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Energy Crisis Or Fossil Energy Crisis?
Jakarta, October 11, 2021 – In recent months, many media have reported on the energy crisis in Europe. In the UK, for example, many electric and gas utility companies went bankrupt and were forced to close. People are also seen queuing at gas stations to buy fuel. This phenomenon shows us that even countries with strong economies are still quite vulnerable to energy security issues.
CASE for Southeast Asia Project held a discussion entitled “Energy Crisis in UK and Europe: Lessons Learned for Indonesia’s Energy Transition” which invited speakers from the UK and Europe (11/10/2021). In this discussion, the public in Indonesia is involved in the discussion to find out various important facts and findings related to the issue of the energy crisis that is currently happening in the UK and Europe.
In the UK the, industrial and household sectors are quite dependent on natural gas. With the winter season is approaching, the demand for gas is increasing as the need to warm homes also increases. This condition, when a country relies heavily on energy sources that are vulnerable to global markets, does raise a question: is this really an energy crisis, or is it a fossil energy crisis?
William Derbyshire, Director of Economic Consulting Associates (ECA), UK, on this occasion gave an explanation regarding the fact that the primary energy mix in the UK relies on natural gas as much as 42%. Furthermore, William also showed data that illustrates that since 2017, the price of natural gas has gradually increased until 2021, which has resulted in an increase in the selling price of electricity.
“If high fossil fuel prices are the problem, then the answer is reducing dependence on coal and gas, not adding more fossil fuels,” William said.
Based on this conclusion, renewable energy is a good solution to reduce dependence on fossil energy. But not without challenges, the UK, which has 16% of wind power plants in its power generation mix, has several important points to note. For example, Gareth Davies, Managing Director of Aquatera explained that wind farms in the UK have a fairly high variability scale.
Responding to this challenge, Gareth conveyed the need to conduct spatial analysis and planning related to areas that have sufficient wind gust potential, also taking into account the historical climate data.
“By distributing wind power production over a wider geographic area, it will help improve energy security and balance the UK’s energy supply through renewable energy,” said Gareth.
In line with William’s statement regarding the importance of making an immediate energy transition, Dimitri Pescia, Program Manager Southeast Asia of Agora Energiewende explained the fact, for example, in Germany, the investment cost to build renewable energy power plants is much cheaper than to build fossil power plants. In this context, Dimitri explained that investment in renewable energy can be considered as a hedging strategy to minimize the risk of using fossil energy in the energy transition period over the next few years.
From this discussion, the public is being helped to understand the real situation and the lessons that can be drawn for the energy transition process in Indonesia. Fabby Tumiwa, Executive Director of IESR said that Indonesia needs to quickly adopt the use of renewable energy to minimize the risk of an energy crisis due to dependency on fossil energy. Fabby added that the development of these abundant potentials of renewable energy in Indonesia needs to be accompanied by energy efficiency, development of energy storage technology, as well as inter-island interconnectivity.
“It should be remembered that the current energy crisis is a fossil energy crisis. The volatility of fossil energy prices is very high. The increase of fossil energy prices will have an effect on other aspects,” said Fabby, emphasizing the real cause of the energy crisis in the UK and Europe.
Closing this discussion, Fabby expresses the urgency for the public to know this issue contextually so that there would be no panic in the community. “Indonesia itself does not need to worry about energy crises that occur in Europe, China, Britain, India, because Indonesia has the advantage of a better energy transition planning towards decarbonization way earlier,” concluded Fabby.
Watch again the discussion here:
Energy Crisis in UK and Europe: Lessons learned for Indonesia’s energy transition
Playback Recording
Clean, Affordable, and Secure Energy (CASE) for Southeast Asia (SEA) is a regional programme running in Indonesia, Thailand, Philippines and Vietnam. CASE’s objective is to change the direction of the energy sector in Southeast Asia to substantially shift towards an evidence-based energy transition, aiming to increase political ambition to comply with the Paris Agreement.
Through CASE Indonesia, we would like to organize a discussion with speakers from the UK, and Europe representative to discuss what happens and what are the lessons learned. Indonesia does not have winter and reliance on natural gas is still small. However, with more intermittent power plants (e.g. solar) are planned to be installed, the government looks at using gas-fired power plants to balance this intermittency. We also hope this discussion will help set the right direction for the Indonesian energy transition.
