Energy transition

The energy transition will be led by continuing rapid growth of wind and solar, combined with the use of batteries and hydrogen. These are crucial in the push to ‘electrify everything’ – not least for heating and surface transport.

The good news is that 80 per cent of the energy transition is already possible with current technology. But many difficult issues remain. 

Matching electricity supply and demand

First, there’s the matter of intermittency and unpredictability of wind and solar supply. In some countries, batteries to store electricity overnight will be enough. But in much of the world, the storage buffer could be provided by hydrogen. When power is abundant, electrolysers will turn it into hydrogen. That green hydrogen can then be stored in underground caverns and used to make power when electricity is scarce. This would put H2 at the very centre of the transition – if it ever becomes cheap enough to be financially feasible.

Transport

Then there’s transport. We’ve got used to the electrification of cars, trains, bikes and even buses. But elsewhere there are significant issues.

Take aviation. Hydrogen and ammonia, which can be used as a source of pure hydrogen, probably won’t work for airplanes, though it might for ships. The aviation industry will have to use synthetic jet fuel instead – where the hydrogen is part of a man-made hydrocarbon. But this will probably be much more expensive than conventional fuel and will require large amounts of electricity (for the hydrogen) and carbon dioxide capture (for the carbon). And that’s without considering the global warming effect of vapour trails left by airplanes.

As for shipping, although ammonia might be cheaper than methanol, the latter is gaining momentum for use in ‘dual-fuel’ ships, not least because it is easier to work with. The pioneers will be able to make methanol from organic wastes. But this source will run out, and mass production of methanol will be dependent on carbon capture at very large scale.

And, finally, for heavy vehicles, it was long the assumption that hydrogen fuel cells would be the energy source. But improvements in batteries, and the reduced impact of their weight, means that most manufacturers are gambling on electricity being the replacement for diesel.

Industry

Industrial applications are a major source of greenhouse gases, and here progress has often been slow. Steel, cement, high-temperature industries, plastic, clothing and agriculture all require significant effort.

Hydrogen looks as though it will replace coal in primary steelmaking. But it’s not clear whether the industry has the capital to make the switch; one solution could be for steel production to move to countries that can produce hydrogen cheaply thanks to low electricity prices, such as Australia and Sweden.

The global cement manufacturers are choosing very different routes. Building materials company Heidelberg is gambling principally on carbon capture and storage. Others are assuming that alternatives to cement will reduce the CO₂ emissions from the manufacturing process. In any event, CO₂ taxation will have a disproportionate impact on the industry because of how CO₂ intensive it is.

Industries such as ceramics and papermaking may be able to create the 1,000-degree temperatures that they need using electricity. Some companies are going down this route while others are beginning to invest in hydrogen. But because hydrogen generates less heat when it combusts, it is not as appropriate as natural gas for ceramics. At the same time, electricity might not be able to produce the even higher temperatures ceramics production demands.

The oil industry is convinced that petrochemical demand will remain robust, even as volumes sold to the transport sector begin to fall. And they have history behind them; the modern economy is increasingly reliant on single use plastics. Decarbonisation of plastics will require a combination of effective reprocessing (chemical recycling), massive reduction in the 10,000 or so current varieties of plastic, greater durability and effective collecting schemes.

Almost no clothing is recycled, and the amount produced continues to increase. The number of times an item is worn before being thrown away fell by 20 per cent across the world in the fifteen years to 2015. Clothing is often carbon-intensive, and the industry will need to switch to lower footprint materials, such as hemp, and build far greater durability and recyclability into its products. One implication is that the clothing industry will shrink in size if decarbonisation becomes a higher social priority than today.

By some calculations, agriculture is responsible for one quarter of emissions. Most is from livestock farming, which is also accountable, directly and indirectly, for much deforestation. Will the world develop effective low carbon substitutes for meats that are both inexpensive and appeal to customer tastes? 

Infrastructure

Electricity grids around the world are not easily capable of dealing with the expansion of supply that will be required to power the electrification of the other industries, nor the change in the location of electricity supply and electricity demand. This is well understood but governments, regulators and electricity network operators continue to hesitate to develop schemes for building out and updating grids in advance of when the capacity is needed.

Shortages

Every few months, there is a global panic about the availability of metals necessary for the transition. Last year, for example, the concern focused on lithium. With the exception of iridium (for PEM electrolysers), global availability is probably adequate but the expansion of demand for crucial metals will probably create cycles of boom and bust in prices that are at least as severe as past fluctuations in fossil fuel prices. 

More generally, the transition will demand that the world significantly increases investment in carbon reduction  as a percentage of GDP. How much extra will be required and where will this money come from? Particularly, how will poorer countries get access to the capital required?

Voter support

Decarbonisation is now generally seen around the world as being particularly costly to poorer people. Many leaders of the political right have chosen therefore to oppose speeding up the transition. Donald Trump has said he would roll back President Joe Biden’s Inflation Reduction Act, a massive carbon-reduction program me IRA. The French far right has indicated similar intentions as have leaders in countries as diverse as Australia and Argentina. The risk that the move to zero carbon will be blocked by politicians can’t be ignored. 

Retaining carbon

The world will inevitably need large capacity for carbon capture. Although most power generation from fossil fuels will stop, cement and other industries will probably continue to produce CO₂. Agriculture is also difficult to completely decarbonise. How will gigatonnes of carbon be captured and stored, either from industrial processes or directly from the air? 

And how can we best put carbon that’s extracted from the air back into the soil. These techniques range from ‘regenerative’ agriculture to spreading tiny particles of basalt over the surface of the land or adding biochar. These might all be helpful, but it’s not yet clear which would be the most effect and cheapest or to what degree the agriculture industry will be affected. 

Overall, there has been considerable progress on the road to decarbonisation. But the final 20 per cent of that journey is, nonetheless, fraught with difficulties.