The UK may currently be going through a very erratic time politically, but a recent Oxford-based study suggests there may be some clarity ahead when it comes to energy issues. It asks ‘Is there a path forward that can get us to net-zero emissions cheaply and quickly?’ and its answer is: ‘Very likely, and the savings are probably quite large.’ Indeed, the savings could be very large, mainly since, the team says ‘its analysis supports other recent efforts using up-to-date data and technology assumptions that conclude that the green energy transition may be cheap’.
It notes that the 2022 IPCC AR6 estimates that the additional cost of decarbonizing the energy system in order to have a greater than 67% chance of keeping warming below 2°C corresponds to a GDP loss in 2050 of 1.3%–2.7%. But the Oxford team study suggests that ‘there is likely no cost at all—the transition is expected to be a net economic benefit, raising future GDP’.
Is this credible? The teams ‘empirically grounded’ study says ‘the deployment trajectories are in line with past trends’, and that ‘there appear to be no major obstacles to bringing the necessary technologies to scale in terms of land use, sea, climate, raw materials, manufacturing capacity, energy return on energy invested, or system integration’. It could also, it says, be fast, without adding excessive cost, since the study notes that ‘lifetimes of large energy infra- structure projects typically range from 25 to 50 years, meaning that on average about 2%-4% of capacity needs replacing in any given year. In addition, useful energy demand grows at 2% per year in all our scenarios’. These two factors it says ‘make it possible for key green technologies to replace most of the existing energy system in 20 years, and replace the remaining 5% within a few decades more, without necessarily stranding assets before their economic lifetimes.’
They add that ‘past estimates that suggest the emissions from existing, planned, and proposed electricity generation infrastructure will exceed the Paris carbon budget assumed that current utilisation rates of such assets will remain constant in future, despite an increasingly competitive market, and that all planned and proposed deployments will go ahead, which has become increasingly unlikely over the last decade’
So, it seems, it’s all good news. Although the infrastructure costs for a rapid green energy transition are substantial, the study forecasts that ‘they are likely to be more than offset by lower energy costs. The largest infrastructure cost is for enhanced grid capacity. In 2050, for example, our estimated electricity network annual expenditure for the Fast Transition is about $670 bn per year, compared with $530 bn per year for the No Transition. However, the expected total system cost in 2050 is about $5.9 trillion per year for the Fast Transition and $6.3 trillion per year for the No Transition.’ Thus, they say ‘although the additional $140 bn of grid costs might seem expensive, it is significantly less than the savings due to cheaper energy’. They add that the ‘essential reason that the Fast Transition is cheaper than the Slow Transition is because it realizes the cost savings due to cheaper energy sooner-faster deployment increases the probability of rapid progress in key green technologies, so that savings accrue for longer’.
The likelihood of cheaper energy does of course raises the possibility of a rebound effect and higher energy demand, but the team says that their the results were robust to these variations. And in terms of balancing variable green power, as well as battery storage and grid links, excess power is used to produce sufficient P2X fuels (Power to X conversion to hydrogen etc) ‘to supply all end-use sector requirements and also to provide global power grid backup for 1 month each year’.
Although it is possible that not all candidate technologies will be successful, the overall robustness of the study was statistically validated by back-testing on more than 50 technologies- enough should get through. And that was without looking at some ‘outlier’ options like wave, tidal and geothermal energy. Liquid biofuels were also excluded because it was felt that any significant expansion would have high environmental costs. Carbon capture and storage too, ‘because it is currently a very small, low growth sector, it has exhibited no promising cost improvements so far.’ Nuclear power wasn’t taken seriously, since it has mostly got more, rather than less, expensive and it looked likely to stay that way. Instead, the emphasis is on those technologies that has clearly succeeded well so far, led, especially for the fast scenario, by wind and solar.
Clearly they see renewables as the key way ahead. Indeed, they say, in many cases ‘energy-economy models have underestimated deployment rates for renewable energy technologies and overestimated their costs’, and their study aims to correct that . And they certainly present a very positive case. In their conclusion they say ‘even the downside outcomes of a rapid green energy transition are not that bad, due to the dramatic cost declines seen already. When energy system pathways are viewed in terms of bets placed on portfolios of technologies, we find that the Fast Transition scenario has an expected payoff of around $5–$15 trillion. Moreover, it is also a safe bet, with around an 80% probability that it will be cheaper than continuing with a fossil fuel-based system’.
So it’s pretty optimistic stuff. One team member told the media ‘scaling up key green technologies will continue to drive their costs down – and the faster we go, the more we will save. Accelerating the transition to renewable energy is now the best bet not just for the planet, but for energy costs too’. In the depths of an energy cost crisis and with winter approaching, it’s good to have it confirmed that, as Prof. Mark Jacobson at Stanford and the team at LUT University in Finland (see my next post), have also been arguing, over time, there could be a fast, positive, green and cheap global way forward. Although it’s also important to remember that, in the short term, not everything is going right everywhere. For example, there has been a slow-down in renewables in China and India as well as Europe. Though that has not changed the overall situation re-nuclear power. As the latest edition of the World Nuclear Industry Strategy Report notes, in terms of new capacity, renewables are still accelerating well ahead of it, and, indeed, all other electric power options in China and India, as well as just about everywhere else.
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