Availability, efficiency and sustainability:The energy mix in the 21st century

In conjunction with our Insight publication the following slides portray the opinions of key energy figures on the future of our global energy sources. Simon Reeve, Director of Lloyd’s Register’s Power Sector, and some of the Power industry’s top figures, deliver their opinions on the impact of Fukushima and the way forward.

“The nuclear accident in Fukushima dealt a heavy blow to nuclear power…Countries are all re-examining the safety of nuclear power or adjusting their nuclear power development plans. But we also see that major nuclear countries have vowed to continue with nuclear power, and stepped up research and development of safer and more effective types of reactors…China has now 13 nuclear power units in operation, with 28 new nuclear power plants under construction. The plan of bringing the national installed capacity of nuclear power to 40 million kW (40GWT) by 2015 has not changed”.

Minister Zhang Guobao,

Chairman of National Energy Consultant Committee of PR China

“China’s coal output in 2010 reached 3.2 billion tons, if China does not develop nuclear power, total coal consumption in 2015 is likely to exceed 4 billion tons. China is seeking a more balanced portfolio of supply including reduced reliance on coal to reduce emissions and improve air quality…Development of nuclear power is an inevitable choice of the adjustment of China…while vigorously developing renewable energies, nuclear power will still be an option that cannot be given up.”

Minister Zhang Guobao,

“The Fukushima nuclear incident will change the energy mix of the world. After the incident countries have reviewed their approach to nuclear power. The incident will lead us to replace some of the nuclear capacity with other sources of energy and this, together with technological developments and decreasing costs, mean that breakthroughs are very likely to be made in the development of hydro, wind and solar energy”…

“China plans that the use of non-fossil energy will reach about 15% of total energy consumption by 2020…The high level of development of wind power generation during recent years has led to fierce competition in the wind power generation market in China. The fast development speed and intense competition are very likely to cause a ‘shuffle’ soon in the whole wind power generation industry”.

Liu Dongyuan

President, GuoDian United Power Technology Company Ltd

“China will try to set up a safe, stable, economical and clean modern energy system. It aims to promote a diversified and clean development of energy sources, develop safe and highly efficient coal mines, enhance the exploration and development of petroleum and natural gas, and push forward the development and utilisation of unconventional resources such as coal bed methane and shale gas. China plans to develop hydroelectric power, taking care to protect the environment and people, and to develop nuclear power with core emphasis on safety”…

“China has adjusted its nuclear power development plan to make safety the main consideration for development. New nuclear power projects will be examined and approved under strict procedures”.

Liu Dongyuan

As catastrophic as Fukushima was, there is no question that nuclear energy has to remain part of the energy mix for the foreseeable future. With more and more pressure on reducing fossil fuel use, combined with the relatively long timeline necessary to achieve an appreciable percentage of renewables in the energy mix, nuclear energy provides the only real practical option to fill the needs gap”.

“…Fukushima was of grave proportions relative to other incidents involving energy sources…Clearly, it would not have been prudent to have eliminated coal use each time a mine accident occurs, or oil and gas use each time a catastrophic release occurred. And history has proven this point – we still use oil, gas, and coal. Even after Three Mile Island and Chernobyl, the world realised nuclear had to remain viable”.

Edwin Piñero

Executive VP and Chief Sustainability Officer, Veolia Water North America,Chair - ISO Technical Committee 242 – Energy Management,Former adviser to President George W Bush.

“More importantly we need to be much more aggressive in promoting the forgotten energy source, one that has the lowest footprint. That is energy efficiency. The most efficient use of energy is to not use it at all. Clearly, there is some basic use of energy that will always occur, 100% energy use reduction is unrealistic. However, more aggressive efforts and approaches to reduce the use of energy will make the current supply last much longer, and reduce the footprint per capita or per unit of gross domestic product. The regulatory arena and market need to play a role, as well as awareness and behaviour change, so that efficiency is as prominent and attractive as renewables”.

Edwin Piñero

“The global wind industry has an estimated annual turnover of £5.5 billion, 84% of which is based in Europe. The UK is the acknowledged world leader in offshore wind. The proposed capacity of the next round of offshore projects will bring the overall contribution of offshore wind to 47GWT, which will amount to more than a third of the UK’s total electricity consumption”.

“In the longer term, the total offshore wind capacity for the UK has been estimated at 116GWT. This would make the UK a net electricity exporter, but to export successfully we need to upgrade the grid. Britain is facing an unprecedented challenge to connect large amounts of new, low carbon generation to electricity networks.

Maria McCaffery MBE

Chief Executive, Renewable UK

“Another challenge we face is a shortage of skilled workers. RenewableUK recently produced a report which explains in detail how over 88,000 people will be working in the wind, wave and tidal energy industries by 2021. The study shows the enormous potential which exists within renewable energy industries to provide permanent, well-paid jobs for the engineers, scientists, technicians and economists of the future. We must also ensure that the right training is available to ensure that the workforce has the appropriate skills to serve the sector”.

Maria McCaffery MBE

“The global impact of the events at Fukushima will undoubtedly remain significant for many years to come. Since the disaster in Japan we have seen many countries respond to the pressure to change their plans for nuclear energy. In the UK I expect the impact to be much less than elsewhere. The Weightman report brings out a number of recommendations but is broadly supportive of a continued nuclear programme in the UK”.

