management and technology and in the related areas of ecology and the environment.

Seminar III—Energy policies The following spoke briefly to introduce discussion: Professor John Twidell (De Montfort University, Leicester): Sustainable energy technology Dr Peter Flowerday (Conoco Europe Gas Ltd): Competition as a concept Martyn Hill (British Gas plc): Gas as an example of competition in international energy trading Dr Francis McGowan (University of Sussex): Effect of liberalisation on energy efficiency and the environment Dr David Elliott (Open University): Energy education and training for new social market patterns Dr Stephen Nicholson (East Midlands Electricity): Issues of Policy for a Major Utility Dr Tadeusz Kotas (Queen Mary and Westfield College, University of London): Energy analysis and the role of the E Group Professor Michael Laughton (Queen Mary and Westfield College, University of London): Summing-up The Chairmen were: Professor Anthony Challis (The Institute of Materials; Deputy Chairman, The Watt Committee on Energy) Professor Cleland McVeigh (University of Westminster).

Discussion of energy policies—a personal assessment Graham Mordue The underlying purpose of Seminar III was to set the scene for the consultative conference, which followed some 3 months later, so there was not enough time for the presentations made at this seminar to be properly prepared for circulation at the conference, even in summary. Naturally, the Watt Committee concentrated on the papers presented and the discussion at the Conference, when it had taken place. From Seminar III, therefore, papers and reports of discussion were not assembled with the same thoroughness as from the two previous seminars and little survives. In any case, the proceedings of Seminar III were intended to be superseded by the more considered papers and discussion at the Conference. Nevertheless, for the information of the Watt Committee executive and for the guidance of speakers at the conference, I wrote the following personal assessment of the issues discussed at Seminar III. On behalf of the chairman (the late Dr Geoffrey Pardoe) and members of the executive, I am glad to have this opportunity to express thanks all those who took part in Seminar

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III, especially the invited speakers, listed above, with apologies that their contributions are not recorded here to the same extent as for Seminars I and II and the Conference. Background The two preceding seminars had dealt with ‘Energy resources and scenarios for the next half century’ (1 July 1994), and ‘The impact of possible changes in living and working patterns on energy markets and demands’ (23 September 1994). They had explored such issues as nuclear power, information technology and energy from biomass. The organising committee wished this third seminar (11 November 1994) to go on to discussion of the decisions which, if made now, would affect developments on the energy scene between now and the mid-twenty-first century, adopting a reasonable approach to the type and scale of the changes that might be expected. It appears to be generally accepted that the drive for economic growth will provide the resources for investment in sustainable development over the period defined for this study by the Watt Committee. Already, with competitive energy markets operating to a large extent in the UK and increasingly in other countries, companies must think almost that far ahead—short-term thinking is not enough. For industry and commerce, investment in more efficient use of energy and the conceivable variations in the economic and institutional framework and in market sentiment (including public opinion) that would determine practical decisions are central issues. Energy policies in a global institutional framework Much public debate arises from the perceived interaction of competition, environmental concerns, the effects of market liberalisation and the desirable level of security of energy supply, but such expressions are often used without a consensus as to their meaning. Without a generally accepted framework (such as Government policies may provide), energy price movements may have undesirable environmental effects and market structures are less stable, giving rise to short-term decision making. Difficult though it is to devise national and international energy strategies that will be justified by experience, a strong current of professional opinion holds that it is irresponsible to forgo the attempt. After the failure of the command economies, almost everyone accepts that the improvement of the human lot must be pursued through a capitalist system, probably subject to various constraints that are thought to be beneficial. However, a large sector of humanity is still more or less bypassed, and demands from this sector and through a number of other causes and mechanisms restrict the application of policies that appeal in the advanced countries. Policy areas—energy, democracy, economics and climate Whatever energy policies are adopted in Europe, their effect on the inhabited earth will probably be small compared with population changes and economic and technical developments in China and elsewhere. Although the evidence cannot be complete, most of the governments of the world seem to have concluded, therefore, that international

