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Question

What will it take for the electricity sector worldwide to rapidly transition to zero carbon primary energy sources?

Academics and concerned citizens often ask "how long" will it take for the global economy to transition to zero carbon energy systems in the transportation, electric generation and heavy industry sectors. Many people also think politicians can and must "take action" on climate change, implying (mistakenly) they have direct control over these energy sectors, and sufficient practical knowledge to quickly and effectively re-engineer key components of those sectors.

Few have asked the people who actually own or run electric utilities "what it will take" for all electricity utilities worldwide to rapidly switch to solar, wind, geothermal, tidal or nuclear primary energy sources to power electric generation. It would of course require unprecedented inter jurisdictional cooperation and technical transfer – and of course investment. It would require thinking outside the proverbial box, such as fast tracking the development and deployment of small modular nuclear reactors to replace coal or gas-fired thermal units while maintaining the steam turbine and other components of a generation plant.

So, what will it take? Many of you have thought about it, no doubt.

Answers

What will it take? Depends on the 3”I”

Inertia / Iteration / Integration

Let’s start by Integration: how easy is to integrate new Renewables in any system - good grid and good balancing (hydro / storage), available land and wind/solar resources. A key of success is to blend into existing infrastructure rather than wanting to replace it completely.

Then Inertia is the main enemy: how thick is the system? How entrenched are the incumbents? How strong are the regulatory defenses that they have put forward? How much are they willing to spend to postpone more development. A profitable system is harder to crack than a sytem in deficit.

Finally iteration: Success breeds success. Each project, provided it is well executed, triggers copy cats, learning curves, positive experiences. "Pioneers get the arrows, farmers get the land", as they saying go.  

A good example is the 3i is the Hornsdale Battery in South Australia. Tesla installed a 100MW/130MWh battery in South Australia. It was perfectly integrated near a wind farm, using existing infrastructure. Inertia was overcome because Elon Musk proposed to give it for free is he couldn’t start it in 90 days. Less time than it takes to write a report to argue that it cannot work. Finally iteration: once the scale was proven (and profitable), everybody jumped in. a few months later, there were 64 proposals for similar projects in Australia.

Conclusion: Work with and around the 3I and decarbonisation will occur. 

Laurent Segalen

Peter Sircom Bromley's picture
Peter Sircom Bromley on Jan 17, 2020 8:39 pm GMT

Inertia, iteration and integration would be consistent with the characteristics of “diffusion of innovation”, of which the Australian battery installation is, as you point out, an excellent example. The question now becomes what would it take to overcome inertia, the main enemy, and trigger the process.

"Many people also think politicians can and must "take action" on climate change, implying (mistakenly) they have direct control over these energy sectors..."

Peter, once upon a time U.S. politicians did have direct control over electricity generation here; now, they maintain limited control over commerce of electricity but little over how it's generated.

For any country to be serious about addressing climate change, government control over electricity generation is a must. Otherwise, free market competition will triumph - and there is no indication the most profitable way to make electricity is the cleanest, especially when selling fuel is so obscenely profitable.

"It would require thinking outside the proverbial box, such as fast tracking the development and deployment of small modular nuclear reactors to replace coal or gas-fired thermal units while maintaining the steam turbine and other components of a generation plant."

Government control over electricity generation has already given China an advantage at thinking outside the proverbial box.

China Building Technology That Can Convert Coal Plants to Nuclear Plants

 

Peter Sircom Bromley's picture
Peter Sircom Bromley on Jan 19, 2020 11:00 pm GMT

China is an interesting example. It’s not clear how much direct control the central government of China has over its two state-owned grids and to what extent decarbonization influences energy policy. While China is moving forward rapidly on wind, solar and 4th generation (and HTR) nuclear, utilities in various parts of the country are still commissioning new coal fired electric plants. It would seem the Chinese government is doing a balancing act with short term economic gain (supposedly cheap coal power) and environmental protection (zero-carbon energy). This would be typical of all governments, democratic and otherwise. And the toughest nut to crack.

