Introduction
Circular economy manifests a transformative approach to sustainable development that prioritizes resource efficiency, waste minimization, and environmental regeneration, unlike the traditional linear "take, make, dispose" approach. Circular economy is a vital strategy and a survival necessity to meet with the challenges of climate change, resource depletion and biodiversity loss. This is especially true when the growing public expectations and industrial expansion place immense pressure on natural resources.
Application of Circular Economy in Energy Transition
Circular economy works on three core principles:
1. Designing out waste and pollution: Implemented at the design stage itself
2. Keeping materials in use: Reuse and recycling of materials for longer life and value
3. Regenerating natural ecosystems: Aimed to create a net positive environmental impact
While advanced economies aiming to decarbonize by 2050, and India by 2070, the Power Sector can play a key role in advancing circular economy as a sustainable strategy in the following areas:
1. Renewable energy generation: To meet net-zero by 2050, the world needs the equivalent of the largest solar farm added every single day. Shifting to RE sources and applying circular principles will reduce dependence on finite resources and lower carbon emissions. For example, Spain operates wind farms that recycle old turbine blades into construction materials to reduce wastage.
2. Grid expansion: Applying circularity optimizes material use and associated costs.
3. Closed-loop systems: Innovations in Waste-to-Energy (W2E) plants and recycling materials from end-of-life solar panels, wind turbines and storage batteries promote circularity. For example, Sweden’s W2E systems is designed to turn 99% of the household wastes into energy, drastically reducing pressure on landfills.
4. Decoupling growth from resource consumption: Generating clean and sustainable energy by adopting circular economy creates new business lines in asset recycling and reuse, besides reducing adverse environmental impact.
Achieving Circular Economy in the Power Sector
Circular economy aims to achieve the triple bottom-line of sustainability– People, Planet and Profit. Achieving financial results (profit) through efficiency and performance need not be at odds with the goal of serving the customers (people), and acting responsibly towards our environment (planet). The benefits of circular economy in the Power Sector can be classified as under:
Environmental
Reduced GHG emissions due to material reuse and waste minimization
Reduced dependence on resource extraction, preserving natural ecosystems.
Reduced cost of compliance of environmental regulations.
Economic
Asset recycling: The Dutch football Ajax uses recycled Nissan Leaf batteries to store energy during daytime and power the stadium for evening games, even supporting the local grid.
Cost optimization: Lower operational costs through asset and energy optimization
Managing supply chain and reducing cycle time: When Covid pandemic led to supply chain disruptions, a premier US utility introduced innovative recycling and reuse of critical components of end-of-life transformers and other assets. This reduced dependence on international imports and created local job opportunities with a more diversified market base. Also, collaborating with peer companies in critical spares improved supply chain management.
3. Social:
Enhanced energy security at affordable cost: Circularity principles can help in indigenization and market development of used spare parts and refurbishing industry. Reusing spares can reduce maintenance costs, control emissions, defer CAPEX and enhance savings.
Job creation: Adopting circular economy creates job opportunities and new business lines to raise income level.
Accelerating circular economy in energy transition
A multi-pronged strategy is needed to accelerate circular economy in clean energy transition:
1. Investment in RE and Storage systems: Recycling and reuse of materials from ageing RE plants reduce project costs and avoid emissions from new manufacture.
2. Policy Frameworks: Incentivizing circular economy in clean energy transition, such as tax benefits for reusing/ recycling of materials, waste minimization and infrastructure creation for circular practices.
3. Collaboration: Driving innovation and shared accountability for Public-private partnerships.
4. Public Awareness: Creating awareness to encourage its wider adoption among communities.
Challenges of integrating circular economy
Integration of circular economy in the power sector also faces the following key challenges:
1. Technology and infrastructure: Many regions lack the infrastructure for recycling.
2. Regulations and policies: Lack of consistent policies and incentives to promote circularity.
3. Supply chain and markets: Sustainable sourcing of recyclable materials and recycling facilities are scarce, compounded by a lack of an organized market structure.
4. Stakeholder collaboration: Adoption and success of circular economy mandates close cooperation among all the stakeholders- government, industry, academia and community.
Case Studies and Best Practices
While the path to achieving circular economy is fraught with challenges, there are several encouraging innovations that are happening around the world, for example:
1. Battery Energy Storage System: One of the largest lead battery manufacturers in the US has applied circularity in the design and manufacture of lead acid batteries that consume lesser resources. It recycles the acid in used batteries for reuse in new batteries. Also, the industrial wastes from the plant are fully recycled with zero liquid discharge, conserving energy and resources.
2. Circular Economy for Grid Decarbonization
A major Italian electricity distribution company is promoting circular economy as a grid decarbonization strategy to increase resilience in operations. It has developed a solar photovoltaic park which uses recycled batteries from electric vehicles (EVs) with a storage capacity of 10 MWh. When the grid is overloaded, or under shutdown, the energy storage system of recycled batteries supplies power to the local community. It is also setting up Italy's first large lithium battery recycling plant with a capacity to recycle 10,000 tons of batteries every year to promote circular economy.
3. Circular Economy in Waste-to-Energy conversion
In India, a major business conglomerate has implemented a circular economy model by repurposing plastic wastes. It has set up a Waste-to-Energy plant that converts plastic wastes into fuel used to power the company’s manufacturing plants. This project is an excellent example of circular economy, as it not only tackles waste management but also reduces the need for fossil fuels.
Conclusion
Circular economy plays a pivotal role in clean energy transition by minimizing the depletion of earth’s resources, promoting optimum utilization and waste minimization. Reuse of materials from decommissioned RE assets, e.g. wind turbine blades, solar panels and batteries, reduces adverse environmental impact. It also stimulates economic growth by creating new jobs in recycling and refurbishment industry. It encourages the design of products with longer lifespans and higher efficiency, reducing energy consumption and encouraging local production, making the community self-reliant and resilient to economic shocks. It provides a vital pathway to achieving energy transition and sustainability. By embracing renewable energy and adopting circularity, the energy sector can significantly reduce environmental risks and drive economic growth.
Authors
Mr K Ramakrishnan is an alumnus of IIT, Madras, IIM, Ahmedabad and NUS, Singapore. He has served as Executive Director of NTPC - India’s largest integrated power company, and in leadership roles in Rolls Royce and Siemens in Singapore. He is an expert on the power sector in India, and lives in Melbourne, Australia.
Mr Soubhagya Parija is an MBA (Fin), Indiana University and HBAP, Harvard University. He has served as Chief Risk Officer at FirstEnergy, USA. Earlier he was the Chief Risk Officer at New York Power Authority. He has taught in Columbia University, New York, and served on the Board of Risk and Insurance Management Society (RIMS), USA.
Mr Jayant Sinha is an Engineer from BITS (Pilani), PGDBM, Accredited Management Teacher and a Certified Clean Energy Professional. He has served in PSUs and multinationals, offering project execution, engineering, consultancy and capacity building expertise in Smart grids, Power automation, EMS and Sustainability in India, UK, EU, Americas and Middle East.