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action is essential because the damage caused by global warming, if it were to occur on the scale that some envisage, would outweigh virtually all other considerations. Even without the enhanced greenhouse effect, smallerscale climatic and agricultural changes could seriously upset the stability of the world as the home for humanity. At least in the UK, there appear to be prevailing attitudes expressed at three levels: international co-operation on a world scale; action at the national level, rather than through existing supranational mechanisms within the boundaries of Europe; and weakening of the official structure for action at more local levels. Naturally the immediate picture already includes uncertainties. For example, the mix of national and regional energy utilities may undergo further extensive changes, and taxation of domestic energy use may be seen as either environmentally beneficial or socially harmful. Some countries that regard themselves as democracies have adopted much greater degrees of compulsion within their boundaries. Some priorities for the UK Naturally, there is scope for helpful action in the UK, and some expressions of energy policy, perhaps generated spontaneously in a modified free-enterprise system, may deserve to be promoted. The road transport industry (including private car ownership), and particularly the harm due to vehicle exhausts, is an outstanding example. It is not clear how the universal popularity of individualised transport can be reconciled with the practical benefits of urban mass transport systems. This implies that energy strategy might be directed to nudging UK policies and public opinion in the direction of particular improvements in the production and use of energy. Other examples are possible changes in the education system, the development of renewable energy sources and regulatory or fiscal encouragement for energy efficiency. Energy policies must inescapably be seen, however, in the widest context. The world as an economic system depends on investment for profit, which has been shown to deliver enormous improvements in human happiness. The end of the cold war has freed resources that can be applied for the obvious benefit of humanity. But in some areas the system permits and even reinforces large-scale urban poverty, balkanisation and war, farming for cash crops and mass starvation—all intrinsically energy related. As an energy strategy, therefore, rich countries must aim to learn lessons that can be applied by poor ones. Conclusions At the end of the Seminar on 11 November, Professor Laughton suggested a list of energy policy objectives with the constraints to which they must be subject, and asked whether a national energy policy would be possible. Predictions of population growth and the availability of resources would be particularly important. He offered definitions of the issues with respect to the timescale, production and use, research and development. Specific topics to which these ideas should be applied would include, in the UK,

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regulatory standards to promote greater enduse efficiency, renewable resource development plus identification of linked electricity supply system investments in network infrastructure and system operating control procedures, the use of alternative fuels such as hydrogens, and means and development of energy storage.

Consultative Conference—Discussion report Session I Dr Geoffrey Pardoe (Chairman of the Watt Committee on Energy) welcomed those attending. Dr Colin Hicks introduced his paper: Development of energy modelling. Professor Brian Brinkworth introduced his paper: Changing patterns of human need. Michael Jefferson introduced his paper: Population levels and their implications for energy demand. Discussion Professor Challis (Deputy chairman of the Watt Committee), from the Chair, said that, despite the wide range of the papers, the discussion should concentrate on the energy situation in the UK. Professor Sayigh (World Renewable Energy Congress) advocated a national energy plan to concentrate on improvements in energy supply and usage. He would prefer a fair chance for renewables and safe nuclear energy. Mr Orchard (Orchard Partners) referred to the divergence in population growth since 1750 between the developed and the developing countries. Was there a fundamental reason? An on-going forum would be preferable to an energy policy. City-wide CHP would be an effective way of reducing CO2 emissions; if applied in 30 per cent of British cities, it would save 30 million tons coal equivalent. Since the potential saving was so large, perhaps the objections to wider adoption of CHP arose from the vested interests of the present energy suppliers. Mr Sharp (British Gas), agreeing, said that a study carried out by British Gas, the Energy Savings Trust and Ofgas had found that 40 per cent of domestic energy demand was open to conservation measures and 30 per cent could be reduced or eliminated. Efficiency measures as well as the use of CHP might effectively reduce energy output. Draughtproofing was found not to be economically efficient and might cause other problems association with radon. Draught-proofing was included in HEES schemes. Mr Hayman (Office of Science and Technology) explained that the Technology Foresight Programme was an effort to predict UK national interest in wealth creation and quality of life for the next 20 years (i.e. to about 2015). From that, it would be possible to see better how technological effort should be concentrated. In the Programme, of fifteen sectors set up to approach this question, one was energy. As the morning’s papers had shown, the current diversity of opinion had not yet been fully canvassed; the coming year would provide further opportunities for the building of a national consensus. Harold Clarke (Luton Industrial College) was not content with the consensus that appeared to have been suggested. He would not discount any energy source. Energy must

