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CLIMATE & ENERGY
A BREATH OF FRESH AIR Women and the energy transition
SCIENCE
BUSINESS
POLICY
CITIES
Offshore renewables reach for robotics
A marriage of convenience
A fair and just energy transition
Positive thinking
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A BRAVE NEW WORLD FORESIGHT Climate & Energy AUTUMN / WINTER 2018
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Full steam ahead for an inclusive energy transition “We are on the cusp of a new economic era,” states a report published in September 2018 by political, financial and economic leaders from around the world. Commissioned by the Global Commission on the Economy and Climate, an independent organisation, the report predicts that “rapid technological innovation, sustainable infrastructure investment and increased resource productivity” will drive economic growth in this brave new world, which will be powered by “affordable, clean, energy systems” available to everyone. Greater social inclusion is also a key tenet of this vision as is the role of women, who “will play a critical role in delivering this agenda in an inclusive and people-centred way”. The good news is that many politicians, businesses and investors are already onboard and benefitting from such change. The need for the transition to be just and fair is receiving increasing political support, businesses are exploring new solutions to old problems and women have an ever greater influence in industry and politics. But much more can and needs to be done. “We don't want to change,” says Mustapha Mond, the Resident World Controller of Western Europe in a Brave New World, Aldous Huxley’s dystopian novel. “Every change is a menace to stability.” Some of today’s real world leaders likewise seem to believe that social stability can only be achieved through the preservation, at any cost, of the status quo and that brave new worlds are best avoided. Others are still dilly-dallying on the sidelines, wary of fully embracing the change they know deep down is inevitable. This new report makes it clear that the only way to create economic growth and social prosperity, given the increasing threat from climate change, is to move rapidly to an inclusive clean energy economy, and that those in the lead stand to benefit most. “The train is fast leaving the station,” it states. “Leaders are already seizing the exciting economic and market opportunities of the new growth approach. The laggards are not only missing out on these opportunities but are also putting us all at greater risk. Over $26 trillion and a more sustainable planet are on offer, if we all get on board. The time to do so is now.” In short, the choice is simple: join the trailblazers for the benefit of the economy, prosperity, the environment, human health and society as a whole, or remain on the sidelines and miss the opportunity of a lifetime.
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EDITOR-IN-CHIEF
FORESIGHT
Content
MARKETS
SCIENCE
CITIES
BUSINESS
POLICY
A GREEN INVESTMENT BOOST OR RISK OF A BUBBLE
OFFSHORE RENEWABLES REACH FOR ROBOTICS
POSITIVE THINKING
A MARRIAGE OF CONVENIENCE
A FAIR AND JUST ENERGY TRANSITION
Interest in co-locating wind and solar photovoltaic facilities is growing, but finding suitable sites can be a challenge and experts remain divided about its market potential
In an effort to make the energy transition socially and economically fair in coal industry regions, regulators are slowly realising the importance of clear plans and financial support
Could a tweak to financial regulations unlock a green infrastructure investment boom or risk inflating a dangerous green bubble? Page 12
A LOCAL TRANSPORT SOLUTION
Biomethane is a way of converting organic waste into low carbon fuel and could help reduce methane emissions and clean up local transport fleets Page 16
The offshore renewables sector is starting to benefit from offshore oil and gas sector technology, meaning significant cost savings if technical hurdles can be overcome Page 20
WIND FACES UP TO THE INEVITABLE
With increasing numbers of wind turbines reaching the end of their useful life, industry is drawing up strategies to deal with this wave of waste
Vejle, Denmark, is surrounded by water and increasingly at risk of flooding from more frequent and extreme downpours, a direct consequence of climate change. Climate adaptation has become an integrated part of its urban planning with water seen as a positive asset Page 28
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THE HEAVY INDUSTRY CHALLENGE
Heavy industry has an outsized carbon footprint. Change is afoot, but full decarbonisation is a challenge
Page 54
STICKS AND CARROTS
Industry and regulators are looking increasingly to voluntary agreements to boost energy efficiency Page 62
Page 38
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UP FRONT
A major study shows fully embracing the clean energy transition now will mean significant economic, societal and environmental benefits / Page 8 FORESIGHT
THE BIG PICTURE
A competition winning photograph of technicians carrying out a sky-high check of wind turbine blades in Lindenberg near Berlin, Germany / Page 10
PHOTO ESSAY
The all women Finnish Wind Power Association offers a breath of fresh air in the male-dominated world of the energy industry / Page 44 7
UP FRONT
Action to significantly ramp up the move away from fossil fuels and towards cleaner sources of energy will boost the global economy and create jobs, while tackling climate change, according to a major study published in September 2018
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report from the Global Commission on the Economy and Climate, an independent body led by former heads of government and finance ministers, and business leaders, finds that bold climate action could deliver $26 trillion in economic benefits through to 2030 compared with business-as-usual. It defines this figure as conservative, suggesting the benefits of this new growth are being “grossly under-estimated” with current economic models “deeply inadequate for capturing the opportunities of such a transformational shift or the grave dangers of climate inaction”. Ambitious changes to key economic systems, including energy, cities, food and land use, water and industry, could also generate over 65 million new low-carbon jobs in 2030, says the report, Unlocking The Inclusive Growth Story Of The 21st Century: Accelerating Climate Action In Urgent Times.
