Each year, the International Energy Agency puts out a lengthy report called the World Energy Outlook. New Zealand is a member of the IEA, and we pay membership fees to them in exchange for policy advice and so on (although we don’t seem to listen to it). The 2013 World Energy Outlook came out this week, and doesn’t seem to have gotten a whiff of coverage in the Herald, so I guess it’s up to me.
Incidentally, when the 2012 edition came out, the soundbite that made headlines around the world was that the US was going to “become the world’s largest oil producer by around 2020, temporarily overtaking Saudi Arabia, as new exploration technologies help find more resources” – see this Herald article for example. The media tended to gloss over the most important message of the report, which is that greenhouse gas emissions continue to increase, and we actually need to reduce them to have a reasonable chance of avoiding major global warming – but current trends are not taking us in the right direction. Thanks to Dr Sea Rotmann for making this point. As for the suggestion that the US will dramatically increase its oil production, I’ve heard murmurings that the US government was leaning on the IEA quite heavily to make this prediction, and reality may fall short somewhat. We’ll have to wait and see.
I do have to give “mad propz” to Brian Fallow at the Herald for writing some great analysis on the 2012 report earlier this year. He notes:
We already have… more [fossil fuels] than we can possibly ever burn if we are to have a fighting chance of keeping global warming to 2 degrees celsius above pre-industrial levels. And that is the goal the world’s Governments, including ours, signed up to in Cancun in 2010.
[The] 2012 World Energy Outlook, released six months ago, says: “No more than a third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2°C goal, unless carbon capture and storage technology is widely deployed.”
…Carbon capture and storage being a method of “storing” emissions from coal plants, which has not yet been shown to be commercially viable, and may not ever be.
Anyway, on to 2013. Maybe the IEA are setting themselves up for the kind of media coverage they got last year; their press release this week only devotes one paragraph to climate change, stating that “Energy-related carbon-dioxide emissions are projected to rise by 20% to 2035, leaving the world on track for a long-term average temperature increase of 3.6 °C, far above the internationally-agreed 2 °C climate target.”
The report itself, though, makes the point much more strongly:
- Under the IEA’s “New Policies Scenario” – which is a bit more optimistic than ‘business as usual’, and assumes that governments do initiate carbon taxes, trading schemes etc where they have said they will do so – the level of greenhouse gases in the atmosphere will keep rising, “from 444 parts per million (ppm) in 2010 to over 700 ppm by 2100″.
- Global agreements call for the long term concentration to stabilise at 450 ppm. Note, though, that the current 444 ppm is a bit overstated, and comes down to 403 ppm when cooling aerosols are excluded (IEA, p79). Clearly, the path we’re on does not achieve the goal signed up to by the world’s governments.
- “This would correspond to an increase in the long-term global average temperature of 3.6°C, compared with pre-industrial levels (an increase of 2.8°C from today, adding to the 0.8°C that has already occurred)”.
- “As the source of two-thirds of global greenhouse-gas emissions, the energy sector will be pivotal in determining whether or not climate change goals are achieved”. And that’s the kicker. Note that the energy sector includes oil, gas, coal, and other energy sources – so transport emissions are included here.
Here’s what happens to (energy) greenhouse gas emissions over the next 20 years, based on the “New Policies Scenario”:
The world can still meet its targets, with greenhouse gas concentrations stabilising at 450 parts per million in the future, but each year of delay makes that goal harder to reach, and more expensive. This is something the IEA says every year, and maybe it’s the “stuck record” factor that means these reports don’t get the coverage they should. But just because we’re haven’t been thinking about it as much since the GFC, doesn’t mean that the processes driving climate change have gone away.
I’ll just make one more point and leave the rest for another day (it’s an 800 page report, and a bit too much info for just one blog post). A lot of the changes that need to be made can be made for no economic cost; they pay for themselves. The IEA has listed four of the big changes, which “if implemented promptly, cut 80% of the
excess emissions in 2020 relative to the 2°C target”, and make it much easier to achieve the overall target. The four policies are:
1. Adopting specific energy efficiency measures (49% of the emissions savings).
2. Limitng the constructon and use of the least-efficient coal-fired power plants (21%).
3. Minimising methane (CH4) emissions from upstream oil and gas production (18%).
4. Accelerating the (partial) phase-out of subsidies to fossil-fuel consumption (12%).
Some of these aren’t that relevant to New Zealand – but number 1 certainly is. The IEA notes that the efficiency measures they advocate include “new or higher energy performance standards in many fields: in buildings, for lighting, new appliances and new heating and cooling equipment; in industry, for motor systems; and, in transport, for road vehicles”. In light of these recommendations, the shift towards greener building in New Zealand is a positive trend. We don’t have any regulations on road vehicles in terms of greenhouse gas emissions, but maybe it’s time we did. I’ll look at this more in the future.
Any of our readers who are students may like to go and have a look at the report for themselves – it’s not too hard to read, and there’s an executive summary so you don’t have to read the whole thing! If you’re at the University of Auckland, you can access it through the OECD iLibrary here.
I recently authored a report for EECA titled “Powering public transport in New Zealand.” In this report we considered a range of emerging public transport technologies and whether they might be suited to small to medium sized cities in New Zealand.
