(RESHAPING) THE FUTURE OF ENERGY

By Raphaella Gomes

The industrial revolution marked the beginning of modern society. Many of the inventions created at the time such as the steam engine, telegraph and concrete, have set the foundations for the progress that brought us to today's world. 

This revolution was only made possible due to the access to an efficient and affordable energy source - fossil fuels. Large scale coal mining began and for a while it was the only fuel source that powered engines, produced steam and generated electricity. In the late 1860 crude oil consumption began, followed by natural gas a couple of decades later (1). 

If we take a closer look, we will see that the history of fossil fuels consumption is intertwined with the history of progress. Throughout the years, access to an efficient and reliable power source allowed us to advance our technology in all areas of knowledge, grow our population and even venture into space exploration. 

Unfortunately, this progress did not come without a cost.

In the early 1800s, Jean Baptiste Fourier discovered that not all energy received by the earth from the sun made its way back into the space (2).  He thought the air acted as an insulation blanket. Nowadays, we know he was close enough, but it was only in late 1870 that John Tyndall discovered that this “blanket” wasn’t air itself, but carbon dioxide (3) which, alongside with other gases, trapped heat inside our atmosphere - a phenomena we now know as the greenhouse effect.

Fast forward a couple of hundred years and we came to understand that burning massive amounts of fossil fuels once confined to the ground accelerated and increased the release of CO2 onto the air to levels our planet could no longer balance, thus causing the climate to change. 

Acknowledging that this situation was causing an impact on the earth ecosystem, human health and global economies, the majority of world countries got together to tackle the problem signed the Kyoto Protocol and its successor, the Paris Agreement (4). The Agreement signed in 2015 established a commitment to keep global warming well below 2oC, by reaching carbon neutrality by 2050 and speeding-up renewable’s development pace (5). 

Furthermore, the Paris Agreement also established that each signatory country set its national targets (National Determined Contributions - NDCs) to support the global common goal and enhance such commitments every 5 years (6). In addition to the NDCs, countries, and, more widely, cities and companies are also establishing specific sectoral targets. By the end of 2019, 166 countries had renewable power targets, 49 countries had targets for heating and cooling, and 46 for transport (7) and the European Union committed to a net zero emissions by 2050 in its Green Deal act [A](8). More recently the US, following the election of President Joe Biden, also committed to reduce by 50% their carbon footprint by 2030 (8.1).

However, in order to achieve these targets, countries need to tackle three issues: 1) clean their existing energy matrix, 2) ensure their (growing) energy needs will be met by renewable sources and 3) accomplish the previous two without risking destabilizing their energy supply and baseload power. These are not easy tasks.

For a fossil fuel-based society this means changing the very core of how we do things. From production, to transmission and distribution of energy, to economic systems and consumer habits, all will need to be adapted if we are serious about embracing the path towards this new reality. Remember, fossils fuels power not only our houses, factories, businesses, cars, airplanes, trucks and ships in the form on heat, transport and electricity, but also provide us with the raw material used in plastics and chemicals that are present in our everyday activities.

There is no silver bullet or ‘one size fits all’ solution that effectively addresses all forms of energy demand. The colossal task of removing or offsetting the emissions of 51 Billion Tons of CO2eq each year will need to be addressed from multiple points of view, using all of our human ingenuity, but there is light at the end of the tunnel...

Solar and wind are the fastest growing renewable sources, which collectively accounted for 26,0% of the world power production in 2019 (see fig.) (9).

Source: Energy Insights’ Global Energy Perspective, January 2019.

They also had the highest cost decline – between 2010 and 2019 the levelized cost of energy (LCOE) to generate 1 MWh of solar dropped from $378 to $68, while onshore wind decreased from $86 to $53 - making them competitive with fossil fuels (for example, the LCOE for fossil fuels range between $182 and $53 per MWh) (7). These reductions were mainly driven by the incentives granted by some countries, which allowed the technologies to evolve and gains in scale to be achieved. 

The issue with these power sources is that they are intermittent and do not allow for dispatchability, storage and grid stability, which means: no wind or sun equals to no power generation. Therefore, they need to be supplemented with other energy sources or storage solutions. 

Batteries can be a great storage solution, and even though we have seen a sharp decline in production costs in recent years, 1kWh of stored energy in lithium-ion batteries still cost around $150, according to BloombergNEF (10), there is the issue of how to handle the residues and the materials for large scale production. 