NEW ECONOMIC ERA “Amazing technological and market progress” has taken place over the last decade towards “a new cli8
mate economy” despite “often weak or even contradictory policies” in certain countries, says the report, acknowledging particular progress “on low-carbon and energy-efficient technologies”. It cites the “major shift in capital allocation within the energy sector in just the last few years” in favour of renewables and the $280 billion invested globally in new renewable energy generation in 2017. It also underlines how auctions for long-term power contracts are generating unsubsidised bids from renewable energy producers at prices under $0.03 a kilowatt hour, out-competing fossil fuels in an increasing number of locations. A decision by political, finance and business leaders to increase their ambition to reduce greenhouse gas emissions in all industrial sectors would benefit everyone, argues the study, insisting this is the only way to generate economic growth in the years to come. “We are on the cusp of a new economic era: one where growth is driven by the interaction between rapid technological innovation, sustainable infrastructure investment and increased resource proFORESIGHT
TEXT Philippa Nuttall Jones
A faster energy transition will bring greater economic benefits
The benefits of bold climate action Strong, sustainable, inclusive growth
SOURCE Global Commission on the Economy and Climate
Avoid over 700 000 premature deaths from air pollution
Increase female employment and labour participation
Raise $2.8 trillion in carbon price revenues and fossil fuel subsidy savings to reinvest in public priorities
$26 TRILLION
Higher global GDP growth
Benefits up to 2030
Generate over 65 million additional low-carbon jobs
ductivity,” states the report. “This is the only growth story of the twenty-first century. We can have growth that is strong, sustainable, balanced and inclusive.”
CRITICAL MOMENT The report warns, however, that there is no time to waste: “The next ten to 15 years are a unique use it or lose it moment in economic history.” Globally around $90 trillion will be invested in infrastructure between now and 2030, says the study. “Ensuring this infrastructure is sustainable will be a key determinant of future growth and prosperity.” Making the right infrastructure decisions will also be vital in attempting to keep global temperature rises below the critical 2°C level and avoiding the human and financial costs this will engender, adds the report. Disasters triggered by weather and climate-related hazards were already responsible for thousands of deaths and $320 billion in losses in 2017. Climate change will lead to more frequent and more extreme events like these, including floods, droughts and heat waves. • FORESIGHT
The Commission’s main recommendations to speed up the transition in the next two to three years: 1.
Price carbon and move towards the mandatory disclosure of climaterelated financial risks, as part of a broader policy package
2.
Accelerate investment in sustainable infrastructure, supported by clear national and sub-national strategies and programmes
3.
Harness the power of the private sector to unleash innovation and advance supply chain transparency
4.
Ensure a people-centred approach, such that the gains are shared equitably and the transition is just (see page 56)
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The Big Picture Technicians carry out a sky-high check of wind turbine blades in Lindenberg near Berlin, Germany. The wind industry provides 1.15 million high-skilled jobs globally. Germany, Spain, India and the US lead the world with the largest cumulative capacities of wind energy. The global wind market will see “dramatic� growth in 2019, forecasts the Global Wind Energy Council (GWEC), which expects annual wind capacity additions to exceed 60 GW a year by 2020, up from 52.9 GW in 2018. The photograph won the Boosting Economies section of a competition held by wind associations WindEurope and GWEC to celebrate Global Wind Day 2018 PHOTO Paul Langrock
MARKETS
Proposals to require banks in the EU to hold less capital against green lending have split opinion in the policy, banking and environmental activist communities. Could a small tweak to financial regulations unlock a green infrastructure investment boom or risk inflating a dangerous green bubble, posing a threat to banking stability and a collapse in confidence in low-carbon investments?
