// 8.03.2021 //

THE UK CRASHES 63% IN THE ENERGY POWER LEAGUE

EUROPE LEADS IN RENEWABLE ENERGY INNOVATION

CHINA WINS ON PRODUCTION, CONSUMPTION AND RENEWABLES


Headlines since the fall of the Soviet Union 


  • 1990's Chinese energy power was 50% smaller than the USA
  • Germany's energy power shrunk dramatically as it began a shift to renewables
  • 2000’s Brazil had an energy boom, posting a 40% increase in production and consumption
  • China's 2000’s energy boom made it overtake the United States as the world's top energy power in 2005
  • The UK had a massive energy production decline. It became a net oil and gas importer in 2005
  • Japan's Fukushima disaster halved its energy production capacity, forcing a focus on renewables
  • President Trump unleashed a new oil and shale-powered fossil fuel boom in the United States from 2015
  • By 2020 China's rise leaves it 20% bigger than the United States as an energy superpower
  • China, the USA and Russia have the most natural resources.  



Let’s recap how the last thirty years have gone in the League of Nations’ 7 powerapps:


Energypower – why it’s important

So far, we’ve tracked Smart Power economically, militarily and in terms of people power. That’s 70% already of the League of Nations. This week we look at energy power – which represents an important 5% more of the total. Natural resources, energy security and participation in the energy sector (or whether a given country exports or imports energy) are critical to how they can deploy power.




We judge them by quantifying the changing balance between the amount of energy a country produces and what it consumes. 


The energy system has transformed dramatically since the Industrial Revolution. The availability of energy has transformed the course of humanity over the last few centuries. Not only have new sources of energy been unlocked – first fossil fuels, followed by a diversification to nuclear, hydropower and now other renewable technologies – but also in the quantity we can produce and consume.



This transformation of the global energy supply from 1800 onwards has empowered energy producing states. During our five smart power epochs from 1500, energy access has turbocharged state power. Coal and steel power drove the success of Britain, Germany and the United States in the 19th century. Oil and gas resources maintained Russian power both to fight the Second World War but also to rebuild it after the Soviet Union’s collapse. Similarly, without oil and gas reserves, the United Kingdom’s reconstruction from the 1980’s may have been thwarted. 

 

Production:


Top producers


China and the USA were the main contributors to the increase in global energy production in 2019, posting a significant growth in crude oil production and coal production, respectively.



China




United States



Energy production also grew in Russia, Australia, Brazil (oil production rise), South Africa (higher coal production) and Turkey (surge in hydropower generation).


On the contrary, energy production continued to decline in Europe (especially coal production in Germany and Poland, and crude oil production in Norway and the Netherlands, where oil and gas resources tend to decrease).


Take the United Kingdom. It is the second-largest producer of oil and the third-largest producer of natural gas in OECD Europe. But its energy power has plunged by 63% since 1991. Why? Following years as a net exporter of crude oil and natural gas, the UK became a net importer of both fuels in 2004 and 2005, respectively, and in 2013 the UK became a net importer of petroleum products, making it a net importer of all fossil fuels for the first time. High oil and natural gas prices through late 2014 encouraged high levels of investment in the industry and have led to recent production increases. However, since then prices and investment have declined, and production is likely to return to its long-term declining trend.


 


The worst production performer in the League of Nations over the last decade is Japan. Its catastrophic 2011 Fukushima earthquake sent Japan’s energy production down by over 72%. Up until then, Japan was the third-largest consumer of nuclear power in the world, after the United States and France, and nuclear power accounted for about 13% of the country’s total energy in 2010. By 2019, the country’s nuclear energy share was 3%.


 

Consumption: Energy Power


Top consumers:



Demand for energy is growing across many countries in the world, as people get richer and populations increase. In 2019, the consumption of primary energy amounted to the equivalent of about 13.86 billion metric tons of oil, compared to about 11.27 billion tons in 2006.


Global energy consumption has increased every year for more than half a century but it does seem to be slowing – averaging around 1% to 2% per year. As the most populous country in the world with one of the fastest growing economies, it should come as no surprise that China consumes the most primary energy of any country in the world, followed by the United States. Although most of China’s energy is produced by burning coal, in recent years the industrial giant has begun to rely more on hydroelectricity, nuclear energy, and renewables.


