Some progress on emissions is happening

 From The Guardian

There is something of a reality check under way on the response to the climate crisis. It’s no secret that countries and corporations are far from living up to the goals set by international leaders at the landmark 2015 Paris agreement.

Unless there is a significant course correction, the ramifications will be far-reaching and often destructive. The second coming of Donald Trump and growing global instability has made a top-down injection of urgency at the pace needed harder to imagine. Optimism is harder to come by.

But that doesn’t mean nothing is happening.

It’s worth pointing this out because a narrative has started to take hold that renewable energy and other clean solutions have made little to no headway in displacing fossil fuels, and therefore are pointless. Fuelled by Tony Blair and the former US government adviser Daniel Yergin, and embraced by the fossil fuel industry and its lapdogs in the commentariat, it is used to attack zero emissions targets as a fool’s dream. In Australia, it is part of the backdrop as the Albanese government is lobbied over whether to set an ambitious emissions reduction target for 2035.

The reality, though, is more complicated. Here are some things worth considering if you hear climate action is pointless.

Clean energy is coming for fossil fuels

 

One line that has gained some traction this year is that the proportion of global energy supply from fossil fuels has barely moved over the past 35 years. The claim – bubbling away in The Australian, on Sky News [right-wing Murdoch media] and on social media – goes that dirty fuels provided 85% of energy in 1990, and still provide 80% today.

So much for progress, right?

But the Bloomberg New Energy Finance [BNEF]founder and self-declared conservative Michael Liebreich points out that this ignores an important factor.

The percentages referred to by fossil fuel advocates are for primary energy – that is, raw coal, crude oil, gas, wood, sun or wind. They do not refer to useful energy – energy that has been converted into a transportable form, such as electricity or refined petroleum, delivered to a consumer and then used to light their house or move their car.

This useful energy is the more relevant measure. And the process of processing raw fossil fuels into useful energy is, in many cases, not particular efficient. More energy is lost in generating at a remote coal-fired power plant and transmitting it to a home than if solar, wind or hydro was used. Petrol cars require much more energy to travel a kilometre than an electric vehicle does.

If we acknowledge this and consider useful energy alone, Liebreich says the amount of energy provided by fossil fuels is not 80%, but about 68%.

This is obviously still too high. But it won’t stay at this level. Despite all the talk of new coal plants still being built, they are playing in the margins. The International Energy Agency (IEA) forecasts that solar and wind will meet more than 90% of the global increase in electricity demand this year. Global generation from solar and wind energy is expected to increase by about 25%, from 4,000 terawatt-hours to more than 5,000. Next year it is expected to jump another 20%, past 6,000TWh.

The IEA projects that global renewable energy output – including solar, wind and hydro – will surpass coal output in either 2025 or 2026. For the first time in a century, the share of electricity coming from coal will have fallen to less than 33%.

Solar and wind will together be nearly 20% – up from 4% a decade ago.

A key question is if this growth in renewable energy will eventually reduce global fossil fuel use – as is necessary – or mostly just meet growing energy demand. Liebreich argues compellingly that fossil fuel use is set to fall. Using a simple model, he suggests it is likely to start falling in the 2040s and could be squeezed out of the system by about 2065.

That is not near fast enough to deliver the trajectory scientists say is needed to limit global heating since pre-industrialisation to 1.5C. But it is a well argued rejection of claims that a global transition isn’t possible.

China? It’s moving

 

With a population of 1.4 billion and having taken on a huge proportion of the world’s manufacturing, China is easily the world’s biggest direct national climate polluter, pumping out more than twice as much CO2 as the second-placed US.

Its story is mixed, as always. But the data show it is changing. An analysis for Carbon Brief by China experts Qi Qin and Lauri Myllyvirta found that coal’s share of the country’s power generation fell from 73% in 2016 to 51% in June this year. This happened as it continued to build new coal plants for a simple reason – it doesn’t run them at anything like capacity.

A significant moment came earlier this year when China’s national emissions fell for the first time, dropping 1% in the first quarter compared with a year earlier. Beijing needs to do much more if it is to meet its commitment under the Paris deal. Its next five-year plan for economic development, due this year, will be crucial.

Source: Carbon Brief
Note how renewable electricity generation has, for the first time since the deep 2009 recession, grown by more than the growth in electricity demand, even though demand growth has been strong.

Dirty car sales are down

 

According to Our World in Data, global sales of internal combustion engine cars – which run solely on petrol or diesel – peaked in 2016 at 80.47m. Electric and plug-in hybrid car sales in that year were just 780,000.

Last year, sales of dirty cars were 62.05m, a 23% fall. Electric and plug-in hybrid car sales had increased to 17.5m.

Put another way, nearly a decade ago only one in every 100 cars sold across the globe was electric. Now it is more than one in five. Elon Musk’s extraordinary self-own in damaging Tesla’s reputation may dent the pace of growth but it won’t stop it. China has little time or need for Teslas and is home to more than 60% of global EV sales.

Still a mountain to climb

None of this is to understate the scale of the problem. This column has reported before on the big step-up in global heating since June 2023. Averaged across the globe, every day in 2024 was at least 1.25C hotter than preindustrial levels, and three-quarters were 1.5C hotter.

Extreme weather events are becoming more damaging. Feedback loops (melting permafrost and huge wildfires) are releasing large additional amounts of CO2, accelerating the problem. Governments have barely started to acknowledge the expected increase in economic, societal and environmental costs that will hit productivity – the current focus of the Australian political class – and so much else.

It’s hard to overstate how much there is to be done. But don’t believe self-interested arguments that action is impossible, or will be for nothing.

 

50 years of green hydrogen failure

 From Michael Liebreich.

It is over fifty years since Japan's "Sunshine Project" started governments pouring money into green hydrogen as a replacement for fossil fuels. How is it going? TLDR: not well.  That’s why it’s called the #HydrogenSoufflé.

I don’t even need to write a commentary - I’ll just leave you with five charts:

• We’re not producing green hydrogen (despite the investment
• We’re not buying hydrogen vehicles (despite the hype)
• We’re not buying hydrogen fork lift trucks (despite the rumours)
• We’re not buying hydrogen trucks (despite the hopes)
• We’re not buying hydrogen boilers (despite the grift)

Hydrogen is hard to store, because its small molecules can escape through metal and plastic molecules of its container.  It makes pipes brittle.  It needs to be chilled and compressed for storage, so there are energy costs/losses.  And in most cases, alternative technologies are cheaper and more effective.  For example, the round-trip efficiency of lithium-ion batteries for storage is much higher than electrolysing water and then using the hydrogen in a fuel cell.  For aircraft, the hydrogen has to be kept at  -253 C as a liquid or at 5,000 to 10,000 pounds/per square inch (350 - 700 bar, 1 bar equals one atmosphere).  Tricky.  It can be used to smelt steel, but that works best if the hydrolyser is close to the steel mill.  And as I've mentioned often before, if it is converted to methane by the Sabatier process, it can be used for long-duration storage for balancing the grid.

In my opinion, and obviously also Liebreich's, green hydrogen is mostly hype.  Green methane, maybe.  And as the first chart shows,  only 0.1% of hydrogen produced is in fact green.