A GREEN INVESTMENT BOOST OR RISK OF A BUBBLE
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REGULATORY RELIEF Such regulatory capital relief could make lending to green projects significantly cheaper and help tilt banks’ portfolios away from “brown” investments, such as fossil fuel power plants and other high-carbon infrastructure. It is a prospect that has been welcomed by the banks themselves. Following the publication of the HLEG report, the French Banking Federation and the Italian Banking Association reiterated their earlier calls for a GSF. “This incentive mechanism, by reducing the capital charge on green funding, should speed up the channelling of climate investments and reduce climate risk on balance sheets,” the two associations said in a joint statement. Some are, however, sceptical about the usefulness — and wisdom — of a GSF. Frank van Lerven, an economist at the New Economics Foundation, a left-leaning think-tank, believes it would not have the desired effect of increasing lending. In a recent paper, he cites the introduction in January 2014 of an SME supporting factor, under the EU’s Capital Requirements Directive, designed to increase lending to smaller companies. A study of its impacts, published by the European Banking Authority in 2016, found “limited effectiveness”, though added that more data was needed before drawing conclusions. FORESIGHT
TEXT Mark Nicholls ILLUSTRATION Trine Natskår
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n January 2018, the EU’s High Level Expert Group (HLEG) on Sustainable Finance issued a series of recommendations aimed at creating “a financial system that supports sustainable investments”. It reported “consistent feedback” from banks that the current capital framework, which dictates how much capital banks need to hold against their lending and investments to protect them against losses, requires them to hold greater reserves against “some traditional, non-complex lending operations and long-term exposures than is warranted by risk considerations”. The HLEG said it debated “the merits of lowering capital requirements for lending to the green sector”. It added that, as the report was being drawn up in December 2017, European Commission Vice-President Valdis Dombrovskis said the EU executive body was “looking positively at the European Parliament’s proposal to amend capital charges for banks to boost green investments and loans by introducing a socalled green supporting factor”. Dombrovskis suggested a green supporting factor (GSF) could lower capital requirements for climate-friendly investments, such as energy-efficient mortgages or electric cars, and it could be modelled on existing capital requirement adjustments for investments in small and medium-sized enterprises (SMEs) or in high-quality infrastructure projects.
SCIENCE
Offshore renewables reach for robotics Robots have long been used by the offshore oil and gas sector to reduce the costs of installing facilities and operations and maintenance. The offshore renewables sector is starting to benefit from the technology, which could help it make significant cost savings if certain technical hurdles can be overcome
grown. The spurt in technology should also, ultimately, benefit the offshore renewables sector, even if the industry poses some additional challenges, says Toal. “For oil and gas, robots are generally working on the seabed and, depending on the depth, it could be dark and turbid and there might be tidal flow, but the disturbance to the robots is relatively limited.” Offshore renewables such as wind, plus wave and tidal if and when they become commercial, have to operate in very challenging shallow sea conditions, where storm force winds whip up huge seas. In such conditions most ships head to port, says Toal. Oceaneering, an American company with headquarters in Texas, designs, builds and operates the world’s biggest fleet of remotely operated vehicles (ROVs), which are already working in the offshore wind industry in Europe for cable laying. “About 25% of our revenue this year will be from the renewables sector,” says Simon Miller, the company’s business development manager. For the moment, the use of robots is primarily in the construction of offshore wind farms with their use for the inspection of turbines still very limited, he adds.