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be made available for all who might need it without damage to the environment. A disinterested exchange of opinion (i.e. without regard to vested interests) would be needed. Professor Challis (in the Chair) thought that it was obvious that any energy plan would have to be refined and updated. There was apparently a general wish to see wider use of CHP. Mr Orchard argued that CHP based on nuclear plants would be even cheaper. There would be no need for further R&D costs, since the technology had already been developed. Mr Horn (Horn Associates) drew attention to the need to differentiate between electricity and other forms of energy. The bulk of electricity in the world was produced by combustion of another material, he said, the issues being supply, pollution control and energy taxation. For the production of electricity by combustion, the materials available had variable merits. Dr Crisp (Building Research Establishment) drew attention to the Best Practice initiative in buildings, run by the Energy Efficiency Office. Before an energy plan could be adopted, there must be a vision of what was to be achieved. Broadly speaking, the pattern of energy uses was unlikely to change. Professor Hall (Kings College, University of London) argued that the purpose of subsidising energy costs should be levelling the playing field. In the OECD countries, the total amount of subsidies provided was around £3,000 billion. Mr Orchard remarked that it was the intention of the Russian oil cartel to continue selling oil at half the world price. Dr Adrain (National Power plc) observed that the real question concerned the least cost energy situation. The limited potential for CHP was partly due to the large cost of infrastructure. Drivers for change were needed. Professor Challis agreed that the costly infrastructure needed for CHP was a more plausible explanation for its limited use, rather than a conspiracy by vested interests. Mr Keavney (South Bank University) thought that the slow-down in British CO2 emission levels was partly the effect of the recession on industry. Perhaps the Government had felt able to reduce its emissions target for the year 2000 because of its predictions for production by 2005. It was possible that companies, rather than the Government, would implement environmental policies. Mr Horn took the view that the Government did indeed have an energy policy—but it was comprised of separate policies such as the regulation of the energy utilities and the fossil fuel levy. It was not a co-ordinated national policy.

Session II Sir John Mason introduced his paper: The global environment—effects of changing usage of carbon-based and other fuels with rising population. Dr John Wright introduced his paper: Social changes and their effect on the world energy scene.

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Discussion Mr Jefferson, commenting on the reasons for population increase, pointed out that it was difficult to gather accurate data on fertility and maternity rates. In 1995, it was estimated that the population of China was about 1.2 billion, plus or minus about 2 million. The difficulty was continuous movement among the population. In Victorian times, population levels in the UK were affected by the mortality rates—in 1851, average life expectancy was only 29 years. Dr Hicks said that the self-sufficiency model for energy planning generally used in the Second World War period and after had largely been replaced by a moderated market forces model, meant to allow for input from outside government. There were conflicts between what was seen to be necessary and what would be tolerated. The policy of VAT on fuel was almost universally unpopular, yet neither was an increase in CO2 levels seen to be desirable. Moreover, in the advanced countries we could not preach to the Third World about energy efficiency when such relatively simple measures as energy-saving light bulbs were not more widely used in the UK. Sir John Mason added that, in projections for the future, we tended to assume that the life-style in the developed countries would not change, despite the tendency for the centres of world manufacture to move to the Far East. That might lead to lower standards of living in the West, while standards rose in the East. World pollution levels would therefore depend to a greater extent on those new areas of industrial production, where CO2 emission levels had increased in the last 15 years. Yet average wages in China were still only 5 per cent of those in the West. As China developed, western manufacturing industry would be increasingly threatened. Recently, he said, energy use in the UK had been fairly constant. For example, when he flew to Manchester recently, it transpired that all the work done that prompted the flight had been carried out in India. He argued, therefore, that wages in the West might have to fall towards the levels seen in the developing world. Professor Challis wished to see a practical outcome from the ideas discussed so far. In an ongoing review of the issues, he could see a role for the Watt Committee. Mr Cooper-Reade said that the remit should include not only the engineering world and the professional world generally, but also those concerned with social issues. Mr Glendenning pointed out that, in making any such proposition, one must ask, ‘Who is the customer?’ It seemed likely that the Government would be the customer, so the Government must be asked whether it would be interested. Dr Pardoe, from the Chair, expressed his agreement. Mr Clarke said that he could speak for the Methodist Church, which, relatively speaking, was a small organisation, similarly concerned with bringing these issues before the public.

