The Political Economy of Renewable Energy and Energy Security

Common Challenges and National Responses in Japan, China and Northern Europe

E. Moe, P. Midford, E. Moe, P. Midford

• Publisher: Palgrave Macmillan
• Year: 2014
• ISBN:
  9781137338877
• Topic: Biological Sciences
• Subtopic: Environmental Science
• Index: Biological Sciences

Bringing together renewable energy and energy security, this book covers both the politics and political economy of renewables and energy security and analyzes renewable technologies in diverse and highly topical countries: Japan, China and Northern Europe.

1

Introduction

Espen Moe

Introduction

Energy issues are at the forefront of the political discourse as never before. In a world of $100-per-barrel oil, potential peak oil, and with climate change looming ever larger on the horizon, there is an obvious need for a fresh and critical look at energy politics. The idea of this book, stemming from a conference on renewables and energy security in Japan, East Asia and Norway, hosted by the Japan Program at the Norwegian University of Science and Technology in 2011, has been to blend not only perspectives on renewable energy and energy security, but also those of the natural and the social sciences. Building on the conference, this book has developed into a volume on renewables and energy security in Japan, China and Northern Europe. It offers a distinctive blend of theories, methodologies and geographical cases. One of its cornerstones is the notion that energy security and renewable energy, while often treated as distinct in the general literature, are inextricably linked. Blending perspectives of the natural and the social sciences has also been important. Too long has the field of energy been dominated by a discourse of technical problem-solving. But few areas are now more political. Energy is becoming a strategic resource to an extent that we have not seen since the 1970s oil crises. There is growing concern that energy is not just another tradable commodity in a smoothly functioning and apolitical and global liberal market economy, but that in the future its abundance and ubiquity cannot be taken for granted. Once the 1970s oil crises were forgotten, the energy security debate of the 1980s and 1990s shifted away from risk diversification and oil as a strategic asset towards simply buying petroleum in the market as cheaply as possible. In the words of Japan Research Institute president, Jitsuro Terashima, (2012): For Japan, ‘securing energy supply meant building bigger oil tankers’. But the days of blind trust in global oil markets may be coming to an end. Energy will to a greater extent become subject to strategic thinking among energy-importing and energy-exporting countries, bringing energy security back to amongst the foremost issues of the political agenda (see also Chapter 2 of this book, by Gunnar Fermann). The political nature of these issues – issues that are both of high technical complexity and of major importance to the world economy – means that only by bringing in the linkages between the technological, the economic and the political, can we make a meaningful contribution to the field.

Renewable energy also has a very clear political component to it. We obviously need to take into account the technological innovations and limitations that make energy technologies and industries such a crucial part of economic growth and of everyday life. But we also need to focus on the political processes and the political economy of energy production, as in the pursuit of policies of renewable expansion and in the implementation of these policies.

Energy and energy policy are interesting for the number of linkages they have to other areas. Energy is an area where cross-disciplinary efforts are at their most useful. Energy is linked to foreign policy and to geopolitics through, among other things, energy security. And the links to the political economy are obvious as energy prices most certainly affect the world economy. Energy use is at the core of modern-day economic growth processes. Throughout history there has been a symbiosis between industry and energy. Without new sources of energy, new growth industries would have been improbable. Also, the relationship between energy and political institutions is extremely important. Energy companies are among the world’s biggest industrial giants.¹ They wield enormous political influence, and have often managed to secure institutional arrangements that further their own interests. Thus, in many countries, there is a strong bias in favor of the present energy structure, based on fossil fuels (sometimes nuclear) and on big, centralized energy utilities. Finally, energy policy has obvious linkages to industrial policy and climate policy. There are certainly countries that have tried to combine breakthroughs in energy technologies with the promotion of export industries (for instance, both Japan and China). And the argument that the expansion of renewables is necessary to meet climate commitments is one that is made routinely.

