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The deep future energy system
This section attempts to chart out the structure of a quasi zero pollution energy system based on the single premise that local air quality issues, in the short run, and greenhouse gas emissions, in the longer run, mandate the restructuring of the energy system to eliminate the use of fossil energy sourced carbon. If this premise stands the test of time, the configuration of the future energy system will be determined by the forces that render the current system obsolete. Most importantly, the future energy system will need to eliminate the unacceptable burdens that the present system places on the environment, and will ultimately be based on sustainable non-fossil sources and non-carbon currencies. However, the transition phase to the zero carbon energy system will probably last a century or more. Hence the label "deep future."
The term "industrial ecology" reflects the concept of a network of interacting industrial processes that utilize each other's material and energy wastes and byproducts. Revised rules for the selection of technologies, products, and processes provide economic incentives that lead to superior efficiency and productivity in the supply of the goods and services demanded by our societies (Ausubel 1992). Rather than functioning as incremental improvements and add-one, energy efficiency improvements and innovative energy technologies now complement the eco-restructuring process. The net result would be a significant decline in the energy intensity of economic production and consumption, the decarbonization of the energy system, and a drastic reduction in all energy-related GHG emissions. Eco-restructuring of the energy system means adopting industrial ecology features not only within the energy system (e.g. district energy) but also between the energy system and the commercial and industrial sectors.
An energy end-use system based primarily on non-fossil carbon currencies will differ greatly from the present system. Energy conversion efficiency improvements are a necessary but not sufficient prerequisite of the sustainable energy system. Equally important is the restructuring of those infrastructures intimately related to energy services. For example, building and settlement structures affect the quantities and types of service requirements as much as the technology performance of a furnace or vehicle. Although the restructuring of settlement and transportation infrastructures or industrial production processes falls outside the immediate domain of the energy system, these will certainly shape the evolving energy system. Eco-restructuring of anthropogenic production and consumption in general and the development of sustainable energy systems, therefore, are difficult to pursue independently from each other. Because of this interdependence, the momentum for the eco-restructuring of the energy system must start from the level of energy service technologies and related infrastructures.
Currencies and sources
In the introduction, sustainable energy systems were defined as systems in which the fluxes to and from the system are coherent with nature's fluxes and do not perturb nature's equilibria. "Coherent" implies that the energy system must mimic nature's energy flows. Coherent in this context means that the energy system utilizes technologies that exploit what nature would "waste" in any case (Häfele, et al. 1981) at rates consistent with the natural flows. Nature utilizes a symbiotic relationship between solar energy, hydrogen, oxygen, and carbon. The principal fuel of nature is hydrogen. Hydrogen fuels the sun. The "technology" photosynthesis utilizes the sun's radiated energy to split water into hydrogen and oxygen and, together with the carbon dioxide extracted from the atmosphere, to produce carbohydrates. Then, hydrogen weakly bonded to carbon fuels biological organisms including man (Hoffmann 1981). The human body is made up of some 100 trillion cells, each of which contains tens of thousands of nanobial organisms that use hydrogen to produce nucleic acids and protein (Braun 1990). Finally, hydrogen, oxygen, and carbon are emitted or rejected as a variety of differently composed molecules, with carbon, in particular, recycled as carbon dioxide and methane.
A sustainable energy system mimicking nature's approach to energy, therefore, should also be centred on this relationship between solar energy, hydrogen, oxygen, and carbon. Carbon in the deep future energy system would be recycled over time-spans consistent with the natural carbon cycle. In sustainably cultivated plantations, biomass would become the only carbon source in the system and would also serve the carbon sink. Biomass properly managed, e.g. the rate of timber harvesting and reforestation are in balance, is carbon neutral and would not contribute to an increase in atmospheric CO2 concentrations. This would be coherent with nature's material fluxes.
Alternatively, solar energy technologies engineered by homo technicus to intercept sunlight could provide electric or thermal energy services. The energy of electromagnetic radiation from the sun reaching the earth's surface is in equilibrium with the energy radiated thermally back into space (in the form of infrared radiation). Because most energy services dissipate heat in the form of infrared radiation, this would be coherent with nature's energy fluxes.
