Comparative Analysis, Tools, and Questions

This chapter returns to the overarching questions of this book, namely, how can national energy transitions be explained, to what extent do patterns of change align and differ in the transitions of this study, and how does policy play a role, particularly with innovations that emerged amid the transitions. To broadly answer, the four cases are comparatively examined here. The conceptual tools from Chapter 3 are also elaborated based on the findings. Implications of the results are discussed, and will serve as a basis for further discussion in Chapter 9 on how to think about energy transitions as a planner, decision-maker, and researcher. Among the more significant findings are the following. Greater energy substitution (in relative terms) occurred initially within the countries that extended or repurposed existing energy systems versus the country (i.e., Denmark) that developed a new energy system from a nearly non-existent one. Cost improvements were evident in all cases; however, a number of caveats are worth noting. Among the energy technologies and their services that were studied, only Icelandic geothermal-based heating was competitive in its home market in the 1970s; nonetheless, the remaining energy technologies that were studied later became cost competitive. As the national industries of this book became globally recognized, increases in the quality of living within the given countries also occurred, as gauged by the Human Development Index (HDI). With respect to timescales, substantial energy transitions were evident in all cases within a period of 15 years or less. In terms of technology complexity, this attribute was not a confounding barrier to change. Finally, government was instrumental to change, but not always the driver. There are countless ways to compare national energy transitions. This section illustrates ways of doing so, first by describing broadly observed, socio-technical patterns with the tool typologies outlined in Chapter 3. A discussion of tool refinement follows. The section then turns to more systematically assess key, qualitative and quantitative dimensions of the four transition cases.

Rethinking Energy at the Crossroads

The discovery of oil in Pennsylvania in 1859 was a relatively inconspicuous precursor to what would become an epic shift into the modern age of energy. At the time, the search for “rock oil” was driven by a perception that lighting fuel was running out. Advances in petrochemical refining and internal combustion engines had yet to occur, and oil was more expensive than coal. In less than 100 years, oil gained worldwide prominence as an energy source and traded commodity. Along similar lines, electricity in the early 1900s powered less than 10% of the homes in the United States. Yet, in under a half a century, billions of homes around the world were equipped to utilize the refined form of energy. Estimates indicate that roughly 85% of the world’s population had access to electricity in 2014 (World Bank, n.d.b). For both petroleum and electricity, significant changes in energy use and associated technologies were closely linked to evolutions in infrastructure, institutions, investment, and practices. Today, countless decision-makers are focusing on transforming energy systems from fossil fuels to low carbon energy which is widely deemed to be a cleaner, more sustainable form of energy. As of 2016, 176 countries have renewable energy targets in place, compared to 43 in 2005 (Renewable Energy Policy Network for the 21st Century [REN21], 2017). Many jurisdictions are also setting increasingly ambitious targets for 100% renewable energy or electricity (Bloomberg New Energy Finance [BNEF], 2016). In 2015, the G7 and G20 committed to accelerate the provision of access to renewables and efficiency (REN21, 2016). In conjunction with all of the above priorities, clean energy investment surged in 2015 to a new record of $329 billion, despite low, fossil fuel prices. A significant “decoupling” of economic and carbon dioxide (CO2) growth was also evident, due in part to China’s increased use of renewable energy and efforts by member countries of the Organization for Economic Cooperation and Development (OECD) to foster greater use of renewables and efficiency (REN21, 2016).

