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Using fossil fuels to produce electricity in the 20th century made the electricity more expensive than the fuel. This is now changing thanks to fossil-free electricity production, which means electricity will be cheaper than oil, and we will also be able to produce fuel from electricity. “This can give Sweden an industrial advantage over other countries,” says Tomas Kåberger.
Tomas has devoted his entire professional life to the energy issue. Partly as an academic, partly for various companies, industry organisations and government inquiries, and partly as Director-General of the Swedish Energy Agency. Today, Tomas is a professor at Chalmers University and has board assignments at Persson Invest and Vattenfall. He is also chairman of the board of an institute in Tokyo that works with renewable energy in Japan and throughout Asia.
– What has happened over the past ten years is that electricity production from solar and wind energy has become cheaper per unit of energy than oil. This is a dramatic change. In the 20th century, oil and other fossil fuels were used to produce electricity, so electricity always cost more than fuel. But now that electricity can be produced more cheaply than fuel, you can turn the system around and use electricity to produce hydrogen and other so-called electro fuels, says Tomas, who continues:
– In the first instance, this will be used in industry, such as the steel industry, but there are also investment decisions to use electricity to produce hydrogen and, together with carbon dioxide from biofuel plants, to produce liquid fuels for shipping, for example. Reversing the fuel and electricity system is a total revolution in the energy industry.
Tomas explains that the turnaround in the fuel and electricity system will take place first in countries like Sweden, which already has completely fossil-free electricity generation. The reason is simply that you can start now. Making the change in countries where fossil fuels are used at the same time is not a good idea.
– This can give Sweden an industrial advantage over other countries. We can be the first to produce fossil-free steel and the first to produce electric fuels for aviation and shipping. This is a great opportunity, Tomas says.
Geopolitical conflicts can threaten development
Making large and dramatic changes to industrial systems is not without its challenges, including resistance from established companies and industries. Another challenge, according to Tomas, is geopolitical conflicts.
– The current battle over energy is characterised by the fact that Russia, which has been the world’s largest net exporter of oil and gas and a major exporter of coal and nuclear fuel, is a country that has no alternative. It is their largest export income and accounts for a large part of the state budget. At the same time, the EU has been largely dependent on imports from Russia. Getting away from dependence on fossil fuels quickly is very much in the EU’s interest, and this is something that is very bad for Russia.
He says that the leaders of countries like Saudi Arabia and the United Arab Emirates are starting to prepare for the transition. They are building solar power plants and want to encourage energy-efficient industry. Russia is in a worse position, based on geopolitical developments.
– Russia has not developed anything at all in terms of alternatives to the old energy technologies and therefore Russia is now the country that is most concerned to slow down the development of renewable energy in the West.
The profitability of solar and wind power
There are many benefits to phasing out fossil fuels. But any transition, any change, requires both drivers and enablers.
– First, the driving force is that solar and wind power are so profitable. Second, the enabling factor is that the new technologies do not have the same economies of scale as old electricity generation technologies. This means that it does not have to be the established large energy companies that drive development. Households, small businesses, and new market entrants can also achieve a great deal. It will be difficult for the large power companies to stop this development. It will continue and the economic benefits of renewable electricity will be the driving force.
Tomas believes that it is a matter of time and place when and where development will occur, and that the speed can be affected by local political attempts to block it.
– But worldwide, development is unstoppable. On a global scale, if you look at the development it is very clear from a quantitative perspective. For example, the increase in installed nuclear capacity in the world was 4 GW last year, while solar power grew by 200 GW.
As well as providing cheaper electricity, we will have eliminated our dependence on fossil fuels. This will also reduce greenhouse gas emissions.
– We will have eliminated what in the 20th century seemed to limit the possibility for all people in the world to have a reasonable standard of living. Namely, that fossil energy resources were limited. If everyone in the world had used fossil fuels as we have done in the West, the environmental consequences would have been catastrophic, Tomas says. He concludes:
– This has removed some of the most serious obstacles to global development and it will enable, not necessarily lead to, but enable, a better life for very many people in the world.
Tomas Kåberger at Elfack
On 9 May, Tomas Kåberger will appear on the main stage at Elfack. His session is called “It is now possible to reverse the fuel-electricity system!” He will show that solar and wind electricity has become cheaper than fossil fuels and that you can start producing fuels from electricity instead of producing electricity from fuels, as was the case in the 20th century. You can read more about Elfack here.