The main characteristic of the deep future energy system outlined below is to be inherently non-polluting based on highly efficient energy service technologies and sustainable energy sources. This in effect limits the choice of currencies, giving hydrogen an edge over carbon containing currencies. The conversion of hydrogen into energy services or electricity produces virtually no pollution; the byproduct of electrochemical hydrogen conversion is water. In contrast, hydrogen combustion with air as the oxidant will also produce nitrogen oxide and nitric oxides. Although these pollutants can be effectively controlled by catalytic conversion technology, this represents an end-of-pipe clean-up approach. Likewise, carbon-containing currencies use ambient air as the oxidant and thus generate nitrogen compounds (in addition to carbon dioxide and carbon monoxide plus other emissions). Moreover, the most efficient use of currencies containing non-fossil carbon involves a reforming step to hydrogen at the point of use. In essence, hydrogen is a universal currency. It can be produced from all energy sources, which, although not all would be non polluting, is of importance for the transition phase, and can meet virtually all energy services. Because a significant share of services require electricity, which, in many instances, can be delivered more efficiently without a hydrogen involvement, hydrogen in the deep future energy system would be complemented by a well-established currency - electricity.
Figure 5.3 depicts the sustainable energy system in terms of figure 5.1. This system centres around the twin currencies electricity and hydrogen, both of which do not contain carbon and are compatible with all conceivable future energy service requirements.
Hydrogen and electricity complement each other as central components in the future energy system in the following ways (IPCC 1996b):
1. Hydrogen can be stored in any quantity; electricity cannot (at least from current technology perspectives; this may change drastically with the eventual advent of high-temperature superconductivity).
2. Hydrogen can be a chemical or material feedstock; electricity cannot.
3. Electricity can process, transmit, and store information; hydrogen cannot.
4. Hydrogen and electricity can be readily converted to one another. These four compatibilities combine to provide excellent synergies between the two currencies. From these synergies it becomes obvious that hydrogen will be a strong candidate currency - in fact probably the candidate - that will substitute for oil-based liquid fuels in the longer term, while electricity will largely continue to do what it does today (Scott and Häfele 1989).
Fig. 5.3 The deep future energy system
The outlook regarding the exact twenty-first-century energy sources from which the currencies hydrogen and electricity will be derived is less clear. Although the potential deep future options are known - nuclear power (fission and/or fusion), direct solar radiation (photovoltaics, central thermal solar conversion), and indirect solar energy (hydropower, wind, biomass, etc.), at present no single option is superior on all four compatibility constraints mentioned in the introduction.
The potential for nuclear energy to make a substantial contribution hinges upon the satisfaction of public concerns about operational safety, waste disposal, and proliferation. Without this satisfaction, nuclear power could wither away and play only a transitory role. Moreover, current nuclear fission practice is not necessarily sustainable unless breeding technology is employed. Fusion may become an option by the mid-twenty-first century, but to date has not been shown to be technically feasible - the conditions for a self-sustaining net power production controlled by man have not yet been achieved.
Solar and related renewable technologies are rapidly approaching economic viability in many niche applications, and their future potential is, in principle, enormous. However, uncertainty exists with respect to economic performance, in part related to their low specific-energy densities and intermittent availability, although the utilization of renewable energy sources offers substantial emission benefits compared with the use of fossil sources. One point is likely: eventually, the selection from this source option menu will become a socio-political choice at the regional rather than at the global level.
The lack of certainty or determinism regarding sources, however, is not a vice. Because the shape of future civilization depends on the currencies providing energy services - and not on energy sources per se - today's burning issues surrounding energy sources are put into a different time and priority scale. This may appear counter-intuitive given the current socio-political controversy surrounding the present and future use of nuclear power. But the absence of complementary hydrogen end-use technologies would be a much greater barrier to the sustainable energy system than keeping open the question (and the options) as to its eventual sources.
Certainly, if solar and/or nuclear energy are to replace fossil fuels, hydrogen must become their strategic partner. Unless solar and nuclear energy can be effectively stored and transported, they will not be able to displace fossil sources and currencies, especially in transportation. The key to this storage question is hydrogen. The hydrogen-solar/nuclear energy complementarily is illustrated in figure 5.4, the energy service "palette."
