UK pushes for a clean energy future
Author: Al Cook, Executive Vice President, Global Strategy & Business Development, and UK Country Manager, Equinor
October, 2020
When Boris Johnson took to the virtual stage at the UK Conservative party Conference this week, he set out a bold vision for a future energy system.
An energy strategy driven by offshore wind and underpinned by hydrogen and carbon capture now needs to be turned into reality. Governments across the world are similarly looking to these technologies to address the climate challenge.
As the UK plots a path towards net zero emissions by 2050 and recovers from the economic impact of the coronavirus, we need to build on the country’s record by creating lower carbon growth opportunities.
Over the past decade, the UK has reduced its greenhouse gas emissions more than any other leading economy. From 2010 to 2019, emissions fell by almost a third to levels last seen in the 1880s, even as the economy grew 20 per cent.
The UK has seen a dramatic change in its power mix, from coal to natural gas and wind. Natural gas generates just half the emissions of coal, allowing carbon reductions without economic pain.
Wind power is cleaner still, and has grown even faster. As described by Mr Johnson, the UK is ‘the Saudi Arabia of wind’. With a third of the world’s offshore wind installations and the first ever floating wind farm, the UK is a global leader in this sector. This lead will be reinforced when the world’s largest offshore wind farm, Dogger Bank, starts up off Yorkshire’s coast in 2023.
However, the solution to grow wind power and leave fossil fuels behind is not so simple. Some uses of gas cannot be replaced by wind, solar or other renewable power. Today, we use gas both to back up renewables and to fuel heavy industry, and there are two problems: intermittency and intensity.
Firstly, what happens on a still, cloudy day, when solar panels do not generate, and wind turbines do not turn? Batteries are not yet the answer. If London were to rely on batteries for just a week, it would need to buy every battery produced in the world for the next two years.
Secondly, electricity cannot provide the heat required for heavy industry. Cement kilns and steel furnaces — sectors which cause over 20 per cent of global emissions — operate at over 1000°C.
There are many ideas for replacing gas, from sustainable wood to nuclear heat, but just one stands out when economics are balanced with emissions: clean hydrogen. When hydrogen is used as a fuel, only water is produced. Currently, the cheapest way of making clean hydrogen is by converting it from natural gas, and then capturing and storing the carbon left over. This ‘blue’ hydrogen can be used in place of gas in power stations, furnaces and kilns, eliminating 95 per cent of emissions.
We know this technology works. Norway has been safely storing carbon dioxide underground for decades. New projects like Zero Carbon Humber are now bringing this technology to the UK.
By developing hydrogen infrastructure and markets, we also pave the way for 100 per cent carbon-free ‘green’ hydrogen, produced by electrolysing water with renewable power.
But we need to be open about the cost. Even though it is cheaper than green hydrogen, even blue hydrogen costs more than twice as much as natural gas. Following the economic devastation wrought by pandemic, few people want to see their electricity price double. So, energy providers and customers will need to work with the government to share the costs.
Over time, these costs will fall. Just a decade ago wind power needed high electricity prices, but projects like Dogger Bank now compete head on with fossil fuels. With greater scale and technology, hydrogen may one day cost less than gas.
The pandemic has demonstrated one way for us to reduce emissions: stop transportation, reduce activity, and furlough jobs. It might be the right way to control a disease, but it is the wrong way to address climate change.
The devil is in the detail of the UK government’s renewable energy policy. With the right incentives, the industry can combine renewable energy and clean hydrogen to power a clean economic recovery while reducing emissions.
This opinion piece was originally published in the Financial Times.