Wednesday, 23 October 2013 12:13
October 23, 2013
Fossil fuels will continue to dominate the energy sector for the foreseeable future, after a report issued by the World Energy Council made it clear that fears expressed in respect of so-called "peak oil" were unlikely to be realized within the next forty years at least.
Following the recent World Energy Congress in Daegu, Korea, Christoph Frei, Secretary General of the WEC said that the chances of the world running out of oil were slim, citing the fact that global reserves of the engineering resource were 25 percent higher than in 1993 while production has increased by 20 percent. According to Canada's Financial Post, the WEC report demonstrates two potential scenarios for the energy industry, both of which include the implementation of renewable sources, and fossil fuels remain the dominant factor in both.
"Our latest World Energy Resources report shows that 'peak oil' has moved into a far future. It is clear that coal, oil and gas are going to keep powering the economies of many countries for many years to come," said Frei, in a WEC press release. "Renewables will play an important role in our future energy mix. In particular, our World Energy Scenarios study sees that solar PV will have a bright future."
The release of the report comes at a time when proponents of renewable or alternative energy sources are pushing hard for a greater acceptance of the technology, with a number of governments across the world already dedicating significant amounts of engineering research into ways to diminish reliance on fossil fuels. Renewable energy is seen by many as a logical step in reducing the current level of carbon emissions present in the atmosphere, with a recent report from Bloomberg New Energy Finance predicting that the appetite for renewables will increase.
"Our study finds that although fossil fuels continue to dominate, renewable energy and the investment appetite for them are growing from strength to strength," said Guy Turner, Chief Economist at Bloomberg New Energy Finance. "With wider deployment, the price of renewables will fall, reducing the risk for investors, and we expect to see greater uptake over the years."
However, according to the WEC report, fossil fuels are expected to maintain their position as the dominant resource, with 80 percent of global energy currently produced by either oil, gas or coal. To put that into perspective, renewables such as solar, wind, geothermal or marine only provide 1.5 percent, despite significant financial investment by both the private and public sector.
"The growth of new renewables, namely wind and solar, has been mainly dependent on generous government support and subsidies especially in the EU," said Alessandro Clerici, executive chair of World Energy Resources. "In addition, integrating a high percentage of intermittent renewables into the grid has remained challenging due to the high cost of storage and backup power. Intermittent renewables such as wind and solar will have an increased share in future electricity generation but they will still remain marginal in the global primary energy supply for decades to come."
Need for efficiency
While the report highlighted the continuing influence of and need for fossil fuels, it did showcase the need for governments and electricity producers to develop more robust energy efficiency programs. According to the study, buildings account for nearly 40 percent of all global consumption, while power plants have an average efficiency rate of around 34 percent. At the same time, the report noted, the electric system could be improved from its current efficiency level of 20 percent up to a potential rate of 50 percent.
"Energy efficiency presents an immediate opportunity to reduce both energy intensity and emissions," said Clerici. "However, as energy-efficient systems are capital-intensive, decision-makers must abandon the usual short-term mentality to finance projects based on initial costs, to also account for the lower lifecycle costs."
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