A Clean-ish Grid: The Potentials and Pitfalls of Decarbonizing the Energy Sector

A Clean-ish Grid: The Potentials and Pitfalls of Decarbonizing the Energy Sector

Decarbonizing the energy sector to meet the goals of the 2015 Paris agreement will be a monumental challenge. More than 190 countries signed on to limit global warming to under 2°C over pre-industrial levels by 2050, which will necessitate curbing greenhouse gas (GHG) emissions down to net-zero. But on the current trajectory, a rise of 3°-4°C looks more likely.

Net emissions have grown by 40 per cent over the past 30 years and will need to drop by 90 per cent over the next 30. Our world—with its expanding population and its growing economy currently fuelled 4/5ths by fossil fuels—will need to undergo drastic change.


The richest countries are the most polluting and most energy-intensive

The burden for change lays with the richest and most polluting countries. China accounts for a quarter of the world’s emissions, the United States for 12 per cent, and India and the European Union 7 per cent each. The top 20 biggest polluting nations produce about 80 per cent of total emissions.

Yet some rich countries’ economies consume energy more efficiently than others. Despite their high overall emissions, China still has a low GDP per capita and consumes little energy compared to countries in the Organization for Economic Cooperation and Development (OECD), a club of mostly rich countries (see graph below). While Switzerland, Ireland, and Denmark are highly efficient, the United States, Canada, and Norway use large amounts of energy to support their strong economic output.


Energy sector is a big contributor to GHGs

For most countries, the energy sector is a significant source of GHGs; for the U.S, it is the second largest emitter, after transportation. Princeton University recently released a report mapping paths for the U.S. to meet the Paris goals and each scenario requires a decarbonized and enlarged electricity sector.

Entire energy sector transitions, such as from coal to oil, have historically taken generations. According to the International Energy Agency (IEA), 80 per cent of energy in the OECD in 2018 was supplied by oil, gas, and coal, compared to less than 1 per cent for renewables. Although renewables appear poised to replace fossil fuels, the zero-emissions energy mix is not yet fixed. Renewables cannot presently provide the firm supply produced by gas, coal, oil, or even nuclear. Generating this reliable and constant capacity requires more research into nascent technologies.


Gas is a controversial temporary solution

Gas has sometimes been considered a transitional resource, an inexpensive and less-carbon intensive fuel than oil or coal that can provide firm power to the grid until renewables can create an entirely clean electricity sector. As a potential short- to mid-term solution, this is beginning to look less promising.

Despite its relatively low carbon-intensity, gas production belches methane, a far more powerful GHG. Methane has a shorter lifecycle than CO2 (about ten years, versus closer to one hundred), and so focusing on its reduction would more rapidly bring down overall GHGs in the atmosphere. The New York Times reports that the United Nations is set to release a study in May declaring any expansion in gas use “incompatible” with the Paris goals, unless there is significant use of unproven carbon capture technology.

Bill Gates, in his recent book, argued against expanded gas production from another angle. Whereas many environmentalists call for GHGs to be reduced by 2030, he thinks focusing on such a sudden reduction would come at the expense of meeting net-zero emissions by 2050. In such a scenario, whereby coal is rapidly replaced by gas and thus GHGs fall sharply by 2030, his main concern is that gas and its emissions could be locked in for decades, never replaced by truly emissions-free technology.


A larger role is in store for young technologies

Should the world meet its climate targets and the energy sector truly decarbonize, nascent technologies will play a larger role than they do at present. The IEA has highlighted the potential of four to make a difference: hydrogen, small modular nuclear reactors (SMNRs), batteries, and carbon capture, utilization, and storage (CCUS) technology.

Highly versatile hydrogen has tremendous decarbonization potential due to its ability to produce, store, move, and use clean energy. It could have a huge impact on reducing GHGs from the transportation, chemicals, and iron and steel sectors. Hydrogen can be produced from practically any energy source, though now its separation from oxygen is usually powered by gas or coal. It can then be transported as a liquid like natural gas, through pipes or on ships. And it can be transformed into electricity to power homes, cars, ships, trucks, and planes. Lastly, it can also be used to store electricity for up to months at a time, or to transport energy from renewables over vast distances.

Continued innovation, government support, and mass production will be needed to drive down the currently high costs of hydrogen. Its mass adoption will also require an infrastructure overhaul.

Lithium-ion batteries garner great attention as electric vehicle production gets set to ramp up in the coming decades. Consequently, the pressure to improve batteries has reduced their cost to $160 per kilowatt-hour (kWh) in 2019, from $1,100/kWh in 2010. Deeper cost reductions and expanded capacity bode well for decarbonizing the transportation and electricity sectors.

The IEA puts current global battery capacity at 320 GWh, while also predicting that car manufacturers’ projections for electric vehicles will require 1000 GWh by 2025. The Covid-19 pandemic dented production in China, which makes 70 per cent of the world’s batteries, but there should be a fast rebound to meet demand for EVs alone. Additional capacity will be required to support the power sector.

SMNRs are heralded as solving a couple issues for the nuclear industry: cost and safety. They are designed to produce 50-300 megawatts of electricity, versus traditional nuclear power plants, which manage around 1000 megawatts. Smaller in scale and less expensive to construct, the electricity will be cheaper.  Proponents also argue that because they are small, they are less likely to overheat and melt down.

For large countries such as Canada or Russia, SMNRs have the added benefit of portability. Remote communities that normally rely on diesel heating would have access to a clean energy source.

CCUS, the technology called “unproven” by the UN, has the potential to mitigate emissions by extracting carbon at its source of production or directly from the air. It can then store the carbon deep underground or use it as a power source. CCUS, therefore, can decarbonize the energy sector immediately, and can be applied to sources that are are currently a part of countries’ long term energy plans.

While coal is being phased out of most Western nations’ energy mix, it is a different story elsewhere. Almost two-thirds of the world’s coal plants could still be in operation by 2050. The average age of a coal plant in China is just 13 years and in Asia overall it is 20.  Instead of mothballing these facilities and dealing with the concomitant economic and social costs, advanced CCUS technology might be the only solution to reducing their emissions.





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