The palette is divided into two groups of energy services, one served by chemical fuels and the other served by electricity. Located at its periphery, the palette also contains two groups of energy source options: fossil sources and sustainable energy sources (labelled "new/ old hopes"). Fossil sources have unconstrained access to all services. This is not the case for the new/old hopes sources. Direct solar and most of the indirect solar options operate intermittently and are primarily locked into electricity generation. In addition, their availability profile is often discordant with the daily electricity load. Some may argue that "new/old hopes" sources can provide space heating services, or that biomass can be used as a feedstock for liquid fuel production. This is correct. But the relative importance of space heating is declining, and using biomass as the principal source for fuelling the global transportation service requirements of 10 billion people may be difficult to reconcile with sustainability, and may well be constrained by land availability. However, the utilization of solar and nuclear energies for hydrogen production via electrolysis, thermochemical water splitting, or biomass gasification and photolysis enables these non-fossil sources to supply all energy services, including transportation services.
Fig. 5.4 The energy service palette (Source: Scott 1992)
Improvements in the efficiency of energy service technologies are likely to be needed to counterbalance a potential drawback of the sustainable energy system. Harvesting renewable or nuclear energy sources for hydrogen production inherently shifts inefficiencies to the upstream operation of the energy system. Nuclear technologies utilize either steam or gas cycles for electricity generation and their efficiencies are subject to the limitations of heat engines. Renewable energy sources are dispersed and of low specific-energy density, in terms of joules per square metre, with large conversion capacities necessary to compensate for these low concentration or density levels. With the exception of biomass, the efficiency of renewable technologies is mostly an issue of installed capacity and investment costs and less a question of the actual source-to-currency conversion ratio. Still, efficiencies matter, especially when suitable siting locations, say for solar systems, become a constraint.
Producing carbon-free currencies is less efficient and currently generally more costly than producing carbon-containing ones.5 However, the efficiency and cost disadvantages would improve substantially if energy service technologies designed to exploit the unique characteristics of hydrogen are used instead of adapting conversion equipment originally designed for hydrocarbon fuels. Electrochemical and catalytic energy conversion have the potential to become the technologies of choice for the production of many energy services, especially in transportation and distributed combined heat and power applications. The most promising electrochemical technology is the fuel cell. Fuel cells convert hydrogen directly into electricity without first burning it, which enables them to realize much higher conversion efficiencies than heat engines. Compared with internal combustion engines, fuel cells are expected to be twice as efficient, thus compensating for the lower hydrogen delivery efficiencies.
Technology change associated with the deep future energy system
Among the most important changes in energy technologies will be the decline of combustion technologies that close their fuel cycle of fossil carbon oxidation through the atmosphere. The remaining combustion processes will operate on either hydrogen, sustainable biomass, or biomass-derived hydrogenrich fuels. Of course, by the mid-twenty-first century numerous additional environmental technologies will have enriched the menu of technology options. Carbon scrubbing and fossil-sourced hydrogen-rich fuel production may well eke out the fossil era. In any case, technological invention and innovation, in part stimulated by revised energy market prices that reflect their full social costs, will ensure a high degree of technology diversity.
From the perspective of sustainable energy systems and eco-restructuring, the coming of the hydrogen age seems inevitable. However, as the twentieth century draws to a close, the energy system is in the middle of the fossil era and its end is not apparently in sight. The question, therefore, is: When could the hydrogen age come? Are there any indications of the energy system positioning itself to accommodate hydrogen? The following section attempts to shed some light onto these questions
Transition and the rate of change of the energy system
Elliot Montroll once observed: '`Evolution is a sequence of replacements." The energy system is no exception. The historical development of global primary energy production and use has essentially been a sequence of technology replacements. sources and infrastructures (embodied technologies) are intimately interrelated and the degree of use of any energy source is also a mirror of both upstream and downstream technology.
Energy infrastructures have inherently long lifetimes of several decades and more. To obtain a better understanding of the rate at which the energy system can evolve, it is necessary to take a long term quantitative perspective spanning a century or more both backward and forward in time. Figure 5.5 shows the market shares of the world's most significant energy sources, starting in the middle of the nineteenth century. The rippled lines are the actual data; the straight lines are estimated curves based on a logistic substitution model that projects trends of primary energy source shares out to the year 2050.
