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‘Silver Bullet’ Hopes Shouldn’t Distract from Today’s Renewable Energy Solutions, Experts Say

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The Energy Mix is a Canadian non-profit that promotes community awareness of, engagement in, and action on climate change, energy, and post-carbon solutions. Each week, we scan up to 1,000 news...

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Faced with a massive wave of hype for a new generation of “silver bullet” climate solutions, from green hydrogen to carbon capture to (relatively) small nuclear reactors, experts are pointing back to the established technologies that can already deliver on a decarbonization agenda while bringing solid financial returns to investors.

“As political clamour and determination to cut carbon emissions grows, so too has excitement around the prospects of game-changing technologies that can accelerate the process,” the Financial Times reports, pointing to “clean” hydrogen and carbon capture and storage (CCS) as the lead contenders. “But there is a hitch: both of these technologies remain too expensive, and neither has yet been successfully deployed at scale. Experts say a focus on futuristic solutions distracts from the ability of the energy sector to significantly decarbonize power production by using readily available technology and ramping up the deployment of renewables.”

With solar and wind costs falling 90 and 60% respectively over the last decade, “I don’t think we need to wait—and I don’t think we can wait—for a silver bullet,” said Energy Transitions Commission Director Faustine Delasalle. “To some extent, the silver bullet that we needed, we already have—and it’s renewables.”

In the ETC’s view, that means the first priority on the road to net-zero emissions by 2050 is to scale up renewables production five- or six-fold from 2019 levels, while retrofitting buildings to reduce energy waste.

“This is really the low-hanging fruit that doesn’t require any major technology breakthrough,” Delasalle said. “It’s less sexy, but it’s available and it’s cost-competitive.”

Solid returns on investment also make the established renewables technologies “a more attractive bet for most investors than the likes of hydrogen and CCS, and other promising technologies even further behind in the queue like small scale nuclear, tidal power, and direct air capture of carbon dioxide,” the Times adds.

“The vast majority of the actual dollars are going to the things that may be less topical to talk about these days, which continues to be the construction of generation and transmission infrastructure—wind, solar, biomass,” Riverstone Holdings partner Alfredo Marti told the UK-based paper. “It also makes sense, because that is where the vast majority of the volume of dollars is required.”

Some analysts still see a role for carbon capture in allowing gas plants to balance the grid against the intermittency of solar and wind—though the Times article makes no mention of energy storage technologies that are coming onstream to address that issue. The other concern, though, is that a fully decarbonized grid would only deal with about two-thirds of final energy demand.

Which means that “to reach net-zero across the board requires addressing other sectors. Fuel cells powered by green or renewable hydrogen could be used in place of combustion engines, allowing heavy vehicles, ships, and even planes to shift away from oil-based fuel without relying directly on grid-supplied electricity.” But that won’t happen without a deliberate effort to drive down costs and increase supply—the same kind of early-stage support that brought wind and solar to where they are today.

“I think there will be a time where more institutional investors will be interested in hydrogen and carbon capture,” Delasalle said. “But it might come in seven or eight years, rather than immediately.” To get there, she added, “we need to build the business case—and to build the business case will need some public funding.”

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Matt Chester's picture
Matt Chester on Oct 13, 2020

“As political clamour and determination to cut carbon emissions grows, so too has excitement around the prospects of game-changing technologies that can accelerate the process,” the Financial Times reports, pointing to “clean” hydrogen and carbon capture and storage (CCS) as the lead contenders. “But there is a hitch: both of these technologies remain too expensive, and neither has yet been successfully deployed at scale. Experts say a focus on futuristic solutions distracts from the ability of the energy sector to significantly decarbonize power production by using readily available technology and ramping up the deployment of renewables.”

This is a great point. Time is a limited resource-- so investment in CCS 30 years ago might have led to certain useful successes, but we're running out of runway

Bob Meinetz's picture
Bob Meinetz on Oct 13, 2020

If "solar and wind costs [have fallen] 90 and 60% respectively over the last decade," why have Californians' electricity costs climbed 30%?

Joe Deely's picture
Joe Deely on Oct 14, 2020

If "solar and wind costs [have fallen] 90 and 60% respectively over the last decade," why have Californians' electricity costs climbed 30%?

Part of the answer is pretty simple -

Californians are still paying for PPAs that were signed 10+ years ago.  Being an early adopter has its price.

For example this from PG&E -

PG&E is the largest offtaker for Con Ed’s renewable energy portfolio, at about 29 percent of contracts. And the average PPA rate for those projects is about $197 per megawatt-hour, “significantly above market rates for new solar” that are closer to $25-$30 per megawatt-hour, according to analysts at Credit Suisse.

Of course generation is only part of cost equation... but that's a whole other discussion.

Michael Keller's picture
Michael Keller on Oct 19, 2020

The amount of energy involved in the early contracts was miniscule; the impact on current rates is accordingly very small.

Suspect the problem really lies with cumulatively building a lot of unnecessary ill-suited generation and associated dim-witted power contracts. Couple that with politicians with a completely unrestrained attack on the consumers pocketbook. No surprise energy costs continue to rocket towards "off-scale, high"

Joe Deely's picture
Joe Deely on Oct 19, 2020

The amount of energy involved in the early contracts was miniscule; the impact on current rates is accordingly very small.

Suspect the problem really lies with cumulatively building a lot of unnecessary ill-suited generation

 

Makes sense to believe what someone "suspects" vs. facts/data that are out there.

As an example - PG&E is stuck with its Topaz contract till 2038.

Among the existing projects at greatest risk of rejection, according to Moody's, is Berkshire Hathaway Energy's nearly 600-MW Topaz Solar Farm in San Luis Obispo County, Calif., one of the world's largest solar projects, which began delivering power to PG&E in 2013 under a 25-year contract, according to S&P Global Market Intelligence data.

or

Among other high-priced projects underpinned by PG&E contracts, according to Moody's, are the 250-MW Genesis Solar Energy Project, owned by affiliates of NextEra Energy Inc.; Exelon Corp.'s nearly 242-MW Antelope Valley Solar Ranch One; and the Ivanpah 1 and Ivanpah 3 solar thermal projects, both roughly 133-MW facilities part-owned by Google LLC.

Like you said miniscule.

While precise PPA pricing is confidential in California, Moody's based its estimate of potential annual savings from rejections of contracts with above-market prices on a 2018 report to California energy regulators that cited average PPA prices for PG&E's solar photovoltaic projects of $140/MWh, "about five or six times" contract prices in 2017. Average PPA prices for solar thermal electric projects were even higher, at $192/MWh.

 

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