CO2 Emissions | Innovating the Energy Transition

Are you falling into the Innovation Energy Trap?

@paul4innovating — Sun, 15 Nov 2020 10:26:22 +0000

We are falling into a real trap around the efforts of much of the invention and innovation we are putting into the Energy Process. We have the danger of getting our innovation balance wrong.

We are emphasizing shifting significant resources towards energy efficiency, not real energy transition work that comes from radical or breakthrough innovations. The focus on extending prolongs what we have and does not offer the transformation affect our energy systems do require to achieve a decarbonized world over the next fifty years.

We all are accepting that the energy system needs to undergo a massive transformation, one that provides breakthrough innovations in new technology, ones that do transform the energy systems. Are we striking the right balance between incremental and breakthrough innovation? I would question this.

The efficiency trap is a classic trap of all innovators. Efficiency often triumphs over other forms of innovation, such as a more distinctive range of solutions, that give breakthrough and radical potential. Why is that important?

Focusing on improving what we have, giving it more efficiency provides a quicker return on investment and certainly extends much of what we have, it provides limited investments to give short-term better returns. All good and essential stuff, but we are in danger of missing the bigger picture that is required in the energy transition.

Efficiency or Radical, that breakthrough Innovation? Getting the balance right

The efficiency idea or concept has those lead times that can easily work within the one to three-year time frame, the classic judgement time for a management team to validate their credentials in improving the bottom line and providing revenue growth.

The management of resources, costs and commitment can be managed well on the balance sheet or even through the P&L as concepts to solutions are often tangible, the problems known to be resolved and well-scoped out in clearly defined timescales and resource need. This is the ideal ground for focusing on innovation efficiency.

Seeking out more distinctive and radical designs.

Yet we are meant to be in an Energy Transition where whole systems need more radical thinking, more evolutionary or radical in its solutions offered? These are longer-term in commitments, complexity, and often tackling the unknown, searching for new technology discovery and validation. These take time and real dedication in sustained resources. Risks get compounded and justification harder, the longer and more complex a change we are attempting to undergo.

The combining of new technology, in highly collaborative and open exploratory spaces, requires more of the unknowns in cost, resources and time. this is in search of the radical or breakthroughs from the invention, innovation, engineering and technology.

Getting the balance right in the different types of innovation

To fully decarbonize our energy systems requires far more radical design, to shift the energy source from fossil fuels to renewables is a long-term commitment.

We naturally want to form these incremental mindsets as they yield quicker returns, often with one calendar cycle of 12 months, whereas complex issues take years, sometimes decades of dedicated effort. We expect reliable returns on investments, but this is often in direct conflict with much of the research and development that Energy transformation requires.

Most of our resources are placed in working away in the trenches of incremental improvements, and these outputs make up the vast substance of innovation activity. Many working in these trenches of innovation on a daily basis would love to be part of a breakthrough but tend to find this is always ring-fenced for a few selected others or a distant dream beyond the capacity of one individual organisation to work upon.

The needs of the immediacy of business or the search for game-changers.

R&D so often is simply that gazing over the fence in envy or quietly accept this divide between incremental contribution and the need for more radical breakthroughs. Their job is to simply get on with the incremental improvements that deliver to the present needs of the business, important to stay competitive but not radical enough to revolutionize or galvanize the changes the energy system really does need to deliver on the need to rapidly decarbonize and modernize the energy process.

I believe many who work within innovation simply do not share in this delineation of innovation activity, as it divides talent into separate teams, often pitting scarce innovation resource against each other, often in many unseen ways. This divide of activities is often a real pity. Collaboration outside established borders of individual businesses still has a long way to go to become truly open innovation.

I write a lot about collaboration needs, open innovation, building out relationships and networks of collaborators but this is a complicated process, thankfully happening at improved rates from thinking in a more platform and ecosystem design way of thinking. I write on this on my dedicated ecosystems4innovators posting site. The future of more distinctive and radical innovation comes through broader collaborations.

I would suggest organizations give this incremental area far too much of a focus in their resources and efforts, to the detriment of other options.

We should move out of the incremental trap far more and not continue to reinforce it as many do. The Energy transition requires far more radical, distinctive and breakthrough in our innovation discovery process.