Fig. 5.5 Global primary energy substitution (Note: f = market share. Source: adapted and updated from Marchetti and Nakicenovic 1979)
On a market share basis, wood, once the dominant primary fuel, was replaced by coal. Then coal was replaced by oil. Today, natural gas is seriously cutting into oil's market leadership, and nuclear power is rising rapidly. These transitions have occurred despite the fact that resources of wood, coal, and oil were and are still plentiful. Today, well over a century after wood lost its pre-eminence, the world's annual biomass production exceeds the needs to fuel the world many-fold (Häfele et al. 1981). Likewise, coal was displaced by oil not because the world was running out of coal - the conventional view is that coal is by far the world's most abundant fossil resource.
Wood was abandoned because the first industrial revolution demanded a fuel with higher energy density and better transport and storage possibilities. Simultaneously, on the supply side, coal-mining and coal-use technology, notably the steam engine, developed to a point at which coal became a readily available energy source.
Similarly, oil displaced coal once a set of new and superior technologies both upstream and downstream were made available. Refined oil products proved superior to coal for powering trains, cars, and aircraft, generating electricity, heating homes and large buildings, etc. Except for aircraft, all these end-use applications can be, and initially were, served by coal. Refined oil products, however, are much better suited for these purposes (energy services), so that societies progressively abandoned coal for oil.
The historical inter-source substitutions were caused by innovation and technical change and not by global resource scarcity. Fossil energy resource availability is unlikely to be the driver for future shifts either; rather, the fact that fossil resources are plentiful and inexpensive (see fig. 5.6) is likely to be a delaying factor in the transition towards sustainable sources.
The cumulative carbon content of identified and inferred conventional oil, natural gas, and coal occurrences has been estimated to exceed 20,000 gigatonnes (Gt) of carbon (IIASA/WEC 1995). The application of a dynamic resource concept that accounts for long run technical change in the exploration for, and extraction of, fossil sources shows a global fossil availability of some 3,000 Gt of carbon, which can be produced for less than US$30 (1995 prices) per barrel of oil equivalent (boe) (Rogner 1990, 1997; and Nakicenovic et al. 1993). To put this resource volume into perspective: the cumulative use of carbon by mankind to date amounts to some 230 Gt. If 200300 Gt of carbon emissions give reason for severe concern about climate stability, it is obvious that most of the indicated 3,000 Gt of carbon will have to remain untapped in the ground.
Fig. 5.6 The long-run cost of carbon availability (Note: costs include exploration, development, and extraction expenditures for coal, oil, and natural gas resources conventional and unconventional, but excluding methane clathrates - and reflect future technology advances. Source: Rogner 1997)
Figure 5.5 projects natural gas as the next pre-eminent global energy source. Natural gas resources are plentiful and accessible by all the major economic centres worldwide. Natural gas is an established energy source with basically no public acceptance problem. Because natural gas is by far the cleanest fossil energy source, it is increasingly being touted as the fuel of least environmental resistance (Stern 1990). As regards the build-up of greenhouse gases in the atmosphere, natural gas represents the ideal hedging strategy. It automatically reduces CO2 emissions (versus other fossil fuels) and thus buys time for sustainable energy sources and technologies to mature (Rogner 1988). The CO2 benefits of natural gas, however, may not accrue if its enhanced use is accompanied by an increase in methane (CH4) emissions. Methane, the chief component of natural gas, is itself a greenhouse gas, with a greenhouse forcing potential per molecule up to two orders of magnitude larger than CO2 depending on the time-horizon and the decay response of the underlying carbon model. IPCC reports a 56 times higher warming potential for methane over a 20-year time-horizon and 6.5 times over a period of 500 years (IPCC 1996a). Leakages from extraction, transmission, and distribution systems, as well as from end-use devices, therefore, need to be curbed substantially from present practice in order not to undermine the CO2 gains.6
The dynamics of the energy source substitution model suggest that the fossil era will extend far into the twenty-first century - that a deep future hydrogen age will be preceded by a "methane age" (Lee et al. 1988). In fact, natural gas is the ideal bridge towards hydrogen for two reasons. First, a global market share of 50 per cent or more requires natural gas to expand into other than the traditional residential, commercial, and industrial markets. Electricity generation is certainly the market offering the largest opportunity for expansion in the short run. On a global scale, however, the electricity generation market is unlikely to be large enough to lift the gas market share to the level suggested by the substitution model. If gas is to achieve a 50+ per cent market share, natural gas would have to become a major source of transportation fuels. Today, natural gas already contributes to transportation fuel supply in three ways: as a feedstock in oil refining to improve the premium yield of the barrel; as a feedstock for upgrading heavy hydrocarbon sources such as oil sand bitumen; and directly as a vehicle fuel in the form of compressed natural gas (CNG). In absolute terms, however, the present market share in transportation is negligible.
