Decarbonization - The titanic challenge of our times
Mateusz Kasprzak
European Energy Transition Business Leader with a Passion for Innovation, Sustainability and Business Development
When I am asked to describe?The Future Digital Energy System?in only two words, I instantly say?decarbonized?and?decentralized.
Decarbonization?perfectly expresses the physical aspects of energy systems of tomorrow, which rely on a selection of technologies that minimize any excess carbon atoms emitted into the atmosphere.
Decentralization, on the other hand, is a great synopsis of all transitions which need to happen at the information technology and communication level. It is implausible to have a factual energy transition without decarbonization and decentralization as a centre of gravity for next-gen energy systems.
Let's first look at decarbonization and see different possibilities for how we can?clean?our energy systems and shift to a low-carbon economy.
Where will decarbonization make a difference?
We cannot lose sight of the fact that focusing?only?on carbon dioxide does not completely solve the problem - we still need to reduce other greenhouse gases. Nevertheless, whether we tackle CO2?or GHG, the main culprits are the same: industry, transport and buildings. Decarbonization of either of these sectors will also diminish other emissions (i.e. electrification of the industry will reduce methane fugitive emissions).
The only sector which is insufficiently addressed with decarbonization and is a paramount GHG emitter is agriculture. Yet, when we consider?The Future Digital Energy Systems, agriculture is perceived rather as a beneficiary of clean energy, not an active participant (prosumer).
Source: IPCC Fifth Assessment Report (AR5). 2018. Working Group III.
Confining focus on transport, industry and buildings encourages us to assess the contribution of various technologies to the ultimate goal of decarbonization - curtailment of CO2?emissions to zero.
How can we decarbonize?
The road from almost 40 Gt CO2?to net-zero in less than 30 years is not a cakewalk. The scale of the change and the amount of financing needed to make it happen had not been seen beforehand. If we look at previous energy transitions, from wood to coal or from coal to oil, we can see how huge a dilemma we are facing.
Abraham Darby figured out that he could enhance iron production by switching from wood to coal at the beginning of the 18th?century. It lasts almost 200 years to dethrone wood with coal as?No. 1's energy source. Switching from coal to oil was faster but still, it took a century, three times longer than we have for decarbonization.1?And yet, previous transitions were far?easier?as we were enhancing energy sources, not switching to completely different principles, that are contractionary to any known economic orders.
Contradictory, the acceleration of technological breakthroughs is inimitable. Looking at a recap of technologies that could drive decarbonization in the next 30 years, we should not feel uncomfortable, most of them are already known and investigated to a certain degree.2?Let's have a quick overview of where and how each of the instruments can support and enhance decarbonization in the midterm (2030) and long-term (2050).
Renewables
Renewable energy, especially solar and wind, will be a major CO2?pruner from the midterm perspective. The reasoning behind this is evident - costs. PVs and wind turbines became a commodity and the Levelized Cost of Energy, especially if we take into account carbon taxes, went dramatically down. We can expect that technology behind solar and wind turbines will only enhance, which, as a result, will drive further prices down and address a common flaw in renewables which is the instability of energy generation.
Undoubtingly, renewables will contribute to decarbonization mostly in the industry and building sector by providing green electricity. Additionally, geothermal energy has great potential to heat our houses with quite attractive Levelized Cost of Energy and scalability capabilities.
Electrification
Electrification in terms of electricity supply is nothing new and the utilization of green energy is?THE MAIN?scenario for the future. In terms of decarbonization, electrification is more related to the end-use of energy. The switch from molecules to electrons is the biggest shift that needs to happen if we want to decarbonize in a such constrained time frame.
Fortunately, technologies like heat pumps or EVs are starting to be a default standard not only in terms of consumer choices but also legislation priorities.
What is important, electrons are the universal carrier of energy which allows us better interconnection and interoperability of energy systems operating at various scales.