Brazilian Biofuels: Distilling Solutions

Worldwide, transportation accounts for roughly a quarter of the total final energy demand and a similar share of energy-based carbon dioxide emissions (IEA, 2016f). The transport sector has the most homogenous of fuel mixes, with petroleum-based products accounting for roughly 95% of the overall final share (Kahn Ribeiro et al., 2012). Biofuels and other options, like electric vehicles, have the potential to displace a notable portion of petroleum and CO2 emissions in the transport sector. Global use of ethanol, the most widely used among biofuels, has grown significantly in recent years. Between 2000 and 2010 alone, ethanol utilization increased 350% worldwide, with trade increasing by a factor of 5 and usage equaling 74 billion liters in 2010 (Valdes, 2011). This chapter examines the underlying roots of the biofuels transition in Brazil. Two micro-shifts—one that is government- led and a second that is industry-led—are evaluated, demonstrating how a new, energy market and industry can develop at a national scale through the retooling of existing industries and infrastructure. Insights on policy inflections, market longevity, and dual-use technology are also covered. Brazil is the historical leader in biofuels and the only country to substantially alter its automotive fuel mix with ethanol, shifting from 1% in 1970 to 34% in 2014 (see the section entitled “Modern Transition” later in this chapter). Ranked sixth globally for its population of roughly 206 million people and eighth for its economy of $3.1 trillion in mid-2016 (CIA, n.d.), Brazil has been a leading pioneer in the production and export of ethanol, its principal biofuel. In 2015, Brazilian ethanol equaled 28% of the global supply (Renewable Fuel Association [RFA], 2016). The country is known for having the lowest production costs of ethanol (Goldemberg, 2008; Shapouri, and Salassi, 2006; Valor International, 2014). Brazil also has a unique distribution network of more than 35,000 fuel stations supplying the renewable fuel (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis, 2008).

Research Design, Scoping Tools, and Preview

This chapter outlines the design of the current study. It discusses my underlying logic for scoping energy system change with theory-building in the form of (1) a framework on intervention that operationalizes insights from the previous chapter and (2) conceptual models of structural readiness. A brief review then follows of related, global developments to provide broader context for the cases. The chapter concludes with a preview of the transitions that will be discussed in depth in subsequent chapters. This book draws on my research of four national energy system transitions covering the period since 1970. I selected a timeframe that reflected a common context of international events which preceded as well as followed the oil shocks of 1973 and 1979. Such framing allowed me to trace policy and technology learning over multiple decades for different cases. I completed field work for this project primarily between 2010 and 2012, with updates continuing through to the time this book went to press. I selected cases from more than 100 countries in the International Energy Agency (IEA) databases. The ones that I chose represented countries which demonstrated an increase of 100% or more in domestic production of a specific, low carbon energy and the displacement of at least 15 percentage points in the energy mix by this same, low carbon energy relative to traditional fuels for the country and sector of relevance. I utilized adoption and displacement metrics to consider both absolute and relative changes. Final cases reflect a diversity of energy types and, to some extent, differences in the socio-economic and geographic attributes of the countries. The technologies represent some of the more economically-competitive substitutes for fossil fuels. It’s important to emphasize that the number of cases was neither exhaustive nor fully representative. Instead, the cases reflect an illustrative group of newer, low carbon energy technologies for in depth evaluation. Each of the cases shares certain, basic similarities. These include a national energy system comprised of actors, inputs, and outputs with systemic architecture connecting the constituent parts in a complex network of energy-centered flows over time—including extraction, production, sale, delivery, regulation, and consumption.

Beyond Malthus

This chapter explores the evolving understanding of carbon and sustainability since the 18th and 19th centuries. Relevant applications of influential ideas are then identified with respect to knowledge, innovation, policy, and meta-level change. More than 100 years ago, Swedish scientist Svante Arrhenius hypothesized about the onset of ice ages and interglacial periods by considering high latitude temperature shifts (NASA Earth Observatory, n.d.). Applying an energy budget model and ideas of other scientists, like John Tyndall, Arrhenius argued that changes in trace atmospheric constituents, particularly carbon dioxide, could significantly alter the Earth’s heat budget (Arrhenius, 1896, 1897; NASA Earth Observatory, n.d.). Today, science indicates that the global, average surface temperature has continued to rise alongside the increase in greenhouse gases. Among global GHGs, CO2 emissions have increased by more than a factor of 1,000 in absolute terms since 1800. During that time, global carbon emissions found in the primary energy supply increased by roughly 6% per year (Grubler, 2008a). This growth in carbon emissions from energy is significant because CO2 from fuel combustion dominates global GHG emissions (IEA, 2015a and 2015b; IPCC, 2013). As noted earlier, 68% of the global GHGs that are attributed to human activity are linked to the energy sector; namely, fuel combustion and fugitive emissions (IEA, 2015a). Within this share, 90% consisted of CO2 (IEA, 2015a). In contrast to the rise in absolute numbers, carbon emissions per unit of output in the global primary energy supply has decreased 36% overall or by slightly less than 0.2% per year over the past two centuries (Grubler, 2008a). This subtle decarbonizing pattern in the energy mix is explained by the faster growth rate of energy use in relation to the rate of carbon emissions from that use. The delinking of energy utilization and carbon emissions occurred in part with the introduction of less carbon-intensive fossil fuel sources, like natural gas, in which a higher hydrogen-to-carbon ratio is evident (Gibbons and Gwin, 2009; Grubler, 2004, citing Marchetti, 1985).

