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Energy Transition Is Here And Now - Energy storage is the next big kid on the block

 

Carbon emissions have peaked, to plateau &/or fall over time

Source: Energy Transition Outlook (ETO), Wood Mackenzie, 2019

Anywhere you go these days, everyone is talking about energy transition or transformation. While no one knows for sure what they are talking about, the transformation generally includes references to the rapid rise of renewables, electrification of the transport sector, continuous drops in the cost of energy storage and better management and control of all sorts of energy using devices made possible through connectivity and reliance on artificial intelligence, among other things. The main driver, it is generally agreed, is the rising concerns about climate change and the need to decarbonize the global energy system (lead article).

The means of getting there and the speed of the transition varies from one place to anther with the CEOs of major companies, for the most part, acknowledging the inevitable.

In a report released in August 2019, Wood Mackenzie says global carbon emissions are most likely near their peak and – depending on the collective political will of the elected officials who are under increasingly pressure to act decisively – will plateau in the 2030s and potentially begin to decline over time (visual on page 2). Massive protests are expected on 20 Sept at the UN and cities across the world.

WoodMac examined a few scenarios in their latest Energy Transition Outlook and concluded that even under an aggressive carbon reduction scenario, the outlook is dim for keeping global warming below 2° C, with emissions plateauing but not falling in the 2030s.

Others, including one scenario considered by the International Energy Agency (IEA), are predicting more optimistic carbon trajectories as illustrated on the visual. If the global leaders act decisively and in unison – as the secretary general of United Nations hopes – the outcome can follow one of the two lower trajectories shown in the visual on page 2.

 

After a hiccup in 2018, solar expected to rebound in 2019 & plateau afterward

Annual projected additional solar capacity, in GW

Source: Energy Transition Outlook (ETO), Wood Mackenzie, 2019

But given the politicians that are in office today – US’s Donald Trump, Brazil’s Jair Bolsonaro (lead article), Poland’s Viktor Orban or Australia’s Scott Morrison – to name a few – don’t hold your breath.

Major carbon emitters, be it oil, gas or coal companies or those who rely on fossil fuels – car makers, electric power generation companies, airlines, shipping companies – are not waiting for governments to act in unison or individually. They, for the most part, recognize that they will be impacted one way or another, and sooner or later. Many are taking the first baby steps to reduce their exposure to rising temperatures and the risks associated with a warming climate.

Likewise, the insurance and the financial sector are beginning to register the same. Insurance companies, the banks and the pension funds, not previously on the radar screen of environmental activists, are now feeling the heat. There are calls for them to stop investing in fossil fuels – particularly those that are perceived to be carbon-intensive such as the coal and tar sands. University endowments and retirement funds are particularly pressured to divest of their fossil fuel investments. Progress is slow, but is gaining momentum.

When and if everyone agrees that we have already put too much carbon in the atmosphere and must move away from fossil fuels, renewables must deliver even more along with more efficient use of energy. Nuclear energy, once expected to be too cheap to meter, is not going to make a big dent.

Solar energy has experienced phenomenal growth in the recent past but suffered a rare slowdown in 2018. WoodMac says the global solar market is poised for a rebound in 2019 but expects relatively flat prospeects between 2020 and 2024 (visual on page 3).

Wind: Continued growth

Source: Energy Transition Outlook (ETO), Wood Mackenzie, 2019

The emerging picture is not bad. It shows continued massive investments going into the solar sector over time – over 100 GW of new installed capacity year after year. Yet it suggests that the days of exponential growth may be over.

A similar pattern is projected for wind experiencing 70-80 GW of additional installed capacity through 2028 (visual on right). Its costs continue to fall as described in article on page 15. Not bad, but perhaps not as fast as renewable advocates would have liked.

The next big kid on the block is energy storage, which should come as no surprise given the fact that so much solar and wind are being added year after year. WoodMac expects over 160 GWhrs of global energy storage by 2024, which is astonishing given that there was virtually none as recently as 2013 (visual below).

 

Next big kid on the block: Energy storage

Global cumulative energy storage capacity deployment through 2024, in GWhrs

Source: Energy Transition Outlook (ETO), Wood Mackenzie, 2019

One might disagree with WoodMac’s projections, but few would disagree with the major trends identified and the resulting trajectories. Everyone in the global energy value chain is looking at similar trends, same drivers of change, same political and environmental pressures, and similar trajectories – give or take a little. Companies that do not act in time risk being overtaken by those that do.

https://www.eto.think.woodmac.com

https://www.greentechmedia.com/articles/read/the-energy-transition-in-charts?utm_source=RMI&utm_medium=email&utm_campaign=gtmpartner#gs.xkm1sy

This article originally appeared in the Oct 2019 issue of EEnergy Informer, a monthly newsletter edited by Fereidoon Sioshansi who may be reached at fpsioshansi@aol.com

Fereidoon P. Sioshansi, Ph.D.'s picture

Thank Fereidoon P. for the Post!

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Discussions

Bob Meinetz's picture
Bob Meinetz on Sep 28, 2019 5:04 pm GMT

"Next big kid on the block"? That's a laugh. Here we have more advertising from Wood-Mackenzie on behalf of battery clients, masquerading as "information".

Fereidoon, that there's lots of money to be made selling grid-scale batteries might be worthy of note, if it wasn't simply exploiting public ignorance for a buck. Batteries are worthless for powering the grid, and always will be:

• 160 GWh of global storage is nothing. To power a single regional grid in the U.S. for more than one day would require multiples of that, at an expense of $trillions for batteries

• They would need to be replaced every 10-12 years

• Renewable capacity and land use, already a problem, would need to double. One solar farm to charge batteries, another to provide energy to the grid during the day

• There can never be enough batteries. After spending $trillions for two days of storage, any grid powered by 100% renewable energy + batteries would shut down after three days of overcast weather

• Shutting down an entire grid is not an option

That we continue to indulge the fantasy of powering a grid with wind and solar might be tolerable if it was advocates' time and money at stake. Wasting public time and money on it should have ended decades ago.

But don't listen to me - listen to Bill Gates, who describes the idea we can power an industrial economy on renewables + batteries "so disappointing":
https://m.youtube.com/watch?v=9xe3BWPsBTU

Matt Chester's picture
Matt Chester on Sep 30, 2019 12:19 pm GMT

Gates is obviously insanely smart and has been wildly successful, but that doesn't mean we have to agree with every take he's had. Surely he'll be the first to tell you about times he's been wrong, mistakes he's made in his bets along his career. That said, it's also unfair to characterize his take as being wholly against investing in energy storage: https://twitter.com/BillGates/status/1128726963990827008?s=20

Matt Chester's picture
Matt Chester on Sep 30, 2019 12:20 pm GMT

Major carbon emitters, be it oil, gas or coal companies or those who rely on fossil fuels – car makers, electric power generation companies, airlines, shipping companies – are not waiting for governments to act in unison or individually. They, for the most part, recognize that they will be impacted one way or another, and sooner or later. Many are taking the first baby steps to reduce their exposure to rising temperatures and the risks associated with a warming climate.

This, in my opinion, is one of the key indicators of where things are going. Policy squabbles and gridlock aside, the corporate world isn't waiting-- they are looking to invest and make these breakthroughs one way or another. Thanks for sharing, Feridoon

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