Session III Professor Alan Williams introduced his joint paper: Energy resources—technology exploitation and sustainability.

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Brian Bulloch introduced his paper: Energy use in industry. Dr Ian Glendenning introduced his paper: Energy markets and the role of governments. Discussion Dr Adrain remarked that, in considering energy sources, it was essential to recognise and quantify the risks involved and relate them to the costs. Mr Veitch (Mari Group) described an initiative in the North East of England, intended to obtain support from European Regional funds. There was a potential for smaller industrial companies to look at energy use in the developing countries, including the part to be played by information technology. Academics, local authorities and industrialists had been brought together and prepared a threefold approach: building R&D infrastructure for renewables, energy efficiency, transport. That would involve education and training in the energy and information technology sectors and developing mechanisms for transferring R&D to business support.

Session IV Michael Cooper-Reade (Environmental consultant) introduced his paper: Electricity— the common energy currency. Sir Alan Muir Wood (Sir William Halcrow and Partners) introduced his paper: Future energy supply and demand—a response to the assumptions. Discussion Mr Cartwright (Coal Authority) said that his Authority would approach energy from the point of view of energy production rather than energy use: there were huge reserves of coal available; given a level playing field, coal could be price-competitive; in the UK there was relevant and exportable expertise to help the developing world; the coal industry was almost entirely extractive and open-cast; coal-bed methane was a viable energy source; geothermal exploitation of coal reserves might be the ultimate way of extracting energy. Professor McVeigh feared that high-ranking government decisionmakers might not have relevant engineering knowledge to read the issues involved. Statistics were available to show the use of different energy sources since 1850, including a Greenpeace prediction taking out the use of fossil fuels and increasing the element for renewables. Professor Brinkworth was thinking about the question, ‘What next?’ He would be worried about the terms of reference for any forum. Sir John Mason, he said, mentioned the likelihood that the West would have to plan for a reduced standard of living. He doubted the practicality of any government confronting the electorate with that prospect. It was in the interest of the West, however, to increase the general standards of living across the world. Gross disparity might cause hitherto unseen movements in population to claim the resources of the West. He reiterated the importance of transport, but again it

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was unlikely that any government would ask for a large reduction—even a total ban—on private transport. There could well be a role for a body such as the Watt Committee to present scenarios and measures leading to reduced standards of living in the West. Sir Alan Muir Wood too had noticed the lack of a forum for discussing these issues— something on the lines of the Swedish Academy. Mr Keavney noted the problem of over-specification in the building industry, mentioned by Mr Glendenning. Standard specifications would not allow for new technologies. Experience in Yorkshire of reduction in the standard of living prompted fears that it would affect those already disadvantaged. Everyone should have the right to basic standards of heating, water supply etc. The Government’s energy policy could be seen in the large number of unemployed miners, the extensive areas of open-cast mining and the widespread defacing of the landscape that it caused. On the world scale, the supply of water to the developing world might give rise to similar conflicts of priority. Professor Challis, in conclusion, referred again to the proposed role of the Watt Committee. It seemed that the idea of providing a forum for policy discussion was taking root. He was not sure, however, that the main customer should be the Government. The Watt Committee had originated from and still functioned through the professional community, and it was in that sector that support should be found now.