Nevertheless, there are some limitations concerning electrification when we look at:
Hydrogen
Hydrogen is one of the options to extend the limitations of electrifications by i.e. utilizing fuel cells for transport or re-designing standard energy-intensive processes (like direct iron reduction in steelmaking or green ammonia in fertilizers). Yet, all these technologies are in test phases, but it is expected that they will become a full-scale reality in the 2nd?phase of decarbonization in the long-term horizon. The next 10 years is crucial to develop capabilities and scale to decrease the cost of green (electrolysis + renewable energy) and blue (carbon capture and storage with grey hydrogen) hydrogen below today's prices of grey hydrogen (produced from natural gas).3
Source: McKinsey & Company. Hydrogen Insights.
And if we add on CO2?pricing, which is already a reality in Europe, we can see that green and blue hydrogen are the only acceptable colours of hydrogen in?The Future Digital Energy Systems.
Source: McKinsey & Company. Hydrogen Insights.
So, ultimately, we end up with a discussion of blue or green? I am a strong believer that we do not have to make rigorous decisions and both technologies will find their way to the market. Industry, already equipped with knowledge and assets to produce grey hydrogen (steam methane reforming, autothermal reforming and partial oxidation) will certainly incline towards blue hydrogen. On the other hand, transportation will rely on more decentralized production, which puts green hydrogen as a natural candidate.
There are also weather aspects, legislation and the stability of the grid, so one thing which we can be certain of is that the real scenario will always manoeuvre between green and blue hydrogen.
Carbon Capture, Storage & Utilization (CCUS)
We have already addressed carbon capture, storage and utilization (CCUS) in the production of blue hydrogen. It is a perfect example of how we can quickly accelerate in transition with the support of already known and proven technologies (production of grey hydrogen).
And that is only part of the story. CCUS is not just a perfect retrofit for today's grey hydrogen production but can be perfectly utilized in the steel and cement industry, generating electricity and heat from natural gas or as a key technology to create biofuels from the?dirty?feedstock.
Another aspect of CCUS is a technology called Direct Air Capture (DAC) - which captures excessive CO2?from the atmosphere. DAC is not efficient enough to be the?only?technology to capture carbon, but can be used as a last resort.
Power heavy vehicles, ships and high-temperature processes cannot rely on electricity and batteries. Adding to this bucket other activities which are difficult to decarbonise, we should perceive CCUS as a?sin qua non?if we want net negative emissions to become reality. What is missing is an infrastructure and a market. To switch gas from a combustible energy source to a hydrogen feedstock requires transport and storage for hydrogen and CO2?and facilities to sequester carbon. Such investments are hard to justify unless sufficient demand is expected.
Nuclear
Let's make it clear at the beginning -?nuclear energy is the safest of all non-renewable energy.
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Having this in mind,?we will not be able to decarbonize our planet and remain energy security without the big involvement of nuclear energy.
Unfortunately, building new conventional nuclear plants with a capacity above 1GW is not an easy, quick and cheap task. With all market disturbances, fluctuation of material prices and extensive labour efforts, it will be titanic to do it on a bigger scale in the short period which has left for decarbonization. The most probable technology which could take a lead in nuclear expansion is Small Modular Reactors (SMR).
Source: A. Vargas. International Atomic Energy Agency
Small Modular Reactors are:
Being small and modular means we can perfectly couple SMRs to decentralized?Future Digital Energy Systems. Obvious examples are 1-to-1 replacement of industrial power generation units or heat generation for municipal areas. Modular is of the utmost importance, as reactors can be pre-processed in factories, which results in decreasing time for execution 3-4 years, almost half of the time required for conventional nuclear plants.??As very often with new technologies, we are having?chicken and egg?problems - to utilize scalability we need to … scale -up. Get more experience through licensing key technologies, construction management and creating a supply chain for efficient execution.
Bioenergy
Bioenergy is nowadays defined as one of the forms of renewable energy, but, coincidentally, it is one of the main greenwashed forms of?green?energy. Bioenergy's contribution in decarbonized?The Future Digital Energy Systems?is ineluctable, but its performance is dependable for several considerations. So let's define what is?good?and what is?wrong?in bioenergy.