Lets consistently question the incrementalists and get them thinking more about distinctive, radical innovations as we require these for any chance to deliver on the energy transition and achieve any net zero, so often talked about but not delivered upon.

The post Are you falling into the Innovation Energy Trap? first appeared on Innovating the Energy Transition.

Coal, Steelmaking and Asia

@paul4innovating — Wed, 11 Nov 2020 13:14:05 +0000

Further major Energy Solution Providers have announced their intentions of withdrawing from Coal. Toshiba will stop taking orders for coal-fired power plants in line with growing global trends toward reducing carbon emissions. Toshiba holds 11% of the global thermal-power generation market, excluding China. This includes building power plants, producing steam turbines and providing maintenance. While the company will stop accepting new orders for coal-burning plants, it will build 10 stations under existing orders in Japan, Vietnam and other countries. Siemens Energy, which builds steam turbines for power plants, will no longer take on new business to supply coal-fired powered stations, it said on 10th November 2020 making it the latest firm to scale back fossil fuel-related operations. Selling turbines to coal-fired power plants accounts for a low single-digit percentage of the company’s sales or roughly 820 million euros ($970 million) based on 2020 figures. According to a recent comment, the business was profitable. Siemens Energy has stated it will still meet existing commitments, including placed bids, and honour service contracts for combined heat and power stations but not engage in further coal business (Source Reuters). Also Black & Veatch, an engineering and construction firm, has announced it also will cease participation in any further coal-based power design and construction. This shift allows its workforce to further accelerate the creation of solutions that help transform the industry, including helping clients reduce dependence on coal power assets and minimize the impact of those assets to the environment. The company says its transition away from any coal-related activity is about a commitment to sustainability and accelerating efforts toward a carbon-free energy future, reported the press release.

The pressure to stop new Coal investment is building- is that really good?

The pressure on Energy Solution Providers has been building for quite some time. Instead of backing coal, new finance is getting behind renewable energy and putting shareholder pressure on forcing decisions on those still involved in the fossil fuel areas. I find it ironic when most of the financial energy investors portfolio is still in existing fossil fuel companies. Blackrock for example is the most visible but holds a very significant fossil- fuel portfolio still. I would like to see the financial institutions “walking far more the talk” Financial companies may feel they are being very noble and argue, perhaps realistically, “why would any debt or equity capital provider fund a high emission, highly polluting new coal-fired power plant at double the cost of deflationary, domestic renewables?” was raised as a question by IEEFA. Having a logical, well thought phased exit plan that accounts for all the supply chain for coal to reduce co2 emissions makes better sense. Not knee-jerk reactions Any transition plan should account for everything associated with coal in the energy system and the one really big one is steelmaking.. The one that worries me is how do you phase out coal in the Iron & Steel industry? This will take decades and we do need to think through more robust policies and not just threaten Energy providers, believing that solves the issue, it simply does not, it does the opposite, it complicates it.

Threats & Pressures for reducing CO2 emissions

Threats and Pressure can be equally a blunt instrument when your energy dependency is tied to coal such as China and India’s. Both are fast emerging economies that have invested only (fairly) recently in the building blocks to modern infrastructure. Are these withdrawals of Energy Solution providers fair and on realistic time scales when we seemingly do not have the alternative solutions in place? In a report released this month, November 2020, by the IEA “Iron & Steel Technology Roadmap” the major issue of Coal, Asia and Steelmaking brings home the enormous difficulty of easily moving from Coal. To quote from the IEA report: “Among heavy industries, the iron and steel sector ranks first when it comes to CO2 emissions, and second when it comes to energy consumption. The iron and steel sector directly accounts for 2.6 gigatonnes of carbon dioxide (Gt CO2) emissions annually, 7% of the global total from the energy system and more than the emissions from all road freight. The steel sector is currently the largest industrial consumer of coal, which provides around 75% of its energy demand. Coal is used to generate heat and to make coke, which is instrumental in the chemical reactions necessary to produce steel from iron ore. Global demand for steel is projected to increase by more than a third through to 2050 yet we are struggling to provide a globally attractive or realistic alternative process to replace the coal need to generate the heat required to make coke, that eventually produces steel from iron ore.

