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Addressing fossil fuels, meeting energy needs

Bonn, 12 June (Alejandro Rafa) Thecomplexities and challenges in addressing fossilfuels while meeting energy needs, especially ofdeveloping countries, emerged again in a

workshop held under the Ad Hoc WorkingGroup on the Durban Platform (ADP)Workstream 2.

On 7 June, the Workshop on pre-2020 ambition:Energy explored mitigation and adaptationbenefits of actions of the specific thematic areasof energy efficiency, renewable energy andcarbon capture and storage (CCS). It wasorganized in three parts with three introductorypresentations, followed by questions andanswers, then by focused intervention by some

Parties.

Developing countries highlighted the importanceof sustainable development and energy access,and that the implementation of renewableenergy, energy efficiency and CCS would requirethe provision of finance and technology. ManyParties highlighted positive experiences withdomestic feed-in-tariffs and other policies and

AOSIS continued to call for a more focuseddiscussion on renewable energy, energy

efficiency and CCS as a part of a structuredworkplan for Workstream 2. The roles of theTechnology Executive Committee (TEC), theClimate Technology Centre and Network(CTCN) and the Green Climate Fund were alsohighlighted, while several developing countriesemphasized a country-driven approach.

(This workshop was a part of a series ofworkshops with different focuses, and in theWorkstream 2 roundtable discussions here inBonn, many developing countries had expressed

a desire not to focus on one sector specificallypending the finalisation of the parameters of

Workstream 2.)

Mr. Seyni Nafo of Mali, facilitated the 7 Juneworkshop and in his opening noted that inprevious sessions Parties and observers hadrealized that there was sizeable mitigation

potential in the energy and renewable sector. Hereminded Parties of the presentation by UNEP(see TWN Bonn Update # 9) that suggested thepower sector had a high mitigation potential of2.2 - 3.9 gigatonnes (Gt) and the use ofrenewables had up to 2.5Gt.

The first presentation was by Luis Gomez-Echeverri, Senior Advisor to the UNSG onSustainable Energy For All (SE4ALL) whooutlined the history of the initiative and its goals,including universal energy access for all by 2030;

doubling the share of renewable energy by 2030;and doubling the rate of improvement of energyefficiency 2030. He said these would entailincreasing the amount of expenditures on accessby a factor of four and even more for renewableenergy and energy efficiency. He noted there

were significant co-benefits of all of theapproaches.

Mr. Nafo noted that in his region of sub-Saharan Africa energy access was fundamental

given that energy demand increases by 10% peryear but installed capacity only increases by 3%,leaving a clear gap to be filled.

Philippe Benoit, Head of the Energy &Efficiency division of the InternationalEnergy Agency (IEA), described energytransformation as a collective marathon. He saidthe IEA partnered with many organizations andmade many recommendations, such as a list of25 technical recommendations on energyefficiency, but that the scale of the challenge

meant that technical work was not enough.

He said the key challenge was to increasemotivation. One means of doing this was to


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highlight the multiple benefits of efforts. Hesaid the IEA was now repositioning energyefficiency as the hidden fuel to compare it toother fuels and to highlight ways it was oftenpenalized. He said that in general renewableenergy was expanding at a rate consistent withthe 2C target, but that there were clouds as

new capacity investment decreased from 2011 to2012. He said this was due policy uncertainty andthat continued policy commitment wasimportant to keep us on track. He added thatthe global Energy Sector Carbon Intensity Indexhad remained largely flat and that to meet the2C target this would need to drop by 40-60%over the coming decade. This, he said, showedthat we needed to reduce fossil fuels and focuson the fossil fuel side of the equation.

Trygve U. Riis, the Chairman of theTechnical Group of the CarbonSequestration Leadership Forum (CSLF) saidthat renewables would take a long time andasked whether there was time to wait. He saidthat to meet a 2C target CCS would have to playsome role. He acknowledged there were variousCCS methods and there was uncertainty over thebest and that the technology needed to bedeveloped. He described the Sleipner project inNorway, which had injected 1 megatonne of

CO2 in 17 years. He conceded that the cost ofcapturing CO2 was high but suggested it was inthe middle of alternative technologies and thecost would come down if it were done at a largerscale. He also said the challenges for CCSincluded limited public funding, limited marketincentives (like the feed-in tariffs which had

worked for renewables) and a lack of resourcesand expertise in developing countries. He addedthat the high public resistance to CCS came

without a scientific background and that with

funding it would be a viable technology.(According to an observer at the workshop whois familiar with the subject, Riis dismissal ofpublic concerns was unfortunate given that thereare uncertainties and an ongoing scientific debateon the CCS technology.)

