The Future of Energy

Discussions on the future of energy, and more precisely on the ways of producing and using it by humans, are not all that much different from fantasizing about artificial intelligence. That which is potentially possible is confused with what is actually needed, while reality develops anyway in accordance with its own unpredictable dynamics.

Thinking about energy is different from fantasizing about artificial intelligence in one fundamental aspect – the timescale. Systemic investments in the energy sector are pursued in the awareness that their full depreciation will take approximately 40-60 years, as is usually the case for coal and nuclear power plants. This is a completely different perspective than the pace of change imposed by the development of computer science and computers. The Internet is not yet 60 years old and has been a generally used medium for only two decades. It is the development, however, of the digital domain which shapes the human imagination and the conviction that the world and technological progress are accelerating.

A look at the energy domain makes one less optimistic. A 2016 report from the International Energy Agency (IEA) on Poland indicates that 62 percent of our coal-based production capacity is more than 30 years old and a further 13 percent is between 26 and 30 years old. It would be heart-breaking to turn off the “thirty-year-olds”, for they are capable of working much longer, but they are as much as 20 percent less effective than new power plants, burning more coal and emitting more greenhouse gases than modern alternatives based on fossil fuels. It is therefore possible that Poland will end up producing electricity in power plants built in socialist times to power autonomous cars driven by artificial intelligence.

Energy policy as a crucial aspect of climate protection

Decisions taken in the past cannot be undone, but they will shape the future for a long time to come. Decisions taken today will have an even greater impact, for in this case it is not just about the time of depreciation of investments, which may be as long as the end of the century, but also about the period in which the systemic consequences of these decisions will be felt.

Energy policy forms a crucial aspect of climate protection policy at present. A strategic challenge for all humanity is to maintain the rise of global temperatures at a safe level, “safe” meaning here that the effects of temperatures rising, that is destructive weather developments such as drafts or melting of the ice cover, will not threaten the functioning of our civilization. At this moment, the atmosphere of the Earth is about 1°C higher than in the preindustrial era. The Paris Agreement on climate conclusion, during the UN Climate Summit in Paris in 2015, indicates that there is a need to attempt a stabilization at 1.5°C and that 2°C should not be exceeded.

Energy policy forms a crucial aspect of climate protection policy at present. A strategic challenge for all humanity is to maintain the rise of global temperatures at a safe level drafts.

These values can be converted by scientists into the amount of carbon dioxide, the main greenhouse gas, that can still be emitted. If we set the ceiling at 2°C, the “coal credit” that can still be used is about 1000 gigatons of carbon dioxide, while the 1.5°C ceiling brings this amount down to 300 gigatons. About 35.8 gigatons of carbon dioxide ended up in the atmosphere in 2016 and coal-red power plants with a capacity of 273 gigawatts are built across the world. Facilities with a total capacity of about 570 gigawatts are planned for the future. If all of them are completed, even the level of 2°C will be impossible to achieve.

Nicholas Stern, a British economist and author of a celebrated report on the economy of climate change published a decade ago, claims in a new report entitled The New Climate Economy that the next two-three years will determine the future of the world (and energy). To maintain our civilization’s infrastructure, investments at a level of 90 trillion dollars are needed by 2030. And such investments are planned. Stern argues that this is the moment to decide on a new development model, compatible with environmental and climatic goals. Most importantly, such a model will actually pay off, for it will not only help avoid ecological disaster, but also produce an additional economic stimulus of 26 dollar trillion by 2030, generate 65 million new jobs and allow us to avoid 700,000 premature deaths caused by air pollution.

It should be obvious what decisions need to be taken. Is this actually the case though? In a world where societies democratically entrust power to such leaders as Donald Trump nothing is clear.

Scientific knowledge vs. Political motives

The matter seems abundantly clear. We have scientific knowledge concerning the effects of climate change and high-quality economic and technological analyses showing that not only there is a technologically efficient alternative to the existing energy model, but also that this alternative is profitable in economic, medical and social terms. It should therefore be obvious what decisions need to be taken. Is this actually the case though? In a world where societies democratically entrust power to such leaders as Donald Trump nothing is clear.

The President of the United States announced in his campaign that he would end the “war against coal” and restore its importance to the American economy. He has consequently acted upon this during his stint in the White House. In August, the Environmental Protection Agency (EPA) announced the Affordable Clean Energy Rule proposal, the being regulations to replace the Clean Power Plan launched in Barrack Obama’s time. The proposal effectively lifts emission restrictions on coal energy, both for carbon dioxide and for toxic substances. As a result, as the technical analysis attached to the proposal predicts, new regulations will lead to an additional 1,400 premature deaths per year.

The energy minister in Poland has proposed quality standards for the fuels available on the market which effectively mean that people will be allowed to burn anything that was lying next to a coal mine. The entire program of fighting air pollution, one of the most important challenges in environment and health protection in Poland, will consequently become meaningless. Political rationality follows a different path than the knowledge of scientists and experts. Donald Trump, just like the government in Poland, is held hostage by his constituency and especially that part of it which is most easily mobilized into forceful protests: employees of the strongly unionized coal and energy sector.

Political rationality follows a different path than the knowledge of scientists and experts. The government in Poland is held hostage by employees of the strongly unionized coal and energy sector.