Index Page references in italics refer to charts and tables

Acceptable rate of growth 101 Acid rain 90, 92 Adrain, Dr 135, 137 Aerosols, climatic effects 32, 43–5 Afforestation 102 Africa, population 21 Anniversary project, Watt Committee 104 Anthropogenic sulphate aerosols, climatic effects 43–5 Asia, population 19–21 Atmosphere-deep ocean models, globally coupled 37–8,41, 44–5 Austria, biomass 118 Biomass 17, 66,129 Austria 119 Denmark 119 developing countries 117–8 gasification 118 OECD Europe 118 subsidies 117, 118, 119 Sweden 118 Black coal 64 BNFL 64 Brinkworth, Professor Brian 122, 135 biomass 129 human need 11–6 social change 11–6, 109–10 standard of living 138 Brown coal 64 Buildings Best Practice 136 energy control 15 Bulloch, Bryan 71–7, 138 Burden analysis 92–3 Buses 126 Capping, price 76, 82 Carbon taxation 110 Cars

Index methane 118 saturation point 109 Cartwright, Mr 138 CCGT see Combined-cycle gas turbine Challis, Professor Anthony 112, 131 biomass 119 CHP 136 consultative conference 135 Eastern Europe 130 introduction 3–5 landfill gas 119 polymer engineering 118 R&D 120 Technology Foresight Programme 119, 120, 121 Watt Committee 130, 139 Charles, Dr Enid 18 Chemical industry, future energy requirment 71–81 Chesshire, Professor John 112 electricity 117 energy efficiency 115 energy scenarios 116 R&D 120 China, population growth 20 CHP see Combined heat and power Clarke, Harold 135, 137 Climate change 26,102 aerosols 32, 43–5 CO2 role 45–34,38–42,39 models 34–42 prediction developments 32–47 weightings 92 see also Global warming Clouds aerosol effects 43 modelling 40 CO2 atmospheric 32, 33, 38–42 climatic role 42–35,39–42,39 coal 114 emission forecasting 5, 26–9 future levels 94 IPCC forecasting 27, 30 modelling 38–42 ocean uptake 36 rising levels 32, 33, 38–43,114 traceable increase 113 CO emissions 93–4,95, 96 Coal 64, 69

140

Index clean combustion technology 114 CO2 114 European Energy Charter 123 future 105 mining industry collapse 75, 82, 98 NOx 114 politics 79 privatisation impact 82 producing countries 64 proven reserves 63, 64, 138 SOx 114 UK energy policy 51–2 Combined heat and power (CHP) 73, 110, 135–6 Combined-cycle gas turbine (CCGT) dash for gas 74, 82 development 114 technologies 115 Combustion clean coal 114 natural gas 65 Communication 126 transport impact 15 see also Teleworking Competition RECs 76, 77 supply 115 Constrained-on, constrained-off bidding 75 ‘Consultative Conferences’ 103 objectives 103 reports of discussion 103–4 ‘Consultative Council’ meetings 103 Consumption see Energy Consumption Cooper-Reade, Michael 112, 137 biomass 119 electric vehicles 129 electricity 86–97, 116, 138 energy scenarios 116 R&D 120 Coppinger, John 122, 126,129 Cows, methane 118 Crabbe, Michael 122, 127,128 Crisp, Dr 135 Crude oil 62–4 Dash for gas 74, 82, 84 Davis, Derek 51 Denmark, biomass 118 Department of Trade and Industry (DTI) 7

141

Index

142

Energy Technology Support Unit 50 Technology Foresight Programme 119–21,135 Developed countries 21, 109 Developing countries biomass 117–8 capital investment 96 characterisation 109 CO2 emissions 26 electricity 86, 117 energy consumption 11 energy demand 21–3,54, 58, 79,101 energy efficiency 98 GHG emissions 26 infrastrucutre 100 population 20–3,59–60,111 priorities 24–6,24 standard of living 114 technology transfer 88, 97 Devolution, Scotland and Wales 102 Directorate General for Energy of the European Commission 8 Domestic energy use 13 Dong, Mr Kejun 116 DTI see Department of Trade and Industry Eastern Electricity 116–7 Eastern Europe 127, 130 Economic models, energy demand 6 Education 98, 127,128 Efficiency electrical generation 128 see also Energy efficiency Electric vehicles 129 Electricity 136 CO emissions 93–4,96 developing countries 86, 117 end-use technology 87 energy currency 86–97 energy efficiency 88–9 energy resources 86 environmental impacts 89 fuel cycle 93 future demand 129 generation efficiency 129 induction heating 88 infrared powder coating process 88 infrastructure 86, 87, 100 pollution control 87 pricing 87–77,89

