An outlook on the global energy mix in 2040
Making predictions regarding the future is all about drawing meaningful conclusions from a limited set of assumptions while accounting for changeable conditions.
Typically the further into the future you are making your predictions, the bigger the level of uncertainty becomes. Interestingly this rule does not apply when it comes to envisaging the future of the global energy mix in 20 – 30 years’ time.
If we accept that the decarbonisation of our entire energy generation is a must by 2040, then any serious prediction of the energy mix comes to the conclusion that globally we will have a generation mix of:
40% - 60% solar power
30% - 50% wind power
A mix of hydro power, biomass and biogas
All supported by battery storage. Furthermore, the demand for electricity is bound to rise by a factor of two to three due to the electrification of heat and mobility.
Regionally there will be variations of the contributions of the individual energy sources. However, it’s there’s no doubt that this is what the energy mix in 20 to 30 years will look like on a global scale.
Interestingly it is much more difficult to predict the energy mix in 5 and 10 years’ time compared to the long term goals. The really tricky question is how our decarbonisation goals can be most effectively met.
There are a multitude of pathways to a CO2-neutral future and the big challenge for policymakers and regulators is to make the transition as smooth and as cost effective as possible. This will be done by identifying the right measures and imposing them at the right time. The timing and the strictness of the measures to be imposed is critical.
To all those who believe a minimal regulatory framework will be sufficient and that market forces are suitable to identify the least costly route to the desired outcome I have to say that this is clearly not the case, if only for two fundamental reasons.
Firstly, the feedback loop of climate change is too slow – its consequences manifest themselves over decades and centuries, rather than in months and years. This simply isn’t fast enough to be able to set proper pricing signals and guide investment decisions.
Secondly, a number of consequences of climate change are irreversible once triggered. So there is no economic price you can attribute to fixing a broken system if there is no fix (i.e. rising sea levels).
Therefore the next five years are critical for companies, policymakers and regulators. The typical investment cycle in the energy industry is 20 to 30 years, so any wrong investment decision or missed opportunity to impose suitable market regulations today will have lasting consequences for decades to come.
Fortunately there are metrics by which one can measure if today’s business and policy decisions will be compatible with the future energy system. With these analysis tools at hand we can be well positioned to support all stakeholders in making the energy transition a success.
By Götz Fischbeck, Head of Business Development - Central Europe, Delta-ee
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