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growing number of innovative researchers in academia and industry are developing robots for use in offshore renewables. Their work draws on decades of experience gained in using robots in the offshore oil and gas sector. “The offshore oil and gas industry has effectively been using marine robots since it started in the 1960s,” says Dan Toal from the University of Limerick, Ireland. “The original autonomous underwater vehicles (AUVs) were built around then.” The use of marine robots is driven by cost and their potential to be superior to their human counterparts and to operate in harsher environments. “The sector has always been interested in how it could reduce the use of commercial divers because the health and safety aspects make using them hugely costly,” says Toal. The marine technology sector as a whole is also closely linked to the price of oil. This means that in recent years, as fossil fuel companies have been hit by a fall in the price of a barrel of oil, the push to reduce costs in the sector through the use of robots has
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FORESIGHT
TEXT Iva Pocock
UNDERWATER ROBOTS An ROV is an underwater robot tethered to a ship by a series of cables through which the robot can be remotely operated by a person on board. ROVs may include cameras, sonar systems and articulated arms that enable them to perform basic tasks such as retrieving objects or cleaning a surface. AUVs also include camera and surveillance equipment, but operate without human intervention. They are programmed to follow a predetermined path and return to a predetermined destination. “We are also starting to see more AUVs in renewables, with smaller autonomous vehicles that operate in shallow waters and do cable route mapping, surveys, that type of examination,” says Miller. Hybrids, crosses between ROVs and AUVs, are also starting to appear. Oceaneering is developing a subsea welding solution in response to a competition for new technology hosted by the UK’s Carbon Trust aimed at completely removing the need to use divers. “That is in progress right now and it uses technology we are transferring from oil and gas.” The company is likewise transferring technology from the fossil fuel sector to try to solve the challenge of how to inspect floating wind turbine structures without having to take them off anchor and back to shore. Miller also points to the development of resident ROVs which can stay on the seabed and be remotely controlled from the shore. Oceaneering has complet-
SCIENCE
An offshore vessel costs between €20 000 and €50 000 a day. Using robots instead of boats could mean significant savings
ed a 21 day demonstrator resident ROV project for Equinor, formerly known as Statoil. “That’s 21 days without a vessel, 21 days of people in the comfort of an office rather than offshore and 21 days of no emissions.” The company’s aim is to have “six months of operation subsea with no vessel and no people”.
EUROPEAN COOPERATION In April 2018, Toal’s centre in Ireland launched a €2 million remotely operated underwater vehicle to inspect, repair and maintain marine renewable energy facilities. “We are looking at putting dynamic positioning capability on the robots so they can reject wave motion, increasing currents and other challenges and hold position,” he says. “At the moment they can hold a static position and not be pushed off.” The aim is to develop the technology so if a robot is close to a floating, moving structure it can hold a relative position, in synchronism with the moving structure. Toal’s centre is one of 15 partners in ten European countries that launched a new EU Marine Research FORESIGHT
Infrastructure Network in March 2018. The network aims to open transnational access to significant national marine robotics research and development assets such as research labs with test tanks, vessels and robots across Europe. Another network partner is the Norwegian University of Science and Technology, which has a marine structures working group focusing on offshore renewables. “I think in terms of the use of robotics the main tasks will be the inspection of power cables and the seabed prior to installation,” says Martin Ludvigsen of the university’s marine technology department. “There will be some need for remotely operated vehicles and AUVs during installation and, when in production, to inspect the cables, pipelines and seabed installations.” These tasks are “quite parallel” to those in the oil and gas industries and so the technology should bring down the cost of offshore wind or other offshore renewable energies, adds Ludvigsen. “Obviously in oil and gas the most expensive element is ship time so everything we do with robotics or sensors that can re21
SCIENCE
With numbers of wind turbines reaching the end of their useful life now moving into the thousands each year, industry is drawing up strategies to deal with the wave of waste. Blades are posing the biggest challenge
Glass fibres from waste blade composite can last for 500 years
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I
