It may be a cliché to say the world is facing a tipping point, but as thousands of business leaders, government officials, NGOs and other decision makers arrive at COP28, it’s not much of an exaggeration to say that this is a critical moment in the fight to minimize climate change.
While the conference will address a host of issues, including the first global stock take on climate progress, how to put people at the center of climate action, the impact of global trade on climate and more, one of the key debates will focus on how to speed up the transition from fossil fuels to clean, affordable energy sources.
The need to accelerate that shift is quickly becoming urgent. While studies have shown carbon emissions are slowing, they remain at an all-time high, putting the goal of limiting global temperature warming to 1.5°C in jeopardy.
The Road Ahead
While there is little doubt that hydrogen will play a key role in global decarbonization efforts, to understand how and why, it’s important to start with what’s been called the “long tail” model of climate change solutions.
According to that model, renewable energy sources, like wind, solar, geothermal and even nuclear power in the form of small modular reactors, can generate enough power to satisfy most of the demand for green energy.
Where hydrogen and carbon capture, utilization and sequestration (CCUS) will be most critical is in reducing or eliminating emissions from some of the hardest-to-abate industries like steel production, long-distance transportation and shipping, and aviation.
The good news is existing technologies – like solar and wind power, energy efficiency measures, battery storage and more – have the potential to significantly reduce emissions now as new technologies are being developed to help address these hard-to-abate parts of the economy.
In many ways, the challenge today is how best to deploy those technologies at the scale needed to significantly move the needle on carbon emissions.
Both solar and wind power have grown dramatically in recent years, and today make up as much as one-third of global electricity generation, but there is still significant room for growth. Research from the Lawrence Berkeley National Laboratory found, in the U.S. alone, thousands of projects have been proposed with a combined generation capacity of more than 1,250 gigawatts – enough for the country to get up to 80 percent of its electricity from zero-carbon sources by 2030.
Unfortunately, complex permitting processes often lead to years-long delays, during which economic conditions can change, prompting many developers to halt projects before they’re built. Berkeley Lab research showed that, of the projects proposed between 2000 and 2017, only about one in five had been built by the end of 2022.
There are a host of ideas aimed at addressing this problem, including streamlining the permitting process, increasing the number of people who review and more. While the solution may ultimately require multiple pathways and more, it’s clear digital technology will be at the forefront of those efforts.
As solar, wind power and other renewable energy resources continue to scale up, they will rely on modeling and simulation tools, optimization software, reliability analyses and more to help de-risk projects and ensure they move quickly from proposal to profitability.
As the grid modernizes to accommodate these technologies, digital solutions, like distributed energy resources management systems (DERMS), will be key to enabling utility operators to make better, more informed decisions that maximize the value of renewable resources while maintaining a reliable power system for consumers.
Going forward, many of those same technologies will be critical to driving the development and deployment of new and emerging sustainability technologies. By enabling efficient hydrogen production, for example, advanced process controls and optimization will help reduce the green premium for the industry and drive increased adoption of hydrogen-based technologies and processes.
Digitalization will also allow companies to improve the safety and reliability of hydrogen systems through the use of asset performance management (APM) tools and other maintenance solutions. By monitoring for potential leaks in both above and below-ground hydrogen and CO2 storage facilities, digital tools can make such systems significantly safer and ensure sequestered carbon stays out of the atmosphere, resulting in better outcomes in general.
In recent years, hydrogen’s potential role in decarbonization has driven a worldwide explosion in projects, with nearly 1,500 – representing more than $2 trillion in investment – proposed in just the last two-and-a-half years, according to Gulf Energy Information.
Demand for hydrogen is expected to see similar increases. According to the International Renewable Energy Agency (IRENA), demand could increase six-fold, to as much as 650 million tons per year, by 2050, while other studies suggest the value of the hydrogen market could increase from about $160 billion today to $640 billion by 2030 and more than $1.4 trillion in 2050.
Recently, during a panel discussion at key industry event ADIPEC on the hydrogen economy, the agreement among government and business leaders was clear – scaling the hydrogen economy to meet those demands will require effort and focus on many levels, as well as unprecedented global cooperation.
At the same time, investment in CCUS has more than doubled since last year to hit a record high of $6.4 billion. Carbon capture has proven to be a technically viable way to reduce CO2 emissions in fuel, chemicals, even directly from the atmosphere, contributing to companies achieving sustainability goals. However, carbon capture projects face technology limitations and economic challenges in both capital expenditures (CapEx) and operating expenses (OpEx).
In the near-term, however, there is good news. The growth in solar and wind power generation has been driven by the combination of increasing efficiency and significantly reduced costs. Over the past decade, solar panel efficiency has jumped from about 15 percent to an average of more than 22 percent, while wind turbines can be as high as 60 percent. Over the same time, the cost of solar panels has dropped by as much as 85 percent and wind power costs have seen reductions of as much as 75 percent.
That’s sparked a boom in building for solar and wind power. According to the Federal Energy Regulatory Commission, renewable generation jumped from less than 18 percent of U.S. generating capacity in 2015 to more than 27 percent of by the end of 2022. That upward trend is poised to continue.
While it’s far from an overnight process, the good news is that progress is clearly being made. Nearly one-third of all electricity today comes from renewable sources, billions are being invested in new renewable projects around the globe and a growing number of companies are turning to electrification with renewable power to help reduce their carbon footprint, to cite just a few examples. Though challenges still exist, it’s increasingly clear going forward that technology and innovation will play a key role in helping to overcome them.
We don’t need to wait for those technologies to arrive – they’re already here.
Accelerating the energy transition inclusively and sustainably will sit high on the agenda at COP28. Discussions will focus on the rapid scaling up of renewable energy, how innovations like hydrogen fuels and carbon capture and sequestration technologies can help reduce emissions. At the same time, delegates will look for pathways to ensure the energy transition benefits developing nations and minority communities in equal measure, to deliver a just transition that leaves nobody behind.