Global energy security and international economic development

Размещено на http://www.allbest.ru/

Polotsk State University Novopolotsk, Belarus

Global energy security and international economic development

Yaryhina Halina

Global energy security and sustainability in the 21st century will be less dependent on the total world population than on incomes and their distribution. This, in turn, will depend to a large extent on how effectively the problem of the lack of energy services, which currently limit economic opportunities in less developed regions, is addressed. In addition, energy security will depend on the ability of countries to maintain reliable energy sources to meet their needs.

As the economy develops, the energy needs and priorities of countries change. The evolution of demand at different stages of economic development is changing. As the economy develops, as happened with industrialized countries, there is a tendency to introduce more efficient technologies for the provision of energy services, and the structure of economic activity changes, since energy intensity tends to decrease over time [1].

Prices play several significant roles in economic production and demand. Most importantly, prices send signals to buyers and sellers. However, it is important to distinguish between prices and costs. There are four types of costs: cash costs, opportunity costs, environmental and healthcare costs, and socio-political costs. Most consumers are mostly prone to cash costs and less to others, although they are also important.

Renewable energy technologies, energy efficiency, advanced energy technologies and related products and services are among the fastest growing investment sectors in recent years, with large developing countries becoming investment leaders, not just technology transfer followers. Despite this progress, total public and private funding for energy-related research, development and deployment remains far less than the amount needed to move to a sustainable, climate-limited world.

Due to their important role in job creation and economic growth, small and medium-sized enterprises are potential leaders in transforming business models in many parts of the world [2].

Energy security

Energy security may be defined as a partial match between economic security, national security and environmental security.

In fact, economic security can mean creating new jobs or searching for product markets. The idea of national security is that lower energy demand will affect our sense of global security. Environmental safety includes the link between air pollution and health, as well as greenhouse gas emissions and global warming. Moreover, economic security is the security that generates security resources, and within it, energy security is one of the fundamental prerequisites for the normal functioning of the state and the achievement of the welfare of its citizens, which can be transferred to the global level [3].

Preserving our environment and reducing our dependence on raw materials and energy require a profound transformation of our production and consumption processes, which would not be possible without using the concept of a circular economy. The areas of optimal energy transformation, waste management and water treatment are the triptych on which our economy and the ecological balance of our territories, as well as our planet as a whole, are based.

According to experts from the International Energy Agency (IEA), energy security is a comprehensive concept whose goal is to protect consumers from supply disruptions caused by emergencies, terrorism or inadequate investment in energy market infrastructures. Recently, the greatest attention has been paid to such key issues as international cooperation, optimal organization of markets and unification of the conditions for consumers to access global energy resources.

According to the average forecast scenario of the UN organization, the world population will grow from 6.2 billion people (at the beginning of the XXI century) to 8 billion by 2030 and up to 10 billion people by 2050, with 80% of the population living in developing countries. The population of the Earth significantly affects energy consumption, but more energy balance depends on the pace of industrial development. For example, in the XX century the world's population has grown by 3.6 times, while the global energy balance has increased by more than 10 times. The gigantic energy needs were determined by the intensive development of industry mainly in Europe, the United States and Russia.

If other countries of the world developed in recent decades according to a similar scenario, the volume of oil, gas and coal production was many times higher than the current level. For the countries of Southeast Asia in the medium term, extremely high economic growth rates are projected - up to 4% per year. The leader is currently China with an annual growth of 9%. It would be impossible to provide energy for such an economic growth using the technologies of the 20th century. That is why innovative technologies in the energy sector are becoming crucial in the world. In most developing countries, the current lifestyle does not yet require the same energy costs per capita as in Europe or the USA, but by the middle of the 21st century. As a result of industrialization of the economy, these countries will consume half of the global energy balance [4].

For most professionals, energy security means the necessary energy production in their own country and minimal dependence on foreign imports. However, energy security includes three aspects: providing alternative sources of supply, determining alternative energy routes and ensuring the safety of existing sources and transportation networks [5].

In March 2019, the European Commission reported on the implementation and progress of key initiatives of its Action Plan for 2015 in the “Report on the Implementation of the Circular Economy Action Plan”. Three years after the adoption of the 'Plan of Action for the Circular Economy' is fully completed. His 54 activities were completed, even if work on some of them continues after 2019.

