Energy Use_its Politics and Economics Compared_Scotland_South Africa_Spain

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 Linda Forbes G11EC Energy in the 21 st Century 1 Comparative Study Energy Use, Politics and Economics  Scotland South Africa Spain Linda Forbes Module G11EC Energy in the 21 st Century Lecturer: Dr Sandy Kerr Submitted 5 th December 2008 MSc Renewable Energy Development ICIT/Heriot-Watt University

Transcript of Energy Use_its Politics and Economics Compared_Scotland_South Africa_Spain

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Linda Forbes G11EC – Energy in the 21st

Century 1 

Comparative StudyEnergy Use, Politics and Economics 

Scotland

South Africa

Spain

Linda Forbes

Module G11EC

Energy in the 21st

CenturyLecturer: Dr Sandy Kerr

Submitted 5th December 2008

MSc Renewable Energy Development

ICIT/Heriot-Watt University

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Linda Forbes G11EC – Energy in the 21st

Century 2 

IntroductionThis assignment explores and compares energy-use patterns within and between three

countries of the author’s choosing: namely Scotland, South Africa, and Spain. It discusses

the influential factors on past, current, and future energy supply and demands; before

reviewing policies and processes which are expected to deliver their country’s future energy

needs, particularly electricity. The linking theme between these three countries is their

traditional dependence on coal-mining, be that historic (as in the case of Scotland and Spain)or current (as in South Africa), and how, these countries, each with very different political and

economic environments, are moving towards a lower-carbon renewable energy future.

Scotland Coal mining, possibly Scotland’s oldest major industry1, stretching back to the 12th century,

required substantial investment post-World War II consisting as it did of fragmented privately-

owned operations with little money. To achieve this, the industry was nationalised in 1947

under the banner of the National Coal Board, finally returning to the private sector following

the miners’ strike of 1984. Scotland’s last deep mine, Longannet, closed in 20022, whereas

Scottish Coal exploits around 4 million tonnes of coal3 annually at a number of opencast sites

in the Central Belt.

Scotland’s second energy windfall, in the form of oil, was as a consequence of the first

discoveries in the North Sea in 19654, with strikes in the Forties and Brent fields thereafter.

The optimism and expectation of prosperity arising from these finds were key features of this

period, with ‘It’s Scotland’s oil’ becoming the rallying cry of the SNP as calls for

independence from the Union reached their height.

The face of the British energy industry began to change in the 1980s when British Gas was

privatised by the Thatcher government, then followed by the break-up and sale of the Central

Generating Board and regional electricity boards in the 1990s, and culminated in the sale of

British Energy, owner of UK nuclear power plants, to Electricite de France (EDF) in 2008.

Fulfilling a Labour Party manifesto promise of 1997, devolution was granted to Scotland

following a positive referendum of the Scots; with the Scottish Parliament coming into being

in 2000. Westminster reserved to itself a range of portfolios subject to UK-wide decision-

making, whilst others became the responsibility of the devolved authority under the Scotland

Act. Although responsibility for legislation on energy

matters lies with Westminster, the Scottish

Executive (or Government, as it has renamed itself

following the SNP’s ascension post-election) has

substantial influence, using its devolved powers to

manage the planning regime. A clear example is the

differences between UK and Scottish parliamentswith regard to the building of new nuclear reactors.

South  Africa 5Founded as a state in 19106, some years after the

Second Boer War between Britain and Dutch

settlers, it was not until 1994 that the first multi-racial

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Linda Forbes G11EC – Energy in the 21st

Century 3 

elections took place, thereby returning the ANC (African National Congress) Party to power

and effectively marking the end of apartheid between indigenous and immigrant populations.

Two years later the South African Constitution was approved, which enshrined the concept of

a central government underpinned by nine provincial ones.

Endowed with substantial coal and uranium reserves, South Africa’s reliance on energy from

coal increased during the apartheid years as sanctions constrained the availability of

petroleum products from overseas. The Fischer-Tropsch7

process, which converts coal andgas to liquid fuels, was commercialised by Sasol8 from the 1950s – then a state-owned

organisation, now privatised.

Spain 9Spain, as sovereign state, comprises a number of

autonomous regions with their distinctive characters.