f facing the reality and inevitability of death is a sign of maturity, wind turbine designers, manufacturers and operators have, as it were, well and truly reached old age. No longer is it hundreds of onshore turbines from the early years of wind energy entering their graves, but thousands as they reach the end of what for most is their useful 20 to 25 year lives. In Europe, wind turbine age data, which has been compiled for 69% of the continent’s 169 gigawatt (GW) installed capacity, shows that 3% of wind turbines are 20 to 25 years old, 15% are 15 to 20 years old and 23% are between ten and 15 years old, according to industry association WindEurope. In contrast, just 14% of the 89 GW wind fleet is over ten years old in the US, according to the American Wind Energy Association. Older wind turbines are being decommissioned and increasingly refurbished, prompting efforts by industry to work out what to do with disused parts. Turbine foundations, towers and gearboxes can be largely recycled, according to WindEurope, whereas blades pose considerable challenges. They are predominantly made of a combination of fibre and polymers, known as fibre reinforced polymer (FRP) or glass reinforced polyester, as well as various plastics, coatings, metal and wood. “These give the blades aerodynamic and structural characteristics such as high tensile strength and resistance to fatigue,” says Mattia Cecchinato of WindEurope. “But it is difficult to return these materials to their original form without consuming a lot of resources.” FORESIGHT
DISPOSAL METHODS In Europe old blades are dismantled, removed and treated by waste contractors operating according to local regulations, says Cecchinato. According to the WindEurope paper, jaw cutters are the most commonly used machinery for chopping the blades into smaller sections, producing dust and fibre emissions. “It is also necessary to sanitise the area after completion. The sections are prone to emit dust and fibres during transport, which increases the demand for proper stowing and protection on lorries,” the report states. When not recycled, these sections of waste blades are buried in landfill sites or incinerated in Europe. In Germany and the Netherlands there is a landfill ban on composites, while in other countries the material is subject to landfill taxes. The cost and responsibility of decommissioning turbines falls to the wind farm developers, who are required to submit decommissioning plans at the permitting stage, says Cecchinato. “The decommissioning of wind turbines, if not correctly undertaken, can lead to environmental impacts,” admits the European Commission, the EU executive body. It does not, however, plan to present any initiatives related to wind turbine decommissioning since broader legislation such as that on waste and the end-of-life treatment of materials and guidance already exist.
RECYCLING OPTIONS “Recycling capacities have been increasing and recycling methods have been maturing in order to accommodate the expected amounts of blade waste,” says WindEurope’s discussion paper. “Further, waste policies and the demand for wider producer responsibility are also increasing.” Alla Swets and Cora Burger set up Demacq Recycling International in the Netherlands to deal with the burgeoning mountain of composite waste. The wom-
TEXT Iva Pocock PHOTO Lars Just
Wind industry faces up to the inevitable
The association has set up a task force to deal with the issue of blade waste and in March 2017 published a discussion paper on the issue. This shows the wind industry is one of the fastest-growing consumers of FRP composite in the world. There was a three-fold increase in the amount of it used annually by the industry between 2000 and 2016, based on the assumption that turbines use 12 to 15 tonnes of it per megawatt of wind energy produced. WindEurope predicts the industry will use about 180 tonnes of FRP composite a year up to 2030. These projections mean the first large wave of blade waste is about to arrive, says Cecchinato. WindEurope is updating its blade waste estimates by cross-checking with wind farms.
TEXT Karin Jensen PHOTO David de Larrea Remiro / Anders Sune Berg
POSITIVE THINKING
CITIES
Vejle, one of Denmark’s largest towns, is surrounded by water. Increasingly it is at risk of flooding from ever more frequent and extreme downpours, a direct consequence of climate change. Climate adaptation has become an integrated part of urban planning in Vejle, where water is seen as a positive asset rather than a problem to solve
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nce known as the Manchester of the Nordic region because of its vicinity to water and rich textile industry, Vejle is today an example of where not to place a city. Located in a valley, surrounded by hills, an inlet and three rivers, Vejle gets hit by water from above, from below and from the sides during cloudbursts and storm surges, which are becoming fiercer and more frequent as a consequence of climate change. “Water is our DNA. No matter what we do, this is a factor we have to consider,” says Lisbet Wolters, city architect for the municipality of Vejle. Historically, water was a growth engine for Vejle, feeding a booming textile industry and generating wealth. Now, the factories are gone and climate changes threatens the city. But instead of panicking or ignoring these challenges, the city is taking an innovative approach to climate adaptation and positively embracing the water that could herald its destruction. One project that demonstrates this mindset is The Wave, a new housing complex built within the harbour area. “The ground floor of The Wave is really the first floor, so there is no risk of flooding during a storm surge,” explains Inge Faldager from the Danish Technological Institute. “The buildings around The Wave are also raised above ground.”
