(c) aboutpixel.comArticle by Hermann Scheer, General Chairman WCRE, published in Le Monde diplomatique, June 2006 

Renewable energies are a realistic and affordable alternative

There is both bad news and good news for world energy supply. The bad news? Oil is running out. The good news? Oil is running out. And not only oil: sooner or later, every type of fossil energy will run out – including fossil uranium ore which is needed to make atomic fuel rods. The reason why oil became the most used form of energy was simple: because it is liquid, making it easier to use, it became the 20th Century's "Black Gold". Yet even John Rockefeller, the first and best-known of the oil magnates, spoke prophetically of "the devil's tears".

It was always clear that oil would run out one day. But because people didn't know when, they put the problem to the back of their minds. The alarmist mood among by state leaders today shows that they were living from day to day, whilst their countries' dependence on the resources which were becoming depleted grew greater and greater. Yet the question as to how long the reserves will last is only the third most important question.

The most important question arises from the following fact: the maximum ecological burden which world civilisation can cope with will be reached before the limit of availability of finite resources. According to the findings of the Intergovernmental Panel on Climate Change (IPCC), climate gases will have to be reduced by at least 60 per cent by 2050 if ecosphere collapse is to be avoided.

The second most important question is: what does the development of energy prices mean for the global economy and the individual national economies? The unbroken increase in energy prices is rooted in several factors. Firstly, the era of oil which could easily be extracted ("easy oil") is definitively over, leading to an increasing tendency to resort to the potential of non-conventional fossil fuels. Secondly, due to the development of China, for example, and the increase in world travel, world energy demand is increasing more rapidly than new technology can increase supply. Thirdly, the necessary infrastructure is becoming increasingly costly, as the world's fossil system becomes ever more dependent on exploiting the very last remaining sources.

The political uncertainties constitute a fourth factor. In a world which is growing more and more instable in cultural, economic and social terms, as a result of dogmatic economic-libertarian liberalisation, these uncertainties are likely to grow further. This means that the vulnerability of the outdated energy system to disruption is increasing; the main logistical challenge of this system lies in ensuring energy supply to the whole of the world by means of oil, gas and uranium from relatively few extraction points and countries, using long supply chains. This vulnerability to disruption means an increase in the political and military costs of energy security, i.e. in the task of protecting strategic energy supply lines and centres from terrorist attacks.

Rising costs make the energy trap ever more perilous. The developing countries, whose GDP amounts to less than 10 per cent of the GDP of the "Western industrial nations", are the hardest hit – they are nevertheless forced to pay world market prices for their energy imports. The economic burden placed on them is 10 to 20 times that placed on other countries. For many countries, energy imports are already swallowing the whole of their export revenues. In 2005, the developing countries' oil import costs rose by 100bn dollars; this is significantly more than the sum of development assistance provided by all the industrial nations put together. Meanwhile, the profits of the concerns operating in the oligopolistic energy sector, are rising astronomically: in 2005, Exxon made a profit of 35 billion dollars, Shell of 25 billion dollars and BP of 22 billion dollars.

Thus, world energy supply is already in a precarious and desolate state today, far in advance of the actual depletion of resources. That is why initiatives are planned for the next G8 summit in St Petersburg aimed at finding a way out of the energy trap. Yet these plans are illusory: the worldwide renaissance of nuclear energy and the promotion of "clean coal" power plants are based on the assumption that the world energy system would be intact if only it were not for the carbon-dioxide/climate problem. For this reason, calls are made for the extracting countries to be pressurised into increasing their quotas and the international transport networks expanded, in the interests of energy security – even though this is in conflict with climate-protection goals. Renewable energies are also to be promoted, but they play only a marginal role in the initiatives.

Yet a general shift in the energy basis – a shift to renewable energies - ought to have been given absolute strategic priority long ago. In order to continue to avoid this conclusion, untenable excuses and apologies are given. It is claimed, for example, that the potential of renewable energies is not sufficient to replace nuclear and fossil energies and that it is too expensive to introduce such energies on a large scale, meaning that renewable energies constitute an unacceptable economic and social burden. In addition, there are assertions that the whole thing would take too long, meaning that the focus must remain on conventional power plants for the decades to come. And, finally, it is claimed that the problem of storing renewable energies has not been solved.

Nothing can be activated more quickly than renewable energies

On closer examination, none of these arguments are convincing. The sun, with its by-products (wind, water, biomass, waves) supplies our planet with 15,000 times more energy per day than the earth consumes. No form of energy supply can be activated more quickly than the de-centralised facilities needed to exploit renewable energy. A wind turbine can be installed in one week, whilst the installation of a large-scale power plant takes 5 to 15 years. Both storage technology - such as pumped storage plants and compressed air power plants - and hybrid structures to enhance efficiency - such as hydropower or bioenergy hook-ups for sun and wind energy plants - are well developed. The possibilities for rapidly increasing the proportion of renewables in the energy mix and moving towards a situation where all energy is provided by renewables have been set out on a number of occasions. This was done for France as early as 1978 by the groupe de Bellevue and for the US in 1979 by the Union of Concerned Scientists.

