The All-Electric Dream

In 2006, George W. Bush, despite his Administration’s deep hostility toward climate science and emissions reductions, famously said that “America is addicted to oil”. Despite decades of concerning evidence about climate disruptions, oil consumption has continued to rise, not only in the US but globally. But we may have found another love, renewable electricity. The UK Government’s 2022 survey of public attitudes towards renewables showed that 88% of people supported renewable energy - a record high - and only 2% opposed it. This is a global phenomenon as renewable electricity is gaining popularity everywhere. The use of electricity is convenient, efficient, and clean, and since renewable electricity is now also cheap to produce, most of the new generation capacity in the world has been solar and wind in recent years. A report by the International Renewable Energy Agency (IRENA) showed that 162 GW or 62% of total renewable power generation added in 2020 had lower costs than the cheapest new fossil fuel option[i] .

Electrification is the bedrock of the energy transition. Not only are we greening and cleaning current electricity uses, but we are also using more and more electricity in areas traditionally dominated by fossil fuels, such as transport, industry, and space heating. The IEA’s annual Global Electric Vehicle Outlook shows that more than 10 million electric cars were sold worldwide in 2022 and that sales are expected to grow by another 35% in 2023 to reach 14 million[ii] . Last year also saw a 40% increase in European deployment of heat pumps. According to IRENA, 28% of all electricity produced in 2021 was renewable, up from 21% in 2013[iii] . The IEA predicts that renewables and nuclear energy will dominate the growth of global electricity supply over the next three years, together meeting more than 90% of the additional demand[iv] .

Electrons and molecules

Electricity is on a roll, and we have cracked the nut on generating it cleanly and cost-effectively. However, electricity only constitutes 20% of all final energy consumed globally today, the rest are molecules in the form of solids, liquids, or gases. Most energy molecules we use are fossil fuels, i.e. coal, oil and methane. We typically burn fossil fuels to propel vehicles, cook our food, generate electricity, make steam, and heat our houses, which causes CO2 emissions leading to global warming and climate chaos. The meteoric rise of renewables has made it a fundamental aspect of the energy transition, further fueling our love affair with electricity. Some people dream of an all-electric future, where everything we do or operate is powered by electricity. This electricity would be endless and clean, generated by solar panels and wind turbines, stored in batteries, and pumped hydro systems, and transported through wires, some even spanning the entire earth.

Let’s delve deeper into specific facets of this dream.?

Transmission

A recent US study found that a reliable power system that depends on high levels of renewable energy would be impossible to implement without doubling or tripling the size and scale of the US transmission system[v] . The wind blows hardest in the vast plains of the Midwest, yet the bulk of the power demand is on the east and west coasts. The challenge is that the existing grid infrastructure is currently inadequate to effectively transmit the increasing power output of the fast-growing renewable energy capacity to the load centers. Take a look at Germany as an example: In 2015, the cost of curtailing renewables due to grid congestion was approximately €402.5 million[vi] . Fast forward to 2022, and this figure had surged tenfold to exceed €4 billion[vii] . Despite ambitious targets set by the German federal government, the grid hasn't kept pace with the rapid growth of renewables, leading to ongoing challenges. This issue can be attributed to a straightforward cause: a mismatch in pace of development. It takes 1-3 years to develop and construct a wind farm or solar plant, whereas it currently takes more than 10 years to construct a high-voltage grid line in the US and Europe[viii] . People routinely resist the installation of overhead power lines, and the permitting procedure in many countries is often lengthy. On a planning level, transmission expansion is slow because it is difficult to predict exactly where future generation will be located, who will benefit from it and who will pay for it. ?However, the speed of grid expansion, or lack thereof, is not the only problem.

There is a difference between electrons and molecules as energy carriers. The bulk transmission of energy is typically done via high-voltage cables for electrons and in pipelines for gases and liquids. It is worth comparing the two. The 1,000 MW BritNed sea cable is a 260 km HVDC interconnector that links the UK electricity grid with the Netherlands. It was commissioned in 2011, and cost approximately €600 million[ix] . The Balgzand Bacton Line, or BBL Pipeline, is a 36-inch natural gas interconnector, also between the UK and the Netherlands. The 235km pipe was commissioned in 2006 at a cost of €500 million and an initial capacity of 16 billion cubic meter (bcm) of natural gas per year[x] . The BritNed electricity cable can carry 8.7 TWh in a year, whereas the 16 bcm natural gas pipe can carry the rough equivalent of 170 TWh. So, for roughly the same investment, it is possible to transmit 20 times more energy in a pipeline for molecules compared to a cable for electrons. This clear advantage of molecules over electrons is often overlooked. Now, the obvious elephant in the room is that natural gas is a fossil fuel and not a good comparison for an electricity cable that can transmit clean renewable energy. Fortunately, most natural gas pipes can be modified to accommodate hydrogen, which can be made using renewable electricity (i.e. green hydrogen), at a fraction of the cost of newly built pipes. Since gas pipelines are already available in many places on the planet, and most of us are committed to decarbonizing our energy systems, we should explore converting this existing infrastructure to accommodate future renewable energy carriers such as green hydrogen. A group of European gas transmission system operators (TSOs) have started working on this, and they state they can use most of Europe’s 200,000 km of high-pressure methane pipes for hydrogen[xi] .

