Global demand for energy grew by 5.6 per cent last year, the fastest rate since 1973

The amount of carbon dioxide released from the use of energy grew at its fastest rate since 1969 last year.

In its keynote annual statistical review of world energy, BP said that global demand had grown by 5.6 per cent in 2010, the fastest rate since 1973, largely because of the post-crisis industrialisation of coal-dependent developing nations.
China overtook the United States for the first time to become the world’s largest energy consumer, as countries outside the richer nations of the Organisation for Economic Co-operation and Development drove demand. Non-OECD countries used 7.5 per cent more energy last year than in 2009 and 63 per cent more than in 2000.

In total, global emissions from energy consumption increased by 5.8 per cent. China accounted for the biggest rise, being responsible for 43 per cent of the global increase and a quarter of emissions. America was the second-biggest contributor to emissions, accounting for 13 per cent of the total after a 4.1 per cent rise.

The global level of carbon intensity — the amount released for each unit of energy consumed— is also on the rise. Developing countries rely more on coal plants to generate electricity, which release twice as many emissions as the modern gas plants more common in the West. China alone accounted for almost half the coal consumed globally last year. Global oil consumption last year rebounded strongly, growing by 2.7 million barrels per day, or 3.1 per cent, to reach a record of 87.4 million barrels per day. Oil production grew by a slightly more modest level of 1.8 million barrels per day, or 2.2 per cent, but was supplemented by a big increase in the supply of biofuels.

Norway experienced the world’s largest production decline, followed by Britain, where production fell by slightly over 100,000 barrels per day.

Christof Rühl, group chief economist of BP, said that the US could suffer a repeat of the economic slump it experienced after the 1970s oil shock: “The combination of a rise in interest rates and rise in energy prices have proved toxic [for the US].”

Tim Webb – Times – June 9 2011 12:01AM

Energy challenge: Ed Miliband, Leader of the Labour Party

Short-termism is bad for us and the planet. The Government should use the Green Investment Bank to fund clean-energy projects.

With oil prices having reached close to $120 a barrel, this is the opportunity to make decisive steps towards a post-oil economy. We cannot stop our reliance on oil and gas tomorrow. They are an essential bridge to our energy future. But the question is if they are a bridge or a stopping point.

The Conservative-led Government’s reckless approach on the deficit means they are not making the right strategic decisions for now or for the next generation. To create the green economy we have to get past the fundamental short-termism that exists in parts of industry, finance and governments.

The truth is that even despite the known risks and limitations, there is comfort and security about investing in old-fashioned hydrocarbons. UK pension funds still see investing in BP’s deep-water drilling as a lower risk than funding offshore wind farms. It is the worst sort of short-termism: for the planet and for all our economic futures.
But there is no point in railing against the short-termism of markets: it is what they do unless the rules are right. The job of government is to change this short-termism through concrete policies, not voluntary pledges and exhortations. The obvious opportunity is the Green Investment Bank.

Instead of endlessly delaying decisions, the Government should support a fully functioning Green Investment Bank. This has the potential to fill some of the funding gap faced by the low-carbon sector and unlock some of the potential 400,000 new green jobs that could be created by 2015. Clean energy investment in Germany and China is being driven by public development banks. It is time we gave the same support to British businesses.

The potential for long-term economic growth and jobs for the UK is there, if only government takes the right decisions for now and the long-term. There is a huge reservoir of energy and entrepreneurship in British industry waiting to be released. But industry needs certainty over future markets which has been clouded by hasty decisions, such as the early review of feed-in tariffs. Ministers must hold their nerve and show long-term vision.

But if we are to accelerate the creation of the green economy we should be making it easier for people to cut energy use. The proposed Green Deal risks becoming a lame duck unless the Government co-operates with us to improve incentives designed to encourage participation from households and businesses.

People need to know there is fairness in the way energy is provided and who pays. That is why the state has to play a strategic role in guiding change. Otherwise it would be too easy for the costs of tackling climate change to fall disproportionately on the poorest. Consumers rightly expect the Government to protect them so the Government should introduce a statutory code of consumer rights on energy bills.