In that sense, biomass could be a great supplement to solar and wind power generation. Thermal energy generated from burning biomass is already being used as a coal substitute in countries such as the United Kingdom, The Netherlands, Germany and Japan. An easy drop-in solution that requires little investment and provides grid stability. In Brazil, 8.4% (2019 reference) of the power matrix is supplied by biomass generated electricity - mostly from burning sugar cane bagasse, tops and leaves - agriculture residues from the sugar and ethanol production (11). In the first semester of 2020 biomass power generation in Brazil avoided the emission the 2.8MM tons of CO2, which is equal to 20 million trees for 20 years according to Unica (Brazilian Sugar Cane Industry Association).

This renewable source can also be paired with biogas produced using agriculture and urban waste. In addition to power production, biogas can be purified into biomethane, a sustainable advanced biofuel that could displace diesel and natural gas. Brazilian potential for biomethane production is enormous (~125MM Nm3/day) which converted into power would be enough to meet up to 40% of Brazilian power demand (2018 reference) (12,13). Biogas carbon footprint is also significantly lower than its fossil equivalents when applied for power generation or as a fuel alternative (see fig. below), for example, if used to displace fossil methane would avoid the emission of ~70 million tons of CO2eq each year.

Source: ANP/RenovaBio, Ecoinvent and MME (Ministry of Mines and Energy)

Another hot topic is electrification of the transport sector. Electric vehicles (EVs) are perceived by some as the final solution, but let's take a closer look. 

For battery powered EVs, an electric car is only as clean as the power matrix it is charging from. Apart from the issue of the investments required to the make the necessary adjustments to the power grid to support the additional power consumption (e.g. converting all combustion engines to electric in Brazil would demand up to 1/3 of additional power!), a coal based power generation paired with electric cars will not lead to less CO2 emissions. It would actually have the opposite effect as coal emits more CO2 than gasoline or diesel (as presented above).

For hard to abate sectors such as heavy transports (marine, aviation, etc) batteries do not seem to be a feasible solution at all, the weight of a battery required to power a plane would make its use unviable. Having said that, battery EVs may help large cities with bad air quality to solve a local issue and, if paired with a clean power matrix, could really help energy transition.

There is also another category of EVs – powered by hydrogen fuel cells. Even though the technology is not quite there, this avenue has the potential to become one of the best solutions for cleaning up the transport energy matrix. But here there is also an interesting twist, instead of fueling the car with hydrogen, ethanol could be used as a fuel source for converting (by means of a reforming process) the hydrogen inside the car or at in a reformer located at the gas station. Ethanol is a liquid fuel with high energy density and, therefore one of the most efficient ways to store, transport and deploy energy. To put it into perspective, while lithium-ion batteries have an energy density ranging between 50 and 260 Wh/kg, ethanol's is 7.500Wh/kg [B] (over 30 times more efficient)(14).

Using ethanol to produce green hydrogen at the station or inside the veichule could solve many of the issues of transporting and storying hydrogen, which is expensive and dangerous as it has a high risk of explosion and needs to be stored in titanium tanks. In this scenario, there would be no requirement for additional investments in infrastructure, as the existing base for fossil fuel distribution can be used to distribute ethanol (many countries in the world, such as Brazil and the US already produce and distribute ethanol at large scale).

In reality, ethanol and other biofuels are cost competitive drop-in alternatives to displace fossil fuels in the transport sector. Brazil is home to the world’s largest flex fuel fleet, using ethanol derived from sugarcane as an alternative to fossil-based petroleum. Twenty-seven million cars, 73% of the total, can use a mix of ethanol and gasoline (2018 reference)(15). Even more extraordinary than the scale of the transition to ethanol in Brazil is the speed at which it occurred. In only 6 years from the introduction by the Brazilian Government of the National Alcohol Program (“Proálcool”), in 1975, 90% of all new vehicles sold in the country could run on ethanol. Not only the technology is widely available, but ethanol is also a renewable product that requires no green premium to compete with fossil fuels. Fuel ethanol produced with sugarcane in Brazil emits less CO2 when compared to gasoline. Actually, even when compared to battery EVs (in the United States, China, Canada or Europe), they still have a much lower carbon footprint (see chart below)(16).

Brazil produces 30.0 billion liters of ethanol per year and it is the world's second largest producer behind the US, with a total production of approximately 52.2 billion liters (2020 reference)(17). This would represent a total of 165 million tons of Co2eq avoided per year if the ethanol was used to displace fuel petroleum. Brazilian ethanol is in its majority sugarcane based and to be produced uses around 8.5 million hectares of land(18). The same land is used to produce around 30 millions tons of sugar, putting Brazil as the world's lead sugar supplier(19). 

