@ green | November-December . 2024

Azerbaijan has multifaceted role to play in the future Energy Trilemma deliberations and decision-making of many countries

Whilst both points carried substance , the naysayers missed a key positive . Its geographical location makes Azerbaijan the perfect host of COP 29 . Azerbaijan is transcontinental . Its western lands are located in Europe , whilst the southern areas are considered a part of Western Asia .

Why is this important ? The reality is that both Europe and Asia are currently on a collision course as far as emission reduction strategies are concerned .

Thus , where better a location for a debate on the relevant , complex issues in the fundamental areas of energy supply options ( and their emissions ) than at a conference in a country that is between the two relevant continents , each with populations possessing widely differing views on the environment , emissions and the future of the planet ?

THE CRUX OF THE DILEMMA

At the heart of the debate is the Energy Trilemma . In the widely accepted Trilemma , energy security , affordability , and sustainability are the considerations that must be cautiously balanced to achieve social and economic stability while concurrently pursuing a cleaner environment .

The level of focus on each element of the Trilemma shifts as global macro conditions change from time to time .

But if the elements of the above Trilemma are generally globally accepted , why are there issues in interpretation and implementation ?

ONE SIZE DOES NOT FIT ALL I believe that difficulties arise from the

THOTSPOT

BY DR KENNETH PEREIRA

Dr Kenneth Pereira is the Founder and Managing Director of Hibiscus Petroleum

Figure 1 : New coal-fired power plants starting construction – a collision of emission management strategies fact that whilst the elements of the Trilemma are similar for all nations , the prioritisation of the elements when implemented in energy supply strategies , precipitates problems . Asia : China For most Asian nations , if itemised in order of priority , the elements of the Trilemma would likely fall into the following sequence :

• Energy Security

• Affordability

• Sustainability China , the largest economy in Asia

( and the second largest in the world ), is implementing far more renewable energy infrastructure than any other country . Its industry is also building more clean energy systems and electric vehicles ( EVs ) in support of the global climate change agenda than any other nation .

To assist in achieving its economic goals , China relies on power from its 1,161 operational coal power plants situated on the Chinese mainland . It produces over 1100 gigawatts ( GW ) of energy , more than half the world ’ s capacity . This is also more than four times the number of such power stations in India , which is globally ranked second for coal-fired power generation .

Not only has China the most extensive installed base of coal-fired power plants over the past five years , but its rate of commissioning of new plants is also staggering , as can be seen in Figure 1 , creating a problematic negotiating task for world leaders ( see Figure 1 ) attempting to convince the Chinese that they need to do more towards achieving global climate change goals . Asia : India India is not much different . It is No 5 on the list of the world ’ s top economies ( by GDP , with China at No 2 ) and over 80 per cent of India ’ s energy needs are met by three fuels : coal , oil and solid biomass . It also holds the fifth position in terms of global coal resources , with about 10 per cent .

WHY DO LARGE ASIAN ECONOMIES CONTINUE WITH COAL ?

Both graphs in Figure 1 indicate that China is executing an energy supply strategy that goes against the grain of green energy strategic approaches being implemented globally . Why is this so ?

The indications are that China has prioritised the Trilemma elements in the following order : energy security , then affordability , with sustainability taking third place . This is quite logical given that :

• China has the world ’ s fourth-largest coal reserves , with an estimated 143 billion tonnes in 2020 . This is about 13 per cent of the world ’ s total coal reserves .

• Using coal provides China with a comparative advantage ( the theory of comparative advantage is attributed to political economist David Ricardo , who wrote the book “ Principles of Political Economy and Taxation ” ( 1817 )). China could also contend that it is using “ dirty ” power to manufacture products that enable the rest of the world to go green and clean .

Politicians in India would argue the same . They are ensuring energy security for their nation whilst prioritising affordability as their trilemma focus areas . A cheap and secure energy source also gives their industry a significant comparative advantage . Europe Over the past five years , as European governments aggressively pursued a clean energy strategy – as part of a broader climate change agenda - they have been confronted with a war at their doorstep .

This war , the escalation of hostilities between Russia and Ukraine since early 2022 , invoked a slurry of sanctions being imposed by the European Union ( EU ) on various Russian entities and individuals .

These sanctions , coupled with the sabotage of the Nord Stream pipelines in late 2022 , have escalated the energy security concerns of a European continent already in steady economic decline .

The 2024 European Energy Trilemma will formally be reported as follows :

• Energy Security

• Sustainability

• Affordability It is likely , however , that an informal desire would be to emulate the Trilemma priorities of Asia .

Why is there a perceived difference in the Trilemma priority sequence in Europe ? Are the various European governments ready to sacrifice economic well-being in the name of environmental concern ? Probably not . It is more likely that :

• a demonstrable concern for the environment is a political platform to recalibrate ( almost rewrite ) the rules of economic engagement . It is becoming more and more apparent that environmental concerns are an attempt to balance economic competitiveness . Asia , in particular China and India , are fast becoming part of an unstoppable runaway machine powered by the energy of growing populations that are