This is the time to declare that we want a hi-tech, clean-tech future faster than ever before. The countries that make the leap first will be the successful economies of this century, exporting technology around the world to cities seeking cleaner air and lower emissions. We must enable our business to compete with China, which is targeting clean energy industries as the focus of its next Five-Year Plan.

Climate change poses a big challenge to our politics because the challenge is marked by a distance between the generation that needs to act and the generation that feels the greatest benefit. The DIY state cannot build the green economy. It requires determined action by government in partnership with people, driven by fairness. We must be prepared to rise to the challenge and to lead.

Telegraph March 19th 2011

Low carbon energy: vast potential rewards for a greener UK says Chris Huhne

The transition to a low carbon UK will be a mammoth task and will in time directly affect us all. Inaction, however, is not an option, says the Energy and Climate Change Secretary Chris Huhne.

Two months ago the Coalition Government published its programme for government, in which we pledged a package of measures to fulfil our joint ambitions for a low carbon and eco-friendly economy.
Speaking at my department during his first few days in office, the Prime Minister announced that this will be the greenest government ever.

The challenge is huge: to reduce the potential impacts of climate change and ensure our future energy security by weaning ourselves off our addiction to fossil fuels. And we face it as we come out of recession, wrestling with our biggest ever peacetime deficit.

Economic recovery, energy security and climate stabilisation all require a commitment to a consistent, long term policy and this month I will present to Parliament the first of our promised annual statements on energy policy.

Alongside this we will publish the detailed analysis and underpinning data of the 2050 Pathways project, which will help us understand the scale of the challenge and the choices and trade-offs we will have to make over the next 40 years.

The long term task is nothing less than the transformation of our economy, to put in place the right incentives for low-carbon growth to create the investment, exports and jobs we need to bring back economic prosperity. In short, we must seize our share of the green technology revolution and make the UK the best place in the world to do energy business.

During that transition we must secure diversity of energy supplies from abroad while making the most of our home-grown energy, including north sea oil and gas, and developing renewables technologies such as wind and marine.
There can be a role for nuclear so long as there is no public subsidy, a pledge set out in the coalition agreement and guaranteed by the state of the public finances. Carbon capture and storage can also provide us with a low carbon energy source to meet peaks in energy demand.

It will be government’s role to provide the long term certainty in which to develop this new energy infrastructure. £200 billion of investment is needed over the coming decade and we intend to leverage private sector investment through a Green Investment Bank.

We are working on a wide range of options for the scope and structure of the Bank and will bring forward detailed proposals in the autumn. In the recent Emergency Budget the Chancellor also announced that we will reshape the Climate Change Levy as the way of delivering our coalition commitment to a carbon price floor, in order to boost investment across the range of low carbon energy technologies.

The cheapest way of closing the gap between energy demand and supply is through energy saving measures. The Green Deal for households will be established through legislation in the forthcoming Energy Security and Green Economy Bill and will encourage home energy efficiency improvements such as insulation and lagging, paid for by savings from energy bills.
Energy saving will also mean smart meters and smart grids that can give consumers control over their appliances, curb energy waste and save money. We will take measures to improve energy efficiency in businesses and public sector buildings – we are leading by example with a target to reduce central government carbon emissions by 10 per cent within 12 months.
The transition to a low carbon UK will be a mammoth task and will in time directly affect us all. Inaction, however, is not an option and the potential rewards for our country are vast.

Telegraph on Line

Age of Energy: Will the lights go out?

Telegraph on Line

Gordon MacKerron, director of Science and Technology Policy Research at the University of Sussex, examines how we might fill the looming ‘energy gap’ that is currently haunting policymakers.

Energy policy decisions are complex and difficult. Objectives are wide-ranging — security, efficiency, affordability, environmental protection (including climate change) — and they are not always mutually consistent.
Among these objectives, security especially worries politicians. The last Prime Minister declared in 2008 that security was an “imperative”, a core state responsibility that the present Government endorses. Among security issues, the threat that the lights might (literally) go out especially haunts policymakers.

