Schalk Cloete is creating his own 5-part independent Global Energy Forecast to 2050, to compare with the next IEA World Energy Outlook, due in November. To make his predictions he has created simulations of cost-optimal technology mixes and made his own assumptions over the drivers that will affect them: policy, technological progress, demand growth and behavioural change are all included. If nuclear, biomass and CCS take off they will dramatically reduce the need for wind and solar. That’s because they are intermittent whereas nuclear and biomass are despatchable, and CCS brings back into play despatchable fossil fuels. Of course, this will depend on nuclear overcoming public opposition, and all three delivering on their promise for technological advance and reductions in cost. He makes “primary energy” projections for the three technologies, and presents six scenarios to uncover the final generation mix we should be aiming for in the power sector. Whatever happens, Cloete says a game-changing carbon tax as high as $100/ton and tech-neutral policies will be needed to meet our climate goals.
You can also read the author’s first article which introduced his methodology. The second covered wind and solar, the third fossil fuels. The final, published here in the next fortnight, will cover battery electric vehicles. After the IEA WEO 2019 is released he will compare his predictions with theirs. On his journey, Cloete welcomes comments and feedback from our readers.
Wind and solar are undoubtedly the most popular clean energy supply options around today. But there are several other technologies that will also see significant growth when the world eventually manages to put economically efficient technology-neutral climate policies (such as a CO2 tax) in place.
As outlined in the first article in this series, this forecast assumes that we will be forced into technology-neutrality roughly one decade from now. At this point, the 1.5 °C carbon budget would be exhausted, and current technology-forcing policies would still not have managed to achieve a clear peak in global emissions.
From this starting point, my estimate for the growth of different clean energy options follows a genuine “all of the above” strategy. This forecast is neatly summarised in the graph below. After the advent of technology neutrality around 2030, I forecast significant growth in nuclear, biomass and CCS, while the wind and solar growth trajectory sees little change because technology-neutrality will have an effect similar to the technology-forcing policies driving deployment today.
Consequences for Wind and Solar
I should point out that absolute growth in wind and solar power is considerably larger than this graph suggests. This is because the adjustment of wind and solar electricity to primary energy is done by dividing by the average thermal power plant efficiency and multiplying by the wind and solar value factor. Since reference plant efficiencies will increase over time and wind and solar value factors will decrease with further deployment, this adjustment factor falls substantially over the forecast period (from 2.6 to 1.8 for wind and from 3.1 to 1.3 for solar).
As a result, wind and solar do not reach the dominant role envisioned by many clean energy advocates. Instead, they slot into a balanced and diversified portfolio next to many other clean energy options. The following sections offer some more detailed explanations regarding the relatively high deployment of less popular clean energy options in this forecast.
As shown below, I expect some revival of nuclear power towards the end of the forecast period. Nuclear is extremely sensitive to political influences and technology-neutrality will therefore be good news for this declining (in relative terms) clean energy technology. Due to the long lead-times of nuclear plants, this revival takes quite a while to get going after 2030, but it will continue to surge upwards after the end of the forecast period.
As shown in the earlier article, both wind (15%) and solar (18%) achieve higher shares of global electricity generation than the 12.6% of nuclear by 2050. However, nuclear has a higher primary energy share because it does not suffer the value degradations of wind and solar.
Such nuclear vs. wind/solar comparisons easily trigger serious disagreements within the clean energy community. This is understandable given the fundamental incompatibility between nuclear and variable renewables. When nuclear is in the system, the value decline of wind and solar becomes much more severe, making higher wind/solar shares less attractive. Similarly, high wind/solar shares force nuclear plants to ramp down more often, making it much harder to achieve a good investment return on these capital-intensive plants.
For this reason, the middle of this century will be a very interesting time. A nuclear-based power system will look totally different from a wind/solar based power system, and transitioning from one system to another will be very expensive, complex and time-consuming. Only time will tell how this will play out, but biomass and CCS may well have a crucial role to play in limiting the cost and technical difficulty of transitioning between nuclear and wind/solar strategies.
The main benefit of biomass is that it can be used in a very similar way as fossil fuels. Its main drawback is the limited availability of sustainably produced biomass that does not seriously impact food production or natural habitats. Biomass will therefore never be able to displace all fossil fuels, but it makes a lot of sense to deploy as much of it as possible.
