On the 19th January 2012, Chief Economist of the IEA Dr Fatih Birol gave yet another eye-opening address to delegates at the Imperial College Grantham Institute, London, as part of his World Energy Outlook (WEO) tour. Dr Birol expressed a keen concern for alleviating energy poverty which of course is no easy challenge. As western and some industrialising economies worldwide are grappling with climate change targets while trying to pull themselves out of recession, 1.3 billion people worldwide are lacking access to any form of electricity supply. Access to energy is one of the key determinants that pulls people out of poverty. After all, coal enabled millions to come out of poverty in China and India, said Dr Birol. One thing is clear, coal will not be disappearing from global energy markets for some decades. China will continue its march towards economic supremacy, but a tonne of CO2 emitted in Shanghai is no different than a tonne of CO2 emitted in the UK – it will have to be dealt with one way or another.
The special regional study in the WEO this year is Russia, and the role it has as a leading gas exporter. While the export business will remain with Europe, more of Russia’s revenue will be earned by selling gas to the Far East.
Many issues seem to create more questions than answers. Energy subsidies awarded to fossil fuels are immense at $ 409 bn, compared with renewables which receive just $ 66 bn according to Dr Birol. However, on a per Mtoe basis, fossil fuel subsidies drop to 97 $/Mtoe, while renewables cost a whopping 168 $/Mtoe. Ironically, fossil fuel subsidies are applied to a larger extent in industrialising countries, where fuel poverty is greater, so here is an example of why the task of managing energy worldwide is so complex.
An important final message was that we should not forget the role of coal. Dr Birol’s insistence that coal is too easily forgotten by the media is perhaps an indication of the blissful ignorance of many people in the west who think that coal is a fuel of the past and that it no longer supplies their electricity; so they do not consider its implications at all. This ignorance is dangerous for climate change and the support for cleaner fossil fuel generation, yet one can’t help thinking that Dr Birol’s words could yet again fall upon deaf ears. Let’s hope not.