“Globally, demand for energy is rising as developing countries provide increased standards of living. This overall increase in demand should be substantially offset by greater efficiency in developed countries. In the UK, our models assume a 20% increase in efficiency which will be critical in achieving the CO2 emissions targets”.

Nick Winser

Executive Director, National Grid

“At National Grid we have looked at a number of scenarios that enable us to reach the CO2 targets and with nuclear in the generation mix this is achievable. We envisage 11GWT of nuclear generation by 2020 and between 25GWT and 30GWT by 2050. To achieve the environmental targets without nuclear would be extremely challenging”.

“Renewables present very different challenges. Wind is a relatively mature technology, but there are major challenges associated with offshore wind and the associated connections to the onshore network. Public acceptance of onshore wind remains a constraint and other technologies are much less mature. Carbon capture and storage, solar and tidal are all in early stages of development and demonstration and the challenges with these technologies are only just emerging”.

Nick Winser

Danny Walker

Energy Compliance Services VP, Lloyd’s Register North Americas, Inc.

“There is a global picture that extends well beyond Fukushima…Safer designs and locations for nuclear plants will not change the need to develop an energy future that both recognises the needs of the world’s growing population and protects the future viability of the planet. Energy demands are growing in response to lifestyle demands; to satisfy them and control carbon emissions nuclear power cannot be overlooked as an energy source”.

“Biofuels (along with alternative renewable energy supplies) may become more attractive in that they may serve to replace imported oil and help diversify energy sources and increase energy security. Furthermore, if produced sustainably, biofuels can substantially reduce greenhouse gas emissions compared to the corresponding fossil fuels”.

“Over the next 20 years, a paradigm shift is likely to take place at the global level. Two decades ago, 75% of global oil consumption and global carbon dioxide (CO2) emissions – the two most important constraints on future energy policy – resulted from activities in industrialised countries which cover less than 25% of the world’s population. Today, rapid economic growth in many developing countries, most spectacularly in China, is broadening the range of countries which need to be involved in responding to this global challenge…Government stakeholders (including OPEC) need to develop concrete policy initiatives with a collective objective and timescale”.

Danny Walker

Rune Bjørnson

Statoil’s Senior Vice President for Natural Gas

At a time when governments in Europe are rethinking their energy policies, it is important that the industry collaborate in promoting natural gas as essential for Europe’s energy future.

“Only together we can ensure that gas receives the attention and the role it deserves, being a secure, cost-efficient and relatively clean source of energy,”

By increasing the share of natural gas in the European energy mix, being the cleanest fossil fuel, Europe will be well positioned towards reaching its 2050 climate goal. Replacing existing coal power plants with new gas power plants can reduce CO2 emissions by up to 70%.

“I am convinced that a combination of natural gas, renewable energy such as offshore wind, and in the long term carbon capture and storage, will allow Europe to meet its environmental targets in an efficient and affordable way.”

“In that context my main message to the politicians is that they should start trusting the carbon market that they have invested so much prestige and efforts in, and therefore let the market pick the winning fuels in reaching the 2050 ambition…we as an industry – both customers and gas producers – must pull together to achieve a clear and coherent regulatory framework, securing a levelled playing field between all the energy carriers”.

Rune Bjørnson

“The principal drivers for energy demand are growth in population and growth in income. As countries grow in population and their income per head of population rises (GDP), expenditure on energy follows as a pre-requirement for development. As technology matures there is a move from energy intensive industries to more efficient and sustainable technologies”.

“Countries historically developed their energy infrastructures based on a combination of their natural fuel resources and the technologies they had to exploit them. In the past 30 years we have seen a marked increase in the international trading of energy fuels and electricity. In the past 10 years this has extended to the trading of emissions allowances as a means to control and balance the environmental consequences of energy policies”.

Simon Reeve

Power Sector Director, Lloyd’s Register

Despite the current focus on renewable technologies and nuclear power, globally fossil fuels are expected to continue to dominate primary energy demand for the next 30 years.

•Coal will continue to prevail as the leading fuel for power generation •Oil will remain strong but accelerated growth in non-OECD countries will be more than countered by a slowing growth rate in OECD countries.•Natural gas will continue to grow as a cleaner and more efficient alternative•Unconventional gas will increase in proportion to the total but will still be at a lower level than conventional gas.•Liquefied natural gas will grow as the technology for compression and liquefaction becomes more economic, increasing its attractiveness for international trade.

Simon Reeve

Nuclear power today provides 6% of the world’s primary energy and 13% of the world’s electricity with fewer emissions than any fossil-fired plant. In economic terms, the distinguishing factor is no longer the fuel price or life cycle cost alone, but increasingly influenced by the carbon price penalty placed on the emissions from a coal-fired plant.

A further factor to consider is conservation. World population growth and income will continue to rise, increasing the demand on primary energy supplies. How this demand is met will evolve in parallel with the development of the relative drivers of fuel availability, technology efficiency and environmental sustainability…In today’s world, a smart, informed local public will increasingly have the final say in what is both politically affordable and sustainable.

Simon Reeve

Rune Bjørnson

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