ADDING VALUE “It is about using future threats as a catalyst and turning them into opportunities,” says Wolters. This is often easier said than done. Citizens are generally not excited by technical solutions, especially as the associated costs are often high. Vejle’s response is to add value to every project. A new lock on the canal, inaugurated in 2017, is one such example. Its purpose is to prevent flooding and control water levels in the rivers, but the local authorities have added a recreational area as part of the project, including a kayak club, cycling lanes and restaurants. In addition, an art installation created by Danish-Icelandic artist Olafur Eliasson opened there in June 2018. “This shows water as a sensual element,” says Wolters. “A lot of the work we do is about controlling water, but we also make the effort to create positive experiences.” The same attitude applies to Vejle’s risk management plan aimed at minimising the damage caused by storm surges and cloudbursts. Part of this plan is the creation in the hills of five water capture stations to contain and slowdown rainwater to avoid flooding in the fjord. “Each of these stations will also be a public area with different activities or just places where people can meet and hang out,” says Wolters. FORESIGHT
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BUSINESS
A marriage of convenience Interest in co-locating wind and solar photovoltaic facilities is growing, but finding suitable sites can be a challenge. Strong wind and solar resources are just two of the ingredients needed to bring together a viable hybrid project and experts remain divided about the real potential of such an approach
“
The beauty of wind-solar hybrids is that the wind tends to blow the hardest when the sun is not shining,” says Rahul Munjal, head of renewable energy firm Hero Future Energies in India. In April 2018 the company inaugurated the first large-scale wind and solar photovoltaic (PV) hybrid power plant in the country, where hopes for wind and solar hybrids are high. The facility is located in the state of Karnataka in southwest India and combines 50 megawatts (MW) of wind turbines with 28 MW of PV. Hero also plans to add storage to the project. That the variability in wind and solar output in some geographies is often, although not always, complementary goes a long way towards explaining the increasing interest in combining them in a single power project. Wind often tends to be strongest in the evening and early morning, when the sun is rising and setting, and the two resources also complement each other well on a seasonal basis. “Looking over the lifetime of a plant, you can balance the output of the two assets to get a firmer and more secure production profile,” says Mads Blumensaat from Vestas, a Danish wind turbine manufacturer. The company sees significant potential in wind-solar, and storage, hybrids and is involved in various projects.
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FORESIGHT
Along with wind and solar irradiation, crucial to the hybrid investment case are cost synergies, namely for transmission infrastructure such as interconnections and substations. Developers also point to synergies in land use and permitting along with improvements in forecasting and scheduling power production that can bring down balancing costs. And while the two technologies are quite different, with operations and maintenance for wind farms decidedly more complex, they also see room for saving at least a little money in this area as well. From a cost perspective, there are no disadvantages from combining wind and solar assets, says Vicente Garcia Munoz from Siemens Gamesa, a Spanish renewables company. As is the case with standalone wind and solar farms, hybrids will not be built if there is not a business case, he adds.
LOCATION, LOCATION, LOCATION Despite the potential advantages of hybrid power stations, there is one major catch. Finding the right location can be a challenge. “You already need the stars to align to have an optimal wind site,” says Michael Goggin in the US, vice president of Grid Strategies, a consultancy. “And it becomes even more complicated when you add solar to the picture.” Finding sufficiently strong wind and solar resources that are complementary at a specific site is not easy, but it is not the only condition for a hybrid project. “The development of wind and solar hybrids depends on the availability of resources, land and a regulatory framework that allows adequate remuneration for investors through power purchase agreements,” says Giovanni Tula, head of innovation and sustainability at Enel Green Power. The surface area required for a co-located wind and solar PV plant is less than the sum of its parts. At the same time, the larger land footprint of solar projects is one reason that not all wind farms with strong solar resources could be fitted with solar panels. Solar at times must compete with alternative land uses, such as farming and ranching, which thrive at many existing wind farms. For this reason, solar PV plants may also face difficulty securing land leases and approval from local authorities on sites already occupied by wind farms, particularly when land is scarce or alternative, less land-intensive green energy sources are available.