Well I have asked the people who actually own or run electric utilities "what it will take" for their utility to rapidly switch to clean energy. (I don't know if I can tackle "worldwide.") The answer tends to be incremental steps plus more research.

I find this answer very feeble. Utility executives are in a unique position to drive major investments and validate new directions in technology. I hear strong enthusiasm for this from mid-level staff at utilities, but they don't have the support of senior management.

While short-term earnings focus is probably a part of the reason that senior managers are bolder, my opinion is that it is more about the culture of leadership at utilities. They operate in a world of politicians, executives from other industries, and financial advisors who are more comfortable with the status quo.

What if TVA had embraced the Clean Line HVDC transmission project? What if Georgia Power had spent a decade investing in energy efficiency and renewable energy instead of Plant Vogtle? What if FPL had embraced and energized the offshore current technology testing in the Gulf Stream? In each case, we could literally have gigawatts of clean energy deployed in the Southeast at costs that would not be of great (or any) concern to ratepayers.

Yes, politicians can definitely take action to re-engineer the electric sector. So I do disagree with the premise of the question. But I do agree that they don't have direct control, politicians need to change the culture of electric utilities.

A good example is basic environmental compliance. Increasingly, I see a culture of compliance within many electric utilities. (Of course, they may comply while also seeking to repeal those laws.) While some continue to fall short of truly engaging environmental protection practices, many utilities view a compliance culture as complementary to overall business success. This culture change didn't come from line engineers at utilties, it came from regulators who maintained pressure on utilities until more enlightened management took over.

To decarbonize the electric sector, we'll need a more rapid culture change. But with the right pressure and support from federal and state governments, my believe is that the technology and talent are pretty much available and ready to be put to work.

Peter Sircom Bromley's picture
Peter Sircom Bromley on Jan 17, 2020 8:11 pm GMT

Since politicians are typically bound to serve all interests including the status quo, what would it take for a sometimes prochially-focused political culture to achieve changes in the bottom-line business culture of utilities? It seems to be achievable in California which has legislated 100 percent renewables by 2045. Georgia Power is investing in nuclear, an expensive low-carbon solution.

Initiatives like the Clean Line HVDC project would connect formerly independent utilities and require new revenue schemes. Utility executives are in a good position to coordinate and accelerate such moves along energy transition pathways but need to feel safe doing so. Or something like that...

The first step is to define "Rapidly" and "decarbonize".  Even once these are defined, there are very few, maybe no examples of a worldwide implementation of policy, technology, etc...  A major hurdle is that one or many countries could completely decarbonize tomorrow and since this is a worldwide issue, they would accomplish nothing for their citizens except to increase costs and potentially damage their economies.  To decarbonize, a worldwide Carbon Tax is necessary to set the bar worldwide such that the most economic projects WORLDWIDE get funded first and the most decarbonization occurs for the investment capital.  Even if the OECD countries or G8 agreed upon a Carbon Tax and allowed their participants to reduce Carbon worldwide this would be a step in the direction of reason and cost effectiveness.  If there is not a worldwide view, many countries will spend tremendous effort & capital to eliminate carbon in their "neighborhood" yet the problem will not be addressed.  

Peter Sircom Bromley's picture
Peter Sircom Bromley on Jan 17, 2020 7:24 pm GMT

So the question is what would it take to implement a worldwide carbon tax and transition policy? The diplomats and politicians attending the annual COPs do not seem well positioned (or practically minded) to consider such things. We likely need to consider alternative or innovative models of economic cooperation and technology transfer? For example,  there is renewed interest in integrating the 95 percent hydro British Columbia grid with the Alberta grid, to help Alberta get off coal.

Bob Meinetz's picture
Bob Meinetz on Jan 19, 2020 4:25 pm GMT

Gary, I think you're confusing "define" with "quantify".  "Rapidly" and "decarbonize" already are defined; putting a value on each is a subjective endeavor and coming to agreement, an exercise in futility.

