The World Summit on Sustainable Development 2002: Reports from the Scottish Civic Delegation
Ian Russell, Group Chief Executive, ScottishPower
The World Summit on Sustainable Development was never going to be as ground breaking as the Rio Earth Summit in 1992, where the concept of sustainable development was embraced internationally for the first time. But Johannesburg achieved its own successes - adding focus and momentum to those visionary goals from10 years ago. While global targets for renewable energy were not specifically on the Johannesburg agenda, the need to achieve the Kyoto Protocol targets was restated and given fresh impetus.
The hallmark of the Summit was a pragmatic approach, which fuelled an agenda for action in the short and medium term to tackle some of the fundamental sustainable development issues, in particular measures to alleviate poverty in developing nations.
Agreements were reached to reduce by half the number of people without access to sanitation by 2015 and also to radically reduce the numbers without access to clean water. Together these represent a significant breakthrough in the war against hunger and disease, for those two billion people without access to clean water or basic sanitation and the 13 million people in Southern Africa who face extreme food shortages due to drought.
A clear message from the Summit was that we all must develop more sustainable patterns of production and consumption. Richer nations, like Scotland and the rest of the UK, can lead by example in this area. Taking electricity as an example, this means using cleaner forms of generation, transmitting and distributing power efficiently and reducing energy use by adopting energy efficiency measures in business and in the home. It also means reducing consumption of materials generally and minimising waste through recycling and reuse of resources.
A key strand of tackling global poverty will be enabling developing nations to benefit from trading in the global economy. Lack of energy, however, remains a key barrier to economic development in the world's poorest nations, while access to electricity plays a crucial role in supporting economic growth and transforming social welfare. Currently, two billion people worldwide do not have access to electricity. Developing countries, which have three-quarters of the world's population, account for just 25% of world electricity consumption. The world's 25 richest countries, with a population of 800 million, have a per capita electricity consumption and production capacity 100 times greater than the three billion inhabitants of the 40 poorest countries. Addressing this imbalance will require the global community to make trade-offs to ensure access to sustainable and affordable electricity for the world population. From a sustainable development point of view, having no electricity is the worst-case scenario.
Until now, the development of electricity has been closely linked to local availability of cheap energy sources, such as water, coal, gas or oil. Where those resources are not available, people may use firewood or dung as fuel sources in the home, creating local air pollution and deforestation problems. All forms of energy must therefore be considered to achieve mass availability of electricity. Without electricity there is no development, no improvement in standards of living, no access to modern health services and no access to the Internet and other telecommunication technologies - effectively excluding electricity-deprived areas from the benefits of globalisation.
Equal access to the benefits of electricity stands at the heart of sustainable development. For communities in sparsely populated areas, the most practical options are likely to be off-grid, distributed renewable power systems. The e7, a group of nine utilities from the G7 countries, is supporting projects of this nature to promote the use of sustainable technologies and provide people in previously unserviced areas with access to electricity. A large part of these projects involves 'human capacity building' - teaching communities how to build, operate and maintain small-scale electricity systems. ScottishPower is extending its involvement in this area by supporting an e7 sustainable development project in the Galapagos Islands. In addition, in line with the Scottish Executive's interest in developing links with the Eastern Cape, one of the most deprived areas of South Africa, we have taken initial steps to examine the feasibility of leading a renewable energy project in the region.
Renewable technologies such as solar, wind and geothermal, however, remain relatively expensive and cannot provide sufficient electricity to meet demand in developing cities without other forms of generation. To address climate change while enhancing global access to electricity, it is imperative that low or zero carbon emitting technologies are utilised. These include efficient combined cycle gas turbine plants, new advanced fossil fuel technologies such as coal gasification, fuel cells and biomass, in addition to wind, geothermal, hydro and solar. It is possible the future will bring fossil plants with carbon capture technologies, to ensure best use can be made of the world's abundant coal resources.