Fuel?for bioenergy is biomass, in particular:
Next, biomass can be processed by burning, bacterial decay, and conversion to a gas or liquid fuel.
The devil lays in detail, because by simple burning biomass, a lot of CO2?is emitted, and an even worse big part of deforestation and land-use change has its source in bioenergy??which is backfiring on any decarbonization efforts. Additionally, there are also doubts about food vs energy, so is the processing of biomass that could be consumed by people, a sustainable way of generating energy?
So what and how we are processing is setting the limits of what is good or wrong. Generally, we should burn only?biomass?that cannot be processed in other ways and focus heavily on conversion to gas or liquid fuel. All those doubts led to the development of the generation-classification of biofuels, which is a guidance of?good?and?bad?bioenergy.
The 2???generation of biofuels is an answer to the food vs fuel discussion.
The 3???generation of biofuels is answering deforestation & land use arguments.
The 4???generation of biofuels is (still) a vision of a fully accessible and environmentally friendly fuel of the future.
The three most common biofuels are bioethanol, biodiesel and bio-jet. The utilization of bioenergy will remarkably increase in the mid-and long-term and the predominant impact we will see on transport decarbonization, especially aviation and marine.
Offsetting
Carbon offset schemes allow individuals and companies to invest in environmental projects around the world to balance out their carbon footprints.
It can be a powerful vehicle to raise funds for projects that are incapable of finding it on their own (i.e. distribution of efficient cooking stoves to poor families or capturing methane gas at landfill sites), but furthermore, it can be a scam that supports buying permission for doing nothing.
What is certain, offsetting needs standards and certification. Existing certification is voluntary (Voluntary Gold Standard and Voluntary Carbon Standard) and have serious gaps which don't build enough creditability in the decarbonization journey.
With proper standards which also assess the additionality of offsetting and avoid double-counting, we can treat carbon offsetting as an outright decarbonization instrument.
Conclusion
By summarizing all available technologies, we can strive to detail the final landscape of the energy system after transition. Certainly, there won't be only?one, but many that will differ based on regions, political systems and society. An example of a hypothetical?Future Digital Energy System?in the European Union we can find in the picture below.?
Source: Hidalgo & Others (2015)?
Still not ideal, as Europe has more extensive scrutiny towards hydrogen, and we should expect bigger shares of blue/green hydrogen. Not only as a fuel for transport, but also as a feedstock for industry.
And yes, there are some gaps to be filled, especially if we look into the long-term (2050) future. International Energy Agency estimates that?The Future Digital Energy Systems?will encompass technologies that aren't developed yet. In 2030 they will appertain around 18% of the whole system, but for 2050's energy systems almost half of the technologies are not yet developed.?
However decarbonization, as one of the biggest challenges of our times, is placed by existing constraints - economic, political and social. The pace of development will be subject to changes at macro and microscales. Take a look at the pricing of materials crucial for scaling up the solar and wind industries. Such a rapid increase in prices can significantly erode success and efforts from recent years and hinder renewable expansion.
It is by far the most difficult transition which our humanity is facing, that additionally needs to happen in the shortest time ever. However, based on available technologies, science and scenarios, we are also the best-equipped candidates to solve this problem. As Sir David Attenborough said at COP26, we are by far the greatest problem solvers who have walked on Earth. We just need to start addressing it properly. Let's do our utmost to treat the scenario of Adam McKay's film "Don't Look Up" as an alternative fiction, not as a documentary of our indolence.
With The Future Digital Energy Systems articles series, I'd like to address the main drivers and enablers of our future energy landscape. Analysing available technology, required changes in organizations, legislation, and society, I want to disenchant and simplify all actions needed to fulfil net-zero commitments and limit global warming.
Other articles in the series:
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About the author:
Mateusz Kasprzak?is an enthusiast of sustainability with the aim to understand and describe?how the industry is changing our planet and how our planet is changing the industry.
Professionally, for more than 10 years, he is helping the industry to translate management goals into real actions and projects with respect to energy efficiency, digitalization, and operational efficiency. One of the first?Official SIRI (Smart Industry Readiness Index) Assessors?in Poland.
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