"A major hurdle is that one or many countries could completely decarbonize tomorrow..."

Hardly a hurdle, that's fantastic news! Which countries could completely decarbonize on January 20, 2020?

"To decarbonize, a worldwide Carbon Tax is necessary to set the bar worldwide such that the most economic projects WORLDWIDE get funded first...

Who will enforce this worldwide Carbon Tax? Who will determine which projects are most economic? Your theory raises more questions than answers.

Hi Peter:

This is an amazingly complex challenge. Rather than trying to provide a short response, I'm suggesting two papers that I've posted on Energy Central, linked below. The first are the basics, but includes other content, and the second focuses on more complex solutions. I try to keep my posted papers (like these) under 3,000 words each. I've probably posted at least 20 papers related to this subject, so if you have any additional questions, post a reply to this.

https://www.energycentral.com/c/ec/climate-and-energy-part-2-impacts-infrastructure-rev-b

https://www.energycentral.com/c/ec/climate-change-two-challenges-and-five-solutions-%E2%80%93-part-1

-John

Peter Sircom Bromley's picture
Peter Sircom Bromley on Jan 17, 2020 7:09 pm GMT

Hi John -

As you show with the emissions trends chart on page 5 (Climate and Energy Part 2), the State of California is a leading jurisdiction with respect to GHG reductions. The legislated goal of 100 percent renewable primary energy for the grid by 2045 is doable for two main reasons: 1) the progressive, informed mindset of the State Government which is willing to legislate ambitious goals despite a certain amount of resistance from private utilities, and 2) there is more than enough solar, wind and geothermal primary energy in the state to accomplish the 100 percent goal. Other jurisdictions are not so well-informed or well positioned – which translates into perceived economic barriers. So I suppose the question is what would it take to raise or redistribute capital to overcome those barriers?

John Benson's picture
John Benson on Jan 23, 2020 5:27 pm GMT

Hi Peter:

I will reference you to another post, one that I'm working on, that should be posted week after next (generally on Tuesday). It is on "Financial GHG Reduction Incentives."

California is by far the most progressive state especially when it comes to environmental goals, but there is a path for convervative states also. It mainly has to do with being politically flexible. Also all states are starting to experience major hits from climate change-driven disasters, and these will get worse and will focus the conversation on how to mitigate these.

-John

I like the answers and the discussion on this question so far. A few points to add:

1) Numerous private utility companies and the states they reside in continue to fight any advance by renewable energy technologies. They do so because they have a huge set of sunk costs that are only recovered over time. As discussed by others, they have a very profitable enterprise supported by tens of thousands of investors large and small.  The present system is what they know how to do. The regulatory bodies have been captured by the industry.

2) The cost of renewable technology drops on almost a daily basis. The resulting economic pressure over time will become something that can not be resisted by the most entrenched utility company. The coal companies already know this reality. The great flywheel of the economy and innovation will sweep away any obstruction given enough time.

3) Private utilities enjoy a public mononoply granted by the public. Ultimately, the public has the right to determine what it gives and what it takes.  As daily weather disasters grow in intensity, coastal cities sink under the ocean, fires rage, and disease runs rampant, the reality will be too great to ignore, and the public will rise up and set things to right, including the elimination of private utilities with profit as their primary goal.

4) There is no shortage of private sector funding on a world wide basis. Mega funds everywhere are looking for reliable, long term, solid return investments to meet their needs.  The missing element is solid projects that are ready for funding,  Governments never have enough money. The private sector has plenty.   We need to look to public/private ventures to create the change that we need.

5) What we can do today is to ignore the utilities, and install as much renewable energy as possible behind the meter with serious energy storage support.  Every rooftop and every parking lot should be filled with renewables to support the energy needs of their owner.  Community Microgrids can be created to support neighbors. Done right we will eat the utility company lunch, dinner and dessert, and there is not a darn thing they can do about it except to watch, and ultimately get on board with the future that is 100% renewable.

