Upload
isaac-leonard
View
216
Download
1
Tags:
Embed Size (px)
Citation preview
Energy Security and Energy Policy – Where will our energy come from?
Dieter Helm, New College, OxfordWednesday, October 21st 2009
The Questions
What’s the problem? What’s the threat? What are we doing? What are the solutions?
What’s the problem?
Security of supply is a public good
Security is relative risk, price and storage Security is multidimensional price, quantity and
time profiles Security is multinational European, global
And it has to be solved whilst decarbonising...
What’s the threat?
Peak oil and demand Russia and gas supplies The investment challenge The climate change challenge
Threat no. 1: Peak Oil
Too much, not too little Price not necessarily up Arctic, Antarctic, Brazil, Mexico, Africa, Iraq etc etc Lots of coal Lots of unconventional gas
Peak Oil: demand ever up
Global population 6bn→ 9bn by 2050
2004 2010 2015 203010000
11000
12000
13000
14000
15000
16000
17000
18000
World primary energy demand (Mtoe) Pro-jections
2009 2010 2011 2012 2013 2014-3
-2
-1
0
1
2
3
4
5
Economic growth projections(% yoy)
Sources: 1) IMF World Economic Outlook 2009 2) IEA World Energy Outlook 2006
1 2
Peak Oil – proven reserves
Proved oil reserves end 2008 – thousand million barrels
Source: BP Statistical Review of World Energy 2009
42
71
123
126
142
754
Threat no. 2: Russia, Gazprom and the Ukraine
Russia as an oil and gas economy Putin’s regime and Gazprom Russia’s borders and Russia outside its
borders The Caspian problem Crimea, Ukraine and “unfinished business”
Source: US Energy Information Administration, 2007
Russian Pipelines
The European pipelines
The special relationship Germany-Russia and Nord Stream Ukraine, storage and instability Nabucco – the Caspian gas can go north or west
Threat no. 3: The investment challenge
1. The capacity crunch2. The technology crunch
The capacity crunch Legacy of the 1970s
GDP3%
Electricity demand
7%
Massive excess supplies in 1980s and 1990sAnd... North Sea oil and gas...Now... we need...30-35GW replacement capacityImporting gas (and oil)
The technology crunch
Decarbonisation Existing technologies New technologies
Application of IT to grids Smart meters Electrification of transport
So what are we doing? Building windmills Energy efficiency EU 2020-20-20 package UK = 5% - 35% wind by 2020
gas gas gas
gas imports
security
What should we do?
Very large investment programme needed Design the market for investment Capacity markets Long term contracts
And.....
Decarbonise
Large scale supplies New technologies
Nuclear, CCS and Renewables
The economics of nuclear Making CCS work – to deal with coal Renewables and technical change
In a couple of decades....
Electrification of transport Batteries Smart meters and smart grids
And lots of technical surprises.....
So what do we do?
A coherent charging policy Clear targets for government Clear delivery institutions Clear instruments – a price of carbon, a price of security,
capacity markets, R&D policy etc etc...
What will happen?
An energy crisis – unless the recession continues Price spikes and volatility
And much economic cost...
CO2 as climate change continues
Further information:http://www.dieterhelm.co.uk/publications
FORTHCOMING: October 2009: Helm, D. and Hepburn, C. (eds), The Economics and Politics of Climate Change, Oxford University Press.
Delivering a 21st Century Infrastructure for Britain, with James Wardlaw and Ben Caldecott, Policy Exchange, September 2009.
EU climate-change policy—a critique, Smith School Working Paper Series, September 2009
Environmental challenges in a warming world: consumption, costs and responsibilities, 2009, Tanner Lecture, February 21st.
Georgia, Ukraine and Energy Security, CER Bulletin, February 2009. Credible Energy Policy, Meeting the challenges of security of supply and climate
change, 2008, Policy Exchange Climate-change Policy—why has so little been achieved, 2008 Oxford Review of
Economic Policy, 24:2, 211–238 Caps and Floors for the EU ETS: a practical carbon price, October 13th 2008 Meeting the Infrastructure Challenge, May 2008