Category Archives: Energy & emissions

Why Europe needs a climate-forward innovation policy

By Lee Beck and Eve Tamme – Orca, the largest direct air capture and storage facility to date, recently commenced operations in Iceland and is expected to suck some 4000 tons of carbon dioxide (CO2) out of the atmosphere annually. With increasing climate ambition and the new climate neutrality target, the role of technological carbon removal is emerging as one of the critical points of debate in the European Union. On the one hand, it is evident from mid-century net-zero pathways that steep and transformational emission reductions must be prioritized over carbon removals. On the other hand, it is also becoming clear that carbon removal technologies will likely be needed to balance out residual emissions and reduce the stock of CO2 already in the atmosphere. This begs the question – how can we get this technology to Gigaton scale, so it is available as a decarbonization option? History has taught us that scaling technologies takes decades – time we do not have as the clock is ticking while the climate crisis rages. We need to get the policy framework right today, and there are two significant gaps to fill: commercialization and accounting.

The EU is already a climate leader and policy pioneer. However, the current EU sectoral policies will likely drive investment in advanced decarbonization tech only once technology-specific innovation policy has commercialized them. Considering that it has taken on average more than 20 years for technologies to reach crucial inflection points in deployment, we do not have time to test current, widely adopted decarbonization technologies as the main mitigation strategies before deploying technologies that are not commercially available.

With increasing climate ambition and our emissions reduction timelines shortened, carbon removal technologies will also need to be available sooner. Having multiple available technology options also increases our chances for success and provides countries and regions with the opportunity to design decarbonization technology portfolios tailored to their social, economic and resource circumstances. Hence, it’s time for Europe to embrace an innovation-forward approach to climate. more>

Not seeing the wood for the trees—the EU’s environmental blunder

Supporting a conversion to wood burning has unwittingly incentivised power plants to increase greenhouse gases.
By George Tyler – The European Union is leading the world in adopting limits on greenhouse-gas (GHG) emissions, notably via hefty carbon taxes. New policies always experience teething problems but an EU environmental regulation adopted in 2009 has become an embarrassing own goal.

The regulation classified wood burning as environmentally superior to fossil fuels—even carbon-neutral—and exempted it from carbon taxes. That was intuitive perhaps but an untested presumption adopted in a data vacuum. The notion was that harvesting forests for power-plant fuel would establish a virtuous cycle, with tree regrowth offsetting the wood-burning emissions.

But rigorous subsequent analyses have led experts to debunk the notion of wood as carbon-neutral. In no scenario, even stretching over a century, does replanted forest sequester sufficient carbon. In the most environmentally beneficial scenario, a quarter of a hardwood forest can be harvested for power-plant fuel and, if replanted with hardwood—and the entire forest left untouched and free of fire, drought or infestation during the subsequent century—will sequester all of 66 per cent of the emissions released by the initial burning. more>

 

Updates from McKinsey

Japan offshore wind: The ideal moment to build a vibrant industry
As construction starts on Japan’s first large commercial offshore wind farm in the coastal waters of Akita, the country is heralding a future of energy independence.
By Sven Heiligtag, Katsuhiro Sato, Benjamin Sauer, and Koji Toyama – With the passage in late 2019 of a law that allows offshore turbines to operate for 30 years, Japan has begun in earnest its journey away from fossil fuels and nuclear energy.

The two wind farms of the ¥100 billion Akita project will generate with a capacity of 140 MW, enough electricity to power at least 150,000 of Japan’s 52 million homes. By 2030 Japan plans to have installed a total of 10 GW, and the country’s possibilities are even greater. The International Energy Agency estimates Japan has enough technical potential to satisfy its entire power needs nine times over.

Japan can take advantage of the technology advances and cost improvements the offshore wind industry has made since its early days in Denmark in the 1990s. Today, it can learn from the experiences of other countries, not only in creating the turbines and wind farms but also in building markets, setting offtake prices, and designing regulation and financial incentives.

In only a handful of decades, offshore wind has become one of the core power-generation technologies of Europe, with installed capacity of 22 GW2 and about 100 GW planned by 2030.3 Taiwan and the United States have already commissioned the first small projects and plan for more than 10 and 25 GW by 2030, respectively.4 During the industry’s 30-year evolution, costs have fallen so sharply that offshore wind now compares favorably with competing energy sources.

But that does not mean Japan’s journey will be simple. It will require multiple players, including regulators, utilities, and investors, to do their part in a country where the public remains skeptical about offshore wind’s cost competitiveness with other power sources. more>

Energize This: Canada Could Become A Global Hub For New Nuclear Technology

By Tomas Kellner – Canada, like many industrialized countries, has pledged to reduce its net carbon emissions to zero by 2050. But what makes Canada unique is how it wants to achieve that goal. Like others, it has been boosting renewables like wind and solar. But it also plans to add to the mix a powerful new source: small modular reactors, or SMRs.

