Explicit Milestones within this report are staggering in implications

The International Energy Agency (IEA) released its most comprehensive report “Net Zero by 2050: a roadmap for the Global Energy Sector” on 18th May 2021.

The roadmap outlined underscores how pivotal this current decade is to ever reach net-zero by mid-century. In my opinion, it is the next three to five years that will determine this. If we fail to drive down emissions into a really sharp decline through a global political will we are in serious trouble.

It is only through strong and credible energy policies and significant investment into clean energy solutions we will get onto any pathway. If we fail to recognize the overwhelming needs to change we can say goodbye to 2050 as a net-zero target, then that will have colossal economic and climatic consequences.

The report by IEA lays out a viable pathway to building a global energy sector with net-zero emissions in 2050, but as they state this is a (really) narrow window and requires an unprecedented transformation in how energy is produced, transmitted and consumed.

They suggest “to have a fighting chance” to limit the rise in global temperature to 1.5 °C,   requires nothing short of a total transformation of the energy systems.

Milestones that are defined, clear and time-related.

The report sets out clear milestones- more than 400 in total, spanning all sectors and technologies. for what is needed to happen and, more importantly, when, to transform the global economy from one dominated by fossil fuels into one powered predominantly by renewable energy, such as solar and wind.

This “viable” pathway requires vast amounts of investments, innovation, skilful policy design and implementation, technology deployment, infrastructure building, international cooperation at a scale not imagined or seen to date and major efforts across multiple areas associated with such an energy transformation.

The roadmap outlines over 200 plus pages within the report is global in scope.

It does not attempt to tackle country or regional designs, those each have specific circumstances, history and their specific stages of designing a roadmap that works for them to get towards this 2050 net-zero goal.

There are no one-size-fits-all, as each country is at different economic development in its challenges, energy dependencies and ability to undertake such a radical transition.

Where this report goes beyond what we have had in the past is its specific milestones (major ones shown here) that are dramatic and staggering in how necessary these are to offer a “viable” roadmap.

There are staggering changes ahead of us.

There is no scope for new fossil fuel developments anywhere in the world to get on the right and only trajectory of achieving the net-zero goal by 2050.  Again, no scope!! Just think, no scope and what that means in Asia, in China, India, Japan, Australia or in the USA, rich in coal, oil and gas.

The world has known for many years  (in the 1980s, at least) the need to address climate change. The ability to turn observation and scientific evidence into getting the global community deadly serious about eliminating carbon emissions is only just getting serious. The 2015 Paris Agreement offered the foundations of global consensus and still, we are not on that track firmly enough.

Can we in less than 5 to 10 years turn this into that decisive moment?

I have serious doubts, I mean serious ones, but we must try. The IEA modelling made some sweeping assumptions, courtesy of IEEFA:

The new IEA modelling assumes:

• Clean energy investment trebles to US$5 trillion p.a. by 2030, accelerating global economic growth in the process;
• Energy efficiency needs to deliver a 4% annual improvement globally by 2030;
• Global installs of variable renewable energy (VRE) need to quadruple from 2020 levels to 1,020 gigawatts (GW) annually through to 2030;
• EVs need to rise from 5% of global new car sales to 60% by 2030, with new internal combustion engine (ICE) car sales ceasing entirely by 2035;
• Global battery production for EVs needs to increase fortyfold to 6,600GWh annually;
• Global investment in grid transmission and distribution needs to treble to US$820bn annually; and
• Methane emissions globally from fossil fuel supplies must reduce by 75% by 2030, assisted by independent satellite tracking and incumbent players’ belated efforts as transparency increases.

Critically, the IEA has stopped buying the fossil fuel industry smokescreens of offsets and unfeasible technologies like carbon capture and storage (CCS) when talking about the global energy sector’s efforts over this coming decade, suggesting it will play only an immaterial role.

This acknowledgement of only factoring in commercially proven and likely technologies should clear up one of the major issues of placing investments behind unproven technology to deliver this decade.

Future technology, beyond 2030 becomes a different horizon.

Yet to get to that we need immense momentum in the next ten or so years that drive down emissions and stop fossil fuel investments.

Beyond 2030 new technology needs to be coming on stream for breakthroughs in what we have today in the areas of advanced batteries, hydrogen, bioenergy, CCUS air capture and storage and the IEA suggest RD&D investments need to treble to US$90bn annually to get these solutions future-ready.