High-level commitments and long-term commitments are keys to the development of a circular economy in the EU. This commitment led to the endorsement of the EU Circular Economy Action Plan, with the benefits of including and working in various policy areas to support its implementation. This is also reflected in the growing number of financing opportunities for specific projects. Engaging a wide range of actors from the public and private sectors is critical to a successful transition to a circular economy. The mobilization of these actors and the establishment of strong partnerships may require significant efforts, since this process entails the development of circular economy strategies in various sectors and at different levels of activity.

These initiatives have three clear objectives:

1. Politics: expand cooperation between the EU and third countries in the field of environmental policy by signing political agreements that promote the development of a circular economy, environmentally friendly public procurement and innovative, sustainable and inclusive growth;

2. To gain a better understanding of the environmental problems that third countries face;

3. Support green European companies (especially SMEs), expand their activities abroad and promote green solutions through business partnerships.

Discussions in circular economic missions focus on topics related to eco-innovation, chemicals and plastics, waste, water management, marine pollution, and urban best practices.

The circular economy provides pragmatic and effective solutions for the gradual depletion of vital resources for the functioning of the modern economy. Closing the cycles of materials, water and energy, this “other” economy allows the economy to grow, while reducing extraction from nature.

The circular economy multiplies the productivity of the resources extracted by nature: therefore, it meets the goals set by the EU in terms of efficient use of resources. It is aimed not only at the optimal use of water and raw materials, but also at energy resources.

With regard to energy policy, today the priority is to achieve greater coherence between the overall goals of mitigating climate change and energy security and independence. Energy efficiency is the most effective means of combining the decarbonization of the economy and enhancing EU energy security. The potential for reducing fossil fuel consumption through energy efficiency policies is much greater than replacing these fossil energy sources with other renewable energy sources. Such policies can also contribute to the development of new types of economic activity in member states and at the local level in European regions and cities, thereby creating new pools of long-term jobs, stimulating growth and reducing energy dependence. Nevertheless, energy efficiency as a fundamental instrument of policy and strategy is not sufficiently taken into account by European and national politicians.

At the EU level for 2020, a mandatory goal was set - to achieve 20% energy savings. The EU is likely to miss it by 1% only if its targets for CO2 emissions and renewable energy sources (for which mandatory targets were set in 2008) are exceeded. The benefits of a binding approach are therefore tangible and a valuable lesson for policy makers who are responsible for defining policies for the post-2020 regime. In times of economic and energy crisis, energy efficiency combined with diversification of energy sources can help solve current difficulties in the context of the recent Ukrainian and Russian crisis [6].

Energy is not taken into account by economic theorists who write books and develop economic models, except in rare cases, since they rely on a theory that speaks of the role of energy as an engine of economic growth with its share in the total budget of each country, since the prevailing economic models consider that economic growth depends on demand. A consumer who is connected with the reality of the population, that is, with the availability of labor, in addition to investing mainly in savings, the problem is that most of these models neglect the role of energy and are not considered an essential factor in production.

Given the low contribution of the energy sector to GDP of less than 5 percent over the past 25 years, it does not fall under the calculation of economic models adopted by institutions such as Cooperation and Economic Development or the International Monetary Fund, since it believes that the growth is due to the availability of cash.

Energy problems make up a small proportion of analyzes and articles in the international press, except in the case of crises in the Middle East, therefore, it is believed that money is the basis of the economic movement in the world, but capital is inefficient and productive without activating the role of energy, as the availability of labor. Thus, energy is the basis of the movement of the world.

Sources of energy at the present stage

An analysis of many studies shows that the potential of the Earth's natural resources can provide humanity with energy for the long term. Oil and gas have a fairly powerful resource, but this “golden fund” of the planet must not only be rationally used in the 21st century, but also be preserved for future generations. But also an analysis of other studies shows that in the future we can expect that oil production will peak and consumption and prices will continue to grow, disputes and conflicts over limited resources will increase and become a constant issue on the international community's security agenda. The risk of conflicts based on gaining access and control over the exploitation of energy resources will remain high.

The energy sector should be a dynamic sector that actively supports the development of the global economy and helps reduce imbalances between countries. In this regard, the overall goal of the global energy strategy is to meet current, medium and long-term energy needs in the energy sector at affordable prices that are most suitable for a modern market economy with a decent standard of living, in terms of quality and safety. In this case, the principles of sustainable development must be taken into account. Thus, due to common goals, which are aimed at ensuring security, maintaining a balance between the import of primary energy resources and the rational efficient use of national reserves based on commercial and economic factors, it represents a priority for the further development of safe and competitive energy.