The world already uses a surprisingly large amount of biomass, mainly in very primitive and inefficient ways (e.g. wood burning for cooking and heat) that cause serious health impacts from indoor air pollution. This primitive biomass consumption will gradually be displaced by more modern uses where greater value is extracted from each unit of biomass with much lower health impacts.
As shown below, I see a strong surge of power production from biomass towards the end of the forecast period. A substantial portion of this growth is likely to come from cofiring in coal power plants, which can be done with minimal investment and technical difficulty, while also negating problems related to the seasonality of biomass availability. Combined heat and power will remain a key application for biomass in colder climates.
I also see a tripling in biofuel consumption over the next three decades. This growth could have been larger if not for the projected trends away from cities built for cars towards cities built for people. Biomass will also see significant growth in industry as a direct fossil fuel substitute, potentially also via cofiring.
Lastly, negative emissions from biomass with CCS will become increasingly important towards the end of the forecast period. The high CO2 prices required to achieve rapid global emissions reductions can make the effective fuel costs of biomass very low or even negative when CCS is applied, causing strong growth in this sector.
To date, deployment of CCS has been disappointing. Given that capturing and storing CO2 will always be more expensive than simply emitting it to the atmosphere, CCS will not take off until there is a meaningful price on CO2 emissions. Once such policy measures are put in place around 2030, however, rapid growth will take place.
Every part of the CCS value chain has been proven and 18 large-scale facilities are currently operational around the world. The moment that it becomes more expensive to emit CO2 than to store it, this technical know-how will be put to good use to facilitate the rapid scale-up shown below.
As shown on the left, my forecast is broadly in line with the IEA’s Sustainable Development Scenario (SDS). The trajectory towards the end of the forecast period is sharper, mainly due to my expectation of considerably higher energy demand than the SDS scenario.
The figure on the right shows CCS contributions to cutting emissions from different fuels, with solid lines showing emissions with CCS and dashed lines showing emissions without CCS. Emissions reductions start with coal and gas around 2030 and with biomass around 2040.
Initial CCS projects are likely to focus on retrofits of plants with high partial pressure CO2 streams combined with CO2 utilisation. The world is full of relatively young fossil fuel infrastructure that will be under serious economic pressure when technology-neutral climate policies are eventually put in place. The economics of CCS become very attractive when the alternative is to scrap a perfectly functional plant, making retrofits a promising early market. Some revenues from CO2 utilisation can help fund initially more expensive CCS facilities to start the journey down the learning curve.
Around 2040, the next generation of CCS plants will start coming online. These plants will be able to deliver considerably lower energy penalties and CO2 avoidance costs and achieve greater flexibility than conventional post-combustion CCS. Such plants are being developed for power, industry and hydrogen, offering solutions for all sectors of the economy. The combination with biomass for negative emissions will also become increasingly popular in this time period.
Competitiveness in the power sector
Biomass and CCS have the clear advantage of being applicable to direct industrial emissions and clean fuels. However, this section will focus only on the power sector where the most intense competition between clean energy technologies will take place. Six cases are presented using results from the power system model described earlier. All cases are run with a €100/ton CO2 price, a 7% discount rate and technology cost and performance data applicable to the year 2040.
- VRE only: This case uses only wind and solar as clean energy supply options, using batteries and electrolysis to reduce integration issues.
- Conv CCS: Adds conventional coal and gas CCS.
- Nuclear: Adds nuclear at a cost of €5000/kW.
- Cofiring: Adds coal CCS plants with 30% biomass cofiring at a biomass price of €7.5/GJ (almost triple the coal price of €2.8/GJ).
- Flex power & H2: Adds the gas switching reforming plant for flexible power and hydrogen production from natural gas with integrated CO2 capture.
- Cheap nuclear: Reduces nuclear costs to €3000/kW.
The results clearly show that, as more technology options are made available, total system costs (LCOE) and emissions intensities decline.
The VRE only case deploys considerable battery and electrolysis capacity to help balance wind and solar, but still requires substantial unabated natural gas generation to satisfy load at all times. This results in considerable CO2 emissions and a high system cost.
The Conv CCS case replaces most of the unabated NGCC cases with NGCC-CCS plants. However, these more capital-intensive plants are less suitable for balancing variable renewables, causing the optimal share of wind and solar power to fall. Despite the lower wind and solar share, system-wide emissions decline substantially and system LCOE is also slightly lower.