The future of 2050 in this reports prediction

Two-thirds of total energy globally will come from renewable energy by 2050- that is wind, solar, hydro, bioenergy and geothermal. The one that needs really addressing in this decade is Nuclear as a viable option but that has “perception” and acceptance by not just climate activists but the populous at large. and that is not a very easy one but its solution might be vital to have within the new energy mix.

In the foreword to this report, Dr Fatih Birol, the Executive Director of the IEA he states:

“The world has a huge challenge ahead of it to move net-zero by 2050 from a narrow possibility to practical reality. Global carbon dioxide emissions are already rebounding sharply as economies recover from last year’s pandemic‐induced shock. It is past time for governments to act, and act decisively to accelerate the clean energy transformation”

The near-tern determines any hope for achieving the net-zero goals by 2050.

It is this near-term to even get onto a net-zero pathway it requires the immediate and massive deployment of all available clean and efficient energy technologies, combined with a major global push to accelerate innovation for the next round of technology breakthroughs.

Am I optimistic, does this roadmap give me encouragement?

This report on a roadmap towards Net-Zero by 2050, is a must-read by anyone who wants to begin to understand their future.

Does the scenario spelt out in clear requirements what is needed, yes but…….

The “but” is if we can’t achieve a significant new set of global agreements, pledges and commitments at the November COP26 meeting in Glasgow, UK then what is deemed as a narrow window will close and 2050 will be a nightmare of climatic consequences because of the lack of decisive action and agreements needed now.

Decisions need to be made as to the impact are “collective ones”. The stance is these have to be fair, equitable and inclusive and here is where the politics kick in. and our political leadership needs to step up.

As the IEEFA states in their view of this report “IEA’s roadmap shows the global energy landscape is set to change profoundly, and at an unprecedented pace, as world leaders – governments, GSFI and corporates move to align with net-zero emissions by 2050 and a 1.5°C limit.

We live in exciting times. Get ready for exponential change in the global energy landscape!”

We need to move beyond hope and talk, otherwise, we lose the 2050 goal and then what happens?

The post A decade pivotal to a clean energy future. first appeared on Innovating the Energy Transition.

Credit Muhammad Muzamil, Unsplash

As we look across innovation for our energy transition solutions, let’s think a little more about social innovation. What is energy poverty? Why is this important to turn our innovative abilities towards resolving?

Energy poverty has no universal definition. Each country is at different levels of understanding. Here in Europe, I read a white paper by Schneider Electric, released in 2018, entitled “Overcoming poverty in Europe.”

There is no official definition of “energy poverty”, but to start somewhere, it can be described as the struggle to afford the ever-increasing cost of heating or lighting in homes or being able to cook food or heat water as a result of low income or bills that are too high. Energy poverty leads to suffering from the cold in winter and from the heat in summer.

This white paper suggests 40 plus million Europeans cannot adequately heat their homes and or in arrears on their energy bills. Over 16% of European households have abnormally high energy expenditure compared to income, and the overall numbers of Europeans there is 11% suffer from energy poverty.

It is estimated that between 50 to 125 million Europeans are affected, especially the elderly, single-parent families, unemployed or low-income households, and disabled people with chronic sickness.

These are shocking statistics just for Europe alone.

What are the same numbers in the USA or across the world in developing countries where so many do not have access to electricity and rely on wood or charcoal to cook or even heat their homes?

Thinking differently

Innovation is about change; it improves what we have or where we are, and what we face. It is always easy to think of energy improvements, technology acquisition, but what about those that fall out of the net?

Arguably you can raise the minimum wage level, lift income, and contain energy costs. But do these really get into the granularity of the solution needed to address energy poverty?

Where innovation can really kick in is resolving household energy efficiency. We all know of homes with leaking roofs, damp walls, floor or foundations or rot in window frames or infestation causing real deterioration of health, the environment, and conditions that so many people are facing.

What can be done in finding inventive solutions that can make a real difference? Not providing grants but linking improvement in homes with energy incentives. As so many of these homes are deemed “wasteful of energy, how can we change the low energy rating performance into a positive one in energy measurements?

Of course, energy cannot be solved by technology alone.

We need to think differently. Social innovation looks for appreciating and finding a deeper, shared and common understanding of how “others” live is realistically in this connected world, a problem we all need to address in imaginative new ways.

