[MUSIC] Welcome back. In discussing energy we need to be concerned not only about environmental impact but also about other issues, notably about energy poverty and the security of energy supply. Energy poverty can be articulated in two main aspects. The first one is the availability of modern commercial energy, which might, in many places, it is not sufficiently available because the physical infrastructure for delivering it is not in place. The other aspect is more monetary. That is, some people might not be able to pay for energy, their income might not be sufficient. On this basis we distinguish two aspects. One is accessibility which refers to the fact that physical infrastructure may not exist to deliver energy. And the other is affordability, which means that the physical infrastructure might be there, but the people might not afford to pay for energy supply. In the first graph that I'm showing to you, we have an indication of the per capita energy consumption in different countries. And as you can see, this is shown by the yellow dots for each country. As you can see, there are some countries in this world where energy consumption per capita is extremely low, and basically non-compatible with a modern style of life, of economic life, especially. And in other countries, per capita consumption is quite high. Actually, the graph does not include countries like the United States and Canada where per capita consumption is even higher than in Germany. It also shows what kind of energy is used. And as you can see, the countries on the left hand side of this graph are relying mostly on biomass, which is the most rudimentary form of energy, burning wood essentially. And as you move towards the right towards more industrialized countries, other forms of energy become more important. Biomass becomes less and less important. And it is also interesting to note that electricity is not the most important form of energy even in the industrialized countries. So the prospect of relying increasingly on electricity is not presently a reality. The next slide gives us the percentage of population that does not have access to modern electricity, to commercial electricity from the grid. This percentage is very high in some countries. The graph distinguishes in between people living above and below the poverty line. The yellow section of the bars is people living below the poverty lines. So for them the question is also a question of not being able to pay for the electricity, not just the fact that the grid is not available. But for the people on the left hand side, the blue bars, those are people living above the poverty line, people that could pay for electricity if it were delivered to them, and the physical infrastructure is not available. As you can see in this slide the problem is more acute in sub-Saharan Africa, although we expect that there might be an improvement. Nevertheless, the number of people in sub-Saharan Africa that do not have access to electricity has been growing. In other regions of the world, it has been decreasing, especially in some countries notably China, the problem has been essentially solved. And that is a very important aspect of Chinese economic development. In some countries in sub-Saharan Africa the issue is especially bad. You can see that Nigeria, for example, which is a rich country because it's an oil producing country, nevertheless, more than 70% of the people do not have access to electricity from the grid. In the Democratic Republic of Congo, it's close to 70%. So this is a major issue in some countries and something that needs to be addressed with priority. In the next slide, we see that there has been progress made since year 2000. The International Energy Agency expects that more progress will be made in the coming decades. However, the problem will remain a significant one, especially for sub-Saharan Africa. In the next slide, we have some indications about energy poverty, wo not the availability of connections, not the availability, not accessibility, but affordability. And we can see that in many countries, there are significant percentages of people that live in energy poverty, which is defined in this case, as households having to devote more than 10% of their income to paying for energy. Whenever an household is obliged to devote more than 10% of its income to energy to the purchase of energy services, it is considered to be energy poor. On average in this world, more than 15% of the people live in conditions of energy poverty. And that tells us that maintaining cheap competitive energy is an important priority. Some considerations about energy security of supply. The International Energy Agency defines energy security or supply as the uninterrupted availability of energy sources at an affordable price, so there is a physical component, the fact that availability must be available at all times and not be interrupted. Also, there is an economic aspect, which is that energy not only must be available, but it must be affordable. Energy availability is an essential component of economic life. If we don't have energy available, all production activities tend to stop, and economic life comes to a stand-still. Therefore governments view potential interruptions as a security threat and attach importance to it. Sometimes we have excessively high prices, spikes in prices. And this too, can be viewed as a threat to security, but it is certainly less important than the physical availability of energy. Physical availability of energy is sometimes considered secure when countries depend from domestic sources, when all the energy is produced domestically and there is no dependence on imports. I believe this is a mistake because in some cases domestic sources might be themselves insecure and vulnerable to damage, accident and so on. And so to some extent, having an import component can be a source of security depending on the conditions. It is important, nevertheless, to pursue a strategy of guaranteeing security through the verification of sources through accumulation of strategic stocks, through creation of redundant capacity, transportation and logistics. All of these things have a cost and so they may conflict with the objective of decarbonization. Accumulating energy strategic stocks, for example, is easy for coal, which is very bad for the environment. It's easy for oil. It is possible but not as easy for gas. And it is basically impossible for electricity because batteries have very little capacity. So there may be a trade off between security of supply and pursuing decarbonization, because decarbonization may require increased reliance on electricity and electricity of all forms of energy is probably the most fragile. Electricity needs to be provided in real time, needs to be produced when it is demanded and transmitted through grids. Grids can be taken down by natural accidents, storms, fires, earthquakes, by terrorist attack, or even by cyber attacks, because we rely increasingly on digital technology for smart grids, and also utilities in our home will be increasingly digitally connected. And all of this opens the door to the possibility of cyber attacks from outside sources, which may or may not be governmental sources, but may, in any case, create significant damage to the economy of any one country.
