Meeting a net-zero emissions global target by mid-century — as recommended by the Intergovernmental Panel on Climate Change – needs accelerated innovation. But the IEA says that in 2017 only 4 of 38 energy technologies and sectors were on track to meet long-term climate, energy access and air pollution goals. In the UK, moving from the existing target of cutting annual greenhouse gas emissions by 80% towards a net zero emissions target by 2050, as now agreed by the UK government, certainly implies a greater role for key technologies.
Moving from invention to widespread deployment can take many decades, yet only around three decades remain to meet the net zero emissions goal
Against this backdrop, the Aldersgate Group commissioned Vivid Economics and the UK Energy Research Centre (UKERC) to look at conditions and policy approaches that could speed up the cycle of innovation to achieve a net zero target. The resulting Accelerating innovation towards net zero report sees innovation as “learning that occurs during R&D, demonstration and the early stages of deployment”, so that the lessons drawn from its case studies are about ways to accelerate learning related to deployment, as well as during R&D. But learning takes time: “moving from invention to widespread deployment can take many decades, yet only around three decades remain to meet the net zero emissions goal”. It also needs consistent support, as indicated by the case study on wind power.
Lessons from wind
Drawing on a comparison of wind development in Denmark and the UK, the Aldersgate report says that “feed-in tariffs [FiTs] for wind projects were vital to move towards industrial-scale deployment”, as happened initially in Denmark and then massively in Germany. It notes a little lamely that “the UK was not at the forefront of the early development of onshore wind turbines”. Well, yes, the UK resisted FiTs for a long time, right up to 2008, and then only, from 2010 onwards, for small, mostly photovoltaic (PV) solar, projects. But it’s not quite true that the UK was a laggard in wind engineering terms. A 100 kW unit was built on the Orkney archipelago in 1955, while in the 1980s Howden, based in Renfrew, Scotland, developed a pioneering 330 kW machine; California installed 26 MW-worth of the kit in 1984. And in 1987, the UK government backed a very large 3 MW Wind Energy Group project on the Orkneys, as well as smaller ones elsewhere, including a novel 100 kW vertical axis device. But it is true that nothing much came of any of them, in part since there was no UK market for wind projects. In the 1990s, when a UK market was created via the Non Fossil Fuel Obligation (NFFO) and then, in the 2000s, the Renewables Obligation (RO) system, the machines for the UK’s wind farms had to be imported, mainly from Denmark and Germany.
UK Committee on Climate Change recommends net zero emissions by 2050
As this suggests and as the report notes, it is vital to provide support through market creation policies and investment to help technologies go from early deployment to widespread commercialization. “Such policies, from the early voluntary power purchase agreements in Denmark, through to feed-in tariffs in numerous countries including the UK’s Contract for Difference [CfD] auctions, are crucial to help support technologies in early or pre-commercialisation stages,” the report continues. It may be a stretch to include market-based CfDs along with fixed-price FiTs, but it is true that, while FiTs helped wind expand in Denmark and in Germany especially, of late market-based CfDs have helped offshore wind expand to near 8 GW in the UK, though with mostly imported technology.
Banks to the rescue
Direct funding has also helped. “Investment support from governments or government-supported funding agencies has also been important in providing loan capital or loans to invest in projects where the market was not yet sufficiently confident due to the new technologies involved,” says the report, adding that the UK Green Investment Bank (GIB) — now known as the Green Investment Group — invested £1.6 bn in the offshore wind sector, across nine projects with a combined total capacity of 3.2 GW. It also set up and manages the UK Green Investment Offshore Wind Fund, which has a portfolio of six projects with a combined capacity of 1.45 GW. “There is strong evidence that the GIB and European Investment Bank (EIB) provided important support to offshore wind deployment,” the report continues. “They did so by: absorbing early deployment and technology risk and filling investment gaps, allowing the private sector to invest; buying equity stakes in existing offshore wind farms, allowing developers to “recycle and reinvest capital in new projects”; and using their investments to support the development of innovative financial products such as portfolio aggregation, which attracted new investors to the sector.”
Overall bills need not rise as a result of climate policy
UK Committee on Climate Change
The GIB and the EIB were evidently vital — pity then that the GIB was sold off and presumably the UK won’t have access to the EIB post-Brexit. But life goes on. And the government’s advisory Committee on Climate Change (CCC) is quite optimistic about the costs of making the energy transition. It says that, while it will need increased investment, that would be offset by reduced fuel costs, so “overall bills need not rise as a result of climate policy”.
A future for CCUS?
The UKERC/Vivid Economics report also looks to Carbon Capture Utilisation and Storage (CCUS). “New markets must now be created to fully commercialise early-stage low-carbon technologies,” it says. “Market creation mechanisms to be considered include CfDs for power sector CCUS and obligations or incentives for fossil fuel using industries to sequester their CO2 emissions.”
That assumes that CCUS has a future. Although the Committee on Climate Change also seems keen and hopeful, it does admit that it would require “both increased upfront spend and higher fuel costs”. It notes that what was then called CCS, along with nuclear and heat pumps, played significant roles in its earlier plans, but says that they have all under-performed “as projects have been delayed and costs have overrun (e.g. nuclear) or as policy has failed to drive take-up effectively (e.g. heat pumps and carbon capture and storage, CCS)”.
Renewables in the UK: what next?
As implied by the current use of the label “CCUS” instead of “CCS”, the emphasis these days is moving away from just CCS to CCU, and the production of synfuels by reacting carbon dioxide — captured directly from the air or from power plants — with hydrogen, perhaps produced electrolytically, using electricity from renewables or nuclear.
However, CCUS “is not proceeding on the innovation pathway required to meet the IEA’s Sustainable Development Scenario (2018)”, notes the UKERC/Vivid Economics report. “While incentives have been implemented in the US, UK, Canada, and Norway, projects have stalled or not translated into a pipeline of future projects. A common feature of these cases is a stop-start approach to demonstration, which has been ineffective in the context of promoting CCUS deployment.” It suggests using an infrastructure demonstration approach to move things on. That seems a very long shot.
Done fully, “CCUS would involve the construction of a large-scale infrastructure which would be shared by numerous point sources and storage points”, according to the UKERC/Vivid Economics report. “It is instructive that most comparable national level infrastructure systems have been constructed under the guidance of national level coordinating bodies, such as the Central Electricity Board in the case of the original electricity transmission network in the UK, and the Gas Council for the natural gas grid.” Is it really worth it? Just to be able to continue to use fossil fuels? What’s more, when we burn CCU-derived synfuels, we get the CO2 back again. It seems like a case of costly diminishing returns. Why not use the green power, and the green hydrogen, directly? Nevertheless, some UK funding is being provided for CCUS work and the debate continues, with Direct Air Carbon Capture and Storage (DACCS) also being talked up.
Up in the air
That’s interesting, but the proportion of CO2 in the air is — still! — only around 0.039%, so to capture a ton of CO2 you have to chemically process over 2500 tons of air and then store the CO2 somewhere. Doing all this needs energy. You could use PV solar. But trees/plants do all this for free. Of course, some are still keen on biomass energy carbon capture and storage (BECCS) as another negative carbon option. To have much impact that would involve a lot of land-use for biomass and, as with DACCS, a lot of carbon storage space. In terms of CO2 sequestration, it might be better just to plant more trees and as far as energy generation goes, expand renewables fast. And the UKERC/Vivid Economics report does offer some ideas about how to accelerate renewables. So does the recent Climate Manifesto from Greenpeace. In my next post I look at some of the problems efforts like this might face in relation to curtailment.
