Asian power

PUBLISHED : Friday, 14 October, 2011, 12:00am
UPDATED : Friday, 14 October, 2011, 12:00am

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Energy powers our industrial development, urbanisation and other necessary functions. In other words, it permits the progress of human civilisation and is the essential lifeblood of modern human society. Therefore, energy has to be secured for all people.

But energy security can be threatened in many ways. The first comes from a limited supply. We may lack the ability to extract the energy around us, either because we cannot reach it or because we lack the technological ability to use it.

Resources may also be starting to run out, as shown by the concern of many observers over the sudden arrival of 'peak oil'. What oil is left is difficult and expensive to extract. Renewable energy may be a way out, but it takes a long time for a new form of energy to gain significant market share. It would probably take a century for renewable energy to increase its share from 1per cent to 50per cent.

However, it is not just that global supply is falling; global demand is also increasing dramatically, due to growth in emerging markets. Some of this increase is due to population growth. Over the 30 years since 1980, world population grew by 54 per cent while energy consumption increased by 74 per cent. Urbanisation is another cause; cities need cheap electricity to operate their central components. Most of the urban growth in the coming years will happen in developing countries, with at least 300million more Chinese expected to be living in cities over the next 20 years.

But perhaps a more important challenge than just limited supply or increased demand is the uneven distribution of energy. For example, Opec countries have about 6 per cent of the world's population, yet have 77per cent of the world's oil. Consumption is also uneven: the United States, with only 5 per cent of the world's population, drives 25 per cent of the world's cars and consumes 40 per cent of the world's motor vehicle fuel.

This uneven distribution of energy makes balancing supply and demand difficult. The planet's total endowment of energy is sufficient to meet current and future demand, yet, mainly as a result of narrow decisions, a mismatch has persisted. And, unlike Opec countries, which have large oil reserves, and the developed world, which is rich enough to afford greater consumption, the developing world lacks both the resources and the wealth to buy more. Thankfully, developing nations are not left without options. Emerging countries can 'leapfrog' energy development, jumping over fossil fuels, directly to clean energy. Last year, China overtook the US as the main provider of wind power. Four of the 10 major wind power companies and the five major solar power companies are Chinese. Overall, China's renewable energy production is projected to increase from 7.8per cent in 2007 to 15 per cent in 2020. This may be only a small increase, but it will pave the way for the future.

Greater efficiency can also be achieved by recognising that different activities require different methods of energy generation. Industry requires sustainable and dependable base load power, which can only really be generated by coal, nuclear and hydropower. Residential areas vary their electricity use over the day, and their needs could be filled by a 'smart grid' that can shunt energy to where it is most needed.

However, the most important change needs to be a change in lifestyle. What is a better way of living? Is it the American ideal of big houses and big cars? Or, perhaps, should the world aspire to live more like we do here, with smaller apartments and efficient public transport. China, with its construction of smaller houses and massive transport projects, is clearly moving towards the latter.

Fortunately, technological progress will lead to changes in the energy market. The competitive energy resource of today might be oil, but the competitive resources of tomorrow will be uranium and rare-earth metals.

Uranium is needed to fuel the growing number of nuclear reactors. Right now, there are over 440 nuclear reactors, providing about 14per cent of the world's electricity. By 2020, there will be 60 more reactors, most of which will be in China and the rest of Asia.

Rare-earth metals are needed for more efficient batteries and photoelectric cells. One example is the nickel-metal hydride batteries being developed in Guangzhou. These have much larger capacities than lithium batteries, and were reliable enough to power the world's first solar-powered plane.

We should use this period of development to form regional agreements that would solve outstanding energy issues. In Southeast Asia, we could establish a collective energy security mechanism. Energy reserves, such as oil, could be shared. We could create an international, integrated power grid. We can work together on renewable energy development and share related technologies. Energy is a global right, and requires international attention. This calls for dialogue and co-operation, rather than narrow political self-interest and protectionism.

Patrick Ho Chi-ping is deputy chairman and secretary general of the China Energy Fund Committee and a former secretary for home affairs