Each has their own government, with varying

degrees of autonomy and economic success.

Regions such as Catalonia and Asturias have

industrial histories in engineering, shipbuilding, and

coal mining, whereas Andalucia is focused onagriculture. Internal tensions exist: the Basque

Country seeks complete independence from the

Spanish government in Madrid, punctuated by violent

attacks on politicians, the judiciary, and tourists.

The economic history of Spain was of a feudal

peasantry linked to the fortunes of the ‘latifundista’ aristocracy and monarchy: that is, until

Civil War broke out in 1936 between General Franco’s Nationalist forces and those of the

elected Republicans, and which resulted in Franco’s dictatorship of nearly 40 years. During

this period, and particularly after the Second World War (when Spain remained a neutral

country, in name at least) there was significant economic growth – a key feature being the

building of the tourist industry to attract foreign currency. Since the death of Franco in 1975

and the return to democracy with a constitutional monarchy, Spain has enjoyed further

economic growth, joining the EU in 1986 and the Euro in 1999.

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Linda Forbes G11EC – Energy in the 21st

Century 4 

Key energy comparisonsThe data below are extracted from IEA Energy Statistics 2005 tables for the United Kingdom,

South Africa, and Spain. Some indicators relate closely but of those which differ particular

attention is drawn to the CO2 /GDP value for South Africa – being four to six times that of UK

and Spain: this could indicate manufacturing processes are more inefficient in South Africa,

or that GDP creation in Spain and the UK is less energy intensive i.e. services industries v

mining operations. It could also reflect the fact that electricity in South Africa is generated

using fuels which emit more CO2. The differences between South Africa’s TPES/GDP and

TPES/GDP (PPP) indicators and those of the UK and Spain confirm that each dollar earned

by South Africa requires expenditure of more primary energy.

*TPES – Total Primary Energy Supplied; GDP – Gross Domestic Product; PPP – Purchasing Power Parity

United Kingdom South Africa Spain 

Future demandsNone of the countries being studied are energy reserves independent, therefore energy

efficiency improvements and reductions in emissions intensity are essential weapons in

minimising energy insecurity, the need for additional generating capacity, and ultimately, the

burning of fossil fuels. If demand can be subdued by thoughtful innovation then renewable

energy is more likely to be able to meet a larger percentage of their energy needs in future.

South Africa’s target is 13% reduction in energy demand through efficiencies, whereas

Scotland and Spain are constrained by the EU Directive on energy end-use efficiency and

energy services with its 9% target by 2015. All must consider the key sectors to address

namely buildings – in use (heating/cooling) and in construction (embodied energy of

materials/curing of cement); industry and commerce – their design and manufacturing

processes, and transport – public transport systems, development of alternative fuels and

motive power, and more efficient vehicles. As fossil fuel resources reach the point of

depletion, those remaining should be reserved for uses which maximise their unique

characteristics, rather than burning them as fuel.

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Linda Forbes G11EC – Energy in the 21st

Century 5 

Energy use

Scotland The graph of UK energy

consumption (right ) shows a

steady decline in the industrial

sector through a combination ofimproved efficiency and

exporting of heavy industry to

countries with lower labour

costs, while the transport sector

continues to increase. In

Scotland, in 2005, domestic use

of electricity was 29,505GWh, or

42% of the total demand, while

figures for 2006 showed a

negligible decline10.

The Scottish Energy Study11 posits continuing declines in energy use by Scottish consumers,while that of industry and transport both increase by 15% between 2005 and 2020.

South  Africa Generally, energy supply is state-controlled within South Africa, although proposals to

privatise some elements of

distribution have been made.

Furthermore, a substantial proportionof energy use is casual and

uncountable in the traditional

statistical manner: data collection

prior to 1996 being influenced by

apartheid. The latest information on

consumption12 is graphed here:

While South Africa has some offshore oil and gas

deposits, approx two-thirds of its oil, or 306,000

bbl/day is imported, while gas imports by pipeline

from Mozambique can be maintained at 524 million

cubic feet/day at peak capacity. These supplement

the oil and gas distilled by Sasol from coal13. CEF

(Pty) Ltd manages South Africa’s strategic crude oil

stock as well as developing energy efficiency

projects14.