The hydrogen furphy

I've been suspicious about the hydrogen mania for a while now.   Michael Liebreich does a much better demolition job than I could.   But his recommendation to use green ammonia, made from green hydrogen, for long-term storage in electricity generation is very interesting.   And I don't share his doubts about using e-fuels for jets.  If e-fuels cost twice as much as jetfuel, so be it.  We survived without intercontinental jet flights before, and we could again.

[From BNEF]

By Michael Liebreich

Senior Contributor
BloombergNEF

Injecting some reality

Two years ago, BloombergNEF published my two-part primer on hydrogen, Separating Hype from Hydrogen. On the supply side, I was optimistic: green hydrogen (produced from renewable energy) would over time become cheaper than blue hydrogen (produced from natural gas but with carbon captured) and eventually cheaper than gray hydrogen (produced form natural gas without carbon capture).

On the demand side I was more skeptical. While clean hydrogen will be needed to decarbonize a number of use cases in industry, and perhaps for long-duration storage, I found it hard to identify any role for it in applications like land transportation or space heating. Since then, as I have done more work on industrial heat, I have even come to believe it has a limited role even there.

If my intention at the time was to inject some reality into discussions about hydrogen, I clearly failed. Rhetoric around hydrogen has become ever more overblown.

According to lobbying group the Hydrogen Council, citing a series of reports commissioned from McKinsey over the past three years, hydrogen can be expected to contribute more than 20 percent of emissions reductions needed for the world to reach net-zero emissions – a figure repeated by politicians and journalists seemingly without the slightest critical examination.

German Chancellor Olaf Scholz has called hydrogen “the gas of the future” and promised “a huge boom.” Japan’s Prime Minister Fumio Kishida has declared that “shifting to and developing a hydrogen society is critical for achieving decarbonization.” Frans Timmermans, the EU Executive Vice-President for the European Green Deal believes that “hydrogen rocks.” Jacob Rees Mogg, briefly UK Secretary of State for Energy this year, called hydrogen “the silver bullet”.

Public money is starting to flow. The EU has approved the first 13 billion euros ($13.7 billion) of the 430 billion euros ($450 billion) promised under its 2020 Hydrogen Strategy and is now working to launch a “Hydrogen Bank”. The US Inflation Reduction Act (IRA) provides a ten-year tax rebate per kilogram of green hydrogen worth $3, which will soon be more than the production cost itself. Free hydrogen anyone?

Of supreme import

In October this year the Hydrogen Council and McKinsey released another report entitled Global Hydrogen Flows, predicting long-distance transport of 400 million tonnes of clean hydrogen and its derivatives (calculated on a hydrogen-content basis) by 2050, out of total global production of 660 million tonnes of hydrogen. It is worth bearing in mind that today, 94 million tonnes of hydrogen are used annually, virtually all of it made from fossil fuels, creating 2.3% of global emissions. The vast bulk of today’s hydrogen never leaves the compound on which it is made, let alone cross an international border.

The idea of hydrogen imports as a way of decarbonizing major industrialized economies is enormously seductive – so much so that Germany and Japan have made it central to their decarbonization strategies. Here’s Japanese PM Kishida again: “Japan aims to commercialize an international hydrogen supply chain by producing hydrogen in bulk at low cost in countries blessed with bountiful renewable energy resources coupled with marine transport infrastructure.”

Chancellor Scholz is promoting hydrogen imports not just as a way of decarbonizing the German economy, but as a replacement for Russian gas. In August he and Canadian Prime Minister Justin Trudeau flew to Newfoundland and Labrador to sign an agreement to “create a transatlantic supply chain for hydrogen well before 2030, with first deliveries aiming for 2025”. As I write this, German Economy Minister Robert Habeck is on a five-day trip to Namibia and South Africa to secure hydrogen supplies.

The problem with this vision of large-scale imports of hydrogen is that the physics of hydrogen is unlikely to play ball.

The unbearable lightness of hydrogen

In February this year, Kawasaki Heavy Industries’ Suiso Frontier arrived in Kobe, Japan carrying the world’s first ever cargo of liquid hydrogen from Australia. Did this momentous occasion herald the start of a brave new world of trade in liquid hydrogen, as the press coverage suggested? In a word, no.

Set aside the A$500 million ($334 million) cost of the project; set aside the fact that most of the hydrogen on board the Suiso Frontier was made from coal; and set aside the fire that broke out on board while loading. The 1,250 cubic metres of hydrogen carried by the Suiso Frontier contained just 0.2% of the energy content of a single large LNG carrier. Okay, the first ever LNG cargo, carried 63 years ago from the Calcasieu River on the Louisiana Gulf to the UK, consisted of a similarly picayune 2,475 tonnes. Surely liquid hydrogen can be scaled up in the same way as LNG has been? Kawasaki Heavy Industries, builder of the Suiso Frontier claims it has already lined up the first order for a much larger, 160,000 m3 carrier from Nippon Kaiji Kyokai.

This is where the physics of liquid hydrogen step in. Although the scaled-up vessel would carry 60% of the volume of an LNG Q-Max, it would carry only 22% of the energy.

Hydrogen has very good gravimetric energy density – the amount of energy carried per unit weight. On this measure, hydrogen beats diesel, petrol and jetfuel by a factor of around three, and LNG by a factor of 2.7 – which is why it makes a great rocket fuel. However, it has very poor volumetric energy density – the amount of energy carried per unit volume. It’s worth remembering that while a cubic meter of water weighs 1,000 kilograms; a cubic meter of hydrogen weighs only 71 kilograms.

On a volumetric basis, hydrogen’s energy density is a quarter that of jet fuel, and only 40% of that of LNG. Since ships are volume constrained (think Suez Canal, Panama Canal, etc.), this inevitably means more trips. Even if Kawasaki Heavy Industries was to scale its hydrogen carrier to the same size as a Q-Max, it would need to make 2.5 deliveries to carry the same amount of energy as one cargo of LNG. You don’t need to know anything at all about shipping to know that 2.5 times the trips are going to cost you 2.5 times as much.

But this is only the start. A liquid hydrogen carrier will inevitably be more expensive than an LNG carrier. Its load will be at -253C instead of -162C, and all pipes, valves, pumps and tanks have to resist hydrogen embrittlement. And because liquid hydrogen is both colder and lighter than LNG, the liquid hydrogen ship would have up to nine times more boil-off en route (these ships let some of the load boil off as heat enters the tanks, and then use that as fuel for their engines), unless you add either much more insulation or a complex cryogenic recycling system.

Overall, you would be wise to assume that the seaborne segment of your hydrogen trade will cost around four times the cost of LNG per unit energy.

It’s the physics, stupid

But that only deals with the seaborne segment. We still have to talk about liquefaction and regasification.

Liquefying hydrogen is a is a hugely energy-hungry process, made complex by the quirks of hydrogen physics – things like its negative Joule-Thomson Effect (unlike most gases, hydrogen gets warm when it expands and cold when compressed) and ortho-para isomer conversion (without which liquid hydrogen re-evaporates, irrespective of insulation). Liquefaction of hydrogen currently consumes 30-40% of its energy content, versus no more than 10% for LNG. Ways to improve this are being researched, but nothing can change the fact that liquefying hydrogen is, quite simply, a bear.