The slowing pace of growth is seen in China (+3.2%), the world’s largest consumer since 2009, in Russia (+1.8%) and in India (+0.8% only). It declined in almost all OECD countries, including the USA (-1%), the EU (-1.9%), Japan (-1.6%), Canada and South Korea.

 


What about renewables?

In recent years, renewables have become a more frequently used source of primary energy and worldwide investment in clean energy has increased six-fold since 2004.


Renewables now cover 35% of the power mix in the EU, 27% in China, 21% in India and around 18% in the USA, Russia and Japan. In 2019, the share of renewable energy sources within the global power generation mix rose by 1.1 percentage point to nearly 27% of the power mix, following the rising trend it started in the 2000’s.


The top renewables countries are:



Take a look at the UK’s exponential growth in renewables now 37% of the energy mix. Renewable energy use, particularly in the electric power sector, has nearly trebled in the UK over the past decade:



Germany: 45% from renewables

Germany has begun a long-term initiative to transition to a low-carbon, more efficient energy mix. This initiative, known as the Energiewende, is currently in Phase 2 and includes ambitious targets for phasing out coal and nuclear and developing renewable energy. Key targets include relying on renewable energy sources for 65% of gross electricity consumption by 2030 and closing Germany’s remaining nuclear power plants by 2022.



China’s renewable rise: 27%

Rapidly increasing energy demand has made China influential in world energy markets. Despite structural changes to China’s economy during the past few years, China’s energy demand is expected to increase, and government policies support cleaner fuel use and energy efficiency measures. Although coal supplied most (about 58%) of China’s total energy consumption in 2019


 


Power conclusions

Since the industrial revolution the geopolitics of energy, including who supplies it and securing access to those supplies, have been a driving factor in global security and prosperity.


Since the First World War, oil has undoubtedly been the cornerstone of global energy geopolitics. The decision of the then First Lord of Admiralty Winston Churchill to change the fuel source of the Royal Navy warships from coal to oil to make the fleet faster than its German counterpart, marked the opening of a new era. The shift from secure coal supplies from Wales to uncertain oil supplies from what was then Persia, led to the Middle East becoming an important epicentre of global geopolitics and to oil becoming a key issue for national security.


Since the second half of the 20th century, control of oil resources has played a central role in several wars, such as the Biafra War (1967-1970), the Iran-Iraq War (1980-1988), the Gulf War (1990-1991), the Iraq War (2003-2011) or the conflict in the Niger Delta (ongoing since 2004).

Over the coming decades, energy politics will continue to become more complex. The supply of energy will no longer be the domain of a small number of states, since most countries will have the potential to achieve energy independence, enhancing their development and security as a result. The energy consumer, not the producer will hold the power.


World politics will change as a new energy cold war develops between the United States and China, and the rivalry grows more dangerous with Russia, which is pivoting east toward Beijing. Vladimir Putin and China’s Xi Jinping are converging both on energy politics to challenge American leadership, as China projects its power and influence in all directions. The South China Sea, claimed by China and the world’s most critical trade route, could become the arena where the United States and China directly collide.


Falling demand for fossil fuels will tilt the balance of power away from producers and towards consumers. In a world which needs to generate much more fossil-free electricity, mass production of the means whereby to do so will become crucial, as will government backing and knowledge in deployment. China, the world’s biggest fossil-fuel importer as well as its leading exponent of renewable energy at gigawatt scales, will have the wind at its back.


So, the smart power consequences of China’s status as an energy superpower are to recognise that China will dominate many clean energy technologies but still need access to world markets. It will leverage its power as the world’s biggest consumer, allied with the world’s third largest producer, Russia, to link the Northern Arctic Sea Route as a toll road from ports in Asia across to Europe and China's ambition of a "Polar Silk Road."

How can diplomatic power solve this? Next week we examine who’s winning in the diplomatic League of Nations.

 

Sources

·         Asian Development Bank (ADB)

·         Asia-Pacific Economic Cooperation Database (APEC)

·         Cedigaz

·         Euracoal

·         Eurelectric

·         Eurogas

·         Eurostat

·         International Energy Agency (IEA)

·         IRENA

·         Joint Organisations Data Initiative (JODI)