REGULATORY CONSTRAINTS Daniel Fraile, head of market intelligence at WindEurope, the European wind lobby organisation, highlights regulatory constraints that have impeded the
TEXT Heather O’Brian PHOTO Elcarito / Unsplash
WIND INDUSTRY
BUSINESS
Varanasi, India India has high hopes for wind and solar hybrid power plants
development of wind-solar hybrids in Europe and further afield. Among these is pricing. “With feed-in tariffs and feed-in premiums, you would choose either wind or solar. Imagine you get paid €40 a MWh for solar and €30 a MWh for wind, how much do you get for output from the hybrid plant and how do you differentiate between them? They may seem like simple questions, but they need to be resolved. The potential for wind-solar hybrids depends on the regulatory framework.” Garcia believes regulatory frameworks will increasingly adapt to make room for both hybrids and storage. “We expect these technologies to be considered more and more within political frameworks in the future,” he says. “At a certain percentage of renewable energy in the energy mix, these technologies will be needed to ensure grid stability.” MarFORESIGHT
ket players agree that one factor that can help tip the balance in favour of wind-solar hybrids is the grid. “If there are constraints in terms of the interconnection process and high grid connection costs, then these projects can be more economically attractive,” says Goggin. Indeed, hybrid power facilities, increasingly wind and solar, are not a novel solution for serving micro-grids, or isolated communities in sore need of electricity, such as those on small islands. What is new, is that hybrid wind-solar projects are now being used for commercial-scale projects on the main grid.
SOUTHERN PROJECTS One country where grid issues are seen as encouraging the development of larger wind-solar hybrids is Australia, where a few hybrid projects coming in at 33
DECARBONISATION
Heavy industry has an outsized carbon footprint. Steel and cement each account for over a quarter of the world’s industrial greenhouse gas emissions, while chemicals and petrochemicals come in a strong third, contributing 13% of total emissions. The energy transition has, however, largely bypassed these industries. Change is afoot, but full decarbonisation is a challenge, requiring new processes and significant amounts of clean energy to heat and power production
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ndustry accounts for 24% of global carbon dioxide (CO2) emissions, which reached a record 37 billion tonnes in 2017. Scientists estimate that no more than 800 billion tonnes of CO2 should be emitted if there is to be real chance of keeping global warming below 2°C, the upper limit for avoiding catastrophic climate change. If emissions continue as they are now, this budget will be exceeded in less than 20 years. The top three industry emitters, steel, cement and chemicals, account for around 16% of all CO2 emissions globally. They need to severely reduce their emissions if the world is not to overspend its dwindling carbon budget. The easiest way for many heavy industries to decarbonise is to use electricity from renewables instead of fossil fuels to generate the heat used in their production processes, such as metal smelters. Eliminating the carbon incumbent in industrial manufacturing, such as the coke used in blast furnaces to produce pig iron, a precursor of crude steel, or lime from limestone when making cement, is more difficult. The solutions to both challenges require signifi38
cant volumes of renewable energy with implications for the clean energy industry. In the long run the decarbonisation of heavy industry could change the face of these sectors and of renewables if companies decide to relocate to where renewables are abundant and cheap, says the International Energy Agency (IEA). Industry powered by hydrogen rather than carbon fuels could be better located in sun-rich countries where the solar-driven electrolysis of water may allow green hydrogen to be produced more cheaply. Alternatively, a new era of international energy trade based on renewables rather than fossil fuels may emerge, says the agency. Sunny countries currently exporting oil could switch to exporting hydrogen, for example.
REDUCING EMISSIONS Steel is one of the world’s most important engineering and construction materials, but also has the heftiest industry carbon load. In Europe, at least, pressure is building to deal with the problem. Since 2005, the EU has operated an Emissions FORESIGHT
TEXT Sara Knight ILLUSTRATION Trine Natskår
THE HEAVY INDUSTRY CHALLENGE
BUSINESS
The big emitters Consumption of materials and their CO2 emissions
FOUR KEY MATERIALS CATEGORIES
Steel
Plastics
Aluminium
Cement
Used across economy in construction, transportation, industrial machinery, and consumer products
In advanced economies, packaging is a major use, followed by construction and automotive
Key uses include buildings, automotive, electrical machinery and packaging
Used for construction of buildings and infrastructure
40% of demand is served by secondary production in the EU, but the industry still releases some 230 CO2 Mt per year
100 kg/capita is consumed annually in Europe, of which secondary plastics only represent 10% of demand
The EU imports 40% of its aluminum, sometimes from locations with very high CO2 intensity of production