Rami Reshef's picture
Rami Reshef on Jan 19, 2020 7:25 pm GMT

The enormous and profitable investment in renewables by private capital along with the growing pressure by public investors to force corporations to be compliant and accountable on sustainability will hopefully continue and create sufficient momentum to force the public utilities and politicians to get on board the renewables train. In addition to the 3I's mentioned in earlier comments, innovation and investment are also important I's that are driving the renewable energy economy ahead.  I believe the huge market demand for innovative and cost-effective clean green energy generation and energy storage technologies will gradually win out over the questionable brown transition technologies that play an important role enabling the economy to adjust while older generation equipment and labor resources can gradually be retired and make way for younger, bold and daring new technologies. The market will reward innovators and demand will grow and drive down the costs of currently costly but clean alternatives like electrolysis and other methods for producing emission-free power. But we cannot afford to sit back and wait for it to happen.  With the increasingly challenging data from weather scientists constantly revising our temperature targets, we need more discussions like this one to push energy professionals across the industry and around the world to accelerate and coordinate our efforts before it will be too late.  

It will take fixing the greatest market failure in the global economy - fuel prices that don't reflect the true cost to society. Changing this isn't fantasy - the first domino to set the process in motion is in Congress right now. The Wall Street Journal reported in January 2019 on a proposal agreed to be good economic policy by 27 Nobel-winning economists, 15 former chairs of the Council of Economic Advisors, four former chairs of the Federal Reserve and two former Secretaries of the Treasury. That proposal is consistent with values embraced by both Republicans and Democrats: It makes a progressive economic impact while staying revenue neutral. It will put more money in the bank accounts of most U.S. households while reducing carbon emissions (40% by 2030 and 90% by 2050) and creating jobs. It's now in committee in the U.S. House of Representatives, where it inspires increased bipartisan sponsorship (75 cosponsors and counting).

The Energy Innovation and Carbon Dividend Act (H.R. 763) would put a steadily rising fee on carbon-based fuels where they enter the economy, then distribute the net proceeds to households as a monthly dividend. Economists agree that most of us -- including the most vulnerable Americans -- will receive more in dividends than we pay in increased energy prices. As the Journal reported, this fee would send a powerful signal to steer decision makers to choose a low-carbon future. If the Energy Innovation and Carbon Dividend Act becomes law, we'll see that rising emissions curve finally go down. HR 763 also includes a border adjustment to protect US competitiveness and to incentivize other countries to price carbon. 

Fixing the market failure will unleash innovation by motivating every corporation and individual to choose the low carbon (less costly) option in every choice every day. And that includes decarbonizing energy generation. Learn more at energyinnovationact.org 

Well! I'd been kicking myself for taking so long to reply on this thread. But the good news about being inefficient and late is that others have made a bunch of good points, more effectively and succinctly than I could have.

A few additional strands come to mind, but the first up is the one that always seems to get left behind. We know that, megawatt for negawatt (not a typo), reducing demand is the most effective, affordable way to cut energy and carbon, and an enabler for new supply sources on an all-renewable grid -- with more of the wastage out of the system, the remaining supply is that much more straightforwardly delivered with zero-carbon sources.

Even the International Energy Agency, certainly no one's paragon of energy transition planning or low-carbon modelling, is concerned that annual improvements in global primary energy intensity fell to 1.2% in 2018, when a target of 3.0% is more consistent with a 1.5°C pathway. Part of the problem is that the target is easy to set from the top down, but only met from the bottom up -- which means it depends on utilities and cities, and even on community-based job creation and environmental justice organizations and even on your local neighbourhood association to get things rolling and ramped up.