The large-scale use of natural gas as a direct transportation fuel 7 will foster fundamental and far-reaching infrastructure changes that eventually would assist the hydrogen age. The path-breaking function of natural gas is the second reason the methane age is essential to a future hydrogen age. Both natural gas and hydrogen are gaseous currencies at ambient conditions. A natural gas market share of 50 per cent or more would advance gas-handling infrastructures and technologies. Innovative liquefaction technologies and cryogenic storage of liquefied natural gas (LNG) would become commonplace. Moreover, because the methane age may have a life cycle of 40-60 years, societies would have sufficient time to familiarize themselves with gaseous and cryogenic fuels. All these events would ease the large-scale introduction of hydrogen, especially with fuel cells being a key energy service technology. Finally, during the century-long transition phase towards a non-fossil energy system, natural gas is likely to become the predominant source for hydrogen production.
A 40-60-year methane window would also provide sufficient time for non-fossil technologies currently lacking economic feasibility to move down the technology learning curve and become commercially viable. For nuclear power, this time-horizon should suffice for the nuclear industry to develop and demonstrate new, possibly smaller scale reactor designs incorporating "inherently safe" and "walk away" features as well as efficient fuel cycles and waste disposal solutions. Also, fusion may become a viable option by the mid-twenty-first century. Other technology developments that enable the continued use of fossil sources even in a future of severely constrained greenhouse gas emissions may have advanced and their environmental implications become better understood. For example, although the technology to capture CO2 after combustion is available, it is unclear whether the present storage and/or disposal options are environmentally acceptable or the capacities are large enough for long-term CO2 disposal. Although the storage potential in oceans is estimated to be in excess of 1,200 Gt of carbon, not much is known about potential adverse environmental effects 8 or the actual ocean's CO2 retention time. Offsetting CO2 emissions through reforestation and forest management (carbon sequestration) is likely to be one of the least cost mitigation options. The carbon captured from the atmosphere and fixed during the growth of forest, however, would have to be stored for a long time, and land availability may eventually limit the extent of carbon sequestration.9
De-materialization and decarbonization
De-materialization is a major cornerstone of the global economic eco-restructuring process. Within the energy system, decarbonization can be viewed as analogous to de-materialization. De-materialization implies a shift in emphasis from quantity to quality, from inefficiency to efficiency. Decarbonization of the energy system implies a shift in initiatives from energy supply to quality energy services.
Despite the exponential growth of energy-related carbon dioxide emissions since the early days of the industrial revolution, the energy system, in terms of carbon per unit of primary energy use, has been decarbonized at an average rate of 0.2 per cent per year (see fig. 5.7).
Fig. 5.7 Decarbonization of the energy system
The sequence of historical energy source substitutions shown in figure 5.5 can be viewed as an intermolecular substitution of hydrogen and carbon molecules. Figure 5.7 shows the historical variation of the average carbon-to-hydrogen ratio (C/H ratio) of the global primary energy mix. The C/H ratio declined steadily between 1920 and 1975, a trend that slowed down after the mid-1970s as a result of energy policy in many OECD countries. The oil price shocks of the 1970s and early 1980s were perceived as signs of oil and natural gas resource depletion. As a consequence, energy policy banned oil and natural gas from electricity generation and endorsed the use of coal as a secure and inexpensive under-boiler fuel in industry and electricity generation.