The starting point is a combination of unrelated circumstances due to bite in the middle of this decade. The first is that all our nuclear stations but one will need to close before 2020, a non-negotiable position because of safety concerns.
Second, a new and more stringent EU Large Combustion Plant Directive (LCPD) on emissions from generating plant comes into effect in 2015 and this will, if implemented fully, cause the closedown of 8,000 megawatts of otherwise serviceable coal-fired plant.

Some easing of the problem might be expected to come from reductions in electricity demand. After all, the Government is pursuing a Green New Deal designed to help cut domestic energy use. But even if this new deal is rapidly and widely implemented, this will not help much.

As argued by the authoritative Committee on Climate Change, there is a powerful policy need for a large growth in electricity use, for example in transport and in heating, even while total energy demand is expected to fall. This need for rapid growth in electricity use is a consequence of the UK’s ambitious commitments to climate change targets, which in turn can best be kick-started through major expansion in low-carbon electricity generation (renewable energy and nuclear power). Needs for growth in electricity capacity and to shut down large quantities of plant leaves a large apparent “gap” from 2015 onwards.

So how might we fill this gap? Renewable energy and nuclear power are being pursued vigorously. However, they cannot collectively fill the gap by 2015. Renewables are growing fast but from a very low base, and there will be no power from the first new nuclear station until 2018 at best. Hence the fear of the lights going out sounds serious.

In reality, the gap is unlikely to materialise. There is a large stock of gas-fired power projects waiting, ready to go at short notice, and each capable of being built in two years. And the fears around further gas import dependence are also exaggerated given the diversity of gas sources and the recent expansion of US supplies from shale.

There is also a willingness in the policy system to contemplate major reform to the wholesale electricity market, and this could be adapted to incentivise building of gas-fired capacity, should market signals prove insufficiently strong. And if all these mechanisms are not enough and a gap really did loom, then we can rely on the European Commission to allow postponement of the application of the LCPD. So the lights can and almost certainly will stay on, but there is a further twist and a real policy dilemma.

The likely need for a large quantity of new gas-fired plant from mid-decade, with a lifetime of 30 years, means that the rate at which our electricity system can be de-carbonised will be seriously reduced, playing havoc with climate change strategy. The pat answer to this problem is to say that new gas-fired capacity will have carbon capture and storage technology fitted at a later date. But there are two snags here.

First, carbon capture and storage is yet to be demonstrated at full scale. Second, business may be hesitant to bring forward its pipeline of gas-fired projects if it fears that their latter-day profitability might be jeopardised by a retrospective need to fit carbon capture technology.

So there is a potentially stark choice for the Coalition: guarantee security by allowing new, gas-fired power, or stick to climate change strategy and take more risks with security. When Gordon Brown said security was an “imperative” he labelled climate change strategy as a “challenge”.

Governments can afford to fail on challenges but they cannot fail to deliver on imperatives.
The big issue about security is therefore not whether or not the lights can be kept on; it is whether, in keeping the lights on, the UKfinds creative ways to maintain the climate change commitments that the Coalition seems serious about meeting.

Gordon MacKerron, director of SPRU (Science and Technology Policy Research) at the University of Sussex.

Energy challenge: Oliver Letwin, Cabinet Office Minister

The Daily Telegraph March 19th 2011 – Oliver Letwin

We need a wider range of energy sources to ensure security of supply and sustainable growth. The answer is a green economy.

It is surprising that people are still asking whether we can move to a low-carbon economy. The answer to that question is obvious and certain. Of course we can. The real question is whether Britain should make that choice and become the world’s first true low-carbon economy. I believe we should. Why? There are two compelling reasons – each as important as the other.

First, this is an issue of moral leadership – we absolutely have to establish moral leadership on the issue of climate change, just as we have established moral leadership on the question of international aid.
Those of us who made the case at Copenhagen for a carbon cap now have a moral obligation to show that we are true to our word by delivering green changes in our own countries. Doing so will send a signal to more reluctant countries that we are serious, and will help build the conditions necessary to reach a global agreement to act.

But the second argument for turning Britain into a low-carbon economy has nothing to do with global climate change. It has to do with our own energy security and the long-term stability of our own economy.