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Linda Forbes G11EC – Energy in the 21st

Century 6 

In 1996 about half of South African households were using electricity in domestic

applications: quite clearly indicating the scope for increased demand. Universal Access to

Electricity became a policy goal for 201215 and substantial progress has been made towards

this goal, with nearly

80% achieved,

despite a further 2.3

million homes (~17%

increase) being builtin the last decade16.

17 

South Africa’s

industrial needs for

energy are high:

whereas both

Scotland and Spain

show a closer correlation between energy use for industry and that of other sectors.

However, given the relative disconnectedness of South Africa’s residential sector to the grid

this comparison may not be valid and requires further investigation.

Spain The last thirty-five years has

seen a trebling of Spain’s

energy use, and is

particularly marked after

 joining the EU. The increase

in demand in the transport

sector is believed to be

partly due to the growth of

Spain’s tourist industry, and

as its location as an

interconnecting country

between Europe and Africa,

while the expansion of the

service sector has also

contributed to the general energy-use increase18.

Spain’s import

dependency ratio

exceeds 80% of primary

energy19

, with themajority of imports being

oil and gas coming from

Algeria by interconnector

pipeline via Morocco,

Nigeria, Russia and

Mexico20.

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Linda Forbes G11EC – Energy in the 21st

Century 7 

Electricity GenerationThe Large Combustion Plants Directive was introduced to reduce emissions to atmosphere

from large combustion plants by controlling releases of dust, sulphur dioxide and nitrogen

oxides. Large power stations built after 1987 in EU countries (i.e. Scotland and Spain) must

comply with specified emissions limits, whereas pre-1987 power stations must either install

equipment to abate their emissions or close before 2016. The impact in the UK is that 30% of

conventional thermal capacity will be retired within twenty years: and the government

suggests this be replaced

with nuclear and clean

coal technologies.

Demand for electricity in

all three countries is

outstripping the capacity

of local, national and

international grids to

supply: however, there is

little evidence of

decentralised energynetworks being supported

as an alternative.

Scotland The graph above , showing UK electricity generation, displays clearly the effect of the miners’

strike on coal use in 1984 and the move to gas-fired power stations from the early 1990s.

However, the picture in Scotland is somewhat different (below ); with a generating capacity of

~6GW and being more reliant on nuclear power than gas. Electricity is distributed by licensed

companies within the private sector while maintenance of the network is undertaken by

National Grid plc.

With decommissioning of the

two remaining nuclear power

plants due within the next 15

years, and the first of these – 

Torness (840MW) – from

2016, the need for

replacement capacity is

pressing. Furthermore, the

UK’s supply of natural gas

from the North Sea is

dwindling, with a fall inproduction to 1 million barrels

a day expected by 2021; a

quarter that in 2005.21 

22 

For the future 

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Linda Forbes G11EC – Energy in the 21st

Century 8 

The United Kingdom currently has an import dependency ratio of close to 20% of primary

energy23, and despite energy security concerns, Russia is also becoming a major supplier of

gas to the UK – with LNG pipelines, port and storage facilities being constructed recently.

Nearly 20% of the UK’s gas

demand is already being

fulfilled by pipeline from the

Norwegian Sleipner and Troll

fields24.

Scottish Energy Study’s25 

research proposes the fuel mix

by which Scotland’s future

electricity demands might be

met (right ).

Up to 10GW of wind farm

capacity is at various stages in

the planning process, while

Scotland’s largest operational windfarm, Whitelee, which is rated at 209.3MW, has plans to

expand to 452MW, while the Crown Estate offers leases to companies for offshore wind,

wave and tidal exploitation (with 5-10GW anticipated by 2020).

However, a challenge in the renewables age is that resources are often to be found in areas

where the network is at its weakest – thus requiring substantial additional investment to

access new generation capacity. The proposal to build a new overhead line from Beauly to

Denny has encountered opposition. Feasibility studies are now considering an undersea

interconnector cable, costing in the region of £4.8bn, being laid between Shetland and the

mainland in Norfolk to support future supplies from offshore wind, wave, and tidal

generation26.

