World's growing power needs hamper climate efforts

By Stephanie Holmes

LONDON (Reuters): Rocketing electricity demand worldwide poses a big threat to global efforts to cut pollution and reduce global warming, experts say.

Energy is back at the top of the global political agenda following the unveiling on Thursday by President George W. Bush of a national energy plan to boost domestic U.S. energy supplies, led by fossil fuels.

But it is in the developing countries where the real growth in electricity demand will occur.

Heavily-populated India and China will need to build thousands of power stations, pushing up greenhouse gas emissions as their economies expand and catch up with the developed world.

Most of these power stations will be fired by coal, the heaviest producer of carbon dioxide emissions, which most scientists agree are the main cause of climate change.

"There's potentially a very significant rise in emissions from developing countries," said Neil Cornelius of ICF Consulting.

"Developing countries are starting from a low base so as their economies grow, they will need to expand power generation rapidly."

According to the West's energy watchdog, the Paris-based International Energy Agency (IEA), power generation in developing countries will account for nearly one-third of the increase in global emissions to 2020.

Developing countries are excluded from the 1997 Kyoto climate change agreement which calls on industrialized countries to cut carbon dioxide and other greenhouse gas emissions by an average 5.2 percent from 1990 levels by 2012.

The United States, which pulled out of the Kyoto accord in March saying it would harm the U.S. economy, had argued developing countries should also have pollution reduction targets.

The IEA forecasts world electricity demand will more than double over the next 20 years, requiring nearly US$3 trillion of investment.

Over half of the new power stations built to satisfy this explosive demand will be in developing countries, with south and east Asia taking a big bite.

"With its size, fast growth in energy demand and the significance of coal in its fuel mix, India has also become an important influence on the global environment," said the IEA recently in its world energy outlook.

India's electricity demand has been growing by seven percent a year compared with around two percent in western Europe and just over one percent in the United States.

In the U.S., the arrival of the energy-intensive Internet economy has placed strains on power systems in areas like California where power prices have rocketed and blackouts have been ordered to conserve electricity.

President Bush said in his energy plan the U.S., the world's largest polluter, would need to build between 1,300 and 1,900 new power stations over the next 20 years.

The challenge facing power suppliers is that while they have to struggle to meet the immediate extra needs, the high-tech industry is so volatile consumption could easily drop away.

"The utilities have to scramble to meet demand and, with the downturn in dotcoms, it is a very fickle demand," said Martin Rosenberg of Utilities Business magazine in Kansas.

But some analysts say in the longer-term, the high tech economy may actually reduce consumption by making economies more energy efficient.

Energy savings come from the use of more efficient machines and a change in lifestyle -- working, shopping and banking from home all use less energy than jumping in the car.

"Growth in IT industries will result in an increase in energy in the short term consumption but over the long term it could actually reduce it," said Michael Keay, deputy head of the energy and the environment unit at the Royal Institute for International Affairs in London.