- Email: [email protected]
Comments of Conference participants
APPENDIX
I
Comments of Conference participants COMMENT
JOHN W. SHUPE Dean of Engineering, University of Hawaii. Honolulu, HI 96822, U.S.A.
Concerned and informed individuals from different disciplines and different cultures can take part in a four-day Conference on Energy Alternatives, each listening to the same dialogue and opinions expressed by the various participants, and still come away from the symposium with vastly different impressions on the probable energy future. The following summary represents what I “heard”, from my perspective as a strong advocate of renewable energy resources. The case for energy demand projections by “accepted conventional wisdom” was superbly presented by Dr. Hafele. The thorough and systematic analyses performed by IIASA, taking into consideration historical energy trends, make a logical case for a projected demand of 42 TW by year 2030, with per capita energy consumption continuing to vary widely between industrialized nations and the less developed countries. On the supply side, the majority of this energy is to be provided by fossil fuels and nuclear power. In general, these projections were endorsed and reinforced by energy models from other developed countries represented at the Conference. In the face of this overwhelming, well-documented evidence, the potential importance of renewable energy alternatives on the global scale did not fare particularly well. Dr. Goldemberg made a forceful case for utilization by the developing countries of hydroelectric power and biomass to satisfy their increasing energy demands, while certain other solar specialties-OTEC, vertical axis windmills, and the solar satellite-were also given adequate coverage. However, many of the solar technologies such as photovoltaics were discussed only briefly. Unfortunately, the solar thermal power tower concept, which in my opinion is one of the least promising of the solar alternatives, came in for rather close scrutiny. The massive quantity of materials required in the heliostats and collector systems suggests that the learning curve on the solar power tower will not be particularly favorable, so that future costs are apt to remain high. A contributing factor to the current level of interest in the power tower has been the attitude of the public utilities toward the concept-any system that generates steam cannot be all bad. However, the power tower is not the ideal solar technology on which to base generalizations on the probable future impact of renewable resources. Through no fault of the program organizers, the overall case for decentralized and renewable energy alternatives was not aggressively pursued. Neither Denis Hayes nor Paul Rappaport was able to participate extensively in the discussion sessions, and most of the remaining solar “champions” assumed a rather conservative posture. As an example, there was little objection raised to the general consensus that in order for solar technologies to be accepted, they must be near-term cost competitive with conventional energy systems-even though an earlier comment to the effect that fossil fuel and nuclear energy systems had been subsidized in the United States alone to the 1005
1006
Appendix I
extent of over $200 billion had gone unchallenged. Why shouldn’t solar have a honeymoon period of subsidy and support, which other energy technologies have been enjoying for decades? I concur in the general consensus that there will be a relentless increase in global energy demand-probably above the 42TW figure by 203O-even if there are selfimposed social pressures in the industrialized nations to cut back on per capira consumption of energy. The message came through loud and clear from representatives of the developing countries that year 2030 will not find this world in a similar situation as we are today-with per capita consumption of energy in the developing countries running 10 times behind that of the developed countries. This tremendous imbalance cannot continue to be tolerated through “business as usual” for another 50 yr. My bottom-line conclusion from the Conference reinforces the biases with which I entered, which is probably the case with most of the participants. There will be an appreciable increase in the per capita energy consumption throughout the world, and much of this increase can best be met with decentralized, renewable eriergy alternatives. This conclusion reinforces Hawaii’s commitment to continue its quest for energy self-sufficiency with its indigenous energy resources, not only to eliminate its near-total dependence for energy on seaborne petroleum, but also to provide energy planners throughout the world with a highly visible, highly successful demonstration of what can be done in the effective utilization of renewable energy alternatives.
COMMENT
KENNETH
C. HOFFMAN
NationalCenter for Analysisof Energy Systems, Brookhaven National Laboratory, Upton, NY 11973, U.S.A. The Conference indicated considerable interest in, and support of, solar and renewable energy forms among participants from developed and developing countries. Many indicate this preference in order to gain environmental and energy security benefits even at a significant economic cost. This support for renewable energy is widespread and niust be taken seriously by the scientists and engineers active in the development of new energy systems, policy-makers in government who determine national policy, and decision-makers in government and industry who will implement policy. The goals, or objectives of a global energy strategy should be to support continued social development, particularly in low-income areas, by providing increased levels of energy services in the most effective way so that future progress can be sustained for the long term, this indicates the use of renewable energy forms for specific services whenever practicable. The analysis of future energy options and appropriate energy systems is an important element of planning. Given the clear primary objectives of improved energy services and increased energy security, analysis must be performed of the “physical capital”, involving man-hours of labor and quantities of material, that are required to develop and implement the new systems. “Physical capital’* will continue to be strained in the future and must be “invested” with care. Problems of “physical capital”, of course, are manifest in monetary capital markets which must be considered; however, attention must be given to the physical requirements, particularly for solar options which tend to be more capital intensive. Analytical approaches to this critical problem that are employed at IIASA, Brookhaven, Bechtel Corp., and elsewhere are described in several papers presented at the Conference.