To achieve sustainable energy systems in developing nations, the Clean Development Mechanism (CDM) contained in the Kyoto Protocol may have a prominent role to play. The CDM rewards investment projects in developing countries which have no control obligations for greenhouse gas (GHG) emissions, by earning both the investor and the host country Certified Emissions Reductions (CERs). The CDM has the potential to generate massive international transfers of capital, technology and expertise and would provide incentives for developing nations to adopt greenhouse gas minimising technologies, rather than proceeding with cheaper GHG-intensive developments. In effect, this would enable developing countries to build electricity capacity with the least environmental impact, rather than following in the footsteps of the world's richer nations, which now have to undertake a radical review of their energy policies and generation capacity to fulfil their Kyoto commitments.
While access to electricity is the overriding energy issue in the developing world, the number one challenge for richer nations is to provide affordable and reliable supplies of electricity, with minimal environmental impact. Cleaner power sources, efficient use of energy and an increasingly interconnected society will be the key components in achieving this aim. The UK has taken a leading position on global climate change, going beyond the ratification of the Kyoto Protocol in its domestic targets and, in his speech, Prime Minister Tony Blair said that to reverse the effects of global climate change a 60% reduction in carbon dioxide emissions world-wide may be necessary. This would require massive investment in renewables and stronger measures to reduce demand and encourage efficient use of energy.
Within the UK, Scotland is the pioneering force, through a combination of political will, geography and willingness in the industry to drive forward change. The Scottish Executive's proposed target of meeting 40% of the nation's electricity needs from renewable sources by 2020 is a challenging one. As the UK's leading windfarm developer, with 11 established sites in the UK and Eire, ScottishPower is supporting the Executive in its aim to keep Scotland at the forefront of the renewables renaissance now taking place. Currently we have renewable energy projects totalling approximately 500 megawatts (MW) in the planning process - more than any other UK developer - and environmental assessments on our next round of eight windfarms will begin before the end of 2002.
In order to achieve Scotland's target for renewables and encourage improvement in related areas such as energy efficiency and reducing fuel poverty, a partnership for progress needs to be developed between national and local government, the business world, NGOs and the people of Scotland. In addition, there is a requirement for integration between the sustainable development aims of energy policy and the economic brief of regulation. The benefits of competition must be balanced against achieving security and diversity of supply and environmental objectives. Although developments in wind turbine design have helped to improve the economic viability of wind power, continued support will be needed for renewable energy in the medium term, along with funding for the additional development work that will be necessary to bring wave, tidal, solar, biomass and other forms of renewable energy into the marketplace.
Cooperation between developers, planners, NGOs and local communities will be required to deliver the requisite number of renewable megawatts over the next 15 years. This will mean an approach from developers which is sympathetic to local people and ensuring that renewable energy developments, such as windfarms and small-scale hydro-electric plants, create community benefits. On the other side of the coin, it will require the planning authorities and local communities to embrace such projects and play a constructive role in the planning process.
It must be recognised also that network development will be required to support renewable energy developments. A long-term strategic plan which spreads the cost of network reinforcements between the developer and the network operators, possibly incorporating regulatory incentives for operators, would hasten the growth of renewable energy. But again, accelerated development would only be possible with the cooperation of the planning authorities. In the interests of fuel diversity, supply security and network stability, there is a limit to the extent that renewable energy can be used to displace large base load plants. Efficient gas-fired plants, along with cleaned-up coal in the medium term, will therefore continue to have a role to play. Again, market mechanisms may have a part to play in bringing more clean coal technologies into the marketplace.
During the mid-1990s ScottishPower pioneered the Gas Reburn technique, now in use at Longannet Power Station in Fife. This secondary form of NOx abatement can reduce emissions of oxides of nitrogen by up to 80% when used in conjunction with Low NOx Burners. Gas Reburn is the largest research and development project to have been undertaken by a UK utility in recent years. Its successful outcome was achieved with assistance from a number of international partners with similar needs and objectives and grant support from the EU's THERMIE programme. Coal is the most abundant of the world's energy resources and, at present, 80% of world energy consumption is dependent on fossil-fuelled generation. The search to develop carbon removal technologies and make them market-competitive must be encouraged. Partnerships such as ScottishPower's Gas Reburn project could have a key role to play in delivering such technologies.