By studying a number of quite different countries, we can compare and contrast very different experiences and policies. This makes it easier to draw lessons from the empirical material, lessons that might otherwise remain hidden. Japan is small and densely populated, with few natural resources of its own to satisfy its energy requirements, but is wealthy after 150 years of industrialization. China is a potential superpower, with the largest population in the world, abundant in a number of natural resources, but scarce in others, still poor, but with growth rates so impressive and persistent that satisfying its future energy needs will present major challenges, both to China and the global energy system. Northern Europe is represented by Germany, Sweden, Denmark and Norway, with illustrative empirical material from other countries. Norway provides most of the subject matter. While obviously not an economic powerhouse like Japan or China, from an energy point of view Norway is a highly interesting country. Small and scarcely populated, it has benefited from being well-endowed in petroleum, and before then in hydropower. Some even see Norway, with its very large hydro reservoir capacity as becoming the storage battery of Northern Europe, helping Denmark, Germany and others to balance the variability of their renewables (Gullberg, 2013). But this also means that, despite a national identity in which closeness to nature and environmental consciousness are important components, Norwegian efforts in renewables beyond hydropower have been feeble. Thus, Norway serves as a counterpoint to Japan and China, and is an outlier in the Northern European context as well, showing what a major challenge it will be to implement strong renewable policies in a country dominated by petroleum. The other Northern European countries bring their own specific contributions, demonstrating the complexity and rich variety of the region’s renewable and energy security policies. Germany is an economic powerhouse of global stature. It has for long been a frontrunner on renewables, and its feed-in tariffs (FITs) are widely emulated. Also, following Fukushima, it has turned away from nuclear power, something that presents major challenges in terms of energy security, but also a major challenge – and an opportunity – for renewables in terms of plugging the gap in electricity production that will inevitably follow, making for an obvious comparison with Japan (see otherwise Frank Umbach, Chapter 3). Denmark may be a small country, but it was the frontrunner on wind power, and remains a leader, not just being the country with the highest density of wind turbines in the world, but also hosting the wind power giant Vestas. Finally, smart politics is becoming ever more important, making Sweden – one of the frontrunners on Smartgrids – a highly interesting country.

For this book, we have brought together a broad team of scholars from Northern Europe, Japan and China. While they obviously offer different perspectives, approaches and methodologies, their chapters are united by the common perception that renewable energy and energy security should have, at its core, a focus on the intersection among the technological, the economic, and the political. It is only by bringing out the linkages among the three that we can gain a broader understanding of the political economy that underpins the challenges the world is currently facing on renewables and on energy security. Thus, running throughout this book is the argument that none of the three can be left out, which does however happen far too often. North et al. (2009) stress that every explanation of large-scale change contains a theory of economics, a theory of politics and a theory of social behavior, but that very often theories of economics and politics remain independent, scholars not coming to grips with how economic and political development are connected. Technical problem-solving may be an excellent vantage point for analyzing energy policy. But it only gets us so far. Thus, we have sought to link perspectives on economic and political development, together with the obvious technological bent that any study on energy tends towards, for a thorough understanding of the political economy of renewable energy and energy security.

The book is divided into three parts. The first focuses mainly on energy security. The Fermann chapter (Chapter 2) offers a broad theoretical perspective on energy security, introducing key concepts and theories, whereas Øystein Tunsjø (Chapter 5) and Jakub Godzimirski (Chapter 6) look into the energy security context of China and Norway, respectively. In Chapter 3 Frank Umbach looks at Japanese energy security since Fukushima and the recent German Energiewende (energy transformation), suggesting that Japan may learn from Germany’s experiences with its nuclear phase-out. The Japanese policy debate has been active and intense. Paul Midford’s chapter (Chapter 4) on Japanese public opinion and energy security demonstrates how public opinion is playing a crucial role in shaping energy and energy-security policy, and that public opinion has been far more important than it is often given credit for.

