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Energy: (very) long-term perspectives

Greg De Temmerman
managing director of Zenon Research
Key takeaways
  • Global warming forces us to project ourselves into a very different world, where the question of energy is crucial.
  • Technological innovation is at the centre of many scenarios, and not without reason: major breakthroughs have already taken place over the last ten years.
  • Foresight also requires us to think of a future where no disruptive innovation has changed the game.
  • Rich countries are evolving rapidly; emerging, poorer countries could follow by leapfrogging on richer ones by directly adopting decarbonised solutions.
  • But the competition for resources also forces us to consider geopolitical tensions.

The Zenon think tank makes efforts on very long-term forecasting. Does the issue of energy pose any particular problems?

Fore­sight is the effort to map out pos­si­ble paths for the future. Futur­ists do not just draw lines from what exists, they include the pos­si­bil­i­ty of more or less rad­i­cal inno­va­tions in the thought process. But in the case of ener­gy, the pos­si­ble futures are framed by sev­er­al con­straints. The first is the require­ment for decar­bon­i­sa­tion, which is imposed as a gen­er­al framework.

If 2050 is often men­tioned as a tar­get date, it is both because it is an impor­tant mark­er in this frame­work, along with the objec­tive of car­bon neu­tral­i­ty (to have a chance of stay­ing below 1.5°C of glob­al warm­ing), and because the 25- or 30-year hori­zon is fair­ly com­mon – futur­ists are used to think­ing in the medi­um-term. But it is pos­si­ble, with­out slip­ping into sci­ence fic­tion, to move this hori­zon back and rea­son in the long-term.

This is because the cli­mate mod­els upon which we base our ideas run over the very long-term, due to strong iner­tia effects. The heat or salin­i­ty of the oceans, the major marine cur­rents and even cer­tain atmos­pher­ic flows are already under­go­ing changes that are begin­ning to pro­duce their effects, and which are not reversible in the short- or medi­um-term. Sim­i­lar­ly, we can sig­nif­i­cant­ly reduce annu­al COemis­sions, but reduc­ing the stock of CO2 in the atmos­phere is a com­plete­ly dif­fer­ent mat­ter, and this stock is the main deter­mi­nant of what will hap­pen in the com­ing decades. Final­ly, our equip­ment also forms a stock: 14% of cars sold in 2022 will be elec­tric, i.e. 11 mil­lion vehi­cles; but there are 1.4 bil­lion cars on the roads in the world.

The long term is therefore essential. But isn’t there a risk of thinking that in 50 years’ time we will have found the miracle solution and that there is no need to panic?

Fore­sight requires us to explore sce­nar­ios that include tech­no­log­i­cal or oth­er dis­rup­tions. The faster we fail to reduce our emis­sions (and there­fore the low­er the prob­a­bil­i­ty of meet­ing the com­mit­ments of the Paris Cli­mate Agree­ment), the more the sce­nar­ios will include tech­nolo­gies still in the devel­op­ment stage. The pos­si­bil­i­ty of man­ag­ing a tem­per­a­ture over­shoot, for exam­ple, implies hav­ing net-neg­a­tive sce­nar­ios that reduce the stocks of green­house gas­es in the atmos­phere. But at the moment, on the con­trary, methane emis­sions are explod­ing! Ambi­tious poli­cies can make a dif­fer­ence. Even if the exam­ple of methane illus­trates the com­plex­i­ty of these issues, which are marked by feed­back loops: dur­ing con­tain­ment, few­er pol­lu­tants (CO, NOx) were emit­ted, and these help the chem­istry of methane decom­po­si­tion in the atmos­phere. All sys­tems are coupled.

Among the dis­rup­tive inno­va­tions that can occur, nuclear fusion is often men­tioned, or geo­engi­neer­ing (con­trol­ling solar radi­a­tion to cool the earth, which rais­es huge ques­tions). There are also those that are hap­pen­ing before our eyes: like bat­ter­ies, for which price has dropped by 90% in ten years while ener­gy den­si­ty has almost dou­bled. This is a game chang­er for mobil­i­ty, and fif­teen years ago we could not have imag­ined it. How­ev­er, the pos­si­bil­i­ty of inex­pen­sive stor­age makes oth­er appli­ca­tions relevant.

But fore­sight also requires us to think about a future where no break­through inno­va­tion has changed the game. Even if nuclear fusion were avail­able today, it would take thir­ty years to deploy it. So, we must go through the short-term and extend the trends to under­stand how they can be changed. Fore­sight also thinks in terms of arrival points, by out­lin­ing the sce­nar­ios that will enable us to get there. Hypothe­ses are made, and the con­di­tions to be met are specified.

