Low carbon scenarios increase diversity and reduce energy trade

A new study shows that climate action improves energy security, as energy demand declines and low carbon renewable and nuclear energy displaces imported oil and gas.

Jessica Jewell of IIASA and her co-authors found that under a baseline scenario, global energy trade soars from 100 exajoules (EJ) per year today to 400 EJ in 2100. Over-reliance on imported energy could expose many countries to risk of supply disruption or price shocks, especially as oil and gas exports will continue to be dominated by a small number of countries. But under a range of low-carbon scenarios energy trade is much lower, varying from 40 to 240 EJ/yr in 2100. This is partly due to lower energy demand, and partly to replacement of imported fossil fuels with locally produced renewable and nuclear energy. In the baseline scenario, the proportion of the global primary energy supply that is traded remains at around 20%, but in the scenarios with unlimited penetration of renewables it falls to as little as 3%.

There are interesting differences between the 42 different low carbon scenarios. All are taken from the Global Energy Assessment, and all restrict future temperature rise to 2oC over pre-industrial levels. However, the greatest energy security benefits arise in the scenarios that focus on energy efficiency rather than energy supply. These scenarios see energy demand fall steeply, reducing the need to import energy and making the economy less sensitive to global energy price fluctuations.

The lowest energy trade occurs in a high efficiency scenario in which there is a significant switch to electric and hydrogen vehicles, and no restriction on the uptake of renewable or nuclear energy. Interestingly, restrictions on the uptake of carbon capture and storage (CCS) tend to improve energy security, as this forces a move away from fossil fuels.

The most striking impacts are seen in global oil trade. Under the baseline, this rises from around 80 EJ/yr today to a staggering 180 EJ in 2100 – a major security risk, given that the transport sector is almost totally dependent on oil. Yet in all the low carbon scenarios, oil trade plummets dramatically to under 10 EJ/yr by 2100. Trade in gas and coal is also lower in the low carbon scenarios than in the baseline, with the exception of a few scenarios where the use of renewables is restricted.

Trade in biofuels increases in all scenarios, including the baseline, yet it remains at well under half the volume of oil traded at present. In some scenarios, however, trade in hydrogen becomes comparable with present day oil trade by the end of the century. But both biofuels and hydrogen are exported from a greater range of countries than oil and gas, meaning that supply risks are lower. The exception to this is a few scenarios that restrict nuclear energy, as this limits the number of countries that can generate enough electricity to produce hydrogen, e.g. by electrolysis of seawater.

The paper concludes that low carbon scenarios generally lead to lower energy trade and higher energy diversity, especially where the focus is on reducing energy demand, though in some scenarios a high penetration of solar power by the end of the century does reduce the diversity of the electricity supply mix.

Areas for future study could include analysis of other aspects of energy security that were not included in the model, such as resource depletion (for oil and gas), ageing infrastructure and spare electricity generation capacity.

Energy security under de-carbonization scenarios: An assessment framework and evaluation under different technology and policy choices. Jessica Jewell, Aleh Cherp and Keywan Riahi. Energy Policy. 65 (2014) 743-760.