Renewable Energy Transformation or Fossil Fuel Backlash

In 2013, Chinese President Xi Jinping declared that China will no longer sacrifice the environment for temporary economic growth (CCICED, 2013); a year later Premier Li Keqiang followed up by stating that China ‘will resolutely declare war against pollution as we declared war against poverty’ (Guardian, 2014a; GWEC, 2014, p.14). Whether China lives up to its promises obviously remains to be seen, but clearly environmental and energy issues now attract serious attention from very powerful political and industrial actors. In a world where oil prices, despite their recent dramatic fall, had long been stable at more than US$ 100 per barrel, where peak oil (as in the point of maximum oil production (after which it will inevitably decline)) is fast approaching, and where climate change is becoming an evermore concrete and tangible challenge, a fresh look at energy policy, and renewable energy policy in particular, is very much in order.

Notoriously scarce in domestic energy resources (except for geothermal), but very densely populated and highly industrialized, access to energy has always been a concern for Japan. The oil glut following World War II seemed to have solved the problem. In the words of Jitsuro Terashima (2012), for Japan, ‘securing energy supply meant building bigger oil tankers’. The 1973 oil crisis, however, brought energy security back onto the Japanese political agenda. Energy became scarcer, far more expensive, and often arriving from geopolitically sensitive areas.¹

No country has grown faster over the past few decades than China. And no country has more rapidly increased its energy consumption. China is now both the planet’s foremost energy consumer and its foremost CO₂ emitter. Fairly abundant in a number of natural resources, domestically mined coal has been the solution to most of China’s energy challenges up until fairly recently. Coal still accounts for 64 percent of primary energy consumption, almost 80 percent of the electricity generated, and at 47 percent of world total, China is the biggest coal consumer in the world (Andrews-Speed, 2012; Bloch et al., 2012; China Daily, 2015b; Karlsson, 2012; Zhang et al., 2013a). There is, however, also a growing realization within the Chinese leadership that few countries will be hit harder by global warming, through floods, droughts, and air pollution (e.g. Wang, 2010; Zhang et al., 2013a). While major transformation to the Chinese energy structure has yet to happen — and is probably also far away from happening — a dramatic expansion in renewable energy has been among the Chinese responses to both its energy and climate challenges.

From a renewable energy policy point of view, few countries are more interesting than the United States — for better and for worse. In the US, renewable energy policy has swung more violently than in most other countries. There have been booms, busts, and protracted periods of unpredictability. In addition, the federal structure of the country leaves much of the policymaking to the states, where there are major differences in policy and in renewable energy targets. But maybe first and foremost, the US has suffered from minimalist and uncoordinated policies, punctuated by what Sovacool (2009b) describes as haphazard and inconsistent government policy, and Ernst and Young (2014b) as the crippling effects of Congressional gridlock and partisan politics.

For years Germany has been one of the frontrunners in renewable energy. Few countries have installed more renewable energy, few have pursued renewable energy policies more actively, and few can show for a more general social and political consensus on the importance of renewables (maybe apart from Denmark).¹ The German feed-in tariff (FIT) has been emulated by a wide range of countries and has up until now been widely perceived as one of the most successful ways of promoting renewable energy. For short, Germany very often looks like the poster child for good and ambitious renewable energy policies.

This book analyzes six different countries in six chapters. Thus, countries can be compared to each other, but the chapters can also be read as standalone case studies. One of the more obvious comparisons that can, however, be made is between Denmark and Norway. They are both Scandinavian countries, they are small compared to the other four countries in the book — each inhabiting only a little over five million people — but technologically and economically highly sophisticated, and they are politically fairly similar. In terms of energy policy, they have, however, gone their very separate ways. Some of this is for obvious reasons. Denmark is one of the flattest countries around and does not have much hydropower potential, and it does not have the same abundance of petroleum as Norway. It does hold some petroleum reserves, but these were discovered late and are of a magnitude that allows Denmark to be self-sufficient, but not a major exporter.¹

Norway is kind of the odd country out in this book and the least likely candidate for an energy transformation. It has a reputation and a self-image as a clean and environmentally conscious nation, with large swathes of pristine and untouched nature. However, it is also the world’s third largest exporter of energy (behind Russia and Saudi Arabia) (IEA, 2011b), energy for all practical purposes meaning oil and gas (and some hydro). It is also in the quite unique position that its hydrocarbons are mostly exported, since they are not needed for electricity: 96–98 percent of all electricity is instead produced by hydropower (OECD, 2011). Thus, Norway is one of the most energy secure and self-sufficient countries on the planet, exporting almost eight times more energy than it consumes (Godzimirski, 2014). This also means that apart from the self-image of being uniquely clean and pristine, and the programmatic statements of any Norwegian government that the country enjoys frontrunner status in all things environmental, for all practical purposes, despite vast renewable energy resources, Norway has had little incentive to invest heavily in renewable energy beyond hydropower.

The (potential) shift from a fossil-based (and nuclear) energy regime to one based on renewable energy represents one of the biggest structural shifts ever in human history, irrespective of whether we think of it primarily as an industrial shift or as an energy transformation. We know that such shifts have happened in the past. The early Industrial Revolution was based on an energy system that was primarily renewable (i.e. waterpower) (although a renewable system that had undergone a quiet revolution over the past half a century). This gave way to industrial shifts based on coal in the early 19th century. The late 19th century saw the dawn of electricity, and while petroleum in different shapes and sizes was also starting to permeate the world economy, it was in the first few decades of the 20th century that oil became the new wonder fuel. The 20th century also saw the rise of nuclear power, although the nuclear revolution has remained a stillborn one.