South  Africa

 Eskom, wholly-owned by the South African Government, currently generates 96% of South

Africa’s electricity (234,600GWh in 2006) and operates the national grid. However, rising

demand has led to ‘load shedding’ since 2007, with times when consumers should expect

power cuts being publicised on Eskom’s website. As a consequence of this shortfall in

capacity, resulting from underinvestment in plant and maintenance, Eskom has ceased

activity as an electricity exporter, impacting both on the local economy and those of other

Southern African countries.

Load shedding is a protective measure: if it did not occur then a regional or national blackout

is likely. To maintain supplies, Eskom first cuts power to organisations with an agreed flexible

loading tariff, then brings online additional power from standby hydro-electric and gas turbineresources, and increases load factors at other power stations. This adds a further 3.5GW to

the grid but cannot be maintained indefinitely. New generation capacity of around 1GW27 is

expected to be online by next year but will make little impact overall.

The importance of coal to South African electricity generation is clear – 93% is generated

from this fuel with nuclear power at 5%, and other sources such as hydro, oil and renewables

providing only 2%28. And while a replacement for the Kyoto Protocol has yet to be

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Linda Forbes G11EC – Energy in the 21st

Century 9 

negotiated, the South

African electricity industry is

keen to reduce its CO2 

emissions whilst vulnerable

to any capping thereof. The

development of Carbon

Capture and Storage (CCS)

technologies to enabledisposal of emissions from

fossil-fuel burning power

stations is unproven and

may take up to 20 years to

be fully tested and

operational.

ESKOM also has responsibility for generation and transmission, while the final distribution to

consumers is delivered through a large number of small local electricity departments or other

suppliers.

For the future 

The failures in energy supply sent a clear signal that a change in policy was required. The

National Energy Bill (2008) created a National Energy Modelling and Information Agency,

and an Energy Development Institute, to oversee matters concerning South Africa’s energy

supply, its optimisation and use, and includes integrated energy planning, infrastructure, and

security of supply.

When the current cycle of government investment is complete, South African generation

capacity will have doubled to 80GW and the distribution infrastructure improved to meet the

future needs of its population – many of whom do not have access to safe electricity

supplies. EDI Holdings29 was created to restructure the existing electricity distribution

network into six regional electricity distribution companies, with the twin aims of improvingefficiency and access to supplies, and in line with the Universal Access by 2012 policy

announced by Thabo Mbeki in 2004.

Six new power stations (two coal-fired, two gas turbines, two pumped storage) are being built

with some older plant being recommissioned30. A new 4000MW nuclear reactor has been

proposed; and plans for a nuclear Pebble Bed Modular Reactor to be operational by 2016

are in place31. South Africa’s need for energy in the future is such that nuclear may supply a

large percentage of its generating capacity in future: she has uranium deposits of 284,000

tonnes32, but currently operates only two nuclear power stations, rated at 1842MW in total.

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Linda Forbes G11EC – Energy in the 21st

Century 10 

Although South Africa has

substantial solar and wind

resources available it is

only slowly starting to

invest in the renewables

sector with its first

windfarm of four turbines

opening in 200833 atDarling. Eskom has plans

to build a 100MW solar

tower at Upington34 and

take-up of solar PV and

thermal technologies at

the domestic level is

being encouraged

through various

projects35. The

Department of Minerals and Energy has set a target of 10,000GWh of energy generation

from renewables by 2013, with both on and off-grid being eligible.

Currently not an Annex I country as defined under the Kyoto Protocol, South Africa can avail

itself of carbon credit projects under the Clean Development Mechanism. Subject to these

meeting the various criteria defined by the UNFCCC methodologies and South Africa’s own

on sustainable development, energy projects can attract financial support in building new

power stations, implementing energy efficiency programmes (such as in Kuyasa township

outside Cape Town), or developing renewable energy generation capacity, for example.

Fourteen projects have been approved to date, saving 2.5 million tonnes of CO2 emissions

annually36 and contributing revenue from sales of the credits to support the investment.

Spain The electricity market is liberalised with two major companies, Endesa and Iberdrola (who

also owns ScottishPower) providing 75% of generation capacity37. Generation split into two

categories – regimen ordinario for fossil-fuel generation, and regime especial for that

generated from renewables (see table38 below). Generation in the Canaries and Balearics is

shown separately: a 400kV interconnector to Majorca is planned for completion by 2010,

coming ashore near

Valencia39.