As for regasification, again the plants will be more expensive than for LNG. They need to operate at lower temperatures; all valves, pumps, pipes and tanks have to resist embrittlement; and compressors have to be of larger capacity because pressurizing hydrogen gas requires more work than pressurizing natural gas. European politicians, scrambling to build new terminals to receive LNG in replacement of Russian gas, are suggesting that these terminals will be repurposed to receive hydrogen or its derivatives. This is nonsense. You can re-use the docks and infrastructure, and any distribution pipelines can be upgraded, but 70% of everything else has to be scrapped.

In summary, while LNG approximately doubles the cost of gas delivered by pipeline, shipping liquid hydrogen will cost four to six times more than LNG. In other words, you can’t power an economy on imported liquid hydrogen, and that is not because of things that can be fixed – scale, technology, cost of capital and so on – but because of the underlying physics: volumetric density, liquefaction temperature and interactions with other materials.

It’s a gas, gas, gas!

If importing hydrogen in liquid form is out, what about importing hydrogen as a gas?

Here, things look much better. Gaseous hydrogen is already transported by pipeline – all the pipes, pumps, valves and tanks need to be appropriately engineered, but the economics are not terrible. Just as well, given the volume of hydrogen we are going to need at industrial “hydrogen hubs” for industrial uses and to provide long-duration back-up power.

Just replacing the current production of gray and black hydrogen would create demand for 94 million tonnes of clean hydrogen. Pipeline imports are well-placed to meet a decent proportion of this.

There is, however, a caveat. The longest natural gas pipeline in the world (excluding side branches) is Brazil’s National Unification Gas Pipeline (GASUN), just under 5,000 kilometers long. In their report on hydrogen trade, McKinsey and the Hydrogen Council predict 40 hydrogen “trade routes” connecting the globe. Those serving Europe by pipeline from Norway, North Africa and the Gulf are certainly feasible (the one from Russia is clearly off the cards for decades). However, none of the longer trade routes linking the US West Coast with Asia, the US East Coast with Europe, or the Gulf, Africa or Australia with Asia are likely to carry a single cubic meter of gaseous hydrogen.

There are a few companies proposing to carry compressed hydrogen gas by ship. This would allow them to avoid the cost and complexity of liquefaction but would expose them to the same problems of lower volumetric energy density, only more so. Provaris Energy has designed a ship carrying hydrogen gas at 250 bar. But this translates to just 25 kilograms of hydrogen per cubic meter – just over a third of the very poor volumetric density of liquid hydrogen. Scaled up to the size of a Q-Max, their ship would carry around one seventh of the energy. Seven ships to do the work of one, you can imagine what that does to costs.

There may be some niche applications for shipping gaseous hydrogen, for instance moving stranded supplies between islands, but it is not going to happen in more than homeopathic quantities.

The exotics

There are other ways of transporting hydrogen beyond liquid and gas. We’ll get on to derivatives of hydrogen in a moment, but first I want to deal with the exotics – liquid organic hydrogen carriers (LOHCs) and metal hydrides. Here the goal is to load hydrogen into a chemical or metal carrier, which allows it to be transported at ambient temperatures and pressures. On arrival the hydrogen is released and the carrier returned to the point of origin.

One promising LOHC is benzyl toluene, being marketed as a solution for hydrogen shipping by a company called Hydrogenious. But again it has a volumetric density problem. One cubic meter of benzyl toluene can only be loaded with 54 kilograms of hydrogen – which means four times as many trips for each energy cargo as you would have with LNG. In addition, loading hydrogen into the organic solvent is an exothermic process, generating heat where you don’t need it, and then you need to add energy at 300C at the arrival location to extract it – using up around 30% of the delivered energy.

That’s not to say LOHCs are not interesting: they could perhaps find a role in long-duration stationary storage – not everywhere has the salt caverns or depleted gas fields required to store gaseous hydrogen, but any tanker farm would be able to handle benzyl toluene and there may be options to store and reapply the process heat between cycles. There may even be a modest import market for LOHCs, to replenish long-duration storage tanks.

Metal hydrides offer the hope of transporting up to twice as much fuel per cubic meter as liquid hydrogen – but each family of hydrides studied so far has shown disadvantages: cost, gravimetric density, time to charge, absorptive capacity, heat required to release the hydrogen and so on. It would be a brave investor who thought we were going to move hydrogen at scale this way, when 50 years of research has not yielded as single commercial application.

First derivatives

Next up, hydrogen derivatives – e-methane, e-methanol. These are certainly easier to transport – drop-in replacements for their fossil equivalents. Their problem is high production cost. For each of them you need a source of clean hydrogen – whether blue, green, pink or red (from nuclear power, whichever color code you use) or whatever – plus a source of carbon nearby, and then you need to combine them into molecules of varying degrees of complexity.

The cheapest source of carbon would be captured from the combustion of fossil fuels – but that would make no sense as it would not be compatible with net zero. The only thing that could possibly make sense would be to use direct air capture (DAC) or secure carbon from a bio-based source, so that when it is burned it just returns to the atmosphere.

A bit of systems thinking, however, shows that even this makes no sense. Take e-methane. By the time you have gone to the cost of securing your carbon, why not just sequester it, instead of incurring further costs in producing hydrogen and combining them into your derivative. You could then just deliver plain old fossil gas to the importing country – along with a carbon credit if needed. That would be identical from a climate perspective and vastly cheaper.

Methanol can and must be made in future using clean hydrogen. Some of it will be made where hydrogen is cheap and exported, but only for use cases where it will be consumed as methanol. In 2022, global production of methanol was 110 million tonnes – but adjusting for molar weights, that is equivalent to just 14 million tonnes of hydrogen. Should demand double and a third of that get traded internationally, only a 9 million-tonne import market by hydrogen mass would be created. That barely scratches the surface of the Hydrogen Council’s 400 million tonnes.

E-methanol also represents a potential pathway to decarbonize shipping – but ammonia and waste-based biofuels both look like being cheaper. Even using nuclear power for the world’s largest ships would most likely be cheaper than e-methanol. Global shipping fuel demand today is around 300 million tonnes per year; let’s suppose, optimistically, that demand increases by 50% by 2050, that 20% is replaced by methanol, and a third of that methanol is traded internationally. Once you adjust for the molar mass and energy content of methanol, that would only create annual demand for another 8 million tonnes of hydrogen imports.

e-Fuels

Some continue to promote e-fuels as the solution for land transportation, particularly in Germany and Japan. They point to the fact such fuels require no changes in consumer behavior, highlight the millions of jobs that depend on the internal combustion engine and claim that scrapping 1.4 billion internal combustion vehicles on the world’s roads would be unaffordable.

Their arguments have no merit. First, those 1.4 billion vehicles will be scrapped anyway before whichever year countries select for net zero. In most cases, electric vehicles are already competitive on a total-cost-of-ownership basis with petrol and diesel. E-fuels, by contrast, will still be three to five times as expensive in 2050, driven by their production complexity and the efficiency losses at each production stage. Yes, Porsche is building a pilot project in Chile to produce e-fuels, but theirs is not exactly a cost-conscious customer base.

The fact is that those jobs associated with internal combustion engine manufacturing will be disappearing anyway, the only question is whether they are lost to other technologies or to China. As for behavioral change, most EV users like the fact that they can charge anywhere, rather than having to visit a gas station every week.