Developing a national energy strategy that is sustainable will require significant investment. ScottishPower's immediate commitment, to build our wind energy portfolio from around 130 MW to more than 800 MW, represents an investment of 400 million. However, using the example of our recently commissioned 30 MW windfarm in Kintyre, it is clear that such developments have the potential to create real economic, social and environmental benefits within Scotland's communities.
During the construction of Beinn an Tuirc windfarm 3 million was spent in the local economy. We have since established a community fund, which will be used to support projects of an educational, environmental or charitable nature to benefit the people of Kintyre. Part of the site at Beinn an Tuirc is rented from a local farmer providing a new income stream for the farm, while the land continues to be used for grazing sheep. In addition, as part of this project we have undertaken one of the UK's most ambitious biodiversity protection projects to provide a new hunting ground for Golden Eagles, at a safe distance from the turbines. But more crucially, the decision to build this windfarm and others - including a 240 MW development at Whitelee Forest near Glasgow - played a role in the inward investment of the Danish wind turbine manufacturer, Vestas, who established a factory in Machrihanish, creating 108 jobs in a rural area with a high level of unemployment.
If Scotland is to meet its target for renewable energy, at least 1,000 MW of new renewable energy will be needed. This will require plant purchase contracts of significant value and the availability of skilled contractors to undertake the work. Currently 30 countries, including EU members, have pledged a commitment to definite targets for carbon dioxide reduction and renewable energy. By taking a leading position in wind energy engineering and manufacturing now, Scotland will have the potential to compete in a lucrative export market for years to come. World Energy Council projections indicate that cumulative investment in renewables could create a market worth between 500 billion and 1,500 billion by 2020. This - and the Summit agreement to enhance water infrastructure in developing nations - will create new opportunities for Scottish manufacturers and engineers.
Taking electricity as an example, even after the first wave of investment in infrastructure has ended, the 20-year design life of wind turbines - and the quest for ever-improving technology - will ensure there is a continuing demand for replacement machines. Continued research, development and deployment of a broad range of energy technologies will be required to diversify our energy sources and reduce the environmental impacts of energy production and use. Achieving the large-scale delivery of renewable energy projects will require partnerships for action between government, industry, NGOs and the people of Scotland - all of whom could benefit long term from a world-class sustainable energy industry.
Since attending the World Summit on Sustainable Development I have been sharing my view with Scottish business organisations that the successful companies of the future will be the ones that embrace sustainability as an opportunity. Reducing energy use, avoiding environmental damage and subsequent clean-up costs, together with more efficient use of resources and minimising waste, are aims which benefit both business and the environment. Perhaps more crucially, trade, not aid, will lift developing nations out of poverty and in the future we will see new opportunities for overseas investment that will create joint benefits for the host nation and the investor.
ScottishPower hosted a visit recently by a delegation from the Indian Government. India is experiencing a power crisis and plans to build 20,000 MW of new generation capacity in the next decade, as well as introducing energy market reforms. Increasingly, other countries will look to the UK for expertise, investment, technology and products as their economies develop. Our politicians are contributing to world trade reforms and paving the way for Scottish and UK businesses to participate in the global economy.
My observations have concentrated on the energy sector and renewables in particular. It is clear that the drive towards greater sustainability in energy presents major business opportunities for ScottishPower and others. However the energy sector is not unique. The wider requirement, agreed at Johannesburg, to promote more sustainable production and consumption creates a much wider range of business opportunities for a much larger number of companies.
Ultimately, however, it will be up to Scottish businesses to grasp its share of these opportunities as they emerge.