Comments
of Conkrence
participants
1007
COMMENT
JYOTI K. PARIKH Energy Division, Ministry of Planning, New Delhi-110001, India
Close examination of the renewable resources suggests that either they require natural endowment (wind, hydro, geothermal, etc.) or they are land intensive (wood, solar, etc.). Not all countries may be blessed with the former, whereas the latter requires capital, land, and new types of management and social cooperation. The concept of living from “energy income” rather than “energy capital” which is the case with the fossil fuels is most appealing but requires strong political and social support, because in some cases initial subsidies are required and in some cases changes in the life style. However, it should be recognized that the contributions from renewable energy options are not unlimited. They are limited by available land, waste (in case of biogas) and the availability of natural endowments for site-specific resources. In the caSe of the former, competitive uses of land and waste should be foreseen; e.g. cellulosic waste could be utilized for paper or fibre production. For a more detailed discussion see the article by Parikh in this volume. Thus caution should be exercized in estimating the contribution of renewable energy options, so that policy makers are appropriately guided. For some ‘energy uses-such as for transport sector and for urban areas-fossil fuels would continue to be important for most countries, whereas some countries neither endowed with fossil fuels nor with other natural endowments of substantial order may have to resort to the nuclear option as well.
COMMENT
CORAZON M. SIDDAYAO Research Fellow, The Resource Systems Institute, The East-West
Center, Honolulu, HI 90822 U.S.A.
I found the Conference highly stimulating and informative. My comments will be limited to the points I raised at the Conference. 1. Of special interest to me was the work done at IIASA and at the Brookhaven National Laboratory. I am happy to have had an opportunity to interact with the major researchers in this field-Dr. W. Hafele and Dr. K. C. Hoffman. At least two countries in Southeast Asia are applying a systems approach to energy policy planning over the long term. I thought it unfortunate that a few participants failed to appreciate the value of the analytical models presented. Any serious applied scientist is aware of the interconnectedness of the different activities in this world. Because of our finite abilities, a tool of analysis that can capture even a fraction of the reality of interdependence in resource systems-which subsumes technological, socioeconomic, political and other factors-can be useful to a policy-maker who uses this tool thoughtfully. Methods are not ends; they are means to helping a decision-maker recognize the impact of certain decisions. An intelligent policy analyst is aware of the inadequateness of statistical methods and that human elements cannot be neglected in the overall equation. He accepts that, in choosing a certain policy approach, a policy-maker ultimately makes a political decision, One hopes, however, that the magnitude of the impacts of any decision has been considered.
1008
Appendix I
2. Diversification of energy sources and development of indigenous energy are increasingly being adopted by oil-importing developing countries. This two-pronged approach is understandable for at least two reasons. First, an oil-importing developing country (OILDC) that is pursuing a vigorous economic development program is also vulnerable to supply cutoffs that could jeopardize its economic development programs. It is not surprising, therefore, that a heavy importer like the Philippines has turned inward and adopted a policy of developing indigenous energy resources-notwithstanding the apparent high comparative costs of doing so. In the short term, such policies may appear not to make economic sense. In the long term, however, self-sufficiency programs may be socially beneficial and they will help to lessen an individual nation’s vulnerability to disruption in the flow of oil. Secondly, the effective demand of OILDCs for energy imports is constrained by its supply of foreign exchange. Developing countries normally have inadequate reserves to finance their development programs, because their export earnings often fall short of required import expenditures. Increased oil imports have often been financed by new loans, part of which are commercial loans. A recent World Bank study showed the ratios of debt service to exports in 75 OILDCs to be in the region of 10% for the years 1973 to 1976. Specific countries had higher ratios, however. In South Asia, with the exception of Afghanistan, all countries had ratios ranging from 16 to 20% in 1975. Servicing such debts run to 20 yr or more. In terms of export receipts, some countries in Southeast Asia have paid for oil imports with as much as 35% of their export receipts in 1975 (e.g. the Philippines). 3. The latter situation prevents me from sharing the optimism of some observers that total developing country demand for energy will grow at rates as high as 14%. Certainly, the potential for energy demand growth is higher in developing countries than in industrialized countries. This potential is basically related to the potential for increasing the employment of electrical and mechanical energy in industrial and other economic applications. The developing countries problem is not its potential for productivity increases but the constraints placed by its financial capabilities. The international current account deficits of all OILDCs between 1973 and 1977 rose from $9.4 billion in 1973 to $49 billion in 1975, dropping somewhat to $41 billion in 1976 (reference: the Development Advisory Committee of the Organization for Economic Cooperation and Development). In addition, the World Bank notes that the average terms of trade of 40 OILDCs declined by 15% between 1973 and 1975. The raw potential for a low-income country like Bangladesh may be very high, but its effective potential for growth will be limited. The average growth rate of commercial energy consumption in the Far East developing countries was at 6.4% during the preOPEC embargo period 1963-1973 (based on U.N. data); during the post-embargo period 1974-1976, this average rate was at 6.2x, with rates like 8% occurring in 1975 and 1976. Per capita growth rates were at 4.0 and 3.7”/, during the two referenced periods. In a June 1978 projection of energy demand for 1975-1990 in developing countries the World Bank assumed a 6.4% growth rate-a growth rate that is probably realistic under existing conditions. 