Flights of fancy

Time for a deep dive into hydrogen’s potential use in aviation. Airbus has said that it “considers hydrogen to be an important technology pathway to achieve our ambition of bringing a zero-emission commercial aircraft to market by 2035,” and this month, Rolls-Royce and EasyJet made the news by testing a turboprop engine on pure hydrogen.

It turns out that running an aircraft engine on hydrogen is not the difficult bit – the Soviet Union did it back in 1988, not on a test bench but in the air. The real problems are caused, once again, by the physics of hydrogen.

With just 25% of the energy density of kerosene, replacing the maximum take-off fuel load for a long-haul aircraft would require more space than the entire swept volume of its fuselage – a non-starter. For short-haul flights, the focus of Easyjet’s interest, the fuel tank would take up around a third of the fuselage. That means ticket prices 50% higher than now, even before paying for the higher costs of the plane, the cost of the liquid hydrogen, and cost of its ground handling equipment. In total, expect a doubling or tripling of prices.

The real show-stopper, however, is getting the fuel to the airport. Liquid hydrogen transfer lines exist, but there is no way to keep miles of pipeline at -253C and handle the safety issues of any potential leaks. That leaves road tankers or gas pipelines.

Let’s do a thought experiment: try to replace all 20,000 tonnes of jet fuel delivered daily to Heathrow airport with 7,200 tonnes of liquid hydrogen. By tanker truck, that would mean 2,300 daily movements of liquid hydrogen in West London. The safety and traffic implications don’t bear thinking about. Now the only option is to bring the hydrogen in by gas pipeline, and liquefy it on site. But that would require 2.7GW of electrical power, according to engineer and Oxford University ammonia expert Dr. Mike Mason – approximately the output of a new nuclear power station the size of Hinkley C, plus a lot of pylons. And then you need to dump enough heat to raise the temperature of the Thames by 18 degrees C.

The bottom line is that liquid hydrogen could perhaps end up powering a few executive jets – startup ZeroAvia certainly hopes so – but not aviation as we know it. The only substantial role for hydrogen in aviation would be through the production of e-fuels. These are certainly technically feasible – UK company Zero Petroleum has already made some – but they look like being at least twice as expensive as sustainable aviation fuels (SAF) based on agricultural or forestry waste.

If potential volumes of SAF are limited by feedstock availability, then there is a market opportunity for hydrogen in aviation fuels, if not, there isn’t. Global aviation fuel demand was around 300 million tonnes in 2019, which translates to 46 million tonnes on a hydrogen mass basis. If demand grows by 50%, 25% is met by e-jetfuel and one third of that is shipped internationally, that only generates 6 million tonnes of traded hydrogen.

Moan, moan, ammonia

That brings us, finally, to ammonia – the last option for those hoping to develop substantial long-distance hydrogen imports.

Around 190 million tonnes of ammonia are produced each year, mainly for fertilizer and as a chemical feedstock, almost all of it from fossil feedstock. Around 10 percent of current production is already traded internationally but this only comes to around three million tonnes by hydrogen mass.

Switching to clean ammonia for fertilizer production will without doubt drive a big increase in traded hydrogen. Where there are pipelines, hydrogen can be made where renewable power is cheap and imported in place of natural gas and used to make ammonia at the destination. Where there are no pipelines, green ammonia or finished fertilizer will be produced and shipped instead.

Supposing the fertilizer market grows by half by 2050, all of it goes low-carbon and a third of it ends up being shipped internationally, that would increase ammonia trading from 18 to 95 million tonnes per year – a lot of ammonia. This will be a relief for those investing in ammonia projects in Chile, Canada, Namibia and South Africa: their output may not find much use in the energy sector, but at least they should have access to a very substantial market. It is, however, only 17 million tonnes on a hydrogen mass basis.

Back to shipping fuels. Since ammonia will be cheaper than methanol, as discussed, let’s be optimistic and say half of the volumes described above are replaced with ammonia, and a third of it is traded internationally. That would drive an additional 25 million tonnes of demand by hydrogen mass.

Japan’s big bet

Japan is betting that imported ammonia will be used to generate power. Its national decarbonization plan is based on retaining its coal-fired power stations, but fueling them with increasing proportions of ammonia – first 20%, then 50%, then 100% by 2050. So confident is it – and so keen to keep selling its technology internationally – that it is encouraging Vietnam and other South-East Asian countries to keep building coal-fired power stations. Will the bet pay off?

Let’s look first at ammonia made from green hydrogen. That means generating wind and solar power; using it to produce hydrogen (80% efficiency); making ammonia via the Haber-Bosch process (70% efficiency); liquefying it (90% efficiency); shipping it (90% efficiency); and burning it to generate power (45% efficiency). Your end-to-end efficiency will be an astonishingly poor 20%. Although it might be possible to improve the efficiency of each of stage, the tyranny of multiple process steps means your end-to-end efficiency is hard to budge.

What 20% end-to-end efficiency means is that the resulting power will cost five times as much as the original power – and that is before accounting for capital invested in all those process stages and maintenance. In addition, combustion of ammonia produces nitrous oxides – hazardous to health and powerful greenhouse gases in their own right.

Now, ammonia from blue hydrogen. You eliminate the electrolysis stage, so your end-to-end efficiency is a little higher at 26%, but you have the extra cost of carbon capture and sequestration, so the resulting power cost is going to be about the same. The real question, however, is why bother? Why not just ship the natural gas to Japan instead of ammonia – LNG has 1.7 times the volumetric energy density of ammonia, so you need fewer cargoes. Then you capture the CO2 at the other end, and either sequester or send it back to the point of origin on the same ships. You have the same climate impact, approximately the same cost of carbon capture and sequestration, but significantly greater efficiency and lower shipping costs.

The bottom line for ammonia as a fuel for power generation, whether co-fired or pure, is that no economy can be internationally competitive based on the resulting power prices. My estimates are in line with the more detailed modelling work undertaken by BloombergNEF: BloombergNEF found that 100% ammonia-fired power in Japan would cost around $260 per megawatt-hour in 2030 and $200 by 2050 – around double the cost of renewable energy.

The fact that Japan could generate large amounts of renewable energy – in particular, offshore wind – at much lower cost points to the role that clean ammonia could in fact play in the country’s power system: providing back-up. Bill Gates likes to quote Vaclav Smil on the three-day cyclones that hit Tokyo almost every year – which would shut down renewable generation and leave it short of 22GW of power. He laughs at the idea that batteries could fill the resulting gap, and he is correct to do so. However, the gap is only 1,600 GWh, which could be generated from a million cubic meters of ammonia – an amount that could be brought in on just four Q-Max-sized carriers.

So, while basing Japan’s economy on electricity generated from imported ammonia is an economic non-starter, storing a few million tonnes of ammonia and using it for long-duration storage looks a lot more realistic.

Conclusions and implications

This has been a long journey and we have covered a lot of ground. I want to leave you with a few conclusions by way of summary.

The only way to move hydrogen economically is as a gas, by pipeline. Forget liquid hydrogen: it will struggle to find any role in the future energy or transport systems because of its poor volumetric energy density and difficulties with handling. It will have no role at all as a traded commodity.

