Revealed on September 13th, 2018 |
by Visitor Contributor
September 13th, 2018 by Visitor Contributor
Initially revealed on Energy Submit.
By Karel Beckman
The worldwide power transition will lead to an enormous enlargement of energy strains in any respect voltage ranges in addition to a steep progress within the variety of transformers and substations within the electrical energy system. This is among the main new findings of the second version of the Energy Transition Outlook, the annual flagship publication of worldwide technical consultancy DNV GL. Consequently, grid prices will triple, but this value explosion is offset by value reductions in different areas, corresponding to decrease prices within the fossil fuels sector. “The world can afford the transition”, say challenge chief Sverre Alvik and lead writer Paul Gardner of DNV GL in an interview with Energy Submit. “That’s the good news. But it’s not clear yet how we will make the necessary investments. How fast we go may depend more on political will than technology or economics.”
Final yr, when DNV GL for the primary time introduced its Energy Transition Outlook (ETO), it had a shocking story to inform. The report got here to the distinctive conclusion that someplace within the mid-2030s, for the primary time in recorded historical past, international power demand would attain a peak and even decline thereafter.
What’s necessary about this projection is that it comes from an unbiased supply: DNV GL is a worldwide, “technology-neutral” consultancy which is lively throughout the whole power worth chain, each in electrical energy and renewables and in oil and fuel.
What makes the discovering much more vital, is that it isn’t a part of some attainable “scenario.” The ETO, Alvik explains, presents only one forecast of the longer term – not a lot of totally different situations, as most power outlooks do. And it’s primarily based mostly on value comparisons, although together with the consequences of long-term local weather insurance policies. “We don’t hedge our bets,” says Alvik, who’s head of Energy Transition analysis within the firm’s head workplace in Oslo. “We say that this is where we see the world moving.”
“Most of the need for additional grids is simply driven by increased demand rather than by increased solar and wind”
Clearly DNV GL sees the world shifting to a radically totally different power system. “The changes that we will witness in the world’s energy system are momentous,” says Alvik. Final yr the ETO’s conclusions led to numerous debate. “We were invited to a lot of conferences and had more downloads on our website than ever before,” says Alvik. “People appreciated that we stated clearly where we think the energy system is likely to head.”
For this yr’s version, Alvik’s workforce up to date and refined the mannequin and appeared in additional element at some new subjects, such because the potential position of hydrogen, and much more importantly, on the results of the power transition on energy grids and grid prices.
Which led once more to a serious new perception: the enlargement of energy strains and transformers wanted for the power transition will probably be immense. Whereas right now there are some 2 GW kilometers of energy strains on the earth (all voltages collectively), this will probably be over 7 million kilometers by 2050, as proven on this chart:
With regard to transformers, their set up price will roughly double, and this enlargement will begin quickly:
Each final yr’s forecast of peak power demand and this yr’s forecast of large grid progress have the identical underlying main trigger, which may be summed up in a single phrase: electrification.
“We believe humanity will start using less energy from the mid-2030s on,” says Alvik, “partly because economic growth is gradually slowing, but also because of increased energy efficiency, which is not just caused by insulation and other efficiency measures, but mainly by electrification itself. An electrified system is a more efficient system. For instance, if you look at transport, electric cars have an efficiency of around 90%, cars with a combustion engine just 30%.”
“Now network operators will have to make decisions on very big investments in highly uncertain circumstances”
That very same development – electrification – underlies the main enlargement of grid infrastructure that DNV GL expects to occur. ETO sees electrification happening in all financial sectors – buildings, manufacturing, transport – pushed by the necessity for decarbonization. Electrical energy will develop from 19% of ultimate power demand in 2016 to 45% in 2050, changing principally coal and oil. On the similar time, the share of renewables within the energy combine will develop to over 80% by 2050 from a really modest base immediately:
With photo voltaic (40%) and wind (29%) dominating the facility combine in 2050, one may assume that the large further funding within the grid is required to combine these variable power sources into the electrical energy system. Nevertheless, this isn’t the primary purpose why the ETO tasks an enormous enlargement of grid infrastructure, says Alvik.
“Most of the need for additional grids is simply driven by increased demand rather than by increased solar and wind. Think of the revolution in EVs, where we project that half of all new cars sold will be electric by 2027 in Europe and by 2033 for the world as a whole. But you can also think of the electrification of heating and industrial processes and an increase in air conditioning.”
However, skeptics may discover an argument towards the power transition in that, because the ETO exhibits, the electrification of the power system will result in monumental further prices. Grid prices will triple by 2050, rising from some $400 billion/yr in the present day to an enormous $1.four trillion/yr by 2050, in response to the ETO:
Capital funding (Capex) particularly might be giant, particularly for overhead energy strains, whereas operational expenditures (Opex) shall be comparatively small:
And but, in a extra primary sense, the skeptics can be incorrect, notes Paul Gardner, phase chief power storage at DNV GL and one of many lead authors of the report.
“Although CAPEX costs for power lines and for non-fossil generation each increase considerably by 2050, this is compensated by reductions in other areas,” Gardner factors out. “The good news is that total energy costs will actually go down as a fraction of GDP.”
