To keep global warming under check, clean energy technologies must realize their full potential
Technologies have a critical role in the global goal of keeping climate change under control. One major way they do this is by helping reduce the gases causing our planet to warm up. For instance, clean energy technologies such as solar and wind technologies have 20 times lower lifecycle emissions than electricity from a coal-fired power plant. Simply put, this lower number means that if renewables power your home, you can use the same amount of electricity and cause 20 times less harm to the planet. Isn’t that great?
These clean energy technologies must be rolled out on a larger scale in different parts of the world to realize their full potential. Over the past year, the International Energy Agency has released a series of useful reports to assess the status and identify gaps. Based on these reports, it is useful to present a synopsis of these technologies and assess the gaps that need to be addressed to scale them up.
1. Low Emissions Hydrogen
Low emissions hydrogen is produced from a process of water electrolysis in which electricity is generated from clean sources and is used to split water into hydrogen and oxygen. This source is getting much interest because of its ability to be used in industries where emissions are difficult to bring down, such as chemicals, steel and cement.
Gap:
New sources of demand are needed, not just from existing applications. Although there has been significant improvement in the investments in hydrogen in the past 2-3 years, with the world’s largest electrolyzer facility being ten times larger now than it was in 2021, much of the hydrogen is planned to go into existing applications where hydrogen can be integrated with limited modifications, such as in fertilizer or in chemicals like ammonia. While this approach is okay to start with, the International Energy Agency recommends creating demand in new applications, or else there could be situations of supply outstripping demand. New uses of hydrogen use can include aviation and marine fuel, power generation, and road transport, among others.
2. Renewables
Renewable energy, as the name suggests, is power generated through natural processes that are continuously replenished over a period of time. Two of the most common forms of renewable energy are solar and wind. Solar energy harnesses the sun’s power, while wind energy captures the wind’s kinetic energy using turbines to generate electricity. During COP 29, leaders set a target to triple renewable energy by 2030 capacity.
Gap:
Although growth in renewables gives reasons to be optimistic, there still is a gap in deployment. There is an urgent need to simplify, and fast-track permits to deploy renewables, which means scaling up their use in distribution and powering homes. As per the IEA, the time required to obtain permits ranges from one to five years for ground-mounted solar projects, three to nine years for onshore wind, and nine years for offshore wind. In Europe today, around 60 GW of onshore wind capacity – four times the capacity commissioned in 2022 – is held up by various permitting procedures.
3. Electric Vehicles
As the name signifies, they are vehicles that are mainly powered by electricity. Similar to renewables, the growth story of electric cars has been promising. In just ten years, the stock of electric vehicles has grown 40 times, from just under half a million to 40 million between 2013 and 2023.
Gap:
There is a need to expand EV to different categories of transport in emerging markets. Just 3 countries: China, Europe and the United States accounted for nearly 90% of the electric sales combined in 2023. While sales in emerging markets are increasing, they remain low, according to the IEA’s EV Outlook 2024. There are positive stories from some emerging markets, such as those from India, where electric car sales increased by 70% year on year – supported by government policies– yet EVs were only 2% of car sales. On the other end of the spectrum is China, where more than one in three new car registrations were electric in 2023. One reason for the slow uptake in emerging markets could be that personal cars are not the most common means of transportation, especially compared to shared vans, minibusses or 2-3 wheelers. The electrification of different categories of means of transport could be the way to electric transport in such countries.
4.Carbon Capture Storage
Carbon capture storage is a technique that involves capturing carbon dioxide —a major greenhouse gas that contributes to warming—at its source, such as power plants or factories, and transporting it to a storage site. Unlike the success story of renewables and electric vehicle vehicles, carbon capture storage has largely not met expectations. There are only 40 operational CCUS projects globally, with approximately 25 under construction and over 300 in various planning stages, according to a recent report, Global Status of CCS 2023.
Gap:
There is a need to build greater confidence in the ability of CCS to operate at scale. High costs are one of the key reasons why they have not been scaled as much. The cost burden is heavier if almost entirely borne by one project developer.
A hub model to diversify risk is one of the IEA’s recommendations to make this technology scale up faster. The shared transport and infrastructure help in reducing costs. Increasingly, more and more CCS facilities are being planned along the hub model, with over 100 storage hubs in development, mainly in Europe and North America. Countries like China could benefit from this kind of shared model, as per the report, as over 90% of emissions from refiners like cement and steel are within 30 km of large industrial hubs.
5.Smart Grids
Smart grids are electronic networks that use digital technologies to manage the supply and demand for electricity. What makes them smart is that they use data and automated controls to optimize the balance between energy supply and demand, reducing losses and enhancing grid reliability.
Gap:
Investments in emerging markets are far lower than required. Countries such as India, Cambodia, and Thailand have well-designed plans for smart grid infrastructure. However, at the aggregate level, the share of investments in emerging markets (excluding China) has fallen based on IEA’s assessment, a worrying trend, as that is where a large part of future electricity and energy demand is. It stood at about 2 billion USD in the past five years, while advanced economies spent over 10 billion annually. In a report on Unlocking Smart Grid Opportunities in Emerging Markets, the IEA offers a range of recommendations such as developing a roadmap at the national level and creating space for different investment actors in the value chain.