Ammonia will be traded and transported, primarily for use in fertilizer production, plus as a shipping fuel. It will not be imported to power bulk power generation, but will be imported and stored to deliver long-duration storage. Some LOHC might also be imported, but only where it is stored for resilience purposes.

Clean methanol will be made near to sources of cheap clean hydrogen and some of it will be shipped around the world for use as a chemical feedstock. E-fuels – whether methanol, petrol, diesel or kerosene equivalents – will not be shipped around the world in meaningful volumes because their cost will severely limit their uptake, with the possible exception of aviation.

Totting up the various future hydrogen trade flows covered here, it is clear that the Hydrogen Council/McKinsey figures of 660 million tonnes of clean hydrogen production and 400 million tonnes of long-distance transportation are out by a factor of at least three. In addition, given that China and India have only pledged net zero by 2060 and 2070 respectively, such flows that do materialize will take decades beyond 2050.

The implications reach far beyond the question of international trade in hydrogen and its derivatives. The prohibitive cost of long-distance imports means that energy-intensive industries will inevitably migrate to regions with cheap clean energy. It is inconceivable for any country to import iron ore from Australia or Brazil, hydrogen from Australia, the Gulf, Canada or Africa, and make steel at a globally competitive cost. Magical thinking will be no defense against de-industrialization.

Finally, it is worth noting that none of this calls into question the fact that clean hydrogen will be required to decarbonize certain sectors, which will eventually create more than 100 million tonnes per year of demand. Just as railway mania left the world with railways, electricity mania left the world with power networks, and the dot-com bubble left the world with broadband fiber, so hydrogen mania will leave the world with a lot of clean hydrogen.

The worry is that, along the way, we are going to waste huge amounts of money on the wrong use cases for hydrogen and the wrong infrastructure in the wrong places. Worse than wasting money, we will also be wasting time – and that is the one thing we don’t have. Let’s be smart.

Selah.

Michael Liebreich is the founder and senior contributor to BloombergNEF. He is also the CEO and chair of Liebreich Associates, founding managing partner of EcoPragma Capital and an advisor to the U.K. Board of Trade.

Source: BNEF

 

This is the sneeze

 From a Twitter thread by Michael Liebreich.  Liebreich was the founder of BNEF.

The share of BEVs plus plug-in hybrids in Germany jumped from 3.1% in 2019 to 13.6% last year. And the Tesla 3 only just made it into the top three models. 

Remember the sneeze? The first 1% takes forever; up to 5% is like waiting for a sneeze. Well, this is the sneeze:

Here is the sneeze, for those wondering what the hell I'm talking about: it's the point at which substitution curves suddenly accelerate.  Substitution curves: "The first 1% takes forever; 1% to 5% is like waiting for a sneeze – you know it’s inevitable but it takes longer than you think; then 5% to 50% happens incredibly fast. Clean energy is entering this period of rapid transformation.

In response, Wolf-Peter Schill, posted the monthly chart for 2020 which shows just how rapidly EVs and PHEVs  are penetrating the market.   As Liebreich says, 50% penetration is not far away.  2023?  And 75%?  2025?

Under a new president and administration, the USA  will accelerate the take-up of electric cars with tax credits; Europe is well on the way to 50% penetration; and China has an aggressive EV policy.  These giant markets will drive costs down the learning curve.  EVs will dominate sales by 2026 or 2027, globally. 

The challenge of China's de-carbonisation

Source: FT

Stopping burning coal is the single biggest step we can take to reduce emissions.  China is the single largest emitter, producing 28% of global emissions.  It is also the world's largest coal consumer, with more than 50% of the market.  So weaning China off coal is critical to the world's attempts to de-carbonise.  And the government, or at least the central government, knows it.

From IEEFA:

China’s “unprecedented challenge” to decarbonise its energy production could be met if the government is ambitious enough, researchers have argued.

A new report, partly written by the government-backed National Development and Reform Commission (NDRC), has outlined how phasing out coal power could help China meet its commitment under the Paris Agreement.

“Achieving deep decarbonisation and zero carbon in China’s power generation within the next 30 years or even earlier will be an unprecedented challenge,” said the report’s co-lead author Jiang Kejun, from the Energy Research Institute – part of the NDRC.

He said the report, which looked at 3,000 existing coal power generation units, “provides valuable information” for decision-makers hoping to achieve this lofty goal, particularly while China prepares its next five-year plan.

To achieve results compatible with limiting global warming to 2 degrees C – the commitment enshrined in the Paris Agreement – China would need to follow a “three-principle strategy,” the report argued. These principles are:

1. no new coal plant construction, 
2. rapid shutdown of older and inefficient plants (about one in five existing plants), 
3. a shift of coal generation from baseload to peak load in China’s power system (i.e. relying on it only during times of high power usage, rather than for supplying the minimum demands of the grid at any given time).

“[The report] shows that a sustainable coal power phase-out in China is possible, through rapid retirements of the low-hanging fruit and gradually reduced operating hours of the remaining plants,” Jiang said. “Well-designed policies can help lower the cost of coal power deep decarbonisation, contribute to a sustainable transition of existing coal plants, and reduce the potential impact on employment.”

The recommendations are all sensible, and given that unsubsidised renewables have now reached grid parity (i.e., their costs are now equal to or lower than the average wholesale price of electricity), likely to be acted upon.  If so, this will be very good news.  It will mean that China's emissions will peak.  China is already switching its car sales to EVs, with ambitious percentage targets for EV penetration.


From Michael Liebreich:

India and China alone have between them a pipeline of 280GW of new plants, bigger than the entire current U.S. fleet and equivalent to 15% of current global capacity. However, this does not begin to tell the full story.

First, what really matters is not capacity, but how much coal is actually burned. Over the past decade, capacity factors for thermal generation have been falling around the world, in China’s case to record lows. Globally – not that you would know it from the mainstream news – coal consumption in the power sector has been flat since 2012; preliminary figures for 2019 show a drop of around 3%.

Just this month it was announced that over half of the power plants operated by China’s Big Five state-owned utilities are running at a loss. The government has plans for up to one third of them to shut by 2021, removing 15% of the country’s coal capacity. As for India, despite its 85GW pipeline, on average it has commissioned less than 10GW per year for the past three years.

The world needs to cut its emissions by at least 1/3rd by 2030.  If China's emissions peak this year or next, that will be a key factor to making this possible.  China has no demented and depraved oil billionaires, and no Republican Party, to stop it transitioning.  And now renewables cost the same as or are cheaper than coal, the transition should start to build up steam.  As it were.

More from Michael Liebreich

From a Twitter thread by Michael Liebreich:

Now, let's talk about climate change, climate negotiations, the @IPCC_CH, and why we should be in a better place by 2030. First off, it's worth remembering what a hole we were in ten years ago. COP15 Copenhagen had just collapsed. My eldest daughter was the youngest attendee!

Copenhagen was framed around a fallacy: climate negotiations as a one-off prisoner's dilemma, so any solution means ceding power to transnational government to share out and enforce emission budgets. As I wrote in 2007, it's a repeated prisoner's dilemma. [A fascinating piece: read it]

At the time, I had not heard of Elinor Ostrom's work. She too had no time for the Copenhagen approach, proposing instead a "polycentric" approach, based on action at every level: local, regional, states, nations, businesses, individuals. Sounds like Paris!  

