When asked to describe The Future Digital Energy System in only two words, I instantly say decarbonized and decentralized.
Decarbonization perfectly expresses the physical aspects of energy systems of tomorrow, which rely on a selection of technologies that minimize any excess carbon atoms emitted into the atmosphere.
Decentralization, on the other hand, is a great synopsis of all transitions that need to happen at the information technology and communication level. It is implausible to have a factual energy transition without decarbonization and decentralization as a center of gravity for next-gen energy systems.
Let’s first examine decarbonization and consider different possibilities for cleaning our energy systems and shifting to a low-carbon economy.
Where will decarbonization make a difference?
We cannot ignore the fact that focusing only on carbon dioxide does not completely solve the problem—we still need to reduce other greenhouse gases. Nevertheless, whether we tackle CO2 or GHG, the main culprits are the same: industry, transport, and buildings. Decarbonizing either of these sectors will also diminish other emissions (e.g., electrifying the industry will reduce methane fugitive emissions).
The only sector which is insufficiently addressed with decarbonization and is a paramount GHG emitter is agriculture. Yet, when we consider The Future Digital Energy Systems, agriculture is perceived rather as a beneficiary of clean energy, not an active participant (prosumer).
Source: IPCC Fifth Assessment Report (AR5). 2018. Working Group III.
Confining focus on transport, industry, and buildings encourages us to assess the contribution of various technologies to the ultimate goal of decarbonization – curtailment of CO2 emissions to zero.
How can we decarbonize?
The road from almost 40 Gt CO2 to net zero in less than 30 years is not a cakewalk. The scale of the change and the amount of financing needed to make it happen had not been seen beforehand. If we look at previous energy transitions, from wood to coal or coal to oil, we can see how huge a dilemma we face.
Abraham Darby figured out he could enhance iron production by switching from wood to coal at the beginning of the 18th century. It lasted almost 200 years to dethrone wood with coal as the No. 1 energy source. Switching from coal to oil was faster, but it still took a century, three times longer than we have for decarbonization. And yet, previous transitions were far easier as we were enhancing energy sources, not switching to completely different principles that are contractionary to any known economic orders.
Contradictory, the acceleration of technological breakthroughs is inimitable. Looking at a recap of technologies that could drive decarbonization in the next 30 years, we should not feel uncomfortable; most of them are already known and investigated to a certain degree. Let’s have a quick overview of where and how each of the instruments can support and enhance decarbonization in the midterm (2030) and long-term (2050).
Renewables
Renewable energy, especially solar and wind, will be a major CO2 pruner from the midterm perspective. The reasoning behind this is evident: costs. PVs and wind turbines became commodities, and the Levelized Cost of Energy, especially if we consider carbon taxes, went dramatically down. We can expect that the technology behind solar and wind turbines will only enhance, which, as a result, will drive further prices down and address a common flaw in renewables: the instability of energy generation.
Undoubtedly, renewables will contribute to decarbonization, mostly in the industry and building sector, by providing green electricity. Additionally, geothermal energy has great potential to heat our houses with quite attractive Levelized Cost of Energy and scalability capabilities.
Electrification
Electrification in terms of electricity supply is nothing new, and the utilization of green energy is THE MAIN scenario for the future. In terms of decarbonization, electrification is more related to the end-use of energy. The switch from molecules to electrons is the biggest shift that needs to happen if we want to decarbonize in such a constrained time frame.
Fortunately, technologies like heat pumps or EVs are starting to become the default standard not only in terms of consumer choices but also in terms of legislation priorities.
What is important is that electrons are the universal carrier of energy, which allows us better interconnection and interoperability of energy systems operating at various scales.
Nevertheless, there are some limitations concerning electrification when we look at:
- Industry—For energy-intensive processes (above 200 ⁰C), we need to look for alternatives, as electricity will not be able to provide enough heat sustainably.
- Transport—For long-distance transport (planes, ships, trucks), the energy density and weight of batteries are the main reasons to look for alternatives.
