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Research & Insights
04 Mar 2021 | 18:37 UTC — New York
By Kassia Micek
Highlights
Going carbon free is mostly through renewables
California gas economy will decrease 50% by 2045
German coal to fall 40% to reach 2035 net-zero goal
The pathway to achieving net-zero emission goals is through continued technology advancements to bring down costs and more intelligence on the grid, power industry experts said March 4 at the CERAWeek by IHS Markit conference, held virtually.
It is the power sector that is leading decarbonization efforts across the US and Europe, more so than the transportation sector, said Atul Arya, senior VP and chief energy specialist at HIS Markit and the panel moderator.
"It's difficult to judge how much more is possible," said Frank Mastiaux, CEO and chairman of the board of management for EnBW Energie Baden-Wurttemberg AG, said about incremental changes in technology that continue to bring down costs to make adaption economical. "There is constant innovation."
Energy transformation was followed by mobility transformation, which was followed by the hydrogen transformation, Mastiaux said about the ongoing technology changes.
"There are benefits to AI on the grid," Pizarro said. "As an industry, we are just starting to scratch the surface."
In the US, 14 states have legal goals for to reach 100% renewable, carbon-free or net-zero emissions, while six additional states have proposals for 100% targets that are currently being debated by lawmakers, governors and commissions. Eighteen other states have more moderate renewable goals, ranging from voluntary renewable increases to an 80% reduction in 1990 greenhouse gas emissions levels by 2050.
California has one of the more aggressive goals of 40% renewables by 2030 and net-zero emissions by 2045.
The most affordable way to achieve that is going carbon free, mostly through renewables, said Pedro Pizarro, president and CEO of Edison International, adding that means the state needs to add an estimated 80 GW of renewables and 30 GW of storage, in addition to clean hydrogen and carbon capture. This requires $175 billion in investments, along with $70 billion of grid-side investments to manage the changing resources, which translates to the average customer energy bill decreasing 30% by 2045, Pizarro said.
"The largest tools are clean energy and electrification," Pizarro said about reaching net zero.
The most economical way is the minimize fossil fuel use, he said, adding the gas economy will decrease 50% by 2045.
Regulatory reform in Germany is driving the energy transition there, with EnBW's coal production to fall 40% as part of the company's goal to reach net zero by 2035, Mastiaux said, adding they are consistently investing in utility-scale wind and solar and there will be Eur12 billion in investments in the next five years.
Storage is the next place where costs will come down with advancements in technology.
"I think there's a lot of promises in alternative chemistry that doesn't use lithium ion," Pizarro said, adding storage technology advancements are "very promising."
Crowd thinking is pushing the limits of storage, which will be a game changer, Arya said.
"It has become clear energy is not about a handful of people deciding what the future is," Mastiaux said. "It comes from including everyone."
The pathway to net zero also needs to include hydrogen and carbon capture, Pizarro said.
"I think hydrogen needs to be one of the tools available," he said about how intensive research is important to bring hydrogen down to cost level to make it effective. "They will need to play a role in the stack."