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CERAWeek: Do we have the technologies to get to net zero?
By some estimates, emissions reduction technologies that are proven and in widespread use today account for only about 25% of the carbon cuts needed to meet a global net-zero target by 2050, Atul Arya, chief energy strategist at IHS Markit, said 2 March.
"So, how do we get the rest of the way there?" he asked in kicking off a discussion at CERAWeek by IHS Markit.
Three panelists discussed with Arya the state of affairs for widespread electrification, emissions avoidance, carbon capture and storage (CCS), and hydrogen.
The first part of the answer, said David Eyton, executive vice president, innovation and engineering, BP, is that the technical solutions exist, "but some technologies are less mature than others, and costs are too high. On top of that, you have regionally differentiated impacts [that will produce] winners and losers ... If you reduce costs, you make it easier for political leaders to do the right thing."
Mass electrification is clearly a major part of the solution, Eyton said, calling it "the most potent force."
But he listed the well-known challenges: intermittency of renewable power; the difficulty of replacing fossil fuel use in sectors such as manufacturing and aviation; and the cost of retrofitting heating and cooling for buildings.
The other problem, said Peter Terwiesch, president of industrial automation at ABB, is the scale of electrification that will be needed. "In terms of primary energy demand, the world is using something like 150 Terrawatt-hours per year, largely coal, oil, and gas. If we translate that to the largest non-fossil sources of power, it's like 1,500 times the largest hydroelectric dams," he said.
Using less energy, and producing that energy with lower emissions, also fit into the equation, Terwiesch said. He recommended that governments and companies redouble their efforts to improve energy efficiency in fossil fuel production and use, "from the first point you come in contact to the point of consumption."
Matching electricity supply and demand is part of the challenge, he said, not just intermittency, but getting power where it is needed and when it is needed.
While renewable power is making inroads in solving the carbon equation, the third panelist, Ahmad Al-Khowaiter, chief technology officer for Saudi Aramco, pointed out that all forecasts of global energy demand see considerable use of oil and natural gas for decades. Thus, it's incumbent on oil and gas producers to reduce their emissions directly, he said.
"The question is how to make oil and gas sustainable," Al-Khowaiter said.
Solutions exist and should be implemented quickly and globally, he said. One study indicates that about 22% of the emissions as a result of the production of oil around the world come from the flaring of gas. "That's low-hanging fruit," he said.
The refining industry can improve its operations similarly, he said, with another study finding advanced technology is able to reduce the industry's emissions by an estimated 1 gigaton each year. "That's the emissions of all of Germany or a little less than Japan's, just by taking good practices and applying across the industry," he said.
On the combustion side, Al-Khowaiter added that work can be done. Combustion of fossil fuels in most applications has an energy efficiency of 30-40%, but he said that combined-cycle gas-fired power, fuel cells, and other technologies offer the promise of efficiencies of 60-80% — thus also reducing the need for fossil fuels.
No discussion of the drive to net zero could exclude hydrogen, and Eyton explained why it's become such a focal point. "If you take the carbon out of hydrocarbons, you have hydrogen — and that's why everybody talks about it so much," he said.
The panelists said that the hydrogen industry is making great strides, even as they also agreed with moderator Arya that parts of it are now encountering "irrational exuberance" from investors.
Hydrogen is helped substantially by the falling cost of renewable energy, thus reducing the cost of making "green" (zero-carbon) or "blue" (carbon offset) hydrogen, said Terwiesch. Now he's focused on where the best applications will be, and he thinks that heavy-duty trucking is very promising.
BP is looking closely at applications where the high energy density of hydrogen pays the greatest dividend, Eyton added. This can help to counteract the high cost to transport hydrogen, compared with hydrocarbons, he said. "If you can use hydrogen locally, that is, where it's made, that makes a lot more sense," he said.
"$2 per kilogram is the magic number; if you get there, you're in the money," Eyton said. "But I don't want to be in the business of predicting where the line where will be drawn around the world on [hydrogen in] trucking, heating, or other uses."
Companies in the hydrogen space should think of it as a "vector or pathway for other molecules," such as ammonia, Terwiesch added, to avoid the problems of its low energy density by volume (not by weight), which makes it costly to transport and store.
Saudi Aramco put that idea into action last year, producing and shipping 40 metric tons (mt) of "blue ammonia" to Japan, and offsetting all of the carbon emissions with CCS. "The point was to demonstrate that we can track carbon and deliver to a customer across the world. We built a little confidence that this is about lifecycle analysis, not about technology, and we can scale this," Al-Khowaiter said.
Carbon capture is on the upswing as well, the panelists said, because it would be nearly impossible and far too costly to wring out all of the carbon emissions from the global economy. Some will have to be captured and/or offset.
Getting the last shares of carbon out of the energy industry, manufacturing, and elsewhere gets extremely costly closer to net zero, "well north of $200/mt," Eyton said. At that point, CCS looks very cost competitive.
"The numbers don't lie," added Al-Khowaiter.
For those applications, CCS makes economic and technical sense. "If you look at it, there are many industrial applications with relatively concentrated CO2 streams that are far more thermodynamically and economically efficient [than alternatives].… It would be a sin not to tap into them," Eyton said.
However, until recently, the public perception of CCS had not been positive, said Al-Khowaiter, because it has been seen as an oil and gas technology. "But that has changed dramatically in last couple of years. We are seeing tremendous excitement and acceptance," he said. "This urgency to get to net zero has forced policymakers to the realization they are going to have to decarbonize the hard-to-decarbonize sectors. You can't wait for later. So, when you look at the options, they are clearly favoring a lower cost of carbon capture."
Construction began on or investment was approved for an estimated 100 million mt/annum of CCS projects in 2020. "That's about 100% growth since 2017. I've been telling investors to watch this space — because it's gonna be big," Al-Khowaiter said.
And yet, there are still skeptics, sometimes with illogical complaints, Eyton said. "I find there are people who are very favorably disposed towards capturing carbon from the atmosphere but against putting it in the ground. What are you going to do with it?" he asked.
As a final topic, the panelists considered the pace at which these advanced technologies will reach large-scale application. They said that companies and governments around the world have a difficult balancing act, as they face an urgent situation but also have trillions of dollars invested in an infrastructure designed around hydrocarbons.
"How much do you improve the existing infrastructure [vs.] … building new infrastructure. That's the balance we're all trying to strike," Terwiesch said.
In passenger vehicles, it appears the decision has been made: electric vehicles will replace the internal combustion engine. But what about heavy-duty engines, Eyton asked. "How many more generations of internal combustion engines are [manufacturers] going to invest in, in addition to electric engines?"
When shifting to renewables, energy producers and users also have to be aware that the upfront costs are high, though maintenance costs often are much lower and fuel costs are zero. "But many parts of the world can't afford the upfront costs," Terwiesch said. "So, there is a big part of the world population that will burn oil and coal, even when other opportunities exist."
That's where governments must play a major role, the panelists said. They must commit to support the energy transition both with funding for research and development and projects, but also for, as Terwiesch said, creating "predictable boundary conditions." He favors a carbon tax and other regulations that will enable energy companies to make long-term investment decisions.
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