Britain has come up with a comprehensive White Paper (WP) on its future energy requirements and how to tackle the multiple challenges posed by the prospects of rising world wide demand for fossil fuels, investment needs, economic growth and stricter carbon emission regulations.
Pakistani planners, especially those with the responsibility of projecting our energy needs and the investment requirements for the sector would do well to go through this paper minutely. It will certainly give them a broad idea about what Pakistan itself will be facing say, 10, 20 and 50 years hence on the energy front. The WP is a voluminous document spread over hundreds of pages and containing lots of data and statistics.
Commenting on the paper the Director General of the Confederation of British Industries (CBI) said:” Only a combination of nuclear and renewable sources, alongside more efficient gas, coal and oil generation, can deliver the reliable energy supply we need whilst tackling carbon emissions. With a third of UK power plants due to be replaced by 2025, time is against us if we are to avoid power shortages. The White Paper suggests the government understand what is needed to avoid this energy crunch, and to make the UK system more secure and more environmentally sustainable. The real test now will be in delivering these proposals.
The WP which was released on Wednesday last has listed four energy policy goals:
• to put the country on a path to cutting the UK’s carbon dioxide emissions - the main contributor to global warming - by some 60 per cent by about 2050, with real progress by 2020;
• to maintain the reliability of energy supplies; to promote competitive markets in the UK and beyond, helping to raise the rate of sustainable economic growth and to improve our productivity;
• and to ensure that every home is adequately and affordably heated.
The challenges that the UK faces on this score according to the WP are:
“Climate change, as a result of rising greenhouse gas emissions, threatens the stability of the world’s climate, economy and population. More than two thirds of the world’s carbon dioxide emissions come from the way we produce and use energy, so energy policy has to play a major part in meeting this challenge.
“At the same time energy demand worldwide continues to increase, particularly in the United States and emerging economies, such as China and India. On the basis of present policies, global energy demand will be more than 50 per cent higher in 2030 than today, with energy related greenhouse gas emissions around 55 per cent higher.
“Even if we realise more potential for increasing low carbon sources of energy, it is clear that coal, oil and gas will play a significant part in meeting the world’s energy needs for the foreseeable future, and we need to find ways to reduce their emissions. Also, with the UK increasingly reliant on imported energy, we need to manage the risks arising from the concentration of fossil fuel reserves in fewer and further away places, some of them in less stable parts of the world.
“Increased competition for resources will see international trade in fossil fuels double by 2030. This trend and factors such as abuse of market power, poor energy market information, infrastructure security risks, and regulatory uncertainty (particularly concerning government actions to tackle climate change) could add to the risks to energy security and prices.
“The International Energy Agency (IEA) forecasts that $20 trillion of investment will be needed to meet these challenges by 2030. The investment decisions that will be taken over the next two decades will be critical in determining the world’s climate and the security of its energy supplies. At home it is likely that the UK will need around 30-35GW of new electricity generation capacity over the next two decades and around two thirds of this capacity by 2020. This is because many of our coal and most of our existing nuclear power stations are set to close. And energy demand will grow over time, despite increased energy efficiency, as the economy expands.
“Nuclear power currently accounts for approximately 18 per cent of our electricity generation and 7.5 per cent of total UK energy supplies. It is a low carbon source of electricity and makes an important contribution to the diversity of our energy supplies. Without our existing nuclear power stations, our carbon emissions would have been 5-12 per cent higher in 2004 than otherwise. However, most of the existing stations are due to close in the next 15 years or so, based on published lifetimes.
“The UK faces two main security of supply challenges:
• our increasing reliance on imports of oil and gas in a world where energy demand is rising and energy is becoming more politicised; and our requirement for substantial, and timely, private sector investment over the next two decades in gas infrastructure, power stations, and electricity networks.
“We need to manage the potential risks associated with higher imports of fossil fuels. These include:
• increased competition for energy resources in the face of growing global energy demand; reserves becoming increasingly concentrated in fewer, further away places; the need to purchase supplies from markets which are neither transparent nor truly competitive; and, the possibility that there will be insufficient investment in key producer countries in new oil and gas production.
“We will also need to see significant private sector investment in infrastructure to bring the energy we need from overseas to the UK. For example, our current projections of gas demand imply that we will need to increase our gas import capacity by 15-30 per cent by 2020. Much of the investment we need to achieve this is already in train.
“In electricity markets we will need investment in new generation capacity of around 30-35 GW over the next two decades to replace power station retirements and meet rising electricity demand as the economy grows.
“The timeliness of this new investment will be key to ensuring security of electricity supplies.
“Many of the measures to tackle climate change set out in this White Paper will also bring benefits to the UK’s security of energy supplies. For example, our efforts to save energy in business, households and the public sector will reduce the need for energy imports by reducing overall demand.
Similarly, saving energy will reduce the level of new investment we need in large scale electricity generation; as will an increase in renewables and decentralised energy, including micro-generation. Finally, by increasing the number of low carbon generation investment options available to the private sector, we will increase the diversity of our energy supplies, reducing electricity security of supply risks.
