Phasing out G20 Fossil Fuel Industry

Which role do renewables play for achieving the Paris Climate Agreement?

Renewable energy has the most central role in the energy system and its part in achieving the Paris Climate Agreement. The energy system is the major emitter of CO₂. Renewable energy is the one and only solution. Energy efficiency is important to reduce the energy we need, but you can’t achieve a decarbonisation of the energy system with efficiency ­– you will always have energy demand in the long run. Therefore, it is crucial that renewables supply the energy in any decarbonisation strategy. This is not just valid for electricity, but also for renewable heat… and in the long term we need to develop renewable energy fuel systems as well. We can’t just electrify everything, there is still need for renewable fuels for the industry and aviation.

How does the current geopolitical situation feed into this endeavour?

In the past, the debate around renewables was somewhat divorced from the issue of fossil fuel imports and fossil prices. Neither has it been central in the energy debate of the past to reduce energy import dependencies from countries that are obviously not peaceful. The income from purchase of fossil fuels could basically be used to financing wars. These issues can no longer be ignored.

The importance of phasing out oil and gas is now more obvious and present. In terms of oil, the most important measure is to decarbonise the transport system by transitioning to an electric transport system. This doesn’t mean simply replacing oil engines with electrical engines, it also means more public transport and different city designs. This will not only decrease the dependency on oil, it will also improve wellbeing because a liveable city is a city built around people, not cars.

The second important measure is to phase-out gas. In Europe gas is used to a large extent for heating. Which means the heating sector needs to move towards efficiency via building insolation, renewables such solar collectors and electrical heating. That is a huge task and needs longer than a few months. While the energy transition in the power sector progressed significantly, the heating sector was literally in the shadow. The war right now, just next door to the European Union, will make it much clearer that phasing out fossil fuels is crucial, not only from a decarbonisation perspective, but also to be more independent from fossil fuel imports that are obviously not ethical.

You have shown in your study that the world has more than enough renewable energy resources that can be exploited to meet the energy demands of every person in the world. What are the global trends in the energy sector, especially with regard to G20 countries?

My colleagues and I are currently developing a more detailed analysis of renewables in all the G20 countries. The first results already indicate that all the countries have more than enough technical and economic potential for solar and wind energy to supply the entire domestic energy demand for power, heat and transport fuels.

We’re focusing on solar photovoltaics and on- and offshore wind in our analysis. There are obviously more renewable sources such as hydropower, biomass and geothermal – and wave power. However, solar and wind energy will supply the most significant part in renewables’ future. The global electricity supply actually started with 100 per cent renewables, because the first electricity generation plants were hydropower plants; coal power plants came later. Right now, hydropower plans play an important role in the electricity supply of some countries – Norway for example. Hydropower shares in some countries are well over fifty percent, but the early start of utilisation also means the economic and ecological potential of hydropower is exhausted in many countries.

Biomass is, the only renewable energy source that needs fuel supply, and supplying this fuel can be challenging; it can compete with food supply or nature conservation issues. So again, the potential is limited.

Geothermal is a very good renewable energy source. The potential for geothermal for heating is significant across the G20, but it is limited for electricity generation as high-temperatures are need which are only economically accessible in a limited number of countries.

In summary, the existing renewable energy resources and the technical requirements to use those of energy supply for G20 countries is NOT the limiting factor for a transition to 100% renewables. It is almost exclusively the lack of reliable policies.

How do trajectories for a Just Transition of the fossil fuel industry look like?

Here in Australia, we have a lively debate about a ‘Just transition’ – to the just and fair transition from fossil fuel to renewable energy jobs. Australia’s coal industry is among the largest in the world and some communities are very dependent on the income and jobs from the coal industry. To shut down the coal industry in those communities would mean to shut down the village.

Therefore, our institute develops alternative plans. One of the most interesting case studies is Newcastle, about 200 kilometre north of Sydney, where one of the world largest coal port is located. Newcastle is considering a transition to offshore wind. In planning this transition, both technical aspects of the change and the socioeconomic impacts must be considered. Such a transition will require trained people with, some of the required job skills them are new, some are similar to those required for the fossil fuel industry. There is a huge range of different skills and qualifications required – project planning, financing, construction, engineering and maintenance of electrical systems. And of cause offshore wind engineers. Education and training programs are extremely important in implementing our plan for the next 10 years.

The results of the latest IPCC report clearly demonstrate that climate adaptation measures are vital for reducing both exposure and vulnerability to climate change. How to accelerate renewables-based adaptation? How can the G20 implement an equitable transition with the development, deployment and storage of renewables?

From my point of view, climate adaptation is almost a sign of failure. If we had acted 20 years ago, the need for adaption would be minor. Now we need to adapt and mitigate at the same time, which shows that delaying climate action for more than 25 years is a very expensive decision, especially for the next generation.

What is adaptation? Adaption is everything. We need to adapt to less water, droughts; and we need to adapt for more water, floods. It really depends on where you are. In the north of Europe, flood protection is very expensive and needs to happen anyway. There are ideas to combine this with renewables, such as mounting solar panels to flood-protection structures for solar panels. But it should always be a smart double use – we mustn’t compromise the purpose of adaptation.

What are the challenges and opportunities of renewables as climate mitigation solutions?

One challenge is taking increasingly extreme weather events into account. From what we know right now, there’s no obstacle to using wind for electricity generation in the decades to come, but we’ll have to engineer accordingly. We have to install wind turbines that can survive higher wind speeds, stronger storms etc.

Storage presents both an opportunity and a challenge. We are just at the beginning of the process of developing suitable electricity storage, and I think we are on a very good trajectory.

Batteries are getting more efficient, lighter and cheaper. In my assessment, electricity storage using different kinds of batteries will be technically and economically resolved in the next 10 years. We also need to consider the required – metal -resources. Moving to cobalt-free batteries that are slowly entering the market is important as cobalt production often involves human rights violations. We need to open our view and not just focus on producing energy, but also on the required (metal) resources.

Thermal storage systems are often forgotten in the storage debate. And then there is the production of synthetic fuels for processes that cannot (yet) be electrified. Those fuels store renewable energy – and therefore are part of the storage technology portfolio. This is a very important technique, especially for industrial process heat and aviation. Maybe short flights can be electric, but mid- and long-haul flights will not be electric any time soon. We need renewable fuel production to operate aviation.

What is the most important rate limiting factor for Renewables?

Obviously, policy. The technology is there. Technology is not what holds us back. We also have the renewable energy potential. What we don’t have are predictable and long-term policies. We need predictable policy and a good education system that looks ahead of what we need to implement the varies new technologies and services.

Fuel companies need to, and some are actually about to, transform into energy-related service providers. Heat, mobility, light, etc. instead of coal, oil and gas. They need to update their business model and they will. Any delay, however, will be very expensive.

My suggestion is to develop a business transition concept for the fossil fuel industry similar to administrations just before the elections: when governments move into care-taker mode. To decide about long-term fossil fuel exploration and investment projects will no longer be in the hand of the oil, gas or coal company, but will be decided from the national energy ministry which is in charge for an orderly unwinding and phase-out of all business activities from fossil fuel companies.

Thank you, Sven, for this insightful interview!