4. The scope for introducing nonconventional forms of energy was observed by several participants to be greater in developing countries, especially in rural areas, because of the low or zero level of existing oil-oriented technological infrastructure. I concur with this view but would like to underscore a point raised in this connection by Dr. M. Levy. This was that recommendations to utilize new or unconventional fuel sources in developing countries on a scale smaller than that implemented in the industrialized countries could be misconstrued by some developing countries as another form of neocolonialism. Rather than viewing such use as an opportunity to avoid being locked into the same oil-oriented technological infrastructure of the industrialized countries and to be able to utilize newer forms, the move could be misconstrued as assigning to the developing countries an energy form that has been rejected in the industrialized countries in order to perpetuate or even widen the wealth gap between the rich and
Comments of Conference participants
1009
poor countries. Such a development would be unfortunate and could obscure the real positive issues and obvious benefits that could redound to the developing countries. Perhaps, therefore, proposals to develop new forms such as biomass should also be accompanied by adequate analyses, to allow proper recognition of the pros and cons of adopting new forms.
k‘Y
4 5-l
I
Comments of Conference participants COMMENT
JOHN W. SHUPE Dean of Engineering, University of Hawaii. Honolulu, HI 96822, U.S.A.
Concerned and informed individuals from different disciplines and different cultures can take part in a four-day Conference on Energy Alternatives, each listening to the same dialogue and opinions expressed by the various participants, and still come away from the symposium with vastly different impressions on the probable energy future. The following summary represents what I “heard”, from my perspective as a strong advocate of renewable energy resources. The case for energy demand projections by “accepted conventional wisdom” was superbly presented by Dr. Hafele. The thorough and systematic analyses performed by IIASA, taking into consideration historical energy trends, make a logical case for a projected demand of 42 TW by year 2030, with per capita energy consumption continuing to vary widely between industrialized nations and the less developed countries. On the supply side, the majority of this energy is to be provided by fossil fuels and nuclear power. In general, these projections were endorsed and reinforced by energy models from other developed countries represented at the Conference. In the face of this overwhelming, well-documented evidence, the potential importance of renewable energy alternatives on the global scale did not fare particularly well. Dr. Goldemberg made a forceful case for utilization by the developing countries of hydroelectric power and biomass to satisfy their increasing energy demands, while certain other solar specialties-OTEC, vertical axis windmills, and the solar satellite-were also given adequate coverage. However, many of the solar technologies such as photovoltaics were discussed only briefly. Unfortunately, the solar thermal power tower concept, which in my opinion is one of the least promising of the solar alternatives, came in for rather close scrutiny. The massive quantity of materials required in the heliostats and collector systems suggests that the learning curve on the solar power tower will not be particularly favorable, so that future costs are apt to remain high. A contributing factor to the current level of interest in the power tower has been the attitude of the public utilities toward the concept-any system that generates steam cannot be all bad. However, the power tower is not the ideal solar technology on which to base generalizations on the probable future impact of renewable resources. Through no fault of the program organizers, the overall case for decentralized and renewable energy alternatives was not aggressively pursued. Neither Denis Hayes nor Paul Rappaport was able to participate extensively in the discussion sessions, and most of the remaining solar “champions” assumed a rather conservative posture. As an example, there was little objection raised to the general consensus that in order for solar technologies to be accepted, they must be near-term cost competitive with conventional energy systems-even though an earlier comment to the effect that fossil fuel and nuclear energy systems had been subsidized in the United States alone to the 1005
1006
Appendix I
extent of over $200 billion had gone unchallenged. Why shouldn’t solar have a honeymoon period of subsidy and support, which other energy technologies have been enjoying for decades? I concur in the general consensus that there will be a relentless increase in global energy demand-probably above the 42TW figure by 203O-even if there are selfimposed social pressures in the industrialized nations to cut back on per capira consumption of energy. The message came through loud and clear from representatives of the developing countries that year 2030 will not find this world in a similar situation as we are today-with per capita consumption of energy in the developing countries running 10 times behind that of the developed countries. This tremendous imbalance cannot continue to be tolerated through “business as usual” for another 50 yr. My bottom-line conclusion from the Conference reinforces the biases with which I entered, which is probably the case with most of the participants. There will be an appreciable increase in the per capita energy consumption throughout the world, and much of this increase can best be met with decentralized, renewable eriergy alternatives. This conclusion reinforces Hawaii’s commitment to continue its quest for energy self-sufficiency with its indigenous energy resources, not only to eliminate its near-total dependence for energy on seaborne petroleum, but also to provide energy planners throughout the world with a highly visible, highly successful demonstration of what can be done in the effective utilization of renewable energy alternatives.
