MK
Will oil still be the main energy source in 50 years?
If Ray Kurzweil is right about the age of technological singularity which is dawning upon us, then the answer to this question is no. The main question however is not whether oil will be replaced but WHAT will replace it. Companies and governments have been trying to bet on various alternative fuels but it seems to be too early to tell which one of them will become the fuel of choice of future generations.
Is renewable energy a real alternative to traditional energy sources or is renewable energy just about reducing emissions?
The world will not get stuck with fossil fuels. It will move on. So there will indeed be a real alternative. The choice of this alternative will be driven less by anxiety about climate change but rather by economic considerations.
Given current technology how should a small nation, like Macedonia, increase its electricity supply?
Macedonia has one major electricity producer (REK Bitola) that generates about 70% of the total national electricity consumption. As far as I am aware, despite some minor modernisation, electricity generation mostly relies on old equipment which is inconsistent with the goal of increasing electricity production. As a result Macedonia has to import around 30% of its electricity. It does not help that REK Bitola is a state-owned monopoly. Perhaps the two approaches could be: a) de-monopolization; attracting some private / international investors and b) diversifying into smaller electricity generation, such as hydro. As far as I understand, there is, for instance, a project underway with 50 small hydro plants being developed. Hydro electricity generation in Macedonia could partially (or even fully) replace imports.
How can a small country like Macedonia maximize its return on its mining resources?
I would briefly mention two success stories which could act as role models for reforms in Macedonia. The first one is Chile – although not a small economy but it has become a role model for lots of mining countries, big and small. Chile’s stable institutional and regulatory framework kept investors on board during Latin America’s turbulent economic conditions in the 1990s, allowing the country to outperform its regional peers. The mining sector reforms were crystallized in Chile’s 1981 Constitutional Mining Law. The law is a one-stop legislative shop for potential investors, outlining the rights and obligations of concession holders. The Constitutional Mining Law treats a concession as private property and allows concession holders to develop a mine in accordance with their strategy and market conditions. It also provides strong protection against expropriations. Importantly, the existence and termination of the concession are in the hands of the judicial branch, not the legislative branch or the executive. The other examle is a small and very successful economy – Botswana. From 1966 to 1989, Botswana was the fastest-growing economy in the world, transforming itself over that period from one of the poorest states to an upper-middle-income country. That success has largely been due to both strengthened institutions and prudent management of Botswana’s diamond revenues. Botswana follows a strategy of fixed public spending, allowing the government to accumulate revenue surpluses during boom years. Recurrent revenue surpluses that are not spent are transferred into Botswana’s Foreign Reserves Fund. By the mid-1990s, interest payments on those reserves became the largest source of Botswana’s government revenue after diamond sales. Between 1976 and 2008, foreign exchange reserves grew from $75 million to $10 billion, which equaled 33 months of import cover. Those reserves mitigate the impact of price volatility, allowing the government to maintain public spending when commodity markets turn bearish.
Is the south stream pipeline project really dead? It was initially planned to go through Macedonia. What are the alternatives?
No one is certain but I would not count on it. In the current environment gas supply via LNG is plentiful in Europe. And besides – Russia has a lot on its plate. So raising funds to build a new pipeline seems to be hardly possible in the current environment. It is a project from the 2000-s when oil and gas prices were high and so were geopolitical ambitions.