Power capacity investment to top £11.5trn over next 30 years
The stark drop in energy demand due to the coronavirus pandemic will remove around 2.5 years’ worth of energy sector emissions between now and 2050, research company Bloomberg NEF says in its latest New Energy Outlook 20202 report.
Using its proprietary Economic Transition Scenario, Bloomberg NEF’s latest projection of the evolution of the global energy system over the next 30 years shows that emissions from fuel combustion peaked in 2019. Down approximately eight percent in 2020 due to the COVID-19 pandemic, energy emissions rise again with economic recovery, but never again reach 2019 levels. From 2027 onwards, they fall at a rate of 0.7 percent per year to 2050.
The report states that this scenario is based on a huge build-out of super-competitive wind and solar power, the uptake of electric vehicles and improved energy efficiency across industries. However, there will be £11.5 trillion invested in new power capacity over the next 30 years with wind and solar accounting for 56 percent of global electricity generation by mid-century. An additional £10.7 trillion will be invested in the grid to 2050.
In comparison, coal-fired power peaks in China in 2027 and India in 2030, collapsing to 12 percent of global electricity generation in 2050. Gas is the only fossil fuel to keep growing throughout the outlook, up 0.5 percent year-on-year to 2050, growing 33 percent in buildings and 23 percent in industries with few economic low-carbon substitutes.
Jon Moore, CEO of BNEF comments: “The next ten years will be crucial for the energy transition. There are three key things that we will need to see: accelerated deployment of wind and PV; faster consumer uptake in electric vehicles, small-scale renewables, and low-carbon heating technology, such as heat pumps; and scaled-up development and deployment of zero-carbon fuels.”
However, despite the progress of the energy transition, and the decrease in energy demand brought by Covid-19, BNEF still sees energy sector emissions putting the world on course for a 3.3 degrees Celsius temperature increase by 2100.
Matthias Kimmel, senior analyst at BNEF and co-author of the report, explains that in order to stay well below two degrees of global temperature rise, emissions would need to reduce by six percent every year starting from now, and to limit the warming to 1.5 degrees Celsius, emissions would have to fall by 10 percent per year.
Whereas previous editions of the report focused on the electricity sector, this year’s edition includes detailed chapters on industry, buildings and transport to give a full-coverage, economics-led view of the energy economy to 2050. The report also features a Climate Scenario investigating a clean electricity and hydrogen pathway to holding temperatures to well below two degrees.
Seb Henbest, chief economist at BNEF and lead author of NEO 2020, says: “Our projections for the power system have become even more bullish for renewables than in previous years, based purely on cost dynamics. What this year’s study highlights is the tremendous opportunity for low-carbon power to help decarbonize transport, buildings and industry – both through direct electrification and via green hydrogen.”
The report sees total oil demand peaking in 2035 and then falling 0.7 percent year-on-year to return to 2018 levels in 2050. Electric vehicles are projected to reach upfront price parity with internal combustion vehicles in the years leading up to the mid-2020s. After that, their adoption accelerates, eating more and more into the oil demand growth that otherwise comes from aviation, shipping and petrochemicals.
Ultimately, energy use in buildings, industry and certain parts of the transport sector, such as aviation and shipping, have few cost-competitive low-carbon options, and so remain heavily reliant on gas and oil product, it concludes.
NEO 2020 Climate Scenario
- BNEF has produced a Climate Scenario, to sit alongside its core Economic Transition Scenario. This year, it investigates a clean electricity and green hydrogen pathway to holding temperatures to well below 2 degrees.
- This pathway describes a low-carbon future energy economy supplying 100,000TWh of clean electricity by 2050. This is five times all the electricity produced in the world today and would require a power system that is 6-8 times larger in terms of total capacity. Two-thirds of this energy would go to direct electricity provision in transport, buildings, and industry, the remaining third to manufacturing hydrogen.
- For green hydrogen to supply just under a quarter of final energy we would need 801MMT of fuel and an additional 36,000TWh of electricity – that is 38% more power than is produced in the world today. Doing this with wind and PV might be cheapest, but it would require 14TW of capacity covering 3.5 million square kilometres – an area roughly the size of India.
