The Energy Rainbow
The Energy Rainbow

The colour of energy is gradually changing as the world pivots away from coal power generation. Dr Jeanne Ng, Director of the CLP Research Institute, explains the different colours of the energy kaleidoscope and describes how the journey to decarbonisation will take us from brown to green, and the colours in between.

Wednesday, 03 February 2021
4 min read

 

By Dr Jeanne Ng, Director – CLP Research Institute

 

As the world moves towards carbon neutrality, we will witness the changing colours of energy – from brown, carbon-intensive sources, to green, carbon-neutral sources. 

 

This is critical because the demand for power will continue to grow and, as the world becomes more digitalised, concerns over direct personal exposure to emissions from the use of energy will also continue to grow. 

 

Hydrogen is also seen as another future common form of energy in which hydrogen and electricity, as energy carriers, would be complementary in the energy transition. The challenge is how to produce electricity and hydrogen from as much green renewable energy as possible, as opposed to our current dominant reliance on fossil fuels.

Changing colours of energy
From brown to green: Pressure is mounting for the transition away from coal-fired power generation.

Down with brown

For coal, the most carbon-intensive of all the fossil fuels for power generation and hydrogen production, there is little choice but to either deploy carbon capture, utilisation, and storage (CCUS) technologies, or ban its use altogether. Unfortunately, CCUS technologies for the power sector have yet to be commercialised. Despite the buzz and expectations since the early 2000s, little progress has been made.

 

At the same time as this lacks progress, there has been growing pressure for governments to phase out coal as well as for institutional investors to divest from and lenders to restrict funding to coal-related operations and projects. Given this chain of events, which was accelerated by the UN Paris Agreement announced in 2015, it is not hard to imagine the end of coal for power generation, with Europe taking the lead and North America and Asia following over time. 

Brighter hues

As we progress along our energy decarbonisation journey, there will be locations where there are enough distributed renewable energy resources to meet local power demands, but it will take time to scale them up enough to replace significant portions of existing baseload generation. There will also unfortunately be some markets where the lack of available renewable resources means they can never directly meet the local power demand, such as in cities like Hong Kong with high population densities.

Country-level energy demand
Source: Lux Research, adapted from David MacKay's Map of the World

 

In both cases, new baseload generation can be part of an interim transition, or an ultimate solution. The challenge then becomes how to decarbonise centralised baseload generation where it is still the most practical solution. 

 

For new energy infrastructure investment decisions that need to be made today in order to meet current or urgent emerging unmet power demands, such as new capacity to meet the demand gap left from closing down an existing coal-fired power station, we have no option but to choose from the low or zero carbon technologies that are available today. 

 

Apart from coal, the two remaining choices for proven, reliable, and commercially viable baseload generation today are natural gas and nuclear power. Natural gas is seen only as an interim transition option as it still results in CO2 emissions, while nuclear power could remain one of the future zero carbon energy solutions as long as all the relevant safety and environmental issues are addressed enough for it to be socially acceptable. 

 

Today, hydrogen is mostly produced from natural gas, which is often referred to as grey hydrogen. If or when nuclear power does become one of the carbon neutral power technologies of the future, it might be possible for hydrogen to also be produced from nuclear power, which can be referred to as pink hydrogen.

As mentioned earlier, CCUS technologies for the power sector have yet to be commercialised and it is estimated that the price of a metric ton of CO2 would have to rise to between US$40 and US$80 for coal-fired power generation or US$50 to US$170 for gas-fired power generation for CCUS to make widespread economic sense. 

 

However, being the optimist I am, let’s say that CCUS does eventually become more commercially viable perhaps in 10 or 15 years’ time, due to the increasing adoption of CCUS for industrial processes that emit highly concentrated CO2 streams and “hard-to-abate” sectors such as cement or steel manufacturing. This would reduce the cost of CCUS technology and we could perhaps then have blue energy, where electricity or hydrogen is produced from natural gas equipped with CCUS technology.

CCUS facilities
Carbon capture, utilisation, and storage is a process that captures carbon dioxide emissions from sources like coal-fired power plants and either reuses or stores it.

The green dream

By now, it is widely known that energy is considered green only if it originates from renewable energy sources such as wind and solar power. Hence, electricity and hydrogen produced from wind or solar energy is considered green energy. How much and how fast countries can increase their proportion of green energy by 2050 will differ depending on a variety of factors including the availability of renewable resources, population, the amount and profile of the local energy demand, economic development status, political and regulatory environment, and social and community expectations. 

 

Since it is unlikely all countries can be powered 100% by green energy by 2050, it is important that we also explore how to increase the carbon storage capacity of our natural ecosystems. There is a role for nature-based solutions, particularly in enhancing our forests and soil systems so that they can store more carbon and help create net zero aligned carbon offsets. Much work still needs to be done to help legitimise natural carbon offsetting solutions, but given the realities of the limitations we face, these offsets will be needed.

 

At the end of the day, there may well be new and innovative technologies that have yet to appear to help solve our decarbonisation puzzle. What is certain, however, is that the trends to decarbonise, decentralise, digitalise, and become more demand-centric with our energy, are here to stay.

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