COP25 Madrid flopped, but the past decade delivered Paris: “Paris is not posturing. Paris is not the world saying it wishes it weren’t trapped in an abusive relationship with the fossil fuel industry; Paris is the world’s economy serving divorce papers.”

Over the past 3 years, the Paris framework has been progressively embedded into the political, social and business landscape around the world. Boris Johnson’s 2050 net-zero commitment? Paris. 77 countries committing to net zero? More Paris.

President Trump has, of course, capriciously initiated the process of withdrawing. However, its citizens, states, cities and businesses are doing an end-run around him, effectively honoring the deal without the support of the Federal government. Classy!

In Madrid the U.S. argued that it must be forever allowed to continue policing the ‘loss and damage’ provisions, so that they can never be used to seek compensation from fossil fuel producers. No sir! Once out, the U.S. loses its seat at the table.

One of the big mistakes of climate diplomacy of the past 40 years has been to treat it as an environmental issue, instead of what it is: industrial and trade policy. The U.S. is about to voluntarily abandon a vital diplomatic battlefield. Silly Donald.

Stakes are high for #COP26 in Glasgow next year. It will need to restore trust lost in Madrid, pass rules on international carbon credits and usher through the next set of Nationally Determined Commitments. No one better to trust than @Cop26President!

In many ways climate diplomacy will look very similar in 2030 to today: consensus around the need for action, a growing body of rules, an increasing level of ambition and commitment, but a high level of frustration at the inadequate rate of progress.

While climate diplomacy may still look similar in 2030, climate science will not. Sadly, we will have had to give up hope of keeping to 1.5C of temperature increase. But the catastrophism of the last few years will have passed too. Let me explain...

It turns out that the most catastrophic climate outcomes, ubiquitously described as baseline or business-as-usual by climate scientists, journalists and activists, are not where we are headed, but represent an extreme and highly implausible scenario.  To ensure different teams of scientists around the world produce comparable outputs, @IPCC_CH uses a standard set of scenarios or RCPs, with different levels of radiative forcing in W/m2  by 2100. Historically, the IPCC gave them all equal probability. 

For its 5th major Assessment Report in 2014, this changed. The most extreme scenario, RCP8.5, is the only no-mitigation scenario in the ensemble - the others all assume some level of mitigation. So it's hardly surprising people started using RCP8.5 [or 3.7 degrees C] as BAU ['Business as usual. RCP8.5 was never meant to be the BAU base case]

When RCP 8.5 was originally developed, it was described as "a relatively conservative business as usual case with low income, high population, and high energy demand." And that energy demand is met in RCP 8.5 by coal. Lots of coal. Lots and lots of coal.

At the time it was developed, in 2011, maybe RCP8.5 looked justified, because of recent surging emissions, driven by the industrialisation of China. But now the 7x increase in coal use per capita by 2100 in RCCP8.5 looks ludicrous. (HT @Peters_Glen)

In 2017 @jritch and Dowlatabadi showed why "vast expansion in 21st-century coal consumption should not be used to describe any plausible reference case of the global energy future." Basically there's not enough economically recoverable coal in the ground!

To reach RCP8.5 levels of radiative forcing by 2100, atmospheric CO2 would need to reach 1,100 ppm (315ppm in 1959, it's 411 ppm today). Extrapolating linearly gets to 540ppm. Adjust for recent acceleration in rate of increase, and you get about 650ppm.

What about feedbacks? The difference between 650ppm and 1,100ppm by 2100 would require the release of many hundreds of gigatons more CO2. There are no feedbacks I have found in the literature that can deliver this amount in the 80 years between now & 2100.

We need to get MUCH cleverer in thinking about feedback. As @jrockstrom says: "there are two time-scales that matter when it comes to climate change. One is the deployment time-scale, the other is the full impacts time frame, which unfolds over centuries."  And we do NOT want to push the buttons which start irreversible change.

In other words, it is legitimate to worry about feedbacks and tipping points, but NOT legitimate to model them using an implausible concentration scenario for 2100. Give unto 2100 what is 2100s! For century time horizons, Real Options probably beat the precautionary principle.

Just last week @hausfath and @jritch extrapolated the [in my view pessimistic] @iea CPS & SPS scenarios to 2100, and conclude "the world is on a path to warm around 3C above pre-industrial levels by 2100 under policies and commitments currently in place."

This is much closer to RCP4.5 than to RCP8.5. As they point out "this is a far cry from the 1.5C and 2C targets enshrined in the Paris agreements, but is also well short of the 4C to 5C warming in many “business as usual” baseline scenarios that continue to be widely used."

Don’t get me wrong. The world of RCP 4.5 is an ugly place, with warming of 2.0C to 4.5C by 2100. We absolutely must bend the arc towards the lower end of that range, or below. But it's not the 3.3 to 7.4C of RCP8.5, which generate most of the news stories.

If we have to act just as urgently, why does any of this matter? First, a robust coalition for climate action can only be built on bullet-proof science. When @IPCC_CH IPCC Assessment Report (AR6) appears in 2022, it cannot rest on implausible scenarios.

My comments:

• I don't have access to sophisticated climate models.  So I did a "back of the envelope" calculation about the likely rise in temperatures over the next 50 years.   Since the late 1970s, global temperatures have been rising by 0.2 degrees C every decade.  If we manage to cut emissions to zero by 2050, then temperatures will rise by another 0.6 degrees.   If we take longer, then the rise will be higher.  And even after we achieve zero emissions, the thermal capacity of the oceans will likely give us another couple of decades of rising temperatures.  In other words, another 0.8 degrees.
• The 1 degree which has taken place so far is bad enough; another degree would be exponentially worse.  Even if we don't see a 4 or 5 degree rise, things will still be very unpleasant.  Ask anyone living through Australia's current record heatwaves and bushfires.  All the same, 2 degrees is better than 4.
• The IEA's forecasts for the growth of renewables are always too low.  They reckon 2.7 degrees.  So the probablity is that it will be lower than that.
• The polycentric approach (individual, local, regional, national, companies, institutions) makes a lot of sense.  Despite denialism and denialists, as temperatures rise and as the effects of global heating/climate change become more serious, the pressure to act will intensify.  But if we wait for global collective decisions, nothing will happen.  We must all do our bit.  You could take an easy step—become vegetarian.  24% of global emissions come from agriculture, much of that from raising livestock to eat.  Choose a green electricity provider, but check first that its credentials are real—a utility which just buys carbon offsets is greenwashing.  Buy an electric car—they're going to get a lot cheaper.  Push your municipality, your state and province, your nation, to cut emissions as fast as they can.  And vote against denialist parties.  By acting on multiple levels we will prevent the global rise in temperatures from exceeding a (dangerous) 2 degrees by 2100.

Peak emissions closer than you think

Michael Liebreich is the doyen of energy change analysts.  He founded New Energy Finance which was bought by Bloomberg to become BNEF.  

I've taken extracts from this piece published on BNEF's blog.  (The emphases are mine)  If you don't want to read the whole piece, see my summary at the end.