Storage

Storage is another important element in any energy system. It is required to ensure stable energy supply to end users amid variations in energy production and demand. Molecules are easy and cheap to store, coal can be stored in giant heaps, oil and diesel in tanks and natural gas in underground reservoirs, typically depleted gas fields, aquifers, or salt caverns. It is not possible to store electrons, so electricity must always be converted into some other form of energy and reconverted back to electricity when it is needed. Let’s look at Europe to get a sense of the scale. The European Union’s gas demand is currently about 400 billion cubic meter (bcm) per year, of which 100 bcm is stored because of the seasonal demand pattern and energy security considerations. This roughly equates to 1,000 TWh. Gas storage costs are typically around €0.01 per kWh in aquifers or depleted gas fields[xii] . Europe’s pumped hydro capacity, the only grid-scale electricity storage, stands at approximately 145 TWh. The average levelized cost of storage of pumped hydro systems is around €0.20 per kWh, which is 20 times higher than storing a molecule[xiii] .

In a future energy system that is based on renewable energy, Europe’s supply and demand pattern will keep showing a seasonal imbalance. More renewable energy can be generated in the summer, but the demand is higher in the winter due to increased demand for heating and lighting. Therefore, several thousand TWh of seasonal energy storage will be required, the bulk of which will have to be molecules due to the limited potential of additional pumped hydro storage, the limited feasibility of electrochemical storage at this scale, and the high costs associated with both.?

Discussion

Throughout my career I have developed GWs of solar and wind projects around the world. Electricity stands as a key pillar in the energy transition. However, increasing electrification requires more transmission capacity and large-scale storage of electricity, both formidable tasks. Furthermore, storing and transporting electricity is up to 20 times more expensive than storing and transporting molecules. Most scenarios that are compliant with the Paris Agreement, whether from the IEA, IRENA, or the European Commission, cap direct electrification at roughly 50% of all final energy usage[xiv] . The remaining 50% of final energy demand must be covered by molecules, requiring renewables like biomass or green hydrogen, or fossil fuels with 100% carbon capture and storage (CCS). Among these, biomass energy competes with food and plastics, and carbon capture and storage is expected to become more expensive than renewable solutions within a decade. But green hydrogen will echo a cost dynamic similar to technologies like solar modules, computers, and flat screens: the more we make, the cheaper it gets. I therefore anticipate that hydrogen and its derivatives will meet most of the demand for clean molecules, despite conversion losses. These losses that are associated with production and use, a point often brought up by fans of the all-electric dream, will be offset by the fact that transporting and storing molecules is 20 times cheaper than electricity.

While much more efforts are needed to bolster electrification, especially due to grid expansion challenges globally, the leap from 20% to 50% in electricity’s share of final energy is a substantial endeavor. Yet it falls short of the all-electric dream, and only solves half of the problem. We must recognize the strategic value of clean molecules. Hydrogen can carry renewable electricity across space and time at much lower costs than direct electrification solutions, hence equal effort and priority should be dedicated to expanding the production and use of clean molecules.

[i] https://www.irena.org/news/pressreleases/2021/Jun/Majority-of-New-Renewables-Undercut-Cheapest-Fossil-Fuel-on-Cost

[ii] https://www.iea.org/news/demand-for-electric-cars-is-booming-with-sales-expected-to-leap-35-this-year-after-a-record-breaking-2022

[iii] https://www.irena.org/Publications/2023/Jul/Renewable-energy-statistics-2023

[iv] https://www.iea.org/reports/electricity-market-report-2023/executive-summary

[v] https://www.esig.energy/wp-content/uploads/2021/02/Transmission-Planning-White-Paper.pdf

[vi] https://www.cleanenergywire.org/factsheets/re-dispatch-costs-german-power-grid

[vii] https://www.amprion.net/Dokumente/Strommarkt/Marktbericht/2023/Amprion_Market-Report_2022-23.pdf

[viii] https://www.iea.org/data-and-statistics/charts/average-lead-times-to-build-new-electricity-grid-assets-in-europe-and-the-united-states-2010-2021

[ix] https://www.reuters.com/article/dutch-power-uk/update-1-britned-power-link-unites-uk-dutch-markets-idINLDE7301QJ20110401

[x] https://www.gem.wiki/Balgzand%E2%80%93Bacton_Line_(BBL)_Gas_Pipeline

[xi] https://gasforclimate2050.eu/wp-content/uploads/2023/03/2023_Assessing_the_benefits_of_a_pan-European_hydrogen_transmission_network.pdf

[xii] Clingendael International Energy Programme (CIEP), 2006. The European Market for Seasonal Storage. (CIEP 01/2006) The Hague: The Clindendael Institue.

[xiii] https://www.storage-lab.com/levelized-cost-of-storage

[xiv] https://www.irena.org/Publications/2023/Jun/World-Energy-Transitions-Outlook-2023