When Nuclear is added as an option, it takes the largest share of generation with further small declines in system costs and emissions. It is worth noting that the cost assumptions employed in this case return an LCOE of €67/MWh for nuclear and only €48/MWh and €45/MWh for wind and solar respectively. Even so, nuclear ends up generating considerably more power than wind and solar in the optimal power mix because it does not face the value declines of wind and solar power. Also note that additional grid-related costs of wind and solar power are ignored in all these cases.
The Cofiring case displaces all nuclear and conventional CCS power generation with coal CCS plants cofired with 30% biomass. This cofiring combined with 90% CO2 capture allows these plants to achieve negative emissions, which is very valuable when the CO2 price is as high as €100/ton. However, these power plants, CO2 capture facilities and CO2 transport and storage infrastructure are quite expensive (€3240/kW), which means that they are best operated as baseload plants, pushing out most wind and solar power.
Naturally, there will be a limit to the amount of sustainable biomass that can be fed to such a system. But it is worth remembering that biomass only represents 30% of the fuel energy being fed to the plant. Even such cofiring with a minor share of biomass can result in negative CO2 emissions from the system as a whole.
The introduction of Flex power & H2 (flexible power and hydrogen production) in the next case creates a more balanced portfolio by bringing more wind and solar power back into the optimal power mix. This flexible technology can produce power when the electricity price is high and hydrogen (with some electricity consumption) when the electricity price is low. In this way, it provides flexibility to the power system, while ensuring high capital utilisation of all the CO2 capture, transport and storage infrastructure. In so doing, it also supplies plenty of clean hydrogen at an affordable price (€1.65/kg) equivalent to 63% of total electricity production to decarbonise other sectors of the economy.
Finally, the Cheap nuclear case demonstrates the large system cost reductions that are possible if political barriers are removed from nuclear power deployment. Plant costs around $3000/kW are certainly technically achievable, but such low costs are only possible if nuclear enjoys strong political support similar to that currently enjoyed by wind and solar power.
These modelling results clearly demonstrate how nuclear, biomass and CCS can take dominant shares in an optimal power system mix under a technology-neutral policy framework. It is also important to remember that electricity still accounts for only a fifth of global final energy consumption. In other sectors, biomass and CCS will be considerably more competitive.
However, I have kept rapid wind and solar growth in my projections due to the strong political momentum and general enthusiasm behind these ideologically attractive clean energy technologies. It is also possible that the large sunk costs involved in building a power system suitable for high shares of variable renewables will lock a country or region into this path, even when it later proves suboptimal in achieving deep emissions reductions.
We are certainly in for an interesting couple of decades!
Schalk Cloete is a Research Scientist at Sintef
That’s litteraly the same analysis that was sold in the early 00s to energy companies : don’t invest in wind and solar because their potential is limited but put all your money in CCS, cofiring of biomass with coal and nuclear… The result was a trillion $ losses in market cap in the European power sector because the limits on solar and wind were just invented by flawed model and did not exist in the real world.
The “decline of value of solar and wind” is also imaginary, that’s just a model that does not take into account the basis of supply and demand. If prices are low when there is sun and wind people start to invest in order to be able to transfer more usage to electricity (typically heat and battery powered transportation) and also start to move their use of electricity when there is sun and win (heat and cold storage). Consumers adapt their load profile to the needs of generators since the begining of the utility sector in the XIXth century.
It is true that European utility companies underestimated the potential of wind and solar. As I understand it, most of these concerns were practical (that fluctuating wind and solar would crash the system). The discussion in this article centers on economics. I don’t see any clear limit to wind and solar power – just a gradual decline in attractiveness with increased deployment caused by their large temporal and spatial variability. In other words, it is certainly possible to build systems with very high wind and solar shares, it will just cost considerably more (with considerably higher emissions) than more balanced systems built under technology-neutral policies.
The decline in wind and solar value is certainly not imaginary. This decline is the fundamental driver of the demand-response investments you mention. But the potential of demand-response is highly uncertain since it brings significant cost and practical implications. For example, I think the popular prospect of balancing wind and solar with BEV charging will face several practical and economic challenges, particularly in solar-dominated regions: https://energypost.eu/the-celebrity-couple-intermittent-renewables-and-electric-cars/
Bas Gresnigt says
Agree that there is some decline in wind & solar value when the share of wind & solar increase, but it’s far less than the simulation studies of Hirth suggest.