Hydrogen
Hydrogen is one of the options to extend the limitations of electrifications by, i.e., utilizing fuel cells for transport or re-designing standard energy-intensive processes (like direct iron reduction in steelmaking or green ammonia in fertilizers). Yet all these technologies are in test phases, but it is expected that they will become a full-scale reality in the 2nd phase of decarbonization in the long horizon. The next 10 years are crucial to develop capabilities and scale to decrease the cost of green (electrolysis + renewable energy) and blue (carbon capture and storage with grey hydrogen) hydrogen below today’s prices of grey hydrogen (produced from natural gas).³
Source: McKinsey & Company. Hydrogen Insights.
If we add CO2 pricing, which is already a reality in Europe, we can see that green and blue hydrogen are the only acceptable colors of hydrogen in The Future Digital Energy Systems.
Source: McKinsey & Company. Hydrogen Insights.
So, ultimately, do we end up with a discussion of blue or green? I am a strong believer that we do not have to make rigorous decisions, and both technologies will find their way to the market. Industry, already equipped with knowledge and assets to produce grey hydrogen (steam methane reforming, auto thermal reforming, and partial oxidation), will certainly incline towards blue hydrogen. On the other hand, transportation will rely on more decentralized production, which makes green hydrogen a natural candidate.
There are also weather aspects, legislation,, and the stability of the grid, so one thing we can be certain of is that the real scenario will always involve maneuvering between green and blue hydrogen.
Carbon Capture, Storage & Utilization (CCUS)
We have already addressed carbon capture, storage, and utilization (CCUS) in producing blue hydrogen. It is a perfect example of how we can quickly accelerate in transition with the support of already known and proven technologies (production of grey hydrogen).
And that is only part of the story. CCUS is not just a perfect retrofit for today’s grey hydrogen production. Still, it can be perfectly utilized in the steel and cement industry, generating electricity and heat from natural gas or as a key technology to create biofuels from dirty feedstock.
Another aspect of CCUS is a technology called Direct Air Capture (DAC) – which captures excessive CO2 from the atmosphere. DAC is not efficient enough to be the only technology to capture carbon but can be used as a last resort.
Power-heavy vehicles, ships, and high-temperature processes cannot rely on electricity and batteries. Adding to this bucket other difficult activities to decarbonize, we should perceive CCUS as a sin qua non if we want net negative emissions to become reality. What is missing is an infrastructure and a market. To switch gas from a combustible energy source to a hydrogen feedstock requires transport and storage for hydrogen and CO2 and facilities to sequester carbon. Such investments are hard to justify unless sufficient demand is expected.
Nuclear
Let’s make it clear at the beginning – nuclear energy is the safest of all non-renewable energy.
Considering this, we will not be able to decarbonize our planet and remain energy secure without the significant involvement of nuclear energy.
Unfortunately, building new conventional nuclear plants with a capacity above 1GW is not an easy, quick, and cheap task. With all the market disturbances, fluctuation of material prices, and extensive labor efforts, it will be titanic to do it on a bigger scale in the short period, which has left for decarbonization. The most probable technology which could take the lead in nuclear expansion is Small Modular Reactors (SMR).
Source: A. Vargas. International Atomic Energy Agency
Small Modular Reactors are:
- Small – physically a fraction of the size of a conventional nuclear power reactor.
- Modular – making it possible for systems and components to be factory-assembled and transported as a unit to a location for installation.
- Reactors – harnessing nuclear fission to generate heat to produce energy.
Being small and modular means we can perfectly couple SMRs to decentralized Future Digital Energy Systems. Examples are 1-to-1 industrial power generation unit replacement or heat generation for municipal areas. Modular is of the utmost importance, as reactors can be pre-processed in factories, which results in decreasing time for execution by 3-4 years, almost half of the time required for conventional nuclear plants. As with new technologies, we are having chicken and egg problems – to utilize scalability, we need to … scale -up. Get more experience through licensing key technologies, construction management, and creating a supply chain for efficient execution.