But it's no news on this list that utilities' performance on anything transition- or carbon-related is decidedly mixed, and earlier posts on this thread get at some of the reasons. This is easier said than done for institutions with legacy costs, installed capacity, and obligations, but the superficially simplest thing for them to do would be to always, consistently favour the least-cost solution available to them, based on a full accounting that includes a realistic social cost of carbon calculation. (Sorry, with "realistic" as a criterion, the White House need not apply, at least not until next January/February.) Getting that calculation right will mean maximizing the opportunity for energy efficiency and demand response, taking advantage of the enormous unit cost savings in mass energy retrofit programs, further reducing the remaining home comfort demand with heat pumps...then recalculating how much new supply a jurisdiction actually needs.

Or utilities can continue down their current path and watch their coal, gas, and nuclear plants fall ever farther behind the alternatives on cost and reliability. Thankfully, this year has already seen a flurry of coal closure decisions that show more and more power companies getting the math right and following the evidence to the choices they really ought to have made by now.

Peter Sircom Bromley's picture
Peter Sircom Bromley on Jan 28, 2020 1:31 am GMT

Top down targets do occasionally work in the electricity and transportation sectors – California’s legislated target of 100% renewable energy for the grid by 2045, and the Norway’s phase out of internal combustion engines starting in 2025 being two examples. In both cases, progressive governments saw the practical feasibility and relatively low economic risk. Obviously, these are optimal situations. Economically challenged jurisdictions with regressive governments and little or no renewable energy have a problem. Some kind of technical and financial aid may be required to help these less fortunate jurisdictions make the transition.

Moving from natural gas and coal generation to wind and solar requires a robust transmission grid.  WIRES recently completed a report on this topic.  The report includes an assessment of transmission needs for renewable integration for specific regions of the United States.  The report is at https://wiresgroup.com/wp-content/uploads/2020/01/ScottMadden_WIRES_Informing-the-Transmission-Discussion_2020_0113_FINAL.pdf.

 

 

What will it take? Is certainly a good question. Because it looks like we already have everything.  But it’s not the case. 

Fast transition is not easy, especially in the energy sector, because of the protracted nature of energy transition. The long, complex dynamics,  the centuries-long, path-dependent, persistent use of fossil fuels, lock-in strategies, responses and destabilization of incumbent energy actors and institutions, or path dependence of the greenhouse effect and climate change, and even issues of equity and justice underlie many of the challenges involved and increase the difficulties of national and global (public or private) governance to solve it.

So, historical expertise might enhance our understanding and many studies have shown that transitioning away from our current global energy system is of paramount importance, including Sovacool, from Oxford University, or Grubler which has compellingly written, ‘the need for the “next”’ energy transition is widely apparent as current energy systems are simply unsustainable on all accounts of social, economic, and environmental criteria’. Fouquet has noted that “the relatively rare and protracted nature of energy transitions implies that it is vital to look at historical experiences for lessons about how they might unfold in the future.”

Adding to the fact that usually, transitions are lasting for a long time or longer than expected (the “protracted” nature), he outlined that the fastest historical energy transitions observed here was thirty years (in sector-specific cases). 30 years for just one specific sector, while full (or wide-scale) energy transitions, involving all sectors and services, have taken much longer. We don’t have this amount of time yet to fight Climate Change before it’s irreversibly well beyond the 1.5–2.5 C threshold. Last September, the United Nations highlighted that there is “Only 11 Years Left to Prevent Irreversible Damage from Climate Change, Speakers Warn during General Assembly High-Level Meeting”.

Several of the problem areas, identified by energy transition historical research, raise important, tricky issues concerning the development of knowledge about the nature, variety and complexities of energy transitions. They include the distinction between the many kinds of ‘minor’ and ‘major’ (or ‘grand’) transitions. This is important for our capacity to comprehend the scale, pace, duration, smoothness and (dis)continuity or other ‘special’ properties of transitions, and for our ability to guide or manage them. Indeed, studies have illustrated that the price of energy services played a crucial role in creating incentives to stimulate energy transitions. But an additional key factor is whether the new technology offers new characteristics of value to the consumer, which can help create a market even when the initial price is higher. On the opposite, a crucial factor that can delay a transition is the reaction of the incumbent and declining industries.

