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.

Introduction

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.

Nuclear

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.

Biomass

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.

CCS

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.

1. VRE only: This case uses only wind and solar as clean energy supply options, using batteries and electrolysis to reduce integration issues.
2. Conv CCS: Adds conventional coal and gas CCS.
3. Nuclear: Adds nuclear at a cost of €5000/kW.
4. 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).
5. Flex power & H₂: Adds the gas switching reforming plant for flexible power and hydrogen production from natural gas with integrated CO₂ capture.
6. 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.

Conclusion

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!

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Schalk Cloete is a Research Scientist at Sintef