Energy Transition Mountain to Climb

The energy transition seems like a towering mountain to climb. Grand numbers characterize the emissions seen as necessary to cut, the amount of products that would need to be decarbonized, and the investments to be made in alternatives. They all point back to the biggest of energy numbers — 37 billion tons of CO2 — which the energy sector emitted last year and needs to cut by midcentury if the Paris agreement's goals are to be met. This involves renewable energy, carbon capture and storage (CCS), carbon dioxide removal — all at colossal numbers, whether in gigawatts, billion tons or trillions of dollars. Plenty of skepticism has been cited about whether there's enough space and capital to accomplish it all, but experts have also told Energy Intelligence that the hurdles can be crossed with enough planning and legwork.

The International Energy Agency's (IEA) net-zero emissions scenario calls for the construction of 22,000 GW of solar and wind capacity between now and 2050 — more than 10 times today's 2,000 GW. Critics argue it is not be possible to find enough raw materials to build that capacity, nor enough space to install it. Indeed, because of the low energy density of wind and sunlight, renewable energy involves a lot of equipment. Lifecycle analysis shows that wind and solar power plants require more materials such as steel, copper, aluminum and cement per unit of generation than fossil fuel-based electricity. Solar photovoltaic, for example, requires some 10-40 times more copper per megawatt hour than fossil fuel-fired plants, and onshore wind 5-15 times more iron.

In future decades, however, and even if green technologies take off as fast as hoped in climate-friendly scenarios, energy will remain a relatively small user of bulk materials such as cement, steel and aluminum, in comparison with buildings, transport and general industry equipment. Exceptions include lithium and cobalt, where batteries could account for respectively 70% and 90% of global demand by 2040 according to the IEA, up from 30% and 15% now. Electric vehicles and battery storage would similarly take over from stainless steel as the largest end user of nickel by 2040, and clean technologies in general could account for 45% of copper demand, up from 25% now.

But even for these materials, the IEA's head of energy technology policy, Timur Gul, recently said that resources are not an issue as "huge amounts" of minerals are available. The main obstacle is investment risk, as the speed of clean technology ramp-up in the next couple of decades is highly uncertain. This could be addressed by government intervention to ensure the production and use of clean technologies grow in line with climate goals.

Renewables are also land-intensive, but experts such as German grid operator Amprion's Gerald Kaendler insist that "space is not the final frontier for the energy transition." His calculations show that there is enough space for renewable energy self-sufficiency even in densely populated and moderately sunny countries. He found that a carbon-neutral Germany would need some 15,000 square kilometers of land for solar and wind plants, up from 3,000 sq km now. This is equivalent to 4% of Germany or half of Belgium and thus "cannot be neglected," but this includes solar rooftops which are "not really a problem" as roofs are there. Likewise, onshore wind can easily be combined with agriculture, and so can solar energy in "agrovoltaics" projects, where the same land is used for solar energy and agricultural production.

CCS and Hydrogen

The net-zero emissions and similar scenarios assume 6 billion-9 billion tons of CCS in 2050, which critics say is unrealistic because it would involve creating an industry the size of the current oil and gas sector in just 25 years. The Energy Transitions Commission's Kash Burchett agrees in principle, "but the technology does exist, it works, and prospects for cost declines are substantial." And while the physical size of a future CCS industry matches that of the current oil sector, the annual investment involved is only one-third of that sector's spending today, at around $150 billion versus $500 billion per year. "It's a big mountain to climb, but it's not impossible."

Many argue that hydrogen will play a big role in a net-zero world. But some experts, such as Bloomberg NEF's former boss Michael Liebreich, while believing "clean hydrogen will be required to decarbonize certain sectors," doubt it will ever reach hundreds of million tons per year in final demand — up from the current 100 million tons for carbon-intensive gray hydrogen. Reasons include cost of long-distance hydrogen shipping and low efficiency of the hydrogen conversion value chain, plus the amount of resources massive hydrogen production would involve.

In the IEA's net-zero emissions, where hydrogen demand amounts to 450 million tons in 2050 or almost 10% of final energy consumption, almost 15,000 terawatt hours of electricity are used to produce green hydrogen by midcentury — around half of today's global power demand and 20% of it in 2050. Blue hydrogen from natural gas with CCS would account for about a quarter of total hydrogen in 2050, but this would involve a huge 1 billion tons/yr of CCS.

Carbon Offset Debate

Many in the oil industry argue that offsets from other sectors such as forestry can contribute to capturing CO2 and reduce the sector's carbon footprint. However, experts such as the Science Based Targets Initiative's Alberto Carrillo Pineda insist that offsets should be reserved for the hardest-to-decarbonize sectors, mostly outside of the energy industry. About one‐quarter of today's greenhouse gas emissions, or 15 billion tons of CO2 equivalent per year, mainly from agriculture, forestry and other land use, are not related to energy. Experts say tropical forests can absorb some 15 tons of CO2 per year and per hectare during 20 years. It means that capturing 1 billion tons of CO2 would require around 670,000 sq km, or twice the size of Vietnam.

Financing the energy transition also involves big numbers. Investment in clean energy would need to triple between now and 2030, according to the IEA. Assuming that it could be done only through reallocating existing flows "from dirty to clean" would be "mischaracterized and oversimplified," the agency says, as total energy investment needs to double. But financiers are confident it is feasible. "What's lacking is projects, not funding," Philippe Brassac, head of France's Credit Agricole, said in a recent interview about the energy transition.

Philippe Roos is a senior reporter and senior analyst at Energy Intelligence. A version of this article originally ran in EI New Energy.