The fourth energy transition in the global energy sector: technological and energy sovereignty of Russia.

Sizov Andrei Andreevich PhD in Technical Science Head of the Board of Directors, JSC "LOESK" 142074, Russia, Moscow region, Domodedovo, Akulinino village, 77b lohnagar24@yandex.ru Other publications by this author

Introduction

Since the era of the industrial revolution and throughout the subsequent history of mankind, the factor of stability in providing energy resources to the growing world economy has been the most important parameter of global development. However, the principles of this provision, approaches to it, are not constant and are subject to both techno-economic, environmental, social, and political factors of influence. Particular and complex changes in these factors give rise to new global trends in energy development, called energy transitions.

Energy transition is a significant change in the entire energy system due to a new combination of resources used, as well as transformations in the structure of the system, its scale, economy, behavior of end users and the goal setting of a new energy policy. It is advisable to define an energy transition as a change in the state of the energy system, as opposed to a change in a separate energy technology or fuel source. ^[1] Even a superficial retrospective analysis of the history of world energy makes it obvious that over the past 250 years, three global structural changes in world energy have occurred in the world, causing changes in the industrial and social structure, as well as political views and ideologies. The most striking example is the transition from a pre-industrial system based on the energy of burned biomass (firewood, straw, peat) and other renewable energy sources (wind, water, muscle power) to an industrial system characterized by widespread mechanization (steam energy), and, consequently, the use of more calorific fossil fuels.

Research objectives and methods

The purpose of this study is to review the current situation in the global energy sector, which, according to a number of signs, can be characterized as the fourth energy transition and to identify Russia's weaknesses and strengths in this process. 

The methodological basis of the research, in addition to traditional general scientific analytical methods, is based on the use of historical and institutional approaches, as well as elements of content analysis of normative documents and secondary statistical data. 

The relevance of the topic under consideration lies in the fact that issues related to the global transformation of the world energy system affect Russia's strategic interests. Energy security for the Russian Federation as a northern (and therefore energy-intensive) state has always been an issue of existential importance, in addition, over the past half century, energy carriers have been the main article of Russian exports, the main source of foreign exchange earnings, the branch of specialization of the state in the international division of labor. Sustainability and high resource availability of Russian energy is an absolute plus, but this fact should not lull vigilance and ignore innovative global trends.

Research results

The term "energy transition" has had a different definition for several decades of its existence. It was first used in the USA after the first oil shock of 1973. It was popularized by US President Jimmy Carter in his speech from the Oval Office on April 18, 1977 ^[2], in which he called for "looking back in history to understand our energy problem. Twice in the last few hundred years, people have changed the way they use energy... Since we are now running out of gas and oil, we must quickly prepare for the third change (change or transition)- to the strict conservation and resumption of the use of coal, as well as to permanent renewable energy sources, such as solar energy." As the historian Duccio Basosi emphasizes, after the second oil shock of 1979 during the United Nations conference in Nairobi in the summer of 1981, the term "energy transition" received a global definition as a transition to new and renewable energy sources.^[3]

At the moment, there are four energy transitions in the history of energy, and, at the current stage of development, humanity is just at the beginning of the fourth.

· the first energy transition – from biomass (firewood, charcoal, household and agricultural waste, etc.) to fossil fuels, primarily coal (the share of coal in primary energy production in 1840 was no more than 5%, in 1900 – 50%);

· the second energy transition is an increase in the share of oil in primary energy (1915 – 3%, 1975 – 45%);

· the third energy transition is the expansion of gas use (1930 – 3%, 2017 – 23%);

· the fourth energy transition is the transition to renewable energy sources (RES): wind energy, solar energy, internal heat of the Earth, etc. (2017 – 3% more than 7% by 2023 (in some countries more than 50% of electricity consumption is provided by RES).

The prerequisites for the fourth energy transition were laid back in the 1980s and 90s.  However, it was only in the second decade of the XXI century that technologies made it possible to achieve competitively acceptable cost levels of renewable energy sources and make them a really real alternative to traditional sources.

 By the end of the first decade of the 21st century, global climate changes have become apparent. According to one of the versions prevailing among the apologists of "green energy", climate warming is a consequence of anthropogenic impact, expressed in a significant increase in the use of carbon-containing energy resources. The rapidly growing emission of greenhouse gases (carbon dioxide and methane) on a global scale is becoming critical, at the same time, the uneven distribution of traditional energy resources carries a potential threat to the energy security of developed countries.

