The Innovation Intensity needed in the Energy Transition

The level of innovation intensity within the Energy Transition is a fascinating one and one I continually place more and more a focus upon.

One really critical source of reference for tracking clean energy progress comes from the International Energy Agency (IEA). The recent reporting back on the development of the energy transition we are undertaking seems depressing reading. We need to accelerate innovation and technology adoption.

We are so off track for much of the Energy Transition. if we are going to get anywhere near the Paris Agreement, and the below 2-degree climate goal set by 2050, we need to focus even more on transforming our energy systems globally.

The IEA’s Sustainable Development Scenario (SDS) offers a pathway for the global energy system to reach three strategic goals: the Paris Agreement’s well below 2°C climate goal, universal energy access, and substantially reducing air pollution. The IEA assesses the status of 46 critical energy technologies and sectors and offers some general advice on how to get “on track” with this SDS approach.

Presently there is a rising concern the Covid-19 has knocked us off a path.

In the short term, the dramatic economic downturn has given rise to seeing air pollution levels drop during the “lockdown” months, but as was seen after the 2008 /9 financial crisis when the economy came “roaring back,” so did the carbon emissions.

There is significant pressure on Governments as they attempt to stimulate their economies. The fiscal stimulus should be tied to a firm commitment to moving towards a greener economy. At the moment, those that rely on fossil fuels are getting significant support to sustain their current activities, and it seems they are not required to commit to changing their reliance on their fossil fuel dependence.

That lack of commitment to change to a clean energy pathway is, in my opinion, plainly wrong as we have a finite period between 2020 and 2030 to make the energy transition to renewables unstoppable.

The IEA Tracking Focus gives us a top picture of the challenges and complexity of the Energy transition.

I think it is worth referencing here the way the IEA breaks down to track clean energy progress, it is a pathway that needs innovation to be central.

The IEA track the following aspects of the energy system; power, fuel, industry, transport, buildings, and energy integration. Presently they are well behind the position needed to achieve this less than 2 degrees C climate goal.

Just reflect how difficult this energy transition actually is. Not only in a wholesale, radical change to our energy fuel, generation, transmission, utilization, and consumption but in the levels of existing investment that need changing, writing off as potentially stranded assets (coal generation), or being replaced by new technologies based on renewables.

Assets investments are made are upwards of thirty years or more, depending on upgrade, use, and environmental conditions. This can even be twice the period, so dealing in achieving the momentum by 2030 and getting to deliver clean energy targets by 2050 is a relatively tough one in such a short time of thirty years. We need to “push” for change now, certainly in the next five years.

No one is going to stop investment in proven, tested technology, processes. Nor will they argue against infrastructure and energy delivery systems that are reliable, safe, and provide us secure, consistent, and dependable energy, products we rely upon, and jobs dependant on delivering services and products that are demand dependant on the energy system. The need, though, is to shift these from fossil fuel to renewables for a better, sustainable, and healthy world to live in.

A conflicting world full of complexity and tough challenges

We are faced with so many conflicting forces, the lobbyists arguing for an extension to coal, oil, and gas in subsidies or protection for energy security reasons. All Governments have to make tough choices, political ones where one party has strong community support as it backs coal or oil to know new technologies and renewables are driving prices down below their present energy sources.

Each of our economies has become “highly” dependent on existing fuel sources, and the energy security issues are beginning to dominate discussions. There is intense Lobbying to keep investments and make them more efficient is on one side. Then, on the other hand, backed by Scientists, Environmental fractions, and a growing public feeling is that we are feeling the effects of global warming.

This planet-warming is becoming unacceptable, the vast majority is beginning to accept that feeling our planet is under growing “stress” from the worldwide greenhouse gas emissions is forcing real change to happen. We must move beyond lobbying and debates and undertake a world order based on renewables that are sustaining and carbon and polluting gas-free for a healthier world.

To move away from fossil fuels and all of its associated risks and sustained investment over the last century-plus is a difficult one. Yet by relacing energy sources that are dependeânt on natural resources of the sun, wind and water are making for a compelling investment case. Those that become “first movers” can gain significant competitive positions. Economies and their future “fortune” can be radically altered by merely “hanging on” too long and seeing private investment shift countries seeking that new combination of modern infrastructure, low energy prices, and healthier environments.

I want to put the conflicting forces into some form of context by breaking this down using the IEA method of trancking clean energies.

Tracking Power

The “sum” of where we are is today. Power sector emissions declined by 1.3% in 2019, while emissions intensity decreased by 2.5%. The IEA states, unfortunately, recent trends are not on track with the SDS, which requires that power sector emissions fall an average of 4% per year to 2030, and electricity emissions intensity drops 5.6% annually.

