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Renewable Energies Geopolitics and Future Studies on Energy Transition – GENERATE

Materials, patents, oil and water at the heart of the challenges of the global energy transition

The GENERATE project has the advantage of studying in an integrated way the problem of energy transition at the international level and is based on the multidisciplinary (economic, industrial, technological, legal and geopolitical) nature of its approach. Understanding the geo-political drivers resulting from the decarbonation of economies is essential for the positioning of actors and for conducting an efficient scientific policy in the field of decarbonisation technologies.

Which new dependencies for a transitioning energy world?

The objective of the GENERATE (Renewable Energies Geopolitics and Future Studies on Energy Transition ) project led by IFPEN and IRIS is to analyse the geopolitical consequences of a diffusion of renewable energies (RE) at the international level. The challenges targeted by energy transition policies could add to an already rather complicated current energy geopolitics. On top of the traditional relationships between actors (States, companies, etc.), new dependencies be considered as a result of technical, economic, spatial and legal transformations induced by energy transition technologies. This project focuses on three major issues that are likely to have a major impact on global geopolitical issues, namely (1) the criticality of materials integrating energy transition technologies, (2) the new geography of the intellectual property of REs, and (3) the development model of hydrocarbon-producing countries and the evolution of their position on the global scene. The interest of such a comprehensive approach aiming at analyzing the energy transition at the global level is to identify the most relevant decision making tools and public policies that can be used for resolving those dependencies.

The TIAM-IFPEN model (TIMES Integrated Assessment Model), a bottom-up linear programming model, was developed at IFP Energies Nouvelles (IFPEN). It is a global multi-regional model that has a rich technological basis for assessing the dynamics of the global energy system, from resource extraction to energy end-use, over a long-term period of more than 100 years. It was developed for analyzing and assessing the possible consequences of different energy, environmental or legislative orientations with an explicit and detailed representation of technologies and types of energy. Within the GENERATE project framework, we have established all the value chains of different materials (cobalt, copper, lithium, nickel and rare earths) in order to evaluate their demands under different scenarios (2°C and 4°C). In addition, we have assessed the levels of dependency of the different world zones (import levels) for these materials. The second part of the project required statistical studies based on international patent data bases. We therefore identified the registered renewable energies related patents and analyzed different relevant indicators to map the leading countries for the related technologies. Finally, the third part of the project dealt with a bibliographical and statistical analysis of indicators measuring the vulnerability of hydrocarbon-producing countries.

Our scenarios offer differentiated results of resource pressures depending on the scenarios studied. Thus, copper appears as the most constrained metal in the energy transition dynamics, followed by cobalt. These two elements are characterized by a high criticality. By 2050, for each of these two elements, more than 90% of today's known resources would be consumed. This figure will obviously have to be put into perspective according to the evolution of reserves in the coming years and their actual level in 2050. Some countries (Chile, China, and Australia) could thus acquire quite a significant market power by 2050 as a producer or in the metal refining sector, where activities are concentrated, notably in China for these markets. Associated to all the materials studied, we have highlighted the importance of the role of water in the energy transition. China has made a significant technological catch-up and nearly 30% of the patents related to the technologies needed for performing the energy transition have been filed by this country. While the United States, Europe and Japan still possess a comparative advantage, they are likely to face a stiff competition in the coming decades. Major exporting countries such as the Gulf countries and Russia are not, despite a number of preconceived ideas, the most vulnerable to energy transition and could benefit from it if strategic orientations are taken now. Countries with a small volume of exportation such as sub-Saharan exporters, should be more exposed. Oil prices remain a fundamental variable in the energy transition since they are the main determinant of the number of patents registered in the renewable energy sector.

The global deployment of renewable energy technology poses more new questions from a geopolitical point of view than it solves. The issue of intellectual property rights for low-carbon technologies and the competition between States, the diversification models of oil-producing countries and the question of materials specific to low-carbon technologies are part of the global problem to be addressed. More generally, this work should invite us to reflect on the energy transition itself and to move away from the current pattern of energy addition. Thus, in parallel with the public policies currently being considered - sustainable mobility and recycling - the question of the sobriety of energy and economic systems arises. Water could thus be the limiting element of the international energy transition. These issues will be studied in the framework of future reflections on the architecture of climate negotiations. Ownership of a mining resource or of patents for decarbonation technologies could thus constitute interesting assets and keys to relevant negotiations in the framework of a post-COP21 climate agreement.
Several follow-ups are envisaged within the framework of the GENERATE project. The results on the criticality of materials in the energy transition highlighted two major facts: the importance of water in the energy transition and the importance of recycling policies. On the first aspect, the research team plans to submit an ANR project in the autumn of 2020 on the coupling of our technico-economic model with a model representing global water capacities to determine continent by continent the water stress imposed by new low-carbon technologies. On the second aspect, a thesis topic will be submitted to further investigate the economic aspects of recycling strategic materials.