Decarbonization of the energy system is likely to continue as natural gas, chiefly methane (CH4), nuclear, and renewable energy sources take on a growing share in global energy supplies. In a methane age, with global primary energy supply dominated by natural gas, the C/H ratio would approach 0.25. Yet, given an expected world population of 10 billion people by 2050 and a corresponding increase in energy service demand, a C/H ratio of 0.25 may well be insufficient for the long-term target of stabilizing atmospheric greenhouse gas concentrations. Any reduction in carbon intensity well beyond a value of 0.25 requires non-fossil energy sources - nuclear power (fission and/or fusion), direct solar radiation (photovoltaics, central thermal solar conversion), and indirect solar energy (hydropower, wind, biomass, etc.).
North-South disparity and sustainable energy systems
The globalization of environmental deterioration is the direct consequence of population growth and industrialization. In 1990, some 23 per cent of the world population living in industrialized countries were responsible for some 80 per cent of GHG emissions. Future demographic developments will likely push global population close to 10 billion people by the year 2050. Clearly, with 96 per cent of the incremental population growth taking place in the developing countries, the historical link between population, industrialization, and environmental degradation must be decoupled. Yet, present per capita income and per capita energy use in the developing world are about one-tenth of the respective values for the OECD. These disparities between the "haves" and "have-nots" are highlighted in figure 5.8. In the light of these disparities, we must ask how the deep future energy system fits the realities of the developing countries. No doubt, at face value the sheer capital intensiveness of the sustainable energy system, in addition to the capital resources needed for the industrialization process, will far exceed their economic capability.
In the past, environmental degradation has been a steady companion of industrialization and urbanization. At a certain level of prosperity and income, however, societies appear to express a preference for environmental amenities. This preference manifests itself as an internalization of external costs. Clean air acts, mandatory zero emission vehicles, or legislated flue gas desulphurization of coal-fired power stations are representative historical examples of the emergence of environmental awareness in the developed world. To a certain extent the industrialized societies have begun to pay a small part of the interest on the mortgaged environment used to establish their wealth. Most of the interest, not to mention the principal, is still owed.
The industrialized world may well have harvested the benefits of the environment to the point of rapidly decreasing returns. It would add insult to injury for the rich North to withdraw to a position where the developing countries are expected to forgo the benefits of industrialization so that the North can live an enjoyable life in a clean world that the South cannot afford. For sure the South will not consider the preservation of the North's wealth at the expense of their own development as equitable burden sharing.
Fig. 5.8 Development indicators. for the industrialized and developing economies (Note: the CO2 and CH4 data include emissions related to the production and use of commercial energy only. Source: adapted from Grübler and Nakicenovic 1992)
Still, there is growing concern about a potential conflict between economic advance in the developing countries and the protection of the environment. Addressing this concern requires us to ask the fundamental question: What would be the environmental impact of no economic advance?
The industrialized and developing countries are faced with the following dilemma. Successful business-as-usual industrialization will take its toll on the environment. Compounded by the anticipated population growth, even small per capita income improvements may soon put the South on a par with the North, in terms of GHG emissions. However, lack of economic growth and development translate into increased poverty and population growth, which in turn lead to accelerated environmental deterioration through deforestation, soil erosion, and groundwater degradation. Moreover, agriculture-based economies may be more vulnerable to climatic hazards than industrialized economies where agriculture accounts for less than 3 per cent of gross domestic product (GDP) and the bulk of production is little affected by climate conditions.
Is a clean environment a matter of affordability? The answer is yes. Thus, economic development of the South is a necessary prerequisite for global environmental stability. Sustainable energy system development in the developing countries, therefore, is likely to depend on international action such as science and technology transfer. The costs of this transfer should, to the extent it is benefiting the protection of the atmosphere, be borne by the North. It can be said that the North's environment mortgage has matured and the principal including the accrued interest is now due for redemption.
Ideally, this repayment would be financed from the revenue generated by the monetary incentives, green taxes, or other mechanisms deemed suitable for correcting the present market imperfection of free use of the environment. Consequently, the concept of an internalization of external costs that is neutral in terms of tax revenue would have to be abandoned in favour of a capital transfer to the developing countries.
Economic potency demands that the North initiate the transition to the deep future energy system. From the perspective of system evolution, the initial step is under way already - the increasing role of natural gas in meeting global energy service requirements. The redemption of the North's environment mortgage will assist the South in the development of sustainable energy systems. In addition, the combating of global environment degradation may lead to the recognition that a dollar spent in the South may generate higher marginal environmental returns than one spent in the North.10
Planning for the future is a routine activity in the energy industry. Given present blueprint-to-operation lead-times for new-capacity additions of a decade and more, the inherent longevity of energy infrastructures, and the large up-front capital requirements, the temporal scope of the energy sector planning process is among the longest in private sector business planning.