The adoption of the Paris Agreement at the 2015 UN Climate Change Conference implies the commitments undertaken by developed countries to accelerate the energy transition to carbon-free energy, ensuring zero greenhouse gas emissions by 2050. The declared goal of reducing greenhouse gas emissions and achieving carbon neutrality has not been canceled. No country, including Russia, has yet announced that it is withdrawing from the Paris Climate Agreement. The goal remains, but the ways and pace of its achievement are different for individual countries, based on the situation: the energy needs of the economy, the cost of energy, the external trade balance, geopolitical interests, etc. For Russia today it is important to determine how this goal corresponds to medium- and long-term objectives of sustainable development, including the objectives of achieving technological sovereignty in the energy sector and guaranteed provision of consumers with cheap and affordable energy resources. From the point of view of our country, a significant share of the external trade balance of which is the export of hydrocarbons, the completion of the 4th energy transition on a global scale potentially entails a serious economic challenge in terms of the export-import trade balance, budget filling, stability of the national currency, economic and, as a consequence, political weight on the world stage.

The modern energy sovereignty of Russia is based on substantial reserves and the comparative cheapness of fossil hydrocarbon fuels, technologies and scientific and practical developments in the use of nuclear energy, significant hydropower potential of the country's territory. The energy security of the Russian economy is the key not only to the country's competitiveness in the world markets of energy-intensive products, but also to social stability, defense capability and the very existence of the state, the life support of its population in an extremely cold (in comparison with the vast majority of countries) climate. A certain concern is caused by the technological side of the issue: energy based on the use of renewable energy (with the exception of hydro) in Russia is characterized by low efficiency and high cost and, as a result, low investment attractiveness.  This state of affairs does not contribute to the establishment of R&D institutes in the country in the field of renewable energy use, which threatens to potentially lag behind the leading world powers in the energy sector. This issue will become very acute if the pace of the fourth energy transition remains even at the current level, and its geography expands significantly. However, at the momentRussia remains the leading energy power, the neutralization of its competitive advantages is possible only through the use of instruments of geopolitical pressure. It is quite legitimate to consider the current situation from the angle of "there would be no happiness, but misfortune helped." In case of successful mass passage of the fourth energy transition by the leading world powers, the country will have to solve the problem of changing the structure of exports and be ready for possible world agreements discriminating against both hydrocarbon energy and industrial products produced with its participation. 

When making forecasts for the next three decades, power engineers are ready mainly to discuss the technological aspect and give quantitative estimates on it based on the prospects for improving existing and mastering the technologies being developed. A competent forecast of the expected composition and scale of application of new energy technologies in the period up to 2050 was once proposed by the International Energy Agency (IEA.)^[4]

In its report and the list of technologies, the IEA focuses on expanding the use of renewable energy sources, increasing their availability and distribution, with a general trend towards technologies of the fourth energy transition. At the same time, it is worth noting separately the unique role of Russia in such conditions. In addition to the colossal reserves of traditional hydrocarbon energy sources, Russia, unlike most of the world's leading energy powers, has a significant resource of unused hydropower potential, which can be the key to ensuring energy transfer and reducing the carbon footprint in our country.

At the same time, the IEA in its report of December 2022 ^[5] predicts a radical change in the structure of the balance of electricity production. According to the Agency's forecast, renewable energy sources (RES) (including traditional hydropower) will bypass coal by 2025 and become the main supplier of electricity on the planet. At the same time, by 2027, RES will account for about 38-40% of all electricity produced in the world.  According to this forecast, the growth rate of the share of RES will almost double compared to the period 2016-2021.

The flagships of electricity generation using renewable energy will remain China, the EU, the USA, which India is likely to join. These countries properly implement existing measures to stimulate the development of renewable energy and carry out market and regulatory reforms. At the same time, the share of coal, natural gas and nuclear power plants in the energy balance of these states will continue to decline.

The IEA expects that by 2027, the world will have new capacities for the production of electricity from renewable energy in the amount of 2,400 GW compared to 2022, which roughly corresponds to the total generating capacity of modern China. "In the next five years, there will be as much renewable energy in the world as in the last 20 years," said Fatih Birol, head of the IEA.

