We’re at a critical point. The ambitious global commitment to reach net zero emissions by 2050 is a necessary step to combat climate change. However, developing and managing energy infrastructure using traditional approaches falls short when pegged against this timeline.
In this blog, we’ll explore why a transformative approach is necessary and provide actionable insights for energy sector professionals, policymakers, and environmental experts.
The race to net zero isn't just a soundbite; it's a vital milestone that nations worldwide have pledged to achieve. With mounting evidence of the impact of climate change, reaching net zero by 2050 is no longer a voluntary commitment - it’s crucial to our future. Net zero is all about balancing greenhouse gas emissions with the amount removed from the atmosphere.
Although foundational, traditional energy infrastructure and development methods are insufficient to meet the net zero target. Existing energy infrastructure often relies heavily on fossil fuels, making it challenging to reduce carbon emissions significantly. The development of new infrastructure has historically been slow and hampered by out-of-date planning processes. The slow pace of regulatory changes and technological adoption further exacerbate the problem. Our current systems are just not equipped to handle the scale and speed of transformation required.
Given the limitations of traditional methods, a revolutionary approach to energy infrastructure development is needed. This means rethinking how we generate, distribute, and consume energy. The focus should be on integrating cutting-edge technologies, fostering innovation, and adopting sustainable practices across the board.
Replacing coal-fired power plants with renewable energy sources like wind, hydro and solar can substantially reduce emissions at a relatively low cost. Renewable energy sources, are becoming competitive with fossil fuels, leading to significant emissions reductions while meeting growing energy demand.
In the US, renewable energy adoption is starting to snowball, with its largest quarter of solar manufacturing growth in Q1 2024. The total installed capacity for solar is now at 200 GW, according to the US Solar Market Insight Q2 2024 report and total US solar capacity is expected to more than double over the next five years. In the UK in 2023, renewables provided 47% of domestic electricity generation, with electricity generated from wind equalling more than a quarter of that percentage. In the EU renewables supplied 23% of the energy demand in 2022.
While these figures are encouraging, there is still a way to go. To meet Europe’s target for renewable energy generation of 42.5% by 2030, the renewable deployment rate will need to more than double the rate of the last ten years. In the UK, while the figures are impressive in terms of the percentage of electricity produced in the UK, in 2022, renewables only delivered 6% of the nation’s electricity requirement. In the US, 20% of all electricity generation is currently provided by renewables, a number which needs to increase rapidly to meet net-zero targets.
Encouragingly, there is much that can be done by leveraging existing infrastructure and technologies to help reduce emissions. For example, enhancing the efficiency of existing power plants, upgrading transmission and distribution networks and utilising smart grid technologies can improve the overall efficiency and reliability of the energy system and also lower costs.
Smart grids use digital sensors and software to match the supply and demand for electricity in real-time. This helps to minimise costs and enhances the power grid's stability and reliability. While repurposing infrastructure, for example, by converting natural gas pipelines to hydrogen, is not always possible due to the molecular differences between natural gas and hydrogen, it can help support the transition to a low-carbon economy.
Investing in research and development (R&D) is important to reduce the cost of solutions currently perceived to be expensive, like Carbon Capture and Storage (CCS), Carbon Capture Usage and Storage (CCUS) and advanced nuclear reactors.
The Intergovernmental Panel on Climate Change (IPCC) states that carbon capture and removal “is part of all modelled scenarios that limit global warming to 2 degrees Celsius or lower by 2100.” The International Energy Agency’s (IEA) pathway to net zero by 2050 requires pulling 80 million metric tons of CO2 from the air annually by 2030 and more than a billion metric tons by 2050.
CO2 capture is a three step process which can go a long way towards reducing the impact of industrial processes, particularly the outputs of coal and gas-fired power stations, steel and cement factories and hydrogen production. The gas is captured and compressed then transported to where it can be stored deep underground in rock formations. Carbon Capture Usage and Storage (CCUS) can also be impactful where the CO2 is re-used in industrial processes like plastic production, biofuel or concrete. According to the IEA, capturing CO2 directly from the flue stacks of power plants and other industrial operations, like concrete plants, could soak up nearly 4 billion metric tons of CO2 a year by 2050.
CO2 can also be captured directly from the air. One key way to do this is to plant forests. Termed a nature-based solution, reforestation is relatively cheap, large scale and has additional benefits like providing habitats for wildlife and reduced flood risk. Reforestation is not insignificant in terms of what can be achieved with the capture of 11 billion metric tons of carbon via nature-based carbon capture, a possibility before 2050. However, nature-based methods are inconsistent and could be wiped out by a natural disaster like a forest fire. The process can also be industrialised, and there are currently two main methods. Both involve pulling air into a processing area and absorbing the gas into either a solid or a liquid before pulling it back out in order to compress and store the carbon. Both processes have been developed by companies which hope to be profitable by selling carbon credits to companies that need to offset their carbon footprint.
