Which energy technologies will be able to supply an alternative to oil, gas and coal? That question is essential for the speed of the energy transition and for reducing the production of greenhouse gases. According to energy expert Daan Walter of Ember, elektrotech will offer the best opportunities. In this area, China is the leading country (link in Dutch).
Reduce the use of fossil fuels, as fast as possible
Daan Walter specialized in energy. ‘It is so wonderfully complex, one will always have to try to encompass the whole system.’ He started at Ember last February, an international think tank that specializes in electrification of the global energy system. As the chief investigator, he is responsible for reports and analyses on the energy transition. ‘The concept behind Ember is to publish research, on the basis of open-source data collection and analyses. So that people will be able to judge for themselves at what speed electrification will progress in their country or region,’ he says.
The debate on energy transition and climate change concentrates on the question which energy technologies are in the best position to scale up fast; in order to reduce at high speed the production of greenhouse gases. For that is required in order to stay within the scenarios for global heating with 2oC at most. Although global production of CO2 has not changed much over the past ten years or so, it has remained high, about 40 million tons per year. Therefore, CO2 concentrations in the atmosphere still mount; carrying with them all climate risks.
The elektrotech revolution
Walter is a keen enthusiast pleader for the so-called elektrotech revolution, as voiced in a recent Ember analysis. This reveals that three issues are crucial: energy efficiency (which technology can change energy from one form to another, with as little loss of useful energy as possible); economic scalability and modularity (does scale increase result in a systematic lowering of cost per unit product); and energy independence (does an energy technology offer the opportunity to become largely self-supporting).
On the basis of these three criteria, elektrotech will have winners. I.e. companies that are able to combine these three items. Firstly, supply of renewable energy (solar and wind); then the development of electric infrastructure (grids and battery storage); and finally the deployment of electric technology on the demand side in sectors like mobility (electric cars) and the built environment (heat pumps). IT development in the form of smart grids and the like will support this all.
Fossil energy will lose
From the perspective of elektrotech, fossil energy will be the losing party. For fossil energy is less efficient (like in the use of petrol in a motor car) than the combination of electricity/batteries and an electromotor. Fossil energy cannot be scaled up easily enough (easy to access oil runs out, whereas solar and wind energy will be cheaper all the time) and will be less secure (oil and gas are just in a few spots on the globe, whereas in principle each country can deploy its own solar and wind energy). And on the subject of hydrogen, a possible substitute for fossil energy: this is expected to be less energy efficient, and more difficult to scale up).
The elektrotech revolution doesn’t represent a classic case of technological innovation. Crucial for the future of elektrotech is the willingness of governments to invest in it, particularly now in the start-up phase. In this respect, China is ahead of the rest of the world; fifteen years ago already, Chinese governments have made strategic choices in the development of battery technology, electric cars and grid expansion. That is also an explanation for the take-off of the development, with major cost cuts.
Offshore wind parks
A comparable development now takes place in Europe, with the investments in offshore wind parks. It is of the utmost importance, according to Daan Walter, to view this strategically, taking care of these industries staying alive. But the strategic error Europe could make now is that not enough investments are being made in demand-side electrification. If the goal is to make profitable wind parks, he says, we should now invest like mad in the demand side. Make sure that more electric cars and heat pumps are being sold. Possibly this would require some extra subsidies; but once that starts going, wind and solar will accelerate and one could start lowering one’s dependence on oil, gas and coal. The demand side is leading now.
Because of electrification in the built environment, in industry and more recently in transport (electric cars), China has acquired an increasing share in the part of final energy consumption covered by electric current. Europe and the US rather witness a flat development. That’s why Ember calls China the first elektrotech state in the world.
No goodbye to fossil energy?
Yet, in spite of solar and wind energy growth, still more than 60 per cent of the global energy mix is based on fossil. Fressoz has written about this state of affairs the book More, and more and more. He argues that we will not be able to say goodbye to fossil fuels. Even though there are countries and regions where fossil fuels are now being substituted. Like in countries where the absolute amount of coal has diminished, like in the UK and the Netherlands. But the fossil lobby likes the Fressoz arguments. Particularly because of continuing energy demand growth, powered by growth in population and welfare. Shouldn’t we therefore have to invest permanently in oil and gas?
Oil and gas industries are afraid that solar and wind could become so cheap that end users would start to prefer the electric current (as opposed to oi and gas) for transport and for real estate heating. The demand for oil and gas could possibly fall at a rate that would cause existing production to implode. It is telling, says Walter, that the part of cashflow paid to shareholders has risen in ten years’ time from 25 to 55%. A clear sign that industry would like to remain on good terms with shareholders.
Let’s concentrate on what we can do
Walter isn’t a fan either of what he terms to be ‘net-zero purists’. That is: people who lay emphasis on massive state intervention in order to get rid of fossil fuels; and who judge that we should use all means at our disposal in order to reduce CO2 emissions to zero by 2050. His most important criticism is that this group puts emphasis on what we cannot do yet (like greening of heavy industry); whereas we have a solution for three quarters of the problem already. He wants to put focus very simply on this, like wind energy, solar panels, electric motor cars and heat pumps. Some people concentrate on the last tiny bit, and prefer CO2 capture and storage (CCS) for it. But, as Ember says, we then possibly face a huge waste of resources. We should start employing to its full extent the options that we can do. ‘For as we learn more, most probably there will come ever more options in which we can forego CCS.’
Interesting? Then also read:
Will oil industry collapse because of China? (in Dutch)
Solar and wind energy revisited
100% solar, wind and batteries: it’s happening already