COMMENT
KENNETH
C. HOFFMAN
NationalCenter for Analysisof Energy Systems, Brookhaven National Laboratory, Upton, NY 11973, U.S.A. The Conference indicated considerable interest in, and support of, solar and renewable energy forms among participants from developed and developing countries. Many indicate this preference in order to gain environmental and energy security benefits even at a significant economic cost. This support for renewable energy is widespread and niust be taken seriously by the scientists and engineers active in the development of new energy systems, policy-makers in government who determine national policy, and decision-makers in government and industry who will implement policy. The goals, or objectives of a global energy strategy should be to support continued social development, particularly in low-income areas, by providing increased levels of energy services in the most effective way so that future progress can be sustained for the long term, this indicates the use of renewable energy forms for specific services whenever practicable. The analysis of future energy options and appropriate energy systems is an important element of planning. Given the clear primary objectives of improved energy services and increased energy security, analysis must be performed of the “physical capital”, involving man-hours of labor and quantities of material, that are required to develop and implement the new systems. “Physical capital’* will continue to be strained in the future and must be “invested” with care. Problems of “physical capital”, of course, are manifest in monetary capital markets which must be considered; however, attention must be given to the physical requirements, particularly for solar options which tend to be more capital intensive. Analytical approaches to this critical problem that are employed at IIASA, Brookhaven, Bechtel Corp., and elsewhere are described in several papers presented at the Conference.
Comments
of Conkrence
participants
1007
COMMENT
JYOTI K. PARIKH Energy Division, Ministry of Planning, New Delhi-110001, India
Close examination of the renewable resources suggests that either they require natural endowment (wind, hydro, geothermal, etc.) or they are land intensive (wood, solar, etc.). Not all countries may be blessed with the former, whereas the latter requires capital, land, and new types of management and social cooperation. The concept of living from “energy income” rather than “energy capital” which is the case with the fossil fuels is most appealing but requires strong political and social support, because in some cases initial subsidies are required and in some cases changes in the life style. However, it should be recognized that the contributions from renewable energy options are not unlimited. They are limited by available land, waste (in case of biogas) and the availability of natural endowments for site-specific resources. In the caSe of the former, competitive uses of land and waste should be foreseen; e.g. cellulosic waste could be utilized for paper or fibre production. For a more detailed discussion see the article by Parikh in this volume. Thus caution should be exercized in estimating the contribution of renewable energy options, so that policy makers are appropriately guided. For some ‘energy uses-such as for transport sector and for urban areas-fossil fuels would continue to be important for most countries, whereas some countries neither endowed with fossil fuels nor with other natural endowments of substantial order may have to resort to the nuclear option as well.
COMMENT
CORAZON M. SIDDAYAO Research Fellow, The Resource Systems Institute, The East-West
Center, Honolulu, HI 90822 U.S.A.
