By Chris Robinson, Lux Research

A worldwide scramble for green energy has changed the dynamic of the global power industry, and created an increasingly complex web of companies and methods to extract and move energy around the planet.

Many countries rely on a global trade in coal, oil, and natural gas to maintain economic growth because of their limited domestic energy resources. Globally, 2,800 terawatt hours (TWh) of energy a year is transported from resource-rich regions such as the Middle East to energy-intensive regions such as Southeast Asia.

But the nature of demand for energy imports is diversifying. New energy carriers like liquefied natural gas (LNG) tankers are supplementing, or in some cases substituting, the traditional oil and coal vessels that are so far workhorses of energy trade.

A renewable energy imbalance

The world is moving decisively towards a net-zero future, and governments are putting increasing pressure on industries to replace fossil fuels with zero-emission solutions – primarily solar and wind power.

In the global push for decarbonisation, many countries are finding it difficult to replace hydrocarbon-based energy imports with domestic renewables like wind and solar.

The logistics of moving green energy

Lux Research estimates that countries representing US$9 trillion of global GDP – more than 10% of the global share – face difficulties in meeting energy demand with domestic renewable production alone, ramping up the need to import renewable energy.

A new global energy trade in moving zero-emission energy is required. Solar and wind energy is currently carried through electrical transmission lines using high-voltage alternating current (AC) and direct current (DC), but there are alternatives like the electrolyzer, which can use electricity and a supply of water, carbon dioxide, and nitrogen to create a variety of carriers suitable for long-range, clean energy transport. 

Carbon-free hydrogen is the simplest to transport, needing only water and electricity to create hydrogen and oxygen. Both can be combusted or converted electrochemically to recover the energy. 

Synthetic methane can be produced from green hydrogen and carbon dioxide and, importantly, can use existing infrastructure in the global natural gas trade. More dense liquid alternatives are attracting attention as well.

Like synthetic methane, new pathways for producing ammonia and methanol leveraging green hydrogen can store renewable energy while using existing networks to move liquid fuels.

Liquid organic hydrogen carriers (LOHCs) are also gathering momentum. These rely on the reversible hydrogenation of organic molecules to store and deliver hydrogen under ambient conditions.

Although high in price and not yet fully mature, developers are producing a range of LOHC systems that use cheaper hydrogen-carrying molecules and have lower energy requirements to drive the critical dehydrogenation reaction, referring to the unloading of hydrogen after transport and storage using LOHC ships. These technologies will form the backbone of the global renewable energy trade in the future. 

Evaluating energy carriers

Lux Research conducts a cost analysis of moving renewable energy via different types of energy carriers outlined above, comparing them against high-voltage AC and DC electrical transmission based on the capacity and distance each type could deliver.

It is concluded that high-voltage electrical transmission lines provide the lowest-cost solution to connecting remote renewable energy systems to customers, as transmission only drops in efficiency at distances greater than 20,000 kilometers. While this is good for energy costs – not converting electricity to fuels keeps electricity prices low – it limits the prospects of a worldwide renewable energy trade that can balance supply and demand and set prices globally. 

Moving renewable energy through high-voltage DC transmission lines or transporting hydrogen in liquefied form would help energy-intensive economies reach their carbon emissions reduction targets. However, it will take decades to establish a global supply chain that matches the scale of today’s global fossil fuel energy trade.

One of the keys to success would be to focus on difficult-to-decarbonise sectors like chemicals, heavy transportation, and heat, and encourage them to make better use of energy carriers. Partnerships between industry and logistics companies and renewable power suppliers will be essential.

Cross-sector cooperation is critical for another reason. Renewable energy carrier projects will cost billions of dollars each and governments as well as industry players will have a role to play if they are to succeed.

Even so, high-volume renewable energy will only be able to compete effectively with the support of highly favourable economic and regulatory conditions. It will take a fundamental shift away from fossil fuels, including LNG, for renewable energy to achieve primacy in the global energy market.