There is now an unanswerable strategic case for building a diverse portfolio of sources of energy that substantially reduces our dependence on imported oil and gas. Anybody watching events in the Middle East and North Africa cannot fail to see just how fragile the world’s fossil fuel supplies can be, in terms of security of supply and price volatility.

Not only have oil prices increased dramatically in the past two months, but the two epicentres of political instability – Libya and Egypt – play an important role in energy supply. Libya has the largest oil reserves in Africa, around 45 billion barrels, while around 1.8 million barrels are shipped through Egypt’s Suez Canal every day.

Given the energy security challenges we have faced throughout the past decade – in Russia, Central Asia and elsewhere in the Middle East – it would be simply irrational just to carry on as we are and continue to expose our economy to unknown and unknowable risks. Long-term British security and British prosperity depend on achieving much more diverse sources of energy supply.

Once we accept – as the Coalition Government does – that, for both of these reasons, we must move to a low-carbon economy, the next question is: are we doing it?

A few months ago, the Public Accounts Committee looked into the last Government’s record at the Department for Energy and Climate Change. Its verdict was decidedly cool: under previous management, the department lacked urgency, drive and purpose. There was a lack of long-term planning. And when it came to meeting the 2020 emissions target, the department “had not… started preparing a detailed delivery plan”.

This Government is doing things differently. Earlier this week, our Carbon Plan committed the Coalition to a series of radical changes. We will establish a Green Investment Bank, set a floor price for carbon, and cut central government emissions by 10 per cent.

We are establishing a ‘‘smart grid’’, rolling out ‘‘smart meters’’ to every home, using incentives to bring forward renewable energy, promoting the use of waste to produce gas and our vast offshore wind resources to produce electricity, enabling nuclear plants to be built, starting the process of electrifying the car fleet, and working to establish electricity interconnections with our northern European neighbours.

Some people will think that making these changes will require huge short-term sacrifices. Where there are unavoidable transition costs, we will minimise them by focusing on the most efficient low-carbon technologies. But the main point is that this is not a short-term threat so much as a short-term opportunity – for green jobs and green growth.

Our Green Deal alone – which allows households to become more energy efficient without upfront costs – has the potential to support 100,000 green industry jobs within five years. And the other low-carbon transformations I have described will bring huge new investment and jobs.

Going green can mean more security, and it can mean more growth.

Oil production to plateau ‘by end of decade’

The global appetite for energy is likely to swell far more rapidly than available supply in coming decades as oil production hits a plateau and emerging markets see rampant economic growth, Royal Dutch Shell has said. In a report published today, the oil giant predicts that by 2050 world energy demand may have tripled compared with 2000 levels, based on historical patterns of development. However, energy supplies may grow by only 50 per cent in the same period.

Improvements in energy efficiency could curb demand by 20 per cent. But the world still needs to figure out how to bridge a looming gap between supply and demand that is equivalent to the global energy industry’s entire output in the year 2000, Shell calculated.

By the end of this decade the world will run into a plateau in oil production, a development that will put “upward pressure” on oil prices.
Jeremy Bentham, the vice-president for Business Environment at Shell, said: “The coming surge in energy demand reflects the surge in developing nations. China will be continuing through its industrialisation period over the next ten years, and India is probably ten years behind that.
“This will be followed by the likes of Indonesia, Vietnam, and so on. These successive waves of development will create a surge in underlying demand for energy. This is leading us to a vast zone of uncertainty.”

The projections came in a report updating energy scenarios that Shell published in 2008. Since then the recession set global energy demand back by about two to three years, meaning that 2008 demand levels will be reached again only this year.
However the broader trend in energy markets is clear, the report said: the world faces rapid demand growth as emerging markets industrialise, coupled with increasing strains on traditional sources of energy. Oil production is likely to rise 16 per cent between 2010 and 2020, Shell’s projections show. Growth over the subsequent ten years will be virtually non-existent, however, leaving oil production at roughly 96 million barrels of oil a day, Shell said.
Mr Bentham said that while oil production is set to plateau at the end of the current decade, “the stresses in the oil markets may come much earlier”.
He said: “You saw the foreshocks of those developments in 2007-08, interrupted by the recession. Now you are seeing in the market a building up of tension again. In the short term you are in a manageable situation given Opec’s spare capacity but you get to a more stressed situation later in the decade.”