The only direct costs of renewable energy production are those of making available the technology needed. Fuel costs would no longer have to be paid. The only exception is bioenergy, because the agricultural and forestry work needed has to be paid for. The costs of the equipment will sink as a result of mass production and ongoing technological fine-tuning. This, in turn, will lead to a gradual decrease in the costs of renewable energies, whilst the direct costs of conventional energy are perpetually rising.

At the same time, the external costs of renewable energies are minimal. Indeed, renewables offer significant economic and political advantages: fossil imports would be replaced by permanently available home-grown energy; energy security would be enhanced, which would impact positively on the balance of payments. Leeway for regional economic structures in the areas of trade and agriculture would be increased. Infrastructure requirements would be considerably diminished. And, of course, serious environmental and health damage would be avoided.

In other words, massive and far-reaching macroeconomic and political effects would thus be achieved.  The larger the extent to which conventional energies are substituted, the greater these effects will be. Yet they will not automatically have an impact at micro-economic level. In order for investors and energy consumers to benefit immediately and directly, political and economic skill is required to transform the macroeconomic advantages of renewable energies into microeconomic incentives. Only then will the historic turnaround in energy supply required be set in motion.

The new Renewable Energies Act in Germany demonstrates that this is possible. The incentives created by this law have ensured an annual increase of 3000 megawatts in renewable-energy capacities since 2000, amounting to 18,000 megawatts. The decisive instrument in this context is guaranteed grid access for every producer, with a legally guaranteed feed-in tariff for a period of 20 years, which allows free investment. The additional costs incurred are spread across all electricity consumers and amount to 5 euros per person each year. This "bottom-up support" has led to the growth of a new industrial sector with 170,000 new jobs. No political programme of industry support has ever cost so little and achieved so much so quickly. The public accepts the additional costs, because they accept the goal being pursued. In the space of six years, plant costs have already dropped by 40 per cent due to production effects. This energy shift means that CO2 emissions have been reduced by an additional 7 million tonnes per year. So the law has achieved significantly more as a climate-policy instrument than emissions trading in the framework of the Kyoto Protocol. And this has been achieved without red tape.

If the speed of introduction of renewable energies remains constant, electricity production from nuclear power and fossil energies will have been wholly substituted by renewable energies in around forty years time. Direct additional costs compared with conventional energy will drop, as the costs for conventional energy rise. This means that, even before 2020, the costs of renewable energies should be lower than those for electricity generated in new nuclear and fossil power plants. This will further accelerate the energy shift.

There is also a potential for similar processes of substitution to be set in motion in the field of heating and fuel supply. Already today there exist not only private houses, but also Twin Towers, which can meet their own energy needs completely through the use of renewables.  The investment costs incurred will be recouped through the savings made on fuel – though this will take ten to twenty years. The development of hybrid cars will also allow fossil fuels to be replaced by biofuels and electric motors with new battery technology.

This opportunity for a post-fossil and post-nuclear future is not perceived as such, indeed the existence of this opportunity is still denied. This can be explained by a blinkered view of energy: isolated cost comparisons are carried out, instead of energy systems as a whole being compared. The outdated energy system, with its company structure, is seen as set in stone. And the assumption is made that it is technocratically neutral vis-à-vis other energy sources and ready and able to switch to a different source of energy at any point in time.

Yet this is an unrealistic view, revealing a complete lack of basic knowledge of the technology concerned and the sociology of energy. For this type of objective neutrality is impossible in purely physical terms. Each energy system is bound to be geared to those particular sources of energy which it uses. The choice of energy source determines the political, economic and technological effort required for extraction, processing, transport and distribution, including the transformation technology needed.

This means that the switch to renewable energies and thus to wholly different energy flows would change everything. It would mean a switch from commercial to non-commercial primary energies, from a small number of large power stations and refineries to a large number of medium and small-scale power plants, from internationalised to regionalised infrastructure, from energies which produce emissions to emission-free energy. And, not least, from highly concentrated company and ownership structures to more diverse ones. The systemic shift in energy supply represents a paradigm shift in technological, economic and political terms.

It is here that lies the political crux of the energy problem.  Recognising this allows us to understand why certain groups are resisting renewable energies. And how this resistance can be overcome.

(c) Le Monde diplomatique, Berlin

Hermann Scheer is a Member of the German Bundestag for the SPD, President of EUROSOLAR, the European Association for Renewable Energy and Chairman of the World Council for Renewable Energy. In 1999 he was awarded the Alternative Nobel Prize for his writing and initiatives.