By Charles Ellinas
Probably the most important climate change conference in our area so far was held in Cyprus last weekend and inevitably fossil fuels featured prominently in the list of concerns highlighted by the participants.
The chairman of the conference, organised by the Cyprus Institute, was Laurent Fabius, former prime minister of France, and the COP21 architect and chairman who led the preparation of the Paris Climate Change Agreement. There was participation by specialists, scientists, presidents of international environmental organisations and politicians working on this topic from 35 countries.
In his introduction, Fabius praised “the high-level and stimulating programme of this two-day conference and the outstanding participants”.
The Paris Agreement goal is to hold the increase in the global average temperature due to carbon dioxide emissions ‘well below 2°C above pre-industrial levels’. But he expressed concern that the implementation of COP21 has so far not progressed as expected and it is worrisome, with the global average temperature having already increased by 1°C. Many countries are failing on their pledges.
Serious and detailed studies have been carried out concerning the Eastern Mediterranean and the Middle East, which highlight the concerns. Without arresting climate change, the average temperature in the Eastern Mediterranean will rise steadily, and it is expected to exceed 4°C by the end of the century. Generally, the region is expected to have much drier and warmer conditions and prolonged periods of high temperatures and droughts, more frequent fires, as well as increased pollutants and dust in the atmosphere with negative impacts on air quality and health, something which we are experiencing already.
Global energy demand
Based on BP’s Global Energy Outlook, currently, 85 per cent of global primary energy is supplied by fossil fuels, with only three per cent by renewables, sun and wind. Fabius said this is worrisome. The transition to cleaner energy is not progressing fast enough.
With no change, by 2040 global primary energy is expected to increase by about 35 per cent in line with a population growth of 1.7 billion to 9.2 billion, and with 2.5 billion people to be lifted out of poverty through rising prosperity of emerging economies. Based on this, carbon emissions are expected to actually increase by 14 per cent by 2040.
In order to achieve emission reductions commensurate with the 2°C target, the world needs to move from fossil fuels to renewables much faster. This will require drastic emission reduction policies to be accepted, enforced and implemented immediately and globally.
The International Renewable Energy Agency (IRENA) called for a six-fold increase in the rate of implementation of renewables. And there lies the challenge. It proposed a ‘renewable energy roadmap’ in which deployment of energy efficiency measures, low carbon technologies, including renewables, hydro and nuclear, provide 66 per cent of global primary energy needs by 2050, with fossil fuels expected to provide the remaining 34%.
But achieving this energy transition can be challenging. It requires new policies which must enable society’s orderly, stable and affordable transition to a low carbon global economy, without major disruption or unexpected consequences.
But there is hope. Spurred by innovation, increased competition, and policy support in a growing number of countries, renewable energy technologies have achieved massive technological advances and sharp cost reductions and they will continue doing so.
However, a world of clean, reliable and safe energy is not around the corner and full decarbonisation by 2050 will cost trillions of dollars – there is no cheap option. Investment in renewables so far has been strong, but way below what is needed to achieve Paris goals. An integrated technology and policy approach is needed to drive and accelerate clean energy transition.
The global power generation sector is on the way to be decarbonised, largely because low carbon technology is cheaper than the fossil fuels it replaces. But this is not yet the case in our region.
Impact on the Eastern Mediterranean and the wider region
The contribution of the East Med and the wider region to the implementation of renewables, energy efficiency measures and carbon emission reductions so far is modest at best.
It is disappointing that north-western Europe is doing much better than our region in implementing wind and solar photovoltaic (pv) power generation. Even though all countries in our region are blessed with an abundance of solar energy, most countries, including Cyprus, are still heavily dependent on fossil-fuel power generation.
Only just over five per cent of the region’s power came from renewables sources, including hydro, in 2016. Not surprisingly, the per capita carbon emissions in our region are close to 50 per cent higher than the world average.
At a recent workshop in Jordan, one of the participants put the region’s continued reliance on fossil-fuels down to ‘vested interests’. He said, “it is possible to make commissions out of a fossil-fuel power plant throughout its life – not just from its construction but also through the import of fuel during its operation. You can make money out of renewables only during construction.” Sadly, there might be some truth in this. Endemic corruption needs to be confronted. Transparency and pressure from civil society may be ways to achieve this.
Measures needed in the region
So far, where measures to implement low carbon fuels have had some success, it has been mostly for commercial, but also security of supply, reasons. The most successful switch so far has been to natural gas, the cleanest of all fossil fuels with carbon emissions of only about 40 per cent those from coal. But cheap renewables offer a cleaner, reliable and affordable solution to the region’s energy needs.
In November last year, an auction in Mexico and another in Abu Dhabi set new records for solar pv power, at 1.5 cents per kilowatt-hour (kWh). Recently in India prices at an auction for 80-100 MW pv units were around 4 cents per kWh. When compared to the price of electricity in Cyprus, now at 22 cents per KWh, it becomes clear that there is a huge potential for significant reductions.
Cyprus’ energy strategy must change in line with EU’s new 2020-2030 targets. Cyprus’ new energy plan must be submitted to the EU by January 1, 2019, and, given its implications on the economy and the cost of energy, it still needs to go through wide public consultation.
At the conference, it was said that Cyprus’ new target would be to reduce carbon dioxide emissions by 24 per cent by 2030 (from 2005 levels), compared with five per cent by 2020. Although this is low in comparison to EU’s target to reduce carbon emissions by 40 per cent by 2030 (from 1990 levels), it will still be very difficult to achieve without major change. It will be necessary to change electricity production from Heavy Fuel Oil (HFO) to renewable sources, solar and wind energy and natural gas.
The prospects are enormous. Based on a study by IRENA, renewable energy could provide between 25 per cent and 40 per cent of total electricity supply to Cyprus by 2030. And as reported at the conference, with the latest developments in electricity storage technology, including batteries, this could even expand to close to 100 per cent, with fossil fuels only needed to cater for safety, interruptions and support.
The proposed import of LNG could also contribute to the reduction of carbon dioxide emissions, but not to the electricity price. It could be quite the opposite, due to the cost of LNG, which may exceed $8-10 per million btu (about 1000 cubic feet), and the cost of fixed installations, even after the allocation of the €101 million grant by the EU. This has been presented in Cyprus as necessary for the achievement of the new carbon emission reduction target beyond 2020. But as shown above, this can be achieved efficiently by switching to renewable sources, which will surely result in a significant reduction in electricity prices.
Globally the biggest challenges are in Asia and Africa, but also in our wider region. Change can take place if proposed solutions are commercially competitive, help reduce energy costs and contribute to a better quality of life. Reduction of carbon emissions will then be the outcome – it will not be the cause of change.
Dr Charles Ellinas is non-resident senior fellow at the Global Energy Centre of the Atlantic Council