SMRs can generate carbon-free electricity while overcoming some of the nuclear industry’s biggest challenges — namely, cost and lengthy construction times.

They can play a crucial role in helping Canada decarbonize in several important ways. Designed to produce up to 300 megawatts of carbon-free electricity generation, SMRs can step in when the wind stops blowing or the sun stops shining, which can happen for extended periods during Canada’s long winters, marked by a formidable mix of snow, cold and short days. But they can also help provide carbon-free generation in remote areas, particularly in the northern regions, where many rely on diesel generators for electricity. more>

New UN climate report is a ‘Code Red for Humanity’

By Reynard Loki – In a grim report released on August 9, the Intergovernmental Panel on Climate Change (IPCC) says that climate change was “unequivocally” caused by human activity, and that within two decades, rising temperatures will cause the planet to reach a significant turning point in global warming. The report’s authors—a group of the world’s top climate scientists convened by the United Nations (UN)—predict that by 2040, average global temperatures will be warmer than 1.5 degrees Celsius above pre-industrial levels, causing more frequent and intense heat waves, droughts and extreme weather events. UN Secretary-General António Guterres called the bleak findings a “code red for humanity.”

The report found global warming increasing at a faster rate than earlier predictions estimated. “It is unequivocal that human influence has warmed the atmosphere, ocean and land… [and] at a rate that is unprecedented in at least the last 2,000 years,” the report says. “Widespread and rapid changes in the atmosphere, ocean, cryosphere and biosphere have occurred.” Even if the world’s nations enacted sharp and stringent reductions in the emissions of greenhouse gases today, overall global warming is still estimated to rise around 1.5 degrees Celsius within the next 20 years. That means that the hotter, more dangerous future that scientists and the Paris climate agreement sought to avoid is now unavoidable.

Linda Mearns, a senior climate scientist at the US National Center for Atmospheric Research and one of the report’s co-authors, offered a stern warning: “It’s just guaranteed that it’s going to get worse,” she said, adding that there is “[n]owhere to run, nowhere to hide.” In an interview with the Hill, Kim Cobb, the lead author of the report’s first chapter, said, “We’re already reeling, clearly, from so many of these impacts that the report highlights, especially in the category of extremes that are gripping these headlines and causing so much damage, but of course the 1.5 degree C world is notably and discernibly worse.” more>

Only a fully digital Europe can keep up with China and the US

By Ludovic Lassauce – While Europe’s vaccination campaigns are only just getting into full swing, the global race towards post-Covid economic recovery is already underway – and as usual, the European Union is lagging behind. While the European Commission estimates the Eurozone will need another year to return to pre-pandemic growth levels, a surging US economy has reclaimed its former mantle as the engine of global economic activity, while China’s record 18.3% growth rate in the first quarter shows Beijing is well on its way to making up for 2020’s losses.

With his characteristic bluntness, France’s economy minister Bruno Le Maire laid out the stakes of the moment when he asked his EU counterparts this month whether they “want to play in the first league” or otherwise “lag behind China and the US.” While trillions of dollars in stimulus spending have already buoyed the US economy, Europe is still months away from disbursing the €750 billion in recovery funds it promised last year. Commission officials like Paolo Gentiloni and European finance ministers like Le Maire are thus rightly concerned that a simple ‘return to normal’ won’t be enough to keep Europe competitive in the post-pandemic global economy.

Digital silver linings

And yet, as EU leaders prepare to debate the terms of the post-COVID recovery with their new US counterpart at this month’s G7 summit, they can take heart in the progress Europe has made towards a fully digital economy in the midst of a public health catastrophe. Faced with an urgent necessity, European economies made years’ worth of progress in digitalization in mere months. Some of Europe’s least digitalized countries, such as Greece, were able to move the majority of their services online practically overnight, using the pandemic to overcome inertia in the span of just a few weeks.

By insisting EU members allocate a minimum of 20% of their shares of the EU recovery package to digital investment, Brussels has sent a clear message to European governments that their chronic failure to implement future-minded reforms and invest in the latest generation of digital technologies, exemplified by 5G, is no longer tenable. Even if China and the US enjoy an advantage in pure growth, the EU’s “green and digital” approach to the recovery can still shape the global conversation – but only if the EU’s national governments get serious about implementing the digital pledges they have signed up for. more>

Unsnarling Traffic Jams Is the Newest Way to Lower Emissions

By John Fialka – The Department of Energy is preparing to use the massive computing power of its national laboratories to tackle a daily scourge of American life: traffic jams.

The effort is aimed at more than just improving motorists’ moods. If it works, it could cut U.S. transportation fuel consumption up to 20% and reduce auto emissions.

A second goal is to recover as much as $100 billion in lost worker productivity by unsnarling rush hour traffic jams in U.S. cities over the next 10 years.