The trends of the fourth energy transition have become more pronounced in the light of the aggravation of the situation in Ukraine and the global energy crisis that began in 2022. The rapid growth in the development of wind and solar energy is perfectly illustrated by the latest dynamics of investments in this industry (For example, the International Energy Agency (IEA) notes by November 2022 a multiple increase in investments in renewable energy compared to previous years to the level of $ 1.145 trillion. Only in 2022 there was an actual doubling of investments in the development of "clean" 1). According to further forecasts of the IEA, their volume will double again by 2030, exceeding the level of $2 trillion per year at current prices.

Fig. 1 Investments in renewable energy accumulated since the beginning of the year, billion US dollars, according to the IEA

At the same time, it should be understood that the volumes of investments in renewable and low-carbon energy indicated by the IEA in practice account for 90% of developed countries, primarily China, the USA and EU countries. Thus, at the moment, we can state a growing differentiation between the Global North switching to carbon-free energy and the countries of the Global South increasing the use of traditional energy resources (see Figure 2).

Fig.2 Investments in renewable energy in developed and developing countries for November 2022, billion US dollars, according to the IEA

Based on the diagrams presented in Fig.2, it can be concluded that the share of investments in "clean" energy in developed countries, even in relative terms, is 4 times ahead of developing countries, some of which are now approaching the stage of industrial take-off, which means increased demand for energy.  Most of these countries are trying to solve the problem of energy shortages by increasing the production of available fossil fuels. Probably, based on this trend, the same IEA predicts that with a decrease in the share in total production, the absolute volumes of use of hydrocarbon energy sources such as gas, oil and coal for the period up to 2030 will only increase. In particular, the agency predicts the peak of oil consumption in absolute values in 2030.

Conclusions and suggestions

In general, ^[6] taking into account the ongoing energy transition, various, including major, technological breakthroughs are expected in the energy sector in the next 30 years, but a new technological revolution is unlikely. Indirectly, this may be indicated by the direction of scientific research in the field of electric power, where the main developments are conducted in the field of photovoltatics, increasing the efficiency of wind turbines (wind power plants), and not searching for fundamentally new principles of energy production. The directions of a number of technological breakthroughs have already been laid down, these are the development and improvement of technologies for the use of renewable energy, coal gasification, the development of unconventional oil and gas resources, the development of new types of motor fuels - biofuels, compressed and liquefied methane in transport, the development of gas hydrates, the production of hydrogen fuel, etc. This vector of development, aimed, in addition to reducing the environmental burden, at expanding the resource base, will be able to shift the peaks of production of hydrocarbon energy resources for a long period and, in parallel, slow down the increase in cost and reduce the volatility of energy prices.

It is probably worth noting that the next decade for the world energy sector will be marked by the pluralism of energy sources and the multi-vector development of technologies that ensure both reducing the environmental impact of traditional sources (including hydrocarbons), and increasing efficiency and reducing the cost of energy received from renewable energy sources.

By energy pluralism and multi-vector nature, we understand that in the coming years the world energy system will grope for ways of further sustainable development, using both fossil and renewable energy sources. In different regions of the world, this process will occur in different ways, often revealing contradictory combinations, such as the development of wind energy in China, while maintaining colossal volumes of coal production, or the development of technologies for the extraction of unconventional oil and gas resources in the United States in combination with the growing share of solar and wind energy.

 In this situation, it is very important for Russia not to remain among the technological outsiders in the field of efficiency of the use of REI. It is required to establish a separate state program for the development, testing and implementation of energy generating capacities using renewable energy sources adapted to the climatic conditions of the country (peculiarities of insolation, wind speed), work on improving their efficiency (increasing the CIUM (coefficient of utilization of installation capacity) and reducing the cost of kWh of generated energy. The Russian Federation has sufficient potential for the development of any of the areas. Moreover, it is Russia that can pass the stage of the fourth energy transition in a balanced and gradual manner: on the one hand, without hitting the extremes of the "green agenda", and on the other hand, without repeating the mantra of the economic lack of alternative to traditional energy sources.  The combination of the task of providing the state's economy with cheap energy should be complemented by new technological breakthroughs that will allow the country to play a significant role in the global energy sector, even in the event of a global change in the technical and economic structure.