Kuwait asked Riis about short and long termmonitoring systems.

China asked Riis, with respect to the financeissues, what the source of funds should be and

what the commercial model would be.

Nauru welcomed the presentations and saidthey were compatible with the process they hadbeen trying to promote. It highlighted the 1.2

billion people without electricity and the 2.8billion people using solid fuels. It referred to the

World Economic Forum happening in Myanmar,which had identified the opportunity forMyanmar to leap-frog straight to LEDs, andsaid this was the type of opportunity we need tofind.

It asked Gomez-Echeverri what developedcountries could do as the SE4ALL seemedbiased toward developing countries. It askedBenoit about the disappointing share ofinvestments going to renewable energy and whyinvestments in coal continued. It asked Riis whatthe total storage capacity of CCS would be giventhe largest project mentioned was 3 megatonnes,

which was three orders of magnitude toosmall.

Mr. Nafo asked for an indication of whichapproach was the most important.

Mr. Riis responded that for onshore storagethere was a need to monitor leaks and that lot of

work was going on this issue. On financing hesaid: I wish I knew. He said the CSLF wasorganizing capacity building but there needed tobe transfers for it to happen. He said that on thestorage capacity there was no limitation on thetheoretical side but that as to what could be

really utilized that would require more publicsupport, research and development anddemonstration projects.

Mr. Benoit responded that focusing on energyefficiency in developing countries was a criticalpart of access. He said that the historicalinvestment in fossil fuels reflected the fact it wastraditional and investors were familiar with it.He said that Parties needed to focus on fossilfuel emissions as the IEA had suggested thatnew fossil fuel infrastructure after 2017 would

breach the 2C limit.

Mr. Gomez-Echeverri said SE4ALL was aglobal initiative with energy access being a bigdriver for countries to join. He said developingcountries needed capacity building and support.He said the key was a major transformation thatrequired the right policy frameworks, capacity,and skills. He also said current investments inenergy access were about $9 billion a year andthat figure needed to be closer to $40 billion to

provide access for all.Mr. Nafo summarized that demonstrationprojects, addressing fossil fuel emissions and


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scaling up investment were priorities emergingfrom the presentations.

Saudi Arabia said it was an active member ofCSLF and wanted to highlight the importance ofCCS to its region. It said without CCS the region

would not contribute as much to ambition under

the Convention. On the area of perception it saidsharing experiences was important as it had beenan oil exporter and its practice had shown thatthe technology was safe, having worked incapture, separation, transportation and inmanaging the fields. It said the critical element

was commercialization and so the focus wasfinding ways and means to make it more viable.

Swaziland said on the issue of access it was notonly about power-systems but also their uses. Itsaid access should build on the communities

livelihoods and generate income; otherwise theymay not be able to sustain the energy because ofthe cost. It added that energy services needed tobe reliable; if not people would return to dirty-sources.

It further said the challenge was how to accessthe abatement cost and the infrastructure cost, asthese were very big. Thus, Swaziland stressed,the provision of means of implementation was

very important. It welcomed Europeans taking

up CCS if it contributed to raising ambition. Itsaid that Parties needed to consider risk-management as such things could be exposed toclimate change impacts or even conflict.

Japan said its feed-in-tariff had improvedrenewable energy capacity by 7 gigawatts in thelast six-months, which was almost the same asfor the whole year in 2011. It said the feed-intariff had had a huge impact and it also detailedits energy efficiency program of setting targetsfor manufacturers of various consumer goods. It

said it intended to inject 1Gt of CO2 using CCSin 2016. Japan added that a compilation on bestpractices from the secretariat would be useful.

Malaysia described its national policy on climatechange, introduced in 2010, noting economiccompetitiveness required energy efficiency andrenewable energy production. It said the planintegrated climate change into planning andimplementation at all levels and highlighted theimportance of engaging stakeholders. It said itspromotion of renewable energy generationincluded local communities and through a feed-in tariff, funded through a 1% levy on electricitybills, it had generated significant megawatt hours.It had focused on enhancing energy efficiency in

industry and the transportation sector. It hadalso taken a fourth key action on buildingsincluding zero design concepts, retro-fitting andadding to five urban mass rail rapid transitsystems. Malaysia also said there was animportant role for education and had asustainable schools program, which also acted as

a collection centre for used-cooking oil.