Shown in the 2018 report presentation (sheet 41 and 41) at energy-charts of Fraunhofer ISE.
Realizing that the market isn’t fully adapted to these kind of price fluctuations yet, and that upcoming PtG plants, etc. will facilitate more flexible consumption, it’s highly likely that the electricity system in Germany will evaluate to very high shares of wind+solar; ~90%.
Unless another source such as e.g. geothermal starts to develop greatly with the upcoming of quantum computing.
Tim Beesley says
Hi. I note your comments re a tripling of demand for biofuels for use in power plants. With regard to forestry products, are you taking into account any public revulsion at the clear felling of woodland and the potential backlash that may result from this? There are also considerable emissions of soot resulting from pellet burning and, as seen recently in India air born pollution from power generation is causing a lung health catastrophe, even in the young. What in your modeling do you do to address environmental and health issues?
Also in this context (of biomass) you comment that the growth could be larger if it weren’t for the “projected trends away from cities built for cars towards cities built for people.” I see no connection between city planning issues and specifically biomass power generation. Can you clarify your point here please
Yes, these valid points regarding the sustainable and safe use of biomass did constrain my outlook. If driven only by economics, biomass demand would be much higher in a technology-neutral climate policy scenario since they are such a natural low-carbon replacement for fossil fuels. But, even though the absolute growth in biomass will be constrained by the factors you mention, I think that there will be a considerable shift away from primitive biomass use (cooking and heating with open fire) to modern biomass use (cofiring in power and industry, CHP and biofuels) where health impacts are much lower and more value is extracted from each unit of biomass.
Sorry for the misunderstanding. When I talk about biofuels, I mean liquid fuels for the transportation sector. Hence, the comment about cities built for people instead of cars. I generally use “biomass” when talking about direct combustion in power and industry.
Bas Gresnigt says
– present long real planning & construction periods >10yrs for nuclear reactors;
– the low and declining number of reactors under construction;
– the expected closures;
– the continuing high costs of nuclear, while those for wind, solar. storage are widely expected to decline further next decade;
– the lack of substantial nuclear costs decrease prospects;
there is no chance that the share of nuclear will increase around 2030.
Even around 2040 the chance will be slim as I don’t see possibilities for the substantial costs decreases (>80%) nuclear needs to become competitive against wind+solar+storage being batteries + green hydrogen.
Around 2050 all electricity generation methods that need a steam turbine-generator combination, will become obsolete.
Following the destiny of steam ships, steam locomotives, etc.
Tim Beesley says
Ref your comment “Around 2050 all electricity generation methods that need a steam turbine-generator combination, will become obsolete.” Essentially I want to agree with you but have the following query:
With the increasing efficiency of thermal power plants (e.g. I’ve just been reading about a 10mwe CHP unit whose makers claim 93% efficiency) and the likelihood of fossil fuel gas being replaced/supplemented/diluted with hydrogen and /or biomethane might an argument be made for keeping thermal plants in operation, especially for extreme weather events, e.g. long periods cloud, low wind and low temperatures.
All the more so if the powers that be invest in widespread CCUS facilities? Any thermal plant burning hydrogen and / or biomethane will then become carbon negative and will therefore be reducing atmospheric CO2 levels. I’m assuming in this scenario that hydrogen is manufactured from water using clean energy.
I agree with your assessment that wide-spread use of nuclear power in the near future is unlikely, given its costs, need for subsidy, public unpopularity and history of technical failures and programme over runs.
Bas Gresnigt says
Sorry, I didn’t consider CHP situations. Those will probably be the “The Last of the Mohicans”. And indeed those sometimes operate with unprecedented high efficiency.
My brothers grow tomatoes and have large nat.gas engines to drive electricity generators (~30MWe). They use:
– part of the electricity themselves to light the tomatoes (more light = more grow); – the exhaust heat to warm their greenhouses; and
– the exhaust gasses to increase the CO2 level in their greenhouses (=faster grow).
So it’s a CCUS installation operating with near or over 100% efficiency (depending on how one calculates).
However in 2050 PV-solar and wind will produce for cost prices substantial below 2cnt/KWh. So they can only compete when selling electricity is only a minor part of their income / “raison d’être”…