What can’t be ignored in all this action to stop coal, again to quote from the IEA report:

Global crude steel production capacity has more than doubled over the past two decades; three-quarters of the growth took place in China and around 85% of total capacity today is located in emerging economies. This rapid growth has resulted in a young global blast furnace fleet of around 13 years of age on average, which is less than a third of the typical lifetime of these plants. The critical observation here is this “If operated until the end of their typical lifetime under current conditions, these and other assets in the steel industry could lead to around 65 Gt CO2 of cumulative emissions. This would exhaust most of the CO2 budget compatible with a sustainable transition for the sector, leaving no room to manoeuvre for the capacity additions that will be required over the coming decades.” Are we placing China and India into a direct confrontation of its energy needs with where the rest of the world wants to go? What solutions are to be found to enable clear transition plans that are explicit to tackling the iron and steel sector?

Steelmaking today will “kill” the Energy Transition if we do not find new innovative processes.

The reality is the present steelmaking being undertaken in the world today will “kill” any energy transition and obtaining global emission targets on reducing CO2 and other harmful emissions. By pushing even further Energy Solution providers out of the Coal business is drastically reducing the chances of finding alternative innovation solutions surely?

As the IEA report states ” New steelmaking processes are critical, but there is no one right answer”

The IEA points out Hydrogen, carbon capture, use and storage (CCUS), bioenergy and direct electrification all constitute avenues for achieving deep emission reductions in steelmaking, with multiple new process designs being explored today. Energy prices, technology costs, the availability of raw materials and the regional policy landscape are all factors that shape the technology portfolio Innovative smelting reduction, gas-based DRI and various innovative blast furnace concepts, all equipped with CCUS, prevail in areas where the local policy context is favourable and cheap fossil fuels are abundant. By the way, Siemens Energy is promising to be one of the Hydrogen Industrial players, possibly ironic again!.

Deep emission reductions are simply not achievable without innovation in technologies for near-zero emissions steelmaking.

As the report by the IEA outlines India takes centre stage, as by 2050 almost one-fifth of the steel produced globally is expected to come from India, compared to around 5% today. India is already the world’s second-largest steel-producing country and is expected to increase its annual production volumes by 2050 by an amount equivalent to twice that of the European Union’s total production in 2019. The view is that a diverse technology portfolio needs to emerge in India to tackle an array of challenges for iron and steel. India’s existing production fleet can be characterised as relatively young, energy-intensive and growing at a faster pace than domestic scrap availability. Furthermore, the country has vast renewable resources and long-held experience in DRI production. There is this revolution in innovation and enabling infrastructure then we need urgently for new steelmaking processes ss critical, but there is no one right answer or solution to simply replace coal from steelmaking.

Are we stopping innovation if the known Energy Providers continue to withdraw from their coal associations?

Forcing Energy solution Providers to withdraw from Coal involvement is simply adding to the problems. Simply put, deep emission reductions are not achievable without innovation in technologies for near-zero emissions steelmaking and that comes from the very Energy providers being pressured to withdraw their support from Coal.

Finding a more thoughtful sustainable pathway.

Are we killing the energy transition by some short-sighted pressure groups not recognizing the complexity and dependency we presently have on coal? Steel is deeply engrained in our society, it is in a vast amount of our lives. The construction of homes, schools, hospitals, bridges, cars and trucks rely heavily on steel. We often forget that Steel will also be an integral ingredient for the energy transition, with solar panels, wind turbines, dams and electric vehicles all depending on it to varying degrees. We are in some urgent need for some very focused solutions to switch away from Coal for Steelmaking. To achieve this we need far more stakeholder collaborations, establishing framework fundamentals and very targeted actions and a coherent set of enabling conditions to put us onto a clean energy steel pathway. A pathway that is more dependent on innovation and technology investments combined with clean energy that can generate the conditions to produce steel. This involves huge R&D investments and by systematically pushing out the very Energy Providers who have alternative solutions just does not seem smart to me.

The post Coal, Steelmaking and Asia first appeared on Innovating the Energy Transition.