Renewables and geopolitics: ‘There won’t be as much to fight over’

To understand the geopolitics of the future we must stop applying the norms of the fossil fuel era to the nascent renewable energy world. Indra Overland is convinced of that and told pv magazine we should debunk myths surrounding the geopolitics of renewable energy, a subject he has examined in one of his academic papers.

Old habits

Overland says the current geopolitical debate features a tendency to transpose geopolitical beliefs associated with the fossil fuel energy world onto a system dominated by renewables. People need interesting stories to tell, he says, and fossil-fuel geopolitics are dynamic and violent. And people are still driven by intellectual inertia and laziness, he adds – it is easier for storyteller and listener to follow a familiar plot.

Professor Overland, head of the Center for Energy Research at the Norwegian Institute for International Affairs, predicts the long-term geopolitical implications of renewables are actually fundamentally different from those associated with the fossil fuel world.

“Renewables are much more evenly distributed and there will, therefore, be fewer strategic locations and bottlenecks, as well as less windfall revenue and territorial competition once they fully dominate the energy system,” he said. “There simply won’t be as much to fight over.”

Solar and wind are reliable

Another myth Overland criticizes is that of the “unreliability” of solar and wind power generation. It is a claim that has been used to undermine the ability of renewable energy sources to supply a safe and stable power supply due to their intermittent nature.

“If we look at it over time, the perception of wind and solar power as unreliable has steadily been weakened and I expect this trend to continue,” said Overland. The reliability of solar and wind, he said, will depend on the scale of their deployment and on the development of storage solutions. “If such supplies are connected to a grid that covers a large enough area, much variability can be evened out,” he added. In a previous interview in this series Overland defined storage as the game changer in the energy transition and he returned to that point to highlight the ability of energy storage to eliminate entrenched strategic dependencies between countries and regions, with the technology likely to be subject to significant innovation in the years ahead.

The resource curse

Although a new kind of ‘resource curse’ may arise in the clean energy world, Overland believes renewables will be much less associated than fossil fuels with the ‘paradox of plenty’ that dictates the countries with the most abundant natural resources tend to suffer the poorest economic outcomes. Overland believes the renewables industry may suffer from raw material scarcity issues but thinks they will probably concern countries with large amounts of the critical materials needed for renewables.

“Scarcity and rising commodity prices are likely to drive innovation that reduces demand for those materials, as well as to spur the entrance of new suppliers and of recycling,” he said. The professor believes only the small number of countries with major hydropower resources could end up positioned to earn big money – and thus also fall victim to the resource curse by being exploited.

In Overland’s view, a renewable energy powered world will not see massive transfers of wealth from the majority of countries to a small clique of resource-rich countries – or its related consequences of unpredictable prices and oil wars. “Oil and gas are based on the control over, and extraction of concentrated, non-renewable natural resources,” said Overland. “Conversely, renewables are more similar to a cross between industry, high-tech innovation and farming. It’s an entirely different kind of story.”

Rare earth scarcity is highlighted by the professor as a potential threat, especially for the wind industry, which requires rare earth elements such as neodymium for its magnets. “That is possible, but rare earths are not actually that rare,” he said. “Rather, they are difficult and expensive to extract and therefore nobody could be bothered except for the Chinese when demand was not so high.” As demand rises, says Overland, more countries and companies will take an interest. “And yes, recycling will play a very important role, spurred both by rising prices and by the fact that renewable energy is supported by a wave of environmental consciousness.”

By contrast with burnt coal or oil, many of the critical materials used for renewable energy generation can be recycled without leaving the industrial cycle. “This is a fundamental difference between fossil and renewable energy technologies and is another example of how fossil fuels and renewable energy will lead to different types of geopolitical games,” Overland added.

Control over technology

As renewable energy resources are abundant and evenly spread worldwide, the emphasis will shift from control of resources to mastery of technology. “China is obviously doing well in solar manufacturing, as it is doing in most areas of manufacturing, and this is definitely a great strength for China, and other countries have much to learn from the Chinese,” Overland said.

However, the PV tech of the future may differ markedly, he added, and it is not certain the Chinese will lead on innovation. “That will depend on their effort and strategic choices as well of those of other countries,” said the professor. “Furthermore, solar panels may become so cheap that profit margins become small with the big income coming instead from, for example, storage. In that case the big money might accrue to whoever has the best storage technology in the future.”

No more gas and oil crises

Rising volumes of electricity will be exchanged between neighboring countries and regions in future, which could reduce conflict.

“It is quite different from the oil and gas trade which is highly asymmetric, with suppliers upstream and buyers downstream and sometimes transit countries midstream” Overland said. In a trans-boundary electric network, trade relationships could be more symmetrical and complementary – everybody will depend on each other in a much more interwoven way than they do under the domination of a few petrostates having a stranglehold on energy security. “There should be little reason for oil and gas crises in the future if renewables continue expanding the way they are doing now,” Overland said.

Such energy dependency is evident in Eastern Europe, where relations between Russia and Ukraine are poor but the gas keeps flowing. “There can be many reasons for this but perhaps they also understand that a big gas quarrel and cut-off now would just give another boost to renewables,” said the academic.

Cybersecurity concerns exaggerated

The potential threat of cyber attacks on renewable energy installations has been exaggerated, as Overland has stated in another of his studies. Cybersecurity risks are real, he says, but in no way specific to renewables.

“Almost everything is digitally controlled nowadays, including oil platforms, refineries, gas pipelines, and nuclear plants – not to mention many things outside the energy sector,” he said. The scale of concern about cyber security ensures governments and institutions are vigilant, he added. “This is why I refer to concerns about cybersecurity as a self-destructing prediction. It’s like one of those secret messages in the Mission Impossible films: an important message that will imminently self-destruct.”

In previous interviews in this series, Indra Overland has discussed geopolitical issues related to the combination of solar and hydropower; China; Russia; Saudi Arabia; storage; super-grids; and the energy transition.