Let’s take a glob­al, sys­temic hypoth­e­sis: decar­bon­i­sa­tion. To draw up pos­si­ble paths, we will first ask our­selves what can be elec­tri­fied, then what can be trans­ferred to hydro­gen, then to bio­gas, and then we will com­plete our rea­son­ing. Explor­ing the “how” leads us to con­sid­er the speci­fici­ties of a ter­ri­to­ry – off­shore wind pow­er is not pos­si­ble every­where! But these con­di­tions change, some­times very quick­ly. On key issues such as mobil­i­ty and elec­tric­i­ty pro­duc­tion, the move­ment has begun, and we are now see­ing expo­nen­tial growth. Thanks to polit­i­cal efforts, reg­u­la­tions, and sub­si­dies, we are no longer very far from par­i­ty in terms of price (if we rea­son in terms of total cost of own­er­ship, for vehi­cles, or, for renew­able ener­gies, in terms of the dis­count­ed cost of the kWh, a met­ric that takes into account all the costs and pro­duc­tion of a piece of equip­ment over its life­time). We are reach­ing a point where the mar­ket will be able to func­tion with­out sub­si­dies. In oth­er areas, such as hydro­gen for exam­ple, sub­si­dies are still needed.

All these developments are taking place in the rich countries. Isn’t the challenge in the emerging and poor countries? And if so, what are the possible scenarios?

If we think in terms of the future, we see two very dif­fer­ent sce­nar­ios. The first, which is opti­mistic, is leapfrog­ging: these coun­tries direct­ly adopt decar­bonised solu­tions. What sup­ports this hypoth­e­sis is that in Africa, for exam­ple, the net­works have yet to be cre­at­ed, and the issue of inter­mit­ten­cy is dif­fer­ent when you start from noth­ing or almost noth­ing. There is no path depen­den­cy. The weak point of this hypoth­e­sis is the invest­ments, with the ques­tion of finan­cial sta­bil­i­ty in the back­ground. India, for exam­ple, is a large con­sumer of local­ly pro­duced coal. At the last COP, it said yes to accel­er­at­ing its tran­si­tion but is demand­ing the means to do so.

This brings us to polit­i­cal issues, with pub­lic choic­es: for emerg­ing coun­tries, to com­mit them­selves; for rich coun­tries, to help them (or at least to stop invest­ing in fos­sil fuels in emerg­ing coun­tries). The prob­lem is that all these choic­es inter­fere with each oth­er: Pak­istan, for exam­ple, has switched back to coal since Europe turned to LNG to do with­out Russ­ian gas. If we buy more of one resource (whose pro­duc­tion can­not instant­ly increase), we cut off access to some­one else’s mar­ket. And con­verse­ly, if we turn away from a resource, we make it more acces­si­ble to oth­er buy­ers. This brings us to a sec­ond sce­nario, where the coal, gas, and oil that we no longer con­sume will be con­sumed in emerg­ing and poor countries.

Part of the equation lies in the still uncertain balance between China, the supplier of the transition (solar panels, nuclear power, batteries, electric vehicles) and the developed countries, which are trying to recover their industrial sovereignty. As a result, there is competition for resources and critical metals such as lithium, cobalt, and rare earths. Are the tensions linked to this competition taken into account by futurists?

This ques­tion is relat­ed to that of extreme polit­i­cal shocks. They are rarely tak­en into account in the mod­els (one of the five IPCC sce­nar­ios, known as the SSP, takes into account ‘region­al rival­ries’). The effects of cli­mat­ic crises on pro­duc­tion (par­tic­u­lar­ly in agri­cul­ture) are tak­en into account to a greater extent, but lit­tle account is tak­en of the pos­si­bil­i­ty of geopo­lit­i­cal shocks or the col­lapse of states. The implic­it bet is that the shocks will be absorbed, that the mar­ket will find the solu­tion. This is what it does in many cas­es: for exam­ple, the lithi­um cri­sis pre­dict­ed ten years ago did not hap­pen, solu­tions were found and pro­duc­tion and reserves were great­ly increased. But it is also because of a lack of imag­i­na­tion, and because they are dif­fi­cult to mod­el, that these extreme sce­nar­ios are rarely used.

We could pro­ceed as we do in project man­age­ment: iden­ti­fy the risks and make sure they don’t hap­pen; make the sce­nar­ios evolve. But we tend to want to fol­low one sce­nario, rather than putting it in dia­logue with anoth­er to imag­ine oth­er paths. This is one of the great mis­un­der­stand­ings of fore­sight work: those who read it believe that we must choose one sce­nario or anoth­er. The les­son of the past is that we tin­ker and adapt.

Richard Robert

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