Renewable energies offer the only chance

Decision-makers in developing countries are wrong if they think that renewable energies are too expensive for them. The opposite is the case. Neither in economical nor in socio-political terms can it be justified to follow the expensive example of wealthy countries.

[ By Hermann Scheer ]

Arguing for the mobilisation of renewable energies on ecological grounds alone will hardly convince developing countries. This became apparent during the world climate conferences held between 1995 and 2001, which spawned the Kyoto Protocol. The developing countries consistently claimed that switching to a more environment-friendly energy policy is primarily a task for the industrialised nations. The latter consume 10 to 15 times more energy per capita than the developing countries. This is one reason for their greater economic power. Therefore, according to developing countries, any initiatives for ecological power provision must first come from the industrialised nations. For themselves, they consider it economically prohibitive. They say that discussions in industrialised countries have shown that the financial burdens of a new energy policy are too high for rich economies. Therefore, this objection would apply even more to developing countries. Basing their argument on this prejudicial assumption of higher costs compared to conventional power supply, developing countries are of an almost unanimous opinion that they can only take steps to mobilise renewable energies if this is funded within the framework of development aid.

Such a point of view reduces the question of renewable energies to the one of immediate costs alone, to the the micro-economics of immediate energy provision. This includes no concern at all for macro-economic aspects of energy provision – be these effects negative or positive. Energy provision, however, is not a sectoral problem. We have to talk about energy sociology and economic sociology in order to recognise the fundamental links. In the early 20th century, the British sociologist Frederick Soddy wrote in his foundational work “Matter and Energy” that the laws expressing the relations between energy and matter were not solely of purely scientific importance. Rather, he considered them relevant for understanding humankind’s history and crucial for shaping its future. Energy issues, according to Soddy, are decisive for the rise or fall of political systems, the freedom or bondage of nations, the movements of commerce and industry, the origin of wealth and poverty and the general physical welfare of the human species.
We will remain unable to grasp such links as long as we speak of the costs of individual energy technologies in isolated terms, which is typical of both energy economics and energy policy. Instead, we have to consider energy systems, all energy flows from source to end-use, all direct and indirect costs to national economies and all direct or indirect negative environmental impacts as well as all political consequences.

In terms of physics, every man-made energy system must follow the flow of those energy sources, in favour of which decisions have been made. These energy flows determine the choice of technology, the necessary infrastructure and the business models for energy provision. All this defines the actual costs and the scope for society to fulfil energy needs. It would be short sighted to turn the intellectual approach up-side-down by taking a particular technical and commercial system of energy provision as given and merely changing the energy sources, which pass through this system, as and when the need arises. Regard for energy flows makes fundamental differences apparent between conventional fossil-atomic energy on the one hand and renewable energy on the other. These differences are the true reason for renewable energies being such a contentious issue and so poorly understood. Above all, they explain the widespread underestimation of the options they offer in both economic and social terms.

Active consumption or usage of energy is always decentralised, occurring where people live and work. The extraction of atomic and fossil energies, on the other hand, is inevitably based on centralisation, oligopolisation or even monopolisation. It also implies long energy chains. Mineral resources of oil, natural gas, coal and uranium are concentrated in a relatively low number of regions of our planet. To name the most compelling example: 60 percent of all oil, which constitutes 40 percent of present world energy consumption, currently comes from only 40 so-called giant oilfields, 26 of which are located in the countries around the Persian Gulf. The more these oilfields become depleted in the course of the next few decades, the greater our dependence on them will be, and the longer the energy chains will grow. The cost of these chains will thwart the global economy as well as individual national economies and even energy-supply companies.

With respect to natural gas, the problem is almost the same, since its sources are virtually identical to those of oil. Only coal deposits are more widely distributed and have somewhat longer availabilities, although fundamentally the situation is not very different. Uranium too, the basic raw material of nuclear fuels, will be depleted within the next few decades, and the deposits of extractable uranium are even more highly centralised.

This situation will lead to dramatic levels of existential dependency for societies, constituting a potentially disastrous economic and social problem with serious implications for world peace. As these finite energy deposits become exhausted in the course of the 21st century, prices will systematically rise. More and more people, even in the wealthier countries, will be unable to afford the energy, and more and more entire economies will be adversely affected.

This problem is already being experienced by most developing countries, at least by those without fossil energy deposits of their own. Developing countries pay the same prices for energy on world markets as the industrialised nations. However, in many cases, their per capita income only amounts to five to ten percent of advanced economy levels. Therefore, their de facto energy costs are already ten to twenty times higher. Nothing illustrates the developmental crisis in the Third World better than this comparison. There are, however, numerous other indicators. For example, energy taxes are out of the question in many developing countries. Rather, oil consumption has to be subsidised. Another indicator is that several dozen of the “least developed countries” already have to pay more to import energy than they obtain in export earnings. In other words, this basis does not leave them with any economic perspective at all. It must not be forgotten that the worldwide oil price crises of 1973 and 1982 were the main reasons for the escalation of Third World debt from about 200 billion to 1.2 trillion dollars in that period. To date, developing countries have still not recovered from this disaster. With the increase in conventional energy prices, they are facing the danger of an economic fall-out of dramatic proportions.

One of the most glaring developmental mistakes of the past decades was to implant centralised systems of power provision in developing countries, following the example set over decades by the industrialised nations. This was completely inappropriate for the societies concerned, because far more than 50 per cent – in some places up to 90 per cent – of their populations live in rural areas. The costs of energy provision, however, are less about power stations as such, but rather result from widely-branching grids. As there was not enough money available for such networks, power connections were mainly concentrated in the cities. The result was a systematic marginalisation of rural areas within a considerably shorter period of time than had occurred in industrialised countries. The consequent rush of people to urban slum areas caused a dramatic growth of cities within a few decades, leading to overcrowding and people living under the most degrading conditions. Such a situation had never arisen in the history of the industrialised societies.

The developing countries, to a greater extent and sooner than everyone else, are thus stuck in an existential energy trap. The only chance they have of escaping is to mobilise renewable energies, because a conventional energy supply system is socially prohibitive. In addition to their fundamental environmental advantage, moreover, renewable energies are home-grown energies. With the exception of large hydro-electric schemes, energy generation will be decentralized. There are more than just a few available sources. Natural local energy can and must be produced on-the-spot, where it is consumed, using decentralized technologies. Developing countries can thus save their hard-earned foreign cash, which otherwise would have to be spent on primary energy. They can cut costs by coping without wide-spread infrastructures. Using their potential of bioenergy, they have the opportunity to accelerate economic development of rural areas. As energy demands are quick to satisfy here, renewable energies offer clear advantages. Decentralized technologies lead to a modular energy system, which can be quickly installed. Large-scale power plants, on the other hand, require a construction period of at least ten years before generating any power. For these reasons, it is a dangerous myth to classify renewable energies as prohibitive in developing countries.

The exact opposite is the case. Fundamentally, mobilising renewable energies offers the only economic chance. A crucial task of the upcoming global event on renewable energies in Bonn is to make this link clear to the development economists of the industrialised nations, to their implementing organisations and to the elites of the developing countries themselves. At any rate, the World Forum for Renewable Energies in Bonn, which is organising the World Council, is dedicated mainly to this issue. One of the most important challenges is the need to set up an international agency for renewable energies – a new inter-governmental organisation to promote development along these lines.