Karim Amin, Member of the Executive Board and Vice-President of Generation at Siemens Energy, spotlights the key factors for reaching a net-zero economy by mid-century.
These are decisive times for the energy sector as the world tackles climate change with a growing sense of urgency.
Already during the COP26 summit in Glasgow, the participants agreed on a first climate resolution committed to reducing coal use. With considerable ambition, this document aims to clearly define the direction the world is headed. The energy sector’s contribution to this path will be crucial.
Why? Today, the primary source (40%) of global CO2 emissions stems from power generation, with industry and transport each contributing 23% and buildings 10%.
And given high CO2 emissions per capita as well as in total, major players need to act, be it the US, China, the European Union or Russia.
While determined to reduce coal-fired power generation, we also continue to face challenges. These challenges do not only stem from the war in Ukraine and the resulting ramp-up, in some countries at least, of coal-fired power plants.
As long as the global capacity of renewables is not large enough and without enough storage capacity to compensate for their fluctuating power generation, conventional power plants will be needed to cover the difference between renewable generation and demand. The ultimate goal, however, is a reliable, affordable and CO2-free energy supply for every single person on this planet.
Revolutionary transformation
In short, we need a new energy system that won’t only lower emissions to net zero, but also ensure supply, stability, and affordability at the same time.
To reach these goals, our industry must undergo a revolutionary transformation. And at this point, it’s clear that nobody knows with absolute certainty how to make a decarbonised economy a reality.
When it comes to managing a profound change, there are no simple or quick solutions. Any viable path will involve more than one technology and require finding the right solutions for any given moment in the journey towards net zero.
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And while we are uncertain of exactly how to achieve this goal, we do have a clear roadmap of what we can and need to accomplish by 2030, so that we are well on our way to reaching a net-zero economy before mid-century.
Siemens Energy has formulated clear, long-term goals. We support the EU’s 2050 climate neutrality goal not only by supplying many of the tools for energy generation and transmission necessary for achieving these targets, but by also becoming climate neutral as a company by 2030.
Moreover, in 2020, we announced that we no longer support the building of new, coal-fired power plants. Thus, a net-zero energy system by 2050 is not just in our future, it is our priority now.
While we at Siemens Energy can provide many of the tools necessary for a decarbonised energy future, we still need a holistic vision of the energy future we’re heading towards.
We need to know how we can move towards a decarbonised energy system while meeting key criteria such as securing our energy supply, the resilience of our grids despite fluctuating supply, and its affordability for the industry and households.
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Building blocks
Then let’s begin by taking stock of what we know so far. First, we know the building blocks we have as a society.
We know which technologies we have at our disposal, such as energy storage systems addressing part of the intermittence of renewable energy supply. We have flexible transmission systems and rotating grid stabilisers that ensure stability and reliability in the grid. We have gas turbines capable of co-firing ever larger amounts of hydrogen and we can tailor energy solutions to regional and local needs, including smart controls for hybrid power plants.
At the same time, we know which technologies still need further development. We’re familiar with our customers’ pain points, and thus society’s pain points.
Finally, we know that no company can master this undertaking alone. We need partners, not only in industry, but also regulators, and especially the public.
While we at Siemens Energy can provide many of the tools necessary for a decarbonised energy future, we will need a holistic vision of the energy future we are heading towards.
Karim Amin
Different paths
In general, we foresee three major approaches towards net zero. They don’t have to happen strictly sequentially, as each approach can be undertaken individually. Different regions can, and will, choose different paths based on their respective political agendas, technological realities, and societal frameworks. In many cases, however, these represent successive steps:
Step 1
First, immediate steps towards reducing CO2 emissions can be applied to the installed base – the low-hanging fruit if you will.
In the medium term, we expect coal-fired power plants to be phased out and replaced with renewables as well as gas-fired power plants. Therefore, it’s important to continue to increase the efficiency of existing gas-powered plants. A good solution is Brownfield Engine Exchange – whereby gas turbine sections are replaced with newer, more efficient ones – as well as other measures to reduce gas consumption and corresponding emissions.
