Decarbonizing the power sector globally or in individual countries appears feasible, but the solutions will vary and require a mix of technological advancements, declines in cost, cohesive policy and creative financing, experts said Dec. 11 at the Platts Global Energy Outlook Forum in New York.
In a mock debate, S&P Global Platts Analytics analysts discussed the feasibility of reducing carbon dioxide levels to the extent needed to hold global temperature increases below 2 degrees Celsius as set in the 2016 Paris Agreement.
Battery energy storage could be an important tool in reducing power sector emissions and battery electric vehicles could help cut emissions from the transport sector, but inputs like cobalt, nickel and lithium supplies could become constrained and battery costs might not decrease quickly enough, said Dan Klein, head of scenario planning, coal analytics at Platts Analytics.
"If battery prices get too high, battery makers will respond and we are already seeing this," Roman Kramarchuk, head of energy scenarios, policy and technology analytics at Platts Analytics, said. Companies can shift the ratios of metals used in batteries and adopt technologies that use less of a certain metal if prices increase, he said.
One main challenge for power sector decarbonization will be removing coal from the energy mix because coal-fired power plants are less expensive to build and supply in many places, and countries may be reluctant to shut them down, Klein said.
But coal use could be reduced if developed countries provide financing to developing countries for cleaner alternatives, Kramarchuk said.
Klein agreed that it might be possible to build up another country's economy so it can afford to construct cleaner power stations, but that strategy so far has not been attempted.
Energy transition practitioners
There are two billion people in energy poverty who need electricity, said Paul Ferneyhough, executive director for North America at Spanish energy company Repsol SA. Carbon capture and storage remains too expensive and there needs to be greater focus on acting coherently with governments to deploy economically viable solutions, Ferneyhough said.
Repsol earlier in December pledged to reach a net-zero CO2 emissions level by 2050, in part through a mix of carbon capture, energy storage and an increasing amount of renewable generation.
Yoven Moorooven, CEO of French energy company Engie SA's Africa business, said 70% of the continent's demand by 2040 will be met with on-grid renewables, with gas playing an important role in balancing intermittency.
There are 600 million people with no electricity in Africa and that number will double as the population grows, Moorooven said. They will "have to go through very disruptive solutions," and technology improvements along with cost reductions will make that happen, he said.
The company has already deployed nearly 800,000 rooftop solar power kits and developed more than a dozen microgrids that are 100% renewable with batteries, he said.
Government targets, subsidies
Government targets codified into law have proven effective in a number of countries and could serve as an important example. Alicia Barton, president and CEO of the New York State Energy Research and Development Authority, the state's central procurement agency for renewable energy, said she is on the front line of "implementing New York's very aggressive climate goals."
The state's landmark Green New Deal, officially called the Climate Leadership and Community Protection Act, calls for a carbon-free power system by 2040 and codifies the goal of achieving net-zero greenhouse gas emissions by 2050. Setting targets and codifying them in law has sent a powerful market signal, Barton said, and the level of response from the industry since the law was passed in July has increased significantly.
"New York has put a definitive stake in the ground in terms of where it's going on energy that sends investment signals in the right direction," she said.
Asked about the role of carbon pricing in the energy transition, Barton said that it has not received the same level of political support as targets like a 100% clean power system. She added there is room for carbon pricing and state incentives like renewable energy credits.
"Subsidies are a blunt instrument, but an effective one," Barton said.
Jared Anderson is a reporter for S&P Global Platts. S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.