Long-term R&D, hydrogen, renewables powering energy transition: executives

Officials at chemical giant BASF and investor-owned utility Southern California Edison are moving the energy transition forward through efforts such as electrifying steam cracker technology, increased use of hydrogen and renewable energy procurements, they said during a Sept. 21 New York City Climate Week event.

"We are serving a population that has seen the impacts of climate change in a major way" through drought and recent wildfires, Pedro Pizarro, president and CEO of Edison International, the parent company of Southern California Edison, said.

The company looked at California's goals to decarbonize by 2045 and calculated what it would take to get the whole state economy in line with the targets.

"We calculated the most feasible and cheapest way to get there will be to use a lot of clean energy like renewables paired with storage," Pizarro said. By 2045, three quarters of passenger vehicles will need to be electric, 70% of buildings will need to move to electric heat and water heating and some sectors will need to use hydrogen produced from renewables, along with some form of carbon capture, he said.

According to a recently released study from Hitachi ABB Power Grids, declining cost curves and state, local, utility, and corporate clean-energy goals, will drive most incremental generation capacity construction (over 60% by 2044) in North America to be solar and wind projects. The study is titled "A sustainable future for the global power industry."

But Hitachi ABB still sees natural gas playing a big role, as the fuel will continue to dominate capacity and generation volumes, accounting for most of the rest of the new capacity additions (about 34% by 2044).

And BASF sees an opportunity to bring forward energy transition solutions from its position as the world's largest chemical firm, Wayne Smith, chairman and CEO, said.

The company sells about 45,000 products, but is focusing on things like high-performance insulation to improve energy efficiency, polymers to lighten cars and investing heavily in advanced batteries, Smith said.

Decreasing emissions

"We have about €15 billion in sales of these types of products ... and are trying to steer the company toward finding more of these accelerated products," Smith said. But chemical manufacturing is both energy and capital intensive so decisions about where to invest are very important, he added.

Asked about the motivation for pursuing an energy transition supportive strategy, Pizarro said year after year 70% of the voting public in California supports decarbonization and renewable energy and that observation cuts across demographics. Even a majority of Republican voters in the state support such efforts, Pizarro said.

"Investors are watching and demanding we take these steps and what started as European movement has become a US movement," he said.

Smith agreed, saying there is high-profile pressure from global leadership on sustainability and investors want transparency on ESG.

In response, leadership plans to grow the company 50% by 2030 without incremental emissions growth and will release information detailing the carbon footprint of all their products by next year, Smith said.

Smith believes BASF can grow without adding emissions by using energy efficiency, renewable energy procurements and "most interesting" is investment in transformational research and development to cut the emissions intensity of its products.

Steam crackers to break hydrocarbons are the most carbon intensive equipment BASF has and "our view is to transfer this to an electrically operated cracker" that if power by renewable energy could cut carbon dioxide emissions by 90%, Smith said.

Another strategy is to make long-term investments in green hydrogen production through electrolysis. Both the hydrogen and electrified cracker efforts will likely take eight or 10 years to commercialize, "but we think we can do it," Smith said.