Nevertheless, governments have, in a few (just a few!) instances, created the regulatory setting to stimulate energy transitions to low-polluting energy sources. Yes, this could be done again, but only if the political will is available at the same time as alternative sources of funding while the clean energy sources project are deploying.  Many technologies are available (and it's indeed a mix of technologies that is required for this clean transition), but the governments and the financial sector, i.e. the funding, should be following soon to make this transition as quick as possible.

 

Peter Sircom Bromley's picture
Peter Sircom Bromley on Jan 27, 2020 7:51 pm GMT

Hello Stephane

You may know that Benjamin Sovacool also co-authored a paper titled Expert perceptions of low-carbon transitions: Investigating the challenges of electricity decarbonisation in the Nordic region (2018).

The co-authors interviewed 257 professionals from government ministries, universities, research institutes, utility companies and private industry located in the five Nordic countries considered leaders in climate and energy policy: Denmark, Sweden, Norway, Finland and Iceland. Among other questions, they were asked “What do you see as your country's or the Nordic region's greatest energy or electricity challenges?”

The top ten challenges mentioned were:
(1) integration of renewables
(2) electrification of transport and other sectors
(3) managing intermittency
(4) carbon intensity and climate change
(5) supporting local grids
(6) ensuring adequate capacity
(7) Nuclear power
(8) Transmission
(9) Interconnections
(10) Overproduction of electricity

Of course, any jurisdiction intent on rapid transition to zero carbon primary energy sources (California, for example) would also have to deal with these issues.

Time is indeed a factor, but the important thing is to be clear on the steps required. Clarity facilitates speed. N'est-ce pas?

I looked at the responses thus far and none of them are particularly well thought out or have any realistic path to addressing this issue.  Most of the discussion focused on the power industry, but that is only about 1/3 of our energy use.  Furthermore, many of the statements made are just not true.  In the US, electric generation has been mostly deregulated.  That means that the generator has to bid into the system and be accepted in order to sell its power.  Statements such as "utilities enjoy a monopoly" are just not correct.  Further, statements like "there is plenty of private money" are also not correct.  If power generation was such a lucrative business, why aren't any of the generating companies worth $ 1 trillion or more?  That fact is that they are not.  The power business is a tough business and many of the independent producers have either shut down or gone bankrupt.  Then we have the transportation industry.  The world uses 100 million barrels of oil per day.  The US has cheap natural gas, but that is not the case in the rest of the world.  Southeast Asia will continue to burn coal because it is cheaper to do so.  We forget that with the technology that was available in the early 1800s, the world could not support the 7.5 billion people on the planet today.  Some 6 billion would be dead from starvation, disease, heat, and cold.  Fossil fuels enabled us to conquer most of those problems.  Now to replace them, we are going to need more technology than a few solar panels.  We will need to figure out how to replace the current grid system with something more adaptive.  We will need carbon capture and storage.  We will need better battery systems than we have today.  We will one day need a new source of energy (fusion? dark energy? other?).  None of this occurs in a vacuum and we will continue to want to heat our homes in the winter and cool them off in the summer.  We will still need to travel from place to place.  We will still need our hospitals, police stations, fire departments, and city services.  We still want our computers and cell phones and streaming video.  None of the comments thus far address how all of these things will be taken care of.  Therefore, regardless of what people say they want and what governments promise, it will take a long time to "decarbonize".  In fact, it may be the case that we never really get there.  The atmosphere needs a minimum level of CO2 to sustain plant life and keep the temperature from freezing (something on the order of 200 ppm).  Technology and engineering are the only real solutions and those will likely take time.  People talk about a carbon tax.  I would remind them that Europe has had a tax on gasoline for decades that made their gas cost about 5 times the US price.  Have they gotten electric cars any faster?  I think not.  People just paid the tax.  This is not an easy problem and there are no simple solutions.  We just have to keep working on it in many and various ways.

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