Tracking Fuel Supply

  • Emissions from oil and gas extraction, processing, and transport rose marginally in 2018 to around 5.4 GtCO2-eq – approximately 15% of the global energy sector GHG emissions. Over half of these emissions (2.7 GtCO2-eq) came from flaring and methane released during oil and gas operations. The IEA tracks specifically Methane emissions from oil and gas and Flaring emissions

The available data suggests that there is a significant variation between the best and the worst-performing companies on these issues, so a vital task is to ensure that best practices and operational excellence on these emissions become standard across the industry as a whole. Considerably enhanced policy ambitions and regulatory efforts, better measurement and reporting, strong industry efforts, and investor-led support are needed to meet SDS targets for 2040, along with technological progress to improve the effectiveness of leak detection, measurement, and abatement.

Tracking Industry

Direct industrial CO2 emissions, including process emissions, declined 0.6% to 8.5 GtCO2 in 2018 (24% of global emissions), which is good news, but industry emissions must fall by 1.2% annually to 7.4 GtCO2 by 2030 – despite expected industrial production growth.

Greater energy efficiency, the uptake of renewable fuels, and research and deployment of low-carbon process routes, including CCS, are all critical. Governments can accelerate progress by providing innovation funding and adopting mandatory CO2 emissions reduction and energy efficiency policies.

Tracking Transport

Global transport emissions increased by less than 0.5% in 2019 (compared with 1.9% annually since 2000) owing to efficiency improvements, electrification, and greater use of biofuels. Nevertheless, transportation is still responsible for 24% of direct CO2 emissions from fuel combustion. Road vehicles – cars, trucks, buses, and two- and three-wheelers – account for nearly three-quarters of transport CO2 emissions, and emissions from aviation and shipping continue to rise, highlighting the need for a greater international policy focus on these hard-to-abate subsectors.

Tracking Buildings

Energy-related CO2 emissions from buildings have risen in recent years after flattening between 2013 and 2016. Direct and indirect emissions from electricity and commercial heat used in buildings rose to 10 GtCO2 in 2019, the highest level ever recorded.

Several factors have contributed to this rise, including growing energy demand for heating and cooling with rising air-conditioner ownership and extreme weather events.

Enormous emissions reduction potential remains untapped due to the continued use of fossil fuel-based assets, a lack of effective energy-efficiency policies, and insufficient investment in sustainable buildings. This is the really vital one that is in ALL of our hands to expect and encourage change.

Tracking energy Integration

  • The ability to integrate our energy systems to combine fossil fuel and renewables has to accelerate, the whole issue of sector coupling, storage, and transmission is locked into this energy transition debate. Innovative solutions need to enable this energy integration and then transition into just renewables over the next thirty years.
  • This is a really fascinating area to watch of leveraging Energy storage Hydrogen Smart grids Demand response and Direct air capture. These areas are needing deeper innovation funding and co-ordinating from policy support to fund experimentation, piloting, and extensive scaling out, all on demanding time scales.

To align with the SDS, industry emissions must fall by 1.2% annually to 7.4 GtCO2 by 2030 – despite expected industrial production growth. Greater energy efficiency, the uptake of renewable fuels, and research and deployment of low-carbon process routes, including CCS, are all critical. Governments can accelerate progress by providing innovation funding and adopting mandatory CO2 emissions reduction and energy efficiency policies.

The consistent reposting by the IEA along the 46 critical energy technologies or sectors does give a good focal point to direct innovation. What we see today, we are not on track, we have been arguably blown off track by the pandemic and the required economic stimulus required to “kick start” our economies back into “normal” life.

We do expect a return to some form of (new) normal of expecting growth, wealth creation, and jobs. Yet what is ahead of us will have even a more significant impact unless we address it, global warming.

This needs us to transform the energy systems globally so we can have a chance still to stop this planet from warming even further and giving us improved health, economic and environmental possibilities. The effects of the present Covid-19 surely give us all a wake-up call. It is how global failure has an enormous impact, and the concern is here that we are moving from one crisis into a longer, more dangerous one.

Unless we change the course of where we seem to be heading in fueling our energy needs with harmful emissions, we face rapid global warming that will not protect us. We have no second planet, and it is not just developing a vaccine to make us all feel safe, this is threatening human life as we have known it, pandemics included.

** the majority of this post has been drawn from the Tracking clean energies IEA report, published in June 2020 and brought out my own views or thinking

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