Notes on a talk given by Christiana Figueres (ex-Executive Secretary of the United Nations Framework Convention on Climate Change) at the Energy Lab 03:
Technology and markets
We need to be aware that the economy and the energy situation forms a system.
Renewables are not fossil fuels, they have different characteristics. If your energy system is set up for fossil fuels then it is already not ‘technology neutral’, it is historically biased in favour of fossil fuels and the characteristics of fossil fuel power. Consequently, there is a legacy effect in the system which inhibits innovation, both politically and in terms of expectation of how energy should behave and what factors of that energy production can be ignored.
[For example we ignore the slow response time of coal power, the amount of poison and health problems, it generates, the fact that it cannot be turned down when we don’t need it, its tendency to fail with unexpected temperatures, the amount of subsidy we pay, and so on]
In Chile, which has the advantage of not having coal or oil, the electricity market is fully open. There are no subsidies for fossil fuels or for renewables. They simply have auctions and those companies which can provide the lowest electricity price win the auction. So far that has been renewables. It has not been coal.
India can also be freer of this legacy inertia, and India has recently announced that no new coal power plants will be built in India in the next ten years. This will give time for renewables to develop and demonstrate their worth. They aim for 60% of all power to be renewable by 2027.
Increases in electricity prices have nothing to do with renewables, as is often argued. Renewables have not been around long enough to cause the price rises in those countries in which price rises have been occurring. It is like blaming a baby for the ongoing dysfunction of a family. The baby cannot do it entirely by itself, and the problems were around before it came on the scene. Prices are high because of the way markets are structured and they are structured around fossil fuels. To repeat: fossil fuel markets are set up not to be technology neutral.
Fossil fuels are like libraries – huge centres of generation. Nowadays you almost do not need libraries. You have information online.
We are moving to a decentred market in power where you do not need to go to a centralised place of generation. Australia has the world’s biggest market penetration of rooftop solar, it is moving towards decentred power, irrespective of policy. Some of us will generate more power than we need for ourselves. We are moving from the library to the internet.