Index privatisation 89–77,82 RECs 82–74,76, 89 technology transfer 88, 97 Elliott, Dr David 131 Emissions CO 93–4,95, 96 GHG 26 methane 93, 95, 114, 118 N2O 93, 95 NMHC 95 NOx 89, 92, 95, 114 reduction 136 SO2 89, 93, 96 sulphur 5, 9, 26 tradable permits 5, 9 transport 26 see also CO2; Global warning Employment 52, 113 End-use technology, electricity 87 Energy consumption by fuel 68 chemical industry 71–7 historical patterns 57 per head 54, 57–8 regional 59 transport 14 world renewable (1990) 66 world trends 60 Energy efficiency 22, 98, 115, 135 Eastern Europe 127 electricity 88–9 transformation processes 71 Energy life cycle, environmental impact 90 Energy management 109, 127 Energy markets, government role 79–84 Energy modelling 5–9 economic models 6 need for 5 techniques 6–8 uncertainty 8, 9 see also Models Energy policy 131–3,136 coal 51–2 education 98 employment 52 environmental concerns 50–1 global institutional framework 132 government 5, 8–9

143

Index international 98–9 market forces 49 national 49–50,98–9 nuclear power 49 past plans 80–1 priorities 133 self-sufficiency 51 social attitudes 49–53 sustainable development 54 UK 49–53,132–3 Energy ratio 11–2 Energy scenarios 112–3,116 see also Energy policy Energy Technology Support Unit, DTI 50 Energy trading 124 Energy-balance models 34 Environmental burdens 91 matrix 92 see also burden analysis Environmental impacts electricity 89 energy life cycle 90 matrix 92 weighting 92 Europe Eastern 128, 130 energy ratio 12 population 20–1 European Energy Charter 122–3 Ezra, Lord 112 Ferguson, Mr biomass 129 education 128 electric vehicles 129 Technology Foresight Programme 120 Fiscal policies see Taxation Flowerday, Dr Peter 131 Forecasting CO2 emissions 26–9 energy ratio 11–2 future energy demand 59–68 global warming 32–47 population growth 18,20–1,21 unreliability 14 Fossil fuels proven reserves 63–4,63, 64 see also Coal;

144

Index Gas; Oil France, energy exportation 123–4 Free markets 79 Fremantle, Sydney 122 electric vehicles 129 European Energy Charter 122–3 international energy trading 124 Fuel cells 117 changing mix 93, 94, 99 pattern of use 57, 58 tax 110 Fuel cycle, electricity 93 Fuel wood 16, 66 Fullelove, Glyn 122, 125 Fusion technology 65 Future CO2 levels 93, 94 coal 105 demand forecasting 59–68 demand trends 20–3,57–68 electricity demand 129 industrial requirements 71–7 N2O emissions 93, 95 NOx emissions 89, 92, 95 nuclear energy 65 SO2 emissions 89, 93, 96 Gas CCGTs 74, 82, 84, 115 CO emissions 93–4,96 European Energy Charter 123 fuel cycle 93 increasing use 84 see also Natural gas Gas turbine CHP 73 GDP see Gross domestic product Geothermal energy 67, 118 GHG see Greenhouse gas GHW see Greenhouse warming Glendenning, Dr Ian 137 Eastern Europe 130 electric vehicles 129 energy markets 79–84 international energy trading 124 Global energy demand 57–68 Global energy price 5

145

Index Global warming global problem 50–1 long-term implications 5 prediction developments 32–47 since 1850 33 timing 46 see also Climate change Government coal future 105 electricity privatisation 77 energy demand projections 7 energy markets 79–84, 137 energy modelling 6, 7 policy making 5, 9 see also Energy policy Greenhouse effect 32 CO2 114 global problem 51 methane 114 Greenhouse gas (GHG) emissions 26 Greenhouse warming (GHW) 26 Gross domestic product (GDP) 98 Growth acceptable rate 101 population 18,20–1,21 Guided buses 126 Hall, Professor David 112 biomass 117–8,119 electricity demand 129 subsidies 136 Hayman, Mr 135 Hicks, Dr Colin 5–11, 135, 136 High-income countries 20, 109 Horn, Mr education 128 electricity 136 international energy trading 124 Hot-rock technology see Geothermal energy Houses see Buildings Hydro-electricity 66, 123 Ice-sheets, melting 46 ICI, energy requirements 71–7 India, population 20 Induction heating, electricity 87–8 Infrared powder coating process 88 Infrastructure