New Paradigms: Lessons and Recommendations

There is an old saying that history is about revolution and evolution. This book considered history in the context of disruptive and incremental change within energy systems. In doing so, the research advances new tools and theory-building, while emphasizing broader lessons, particularly for policymakers, regarding the strategic management of energy transitions. This chapter discusses key insights from the study. It also identifies avenues for further research. There is no set formula for a country to shift to low carbon energy (or, for that matter, to undertake any energy transition). Whether transitions emerge or are driven, there is room for strategic management. • Focusing events, like oil shocks, can provide an opportunity for the rapid mobilization of an energy transition, despite differences in views. Such windows of opportunity, however, have a limited shelf life. Common tensions between competing interests will re-emerge and can undermine progress. Here, cross-sectoral collaboration and learning can provide important traction amidst a transition for meeting longer term objectives. • Least-cost economics can play a role in energy decision-making, yet policymakers should recognize that this approach does not adequately reflect all important objectives, costs or benefits. Co-benefits, including the flexibility to adapt in otherwise irreversible decisions, may matter for a society in an energy transition. Such benefits can be difficult to value in planning and analysis, but warrant scrutiny. Here, analysts and decision-makers can be pivotal by ensuring that viable options which add important value are not crowded out. • It is clear from the preceding pages that governments have a role to play in the energy playing field, even if government is not the driving force. The fundamental importance of energy, the widely entrenched nature of such systems, and the intersecting aspects of energy-related challenges with other public priorities reinforce this point. Here, public actors and policy can be instrumental in bridging gaps at critical junctures in a way that no other individuals may adequately address. • Societal views about ways to govern natural resources will factor in whether an energy transition depends on markets, government, or other means.

French Nuclear Energy: Concentrated Power

Nuclear energy is one of the most significant sources of low carbon energy in use in the power sector today. In 2013, nuclear energy represented roughly 11% of the global electricity supply, with growth projected to occur in China, India, and Russia (International Atomic Energy Agency [IAEA], n.d.a; NEA, n.d.). As a stable source of electricity, nuclear energy can be a stand-alone, base-load form of electricity or complement more variable forms of low carbon energy, like wind and solar power. Among the energy technologies considered here, nuclear energy is complex not only for the science behind it, but also for its societal, environmental, and economic dimensions.This chapter explores the rapid rise of French nuclear energy in the civilian power sector. It considers what a national energy strategy looks like under conditions of high concern about energy supply security when limited domestic energy resources appear to exist. The case reveals that centralized planning with complex and equally centralized technology can be quite conducive to rapid change. However, continued public acceptance, especially for nuclear energy, matters in the durability of such a pathway. France is a traditional and currently global leader in nuclear energy, ranking the highest among countries for its share of domestic electricity derived from nuclear power at 76% of total electricity in 2015 (IAEA, n.d.b). France is highly ranked for the size of its nuclear reactor fleet and amount of nuclear generation, second only to the United States. In 2016, this nation of 67 million people and economy of $2.7 trillion had 58 nuclear power reactors (CIA, n.d.; IAEA, n.d.b). Due to the level of nuclear energy in its power mix, France has some of the lowest carbon emissions per person for electricity (IEA, 2016a). France is also one of the largest net exporters of electricity in Europe, with 61.7 TWh exported (Réseau de Transport d’électricité [RTE], 2016), producing roughly $3.3 billion in annual revenue (World Nuclear Association [WNA], n.d). This European country has the largest reprocessing capacity for spent fuel, with roughly 17% of its electricity powered from recycled fuel (WNA, n.d.).