Brent crude prices currently hover above $100 a barrel amid tensions in the Middle East and growth of around 10 per cent a year in China. The countries that control easily accessible oil are likely to develop their resources “at a pace that meets their own underlying aspirations, and not at the pace at which others would like it to be developed,” Mr Bentham warned.
One positive recent improvement in the energy supply outlook stems from huge “shale” gas discoveries. Explorers have more than doubled the discovered resource base in North America in the past three years, prompting Shell to increase its estimates for gas output.
Its previous energy scenarios forecast gas production to reach 65-70 million barrels of oil equivalent by 2030. It now sees close to 83 million barrels of oil equivalent being produced by that time.

That should help to ease demand for polluting coal, but the oil giant is still expecting a doubling in the use of coal between 2000 and 2030. By contrast, oil production is expected to rise by only 27 per cent over the same period.
Renewables will help to bolster resources but they are expected to meet only 16 per cent of energy demand by 2030 compared with 11 per cent in 2000, including so-called biomass fuels such as wood burning.

Sunday Times
Sam Fleming Economics Editor
February 13 2011

Are Smart Meters the Way

If the government is to achieve its 2050 target of reducing greenhouse gas emissions by 80 per cent, relative to 1990 levels, then the way energy is supplied and priced will need to change dramatically.
Smart meters will be a central element in driving this change by enabling customers to act on real-time data to reduce energy consumption. Yet if smart meters are truly going to make an impact on carbon emissions then energy efficiency alone will not be enough. Smart meters will need to be part of a smart grid that has renewables as one of the major sources of energy.

Great Britain must meet a 15 per cent renewable energy target by 2020. However, the output from some renewables is not easily predictable and could result in peaks and troughs in supply. This means customers will no longer be able to assume that energy is on tap, but will need to understand that its availability and price varies throughout the day and the year.

What we are likely to see in the future is a range of tariffs that reflect both demand and supply and give real incentives to consumers to use renewable sources. This pricing will be much more sophisticated than current Economy 7 tariffs — and therefore potentially much more difficult for consumers to understand and manage. So, customers will need smarter appliances that can tell when prices are lower and respond automatically.

Yet automation will be only part of the answer. To maximise the benefits of this renewable world, customers will need more tailored advice. The unit cost of energy will become less important than how customers manage and use energy. However, for them to take advantage of this, they will need to know the best options. This will depend on factors such as their personal priorities, the nature of their property, their ability to generate energy, and the payback on potential energy efficiency investments.

That could have profound implications for the business models of the big six electricity providers. They will need to build much closer relationships with their customers, reaching beyond supply of energy into service management and advice in the home to encourage behaviour change.

According to an Ipsos MORI survey for Ofgem, “just under half of consumers are likely to adopt automatic switching of appliances … if energy is cheaper at certain times of the day.” However, evidence to date is that creating behaviour change is difficult in the energy sector. For example, since the introduction of competition last century a significant proportion of consumers have still not changed supplier, despite the potential savings.

Smart meters and the associated changes to energy pricing will be difficult for consumers to understand. Enthusiastic early adopters of the technology will be important to encourage mass consumer use. Central and local government can play a role in supporting this change by adopting the technology early — for example, visibly using smart meters in public buildings and schools; installing them in social housing and publicising them at advice centres.

While it is the responsibility of the energy industry to deliver the solutions to reduce carbon emissions, we, and particularly government, can all play a part in demonstrating the value of those solutions and encouraging the behaviour change required to exploit the technology.

Darrin Hill Opinion – Times
Darrin Hill is an energy specialist at PA Consulting Group

Middlebury College’s biomass plant, USA

Middlebury College in the USA shows how gasification generates clean, green energy with this short virtual tour of the biomass plant. The plant opened in January 2009.

CBI calls on government to encourage EfW

8 October 2010 | By Ruth Faulkner

The UK’s leading business organisation is calling on the government to encourage the use of non-recyclable waste to meet the UK’s energy needs.

