COLIN WOOD: Achieving net zero by 2050

Zero 2050 — this buzzword from the Paris agreement of 2015 (COP21) is certain to be burned onto the soul of every human being by 2030. To remove 8-billion tonnes of annual coal production from the world’s energy economy will require considerable focus on continuous milestone achievement for the next 30 years. It certainly means every sector in the energy economy needs to eliminate carbon emissions completely by mid-century. There can be no free riders.

For interim milestones to be met to accelerate decarbonisation, immediate policy action is required today by governments. Fortunately, in technical terms the transition to a zero-carbon emission target in 2050 is now reaching a mature capability stage. And there are a number of competing processes in the mix to drive unit costs down and facilitate the change, rather than affecting the quality of life for growth.

This change, as measured by capital requirements, is by far the greatest technical revolution in the history of mankind. It involves not only energy but also chemical/metallurgical aspects such as steel manufacturing , which produces some 2-million tonnes of steel per annum, with the leader (China) at 1-million tonnes. The associated green hydrogen manufacture is also gathering momentum, with two enormous complexes currently being built in Spain and in the US state of Texas.

World coal production is currently 8-billion tonnes, with China by far the leader at 3.7-billion tonnes. No small fry, and by any standards it will require an additional dramatic change to achieve Zero 2050. SA, a significant contributor at 277-million tonnes, is in seventh place at 3.5%, though the population percentage is less than 1%. Coal per capita is hence very high, which shows the importance of the coal sector and the much-vaunted SA call for a “Just Transition”.

To be on target for Zero 2050 Bloomberg’s New Energy Outlook 2021 has analysed in great detail three possible scenarios that could be implemented by 2030. The three scenarios have colourful descriptors; namely, green, grey and red:

• The green scenario is a renewables-electricity and green-hydrogen net-zero pathway. Hydrogen produced from water using electrolysers powered by wind and solar is applied in sectors such as industry ( steel and ammonia) and heavy transport, as well as in electricity generation via fuel cells. Fuel cell applications generate electricity for use in electric cars and more recently in light aircraft. Shipping is an obvious next target sector.
• The grey scenario is a renewables-electricity and carbon-capture-and-storage (CCS) net-zero pathway. In this scenario, in addition to growth in electricity use and renewable power, emissions from fossil fuels in some sectors are mitigated using post-combustion carbon capture and storage technology. The weakness in this approach is that the liquid carbon dioxide is stored and accumulates. Steam reforming of methane to produce so called “blue” hydrogen produced from natural gas can be coupled with urea manufacture to utilise the carbon dioxide from the methane. Interestingly, urea is used in fertilisers and can be chemically dimerised into biuret as an animal protein supplement. Biuret has been produced at full scale production.
• The red scenario is a renewables-electricity and nuclear net-zero pathway. This one follows a similar trajectory to the green scenario except that small, modular nuclear reactors complement wind, solar and battery technology in the power sector, and add so-called “red hydrogen”, which is produced using electrolysis as in the green scenario, but powered by dedicated nuclear power plants.

For most countries there is likely to be a mix of the three scenarios depending on their basket of complexities and the distinct needs of their particular technology choice. The Bloomberg analysis for “getting on track” to 2030 outlines the phenomenal accelerated need not only in the scale-up of new competitive technologies but also in the increased installation of existing technologies.                                                            

The capital flows needed to be on target for 2030 for say, solar and wind, illustrate the need for huge capital injections of existing technologies worldwide. For example, annual wind and solar investment has been flat at about $300bn (R4.37-trillion) for a number of years. This has to increase to between $750bn to $1.8-trillion every year from 2021 to 2030 to be on course for Zero 2050.

The increase in capacity for the power sector illustrates the need for significant acceleration of installing existing technologies to 2030, that is getting on track for the power sector means adding up to 500GW of new wind, 450GW of new solar, and 250GWh new battery storage on average every year to 2030 under the green scenario. This is over 5.2 times the amount of wind capacity added in 2020, 3.2 times the amount of solar, and 26 times the amount of battery storage. By 2030 that would add up to a total of 5.8TW of installed wind, 5.3TW of installed PV, and 2.5TWh of batteries. These totals therefore are up eight-fold, nine-fold and 176-fold from 2020 levels respectively. Compare Eskom’s installed capability at about 45GW (though it actually runs at about 40% of that).

Other sectors also indicate dramatic increases; for example, in terms of electric vehicles the number on the road by 2030 needs to be 355-million out of 1.4-billion worldwide — a 25% market share in 10 years from essentially zero in 2020. Green hydrogen and its associated electrolyser technology are similarly poised for phenomenal growth — from essentially zero in 2020 to a projected 1.9TW in 2030 — at least 40 times Eskom’s current installed capacity.

Today, the oil majors define their market focus as energy and not oil — a meaningful shift in positioning. The recent investment plan announcements by some, such as Shell (UK) and BP recorded in the latest International Energy Economy Financial Analysis bulletin show that Shell plans to invest some $24bn into the energy sector over the next 10 years (75% of which will be invested into zero carbon products and services (renewables).

BP is similarly teaming up with Marubeni of Japan in the offshore wind energy market. No doubt these companies are contributing their offshore oil-rig platform construction technology know-how, which is significant. This major shift will assist with the substantial expansion requirements outlined earlier. It is already public knowledge that Saudi Arabia has moved significantly into solar energy, with a major cost-effective thrust announced last year. This shift in positioning will no doubt assist with the much-needed expansion capital needed in this specific sector.

It is expected that with all this intense expansion the emissions carbon budget for a 1.5°C increase in temperature will be reached as soon as 2028 — only six years away. Consequently, to reach the Zero 2050 target the carbon emissions budget is expected to fall 30% below 2019 levels by 2030 and 75% below by 2040. The power sector budget is the fastest, with a 57% reduction by 2032 and 89% by 2042. Hydrogen, carbon capture and storage and small modular nuclear reactors are not expected to have an impact on the abatement issue to 2030, but getting their technology scaled up sufficiently is critical to the complete transition model. This model also includes some significant “stranded asset” management, which is associated with the rapid exit from coal production.

The removal of 8-billion tonnes of annual coal production from the world’s economy in the next 30 years, together with the retirement of coal plants annually at about 125GW (three times Eskom’s installed capacity) is also going to require significant financial management focus.

While the Russian/Ukrainian conflict has had wider implications globally, let’s hope it does not negatively affect the focus of the worldwide shift in the energy/power and associated industrial sectors to avoid catastrophic climate change.

• Dr Wood, a former cost engineer with Mintek, silicon metal development manager at Samancor and business group member with ICI Corporate Lab in the UK, is a panellist for Econoquest. He writes in his personal capacity.