Missing Pieces of Decarbonization Puzzle Realized

Jussi Heikkinen, Director of Growth & Development, Americas
Wärtsilä Energy Business

These are exciting times as the renewable energy future is a focus for so many organizations and governments around the world, as indicated by attendance of the Wärtsilä sponsored webcast hosted by GreenBiz on November 19, 2020, Missing Pieces of Decarbonization Puzzle Realized. Emerging technologies are moving closer to reality, which makes ambitious energy goals more realistic and the path to 100 percent renewable energy is now within reach.

A place where the transition to renewables has progressed quite far already is California. The lessons learned along the way have been plentiful, but powerful nonetheless. The record-breaking heat wave that swept across the western part of the country and caused a series of blackouts in the Golden State, offered additional modelling opportunities to demonstrate the most effective mix of energy to accommodate any extreme weather situation during the transition, and to meet clean power mandates.

The big challenge facing California and the rest of the world is how to integrate renewables into the grid while building security of supply and a sustainable power system with an affordable plan for everyone involved.

That’s why Wärtsilä launched its Path to 100% initiative. We believe a 100% renewable energy future is possible, practical and financially viable so we assembled a community of experts to produce solutions based on science and engineering. This fall, we published a white paper that describes the Optimal Path to decarbonization for California using new hourly load data provided by this summer’s extreme heatwave.

In the whitepaper, Path to 100% Renewables for California, we modelled an approach for  California to reach its climate and clean power goals faster, at a lower cost to ratepayers, all while maintaining system reliability.

The “Optimal Path“ includes renewable carbon neutral fuels – hydrogen and synthetic methane. Curtailed renewable electricity is used in the process with water to produce hydrogen, and carbon is captured from air to produce synthetic methane with hydrogen. These fuels are used in power plants to provide a long term energy storage for seasonal and weather management needs. In the Optimal Path scenario, Renewable Portfolio Standard (RPS) commitments would actually be reached by 2040, five years ahead of schedule.

Generation costs in the “Optimal Path” scenarios are between 50 and 54 dollars per megawatt hour in 2045, while these costs would be almost 3 times higher if California opted to use only solar, wind and storage to build the power system. This cost difference is excessive and not beneficial for industries or households to pay. Additionally, carbon emissions are at net zero in 2045 in both scenarios.

How can California get on the Optimal Path to a renewable energy future? One recommendation is to recognize carbon neutral fuels – as presented above – to be counted as renewable for RPS purposes. This would enable the utilities to start looking for ways to invest and use such fuels to the benefit of California.

Another state aggressively pursuing renewable energy goals is Texas. Co-presenter and Electric Reliability Council of Texas (ERCOT) Principal of Market Design and Development, Kenneth Ragsdale shared the Lone Star State’s progress on integrating renewables into the power system.

Climate Imperative’s Executive Director, Bruce Nilles offered a big picture perspective on electricity generation capacity and the commitments needed to accelerate decarbonization.

To watch the recorded presentations from Wärtsilä, ERCOT as well as Climate Imperative and download presentation materials, register today for the Missing Pieces of Decarbonization Puzzle Realized webcast.

Pathways Toward 100% Carbon Reduction for Electric Utility Power Systems

Many states, cities, towns and utilities are committing to a 100% clean energy future. This push toward 100% is ubiquitous in the news, academia and politics. However, there is no clear or commonly accepted understanding of what this means. For example, what is the difference between 100% carbon-free and 100% carbon-neutral?

A recent Wärtsilä whitepaper, “Pathways Toward 100% Carbon Reduction for Electric Utility Power Systems,” breaks down these terms and examines the costs and carbon reduction trajectories associated with these 100% targets. It explores what these different definitions imply for utility systems as they transition from fossil-dominated to clean energy dominated.

