The changing face of energy: DNV GL announces plans for the future of the industry
DNV GL - Energy CEO Ditlev Engel outlines how the company’s plans for the future will help reshape the energy industry.
There are few people within the energy industry as well placed to discuss green initiatives or, more specifically, the integration of renewable technologies into a digitalised interconnected energy system than DNV GL’s Ditlev Engel.
The Dane moved to DNV GL back in 2016 he has been instrumental in sharing his extensive knowledge of the global energy industry, developing value propositions and services as well as helping the business grow in terms of wind and solar energy, transmission and distribution systems and energy efficiency. With all of this in mind, we sat down with Engel to find out more about DNV GL’s current operations and their plans for the future.
Right here, right now
As global government agencies and utilities increasingly introduce programmes to help businesses and households use energy more efficiently, DNV GL’s objective is to help programme sponsors design, implement and track energy efficiency programmes on budget, with verifiable results while delivering high customer satisfaction.
With key services ranging from energy efficiency engineering and inspections through to audits, project modelling and much more besides, what has Engel noticed since joining the business and what are the key focus areas?
“We’re doing work on many different fronts,” he says, “but I think the key word for us at the moment is integration – essentially putting everything together. What we’re seeing is the likes of wind becoming more digital, solar becoming more digital and so on. In order to improve operations we see systems being built in a new way. That’s one thing. I’d also say the industry is now generating a significant amount of data, and that’s fine, but the key question is this – is it something people can use? Also, how do we work with it in a proactive way to ensure it provides value for our clients?” Engel asks.
So, what are some examples of the work DNV GL is currently undertaking? “We have over 2,400 people working in the energy business area developing multiple solutions within that space, but then within DNV general we also have a new business area which is called Digital Solutions. We’ve also launched a new open platform called Veracity.”
Veracity is a data platform designed to help not just the energy industry, but the maritime industry improve its profitability and explore new business models through digitalisation. Veracity will help companies improve data quality and manage the ownership, security, sharing and use of data.
As energy companies are increasingly committed to the sustainability agenda and making a positive contribution to the environment, what has Engel noticed recently in terms of what the industry is doing to maintain these goals?
“What we tend to see is that a lot of B2C companies are becoming very engaged,” he tells us. “For example, the likes of major software or paper companies issuing their own PTAs and going out of their way to become directly involved in the industry. So, that’s one way, people are managing their own carbon footprint in order to improve their sustainability.” And it doesn’t end there: “I think there is a very clear consensus across industries that everybody has to work in this direction and it can be done multiple ways. Certainly, more than it was in the ‘old days’ when all they would have is a CSR report. Now, it’s really about how to embed this information in your day-to-day operations.”
Beyond the demands for the obvious requirements surrounding sustainability, Engel has also picked up on the idea that businesses are still trying to work out what it means to be ‘green’. “It’s quite interesting that, in my experience, when people say ‘we gotta go green’, you sometimes wonder ‘what does that actually mean?’ It’s something that people have very different views on and the best way for me to explain it, in terms of sustainability, is to say ‘how do you create more, with less, continuously’, which is also a way to improve efficiency in operations. So how do you get more out of your assets and consume less from whatever resources you’re using in your value chain? Sustainability is becoming an environmental driver and a financial driver in terms of how people improve their operations.”
Beyond the immediate future of DNV GL, what other trends and forecasts does Engel foresee playing a pivotal role in the advance towards a greener future?
“If you look at the Energy Transition Outlook we launched last year (a global and regional forecast of the energy transition to 2050), which we’ll update in September, it had some key takeaways,” he says. “One of the things that people tend to forget is the role of energy efficiency i.e. how much more efficient can we make our operations? Basically, what we’ll see is energy efficiency through digitisation. The electrification of society will also grow rapidly and wind and solar will have large growth potential across the globe.”
Another aspect of these new dynamics will be the uptake of EVs, something Engel feels has been vastly underrated. “We believe in 2021 the cost of an EV will be lower than that of a combustion engine,” he says. “You also have to remember that as we adopt EVs, not only do they not emit CO2, but they will also become an active player in the balancing of the grid which again means efficiency and higher sustainability. We are already seeing massive investment into battery storage for EVs and we believe this will also have a huge role to play. By 2025 we believe 50% of cars will either be EVs or hybrids.”
Clearly there’s good reason to believe that the energy industry is making strides in the right direction in terms of developing an effective environmentally-friendly approach. By way of conclusion, however, Engel suggests the way energy efficiency is viewed needs to change. “There’s a lot more going on than just some power being produced in a cable.”