Icelandic Geothermal Energy: Shifting Ground

Today’s energy sectors hold different potentials for saving on energy, carbon, and other greenhouse gases (GHGs). Buildings, for instance, represent more than 40% of energy use worldwide and one-third of GHGs (United Nations Environment Programme [UNEP], n.d.a). Improvements in heating, cooling, and powering of buildings, as well as industrial processes, can deliver substantial and cost-effective savings. In line with this, geothermal energy represents a more unusual form of renewable energy in that it can directly contribute to heating, cooling, and electricity services. Unlike a number of its counterparts, geothermal energy can provide a more stable and renewable form of energy that is largely unaffected by weather. The chapter focuses on geothermal energy adoption in Iceland, “a little country that roars,” according to UNFCCC Executive Secretary Christina Figueres (Iceland Monitor, 2014), when discussing leadership in renewable energy use and related action. In developing its renewable energy leadership, Iceland has wrestled, like many countries, with tradeoffs in energy, the environment, and economic development. The chapter highlights the interplay of these interests and explores the innovative engineering and industrial spillovers in Iceland’s geothermal adoption. Iceland is a country of roughly 333,000 people, and is a global leader in renewable energy use (Islandsbanki, 2010; Ministry of the Environment, 2010; Statistics Iceland, 2017). Two-thirds of the country’s primary energy consists of geothermal energy, with roughly nine out of ten Icelandic homes heated by the fuel source and a quarter of the country’s electricity powered by it (Orkustofnun, 2015; Ragnarsson, 2015). The nation leads globally in terms of geothermal heat capacity per capita and serves as a principal source of international training and consulting on geothermal energy, with a diverse industrial cluster that has developed around the technology (Gekon, n.d.; United Nations University Geothermal Training Programme [UN- GTP], n.d). The country’s low carbon development pathway reflects choices and debate about how to manage its natural resources and allow for foreign investment. Iceland began the 20th century as one of the poorest nations in Europe and is now a top-ranked country in the United Nations Development Program’s Human Development Index (Hannibalsson, 2008; United Nations Development Program [UNDP], 2015).

Danish Wind Power: Alternating Currents

According to Michael Zarin, Director of Government Relations with Vestas Wind Systems, there is nothing “alternative” about wind power anymore (Biello, 2010). After all, wind generation is the most cost-effective option for new grid-connected power in markets like Mexico, South Africa, New Zealand, China, Turkey, Canada, and the United States (Renewable Energy Policy Network [REN21], 2016). At 433 GW of cumulatively installed capacity in 2015 worldwide, more than half was added in the past 5 years (REN21, 2016). This technology may be used by individuals, communities, and utilities. It can be grid-connected or off- grid, and be used onshore or offshore. This chapter examines the influences and evolution of the Danish wind transition, highlighting how ingenuity and often less-obvious incremental advances produced a world-class industry. It reveals how citizens can be important catalysts of energy system change. The case also indicates that innovations can emerge in practices and policy, not just technology, science or industry. Denmark is a cultural and traditional technology leader for modern wind power. This country of roughly 5.6 million people and GDP of approximately $65 billion in 2016 (ppp) (Central Intelligence Agency [CIA], n.d.) is where today’s dominant, wind turbine design was established and where state-of-the art wind technology testing centers are based. It is also the site of the first, commercial-scale offshore wind farm, built in 1991. Denmark has a world-class hub for wind energy technology (Megavind, 2013; State of Green, 2015; Renewable Energy World, 2016). Top-ranked companies like Vestas, LM Wind Power, Siemens Wind Power, A2SEA, and MHI Vestas Offshore Wind are among those that base core parts of their global operations in Denmark. A close network of wind engineers and their professional affiliates drives the industry, which includes ancillary services and subcomponent supplies. Wind energy technology also represents one of Denmark’s top-ranked exports (United Nations Comtrade, n.d.). Currently, Denmark has more wind power capacity per person than does any other country in the world (REN21, 2017). This Northern European nation is on track to derive 50% of its electricity from wind power by 2020.