Oil and gas consumption

The energy sector in all countries plays a vital role in socio-economic development. Oil and gas revenues are the main source of income in most countries.

Oil is still the most important natural resource in the Arab world, and all possibilities indicate that this situation will continue in the foreseeable future. Huge oil reserves (such as shale oil in the United States, oil sands in Canada, coal gas in Australia, and deep-sea areas in Brazil).

World crude oil production rose (+ 2%) due to explosive growth in the United States (+ 16.5%). In June 2018, OPEC members agreed to increase oil production to prevent supply shortages and lower prices after previous production cuts were deemed excessive and prices too high. This stabilized world prices before they rose again pending US sanctions on Iranian oil exports. Crude oil production in the United States has increased significantly due to increased exploration and production of oil from rich shale reserves, which has led to the largest annual increase in production for one country in history. This is due to the launch of new projects, steady demand for oil and higher prices ($ 14 per barrel higher than in 2017). Oil production continued to grow in Russia, the Middle East (with the exception of Iran) and Africa. Latin America, on the other hand, experienced a general decline. Venezuelan political problems, compounded by US sanctions, have led to a 29% drop in oil production, equivalent to one-third of US production growth. Similarly, Iranian oil production fell by 7% after the restoration of international sanctions (Figure 1) [7].

Figure 1 Source: own development based on the data of the Statistical Yearbook of World Energy 2019

The USA and China contributed to an increase in global consumption of natural gas (+ 5%). World gas consumption in 2018 accelerated thanks to the efforts of the United States and China, which accounted for about two-thirds of additional consumption. In 2018, gas demand in the United States grew by 10%, which was the highest growth rate in the last 30 years, stimulated by the electric power industry (+15 GW of new gas power plants) and construction. Gas consumption also accelerated in China (+ 18%) in accordance with the policy of substituting coal for gas in the electricity and heat supply sectors. Growth has also been observed in India and South Korea due to sustained economic growth. However, Japan's consumption has declined since restarting nuclear reactors has reduced the need for gas-fired electricity production.

Gas consumption also continued to grow steadily in Russia (albeit at a slower pace than in 2017) and accelerated in Canada, Iran and Algeria.

Despite economic growth, gas consumption in Europe, especially in Turkey, France, Germany and Italy, declined due to rising temperatures, increased availability of nuclear and hydropower, as well as increased production of renewable energy (Figure 2).

Figure 2. Source: own development based on the data of the Statistical Yearbook of World Energy 2019.

Coal, lignite

World coal production increased (+ 1.9%) for the second year in a row. China has strengthened its position as the world's largest producer of coal and brown coal (45% of world production). In 2018, the country approved more than 45 billion Chinese yuan ($ 6.7 billion) for new coal mining projects. The recent gas shortage in the country has weakened the government's motivation to switch from coal to gas used for space heating and has retained its appetite for coal. Coal and brown coal production in China accounted for 70% of global growth. The increase in coal imports to China (by 4% compared with 2018, the highest growth over the past four years) supported a strong international coal market, boosting production in Australia, Indonesia and Russia, the three main suppliers of coal. In India, there was a significant increase in production (+ 5.3% in 2018), due to domestic demand and the government's ambitions to reduce dependence on imports. Coal production in the United States fell to its lowest level in 39 years, despite rising exports. Coal mining also continued to decline in the European Union, as member states are increasingly committing themselves to rid the economy of coal.

Oil, gas and coal until the end of the XXI century will remain the basic elements of energy, their share will be about half of the global energy balance. The rational use of non-renewable resources is the most important task of the world community. Currently, oil, gas and coal are used primarily as fuel, and only 4-5% of their volume is supplied to the chemical industry. In the future a multiple increase in the production of non-fuel products (synthetic materials, fertilizers, etc.) will be required. Oil and gas will retain their leading positions not only as sources of energy, but also as the most important raw material for obtaining special materials necessary for the development of modern civilization. According to forecasts, by the middle of the XXI century in the chemical industry up to 10% of hydrocarbons produced will be used, and by the end of the century - up to 30%. These volumes should be excluded from the global fuel and energy complex (the load on other energy sectors will increase accordingly) (Figure 3).