- According to BNEF a clean electricity and green hydrogen pathway requires between $78 trillion and $130 trillion of new investment between now and 2050 to cover growth in electricity generation and the power grid, as well as manufacturing, storing, and transporting hydrogen.
Form Energy receives funding power for iron-air batteries
Form Energy believes it has cracked the conundrum of commercialising grid storage through iron-air batteries - and some of the biggest names in industry are backing its potential.
The startup recently announced the battery chemistry of its first commercial product and a $200 million Series D financing round led by ArcelorMittal’s XCarb innovation fund. Founded in 2017, Form Energy is backed by investors Eni Next LLC, MIT’s The Engine, Breakthrough Energy Ventures, Prelude Ventures, Capricorn Investment Group and Macquarie Capital.
While solar and wind resources are the lowest marginal cost sources of electricity, the grid faces a challenge: how to manage the multi-day variability of renewable energy, even in periods of multi-day weather events, without sacrificing energy reliability or affordability.
Moreover, while Lithium-ion batteries are well suited to fast bursts of energy production, they run out of energy after just a few hours. Iron-air batteries, however, are predicted to have theoretical energy densities of more than 1,200 Wh/kg according to Renaissance of the iron-air battery (phys.org)
The active components of Form Energy's iron-air battery system are some of the cheapest, and most abundant materials: iron, water, and air. Iron-air batteries are the best solution to balance the multi-day variability of renewable energy due to their extremely low cost, safety, durability, and global scalability.
It claims its first commercial product is a rechargeable iron-air battery capable of delivering electricity for 100 hours at system costs competitive with conventional power plants and at less than 1/10th the cost of lithium-ion and can be optimised to store electricity for 100 hours at system costs competitive with legacy power plants.
"This product is our first step to tackling the biggest barrier to deep decarbonisation: making renewable energy available when and where it’s needed, even during multiple days of extreme weather, grid outages, or periods of low renewable generation," it states.
Mateo Jaramillo, CEO and Co-founder of Form Energy, said it conducted a broad review of available technologies and has reinvented the iron-air battery to optimise it for multi-day energy storage for the electric grid. "With this technology, we are tackling the biggest barrier to deep decarbonization: making renewable energy available when and where it’s needed, even during multiple days of extreme weather or grid outages," he said.
Form Energy and ArcelorMittal are working jointly on the development of iron materials which ArcelorMittal would non-exclusively supply for Form’s battery systems. Form Energy intends to source the iron domestically and manufacture the battery systems near where they will be sited. Form Energy’s first project is with Minnesota-based utility Great River Energy, located near the heart of the American Iron Range.
Greg Ludkovsky, Global Head of Research and Development at ArcelorMittal, believes Form Energy is at the leading edge of developments in the long-duration, grid-scale battery storage space. "The multi-day energy storage technology they have developed holds exciting potential to overcome the issue of intermittent supply of renewable energy."
Investors in Form Energy's November 2020 round included Energy Impact Partners, NGP Energy Technology Partners III, and Temasek.
In May 2020, it signed a contract with Minnesota-based utility Great River Energy to jointly deploy a 1MW / 150MWh pilot project to be located in Cambridge, MN. Great River Energy is Minnesota's second-largest electric utility and the fifth largest generation and transmission cooperative in the US.
Last week Helena and Energy Vault announced a strategic partnership to identify additional opportunities for Energy Vault’s waste remediation technologies as the company begins deployment of its energy storage system worldwide. It received new investment from Saudi Aramco Energy Ventures (SAEV) in June.
Maoneng has revealed more details of its proposed 240MWp / 480MWh Battery Energy Storage System (BESS) on Victoria’s Mornington Peninsula in Australia (click here).
The BESS represents hundreds of millions of dollars of investment that will improve electricity grid reliability and network stability by drawing energy from the grid during off-peak periods for battery storage, and dispatching energy to the grid during peak periods.