At the level of government policy, planning has focused on national energy resource management, energy supply security, geopolitics, and issues of national and regional monopoly control. Because of the huge capital requirements of many energy projects, which often exceed private sector financial capabilities, governments have also been involved in energy project financing through subsidies, loans, or loan guarantees.
Yet, on the whole, it is fair to say that there has been a lot of planning but no plan. Clearly, there was never a private or public sector master plan to become reliant on fossil energy sources. This reliance is the result of an evolutionary optimization process within the energy system driven by the human needs for energy services. It has so happened that fossil-sourced carbon fuels have been best suited to meet past and present service demand. Moreover, fossil resources are plentiful and extraction costs are low. The summation of millions of individual choices has been a vote in favour of fossil energy.
Environmental imperatives are about to change the energy industry planning process fundamentally. Utility regulators increasingly enact system oriented planning approaches. Public policies for the protection of the environment are spreading fast. Yet present public policy has been primarily of the command and control type, with a focus on improving specific local environmental conditions such as urban smog or acid deposition. To that extent, it has been adaptive.
Adaptive policy- and decision-making are inadequate tools for combating the potential threat of global climatic change. Given the long residence times of most GHGs in the atmosphere, and the fact that the energy system does not lend itself to quick fixes, policy must become anticipatory and deal with uncertainty.
Anticipatory policy needs a target, a plan, and contingencies. Regarding the policy response to the threat of climatic change, the target is a sustainable energy system, the plan is the accelerated transition to low-carbon energy sources, i.e. natural gas, and the contingencies centre around technology change and innovation.
The target - an energy system designed around the currencies hydrogen and electricity - is consistent with the target of sustainability and is open to innovation and technical change. In particular, such a target system does not require an early decision on the nature of its eventual no-carbon sources. What is important, however, is the build-up of an adequate and highly efficient energy service supply infrastructure suitable for the effective use of hydrogen-rich fuels and ultimately hydrogen.
It is key to recognize that the hydrogen network is likely to grow out of today's natural gas network, just as the ancestors of today's natural gas network originally moved town gas. In future, this includes not only the pipeline but also the cryo fuel/LNG infrastructure. As much as gaseous hydrogen can use the natural gas transport and distribution grid, liquid hydrogen can piggyback on the LNG experience and infrastructure. Similar to the transition from town gas to natural gas, adjustments to the infrastructure will become necessary that account for the unique properties and safety requirements of hydrogen. The important point is, however, that this adjustment occurs at a mature point of the infrastructure's learning curve, leading to a transition that is technologically straightforward and socio-politically acceptable.
The plan - a larger reliance on natural gas - is therefore consistent with the target of sustainability. Indeed, the greater the dominance of natural gas in the evolving energy system - a Methane Age - the easier will be the eventual transition to hydrogen. The transition towards a Hydrogen Age is unlikely to be established much before the end of the twenty-first century and the actual time-frame will depend on many factors, particularly on the probability of occurrence of climate instability. More important is that natural gas paves the way towards hydrogen, potentially minimizing blunders and thus providing a least-regret cost strategy.
The contingency - that the "target" energy system cannot be cast in stone is essential in a world of continuous technical change. Over a period of 50 years and more, technology forecasting based on current knowledge will certainly fail to anticipate the actual inventions and the rate of innovation. The target energy system and the plan, therefore, must incorporate least-regret cost strategies where future innovation enhances the system's performance rather than making previous infrastructure investment obsolete. The most important contingencies relate to the commercialization and market introduction of renewable technologies, the eventual resolution of the nuclear controversy, and the balance between eco-restructuring of the economic production consumption process, in general, and the energy system, in particular.
Even if the greenhouse effect becomes a non-issue, we end up with an energy system that is better in all respects: less polluting on all counts, more efficient, more resilient to surprise, and closer to sustainability. In summary, many of the prudent things to do about the greenhouse effect may well turn out prudent things to do anyway.
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