Man jumping between buildings

Brave steps. Action now.

Written by Fleur Greetham
28/06/2022

Recent events have once again reinforced the stark reality of our current dependence on fossil fuels.

Even before the invasion of Ukraine, soaring energy costs were already hitting end users, both households and industrials. Now the concern has been a much broader one of energy security and of dependence on Russian oil and gas, especially in Europe. Many responses have already been seen at a national and EU level. The question of how we can reduce dependence on Russia gas, and on fossil fuels more generally, is on the agenda of every Western political leader.

Winter also saw the launch of newly appointed government agreements, with specific policies dedicated to the decarbonisation of industry. Notably, that of the new German Coalition, whose recent proposals include carbon contracts for difference under their Climate Emergency Programme. The aim is to advance the market introduction of climate-friendly processes by cushioning the cost differences and risks (compared to proven climate-damaging technologies). Separately, the new Dutch Coalition has announced it will enter into binding and tailormade agreements with the 10 to 20 largest industrial greenhouse gas emitters in the Netherlands.

Meeting these European and national commitments requires innovation and collaboration between industrial players and energy companies. The decarbonisation of process heat is a particular challenge. Options, such as generating heat directly from renewable electricity or delivering it via hydrogen, infrared radiation, microwaves, or superhot gaseous plasmas, are starting to be developed. In Sweden, HYBRIT (SSAB, LKAB and Vattenfall) has successfully used hydrogen made from hydroelectricity to turn local ore into CO2-free steel which the car manufacturer, Volvo, plans to use for truck parts. Global cement giant Cemex and ETH Zurich spinoff, Synhelion, are building a solar-heated pilot cement kiln to power the energy intensive cement production process and capture 100% of the carbon emissions released, whilst HyCC (Nobian and Macquarie's Green Investment Group JV) aims to produce green hydrogen from renewable power at an industrial scale.

Policies are also aimed at bringing about brave steps in the domestic sector. The UK's Net Zero Strategy, Build Back Greener, includes the rebalancing of policy costs from electricity bills to gas bills and the launch of a Hydrogen Village trial, the H100 Fife project. This involves a hydrogen network on the east coast of Scotland that will bring renewable hydrogen into homes in 2023, providing zero-carbon fuel for heating and cooking. Separately, Cadent and Equinor plan to develop a Hydrogen Town concept in Lincolnshire, England. Elsewhere in Europe, a recent change in the structure of regulated grid connection charges, regional reductions in property tax, and contributions from the Next Generation EU fund has led to the rise of distributed solar PV in Spain, totalling 2.5GW in just three years.

Girl in floral dress running through field towards wind turbines

Despite the current setbacks of some smaller energy suppliers going out of business, increasing availability and usability of data generated by digitalisation is leading to the creation of new products and services. The rise of smart home technology, the rapid adoption of EVs, increasing volumes of micro-generation and the decarbonisation of heat, means a shift away from relationships based simply on kilowatts supplied and a move towards service-based models based, for example, on the number of warm hours, or miles of electric transport.

Digitalisation and the shift from centralised unidirectional to distributed energy systems is also driving the development of microgrids. Although the adoption of microgrids in the US has largely been in response to power outages, they are starting to appear in (mainland) Europe. A barrier to their success, however, is that most grid infrastructure is based on alternating current (AC). Conversely, renewables, which microgrids often use as their power source, generate a direct current (DC) output whilst most modern electrical equipment such as laptops, mobile phones and LED lighting operate on DC. To bridge this gap, the Horizon 2020 supported project TIGON, is developing a modular concept of a DC-based hybrid grid. The technology will first be tested at two demonstration sites, before being tested on a commercial scale in a residential sector in Naantali, Finland and separately, on a metro DC grid in Sofia, Bulgaria. Tackling some of the technical barriers for microgrids will also bring about benefits for the growth in Renewable Energy Communities (RECs). This is one of the aims of the Renewable Energy Directive II (RED II), as it is recognised that citizens who produce their own energy are more concerned with reducing their electricity consumption.

Brave steps to decarbonise are not just limited to end users and generators. TSOs and DSOs are also energy transition enablers through their role in integrating renewable generation and flexibility resources into the energy system and supporting the direct and indirect electrification of different sectors of the economy. However, they are also investigating ways to reduce and limit their direct emissions. Swissgrid is running a pilot to assess the feasibility of replacing diesel-powered uninterruptible power supply (UPS) with a hydrogen powered fuel cell, whilst TenneT and APG are testing alternatives to the use of sulphur hexafluoride (SF6), an inert gas widely used in circuit breakers that has a high global warming potential.

Given the continuance of the high energy price world, politicians will need to be "brave" to pass through this moment to avoid the commitments made at COP26 to become fragilized. This will allow for pilot schemes taking place now, to flourish and lead to mainstream solutions. On the other hand, once we are used to expensive fossil energy then the cost of decarbonisation pales by comparison. This year might just be the push for society to take a brave step and get action quicker - whilst recognising we have to protect the most vulnerable in the short term.

Author

Fleur Greetham - Senior Principal, AFRY Management Consulting

Fleur Greetham

Senior Principal, AFRY Management Consulting

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