In any case, this whole process could be accelerated by using second generation biofuels. Produced with agricultural residues - sugar cane, wheat, rice, corn and other biomasses - these advanced biofuels can have a relevant role in supporting energy transition. With this technology it is possible to increase ethanol production by up to 50% using the same land(20). This means that countries with land use limitations could use their agricultural residues to produce biofuels resting assured they wouldn’t be enhancing deforestation or other harming consequences. 

This technology effectively puts an end to the food vs fuel discussion, as both can be produced using the same land and other natural resources. The problem here is that in the past decade, when there was a big hype for advanced biofuels, the technology did not perform as expected. Be that as it may, we are now seeing changes in the horizon and companies like Raízen have managed to successfully develop technology that works continuously at a commercial scale. In addition, there are new projects throughout the world being announced on a regular basis. All major technology breaktroughs take some time to simmer, and we may now be entering the age of advanced biofuels. 

Which leads me to the last and final part of this article. It is clear that we need renewable and sustainable solutions to power our global energy matrix. Countries, states, cities and companies have set up goals and committed to overcome this challenge. There are many great ideas, some of them need more time and investments, others are ready to use but may only make sense in specific circumstances or require significant green premiums in the beginning.

The reality of the matter is that there is not just one right answer and intermediary solutions will also need to be deployed. Whatever the case, one thing is for sure: we need to go faster.

Biomass and biofuels have all the attributes to power this transition. As flexible as hydrocarbons they share a common ancestral with fossil fuels (yes, today’s oil was yesterday’s forest). Their molecular composition is so similar - with only oxygen to separate them - that everything manufactured using oil could in theory be produced using sugar (or biomass).

Another way of looking at it is that plants are the most efficient solar panels in existence. They capture CO2 from the atmosphere and using solar energy they transform it into energized carbon molecules. And for doing so they only require soil and water – and maybe some love and care. They have been around for longer than we have, and they will still be here long after we are gone. Nature’s own technological disruption that is ready to use, at commercial scale and sustainable.

Widely available, renewable and affordable, this green energy may well be the new oil, powering our way into the next revolution serving global energy transition and reshaping the future of energy.

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SOURCES (Verified on April 2021)

(1)    https://www.bbc.co.uk/teach/how-did-oil-come-to-run-our-world/zn6gnrd

(2)    https://mpe.dimacs.rutgers.edu/2013/01/19/the-discovery-of-global-warming/

(3)    https://earthobservatory.nasa.gov/features/Tyndall

(4)    https://unfccc.int/kyoto_protocol

(5)    https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement

(6)    https://www4.unfccc.int/sites/NDCStaging/Pages/All.aspx

(7)    https://www.ren21.net/wp-content/uploads/2019/05/gsr_2020_full_report_en.pdf

(8)    https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en

(8.1) https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/22/fact-sheet-president-biden-sets-2030-greenhouse-gas-pollution-reduction-target-aimed-at-creating-good-paying-union-jobs-and-securing-u-s-leadership-on-clean-energy-technologies/

(9)    https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2020-full-report.pdf

(10) https://www.energy-storage.news/blogs/behind-the-numbers-the-rapidly-falling-lcoe-of-battery-storage

(11) https://www.epe.gov.br/pt/abcdenergia/matriz-energetica-e-eletrica

(12) https://abiogas.org.br/wp-content/uploads/2020/11/NOTA-TECNICA_POTENCIAL_ABIOGAS.pdf

(13) https://www.epe.gov.br/sites-pt/publicacoes-dados-abertos/publicacoes/PublicacoesArquivos/publicacao-160/topico-168/Anu%C3%A1rio_2019_WEB_alterado.pdf

(14) https://www.fluxpower.com/blog/what-is-the-energy-density-of-a-lithium-ion-battery

(15) https://www.rapidtransition.org/stories/the-rise-of-brazils-sugarcane-cars/

(16) https://www.cosan.com.br/en/about-cosan/cosan-day/

(17) https://www.statista.com/statistics/281606/ethanol-production-in-selected-countries/

(18) https://www.statista.com/statistics/742511/area-planted-sugar-cane-brazil/

(19) https://www.investopedia.com/articles/investing/101615/5-countries-produce-most-sugar.asp

(20) Raízen Internal assessment

[A] Additionally: (a) By the end of 2019, at least 56 carbon pricing initiatives in 47 countries had been implemented; and (b) fourteen countries worldwide had a legally binding target for net zero emissions (while two countries have already achieved this target)(7)

[B] Assumes an energy density of 27MJ/kg for anhydrous ethanol