We need to think of society’s social fabric, apply social innovation, and find technology and business-related ideas that bring those suffering from energy poverty into our collective ecosystems. This can be through combining technology concepts addressing these specific energy poverty issues, supporting solutions in multiple ways, finding imaginative, innovative solutions, and bringing in philanthropy that is not just giving away but seeing “greater” return, lifting people out of this energy poverty,

The combination of health improvement by raising the conditions people find themselves makes for a more productive environment. The cost of mental disorders, poor health, stress, anxiety, and depression eventually cost society.

Social devaluation and low self-esteem ways down not just the person caught in this but the rising costs and burdens for the state, the local community, and public services. Imagine the cost of healthcare as a direct consequence of energy poverty.

What If?

What if we could find new innovative initiatives that create jobs, engage communities, and find new, exciting and pioneering business models that become thriving in micro-generating income, utilization and different payment models, based not just on money but a level of barter?

We can, of course, offer those “sweeping” regulation solutions that somehow lift some but seem not to get to the many that the funding was originally designed to help. We need to be pro-active, not reactive in what we do.

“After the event has occurred” is perhaps good to justify “payback”, but it is not what and where we should go, we need to find self-lifting solutions, self-organizing but within structures that reduce the cost of thousands of similar start-ups.

We need innovative solutions because they are universal and can be ramped up, applied, and offered improved solutions.

So, as we think about more innovation in the energy system, let’s not forget those in energy poverty and where communities, policies and energy providers can find imaginative solutions that stop the burden of debt recovery, (ever-rising) social costs and fragmented approaches.

The post Mobilizing Innovation around Energy Poverty first appeared on Innovating the Energy Transition.

With so much change in fuel sources, the power generation sector has some significant challenges to tackle

The pressure to reduce the concentration of Co2 in the atmosphere is driving a significant change in power generation management.

The combined forces of a growing source of cheaper fuel generation from renewables (solar and wind), the continuing high levels of global Co2 attributed to fossil fuel combustion above 40% of all global emissions need further change.  Along with the continued, increasing demand for electricity as heat sources in buildings or factories are being replaced from fossil burning to electricity-driven heat pumps, and other equipment for greater efficiency, the power generation industry is arguable undergoing a sea-change on the creation and dispatching of energy.

Emission reductions are needed across all sectors.

It will be a ‘combination effect’ of coal-to-gas switching, deployment of new generation gas-fired power plants designed for hydrogen within the fuel mix and plenty of opportunities for upgrades to existing gas-fired plants.

The impact of generation through wind and solar is pointing to a future of electric or clean energy. There are also pushes for reducing power sector emissions by upgrading the transmission grids, building in storage and looking for more at reducing individual electricity consumption by for more demand-side energy management.

Demand-side energy sometimes called the first fuel or the fuel you don’t need to use, is looked at in terms of electrical intensity through more efficient methods and solutions. As appliances, LED lighting and energy-conserving measures are deployed close to or at the final consumption points of buildings or final production plants.

The proportion of electricity in final energy dramatically shifts from 19% to a technically maximum 65% of our needs. This includes the adoption of heat pumps in buildings. Electric vehicles become the vehicle of choice, and induction stoves replace many of the unhealthy cooking methods we have today (coal, wood, charcoal etc.).

The further potential for electrification, 35% of final energy, depends on breakthrough innovation in processes and fuel conversions to generate higher heat. These include Shipping, Aviation and certain high intense heat industry processes of Chemicals, Cement, Iron & Steel.

With transport having Co2 emissions running at 25%, Buildings 9% and Industry at 26%, the source of energy, its ability to perform and what it entails in changes is a massive set of individual challenges.

Today all of the Power Generation providers are looking hard at adjusting their fuel sources to accommodate (rapidly) increasing renewable alternatives. Still, the vast majority of invested assets in fossil fuel generation need to be managed as a bridge into the future. Natural Gas will be needed for the next thirty to forty years or even longer.

To modify existing plants or determine future power generation purchases, the three key points driving the thinking are 1) increase operational efficiency, 2) improve ramp rate and 3) improve reliability.

Then you have a wish list of rather objectives that need to be worked upon with OEM providers. These include adjustments and wishes into 4) improved availability, 5) increased power output on demand, 6) extend plant lifespan, and 7)improve fuel flexibility, interchanging fuels.