Presentation Materials
Aquatera
Indonesia-briefing-on-UK-energy-prices-and-offshore-wind-prospects-rev-3.pptxAgora Energiewende
2021-10-11_Energy_crunch_pesciaECA
20211008_820_ECA-Energy-Crisis-Slides_v3
The Original Wisdom of Energy Use
Energy Transition Blog Series #1
Energy in human civilization
Paolo Malanima, an economic historian from Italy, classifies the history of the world energy into two periods based on the utilization of energy source. The first period ranges from 7 million to 500 years ago, marked with five prime energy sources, namely food, firewood, animal feed, hydropower, and wind power. For about 5 to 7 million years ago, food is known as the only energy source by a human with other two forms of energy (i.e., kinetic and thermal). They only relied on their body and animals to perform some works with limited usage of hydro and wind power. For this reason, he then called this period as the organic vegetable economy.
The second world energy period spans from the present to last 500 years ago. In this era, the prime energy sources for human and animals have been replacing by fossil fuel-based, along with the development of machine tools and mechanization. The fossil energy sources which have been utilized are from coal, crude oil, primary electricity, natural gas, and nuclear, respectively. So, for this second period, Paolo Malanima called the era as the organic economies.
From these two periods, the common principle to extract the energy remains the same: by burning the carbon. While the first period used direct timber and other traditional biomass as the carbon source, the modern period uses the “fossil” carbon from ancient plants and organisms which subject to intense heat and pressure over millions of years. The changes in the use of fuel between these periods encourage the emergence of the energy transition.
What is energy transition?
The energy transition can be interpreted simply as “changes in the system of energy production and consumption in a certain period of time.” Nowadays, the terms globally referred as the transformation process in the energy supply in which from fossil fuel-based energy system (i.e. coal, oil, and gas) towards a more efficient, low carbon, and sustainable energy system with renewables (e.g. solar, wind, bioenergy, hydro). The current transition is driven to achieve global climate mitigation goals in limiting global warming to 2oC – or even limiting to 1.5oC.
Energy transition phenomenon is actually already started a long time ago. It began in the mid 19th century by the utilization of coal as the main source of energy, followed by the introduction of oil in the 20th century, and nuclear in the 1950s. From the 1950s to date, the energy supply from renewables has been taking over the dominance of the non-renewables. It’s fairly to say that the global energy transition has undergone under four major waves (see Figure 2).
The first global energy transition arguably marked when Thomas Newcomen and James Watt invented the steam engine in the late-18th century. In this era, there have been changes in the number and pattern of energy use as well as the energy-carrying substitutes – which were originally dominated by biomass (firewood) to coal and oil later in the mid-20th century. Further, the geographical distribution of energy production, the commercialization of energy resources, and the impact of energy use on the environment began to be visible in this industrial revolution era.
The era of industrialization – along with the discovery of electricity and the increasing population of the world, pushed for greater demand for energy. Coal and oil have more energy density than biomass. Hence, these two sources of energy had been used massively in the era to supply the needs. As a consequence, biomass utilization was dramatically decreased and the new type of energy, i.e. electricity, was started to increase.
High utilization of coal and oil – plus economic development, not only increased fossil fuel usage but also encouraged the development of technology towards more efficient and more environmentally friendly. That’s why the introduction of nuclear energy to generate electricity in the 1950s marked as the third wave of the global energy transition. The world’s first nuclear powerplant started operations in Obninsk, in the Soviet Union, on June 27, 1954.
The fourth wave of the global energy transition marked by the reduction in the use of fossil fuels, especially in developed countries. With the threat of climate change and its impact, countries in the world then agreed to require the transition of the current energy system towards a cleaner system by using renewables. Solar and wind energy are among the most renewable sources which have a rapid deployment around the globe.
“Back to the future past”
Maybe not many people are aware that we finally return to the original wisdom of energy use in the past. If we referring back to the Paolo Malanima’s classification, our ancestors had been evidently used the renewable energy to empower their work in the first place. With technological advancement, we can back to use past wisdom in tapping the energy from renewable energy sources, in more effective ways.
Current renewable energy technologies, combined with the storage system, can substitute the dirty fossil power plants without having the reliability. The rise of micro-power and decentralized generation globally indicates that we no longer need the big, centralized power plant. Moreover, the digital revolution in the energy sector (e.g. digitalization, internet of things) also accelerate the energy transition towards a more efficient, low carbon, and sustainable energy system with renewables.
So let’s turn, not burn!
Jannata Giwangkara,
Program Manager – Energy Transformation
