Supercharging decarbonisation: How engineered solutions can accelerate the transition
At a glance
As pressure mounts, energy leaders must build a more resilient, lower-carbon energy system. Technical, digital and engineered solutions will play a critical role in this transition, but which options are most viable?
Driving the transition through diversification — the role of hydrogen
In fact, SHOCKED found that seven in 10 energy sector leaders say the volatility of natural gas prices over the past 12 months has accelerated their adoption of renewable energy generation assets – rising to over three-quarters of leaders in high-growth businesses (77 percent). Further indicating a strong trend towards cleaner and more diversified energy sources, 44 percent state that this same volatility has slowed down their adoption of coal assets and nearly all have a strategy in place to increase their renewable-energy mix.
As we hasten the shift towards low-carbon energy resources, these findings highlight the growing sense of urgency to find viable alternatives to natural gas. This raises the question of what that logical replacement for natural gas will be, while the adoption of renewables continues to scale-up. Here, the potential of hydrogen and other biofuels come to the fore as a viable transition pathway. Indeed, three-fifths of energy leaders interviewed for SHOCKED say the global energy crisis has accelerated their organisation’s investment in hydrogen over the past 12 months.
Green hydrogen is a promising contender for overcoming the energy-security issues tied to the volatility of natural gas, particularly in the context of heavy transportation, heating and power generation. However, the transition to green hydrogen is not without its challenges. The infrastructure and supply chains for hydrogen must be developed and scaled to bring unit costs down, and the production of green hydrogen also requires large quantities of high-purity, fresh water, which may be in short supply in certain regions. Similarly, blue hydrogen, while possible at larger scale, requires the availability of sequestration locations for captured carbon dioxide.
Tapping the latent potential of carbon capture and storage
CCUS refers to a variety of technologies that can play an important role in achieving global energy and climate objectives. The process involves capturing CO2 from significant production sources, such as industrial facilities or power-generation plants that use fossil fuels or biomass as fuel. Alternatively, CO2 can also be extracted directly from the atmosphere through a process called direct air capture (DAC). Once captured, the CO2 is compressed and transported through pipelines, ships, rail or trucks to be used for various purposes, or injected into deep geological formations, such as depleted oil and gas reservoirs or saline formations, for permanent storage. DAC has the ability to be a true ‘removals’ technology and can be deployed above storage units.
While SHOCKED found that CCUS is one of the most-deployed technological decarbonisation solutions globally, it also found that it is currently considered one of the least-effective approaches. This underscores the need to develop more full-scale CCUS projects – and to establish a track record across the world where geological or undersea storage is available and proven – to unlock the latent potential of a game-changing technology that has been available for years, but that is now increasing in relevance.
Grid-scale and residential digital solutions addressing energy security
And investment in these areas is growing; 66 percent of energy leaders have accelerated investment in smart grids in the past 12 months. A smart grid is an electrical grid that uses digital and advanced technologies to manage the transportation of electricity from various production sources to satisfy the fluctuating energy needs of end users. By synchronising the requirements and abilities of all electricity generators, operators, end users and market participants, smart grids can optimise the entire system’s operation and minimise costs and environmental impacts. It can also maximise the reliability, adaptability and resilience of the grid.
SHOCKED also found that residential smart meters – a demand-side digital solution – are known to be one of the least-deployed but most-effective decarbonisation tools globally. With 71 percent of SHOCKED respondents citing consumer backlash from increased energy bills as a grave threat to their business, improved utilisation of smart meters represents an under-leveraged opportunity for energy companies and government policy makers.
Engineered solutions hold immense promise in driving the transformation to net zero and beyond. While significant challenges remain in scaling-up new and emerging technologies, the urgent need for their adoption cannot be overstated."
Coupling energy storage and transmission solutions
A changing climate also puts pressure on how we transmit energy. This is particularly problematic in regions that use renewable energy from wind and solar and are thus most affected by varying weather conditions. For example, the US state of California has been beset with wildfires caused by electrical transmission systems. Energy leaders must therefore take on the urgent challenge of coupling energy storage and transmission solutions. New, systemic solutions will be required. An example of such an approach may be including redundancy at the outset by pairing electrical and pipeline systems that can move electrical energy as hydrogen molecules. While there is a gap between mature technologies and large-scale projects that can serve as blueprints for such future developments, blending of hydrogen in natural gas is proceeding at pace and offers a promising cross-connection of electrical and natural gas grids.
Ultimately, net negative must become our north star
As the energy industry adapts and navigates a way forward, leaders will have to integrate well-thought-out design principles into new energy infrastructure and retrofit existing infrastructure to build resilience. Here, R&D teams in the world’s top energy companies, in concert with academia, have a major role to play in developing new approaches to the problems faced by the sector. With the right investment and collaboration, we can supercharge engineered solutions and pave the way for a safer, cleaner and more-efficient energy future. Given that many of the technologies that will help us achieve not just net zero, but net negative, have not yet been developed, not only are new engineered solutions necessary, but fast adoption and deployment through a nimble, highly technical network is required.