Why complexity is a good thing for meeting global energy goals

In a series of posts leading up to the World Economic Forum’s New Energy Architecture report launched on Monday 23rd April 2012, Executive Director of International Energy Agency, Maria van der Hoeven explains why a one-size-fits-all solution is not an option. 

Significant technology investments are needed to meet the long-term goal of sustainable, economical and secure energy. Rising population and prosperity trends will inevitably increase energy needs in the coming decades. Such investments will need to be carried out globally, requiring engagement worldwide; they will also have to meet the needs of today while anticipating those of the future. It is clear that we cannot continue to rely on our current energy mix. Determining the right balance to ensure security and sustainability will require a systems-level approach.

Current discussions and decisions about the future energy mix require looking to our energy needs, production, and transmission and distribution in the coming decades. Investments and policy actions taken in the short term should avoid “locking in” technologies already known to be unsustainable, particularly those investments with a service life of several decades.

Our energy infrastructure is not based on a single technology, carrier or sector. Rather, it is a highly interrelated system with a plethora of technologies, stakeholders, resources and end uses. Technological complexity will only increase in the future with electric vehicles, increased use of electricity in heating, the use of thermal storage to balance variable renewable generation, more sophisticated demand-response, and energy storage in hydrogen for heating, power generation and transportation. We will need to improve our understanding of evolving energy systems and learn to work with new technologies and stakeholders not traditionally involved in the energy sector.

Systems approaches to energy deployment must look to leverage the existing infrastructure in order to optimize new investments. One example is to improve the flexibility of the current electricity system to accommodate an increasing share of variable renewable investments. The typical approach thus far has been to install fossil fuel peak power stations, but more innovative approaches are possible. Efforts to increase the flexibility of existing base-load capacity, as well as to improve regional interconnections and leverage excess flexibility from reservoir hydro-generation, reduce the need for peak plant investment and increase the utilization of existing generation facilities. There is also a large untapped resource on the demand side to be unlocked through increased deployment of smart grids. By considering opportunities throughout the system, cities, regions and countries can choose the best solution to match their specific circumstance and resource endowment, and thus optimize investments.

There is no one-size-fits-all approach with regard to technology deployment in the energy system. It is in this context that the New Energy Architecture project complements the systems-based analyses performed by the IEA. To meet the demands of tomorrow, nations or regions must consider a broad range of issues, taking a systems-level approach that includes resource and technical capabilities in the context of social, regulatory and market aspects.

The IEA is continuing to expand its system-based analysis, providing answers to new concerns arising from today’s ever-changing energy context. Will large-scale deployments of variable renewable generation (such as wind and photovoltaics) disrupt the operation of the electricity system? Can the distribution system accommodate future electric vehicle deployments? Should gas networks be expanded for use in building heating applications or should electricity-based heat pumps be used? How can hydrogen technology be deployed in a practical and cost-effective manner for transportation or stationary applications? Will smart grids increase or decrease the cost of electricity to consumers?

Such questions cannot be answered in isolation. Systems thinking must be the rule to allow the energy community, including governments, industry, consumers and all other stakeholders, to work in collaboration globally in an effort to find creative solutions to meet our secure and sustainable energy goals.

Author: Maria van der Hoeven, Executive Director, International Energy Agency, Paris

Picture: A shop attendant touches a lamp at a shopping mall in Taipei April 12, 2012. REUTERS/Pichi Chuang (TAIWAN – Tags: ENERGY BUSINESS)