I believe the new decade will see us hit peak energy-related greenhouse gas emissions and start to see a modest but meaningful decline. Just to be clear, we will not see the sort of decline demanded by the Intergovernmental Panel on Climate Change – a 20% cut by 2030 to keep temperature rises to 2C, a 45% cut to remain under 1.5C – but I would guess at a drop of around 5%.

Clearly that is not enough to put us fully on track to avoid appalling climate change impacts, and by 2030 we will have to admit 1.5C is out of reach. But it will be a game-changer: it will demonstrate to even the most pessimistic that we can bend the arc; it will end the feeling of helplessness and impending doom that has taken over our public discourse; and it will set us up for much more decisive reductions in the subsequent decades.

Optimism, therefore, but not without limits. It’s hard to be an unbridled optimist. Over the past decade, global emissions have risen by 15%. For one brief three-year period, between 2013 and 2016, they were flat – for the first time ever outside major recessions – but in 2017 they took off again, as the global economy boomed and China reverted to pumping cheap money into high-carbon infrastructure and building. Since then, emissions have been growing by around 1.2% per year.

[But,] while emissions grew 15% over the past decade, the global economy grew by 45%. On average, economic growth outstripped emissions growth by 2.4 percentage points per year.  [I.e, energy intensity fell by 2.4% p.a.] If that gap can be made to increase by just 1.4 percentage points, emissions peak, even in a growing economy. Increase it beyond that and we are over the hump: emissions will start to fall. Impossible pipe dream? Or something we will see in the course of the next decade?

First of all, the maths.  In 2017, a report by the World Resources Institute (WRI) showed that there were 49 countries, representing 36% of global emissions, which have already passed peak emissions [even though they have growing economies]. Almost the whole of the OECD is reducing its carbon footprint, even when you adjust for imports (something the ‘degrowth’ brigade pretend is impossible). The WRI expects a further eight countries, representing another 23% of emissions, to peak within the next decade.

Last week, in Paris, I attended the first meeting of the International Energy Agency’s Global Commission for Urgent Action on Energy Efficiency, of which I am a member. The Commission’s goal is to raise the rate of improvement in global energy intensity from its current 1.5% to 3% per year.

I have three main takeaways from the meeting: 1) energy efficiency is finally gaining recognition as a national priority in many countries, whether for climate or energy security reasons; 2) there is as much ‘low-hanging fruit’ today as there ever was; 3) there is a far better understanding of how to deliver improvements than a decade ago.

As we close out the decade, BNEF has concluded that around two-thirds of the world’s population now live in countries in which wind or solar are the lowest-cost ways of generating power. The world records for low-cost wind and solar are both now down to around $17/MWh. That is around a third of the cost of new gas-powered generation – even in the U.S., where there is a glut of cheap gas.  [Averages are of course higher, for both renewables and coal]

By 2030, I have no doubt whatsoever that the world record for low-cost onshore wind and solar will be below $10/MWh. It will probably be set in China, Morocco, Mexico or the Gulf states, who have been vying for leadership for the past decade. However, there is a chance it could be in India, Brazil, the U.S. or even Australia.

As we approach the final days of 2019, wind and solar are generating around 8.5% of global electricity. BNEF estimates that figure will be nearer 25% by 2030.

The biggest unanswered question, as renewable penetration grows, is whether the cost of managing intermittency will drop – with cheaper storage, growing demand-response capacity, business model innovation and smart policy design – as claimed by fans of renewables – or soar, as claimed by their opponents.
It’s a vital question, which will decide whether wind and solar can maintain their historical growth rates, or whether their penetration must soon saturate. All the main energy models are designed around the idea of renewable energy saturation: growth rates decelerating into the future – whether abruptly or slowly, but always markedly decelerating. The IEA’s central scenario, Stated Policies or SPS, has the combination of wind and solar reaching only 24% by 2040. BNEF’s NEO model, always more bullish, shows them at 39% in 2040 and 48% by 2050.

What if these models are wrong? What if learning, innovation and the co-evolution of demand-side industries continue to win the race against the physics of intermittency, and allow historical growth rates to continue for a few more decades?

Two decades ago everyone assumed that the cost of managing intermittency would soar after the first 5% of wind and solar entered the power mix; a decade ago we thought the inflection was 20%; now we know it is not this side of 40%. Modelling exercises around the world suggest that it is not until you reach 80% or more in any decently-connected grid that the cost of managing intermittency really starts to go vertical.  [But of course, by the time we get to 80% renewables, (a) storage costs will be much lower, and (b) overcapacity will be much cheaper]

To believe in a renewable energy singularity, the first thing to do is to extract all the latent flexibility in our current power systems, and then build more, in the form of power storage, demand response, long-distance interconnections and linkages with transport and heat. We’ll see a lot of that in the coming decade.

The second thing we need to do is learn to love overcapacity. As I said in a keynote in 2014, in a high-renewables system, overcapacity is not a bug, it’s a feature.

The average capacity factor of the world’s hydro plants is 42%; gas peaking plants 15%. Even so-called baseload coal plants run on average only 54% of the time. If technology is cheap, and demand or supply are intermittent, we overbuild. Wind and solar are no different.

Will we build many weeks’ worth of power storage, or hydrogen electrolysis, just to capture peak renewable electricity that would otherwise go to waste? In a word, no, because curtailment will be cheaper. Think about it: if your $20/MWh wind or solar suffers 33% curtailment, you know what happens? It turns into $30/MWh wind or solar – still half the price of power from any other source.

The third thing you would need to see if you want wind and solar to sustain their current growth rates is significant electrification of transport, (which I don’t think anyone doubts is on the cards – Daimler Benz clearly things so, for the first time in 135 years it is not working on the next generation of internal combustion engine) and heating (which, with global heat pump sales growing at 12% per year for the last decade, might finally be kicking off).

The fourth thing would be the electrification of industry and the generation of green fuels, be they hydrogen, ammonia or liquid fuels like methanol. It is hard to believe it was just 18 months ago that I wrote about this in Beyond Three Thirds: The Road to Deep Decarbonization, because there has been so much progress since.

BNEF’s seminal work on the cost of electrolysis suggests that green hydrogen (based on renewable power) will start to be competitive with brown hydrogen (from steam methane reforming of natural gas with no carbon capture) by 2030, and that by 2050 it will have a clear advantage. That means that, even in the absence of a carbon price, green hydrogen has the chance to eliminate the 5% of global emissions that currently result from fertilizer production and oil refining. A $20 carbon price would see it eat into the 2.2% of emissions from the global shipping industry. A $50 carbon price pushes green hydrogen into the 13% of industrial emissions from steel and concrete; and a $100 carbon price would take it into space heating, glass and other sectors. So the combination of cheap green hydrogen and a $100 carbon price will create an addressable market by 2050 of nearly 30% of global emissions. Neat.

Let’s talk about the fifth driver of a potential renewable singularity: batteries. By 2030, EV batteries will cost around $65/kWh at the pack level. [Assuming a compound 15% p.a. decline, $65/kWh will be reached in 2024] That’s $6,500 for the battery in a full-sized vehicle with a range of 300 miles; $13,000 gets you a 600-mile range – certainly bigger range than my bladder can handle. [And the batteries in small 'city cars' with 40 kWh will cost just $2600] 

All the pinch-points in the mineral supply chain will have been long ironed out, and by 2030, all end-of-life batteries will be recycled – if there are any.