Fossil gasoline expenditure, for instance, shall be a lot smaller in future. All in all, and because of GDP progress, the quantity that the world might want to pay for energy-system expenditures will lower from round 5.5% of worldwide GDP right now to round three.1%:
What concerning the integration of variable renewables then? Gained’t this current an issue? “This will require some extra investment in wires, cables, substations, and so on,” says Gardner. “It will also require flexibility measures, such as demand response and energy storage. But estimates of those costs are all included in the model.”
So from a macro-economic viewpoint, the ETO exhibits there are not any the reason why we will’t have an power transition based mostly on decarbonization and renewable power. Gardner does make one small reservation. “The model results show several regions getting to levels of wind and solar that are way beyond what we have seen so far. It is difficult to say how the system will cope with that. We have tried to make reasonable assumptions, but it’s complex. It’s possible that we end up with much more demand response, much more ability to adjust demand.”
If there are not any insurmountable financial bottlenecks for the power transition, what’s there to cease it? Properly, Gardner says, “it’s true the world as a whole can afford it, but costs will be incurred in different parts of the system, i.e. by different people than in the past. Right now much of energy investment is made by oil and gas companies. In future, it is electricity and infrastructure companies that will have to make the investments.”
Partly what might occur is that oil and fuel corporations shift to the electrical energy market, which is already occurring. But, Gardner notes, the electrical energy sector is a special ballgame. It’s rather more regulated. Additionally it is much less worldwide. “Grid operators are usually defined by their geography,” says Gardner. “They cannot spread their risks over multiple markets, as oil and gas companies can.” They’re additionally rather more politically pushed. “Electricity is seen as a fundamental right in more and more countries.”
Thus a really huge query mark rising from the ETO, says Alvik, is who will take up the required funding, and much more, whether or not buyers will have the ability to deal with the elevated dangers within the system. Oil and fuel corporations are used to calculating dangers. “Now network operators will have to make decisions on very big investments in highly uncertain circumstances. What complicates matters is that infrastructure represents a very long-term investment. This increases the risk of stranded assets.”
“Right now some countries like Japan and the UK give support to hydrogen, but that’s not enough. You need the type of policy support that renewables and electric vehicles are getting to bring costs down”
The considerably unpredictable affect of regulation and politics will increase the dangers of funding in electrical energy grids. “It takes a long time to build a transmission line, but even longer beforehand to get it approved,” says Gardner. He believes there might be an enormous dialogue about whether or not we might want to socialize a number of the dangers. “In the end, I think it is likely that political and regulatory decisions will determine how fast the energy transition can go, more so than technology or costs.”
Apparently, the mannequin utilized by the DNV GL researchers doesn’t even embrace inter-continental transmission of electrical energy. If that have been to take off, funding in transmission capability would develop into even greater. “We see very little inter-continental transmission happening at the moment,” says Gardner. “For this reason we have not included it in the model. But our model results do indicate that it makes sense to expand interconnections across regions. So maybe we are even underplaying the amount of transmission we will see.”
What’s putting concerning the ETO is that it’s extra optimistic concerning the velocity of the power transition than most different outlooks. Even so, notes Alvik, the tempo of the transition won’t be quick sufficient if no additional measures are taken. “In this sense our results are in-between the reference scenarios and the 2-degree scenarios of most other outlooks. So we are more positive about the changes we will see, but they nevertheless indicate a 2.6 degree Celsius temperature rise.”
Extra “policy support” is required for the world to satisfy the objectives of the Paris Settlement, says Alvik. What applied sciences ought to policymakers help? On this yr’s report, the DNV GL researchers take a better take a look at the potential of hydrogen. They conclude that based mostly on present information, hydrogen won’t represent greater than zero.5% of power provide in 2050, though in some areas and a few segments (for instance, the place there’s numerous fuel infrastructure) the share will probably be a lot larger.
“That is not a lot,” Alvik admits. “But we expected that. What we wanted to know is what it would take for hydrogen to play a bigger role.” The reply, he provides, is: “large-scale policy support on a global scale. Right now some countries like Japan and the UK give support to hydrogen, but that’s not enough. You need the type of policy support that renewables and electric vehicles are getting to bring costs down. Only if that happens are we likely to see a broad take-off.”
“Breakthroughs are always welcome, but even several breakthroughs won’t be enough. Policies and behaviour should give us the breakthroughs we need”
It’s the similar as for carbon seize and storage (CCS), says Alvik. “That too needs much broader and stronger policy support to make it scale.”
Ought to policymakers give this type of help? Alvik: “For CCS, yes, definitely. We need CCS to get to zero emissions, just as we need more energy efficiency and renewables. For hydrogen, it’s a choice. There are different options available. I believe the same goes for nuclear power. It’s an option, it can work, but it is expensive. Still not all decisions are driven by cost considerations. Our model does not say, ‘build Hinkley Point C’ [the nuclear power plant in the UK], but politicians took that decision.”
Alvik and Gardner agree that what we should always not do is rely on technological breakthroughs to get us to our objectives. “Breakthroughs are always welcome, but even several breakthroughs won’t be enough. Policies and behaviour should give us the breakthroughs we need.”
Reprinted with permission.
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