Two years ago Oak Ridge National Laboratory in Oak Ridge, Tenn., and the National Renewable Energy Laboratory in Golden, Colo., selected Chattanooga, Tenn. (population 182,799), as the guinea pig for their first traffic-cutting experiment.

The city, nestled among the hills and ridges of the southeastern corner of the state, is ranked among the nation’s top 20 most traffic-congested cities.

The first step for NREL scientists was to make a detailed computer model, or what it calls a “digital twin,” of the city’s traffic patterns to isolate and then explore solutions to its snarled rush hours.

“Chattanooga provided an ideal microcosm of conditions and opportunities to work with an exceptional roster of municipal and state partners,” explained John Farrell, who manages the vehicle technology management program for NREL.

“Eventually, the plan is to apply these solutions to larger metropolitan areas and regional corridors across the country.” more>

GE eyes 100% hydrogen-fueled power plants by 2030

By Frédéric Simon – While fossil gas is often seen as a transition fuel towards a fully decarbonized energy mix, GE Gas Power sees low-carbon gas as “a destination technology” with the potential to convert power plants to run 100% on clean hydrogen by 2030.

“Today, we have a 50% hydrogen capability for combustion in our largest baseload gas turbines” used for power generation, said Martin O’Neill, vice president at GE Gas Power.

The company’s objective, he explained, is to continue research and development in order “to advance the percentage of hydrogen combustion capability towards 100% by 2030,” he told a EURACTIV event earlier this month.

However, getting there would require a rapid scale up in the production of clean hydrogen, he added. And that will only be possible if multiple sources of low-carbon hydrogen are added to the mix, including so-called “blue hydrogen” where emissions are somehow captured and stored. more>

Germany’s renewable electric plan gets green light from EU

New scheme lifts some important barriers for the use of electrolysers in order to produce hydrogen
By Kostis Geropoulos – The European Commission has approved, under EU State aid rules, the prolongation and modification of a German scheme to support the production of electricity from renewable energy sources and from mine gas, as well as reductions of charges to fund support for electricity from renewable sources, the EU’s competition chief said.

The German Renewable Energy Act (Erneuerbare Energien Gesetz – EEG) 2021 scheme will provide important support to the environmentally-friendly production of electricity, in line with EU rules, European Commission Executive Vice-President in charge of competition policy Margrethe Vestager said.

“Thanks to this measure, a higher share of electricity in Germany will be produced through renewable energy sources, contributing to further reductions in greenhouse gas emissions and supporting the objectives of the Green Deal,” she said. “The scheme introduces new features to ensure that aid is kept to the minimum and electricity production occurs in line with market signals, while at the same time ensuring the competitiveness of energy-intensive companies and reducing pollution caused by ships in harbour. In this way, the scheme provides the best value for taxpayers’ money, while minimizing possible distortions of competition,” Vestager added.

The scheme also introduces small modifications to the German EEG surcharge reductions for energy intensive companies, a dedicated rule for surcharge reductions for hydrogen for energy intensive companies, as well as EEG surcharge reductions to promote the use of shore-side electricity by ships while at berth in ports.

Hydrogen Europe Secretary General Jorgo Chatzimarkakis told New Europe on April 30 the new scheme lifts some important barriers for the use of electrolysers in order to produce hydrogen. “This is good news and important signal for investments in the sector of ‘HydroGenewables,’” he said. more>

Green markets won’t save us

Markets are an unreliable guide for navigating a problem as large and complex as climate change.
By Katharina Pistor – How can one make wise decisions about a perpetually unknowable future? This question is as old as humankind, but it has become existential in light of climate change. Although there is sufficient evidence that anthropogenic climate change is already here, we cannot possibly know all the ways that it will ramify in the coming decades. All we know is that we must either reduce our environmental footprint or risk another global crisis on the scale of the ‘little ice age’ in the 17th century, when climatic changes led to widespread disease, rebellion, war and mass starvation, cutting short the lives of two-thirds of the global population.

The British economist John Maynard Keynes famously argued that investors are driven ultimately by ‘animal spirits’. In the face of uncertainty, people act on gut feelings, not ‘a weighted average of quantitative benefits multiplied by quantitative probabilities’, and it is these instinct-driven bets that may (or may not) pay off after the dust settles. And yet policy-makers would have us trust animal spirits to help us overcome the uncertainty associated with climate change.

Humanity has long sought to reduce uncertainty by making the natural world more legible, and thus subject to its control. For centuries, natural scientists have mapped the world, created taxonomies of plants and animals, and (more recently) sequenced the genomes of many species in the hope of discovering treatments against all imaginable maladies.

What maps, taxonomies and sequences are to chemists and biologists, numbers and indicators are to social scientists. Prices, for example, signal the market value of goods and services, and the expected future value of financial assets. If investors have largely ignored certain assets, the reason might be that they were improperly measured or priced. more>