Fossil fuels dominate

WEC report looks at energy production, usage as world energy demand rises

Alan Bailey

Petroleum News

A view that plentiful coal, oil and natural gas will remain primary energy resources in the years and decades to come, despite concerns about carbon dioxide emissions, was one of the key messages from a new report on world energy resources published by the World Energy Council.

Comparing its current energy report with a similar report that it published in 1993, the council says that, thanks in large part to new technologies such as the development of shale oil and gas, the world now has more energy resources than in the past. Re-assessments of oil resources, new technologies and continuing oil exploration have resulted in an increase in oil reserves by almost 60 percent in the past 20 years — oil production has increased by 25 percent during that period, the council’s new report says. And talk from a few years ago of world oil production reaching a peak has largely evaporated, the report says.

“Oil is a mature global industry which offers the market participants opportunities for good economic returns,” the report says, commenting that oil is a convenient internationally tradable commodity, currently indispensable to the road transport and petrochemical industries.

At the same time, with the world’s population continuing to expand, with many modern technologies relying on electricity and with a pressing need to make commercial energy sources accessible to many more people, overall demand for energy will continue to rise, the report says.

While crude oil continues to maintain its strong position as a global energy source, coal, natural gas and hydropower are the cheapest energy sources for electricity generation, according to data presented in the report. Solar power and offshore wind power are relatively expensive; onshore wind power is cheaper than offshore wind power but more expensive than fossil fuels; biomass-related fuels, such as the burning of wood, encompass a wide range of costs.

And despite the “exponential growth” in the use of renewable energy sources, wind and solar power in particular, renewables still constitute only a relatively small percentage of the overall energy mix in most countries, the report says.

Coal

Coal is the most widespread fossil fuel around the world and remains a crucial contributor to energy supplies in many countries.

Although countries in Europe and North America are trying to reduce their coal usage and coal’s overall share in worldwide power generation is likely to fall, the amount of coal consumed is likely to increase as worldwide energy demand rises, the report says. Coal is widely available, safe, reliable and relatively cheap. However, carbon capture, utilization and storage technology, the only large-scale technology that could significantly impact emissions problems from coal burning, remains at a pilot stage of implementation, with an uncertain future because of high costs and detrimental impacts on power generation efficiency, the report says.

Natural gas

Natural gas enjoys the advantage of being the cleanest of the fossil fuels, while also being plentiful in supply and capable of use in high-efficiency power stations. However, the discovery, development and transportation of gas typically require some significant up-front investment, with close coordination needed between the gas and power infrastructures, the report says. The development of shale gas has revolutionized the North American gas industry and is spreading to other parts of the world.

Nuclear

Nuclear power is highly efficient, results in predictable power costs and does not generate carbon dioxide emissions. But the capital costs of new nuclear power plants are high and rising, while there are major public concerns regarding nuclear waste disposal and high liability risks associated with nuclear accidents. Nuclear’s global share of power generation peaked in the late 1980s and has been declining since then, although total nuclear generation capacity has remained almost constant through that decline. The future of the technology is uncertain.

Hydropower

Worldwide, hydropower has become a major source of electricity, with the recent growth of this sector supported in many cases by government renewable energy policies, the report says. The technology is simple, has low operating costs and does not generate emissions. However, large hydropower systems pose significant land requirements and their implementation can meet with public resistance. And, although hydropower installed capacity has been increasing, the total amount of power generated from hydropower systems has been dropping in recent years, mainly because of water shortages, the report says.

Wind

Wind power, using modern wind turbines, involves simple technology that can be installed or dismantled quickly and that requires no fuel. But, the intermittent nature of wind strengths makes wind power challenging to integrate into power grids. And the relatively high cost of the technology has tended to drive a dependency on government subsidies for viable implementation, the report says. World wind energy capacity has been roughly doubling every 3.5 years since 1990 — China has the highest installed capacity, while Denmark has the highest capacity per capita of the population.

Reductions in government subsidies and the increasing costs of turbine materials may have a negative impact on future wind power development, the report says.

Solar

The use of solar power is increasing, in part because of the declining cost of the manufacture of solar panels, the report says. This type of power source is highly reliable, can be installed quickly and is convenient for use in remote areas. But, as with wind, solar power is intermittent, and is thus challenging to integrate into a power grid. And the technology uses toxic materials, the report says.

Bioenergy

The use of bioenergy and waste, fuel types that depend on biological feedstocks such as wood and agricultural residues, has been increasing along with increased energy demand, although there is a lack of reliable and standardized data for assessing the contribution of this energy source. Bioenergy use, such as the burning of wood, is proven and simple but can generate harmful emissions. Transportation of the fuel can be a drawback, and the use of some types of biofuel can impact water and food supplies.

Energy efficiency

The World Energy Council report also comments on the importance of energy efficiency in the overall world energy economy. For example, a modern coal-fired power station can have an energy output efficiency of 46 percent, compared with an average efficiency of 34 percent for existing plants; a gas-fired power plant can have an efficiency of 61 percent. And energy efficiency improvements in buildings can reduce energy consumption by between 20 and 40 percent, the report says.

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