Demand And Supply In A Changing Climate

Published: Fri 04 Jul 2014
A blog entry by Jonathan Spencer Jones

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Jonathan Spencer Jones

Jonathan Spencer Jones's Blog

In preparing its soon to be finalized latest (fifth) assessment on climate change the influential Intergovernmental Panel on Climate Change (IPCC) has recently released a report that seems to have seen surprisingly little coverage in the energy sector.

In a chapter on the implications of climate change for key economic sectors and services, the report on Impacts, Adaptation and Vulnerability (1), released March 31, presents several key conclusions for the energy sector.

The first conclusion is that the findings in the earlier assessments are confirmed, that climate change will reduce energy demand for heating and increase energy demand for cooling in the residential and commercial sectors – the balance of the two depending on the geographic, socio-economic and technological conditions. However, the balance of evidence emerging “suggests that climate change per se will likely increase the demand for energy in most regions of the world.”

Another finding is the impact on energy supply, which the report notes to be an emerging topic of study. This is that climate change will affect different energy sources and technologies differently, depending on the resources (water flow, wind, insolation), technological processes (cooling) or locations (coastal regions, floodplains) involved. For example, climate-induced changes in the availability and temperature of water for cooling are the main concern for thermal and nuclear power plants, while increasing temperature will decrease the thermal efficiency of fossil, nuclear, biomass, and solar power generation technologies.

The third of the conclusions is perhaps the least surprising, particularly in the U.S. where extensive storm damage has been experienced. It is that climate change may influence the integrity and reliability of electricity grids, and may require changes in design standards for their construction and operation. The report recommends that adopting existing technology from other geographical and climatic conditions may reduce the cost of adapting new infrastructure as well as the cost of retrofitting existing grids to the changing climate, sea level and weather conditions which are likely to become more intense over time.

Each of these presents challenges for utilities and the broader energy sector as it looks to the future, but it is the first two points which will present the most uncertainties in planning. In the case of the changing demand the report also assesses the impact of climate change on heating and cooling demand as “less” than those from other drivers including population, income, technology and energy prices. But that is no reason for complacency and it will need to be factored in future demand modelling.

Perhaps the greatest uncertainty will be in the impact on supply, and the message is clear – like the reinforcement and/or siting of the grid to withstand the impacts of climatic changes, similar considerations will need to be given to generation planning.

Although outside of the scope of this commentary, mention should also be made of the IPCC’s other recently released report on the mitigation of climate change (2), which sets out scenarios to limit the increase in global mean temperature to 2oC above pre-industrial (i.e. pre-1750) levels. Stating that global emissions of greenhouse gases need to be near zero by 2100 to have a likely chance of meeting this target, the report argues for major institutional and technological changes, including the up-scaling of low and zero carbon technologies. Such technologies would include energy efficiency improvements and the use of renewable energies, as well as nuclear energy and carbon capture and storage, among other options, with a combination needed to achieve the deep emission cuts demanded.