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This graphic contrasts the price range of electricity costs stemming from renewable sources with that of fossil fuels for the years 2010 and 2016. For more on the interplay between technological innovation and the geopolitics of energy, see Severin Fischer’s chapter for Strategic Trends 2018 here. For more CSS charts, maps and graphics on economics, click here.
After his reelection in November 2011, President Paul Biya of Cameroon announced [fr] that the country would soon become a giant “construction site”. The goal for his new term is for Cameroon to reach emerging market status by 2035 through a series of “great achievements” in transport and energy infrastructure development [fr]. It’s a deadline that fails to convince [fr] many commentators, if only because the challenges are so great.
Energy, and specifically electricity, is especially problematic. Like many other African countries, Cameroon suffers from insufficient electricity supplies.
Journalist Leopold Nséké explains in an article published in Afrique Expansion Magazine:
Underequipped, the African continent is awash in the obsolescence of its facilities and bore the brunt of poor management of available resources. Representing 15% of the world population, Africa consumes paradoxically only 3% of the total world production of electricity.
Scotland and Albania want to produce 100% of their electricity from renewable sources by 2020. Their commitment, both prime ministers argue, is not only a huge step towards a more sustainable society but will also comprise the creation of thousands of “green collar” jobs. This is good news for the environment and also for their respective populations. But with little more than 8 years to go, isn’t this target too ambitious for the nations’ actual capacities?
The governments’ announcements come at a crucial moment. Investors have started to shift their business to China, and last month a report by the group CBI warned that the United Kingdom was not attractive for investment in renewables. But the recent disaster at the Fukushima nuclear plants and the long-standing urge for clean energies have shifted public opinion in Europe to make way for a new reality. A second green revolution is building as European countries renew their commitment to clean energies as the way forward.
Europe is talking energy and there is no easy way out of existing dilemmas: While nuclear and fossil-fueled power plants entail considerable risks, most sources of alternative energy are not yet considered mature enough to fuel Europe’s economies on their own. Like elsewhere across the globe, Europeans are facing tough challenges in their attempt to secure a clean, reliable and affordable power supply.
As in every crisis, the risk looms that countries just look after their own narrowly-defined national interests and either ignore or forget the advantages of a regionally coordinated approach. In their struggle for secure energy, European nations should not lose sight of the potential of the common electricity market. In the long run, it could play a crucial role in enabling a more efficient energy future both from an economic and an ecological point of view. Yet, many obstacles still need to be overcome at the moment.
In an integrated market, electricity could be exchanged efficiently across the continent, connecting demand to the most inexpensive supply no matter where in Europe. Consumers could benefit from choosing from a wide range of suppliers, which in turn would boost competition and innovation. Currently, however, the European electricity markets remain regionally fragmented. Countries and companies are not investing enough in transmission capacities across national borders because they struggle to agree on the financial burden-sharing of these expensive projects. As long as national grids are not fully interconnected, trade cannot evolve.
The “Nuclear Power Renaissance” might be coming to an end before it has had the chance to flourish. In light of the current nuclear meltdown in Japan, people are growing increasingly suspicious of nuclear plants. Governments in several countries are thus postponing or reviewing plans to advance nuclear power as the keystone of their electricity supply.
In their search for alternatives, policy makers would be well advised to take a good look at natural gas. Recent developments in the market are likely to render it increasingly attractive for consumers.
Firstly, the geography of gas supply is currently being turned upside down. Technological progress has enabled the exploitation of gas reserves previously thought inaccessible in North America. As a consequence, the US has become the world’s main producer, overtaking natural gas giants Russia and Iran.
Europe, India and China, too, are thought to be sitting on vast gas reserves, which may now be exploited thanks to new drilling techniques. At the moment, it remains uncertain how soon, and to what extent, these gas reserves will become economically viable. Nevertheless, global supply of natural gas is expected to rise markedly in the long run. Increased supply coupled with current sluggish demand (due to the global recession) should keep prices low. Moreover, consumers will be able to boost energy security by diversifying their natural gas supply.