This site uses cookies in order to improve your user experience and to provide content tailored specifically to your interests. Detailed information on the use of cookies on this website is provided in our Privacy Policy. You can also manage your preferences there.

By using this website, you consent to the use of cookies.

Learn more
OK

Transition to a zero-carbon economy, where is the tipping point?

Opportunities and Challenges of the Emerging Green Energy Industry

(Source: https://pixabay.com/)

Sustainable Development Goals, adopted by 193 countries at the United Nations in 2015, provides a shared vision for peace and prosperity for all people and the planet until the year 2030 and beyond. The seventh goal which says “ensuring access to affordable, reliable, sustainable and modern energy for all” is fundamental to our economy and societal development. This means not only to meet current energy needs responsibly and sustainably, but it also envisions meaningful plans to meet the needs of the projected population of 10 billion people by 2050, and to do so with affordable, reliable and zero-carbon energy.

The current energy trends suggest the world’s need for energy is set to rise by nearly a third in the next two decades, implying the energy industry is in a stronger position today than it has been in years. But as promising as our future might seem, we are operating in a world that is way too far from a sustainable path. The International Energy Agency New Policies Scenarios,  says the world is not on right course to achieve these goals, as our current approaches exacerbate greenhouse gases emissions where they need to be falling dramatically. This has led us to be deeply distant from our mission unless there is a significant change to correct our course, and how we respond to this unbalance will define our future.

In the UK, the government has agreed to cut greenhouse gas emissions to ‘net-zero’ by 2050, ending the UK’s contribution to global warming within 30 years. This is a huge task and a significant increase on the previous target of an 80% cut.  Simultaneously, in the US, today’s policymakers are talking about the ‘Green New Deal’ which is a proposal for 100% of power demand to be met from renewable and zero emission energy sources in 10 years’ time.

Developing a 100% renewable energy ecosystem, with reliability, affordability and security of supply at its core, requires careful consideration of the right balance between renewable energy generation and energy storage capacities.

A total 100% renewable energy ecosystem will rely on a large array of services based on effective, and scalable energy storage which can boost solar and wind electricity generations and continuously smooth supply fluctuations inherent in renewables.

There could be also a range of other solutions to smooth the variability of solar and wind generations over a longer time horizon, such as using bioenergy coupled with Carbon Capture and Storage (BECCS) as ‘peakers’, i.e. high-capacity plants that are used for relatively few hours during the year, or another alternative is the “Power-to-X” pathway, where surplus electricity generated by renewables is used to produce renewable gas or hydrogen, i.e. green hydrogen, which is then stored for later use that could directly drive rapid decarbonisation in key segments of energy use. i.e. hydrogen as a fuel.

Despite having a good number of green technologies available which are proven and could be deployed at scale, there are obstacles to those technologies getting the necessary support to succeed, such as carbon capture and storage (CCS) technologies. Here effective policies could play a key role, but are not enough to support an invention to realize its economy of scale alone. Alongside right and effective policies, the complementing forces needed are supporting infrastructure or technology enablers.

An invention ecosystem is a collaborative arrangement through which a network of technologies around that invention combine their individual offerings into a coherent, customer-centric solution to help it reaches the economy of scale at a market attractive price. When they work, these ecosystems allow businesses to create value that no single business could have created alone.

Collaboration across the enabling network is critical for invention survival and success. Imagine an energy business develops its invention brilliantly, meets and even exceeds its customers’ needs, and successfully excludes its rivals, but a market may not emerge. Whether and when the market emerges is determined as much by the enabling network’s performance as by the invention performance itself. It is then fair to say the success of an industry invention hinges on how well it assesses its ecosystem’s risks, network maturity and timing.

An example could be the solar energy industry: the silicon solar PV panels are an amazing invention, their costs have reduced by nearly 90% over the last 20 years and further cost reduction of nearly 50% are possible by 2050. But without an enabling network around this invention, it wouldn’t have reached the low cost it has today, enabling it to transform our industry. The network that enabled PV solar panels to scale, comprises efficient silicon supply chain, low-cost inverter manufacturing, effective leasing models, and automation of installation processes.

As mentioned above, to realize a 100% renewable energy ecosystem, there are several emerging technologies that are critical part of the solution. For each of these technologies to emerge as a viable and commercial solution, in addition to effective policies, a supportive network of technologies is needed to collaborate effectively to enable them to reach their economy of scale.

Currently, green hydrogen and CCS are suffering precisely due to the lack of established technology enabling network, though both are viable and proven technologies. For instance, for green hydrogen key enablers are readiness and availability of a versatile carrier, reliable storage system, readily available distribution network in addition to readiness of applications to be able to burn hydrogen as an alternative fuel. Similarly, a reliable storage network, satisfactory business case for captured CO2 utilisation at scale, as well as developing a business case for industry application by providing funding support for pilot and demonstration projects could play a great role in commercializing CCS.

To sum up, the energy transition needs to be carefully managed, first by identifying the right mix of technologies satisfying the targets, second by ensuring existing contradictory and incoherent policies are transformed, and third by ensuring the right network of enablers are identified for each technology and that those networks are collaborating cohesively together to reach the desired economy of scale.