Hydrogen is likely to be a useful part of future clean energy infrastructure, especially for some industrial processes, industrial and domestic heat, and transport, which are difficult to electrify. Hydrogen must be produced by separating it from other elements, either in water or fossil fuels. It is zero-emission at the point of use, but producing it requires energy.
Hydrogen complements other decarbonisation technologies like renewable power and biofuels and clean hydrogen, which is both renewable and low-carbon, offers a rare decarbonisation option for industries like steel, maritime, aviation, and ammonia. Hydrogen facilitates the integration of renewable energy into the energy network because hydrogen can store and transport energy over long distances via pipelines and ships. Energy developers can tap into remote sources of renewable energy to create hydrogen which can then be transported to where it’s needed, for example, manufacturing hydrogen using seawater and energy from an off-shore wind farm. Hydrogen can potentially reuse existing infrastructure further reducing carbon footprint, for example, gas pipelines, but this is not always possible due to molecular differences. Overall, hydrogen as an energy source is in its early stages but is likely to form part of a successful net zero strategy. According to the Hydrogen Council, in a net zero world demand for clean hydrogen could increase from 90 million metric tons (MT) today to 660 MT in 2050, making up 22 per cent of the final energy demand globally.
Economies of scale and mass production can significantly reduce the costs of emerging technologies. For example, the cost of solar photovoltaic (PV) panels and wind turbines has decreased dramatically over the past decade due to increased production and technological improvements. Similarly, scaling up the production of electric vehicles (EVs) and battery storage systems can reduce costs and accelerate adoption.
Fostering innovation and collaboration among stakeholders is essential to reducing the costs of expensive solutions. Public-private partnerships, industry alliances, and international cooperation can pool resources, share knowledge, and accelerate the development and deployment of cutting-edge technologies. By working together, technical and financial barriers can be overcome, generating economies of scale.
Effective financial mechanisms are critical to incentivising sustainable investments and projects. This includes subsidies, tax incentives, grants for renewable energy projects, energy efficiency upgrades, and clean technology development. Additionally, green bonds and sustainable finance frameworks can attract private capital and drive investment in low-carbon infrastructure.
The Biden administration recently announced its intention to invest $3.46 billion to upgrade the electric grid in the US tied to National Interest Electric Transmission Corridors (NIETCs) to accelerate high-priority transmission projects. In the UK, the ESO recently announced a £58bn plan for the future of the UK’s energy system, including implementing a new North/South electrical spine.
Large-scale announcements of available funding like this globally will go a long way toward attracting new investors and accelerating the rate at which new infrastructure projects can move forward.
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Public-private partnerships (PPPs) and innovative financing models can mobilise resources and share risks between public and private entities. PPPs can leverage the strengths of both sectors, combining public funding with private expertise and efficiency. Innovative financing models, such as pay-for-performance contracts and energy service agreements, can also align incentives and drive investment in sustainable projects.
Addressing the risk-reward imbalance is crucial to attracting investment in clean energy projects. This involves de-risking investments through mechanisms such as loan guarantees, insurance, and risk-sharing agreements. By reducing financial risks, we can encourage private sector participation and accelerate the deployment of renewable energy and energy efficiency projects.
Innovative software, like Optioneer, which uses the latest advances in AI, applied to energy infrastructure problems like slow planning processes, can also help mitigate the risk-reward imbalance by speeding up planning, offering greater detail at early planning stages and easing difficulties in meeting regulatory demands and public approval for new infrastructure projects.
Upgrading and modernising energy infrastructure is essential to remove physical bottlenecks and support the transition to a low-carbon economy. This includes expanding and upgrading transmission and distribution networks, integrating renewable energy sources, and deploying smart grid technologies. Modernising infrastructure can improve efficiency, reliability, and resilience, enabling the seamless integration of renewable energy.
Addressing transmission and distribution challenges is critical to ensuring a reliable and flexible energy system. This involves building new transmission lines, upgrading existing ones, and deploying advanced technologies such as flexible alternating current transmission systems (FACTS) and high-voltage direct current (HVDC) systems. These solutions can enhance the capacity and stability of the grid, facilitating the integration of variable renewable energy sources.
In the US, the lack of transmission infrastructure contributes to higher prices and frequent power outages but upgrading and expanding the grid can take years due to permitting, siting and regulatory processes, especially where proposed new transmission infrastructure crosses multiple states and regions. These challenges will need to be addressed rapidly to meet 2050 targets and ensure grid development can take place.
Ensuring a resilient and flexible grid is essential to accommodate the increasing share of renewable energy. Renewable energy tends to be more intermittent, so energy storage is essential. This includes deploying energy storage systems, such as batteries and pumped hydro storage, to balance supply and demand. Additionally, advanced grid management techniques, such as demand response and real-time monitoring, can enhance grid flexibility and resilience. Grid upgrading is required globally to ensure that when renewable energy generation is high, energy can be routed to where it is needed without overloading the grid infrastructure.