Step 2
Preparing gas turbines for clean fuels, such as green hydrogen, makes them sustainable – as opposed to stranded – assets.
For instance, our SGT-800 gas turbine has now 75% hydrogen co-firing capability with a clear roadmap towards 100%. Moreover, we are also working on a Front End Engineering and Design (FEED) study of the world’s first commercial-scale gas-fired combined cycle power plant with carbon capture use and storage (CCUS).
In addition, power generation must be hybridised by integrating a diverse mix of conventional power generation, renewable sources such as solar and wind power, energy storage, grid stabilisation, carbon capture and intelligent control systems.
One central element will be green hydrogen made with renewables. Not only is it suitable for gas turbines, but it also serves as the basis for green fuels like e-methanol. Another important building block will be heat pumps reusing vast amounts of excess heat in industrial processes.
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Step 3
The third step, which should be widely adopted beyond 2030 towards the mid-century, aims for deep decarbonisation relying on renewables, clean fuels, and sector coupling. It works by transferring renewable power to all energy-consuming parts of the economy, such as buildings, mobility, industry, or agriculture. This is possible, for example, with hybrid power plants combining renewables and electrolysers producing hydrogen.
The produced green hydrogen can be stored and used for re-electrification, burnt for generating high-temperature heat, used for vehicles with fuel cells or as a basis for e-fuels, such as e-methane or other chemicals.
Also, energy storage will become an essential building block allowing energy to be stored and used as needed: next to green hydrogen or pumped hydro for long-term energy storage we have batteries for short-term storage of electricity, or, among others, thermal and mechanical mid-term storage providing industrial heat and electricity. Altogether, these efforts will effectively eliminate CO2-emissions from our economy – achieving net zero.
No technical hurdles
Now let me highlight several important parameters supporting this perspective. The first concerns the technologies we need. Do we have them already?
For some, the answer is yes; for others, more R&D needs to be done, such as the research we’re currently conducting at our Zero Emission Hydrogen Turbine Centre in Sweden.
There we test how existing components, such as renewables (in this case, solar), hydrogen production with electrolysers and energy storage (particularly batteries and green hydrogen) can be integrated for a flexible energy supply.
All in all, we don’t foresee any major technological hurdles on our path towards our 2050 goals.
All stakeholders – first and foremost people, regulators, as well as utility and industry operators – need to be on board in building a decarbonised economy while sustaining national prosperity.
Karim Amin
A second parameter involves regulatory matters. A regulatory framework is crucial for our journey towards a net-zero energy system.
One important aspect here is having effective and reliable carbon pricing mechanisms, which ensure that switching from fossil to carbon-neutral energy needs to become a business case for all energy-consuming sectors, in a manner similar to how wind energy has been promoted in the past decades.
Other important aspects can incorporate adjusting regulatory frameworks and reducing bureaucracy to speed up the approval of energy transition projects.
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Decarbonising industry
Another parameter deals with energy consumption in industries, which yields roughly a quarter of the global CO2 emissions. Decarbonising industrial processes can be greatly improved by onsite decarbonized generation, mainly by integrating renewables, energy storage solutions and utilising waste heat.
What’s more, onsite systems allow plants to create new revenue streams by selling back to the grid any excess generation.
And as a final parameter: economic viability. We have no choice when it comes to fighting climate change. At the same time, governments will struggle to join the fight when it’s at the cost of enormous loss of wealth or quality of life.
Therefore, all stakeholders – first and foremost, people, regulators as well as utility and industry operators – need to be on board in building a decarbonised economy while sustaining national prosperity.
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Although these aren’t mutually exclusive, one needs to acknowledge that different regions and countries will approach these goals at different speeds and from different starting points.
A lot of work remains to be done. At Siemens Energy, we believe it is vital that this work is not approached in a random and short-sighted manner. We must pursue it with a sensible, well-developed plan for making a decarbonised economy a reality.
ABOUT THE AUTHOR
Karim Amin is a member of the Executive Board and Vice-President of Generation at Siemens Energy.
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