By the end of 2007,

Spain’s wind (eolica)

generating capacity of

15,145 MW40 was

supplying 10% of the

country’s total electricity

demand, while

dependence on oil and

gas had reduced

substantially from 2006.

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Linda Forbes G11EC – Energy in the 21st

Century 11 

Prior to then, an ever-larger percentage of generation had come to rely on imported gas41.

Transmission networks are the responsibility of Red Electrica de Espana (Spanish Electricity

Network), which 20% is state-owned, while generators are limited to owning not more than

3% of REE42. The final

distribution to consumers

is undertaken by a large

number of smalloperators, as is the case

in South Africa.

For the future 

Spain currently holds

second position globally

for installed wind turbine

capacity (at over 15GW),

and the government’s

target for 2010 of

20GW43 of wind energy

capacity looks achievable. Meanwhile, the Spanish Wind Energy Association estimates that

40GW onshore and 5GW offshore capacity could be operational by 2020: equivalent to 30%

of Spain’s electricity demand44.

Generation from nuclear is gradually being phased out by a moratorium on new builds. The

sustainability of hydropower generation is also being questioned: droughts, possibly as a

consequence of climate change, have affected reservoir levels badly in recent years. But the

development of large parks in the south using concentrating solar technology holds promise

for future supply. Both Andasol 1 (50MWe) in Granada and PS10 (11MW) in Seville are

operational, with a further 387MW under construction and plans for 1730MW having been

announced45.

ConclusionsWhile electricity consumption within the UK has grown by under 40% in the thirty-five year

period under consideration, that of Spain and South Africa has increased by a multiple of

approx five, reflecting differing starting points between mature and emerging economic and

political situations. All three countries are, however, making efforts to reduce greenhouse gas

emissions, with both Scotland and Spain required to do so under the Kyoto Protocol, while all

continue to rely on fossil fuels to a smaller or greater extent in the meantime.

The dependence on imported gas is common to all three, with new pipelines being

constructed in the North Sea and across the Mediterranean, whereas only South Africa is

choosing to expand its nuclear power programme. It remains to be seen whether or not

Scotland can resist the pressures from Westminster to replace its ageing nuclear plant.

Hydropower forms part of the energy strategy of all three; Scotland having reached maturity

in this regard with little opportunity for large-scale expansion since the addition of Glendoe;

South Africa uses its facilities for pumped storage, and is increasingly having water level

problems due to drought (impacts which may increase with climate change) as has Spain in

recent years.

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Linda Forbes G11EC – Energy in the 21st

Century 12 

Nature has been generous to all three in respect of renewable energy resources: Scotland

with wind, wave and tide, Spain and South Africa with wind and solar. As an early adopter of

wind turbine technology, Scotland has fallen behind, while Spain embraced it whole-

heartedly and is second only to Germany in terms of installed capacity (generating nearly

30% of the country’s electricity on one day recently). The Spanish wind industry was

supported through the intelligent use of feed-in tariffs, and whose experience is being

translated into Scotland by Iberdrola. South Africa is in its windfarm infancy but with scope

for substantial development.

Spain is developing a substantial Concentrating Solar Power industry in its poorer south,

while South Africa – with some of the world’s highest solar insolation values – is also

exploring this technology. The use of off-grid solar thermal, and to a lesser extent solar PV, is

encouraged across South Africa, particularly in more remote areas where grid infrastructure

is poor. Transmission networks in all three countries require major investment and

strengthening to meet future demand and distribution.

Scotland’s early lead in wave power experiments (Salter’s ducks) is being encouraged,

slowly, into full-scale reality by government, while research into tidal stream generation is

supported through the creation of EMEC – let us not ignore energy opportunities a second

time. And while South Africa’s unique expertise in coal-to-oil transformation adds to its CO2 

emissions intensity now, it’s part of a country’s individual response to its population’s energy

needs: CCS may render it an acceptable part of future fuel mix.

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Linda Forbes G11EC – Energy in the 21st

Century 13 

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