Tripling electricity demand in global energy by 2050: electrification is seen as the magic wand that will make our planet hospitable again and stop our deadly dependence on fossil energy, in exponential growth since 1950:
Be it for transportation, for industry, like in steel and concrete manufacturing, or for buildings, like for heating and cooling, all sectors that are major and massive users of fossil energy, everything should be electrified, according to the believers in the God of (Renewable) Electricity. And when electricity is not the immediate energy vector, hydrogen has to be, for instance for fertilizer production, without which feeding the 8 billion inhabitants of our planet would become well-nigh impossible. (Remember and think about the energy curve above: we were 2.5 billion in 1950, only fertilizers and global trade in food products have been major contributors for this increase in 70 years.)
Green hydrogen does require electricity, green of course. This transition cannot suffer any delay, as IPCC reminds us with each report, this decade is the last one before global warming consequences get out of control. And we sure are reminded every day of the telltales of this major climate modification in the making, one of the latest being the heat waves in India and Pakistan this spring, that threaten habitability for millions over there and the global market for cereals, already imperiled by the war in Ukraine.
Geopolitics + climate change + pandemic is a deadly cocktail.
But there is an inconvenient truth about renewable electricity supply. New installed capacity is indeed nearly exclusively renewable, 83 % in 2020, but only manages to account for the incremental demand growth, as observed in the graphs below, from a recent IRENA report, REN 2021. Electricity production remains, alas, still strongly fossil-based. The fact that China is leader in the installation of new capacity of renewable electricity, but also has massive programs to install coal-based power generation and that there was an increased preference for renewable energy in the past decade culminating with no less than 300 billion dollars invested in 2020 in renewable power and fuels, do not really change the global picture for greenhouse gas (GHG) emissions from power generation:
So, I do have a problem with this lack of sync: demand for renewable electricity is growing and called upon big time, while the pace of increase in renewable electricity production is remaining so slow. Electricity-based new technologies basing their justification on GHG emission reduction is indeed commendable, but is it realistic?
Turning to economics: investment cost has dramatically dropped for renewable power generation, especially in the solar and wind segments, but this does not necessarily imply the price of electricity for the consumer or the industry will drop as well and as much. Where will governments, especially in welfare economies like in Western Europe, find the taxes they used to collect on motorists using liquid fuels? In my opinion, the price of green electricity can only rise, regardless of any progress in production technology. And let us not forget the rising debt, the rising interest rates, that may force sovereign nations to make difficult choices when massive additional investments, like those for renewable energy, are under consideration. Procrastination is an easy way out to arbitrate between short-term and long-term priorities.
Policy: it seems electromobility and hydrogen-mobility have become a political obsession in the EU, as can be observed by regulation regarding new vehicle future emission factors, zero-emission, no less, for cars as soon as 2035. This political momentum departs from the usual, and natural, industry leadership in innovation, and disregards the complexity of our technology-heavy civilization, disregards the fundamentals of supply vs demand, disregards the key success factors for this ambitious transition, such as the availability in time of green electricity and materials, and disregards the business aspects in car manufacturing.
During a recent Financial Times conference on Future of the Car in May 2022, leading EV maker CEOs from Tesla and VW clearly exposed the shortcomings in this political crusade to impose electromobility in less than one decade. Naming batteries and raw materials like lithium as major supply roadblocks on the way to delivering the supposedly massive demand in 2030, should recharging infrastructure be in place, of course, and not mentioning the fact that cost parity with ICEV seems postponed by at least ten years due to the rising cost of critical materials and equipment for EVs, a key factor in a world where inflation eats out the spending power of the middle classes. Extending the transition period from ICEV to EV does not seem up for negotiation or political motivation, it becomes a painful fact.
And these constraints that apply to transport, responsible for one quarter of man-made GHG emissions, would also apply to other large emitters, clearly for power generation and industry, that use technologies with either scarce materials like rare earths, or energy-intensive basic materials, like concrete, steel and resins. The miracle solution of total electrification, in less than three decades, looks like solving an impossible and too complex equation so, what can we do to simplify?
We can adapt to the complexity we have created first, mitigate with the best available lower-carbon solutions at hand, including biomass-based energy and materials, and replace with revolutionary, fully zero-emission technologies, only as and when adaptation comes to some sort of an end and when we are globally convinced these innovations do not lead us into another dead-end, accept a slower than ideal transition from fossil to renewable, and adapt to its short to mid-term consequences in terms of climate change, or possibly reduce our appetite for energy-intensive goods and services.
In summary, we can stay away from dogma and pipe dreams and focus on readily available, simple, realistic and socially acceptable solutions, in the European Commission words: an energy secure, available and affordable future for all.
Philippe Marchand is a Bioenergy Steering Committee Member of the European Technology and Innovation Platform (ETIP).