Managing the transition from fossil fuels to renewable sources is a critical challenge for the energy sector. This involves gradually phasing out coal, oil, and natural gas while ramping up investment in renewable energy projects. Ensuring a just transition for workers and communities dependent on fossil fuel industries is also essential to minimise social and economic impacts.
Balancing reliability, affordability, and sustainability involves ensuring a stable and reliable energy supply while keeping costs affordable for consumers and businesses. Advanced technologies, such as grid-scale energy storage and flexible generation, can help achieve this balance by providing backup power and managing variability in renewable energy supply.
Energy storage and smart grid technologies play crucial roles in managing existing and emerging energy systems. Battery energy storage systems (BESS) can store excess renewable energy and release it when needed, providing the grid with flexibility and stability. Smart grid technologies, such as advanced metering infrastructure (AMI) and automated demand response, can enhance grid management and optimise energy use.
Leveraging comparative advantages involves identifying and capitalising on regional strengths and resources. For example, regions with abundant solar or wind resources can focus on developing renewable energy projects, while regions with strong industrial bases can lead to energy efficiency and clean technology development. By tailoring strategies to regional strengths, it’s possible to maximise the impact of sustainable energy initiatives.
Cross-border collaboration and knowledge sharing can accelerate the transition to a low-carbon economy. This includes sharing best practices, technical expertise, and lessons learned from successful projects. International cooperation can also facilitate the development of regional energy markets, enabling the efficient exchange of renewable energy and enhancing energy security.
Promoting sustainable and inclusive growth involves ensuring that the benefits of the energy transition are shared equitably. This includes creating job opportunities in clean energy sectors, supporting local economic development, and addressing energy access disparities.
Stakeholder engagement and public awareness are crucial to the success of energy transition efforts. Educating and involving communities in decision-making processes can build trust, address concerns, and foster acceptance of new technologies and projects. Community engagement can also empower individuals to take action and contribute to sustainability goals.
Addressing concerns and fostering acceptance involves transparent communication and collaboration with stakeholders. This includes providing accurate information about the benefits and impacts of new projects, addressing potential risks and uncertainties, and involving stakeholders in planning and implementation processes. Tools like Optioneer can help here by producing clear visuals and 3D animated flyovers of proposed routes for new infrastructure, making it easy for the public to understand proposals. Building a shared vision for a sustainable future creates a supportive environment for energy transition initiatives.
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Aligning policies with net zero goals is essential to drive the transition to a low-carbon economy. This involves implementing policies that promote renewable energy, energy efficiency, and clean technology development. It also includes setting clear and ambitious targets, providing regulatory certainty, and ensuring policy coherence across sectors and levels of government.
Recent signs are encouraging where regulatory hurdles are being removed, for example, the NIETCs initiative in the US and Ofgem’s initiative in the UK to remove bottlenecks from energy infrastructure development. Nick Winser's report for the UK government, released in August 2023, focused its recommendations on streamlining the consenting process for major schemes by removing bureaucratic hurdles that delay the development of transmission projects. The report also advocates for a more strategic approach to spatial planning for future networks to ensure that the infrastructure is laid efficiently to meet the growing demand for renewable energy. Tax credits and grants for renewable energy, energy efficiency, and clean technology development can also help to incentivise low-carbon projects.
Promoting transparency and accountability is critical to ensuring the effectiveness and credibility of energy transition efforts. Monitoring and reporting on progress towards net zero goals, ensuring compliance with regulations and standards, and providing transparent information to stakeholders all help promote accountability and build trust and confidence in the energy transition process.
Collaboration and knowledge sharing are essential to accelerating the transition to a low-carbon economy. This involves fostering cross-sectoral and cross-border collaborations, sharing best practices and lessons learned, and building a global knowledge base for net zero solutions. By working together, we can overcome technical and financial barriers, drive innovation, and achieve economies of scale. By learning from others' experiences, we can replicate successful approaches, avoid common pitfalls, and continuously improve our energy transition efforts.
Individuals and communities play a critical role in transitioning to a low-carbon economy. Promoting sustainable lifestyles and consumption patterns means encouraging behaviours that reduce energy consumption, minimise waste, and support renewable energy. Empowering individuals to take action involves providing information, resources, and opportunities for engagement. By empowering individuals to make sustainable choices, we can create a culture of sustainability and drive collective action towards net zero goals.
To build resilient and sustainable communities, there’s a need to foster social cohesion and environmental stewardship. This includes supporting local renewable energy projects, promoting green infrastructure, and enhancing community resilience to climate impacts.
The urgency of addressing the climate crisis requires a holistic and transformative approach to energy infrastructure projects. By deploying lower-cost solutions, driving down the costs of expensive technologies, building effective financial mechanisms, and anticipating and removing physical bottlenecks, we can accelerate the transition to a low-carbon economy. With the right policies, regulatory frameworks, and stakeholder engagement, we can achieve net zero emissions by 2050.
The path forward involves collaboration, innovation, and a shared commitment to sustainability. By working together, we can build a resilient and sustainable energy system that supports a thriving and inclusive society. The race to net zero is on, and the time to act is now.