146

Index

147

developing countries 100 electricity 86, 87, 100 International Energy Agency 60–1 International energy policy 98–9 International energy trading 124 International Panel on Climate Change (IPCC) 6, 27, 30 IPCC see International Panel on Climate Change Jefferson, Michael 18–31, 135, 137 Jewkes, Professor John 18 Job creation, energy policy 51 Keavney, Mr emission reduction 136 standard of living 138–9 Kotas, Dr 131 Laker, John 122, 126,129 Landfill gas 118–9 Laughton, Professor Michael 131 LCP see Least cost planning Least cost planning (LCP) 89 Light rail tramway system 126 Littlechild, Professor 76, 77 McGowan, Dr Francis 131 McVeigh, Professor Cleland 112, 131 biomass 129 education 128 energy scenarios 115, 116 government 138 international energy trading 124 methane 118 R&D 120 Magnox Electric 120 Market forces, energy policy 49 Mason, Sir John 30, 136, 137 Meteorological Office see United Kingdom Meteorological Office Methane 93, 95, 114, 118 Milborrow, Mr international energy trading 124 wind power 117 Mill, John Stuart 100 Mixed energy economy 56 Models aerosols 44 climate change 34–42 clouds 40 CO2 38–42

Index economic 6 energy-balance 34 oceans 36–8, 41, 45 UKMO 35–29 uncertainties 46 see also Forecasting Monorail systems 126 Mordue, Graham 131–3 Muir Wood, Sir Alan 98–106,138 N2O emissions 93, 95 National energy policy 49–50,98–9 National Power 74, 76, 82 Natural gas 65, 69 benefits 69 chemical industry 72 combustion 65 growth 57 proven reserves 63, 64, 73 NFFO see Non-Fossil Fuel Obligation Nicholson, Dr Stephen 131 Nitrogen fixation 71 NMHC emissions 95 Non-Fossil Fuel Obligation (NFFO) 9, 53, 67, 113 Non-personal action 109, 110 North Sea Exploration and Appraisal Relief 125 Northern Electric 74 NOx emissions coal 114 future 89, 91, 95 rising levels 26 transport 26 Nuclear Electric 74 Nuclear power 65,69, 113–4 current policy 49 electricity 13 European Energy Charter 123 France 80 government ownership 80 levy 75 over-optimism 8 self-sufficiency 51 uranium resources 65 Oceans carbon 33 energy from 67–8 models 36–9, 41, 44–5

148

Index

149

role in global climate 34–5,36–7 thermal expansion 45 see also Sea-level rise OECD see Organisation for Economic Co-operation and Development OFFER 82 Oil 68–9 crude 62–4 European Energy Charter 123 fiscal policies 80 fuel cycle 93 price 136 proven reserves 63–4,63 PRT 125 sulphur 69 undiscovered resources 64 Orchard, Mr 135 Organisation for Economic Co-operation and Development (OECD) biomass 118 European Energy Charter 122 Pardoe, Dr Geoffrey 135, 137 Passive solar energy 15, 109 Penal tax 110 Personal action, transport 109 Petroleum Revenue Tax (PRT) 125 Photovoltaics 15, 110 see also Solar energy Planning see Energy policy Plastics, recycling 110 Pollution see Emissions Pool prices capping 76, 140 electricity 75 Population 11, 18–31 Africa 22 Asia 19–21 developing countries 21–3,59–60,111 distribution by continent 22 energy demand 22–6 Europe 21 forecasts 18,20–1,21 growth 18,21–,21 UN projections 19, 110 world prediction 58 PowerGen 74, 76, 82, 84 Predictions climate change 32–47 data 110