The first question to answer is why do we need this study? Surely there’s loads of comprehensive international studies out there that we can use? Well, yes and no. International studies are useful and we did use them in our report. The second question is why is renewability relevant? Well, it’s relevant because 1) NZ has a ongoing incentive to reduce carbon emissions and 2) a renewable and efficient PT system provides us with a hedge against higher energy prices.
The local NZ context is also relevant for several reasons. Most importantly the local context defines the broad characteristics of our urban form (low density), as well as the scale and structure of our PT systems (small). The local context also informs the price and availability of fuels (limited). And then the reconstruction of Christchurch presents a unique opportunity for us to embed PT into the urban fabric of a city from the outset. Lastly, our cost structures – especially labour – are different from elsewhere, so you can’t just say “country y is building technology x” so we should do that too.
So in our study we took the approach of using international research to identify some potential “winners”, which were then evaluated in more detail for their suitability in NZ. In this post I won’t go into too much detail; I’d encourage you to simply download the report and read it for yourselves (only 40 pages with lots of pictures and graphs. But for those of you (like Patrick) who have short attention spans I thought I’d summarise our key findings:
- Alternative fuel pathways - we consider that there are three potentially viable pathways for New Zealand cities:
- Diesel substitution pathway, which would make use of increasingly efficient diesel vehicles (such as hybrids) and non-mineral diesel fuels, namely biodiesel and synthetic diesel. This pathway is attractive because it offers immediate, albeit incremental, improvements in PT renewability. Public transport is an ideal testing ground for such fuels, because it provides a concentrated point of demand/distribution. On the downside, to be feasible the price differential between mineal and non-mineal diesel would need to decline over time.
- Biogas pathway – which may be suitable where large quantities of biogas can be generated from landfills. Best suited to cities where reticulated CNG is available as a back-up, and that support large PT systems. Scale is important because the switch from diesel to CNG buses will incur fixed capital costs, e.g. in maintenance facilities, which would ideally be spread over as many vehicles as possible.
- All-electric pathway – While the low energy density of batteries does create some range and speed limitations for electric buses, our literature review noted just how quickly these issues were being circumvented with innovative in-service recharging facilities, such as over-head and inductive charging points. These re-charging facilities meant that battery electric buses can now get through the day without needing to be taken out of service for re-charging. One of the interesting advantages of battery electric buses is that they tend to charge overnight when electricity prices are low, whereas trolley buses and light rail draw down during the day when prices are high.
- Alternative vehicle pathways – in a future of sustained high oil prices, such as those forecast recently by the IMF, alternative vehicles, such as hybrid and battery electric buses, because cost-effective alternatives to diesel buses. Fixed route electric vehicles, such as trolley buses and light rail, struggled to be cost-effective due to their high capital costs. Going forward, we would expect newer technologies, such as hybrids and electric buses, to develop more rapidly and only extend their comparative advantage over fixed route options.
Three of the more advanced vehicles are illustrated below, namely 1) the ADL Enviro 400-H double decker; 2) the Arctic Whisper with fast overhead re-charging; and 3) the BYD all-electric bus, of which 1,000 are currently operating in Shenzhen.
ADL Enviro 400H – Hybrid diesel electric
Hybricon’s Arctic Whisper – Electric battery bus with rapid over-head re-charging and back-up diesel engine
BYD’s all electric battery bus, with fast re-charging
If you wanted my personal opinion on what pathway(s) were most likely, I suspect the best way forward is to focus on purchasing more efficient diesel buses, before subsequently embracing all-electric battery buses when they become viable. Of course the circumstances of individual regions and operators will vary considerably, which is why we hesitate to make an universal, all-encompassing conclusion about what is best fuel/technology mix.
Based on our results we made the following recommendations:
- Central government should closely monitor alternative public transport technologies, because these technologies are evolving rapidly.
- Undertake a systematic analysis of the barriers to uptake of emerging technologies, such as weight and mass restrictions.
- Engage with bus operators to gain feedback on which technologies they see as having the most potential.
- Investigate whether trials can be used to gain on the ground experience of new technologies.
- Perhaps most importantly: Central government should establish a public transport vehicle procurement forum to help realise economies of scale in bus procurement.
Recommendation #5 is potentially the most interesting. What we’re encouraging central government to do here is to take a leadership role in the procurement of public transport vehicles. This has two positive consequences. First, it creates opportunities to gain economies of scale in vehicle ordering, which in turn drives the price down. Second, economies of scale are especially important when you’re trying to buy new technologies. As such, by facilitating a public transport procurement forum central government can help us to gain access to cheaper, better buses.
As the report notes, participating in the vehicle procurement forum would be completely optional and moreover self-funding through charging a small commission on successful orders. And ultimately by helping to lower the costs of vehicle procurement (which are a not insubstantial cost of the PT system) we should see reduced demand for PT subsidies and higher quality, more renewable vehicles.
It’s also a useful example of how our Government could take a leave out of the Scandinavian economics text book, by working more closely with the private sector to coordinate strategically interdependent “win-win” outcomes.
*** I’d like to acknowledge the contribution of Jörn and Liz at EECA for supporting this study, as well as Ian Wallis for helping to make it happen ***