Economics of nuclear energy.

Investments in nuclear energy, like investments in other areas of electricity production, are economically justified if two conditions are met: the cost of a kilowatt hour is not more than with the cheapest alternative production method, and the expected demand for electricity is high enough so that the generated energy can be sold at a price in excess of its cost. In the early 1970s world economic prospects looked very favorable for nuclear power: both the demand for electricity and the prices of the main types of fuel -- coal and oil -- were growing rapidly. As for the cost of building a nuclear power plant, almost all experts were convinced that it would be stable or even begin to decline. However, in the early 1980s, it became clear that these estimates were wrong: the growth in demand for electricity stopped, the price of fossil fuels not only did not increase anymore, but even began to decline, and the construction of nuclear power plants was much more expensive than anticipated in the most pessimistic forecast. As a result, nuclear energy everywhere entered a period of serious economic difficulties, the most serious in the country where it arose and developed most intensively - in the United States.

Figure 3. Source: own development based on the data of the Statistical Yearbook of World Energy 2019

If you conduct a comparative analysis of the economy of nuclear energy in the United States, it becomes clear why this industry has lost competitiveness. Since the early 1970s, the cost of a nuclear power plant has risen sharply. The cost of a conventional thermal power plant consists of direct and indirect investments, fuel costs, operating costs and maintenance costs. Over the life of a coal-fired power plant, fuel costs average 50-60% of total costs. In the case of a nuclear power plant investments dominate, accounting for about 70% of all costs. Capital expenditures for new nuclear reactors on average significantly exceed the costs of fuel from a coal-fired power plant over their entire service life, which negates the advantage of fuel savings in the case of a nuclear power plant.

Prospects for nuclear power

Among those who insist on the need to continue the search for safe and economical ways to develop nuclear energy, two main directions can be distinguished. Supporters of the first believe that all efforts should be focused on eliminating public distrust in the safety of nuclear technology. To do this, it is necessary to develop new reactors that are safer than existing light-water ones. Two types of reactors are of interest here: a “technologically extremely safe” reactor and a “modular” high-temperature gas-cooled reactor.

A prototype modular gas-cooled reactor was developed in Germany, as well as in the USA and Japan. Unlike a light-water reactor, the design of a modular gas-cooled reactor is such that the safety of its operation is ensured passively - without direct actions by operators or an electrical or mechanical protection system. In technologically extremely safe reactors a passive protection system is also used. Such a reactor, the idea of which was proposed in Sweden, apparently did not advance beyond the design stage. But it received serious support in the United States among those who see his potential advantages over a modular gas-cooled reactor. But the future of both options is vague due to their uncertain cost, development difficulties, as well as the controversial future of nuclear energy itself.

At nuclear power plants (NPPs), about 16% of the world's electricity is generated, and for many developed countries their share exceeds 60-70%. Currently, nuclear power plants have been built in 32 countries, with about 70% of the world's electricity production coming from 5 of them (USA, France, Japan, Germany and Russia). A world nuclear program is being formed that provides uniform safety standards and provides for controlled access of developing countries to peaceful nuclear technologies. The international cooperation of the leading countries in world energy is expanding. In the XXI century the structure of nuclear energy will change. Fast neutron reactors will be developed and in the future thermonuclear fusion, the introduction of which will not only greatly increase the capacity of the nuclear industry, but also make it as safe as possible. In addition, the use of breeder reactors increases the efficiency of the use of uranium ore by 60 times, which will provide nuclear energy with resources for at least a thousand years.

Figure 4. Source: own development based on the data of the Statistical Yearbook of World Energy 2019.

Modern technologies ensure reliable disposal of radioactive waste, and the transition to a closed nuclear cycle will allow for their processing and reuse in new generation reactors. As a result of large-scale international events on the safety of nuclear power plants and waste disposal, public confidence in nuclear energy has increased. In most countries, multiple growth of the nuclear industry is planned (Figure 4).

China and the United States accounted for three-quarters of the growth in global electricity production in 2018. The main increase in global electricity production in 2018 occurred in Asia (+ 6.1%): China accounted for almost 60% of global growth thanks to strong demand and the rapid development of generating capacities, followed by India, Japan, South Korea and Indonesia.