There is also a constant need to keep extending and securing 8) health and safety, 9) reduce cyber vulnerabilities, 10) Reduce Co2 emissions through new technology applications (CCUS), 11) Reduce other harmful gases of methane, nitrous oxide and fluorinated gases and 12) through digitalization and other efficiency methods improve and maintain stability and maintenance.

All of these forming the wish list of power generation providers are tough, even in stable fuel markets. Still, with price/ demand volatility and the continued march of renewables and the demands for green energy, this is a very challenging set of times.

The positive point is the power industry has the technical capability and a complementary suite of solutions; if the long-term goal fixes on decarbonization with renewables and supported and complemented by natural gas power as its core strategy intent, it can manage the energy transition.

To shape power generation needs global and local understanding. Collaboration, building in increased flexibility, determining the tactics to meet the existing and future conditions and making the right power generation investments give optimization and adaptability in rapidly changing market conditions.

Conditions that are influenced by changing regulations, the balance between managing stable fuel supply and intermittency of renewables, the shift from public to private ownership, a need for cross border collaboration and exchanges and the climate pressures and commitment made locally and globally.

The post Planning concurrent shifts in Power Generation first appeared on Innovating the Energy Transition.

I recently viewed a Power Generation survey conducted a year or so back and found it valuable to motivate change. It was centred on the Middle East Power Generation sector and conducted by Siemens to help them understand future power generation’s underlying trends.

This Siemens survey had as the main question to the survey: “Which trends do you think are currently having the biggest impact on the power generation sector in your region“.

Now in reading this, we have to recognize this is the Middle East with an abundance of oil and gas, but are the trends similar for other regions of the world? The responses I would suggest are certainly reflecting a global movement; the ranking orders might vary. They bring out the opportunities and challenges all power generation is going through presently, I would think.

So in the Middle East, the top three trends that were having the biggest impact were felt to be:

1. The power /gas market liberalization
2. Changing customer expectations
3. Environmental regulation and New emission standards

Then the next three impactful trends

• Decentralization of power generation systems
• Demand growth and urbanization
• Privatization of generation and distribution assets

Followed by these shifts taking place

• The lower range of oil price
• Growth in renewable power generation
• Digitalization of process and operations
• Emerging technology disruption (i.e. battery storage)

Other observations from this report

One area is the increasing priority of digitalization, looking to overcome or bridge the trend impacts. This will come in the form of 1) improving customer data collection and analysis, 2) process automation, 3) virtual power plant (VPP) for management of distributed energy sources, 4) modelling digital asset performance management through greater connected IoT, digital twins etc.

As digitalization grows as part of the solutions, an increased focus on 1) Cybersecurity, 2) the increased use of Artificial intelligence, and 3) Blockchain are all prioritized.

I don’t see these challenges and trends as different for all those involved in power generation globally as they grapple with a changing generation mix but are nicely summarized.

What I draw from this ranking of trends let me offer the following views.

It is the external factors of liberalization, changing expectations and standards that drive the power generation’s underlying changes.

If changes were not “forced”, then we would have no or slow change. The shift in thinking about managing power generation is then triggered, of considering new business models or ways to undertake business, then recognising the impacts driving the actual changes (oil to renewables, digitalization and alternative technologies).

The report states that it seems to be one of optimism as privatization gathers. This gives opportunities to open up a more flexible business model as deregulation continues, and options to build a business become more driven by market and consumer trends.

There is a shift taking place from the combination of an increased pace of regulatory change, raising expectations and demands for flexibility in pricing and energy choices by the final consumer, energy security of supply, and growing competition are all raising the potential for different business models and generation options to explore.

The opening up of previously monopolistic positions does recognize competition will come in different forms. This incentivises the incumbent to focus more on cost and performance, driving down operating costs and finding new ways to manage changing market expectations.

Change can be very uncomfortable for the incumbent.

It is always interesting as “market forces” shift optimism—a feeling of a new lease of life changes to one where change takes on harder meaning.

Eventually, what emerges when you undertake to change is that it suddenly requires different perspectives at the different stages of any change based on how markets’ open up and eventually take hold.

I found it a good prompting report for reflecting on important trends in Power Generation.

The post Shaping the Power Generation sector first appeared on Innovating the Energy Transition.