The GENERATE project has recorded significant scientific output between 2018 and 2020. Five articles have been submitted to internationally peer-reviewed economic journals and three have already been accepted, notably in the journals Applied Energy, International Economics and Oil & Gas Science and Technology. In parallel, the project team supervised a special issue of the International and Strategic Review (IJS) on «Geopolitics of the Energy Transition« and 4 articles were written in French. A fifth article was published in another issue of the RIS. In addition, another article was published in an Italian journal (Energia) and the team participated in a chapter of the International Energy Agency's Global Vehicle Outlook 2019. The team also wrote 4 articles for The Conversation website and 8 working papers (two will be published soon).

The purpose of the project GENERATE (Renewable Energies Geopolitics and Future Studies on Energy Transition) is to analyze the geopolitical consequences of a spread of renewable energies worldwide. This project will focus particularly on three major issues, namely (1) the criticality of energy transition materials for energy technologies (electric vehicle, solar panel, wind turbine etc.) (2) the new geography of patents for the renewable energy technologies and (3) the oil producing countries development model, and their places on the international energy scene.

Raw materials criticality in the development of energy transition technologies: GENERATE aims to analyze key markets (copper, cement, cobalt, platinum, some rare earths metal and water) in terms of a criticality-vulnerability matrix. Many of them are essential in decarbonisation technologies in the transportation sector and in the energy production sector. They could become a key driver of technologies prices and could contribute to a limitation (or at the opposite to an expansion) of the diffusion of different technologies. The widespread diffusion of energy transition technologies could then trigger or expand tensions in those commodity markets. The energy transition factor could then add a new piece of complexity for these markets. Specific factors such as the substitutes on the market, the market size, the existence of futures market, the industrial organization will be studied in order to get a complete picture from an economic, technological and geopolitical point of view. A preliminary work based on Times Markal model will contribute to give a big picture of the energy technologies diffusion around the world in 2050.

Industrial property rights (patents): In 2015 the investment in the four major decarbonisation technologies (biofuels, wind, solar photovoltaic and solar thermal) reached a record around 286 billion dollars. For the first time developing countries' investments in renewable energies exceeded those of developed countries. Among the emerging countries China represented about one third of global investment. These dynamics create many geopolitical concerns regarding the localization of renewable energy innovation and the existence of a new “market power” for the different countries (companies) or group of countries: the United States, Asia (Japan, China) Europe (notably Germany). GENERATE proposes to analyze the new geography of energy transition technologies and to review the new form of cooperation (or struggle) into this field. This mapping will contribute to enlarge the scope of the energy transition analysis. It will contribute to study the new forms of interaction between industrial actors and to propose a normative framework of global environmental architecture regarding technology transfers and decarbonisation technology financing for developing countries.

The development model of hydrocarbon-producing countries: the diffusion of renewable energies in the global energy mix would also affect fossil fuel producing countries in several ways: energy prices, fossil-fuel consumption, energy investments in the petroleum sector, international finance (petrodollars recycling, etc. Energy transition dynamics could then become a game changer in the regional and international balances and more especially in Middle East and Caspian Sea countries. GENERATE will study the energy transition within the hydrocarbon producing countries in order to understand the diversification process in those countries and the strategy of the different players involved in this scheme (States, national company, etc.). A geopolitical analysis will also be carried out in order to build a matrix of risk associated to energy transition. Scenarios for those the two different regions will be explored and we will analyze the consequences of the transition dynamics for the consuming countries and more especially for the European countries.

Project coordination

Emmanuel HACHE (IFP Energies nouvelles)

The author of this summary is the project coordinator, who is responsible for the content of this summary. The ANR declines any responsibility as for its contents.

Partner

IFPEN IFP Energies nouvelles
IRIS Institut de Relations Internationales et Stratégiques

Help of the ANR 236,790 euros
Beginning and duration of the scientific project: September 2017 - 24 Months

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