Bioenergy
Bioenergy is nowadays defined as a form of renewable energy, but coincidentally, it is also one of the main greenwashed forms of green energy. Bioenergy’s contribution to decarbonized Future Digital Energy Systems is ineluctable, but its performance is dependable for several reasons. So, let’s define what is good and what is wrong in bioenergy.
Fuel for bioenergy is biomass, in particular:
- Crop wastes.
- Forest residues.
- Purpose-grown grasses.
- Woody energy crops.
- Microalgae.
- Urban wood waste.
- Food waste.
Next, biomass can be processed by burning, bacterial decay, and conversion to a gas or liquid fuel.
The devil is in the details because burning biomass emits a lot of CO2s, and an even worse part of deforestation and land-use change has its source in bioenergy, which is backfiring on any decarbonization efforts. Additionally, there are also doubts about food vs. energy, so is the processing of biomass that could be consumed by people a sustainable way of generating energy?
So, what and how we process is setting the limits of what is good or bad. Generally, we should burn only biomass that cannot be processed in other ways and focus heavily on conversion to gas or liquid fuel. All those doubts led to the development of the generation-classification of biofuels, which is a guide for good and bad bioenergy.
The 2ⁿᵈ generation of biofuels answers the food vs fuel discussion.
The 3ʳᵈ generation of biofuels is answering deforestation & land use arguments.
The 4ᵗʰ generation of biofuels is (still) a vision of a fully accessible and environmentally friendly future fuel.
The three most common biofuels are bioethanol, biodiesel, and bio-jet. The utilization of bioenergy will remarkably increase in the mid-term and long-term, and the predominant impact we will see on transport decarbonization, especially aviation and marine.
Offsetting
Carbon offset schemes allow individuals and companies to invest in environmental projects around the world to balance out their carbon footprints.
It can be a powerful vehicle to raise funds for projects that are incapable of finding it on their own (i.e. distribution of efficient cooking stoves to poor families or capturing methane gas at landfill sites), but furthermore, it can be a scam that supports buying permission for doing nothing.
What is certain is that offsetting needs standards and certification. Existing certification is voluntary (Voluntary Gold Standard and Voluntary Carbon Standard) and has serious gaps that don’t build enough creditability in the decarbonization journey.
With proper standards assessing the additionality of offsetting and avoiding double-counting, we can treat carbon offsetting as an outright decarbonization instrument.
Conclusion
By summarizing all available technologies, we can strive to detail the final landscape of the energy system after the transition. Certainly, there won’t be only one, but many will differ based on regions, political systems, and society. An example of a hypothetical Future Digital Energy System in the European Union can be found in the picture below.
Source: Hidalgo & Others (2015)⁶
It’s still not ideal, as Europe has more extensive scrutiny of hydrogen. We should expect bigger shares of blue/green hydrogen, not only as a fuel for transport but also as a feedstock for industry.
And yes, some gaps must be filled, especially if we investigate the long-term (2050) future. The International Energy Agency estimates that The Future Digital Energy Systems will encompass technologies not yet developed. In 2030, they will account for around 18% of the whole system, but for 2050’s energy systems, almost half of the technologies are not yet developed.
However, as one of the biggest challenges of our times, decarbonization is influenced by existing economic, political, and social constraints. The pace of development will be subject to changes at macro and microscales. Look at the pricing of materials crucial for scaling up the solar and wind industries. Such a rapid price increase can significantly erode success and efforts from recent years and hinder renewable expansion.
It is by far the most difficult transition our humanity faces, and it must happen in the shortest time ever. However, based on available technologies, science, and scenarios, we are also the best-equipped candidates to solve this problem. As Sir David Attenborough said at COP26, we are the greatest problem solvers who have walked on Earth. We need to start addressing it properly. Let’s do our utmost to treat the scenario of Adam McKay’s film “Don’t Look Up” as an alternative fiction, not as a documentary of our indolence.
With The Future Digital Energy Systems articles series, I’d like to address our future energy landscape’s main drivers and enablers. Analyzing available technology and required changes in organizations, legislation, and society, I want to disenchant and simplify all actions needed to fulfill net-zero commitments and limit global warming.