The book’s second part has technological perspectives at its core, relating technological problems and drivers to the industrial, climate and energy problems that the technologies are meant to solve. Tore Undeland and Bogi Bech Jensen write about trends in wind turbine generator systems (Chapter 7), whereas Kenji Asano (Chapter 8) brings out the technologies and politics of solar photovoltaic (PV) as he discusses the rise and fall (and potential rise again) of Japan’s PV sector. Often overlooked is the electricity grid. The grid is often a very concrete and very major obstacle to the expansion of renewables. Audun Ruud (Chapter 9) looks both at the technologies behind Smartgrids and at why a technology focus alone will not lead to success.

The final part has as its focus a social scientific analysis of the political processes pushing – or hampering – the development of renewables. Yu Wang (Chapter 10) looks at the impact of the original and the modified Renewable Energy Law in China. Jørgen Delman and Ole Odgaard (Chapter 11) analyze the 12th Five-Year Plan and assess the extent to which changes to the Chinese growth model can be expected in the future. Similar themes, of industry and growth interwoven with climate policy can be found in the chapter by Guo et al. (Chapter 12), with an explicit focus on how China is seeking to put itself on a low-carbon path. Karolina Jankowska (Chapter 13) analyzes German PV policies and how Germany became the world leader in PV, but also how the German system has come under threat, both from Chinese imports and from its own success, as government subsidies are becoming ever more expensive. Finally, in identifying institutional and industrial bottlenecks preventing the rise of renewables, Espen Moe (Chapter 14) looks at the vested interest structures of Japan, China, Norway and Denmark, the influence that vested interests wield over energy policy-making, and the extent to which vested interests have become entrenched in the institutional structures of these countries. Among the lessons is the ease with which renewable energy policy is co-opted by vested interests, and the crucial role of the state in pursuing renewable energy expansion.

Energy Access

Thematically, the chapters deal with a number of recurring topics. Energy access is one. Irrespective of whether or not we have reached peak oil, the world no longer has abundant access to inexpensive energy. Granted, Daniel Yergin (2011) holds forth that the world is still awash in oil. The world’s proved oil reserves have kept on increasing, and if we take unconventional sources into account, there is no immediate peak oil. Instead, the question has become one of how eagerly do we pursue the remaining resources and open up new areas for exploration, and the extent to which new technologies can make resources that in the past were technologically unfeasible to exploit. Michael Klare (2012), on the other hand, forcefully states that while it is technically true that we are still awash in oil, the days of ‘easy oil’ are long gone. Over the next 25 years, the ‘easy oil’ fields will lose 75 percent of their productive capacity. Shale gas, breakthroughs in fracking, deep-sea drilling, and Arctic oil may prolong the petroleum age. But if the future is still fueled by petroleum, every pretense of this being a cheap and abundant source of energy must be abandoned. And knowing that at least since the Industrial Revolution, the link between energy and economic growth has been intimate, and that waves of economic growth have been fueled by the rapid exploitation of a new cheap and abundant source of energy (Ayres and Warr, 2009; Moe, 2010), a prolonged period of scarce and expensive energy could seriously jeopardize the growth prospects of the entire world economy.

Ideally, the petroleum age ought to end, not because we run out of petroleum, but because we discover new sources of energy. However, to Klare (2008; 2012) a more likely outcome is that the share of renewables will change only little by 2030, because overall energy demand will also keep increasing. Instead, we might be facing a race for the world’s final remaining petroleum resources, and a future that we should all dread, both for its increased levels of conflict and for the impact that climate change will have on a world that refuses to move on to sustainable sources of energy.

Energy security and the case for renewables

What the above points to are two things, both of which are at the core of this book. First, that we live in a time when energy security is crucial and different countries have to deal with this issue in different ways, based on needs and on access to resources. Second, that alternatives to fossil fuels need to be phased in, for energy (security) and for climate reasons.

Renewables are obviously not the sole answer. Not to the energy problem, not to the climate problem, and not to future energy ...

Table of contents

• Cover
• Title
• 1  Introduction
• Part I  Energy Security
• Part II  Renewable Technologies and Politics
• Part III  Energy and Politics: Solutions and Policy Frameworks
• Index