In its new report, Going to Waste: Making the Case for Energy from Waste, the CBI estimated the UK could quadruple the proportion of energy it generates from waste from 1.5% to 6% by 2015, providing there is strong government leadership.

The report does not favour any particular technology as a means of dealing with waste and producing energy. It said government should avoid “picking winners” in terms of technology and let the market decide the most cost effective option.

However, the report said incineration should be used to deal with non-recyclable household waste, as it is cleaner and more efficient than burning fossil fuels and prevents the need to landfill the waste.

The CBI also warned that unless urgent steps are taken to cut landfill usage, the UK will face fines from the European Union of around £182.5m a year.

Commenting on the report, CBI director of business environment Neil Bentley said: “We cannot continue dumping rubbish in landfill sites. Waste that can’t be recycled could be used to heat homes and produce electricity, as well as improving our energy security.

“Across Europe, generating energy from waste is common and compatible with high levels of recycling.

“The Government needs to encourage the development of more anaerobic digestion and incineration plants, and tackle delays in the planning system.”

The report has been welcomed by leading figures in the waste management industry. Viridor chief executive Colin Drummond said: “This CBI briefing is timely and important, coming as it does at a crucial stage of the UK Government’s waste policy review.”

“Viridor wholly concurs with the main findings and recommendations. As a leading UK recycler and renewable power generator, we are clear on the benefits of EfW technology working alongside high levels of recycling. Energy from waste has an important role to play in meeting our energy and resource efficiency needs, and Government, local authorities and the recycling and waste industry must work in partnership to deliver

Action needed to ensure Britain’s energy supplies remain secure

Ofgem recommends far reaching energy market reforms to consumers, industry and government. The unprecedented combination of the global financial crisis, tough environmental targets, increasing gas import dependency and the closure of ageing power stations has combined to cast reasonable doubt over whether the current energy arrangements will deliver secure and sustainable energy supplies Prompt action will reduce risk to energy supplies, help lower costs to consumers and help progress towards climate change targets.

Ofgem today published its Project Discovery conclusions after extensive consultation and analysis. They confirm the need to act to deliver both security of supply and environmental objectives at affordable prices beyond the middle of this decade. Prompt action will ensure that consumers do not pay more than is necessary and also allows
time for a wider range of reforms to be considered.

Ofgem has put forward a wide range of options for further consultation, including improved market signals, obligations on suppliers and capacity tenders to give greater confidence to help meet our carbon targets. Other options also include more structural reform ranging from a centralised renewables market through to a central buyer of energy.

Ofgem’s Chief Executive, Alistair Buchanan, said: “Our evidence shows that Britain has a window of opportunity to put in place far reaching reforms to meet the potential security of supply challenges we may face beyond the middle of this decade. We do not advocate change lightly, but all the facts point to the need for reforms now to provide resilient supply security. Acting earlier will also help keep costs as low as possible for consumers and business.

“The overwhelming majority of responses to Ofgem’s October consultation show that there is an increasing consensus that leaving the present system of market arrangements and other incentives unchanged is not an option. Ofgem has therefore put forward a range of possible options to unlock the up to £200 billion of investment Britain may need. We are keen to work with Government to find the best way forward.”

Reform is needed because a combination of factors have come together including: the global financial crisis, significant world-wide demand for investment in energy, tough EU emissions targets, the closure of ageing power stations and an increasing dependency on gas imports. The outcome of Copenhagen, in terms of lower carbon prices, reinforces the climate of significant uncertainty just when an unprecedented level of investment is required.

OFGEM – Wednesday 3 February 2010

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News & Updates


Global demand for energy grew by 5.6 per cent last year, the fastest rate since 1973

The amount of carbon dioxide released from the use of energy grew at its fastest rate [...]

Energy challenge: Ed Miliband, Leader of the Labour Party

Short-termism is bad for us and the planet. The Government should use the Green Investment Bank [...]

Low carbon energy: vast potential rewards for a greener UK says Chris Huhne

The transition to a low carbon UK will be a mammoth task and will in time [...]

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Middlebury College’s biomass plant, USA

Middlebury College in the USA shows how gasification generates clean, green energy with this short virtual [...]