Energy prospects after the petroleum age
In the 1990s low energy prices seemed to suggest that energy supplies were secure. But in the last two years surges in the price of oil, the number one source of energy, and power outages in North America and Europe have shown the urgent need for a renaissance in energy policy targeting secure supply.
At the latest when discoveries of new reserves fall short of demand âwhich may be the case in just a few years for oil, and slightly later for natural gas â energy prices will climb significantly. The supply situation is being made more acute by the growing hunger for energy in China and India.
This foreseeable shortage must be addressed with intelligent, future-proof strategies. In the longer run, securing energy supplies will be possible only with a broad range of measures. The needs of the moment call for the use of all available levers â the diversification of energy carriers and technologies and the mobilisation of all conservation, reactivation and efficiency-boosting strategies.
Hopes for the modernisation of power plant parks are pinned on CO 2 -free coal-fired power plants and safe fourth-generation nuclear power stations. They could trigger a renaissance in coal and nuclear energy, also in Germany. A future for energy without higher shares of renewables is inconceivable; their price competitiveness will be buoyed by the growing scarcity of fossil energies.
Massive R&D efforts are needed to smooth the way to solar hydrogen energy. Decentralised supply structures on the basis of efficient fuel cells would reduce the risks of widespread power outages. Moreover, particularly in the private consumer sector, still too little attention is being paid to energy conservation and efficiency.
Germany and Europe should not wait for US leadership in energy policy and ensuing geopolitics. Steps must be taken to counteract the monopolisation of pipeline routes for natural gas so that competition can unfold. The predictable intensification of competition for new energies and technologies on the part of the USA will ultimately benefit energy suppliers in all countries.
Owing to the gradual depletion of oil and gas reserves and the need to reduce the environmental problems of energy consumption, the energy mix of the future will contain a far lower proportion of fossil energy than it does today.
In the period to 2030 alone, the investment required to modernise and expand the energy supply infrastructure in the world will cost USD 16 trillion. The bulk of this, almost USD 10 trillion, will have to be spent on the electricity industry, more than USD 2 trillion of the total in China. Germany must replace half its total power plant capacity of 120,000 MW.
To read the paper by Josef Auer in full, visit the DB Research website (pdf)