Index

150

energy demand 61 world population 58 see also Forecasting Price 112 capping 76, 140 electricity 140–77,89 oil 136 world energy 5, 127 see also Pool prices; Road pricing Privatisation, electricity 127–77,81 PRT see Petroleum Revenue Tax Public transport 109, 126 Quality of life see Standard of living Rance tidal power plant 68 RECs see Regional electricity companies Recycling, plastics 68 Regional electricity companies (RECs) 68–74,76, 82, 89 Reliability of supply see Self-sufficiency Renewable energy technologies 65–8,69, 112 biomass 17, 66,117–9,129 developing countries 11 geothermal energy 67, 118 gradual shift 16 hydro-electricity 66, 123 limitations 16 solar energy 15, 66–7,109 subsidies 5, 9, 53, 67 tidal power 68 wind power 67, 117 Rigby, Mark 122 EU policy 123 international energy trading 124 Rio World Summit 51, 113 Roads building 109 pricing 110, 127 traffic management 110 Roberts, Michael 122 Eastern European change 127–8 international energy trading 124 Round-table analysis 92 Russia see Soviet Union Saturation point, vehicles 109 Sayigh, Professor 135

Index

151

Scotland devolution 102 electricity privatisation 82 Scottish Hydroelectric 82 Scottish Power 82 Sea-level rise 45 Self-sufficiency 114, 137 France 80 national 50 Shareholders, RECs 50–74 Sharp, Mr 135 Shell, energy modelling 8 Smith, Adam 49 SO2 emissions future 89, 94, 95 volcanoes 45 Social attitudes, energy policy 49–53 Social contact, teleworking 16 Solar energy 15, 66–7,109 Soviet Union, European Energy Charter 122 SOx emissions 114 see also Sulphur Standard of living 11, 138–9 developing countries 113 energy importance 54–6 Staunton, Dr Gary 112 energy scenarios 112–3,116 hot-rock technology 118 Technology Foresight Programme 121 Steam turbine CHP 73 Subsidies 79–80,136 biomass 117, 118, 119 nuclear power 74 renewable energy technologies 5, 9, 52, 67, 117, 118, 119 Sulphate aerosols 43–5 Sulphur oil 69 rising emission levels 26 tradable emission permits 5, 9 Supply 112 consistency 115 factors affecting 98 reliability 51 Sustainability 100,115 Sustainable energy development 5, 54–70 Sweden, biomass 118 Table ‘A’ periods, electricity 75

Index

152

Tadj, Mr 128 Taxation allowances 125 oil 80 transport 109 see also Petroleum Revenue Tax Technology Foresight Programme 119–20,135 Technology transfer 88, 97 Teleworking 15, 126,129 Thring, Meredith 13 Tidal electric power 68 Tradable permits, sulphur emissions 5,9 Traffic management 110 Tramway systems 126–02 Transformation processes 71 Transport 129 cars 109, 117 communication technology impact 15 electric vehicles 129 energy consumption 13–4 NOx emissions 26 oil replacement 69 personal action 109 saturation point 109 sulphur emissions 26 urban 126 Trolley-buses 126 Twidell, Professor John 131 United Kingdom energy policy 49–53,132–3 energy use 13–5 United Kingdom Meteorological Office (UKMO) CO2 doubling simulation 41–2 globally coupled atmosphere-deep ocean models 37–8,41, 44–5 ocean climate model 36–7 present global climate simulation 35–6 sulphate aerosol model 44 United Nations (UN) population projections 19, 111 United Nations Population Survey 111 United States, least cost planning 89 Uqaili, Mohammad Aslam 54–70 Uranium cost 114 worldwide resources 65 Vehicles see Transport

Index

153

Veitch, Mr 137–8 Volcanoes, SO2 45 Wales, devolution 102 Watt Committee 139 anniversary project 104 conference objectives 103 Executive 103 reports of discussion 103–4 The Wealth of Nations (Smith) 49 WEC see World Energy Council Weighting, environmental impacts 91–2 What-if assessments 93 Williams, Professor Alan 112 clean coal technologies 114 energy resources 137 energy scenarios 116 industrial progress 117 sustainable development 54–69 Wind power 67, 117 Workstart 2000 126 World Energy Council (WEC) energy demand predictions 61 Energy for Tomorrow’s World 22–3,23 regional priorities 24 solar resource data 66 Wright, Dr John 112, 136 energy scenarios 116 nuclear power 113–4 R&D 120