I found the Conference highly stimulating and informative. My comments will be limited to the points I raised at the Conference. 1. Of special interest to me was the work done at IIASA and at the Brookhaven National Laboratory. I am happy to have had an opportunity to interact with the major researchers in this field-Dr. W. Hafele and Dr. K. C. Hoffman. At least two countries in Southeast Asia are applying a systems approach to energy policy planning over the long term. I thought it unfortunate that a few participants failed to appreciate the value of the analytical models presented. Any serious applied scientist is aware of the interconnectedness of the different activities in this world. Because of our finite abilities, a tool of analysis that can capture even a fraction of the reality of interdependence in resource systems-which subsumes technological, socioeconomic, political and other factors-can be useful to a policy-maker who uses this tool thoughtfully. Methods are not ends; they are means to helping a decision-maker recognize the impact of certain decisions. An intelligent policy analyst is aware of the inadequateness of statistical methods and that human elements cannot be neglected in the overall equation. He accepts that, in choosing a certain policy approach, a policy-maker ultimately makes a political decision, One hopes, however, that the magnitude of the impacts of any decision has been considered.
1008
Appendix I
2. Diversification of energy sources and development of indigenous energy are increasingly being adopted by oil-importing developing countries. This two-pronged approach is understandable for at least two reasons. First, an oil-importing developing country (OILDC) that is pursuing a vigorous economic development program is also vulnerable to supply cutoffs that could jeopardize its economic development programs. It is not surprising, therefore, that a heavy importer like the Philippines has turned inward and adopted a policy of developing indigenous energy resources-notwithstanding the apparent high comparative costs of doing so. In the short term, such policies may appear not to make economic sense. In the long term, however, self-sufficiency programs may be socially beneficial and they will help to lessen an individual nation’s vulnerability to disruption in the flow of oil. Secondly, the effective demand of OILDCs for energy imports is constrained by its supply of foreign exchange. Developing countries normally have inadequate reserves to finance their development programs, because their export earnings often fall short of required import expenditures. Increased oil imports have often been financed by new loans, part of which are commercial loans. A recent World Bank study showed the ratios of debt service to exports in 75 OILDCs to be in the region of 10% for the years 1973 to 1976. Specific countries had higher ratios, however. In South Asia, with the exception of Afghanistan, all countries had ratios ranging from 16 to 20% in 1975. Servicing such debts run to 20 yr or more. In terms of export receipts, some countries in Southeast Asia have paid for oil imports with as much as 35% of their export receipts in 1975 (e.g. the Philippines). 3. The latter situation prevents me from sharing the optimism of some observers that total developing country demand for energy will grow at rates as high as 14%. Certainly, the potential for energy demand growth is higher in developing countries than in industrialized countries. This potential is basically related to the potential for increasing the employment of electrical and mechanical energy in industrial and other economic applications. The developing countries problem is not its potential for productivity increases but the constraints placed by its financial capabilities. The international current account deficits of all OILDCs between 1973 and 1977 rose from $9.4 billion in 1973 to $49 billion in 1975, dropping somewhat to $41 billion in 1976 (reference: the Development Advisory Committee of the Organization for Economic Cooperation and Development). In addition, the World Bank notes that the average terms of trade of 40 OILDCs declined by 15% between 1973 and 1975. The raw potential for a low-income country like Bangladesh may be very high, but its effective potential for growth will be limited. The average growth rate of commercial energy consumption in the Far East developing countries was at 6.4% during the preOPEC embargo period 1963-1973 (based on U.N. data); during the post-embargo period 1974-1976, this average rate was at 6.2x, with rates like 8% occurring in 1975 and 1976. Per capita growth rates were at 4.0 and 3.7”/, during the two referenced periods. In a June 1978 projection of energy demand for 1975-1990 in developing countries the World Bank assumed a 6.4% growth rate-a growth rate that is probably realistic under existing conditions. 4. The scope for introducing nonconventional forms of energy was observed by several participants to be greater in developing countries, especially in rural areas, because of the low or zero level of existing oil-oriented technological infrastructure. I concur with this view but would like to underscore a point raised in this connection by Dr. M. Levy. This was that recommendations to utilize new or unconventional fuel sources in developing countries on a scale smaller than that implemented in the industrialized countries could be misconstrued by some developing countries as another form of neocolonialism. Rather than viewing such use as an opportunity to avoid being locked into the same oil-oriented technological infrastructure of the industrialized countries and to be able to utilize newer forms, the move could be misconstrued as assigning to the developing countries an energy form that has been rejected in the industrialized countries in order to perpetuate or even widen the wealth gap between the rich and
Comments of Conference participants
1009
poor countries. Such a development would be unfortunate and could obscure the real positive issues and obvious benefits that could redound to the developing countries. Perhaps, therefore, proposals to develop new forms such as biomass should also be accompanied by adequate analyses, to allow proper recognition of the pros and cons of adopting new forms.
k‘Y
4 5-l