The most coal-dependent states are moving away from it

A text on the future of energy could be ended at this point by stating that “no can do”; by arguing that you cannot make an energy transition to a world of clean, no-emission technologies, because the future is determined by decisions taken in the past and by the logic of the political process, which is also dominated by the interests of forces shaped in the past and constituting an all-powerful lobby bringing together all those who make their living on a civilization based on fossil fuels. It is a lobby going far beyond the energy sector, for it also involves the entire system of transport and its infrastructure.

Instead of ending on a note of failure, however, this text in fact just begins. As soon as the EPA announced its proposal and was applauded by representatives of the said lobby, the economics press reacted quite differently. FastCompany, a magazine devoted to new technologies, went as far as saying that the new regulations and pro-coal policy of Donald Trump were of little importance in actual reality. 18 percent of American electricity came from renewable sources, twice as much as a decade ago, in 2017. This occurred in the absence of pro-climate regulations, for Obama’s Clean Power Plan never came into force, as it was blocked by a court. Even without it, however, the American economy reduced emissions beyond the targets established in the plan.

It turns out that even the most coal-dependent states are moving away from it, for a growing number of institutional customers, especially large corporations from the new economy, require electricity from clean sources. Successive cities have declared that they will become completely coal-free and some, e.g. in Vermont, have already reached this goal. All this has occurred not only because company bosses in the new economy and inhabitants of Vermont love the outdoors and care about the climate, but also because they have concluded that it simply pays off even at present. The costs of energy from renewables are falling faster than analysts assumed years ago. As a result, as Stern sums up in his global report, new capacities in the energy sector based on renewables are higher already several years ago than new capacities based on conventional sources.

The coal-oil-car system is a relic of industrialism

In today’s world, even the President of the United States is unable to change technological and capital trends with his policy. Capital flows wherever it has a chance of achieving the highest accumulation rates. In the case of energy it is not about a simple choice between available technological models of producing and distributing energy. The energy system in its full scope, that is combined with the transport system, constitutes an infrastructure of civilization, which in turn is an expression of the dominant regime of capitalist accumulation. The current coal-oil-car system is a relic of industrialism, where the main way of producing added value was industrial production.

It turns out that even the most coal-dependent states are moving away from it, for a growing number of institutional customers, require electricity from clean sources.

This model was exhausted already in the 1970s, while its successor, information capitalism in its neoliberal model, turned out to be a simulacrum based on creating value mainly through speculations of the financial sector. The 2008 crisis revealed the reality, that is the necessity of making the economy real through restoring the importance of the productive system. This requires a change to the old accumulation regime, which in turn demands a new technological infrastructure, a new energy and logistics system. Although we do not know what it will look like on the ground, we can feed our imagination with various visions.

An energy system as a self-organising network?

One of the most spectacular visions was presented by Jeremy Rifkin under the slogan the “hydrogen economy”. It is a vision of a world where energy is produced in a dispersed system, where thanks to new resources everyone can be both a producer and a consumer of energy, while an intelligent information network makes it possible to integrate these micro-links into one chain. If we add to that such innovations as hydrogen as an energy carrier, fuel cells, heat pumps and smart home applications increasing the effectiveness of energy use, a world free from coal and other fossil fuels can be imagined and a world where like today’s Internet users we are participants in an energy Internet structured as a self-organizing network.

As it has happened with the Internet, however, reality will be far removed from the vision of Rifkin and others like him. If technological change and the transformation of the energy and logistics system leads to the emergence of a new capitalist regime of accumulation, the logic of this accumulation will dominate. One aspect of this logic is aimed at concentration and monopoly, for example, through control of technologies crucial for a given regime. Visionaries of the Internet did not plan on the emergence of players such as Apple, Facebook, Google or Amazon monopolizing the digital world. Once, however, the Internet became a playing field for the capitalist game and an infrastructure of the regime of accumulation for information capitalism, it began to develop in accordance with capitalist logic.

If technological change and the transformation of the energy and logistics system leads to the emergence of a new capitalist regime of accumulation, the logic of this accumulation will dominate.

Central European energy strategies are doomed to failure

One can consequently easily imagine that the future energy and logistics network will have a dispersed physical structure, as Rifkin predicts, but will most likely be controlled by capital concentrated in a limited number of centers. Local players such as Poland, the Czech Republic, Slovakia and Hungary will oppose this concentration, in an attempt to protect their domestic resources over which they have political control within the nation state, for as long as possible. These resources are based on systemic energy production; in the case of Hungary and Slovakia nuclear energy plays a key role, and this situation is similar in the Czech Republic, although the participation of nuclear energy is lower. Poland is invariably dependent on coal, although its share in the energy mix has slightly decreased in recent years.

Energy and logistic transformation cannot be avoided, just as we have not avoided the Internet. In the new model we will largely lose the possibility of controlling the system.

If the claim about the inevitable change in the accumulation regime (the new Stern report is in fact concerned with this) is correct, then Central European energy strategies are doomed to failure in the long run. Energy and logistic transformation cannot be avoided, just as we have not avoided the Internet. In the new model we will largely lose the possibility of controlling the system. This means in turn that politicians will lose an important source of legitimacy (the example of Donald Trump quoted above illustrates this issue very well). They therefore attempt to use the last decision window to create a fait accompli and petrify the local structure based on the current model. Hence the plans for the expansion of nuclear power plants in Hungary, Slovakia and the Czech Republic as well as modernization of the coal base in Poland.