The European Union (EU) said that energyefficiency and renewable energy had a combinedmitigation potential of 5Gt, which was significantgiven the 8-12Gt gap. It said both developed anddeveloping countries ignore this potentialbecause of barriers such as access to capital,information, and incentives. It described severalmeasures undertaken in the United Kingdomand noted that the cost of solar PV technology

had come down by 75%. It said it was clear thatsolar PV was cheaper in many parts of thedeveloping world but that access to capital wasthe issue. It agreed that that CCS would be a partof strategy to achieve 2C and appreciated thesuggestion from China to have a more detaileddiscussion given CCSs significant costs.

Brazil said, All renewable energies will have animpact and encouraged Parties not to take anideological position. It said CCS was key andshould be accelerated. It said Parties would

commit to more significant things post- 2020 ifthey knew what they could do in the mediumand long-term. It said energy efficiency wouldnot be enough and that Brazil had an impressiveparticipation of renewables, largely biofules andhydro, and that these needed to be recognized asit was not very constructive to only considerthose renewables that developed countries

wanted investments in.

Mr. Nafo noted that in Africa the Democratic

Republic of Congo and Ethiopia had the highesthydro potential but the lowest access to energy.

India supported Brazil and Swaziland in seeingenergy in a holistic manner. It noted that atRio+20 intensive discussions realized thatSE4ALL had been created in a non-transparentmanner and some of the targets wereincompatible, leading to it only being taken noteof. It said that universal access was its numberone priority, irrespective of source. It alsoreminded Parties of Article 4.8(h) (of the

Convention) which recognized the vulnerabilityof countries highly dependent on hydrocarbons,and said that Parties could not recognize them as

vulnerable and then penalize them for being


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vulnerable. It said issues should be addressedbased on the Articles of the Convention.

Mr. Nafo related a story of considering varioussources of fuels in a domestic policy situationbut that the choice was then limited to coal by alack of finance. He said often the political will

was there but the finance or technology wasnot.

Iran said energy was now important because ofthe unrestricted use of fossil fuels, and use ofatmospheric space, by Annex 1 Parties, whichhad led to climate change. It said that energy wasa necessity for developing countries sustainabledevelopment. It said the challenge for the post-2020 agreement was to get everyone involved ina multilateral system under the Convention. Itbelieved in ensuring equitable access to

sustainable development and that by end of its5th development plan the share of renewableresources would reach 15% - including hydro,

wind and solar. It also outlined how it wasbringing the benefits of natural gas to millions ofpeople in Iran and the region. It concluded thatthe environment was a "common good", and all

were responsible to protect it and preserve it forfuture generation and to use it in an equitablemanner.

Nauru said that 2/3 of remaining known coaland gas reserves could not be burnt, observingthat gas is less dirty but it is not clean. It saidthat as it could not put the genie back in thebottle that CCS would be vital for fracking andshale gas. It said that no country was taking therisk to build the first commercial plan for CCSand that governments needed to collaborate andshare the risk.

It welcomed news of feed-in-tariffs in countriesand noted that the cost of renewable energy was

competitive in some countries. It highlighted therole that such policies could play in theempowerment of communities and thedemocratization of energy generation leading tohouseholds and business generating power,changing the role of utility companies in thefuture. Nauru concluded that there had been arich discussion on solutions to challenges andinvited Parties to continue the conversation in amore focus manner (referring to its proposed

workplan) so that countries could bring specific

problems to find specific solutions.

Nepal concurred with Parties who had raisedthe issue of energy access and emphasized thatmany of the people without access were living in

LDCs. It said that enabling developingpopulations to access electricity in a carbonconstrained world would require effort, toproduce growth without increasing emissions. It

welcomed the ideas from the IEA on energyefficiency and the returns it could provide insavings over time. It also highlighted many co-

benefits of renewable energy including cost-savings, lower use of fossil fuels, lower overallprices, local job creation, access throughdecentralized systems, and increased energysecurity. It said the sector presented anopportunity to scale up.

The Republic of Korea noted that for CCS thestorage capacity would be different in differentparties and this should be considered a part oftheir national circumstances.

