Going green: the new energy mix

Innovation around alternative energy sources will benefit the environment, economy and society, but countries still face challenges guaranteeing a reliable supply.

Most of the energy used to heat houses, fuel cars, and fire up power stations still comes from finite fossil fuels. Burning oil, gas and coal accounts for 87 per cent of global greenhouse gas emissions, more than any other activity.

Each year, an estimated 7 million people are killed by the noxious fumes sputtered from cars, factories and ancient lamps. Yet as policymakers move to curb carbon, the global energy mix is changing: around a fifth of supply now comes from clean sources such as wind, solar, biofuels and hydro. Renewables are growing faster than any other energy source.

Fossil fuels themselves can be made cleaner by capturing carbon before it enters the atmosphere and sequestering it back underground, where it cannot contribute to climate change. Yet that alone will not be enough. To meet the global warming targets set under the 2016 Paris Agreement, trillions of dollars must be invested in clean energy. “The scale of decarbonisation is enormous,” says Christoph Frei, CEO of the UN-accredited World Energy Council. “In the past 45 years, the average rate of decarbonisation has been around 1 per cent per year. To keep temperature rises below 2°C [as the Paris Agreement instructs], this needs to increase to 6 per cent per year. That’s not evolution, it’s revolution.”

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After years of supportive policy, however, market forces have begun to underpin the transition towards cleaner energy. Solar panels, which are by far the fastest-growing renewable technology, have grown cheaper and more efficient. Heating and vehicles rely increasingly on electricity rather than dirty fuels. And the digitalisation of power networks and fuel-guzzling consumer products such as fridges promises to optimise intermittent renewable energy supplies.

Ten years ago things like wind and solar were really expensive, and were being pushed in by tariffs and other policies. Today they are often the cheapest—and if they are not the cheapest, they are seen as the lowest risk. So we see more non-policy-driven adoption,” explains Francis O’Sullivan, director of research of the Massachusetts Institute of Technology (MIT) Energy Initiative.

Nowhere is the changing energy mix evidenced more stark than in China. It still produces more carbon dioxide than any other country, but has moved at breakneck speed to curb demand for oil and gas, and now leads the world in clean energy. In recent years it has spent more reforming its energy system, through a blend of subsidies, targets and manufacturing incentives, than the US and EU put together. It accounts for a third of the world’s wind power and a quarter of its solar capacity. Its companies make about 60 per cent of the world’s solar cells. And it sells more electric vehicles than the rest of the world combined.

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Market pressures

The transition towards cleaner energy sources opens up opportunities for businesses built on digitisation and electrification, as well as benefiting the environment. Low-cost solar cells have already allowed millions of people in the developing world to substitute acrid kerosene lamps with a cleaner, cheaper source of power. Yet a changing energy mix poses challenges as well.

The most serious is maintaining the integrity of existing energy systems. Because wind and solar rely on the weather, they provide an inconstant source of power. Today’s batteries cannot store the energy that they produce for long periods, so to stop the lights going out, countries must guarantee a backup supply. “Renewables bring much more intermittence into the market,” says Frei. “The question becomes: how do we manage that to ensure security of supply?”

Some nations use extra electricity to pump water into hydroelectric dams, where it is stored as potential energy, and released when needed. Another answer lies in huge interconnected grids, which could transfer power between sun- or wind-rich spots. A third is in digitisation. Instead of storing power for times of peak demand, smart appliances could reduce their consumption when national energy use is high.

“If you do this systematically for fridges, cooling houses, heating, transportation, you have a massive storage asset which can be leveraged,” Frei believes.

For now, the need for a backup supply eats into the profits of existing asset owners. In California, for instance, gas-fired power stations pay to keep their turbines whirring when solar generation is at its peak, and their electricity is not needed, because their units are needed when the sun goes down. “The intermittent nature of these resources means that the backup has to be accounted for,” O’Sullivan explains. “But today’s markets tend to not be well designed to compensate asset owners for providing backup in systems with heavy renewables penetration.”

If a silver bullet existed, it might be in nuclear fusion: the process that powers the sun and stars. It differs from the more familiar nuclear fission, which many countries have so far relied on to serve large proportions of their power needs. Rather than splitting a heavy, unstable nucleus into two, fusion works by melding light elements together to form heavier ones —releasing huge amounts of energy in the process. If it could work at scale, this technology could provide a potentially inexhaustible and clean, carbon-free source of power, in a fraction of the space needed by solar fields and wind farms. Yet researchers have never been able to move fusion out of labs and into grids.

Their experiments long struggled with technical challenges, such as how to protect the reactor from a burning hot potion of subatomic particles known as plasma. “Capital resources have not been commensurate with the scale of the societal problem posed by global warming and the potential for fusion to address this problem,” adds Martin Greenwald, deputy director of MIT’s Plasma Science and Fusion Center.

Recent breakthroughs bring new promise to the idea. Using state of the art superconducting materials, scientists have recently been able to produce smaller, more powerful magnets, one of the key components of fusion reactors. A collaboration between MIT and a start-up called Commonwealth Fusion Systems is looking to use such magnets to kick-start the fusion process, using less energy. “The new magnets allow us to make fusion power plants about a tenth the size of those previously envisioned,” Greenwald explains. “Not only does this decrease the cost of fusion power, but it enables a development pathway that is faster and cheaper.”

Consumers might feel more positively about this process than conventional nuclear, because a fusion plant cannot melt down. Neither does it produce the same radioactive waste, nor need the plutonium or enriched uranium used to make nuclear weapons. “These points are particularly important because any solution to global warming must be deployable into the developing world, where most of the world’s new power demands will arise,” Greenwald notes. “Fusion energy can meet those demands.”