Yes, you read that right. Solid-state batteries may or may not have hit the market, delivering four-times the energy density, and launching swarms of electric planes. But there will certainly have been continued progress in lithium-ion technology towards the “million-mile EV battery”, which can deliver 10,000 charge cycles. It will make possible either cars with 50-year lives, ubiquitous vehicle-to-grid business models, or second-use applications at scale – or all three. Mindblowing.

Oh, and by 2030, you will not even remember about range anxiety – the same way you don’t remember that there were once insufficient modems to connect to the internet, or insufficient bandwidth for online video. 

Those who doubt the value of renewable energy in addressing climate change always point to negligible impact so far. Even at 8.5% penetration into power demand – and after investment of $2.7 trillion – wind and solar have only reduced global emissions by only around 2.5% from where they would otherwise have been. They have so far failed to absorb growth in energy demand.

That is to miss the point. As leading energy economist Professor Michael Grubb has pointed out in Conditional Optimism: Perspectives on Deep Decarbonisation, the key clean technologies are growing according to the dynamics of logistic curves, penetrating into incumbent technologies. Professor Grubb uses lots of fancy economics to forecast what might happen next. I’ll paraphrase: in a logistic curve penetration, the first 1% takes forever; from 1% to 5% is like waiting for a sneeze –it is going to be explosive, you just don’t know when it will happen; 5% to 50% happens much faster than you think – that is when the restructurings and bankruptcies happen.

No single “sneeze” will wipe out fossil fuel use across energy and transport; It will occur sector by sector, country by country. Over the past six years, LED light-bulbs have gone from less than 5% global market share to over 40%; coal power in the U.K. from 40% to a couple of percent; plug-in vehicles in Norway from less than 5% to over 50%. In each case, there was a slow start, an agonizing wait, and then the sneeze. Bless you!

What does all this mean for coal consumption? According to Global Energy Monitor (formerly Coalswarm), in the final 2.5 years of this decade, global coal capacity grew by an average of 56GW or 2.8% per year – which hardly looks like a harbinger of peak emissions.

India and China alone have between them a pipeline of 280GW of new plants, bigger than the entire current U.S. fleet and equivalent to 15% of current global capacity. However, this does not begin to tell the full story.

First, what really matters is not capacity, but how much coal is actually burned. Over the past decade, capacity factors for thermal generation have been falling around the world, in China’s case to record lows. Globally – not that you would know it from the mainstream news – coal consumption in the power sector has been flat since 2012; preliminary figures for 2019 show a drop of around 3%.

Just this month it was announced that over half of the power plants operated by China’s Big Five state-owned utilities are running at a loss. The government has plans for up to one third of them to shut by 2021, removing 15% of the country’s coal capacity. As for India, despite its 85GW pipeline, on average it has commissioned less than 10GW per year for the past three years. This September, Prime Minister Narendra Modi announced a push for 450GW of zero-carbon generation by 2030.

In the EU, eight out of 28 countries have already committed to phasing out coal by 2030; it will be entirely gone in the U.K. by 2025.  Germany, having prioritized the closure of nuclear over coal to date, will be off coal by 2038. The EU’s Green Deal, announced last week by new President Ursula von der Leyen, included 35 billion euros of support for Poland and other countries to get off coal.

In the U.S., despite promises to end the so-called “war on coal”, more coal capacity has been shuttered under President Trump’s first term than during any three years of the Obama administration.  Every publicly-quoted coal company has gone through Chapter 11 since 2016, as has privately-owned Murray Energy, whose CEO, Robert Murray, wrote the blueprint for the president’s energy policy. Not one new coal plant has been built since 2015. None are being built today, and it looks like none ever will be again.

Of course, coal is used outside the electricity sector, notably in heating and industry. That source of demand looks likely to carry on increasing for a few years at least.

Before 2000, the orthodox view of oil demand (and energy analysts always default to orthodoxy) was that by 2030 it would grow to around 130 million barrels. By 2000, oil demand was still expected to grow forever, but it would reach only 120 million barrels by 2030. By 2010, the accepted wisdom was still endless growth, but only 105 million barrels of demand by 2030. See the pattern? Oil demand growth consistently undershooting the growth predicted by experts.

At no point did it cross the experts’ minds that maybe the same trends that they kept missing would see oil demand peak, and then start to fall. When I first suggested it in 2015, it felt like a transgressive act.

Today, there is not an oil company in the world that is not talking about peak demand. Even Saudi Aramco’s recent IPO prospectus predicted “a levelling-off around 2035”. BNEF expects demand from light and heavy vehicles to peak in 2030; this is one of the rare times I depart (slightly) from its view. I see peak road transport demand around 2025; add in the growing areas of air transport, shipping and petrochemicals, and I think we’ll see peak oil this side of 2030.

So far, you will notice I have barely mentioned policy. The picture I have painted is a bit like the IEA’s Stated Policies Scenario: these trends, which should see emissions from fossil fuels peak by 2030, are what I see happening even in the absence of significant further policy in favor of climate action.

But, of course, there will be further climate policy – and lots of it.

In the U.K., the new Johnson government is committed to achieving net zero by 2050. At this September’s Climate Action Summit in New York, 77 other countries, 10 regions and over 100 cities announced their intention to follow the U.K.’s lead. As I write this, the EU has just unveiled its Green Deal, which is going to enshrine a 2050 net zero target in law, as well as a plan to reduce greenhouse gases by “at least 50% and towards 55% by 2030, in a responsible way”.

In Canada, Justin Trudeau hung on to government, albeit not his parliamentary majority, in this year’s General Election. The country is therefore the first to implement the sort of tax-and-dividend scheme that could be a model for carbon pricing in political economies where new taxes are all but impossible to impose.

In the U.S., climate is a key battleground for the Democratic Party Primary, but what is more interesting is that Republicans with an eye on political life after President Trump are finally conceding they too need a climate policy.

Even the international climate negotiations should be expected to deliver some level of positive mood music over the coming decade, despite the potential withdrawal of the U.S. from the Paris Agreement and the failure of the latest COP conference in Madrid, as I describe in the sister-piece to this article, Climate Wars Episode IV – a New Hope for the 2020s?.

So there you have it – the reasons why I believe we will see peak fossil fuel emissions during the coming decade. 

The small inset chart shows atmospheric concentrations of CO2, the larger chart annual increases in CO2 concentrations.

RCP means representative concentration pathway.  RCP2.6 would be consistent with a 1 degree C rise in temps, RCP4.5 1.8 degrees C.  Liebreich's analysis suggests something between RCP2.6 and RCP4.5.  If emissions only peak in the late 2020s, policy shifts as panic about climate change increases could lead to a much steeper decline thereafter.

To sum up:

• Renewables are going to get insanely cheap.
• Thermal coal demand will peak before 2030
• Peak oil is within sight
• The green hydrogen/methane economy will be cost competitive by 2030, and at $100/tonne carbon price, will replace 30% of emissions
• energy saving still has plenty of low hanging fruit.
• renewables overcapacity will be a design feature in electricity generation.
• CO2 emissions will peak before 2030, and by 2030, will be 5% lower than they are now

I've made a lot of these points before.  Liebreich makes them better, and with greater authority.