The findings of the whitepaper point toward utilities leveraging power-to-gas (PtG) technologies to meet net-zero carbon emission goals, rather than 100 percent carbon-free. In examining the cost of a carbon-free system versus a carbon-neutral system, the analysis concludes that electric utilities can achieve 80 percent carbon reduction based purely on economics, with no subsidies, mandates or renewable requirements by leveraging PtG.

Carbon free may be the ideal solution for utilities that have ready access to hydro or other carbon free resources that can provide firm capacity when wind and solar falter. But most utilities do not fall in this camp and must explore a wider array of technical solutions to meet decarbonization goals. PtG provides an additional degree-of-freedom in the planning process that unlocks new and exciting pathways towards decarbonization. This work shows PtG pathways provide the lowest cost for ratepayers while simultaneously attending to climate change concerns.

The United States can lead in the path to a 100 percent renewable future by investing in PtG to provide a cornerstone of the path towards what the Intergovernmental Panel on Climate Change (IPCC) is calling for: carbon-neutrality. In general, PtG will be a large part of decarbonization for flights, sea-freight and domestic shipping and automotive, supplementing the strides we are making with electric vehicles. The investment in power-to-fuels is already starting and will accelerate.

This will provide positive feedback loops and interplay among the liquid fuels industry, the natural gas fuel industry, and the electric utility industry that will be beneficial for all three in meeting decarbonization targets. What may still be needed, is the legislative and regulatory vision to make this possible, or at the least, not stifle it.

For example, many states openly allow biofuels to count as “renewable” for power generation. Allowing the same for renewably generated power-to-gas would provide a great deal of incentive in the adoption of this technology and hopefully accelerate a 100% renewable future.

This is How the Government Can Ramp Up Climate Tech Investment

At-a-Glance:

The last couple of weeks have brought a steady stream of new pledges to achieve net-zero carbon emissions within the next handful of decades. And yet a report released in September, by the International Energy Agency, estimated that roughly half of the technologies that will be needed to get to net zero globally by 2050 aren’t even commercially available yet. The secret of deep decarbonization is that it won’t happen by just plugging into a wind farm or buying carbon offsets in a tropical forest. Without new technologies, it will be impossible to rein in emissions from the most-carbon intensive sectors of the economy such as heavy industry and long-distance transport. To learn more, read “This is How the Government Can Ramp Up Climate Tech Investment.”  (Reading this article requires a subscription.)

Key Takeaways:

  • Physicist Varun Sivaram sees the first step is to establish a National Energy Innovation Mission and create a White House Task Force to coordinate spending across different federal agencies. Sivaram and his team include a draft executive order in the report so the next administration can just plug and play.
  • Step two is to ramp up spending on energy innovation research and development from the current rate of about $9 billion a year to at least $25 billion by 2022.
  • The plan breaks down decarbonization into 10 categories where breakthroughs must occur. These include clean fuels, clean agricultural systems, carbon capture use and sequestration, and carbon removal.
  • One of the most persuasive moments in the report comes in a chart showing the disconnect between the sectors in the U.S. responsible for emissions and the corresponding research budget through the Department of Energy. Electricity produces 27% of emissions but gets 47% of the research dollars, while industry produces 22% of the emissions but receives 6% of the innovation funding.
  • The proposed budget would remedy that by adding money to underfunded areas, such as tripling the money for carbon capture from $115 million a year to $300 million.

Path to 100% Perspective:

Government economic stimulus must go beyond merely boosting the amount of renewables, but should also support system flexibility. We don’t just need wind turbines and solar panels but also energy storage, optimization platforms and flexible power plant technology to balance the influx of renewables. Energy storage and digital optimization is already becoming essential as we increase the amount of renewables on the grid to manage the volatility of wind and solar. Flexible gas engine technology is ready to use future fuels such as green hydrogen and synthetic methane derived from renewable energy sources (Power-to-X). These will help to balance out the longer-term needs of the grid, that can’t be matched by shorter duration energy storage.

 

Photo: Luke Sharrett/Bloomberg