Carbon dioxide removal revenues worth £2bn a year by 2030
Carbon dioxide removal revenues could reach £2bn a year by 2030 in the UK with costs per megatonne totalling up to £400 million, according to the National Infrastructure Commission.
Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades - although costs are uncertain given removal technologies are in their infancy - and revenues could match that of the UK’s water sector by 2050. The Commission’s analysis suggests engineered removals technologies need to have capacity to remove five to ten megatonnes of carbon dioxide no later than 2030, and between 40 and 100 megatonnes by 2050.
The Commission states technologies fit into two categories: extracting carbon dioxide directly out of the air; and bioenergy with carbon capture technology – processing biomass to recapture carbon dioxide absorbed as the fuel grew. In both cases, the captured CO2 is then stored permanently out of the atmosphere, typically under the seabed.
The report sets out how the engineered removal and storage of carbon dioxide offers the most realistic way to mitigate the final slice of emissions expected to remain by the 2040s from sources that don’t currently have a decarbonisation solution, like aviation and agriculture.
It stresses that the potential of these technologies is “not an excuse to delay necessary action elsewhere” and cannot replace efforts to reduce emissions from sectors like road transport or power, where removals would be a more expensive alternative.
The critical role these technologies will play in meeting climate targets means government must rapidly kick start the sector so that it becomes viable by the 2030s, according to the report, which was commissioned by government in November 2020.
Early movement by the UK to develop the expertise and capacity in greenhouse gas removal technologies could create a comparative advantage, with the prospect of other countries needing to procure the knowledge and skills the UK develops.
The Commission recommends that government should support the development of this new sector in the short term with policies that drive delivery of these technologies and create demand through obligations on polluting industries, which will over time enable a competitive market to develop. Robust independent regulation must also be put in place from the start to help build public and investor confidence.
While the burden of these costs could be shared by different parts of industries required to pay for removals or in part shared with government, the report acknowledges that, over the longer term, the aim should be to have polluting sectors pay for removals they need to reach carbon targets.
Polluting industries are likely to pass a proportion of the costs onto consumers. While those with bigger household expenditures will pay more than those on lower incomes, the report underlines that government will need to identify ways of protecting vulnerable consumers and to decide where in relevant industry supply chains the costs should fall.
Chair of the National Infrastructure Commission, Sir John Armitt, said taking steps to clean our air is something we’re going to have to get used to, just as we already manage our wastewater and household refuse.
"While engineered removals will not be everyone’s favourite device in the toolkit, they are there for the hardest jobs. And in the overall project of mitigating our impact on the planet for the sake of generations to come, we need every tool we can find," he said.
“But to get close to having the sector operating where and when we need it to, the government needs to get ahead of the game now. The adaptive approach to market building we recommend will create the best environment for emerging technologies to develop quickly and show their worth, avoiding the need for government to pick winners. We know from the dramatic fall in the cost of renewables that this approach works and we must apply the lessons learned to this novel, but necessary, technology.”
The Intergovernmental Panel on Climate Change and International Energy Agency estimate a global capacity for engineered removals of 2,000 to 16,000 megatonnes of carbon dioxide each year by 2050 will be needed in order to meet global reduction targets.
Yesterday Summit Carbon Solutions received "a strategic investment" from John Deere to advance a major CCUS project (click here). The project will accelerate decarbonisation efforts across the agriculture industry by enabling the production of low carbon ethanol, resulting in the production of more sustainable food, feed, and fuel. Summit Carbon Solutions has partnered with 31 biorefineries across the Midwest United States to capture and permanently sequester their CO2 emissions.
Cory Reed, President, Agriculture & Turf Division of John Deere, said: "Carbon neutral ethanol would have a positive impact on the environment and bolster the long-term sustainability of the agriculture industry. The work Summit Carbon Solutions is doing will be critical in delivering on these goals."
McKinsey highlights a number of CCUS methods which can drive CO2 to net zero:
- Today’s leader: Enhanced oil recovery Among CO2 uses by industry, enhanced oil recovery leads the field. It accounts for around 90 percent of all CO2 usage today
- Cementing in CO2 for the ages New processes could lock up CO2 permanently in concrete, “storing” CO2 in buildings, sidewalks, or anywhere else concrete is used
- Carbon neutral fuel for jets Technically, CO2 could be used to create virtually any type of fuel. Through a chemical reaction, CO2 captured from industry can be combined with hydrogen to create synthetic gasoline, jet fuel, and diesel
- Capturing CO2 from ambient air - anywhere Direct air capture (DAC) could push CO2 emissions into negative territory in a big way
- The biomass-energy cycle: CO2 neutral or even negative Bioenergy with carbon capture and storage relies on nature to remove CO2 from the atmosphere for use elsewhere