World energy sector must become sustainable, says WEC

LONDON, England, May 11, 2005 (Refocus Weekly)

The world must keep all energy supply options open, including renewables as well as advanced fossil fuel systems, nuclear and hydro, whether large or small.

“Each option is subject to significant uncertainties; we cannot afford to jettison any one of them,” says the World Energy Council in its 2005 statement. Different sources often are complementary, and the best mix to meet expanding world energy needs will depend on technological advances and location-specific factors.

“We can and must act now to put energy development on a fully sustainable path,” it explains. “We do not have a century to act!”

The statement says all energy options must be kept open (“No technology should be idolised or demonised, and energy efficiency must be increased”) and there must be the necessary investment in energy infrastructure for which “cost-reflective energy prices are essential - systems which do not pay for themselves are ultimately unsustainable.” It wants a pragmatic approach to market reform to accommodate specific policy measures to achieve certain objectives, and priority on measures needed to ensure reliability of supply which will depend on “energy diversity supported by sound market design and improved generating plant performance.”

The world must exploit the ‘win-win’ opportunities of emerging climate change responses and “mechanisms, whether voluntary or regulated, should embrace least-cost emissions reduction, encouraging transfer of clean technology from industrialised to developing countries.” WEC also wants technical innovation which is critical to reconcile development with environmental protection, and to foster and sustain public understanding and trust in energy issues.

“On the demand side, increased efficiency is a precondition of sustainable development,” and substantial operational efficiencies can be obtained “simply by improving availability through the introduction of best practices at the world's existing power plants” to optimize fuel use and reduce carbon emissions, while saving $80 billion a year in investment for new capacity. “Combined heat and power systems are a further way to optimise efficiency,” while labeling and minimum efficiency standards are the most effective means to rapidly improve end-use efficiency.

“Sustainable energy systems are achievable, but the challenges are many and need to be tackled urgently if sustainability is to be achieved in this century,” the statement emphasizes. “No single player in the energy system can act alone: government policy, stable and clear regulation, industry investment, civil society and the final consumers of energy services all have their individual roles to play.”

The world has 1.6 billion people who are entirely dependent on highly-inefficient traditional forms of energy which are not sustainable or acceptable, and there are millions more whose access is insufficient or highly unreliable. “The energy systems in both developing and developed countries can have significant environmental impact,” it explains, and “the use of traditional energy sources, such as woodfuel, contributes to deforestation and results in health-damaging indoor pollution.”

The overall challenge is to “deliver sufficient energy for equitable and secure social and economic development, while avoiding environmental impacts which would compromise the capacity of future generations to enjoy the fruits of that development,” it adds. Volatile and higher energy prices will prompt renewed progress in energy efficiency, but this will slow economic growth which, in turn, will add to the difficulties of achieving universal access to energy as an “essential condition for a more equitable and secure world.”

“Delivering sustainable energy to meet expanding global demand for energy services will require increased investment in energy infrastructure to replace capacity being retired, to expand supply where needed, and to cover the cost of cleaner energy systems,” it states. “Energy systems which do not cover their costs over the medium to long-term are not sustainable, and long periods of low prices may jeopardise future energy availability.”

Market reform must adopt the guiding principle of cost-reflective pricing, although subsidies or similar policy measures “may be needed in certain circumstances to achieve essential goals” such as security of supply and internalisation of emission mitigation costs or environmental impacts. One acceptable area of intervention is the promotion of research and emerging energy sources where “renewable energy sources receive significant support in many industrialised countries.”

“It simply will not work to try to protect the consumer from the cost of environmental sustainability,” and greater public understanding of the rationale for price increases will be needed “to avoid political pressures that risk deflecting governments from cost-reflective pricing.”


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