The role of electricity in a carbon constrained world...

… and the role of power utility companies

If we are to build a sustainable energy future for Europe, a key role will be reserved for electricity. Its simplicity and cleanliness at the point of use, combined with the feasibility of clean power generation, make it a preferred energy carrier.

That is the main conclusion of Eurelectric’s study 'The role of electricity'. A summary of that paper was released in March 2007. While it is easy to agree with the general conclusion, the study would gain relevance if it did not limit itself to advocating only those technologies in which power utility companies play a key role.

Scenario’s for 2030 and 2050

The study investigates the impact of energy policies and technologies up to the year 2050. Four scenarios were developed using the PRIMES and PROMETHEUS models:

• A Baseline scenario, building on current policies and current technological deployment
• An Efficiency and Renewables scenario
• A Nuclear and Carbon Capture and Storage (CCS) scenario
• A Role of Electricity scenario, envisioning an intensified use of all electrical options to achieve a low-carbon economy — energy efficiency, renewables, nuclear energy, CCS, electric road transport, and electric heating and cooling

The Role of Electricity scenario looks promising. It is the only scenario out of the four that leads to a reasonable and stable level of carbon emissions, control of the total energy cost, limited gas and oil import dependency, and having a sufficient robustness for countering unforeseen events. The scenario projects a reduction in carbon emissions of about 70 per cent, and in oil and gas dependency of about 80 per cent.

What about distributed generation?

The primary value of this study is that it demonstrates the feasibility of making a transition to a low-carbon economy while maintaining the security of energy supply and the competitiveness of the economy. However, three main points of criticism came into my mind when reading this study:

1. In all of the scenarios that were developed, nuclear energy is coupled to CCS. The individual influence of nuclear energy can therefore not be assessed. But the policy recommendations contain the following threatening sentence: 'Any policy that tends to exclude specific elements of this balanced portfolio will fail to build a robust and economically-sound low-carbon electricity system'. That sounds like an ill-disguised defence of nuclear energy rather than a sound conclusion based on the simulated scenarios.
2. The role of photovoltaic energy and other types of distributed generation is downplayed. The summary paper mentions only that 'many smaller-scale renewable applications still require economic support in the marketplace' and that 'they represent a large potential for the future, but will require very high technological and economic development if they are to attain a significant share in Europe’s power generation mix'. Now that might be true, but is it possible to develop electric road vehicles, CCS, and Generation 4 nuclear reactors without support? It is strange that the paper comes close to blaming solar energy for requiring support, while for electric vehicles it advocates 'supporting R&D and demonstration' and 'reducing the investment handicap through appropriate tax measures'.
3. The study clearly delineates the danger of being dependent on a small number of oil and gas producing countries. But what about an excessive dependency on just a few large power utility companies? Such a dependency may not raise worries in an EU controlled, fully competitive market. But that market is still far away, as we all know. The case of ENRON in California is ample proof of the danger of local quasi-monopolies. If we are heading towards an all electric economy, wouldn’t it be wise to ensure that distributed electricity production by consumers creates a counterbalance to the economic power of utility companies?