Energy prospects after the petroleum age

For the first time, the discoveries of new oil reserves fall short
of growing global demand. This analysis looks at intelligent
long-term strategies for addressing energy supply shortages in
Europe.

In the 1990s low energy prices seemed to suggest that energy
supplies were secure. But in the last two years surges in the price
of oil, the number one source of energy, and power outages in North
America and Europe have shown the urgent need for a renaissance in
energy policy targeting secure supply. 

At the latest when discoveries of new reserves fall short of
demand – which may be the case in just a few years for oil, and
slightly later for natural gas – energy prices will climb
significantly. The supply situation is being made more acute by the
growing hunger for energy in China and India. 

This foreseeable shortage must be addressed with intelligent,
future-proof strategies. In the longer run, securing energy
supplies will be possible only with a broad range of measures. The
needs of the moment call for the use of all available levers – the
diversification of energy carriers and technologies and the
mobilisation of all conservation, reactivation and
efficiency-boosting strategies. 

Hopes for the modernisation of power plant parks are pinned on
CO 2 -free coal-fired power plants and safe fourth-generation
nuclear power stations. They could trigger a renaissance in coal
and nuclear energy, also in Germany. A future for energy without
higher shares of renewables is inconceivable; their price
competitiveness will be buoyed by the growing scarcity of fossil
energies. 

Massive R&D efforts are needed to smooth the way to solar
hydrogen energy. Decentralised supply structures on the basis of
efficient fuel cells would reduce the risks of widespread power
outages. Moreover, particularly in the private consumer sector,
still too little attention is being paid to energy conservation and
efficiency. 

Germany and Europe should not wait for US leadership in energy
policy and ensuing geopolitics. Steps must be taken to counteract
the monopolisation of pipeline routes for natural gas so that
competition can unfold. The predictable intensification of
competition for new energies and technologies on the part of the
USA will ultimately benefit energy suppliers in all
countries. 

Owing to the gradual depletion of oil and gas reserves and the
need to reduce the environmental problems of energy consumption,
the energy mix of the future will contain a far lower proportion of
fossil energy than it does today. 

In the period to 2030 alone, the investment required to
modernise and expand the energy supply infrastructure in the world
will cost USD 16 trillion. The bulk of this, almost USD 10
trillion, will have to be spent on the electricity industry, more
than USD 2 trillion of the total in China. Germany must replace
half its total power plant capacity of 120,000 MW. 

To read the paper by Josef Auer in full, visit the DB Research website.