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Practical solutions: 3 D energy revolution
The challenge is immense. But the economics point
to the requirement
not the impossibility of action. As the Stern report
showed, the
impact of climate change is estimated to be equivalent
to a loss in
average world consumption per head of 5-20% per year.
This is far
greater than the expected cost of cutting emissions which,
consistent
with a 550ppm CO2e stabilisation trajectory, is 1% of
GDP by the
middle of the century. To be pro-economic growth is to
be pro
environmental sustainability.
The positive news is that the practical and technological
solutions
are increasingly available and increasingly cost-effective.
Let me
highlight some key drivers of change across all countries,
what you
could term a 3-D energy revolution.
First, demand management. We are reducing demand
by creating homes,
cars and electrical appliances that are far more energy
efficient.
For instance, a hybrid car is about 30 per cent more
efficient than
its petrol-only equivalent. Homes built in the UK today
are 40 per
cent more efficient that those built in 2001, and we
have recently
committed to ensuring all homes are 'zero carbon' by
2016. The first
industrial revolution saw mechanisation and mass production
revolutionise labour productivity. A similar revolution
is now
underway in resource productivity. Economic growth is
becoming
decoupled from energy growth.
Second, all countries need to decarbonise their
energy production.
Renewable electricity sources are becoming more widely
available at
reasonable prices, from biofuels and biomass, to wind
and solar
power; and there is the prospect of diverting the carbon
emissions
from coal-fired power stations underground via carbon
capture and
storage (CCS). Third, we are increasingly decentralising
our energy
system. Since the opening of the world's first thermal
power station
in London in 1882 by Thomas Edison, the trend over the
past century
has been towards increasingly centralised power generation.
While
centralised production will remain critical, some countries
are
showing that we can increasingly rely on more decentralised
and
distributed power generation - from biomass fuelled combined
heat and
power stations serving a community, to individual citizens
producing
energy through solar or wind power and selling their
energy back onto
the grid. In the next thirty years, we could see the
same
transformation in energy production that we have seen
in computers
over the past generation - with a growing reliance on
small computers
connected via a network rather than a traditional mainframe.
For
instance, a large proportion of energy in Denmark and
the Netherlands is produced on a decentralised
basis - a transition that took around
20 years. But while the UK is having to make a transition
from
high-carbon to low carbon development, India has a unique
opportunity. Forecasts suggest that by 2030, India's
energy
requirements will go from the existing 120,000 MW of
electricity to
about 400,000 MW. Half of India does not have electricity
and the
investment choices you make over the next ten to fifteen
years will
be crucial.
You therefore have the potential
to be a leapfrog economy - going
straight to a model of low-carbon development without
having to scrap
existing infrastructure and technologies. You are already
leaders in
some renewable energy technologies. About 100,000 biogas
plants and
16,530 solar photovoltaic lighting systems were installed
during
2004-05. You are the only country to have a Ministry
dedicated to the
use of renewable energy - sharing experience of development
and
deployment of these technologies can provide global benefits.
You can
forge a distinctive economic path that will give you
a comparative
economic advantage in future. As your President has suggested
in
calling for a goal of Energy Independence, renewable
energy
technologies could contribute 20 to 25 per cent of your
energy needs
by 2030. You have nearly 60 million hectares of wasteland,
of which
30 million hectares are available for energy plantations.
With each
crop lasting 50 years and being carbon-neutral, biofuels
could make a
significant contribution meeting future demand in transport
fuels and
delivering emissions reductions.
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