130 Mt CO2 are released annually from European production
In total, the CO2 footprint of EU demand is around 80 Mt annually
Production is primarily local due to high availability of raw materials and high cost of transportation
75%
of all industrial CO2 emissions
CO2 emissions are more than 110 Mt per year, of which 55% are due to the process chemistry rather than energy
TWO KEY VALUE CHAINS AND PRODUCT CATEGORIES
Cars/Mobility
Buildings/Shelter
Automotive sector uses 20% of steel, 10% of plastics and 20% of aluminium
Buildings account for 33% of steel, 20% of plastics, 25% of aluminium and 65% of cement
CO2 emissions from materials in passenger cars sold in the EU are around 50 Mt per year
The CO2 footprint of building materials in the EU is 250 Mt per year
Embodied emissions in materials are becoming a larger share of total CO2 footprint
Embodied carbon is 10-20% of EU buildings’ CO2 footprint today, but already 50% in countries with low-carbon energy
~50% passenger cars and buildings jointly account for almost half of emissions from steel, plastics, aluminium and cement
SOURCE Material Economics
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PHOTO ESSAY A BREATH OF FRESH AIR
“Reducing gender inequality makes economic sense apart from being the right thing to do,� concludes a World Bank report from May 2018. The United Nations Development Programme estimates that ensuring the full participation of women in the economy could boost global GDP by as much as $28 trillion per year by 2025. Despite such evidence, the energy industry remains one of the most gender imbalanced sectors says the International Energy Agency, with women only faring slightly better in the renewables world, where the International Renewable Energy Agency estimates they represent around 35% of the workforce
ANNA TIIHONEN Communications Officer
HEIDI PAALATIE Operations Manager
The Finnish Wind Power Association is the first to admit it is not the biggest nor the most powerful organisation in the energy world, but it is creating its own mini revolution with a team, from board level to CEO to communications officer, of only women. Heidi Paalatie, the association’s operations manager, insists the lack of men is unintentional. While all female companies are no better than all male ones in the long run, the organisation offers hope the energy industry can diversify its workforce for the benefit of all as it transitions away from fossil fuels towards cleaner energy sources
POLICY
A FAIR AND JUST ENERGY TRANSITION Regions economically reliant on coal have been generally resistant to the energy transition. But as it becomes clear renewables and energy efficiency can create decent jobs and economic growth they are starting to show greater interest. In an effort to ensure the transition in these regions is socially and economically fair, regulators are slowing waking up to the fact clear plans and financial support for disrupted societies are more important than protecting the status quo
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TEXT Philippa Nuttall Jones ILLUSTRATION Trine NatskĂĽr PHOTO Dominik Vanyi / Unsplash
THE IMPORTANCE OF ECONOMIC DIVERSIFICATION AND DIALOGUE
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Impact, Global Leadership web-based tool. It showcases the positive impact of the wind industry on jobs and the economy across Europe. The story is the same globally, says the Global Wind Energy Council, which credits the industry with creating “local jobs that give the younger generation an opportunity for good jobs near home, rather than migrating to the big city”. In particular, it notes how shipbuilding areas in northern Spain and northern Poland now produce towers, foundations, cranes and the jack-up vessels needed to install offshore wind turbines. Oil and gas-driven economies are also benefitting — New Mexico is investing €2.4 billion in wind, with the sector supporting 4000 jobs.
“In the near future, the regulatory risks, such as carbon pricing and tightening cap and trade systems, will unavoidably affect coal and other fossil-fuel assets”
Similar success stories and potential are cited from across the renewables industries. Global renewable energy employment reached 10.3 million jobs in 2017, an increase of 5.3% compared with the previous year, according to the International Renewable Energy Agency (IRENA) 2018 jobs report. Similarly, moving from fossil-fuel vehicles to transport powered by renewable energy will create 206,000 net additional jobs in Europe by 2030, concludes an analysis by Cambridge Econometrics for the European Climate Foundation. All of this, however, comes with a warning. In 2006, the wind energy industry accounted for nearly 263,000 jobs in the EU. In 2020, just over 287,000 jobs are expected to be created to manage the 204 gigawatt capacity that is forecast to be up and running by then. This figure could, however, be as high as 569,049 if decision makers were more ambitious and aimed to double installed wind capacity compared with today, says WindEurope. Slowing job creation in renewable energy is not just a European problem. IRENA highlights that employment in wind power and in solar heating and cooling declined globally last year as the pace of new capacity additions slowed. Fewer jobs are bad news for the energy transition and emissions reductions and also for workers. 58
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