Australia said there as no silver bullet. It saidit employed an ETS (emissions trading system)and a renewable energy target domestically. Itnoted that the private sector does not embracecommercially untested technologies and so ithad established a domestic Clean Energy FinanceCorporation with a $10 billion endowment. Itagreed the case for investing in CCS wascompelling. It said the UNFCCC had a role toplay in supporting a clean energy transformationand supported building likes to the TEC and

CTCN.

Iraq said the discussion of energy needed tooccur in the context of sustainable developmentand the means of implementation.

China said that energy was a good arena forParties to exercise and implement theConvention. It emphasized that the overridingpriority for developing countries was povertyeradication and that this was reflected in theneeds of many people without access to energy.

It said developed countries needed to take thelead to optimize the energy mix, to improveefficiency in transport and building, as well as toaddress consumption patterns and to, changeinefficient products. It suggested a possibleresponse to the recession was the reconstructionof the energy sector, and it was a goodopportunity to fund renewable energy and to joinlow-carbon pathways. It said the other actionthat developed countries could take was tosupport developing countries to undertake low-

carbon pathways.

China also outlined the outstanding need fortechnology transfer. It said that market share didnot represent technology transfer as it was


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possible to have 99% but be missing the key final1%, which was required to make the wholesystem work. It said that smart grids were anexample, and that there was a bottle-neck inscaling up the use of renewables in terms of solaron grid and that some technology inindustrialized countries would help with this

problem, so it needed to be disbursed to avoidlock-in of less climate-friendly technologies.

On CCS technologies China noted it had beenworking hard on the issue but did not have veryhigh expectations and that finance was a keyissue that developed countries needed to address,as provided in the Convention. It noted that theEU had initially wanted 20-30 demonstrationplans by 2020 but had retreated from thisobjective and so there was a need to ensure the

incremental cost of public-private projects wascovered to drive such projects.

It added that there were social-economic impactsof changing energy shares and that, for example,closing large inefficient coal power plants wouldput hundreds of thousands of workers out ofjobs. It concluded that technology and finance

were the real challenge.

Peru called on the GCF (Green Climate Fund)to focus on energy and for it to provide funds

for the problems highlighted by developingcountries.

The United Arab Emirates agreed with Brazilthat all energies were equal. It said that thetechnology mechanism and the CTCN couldachieve a lot, particularly for CCS. It said adiscussion of enabling environments and aframework to promote investment wasimportant.

The USAsaid the objective of concrete actionswas right. It said it was pursuing objectives in theClimate and Clean Air Coalition, the MEF(Major Economies Forum) and at energyministerials. It said leveraging these initiativesshould be the preeminent theme. It welcomedsuggestions on how the CTCN and TEC couldaccelerate transformation.

Kenya agreed with Swaziland that energy wascrucial for sustainable development and thataccess was crucial. It noted that 77% of itspopulation depended on biomass and said theopportunity for renewable energy was high. Itsaid that CCS should not be ignored given thediscovery of oil in Africa. It said there were

barriers in the form of high initial investmentcosts. It said CTCN, TEC and finance would allhave a key role to play and the right institutionalstructures were important.

Saudi Arabia reiterated that discussion onactions pre-2020 was under the Convention andso all of its principles and provisions applied. Itnoted that the objective of the Convention wasto stabilize emissions, not to transform, shift orchange sectors, but to stabilize emissions to

prevent anthropogenic interference with theclimate system. That meant Parties needed toconsider all sources, sectors and sinks. It saidclosing the gap would require work on sinks andreservoirs. It concluded that Parties needed toadvance all issues together in the context ofsustainable development, so as not to causeadverse effects, and with the provision of themeans of implementation central to discussions.

Mr. Nafo closed the session by reviewing Partiesinterventions. He said he had heard that in order

to close the gap in the context of theConvention, with sustainable development as theoverriding priority, all options should beexplored and that the importance of finance andtechnology would be central. He said that Partiesalso wanted to address barriers to technologies,frameworks, and access to finance. He noted tworequests from the session: the compilation ofbest practices; and for the TEC and CTCN tomake links with global networks. He added thatParties had expressed that the UNFCCC could

leverage initiatives through its institutions. Henoted a call for an even more structureddiscussion on frameworks, barriers, technologies,and national circumstances. He concluded thatrenewable energy and energy efficiency wouldnot be enough and so there would be a role forCCS and resources were needed fordemonstration projects.

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