How to Decarbonize the Global Electric Grid
How to Decarbonize the Global Electric Grid
25% of global emissions come from generating electricity, making decarbonization of the electric grid one of the biggest hurdles to reaching net zero.
1882 was the year Thomas Edison built Pearl Street Station in New York. The station provided direct current (DC) electricity to nearby homes and businesses. Sir Charles Parsons in the UK and George Westinghouse in the US began experimenting with alternating current (AC). That’s because DC has the drawback of substantial electricity losses when transmitted over long distances.
The 1900s was the time of the industrial revolution when factories sprung up within and around cities to manufacture goods. Electricity became necessary to run these plants, and AC electric grids expanded. This was when engineers like Nikola Tesla and Mikhail Dolivo-Dobrovolsky revolutionized electricity generation and the first transformer was made.
Despite an exponential increase in electricity demand, rural areas were still electricity-deprived. In 1935, the United States founded the Rural Electrification Administration (REA), which helped expand electricity infrastructure in rural areas. Similar administrations formed across the globe, and 1920-1940 became the phase of expansion of electricity to rural areas.
As power grids expanded, the need for more efficient long-distance transmission grew. Substations allowed the interconnection of regional grids, creating national and international networks: this increased power grid reliability and the ability to transfer electricity across large distances.
In the 1980s and 1990s, many countries began deregulating their electricity markets, allowing competition among companies. This market liberalization aimed to promote efficiency and drive down consumer electricity prices.
In the 21st century, climate change has become the focus of many, and governments are working on finding solutions to integrate renewable energy sources into their electric grids. The environmental concern has led to the development of smart grids, which use advanced information and communication technologies to balance supply and demand, optimize energy usage, and manage distributed energy resources.
Why Do We Need to Decarbonize Power Grids?
1. Non-Renewable Resources Generate The Majority of Electricity
Non-renewable sources - gas and coal, generate more than 50% of electricity worldwide.
Relying blindly on fossil fuels and exploiting them has several adverse effects:
Extracting, transporting, and burning fossil fuels is the main reason for environmental destruction, pollution, and release of greenhouse gases.
The basis of today’s economy is fossil fuels, and hundreds of thousands of jobs rely on their extraction and use. This dependence makes economies vulnerable to fluctuations in fossil fuel prices and geopolitical tensions that can disrupt supply.
Health issues come from air pollution caused by burning fossil fuels, including respiratory and cardiovascular diseases. By transitioning to clean energy sources, the world can improve public health outcomes and reduce the burden on healthcare systems.
2. Greenhouse Gas Emissions Continue to Grow
The increase in the emission of greenhouse gases is due to two main reasons:
Increased fossil fuel dependency
Increased deforestation due to the rise in population
The main side-effect of higher emissions is increased global temperature, causing numerous environmental changes that disrupt our lives and ecosystems all over the planet. The best way to reduce the CO2 emission rates is by accelerating the shift towards renewable energy, such as solar, wind, and hydroelectric power.
3. Enhancing Energy Security
Enhancing energy security through a diversified and decarbonized energy mix is essential for reducing the risks associated with fossil fuel dependency. By diversifying energy sources and transitioning towards cleaner alternatives, countries can achieve greater stability, economic growth, and environmental sustainability.
How to Decarbonize the Global Electric Grid
Step 1: Reach 50-60% Decarbonization Through the Expansion of Renewable Energy
Achieving 50-60% decarbonization of the power system by 2040 can be accomplished with minimal additional investment, as solar and wind power and storage costs have dropped significantly. Solar-plus storage can ensure a steady power supply, and the complementary nature of solar and wind energy helps manage intermittency in markets with both resources. This level of decarbonization would not significantly impact the power system's performance or the utilization of fossil fuel plants, and little new transmission infrastructure would be required. The power system would undergo minimal changes to reach 50-60% decarbonization.
Step 2: Reach 80-90% Decarbonization With Better Energy Storage
We'll have 80-90% decarbonization of the power system by 2040. No new technologies are needed, but longer storage periods and tighter demand management, such as active building heating and cooling management. Some markets may need new transmission interconnections to pool renewable assets and share baseload resources. Fossil fuel plants will operate less (20-35%) but remain available when renewables cannot meet demand.
Step 3: Reach 100% Decarbonization With New Tech and Carbon Capture
Achieving 100% decarbonization of the power system by 2040 is complex and could cost 25% more than the lowest-cost option. The focus will be on filling longer-duration gaps. Some existing technologies that could help build a 100% decarbonized power system include:
Biofuels: Expensive and limited in supply, they can serve as part of the solution in most cases.
Carbon Capture, Use, and Storage (CCUS): Proven but expensive, it requires technological improvements and scale efficiencies. Best suited for highly interconnected markets.
Bioenergy Carbon Capture and Storage (BECCS): A relatively new technology generating negative emissions. There are uncertainties regarding the scalability of biomass and the extent to which retired coal plants can be converted into BECCS plants.
Power to Gas to Power (P2G2P): The process enables long-duration storage but is expensive and inefficient. Its flexibility could help integrate intermittent renewables if there's demand for clean gas outside the power sector.
Compared to 80-90% decarbonization, for 100% decarbonization, fossil-fuel-plant utilization would need to fall sharply (to 4-6%). Each region must get its net carbon emissions to zero using biofuels, P2G2P technology, or additional offsets.
Progress So Far
1. Lower Emissions
In just 15 years, the US power sector has significantly reduced emissions, with 2020's direct power-sector CO2 emissions at 1,450 MMT, 52% lower than the 2005 projection by the US Energy Information Administration (EIA). The 2020 results were influenced by the COVID-19 pandemic, which led to a 4% reduction in electricity demand compared to 2019. In 2019, emissions were 46% lower than EIA’s earlier projections, and the post-pandemic emissions (2020) were 40% less than the emissions in 2005. This demonstrates that the US power sector has made considerable progress towards decarbonization.
2. Advancement in Technology and Federal Policies
Policy, market, and technology factors have driven emissions reductions in the US power sector. Electricity demand in 2020 was 24% lower than projected due to economic changes, sectoral shifts, and energy efficiency improvements. Thanks to technological advancements and supportive policies, wind and solar generation exceeded expectations, delivering 13x more energy than projected. Renewable energy supply, including hydropower, biomass, and geothermal, was 79% higher than projected. Additionally, the coal-to-gas fuel switch played a significant role. Natural gas generation increased rapidly due to the shale gas revolution and differences in fuel prices compared to projections.
3. Lower Health and Climate Burden
The positive effects of reduced electricity supply on climate and health are significant. Climate damages from power-sector carbon emissions in 2020 were $110 billion, less than half of the $229 billion projected by EIA. Health costs were reduced by over 90%, from a projected $419 billion to $34 billion, due to lower coal generation and stricter emissions regulations. Premature deaths from power-sector air pollution in 2020 were just 8% of the projected number under the business-as-usual trajectory. Overall, the social cost of power supply in 2020, considering electricity bills, climate damages, and health impacts, was 44% lower than in 2005 and 52% lower than projected for 2020.
Present and Future
Tech Needed and Being Developed to Decarbonize Electric Grid
1. Renewable Energy Generation
Solar photovoltaic (PV) panels: Harnessing energy from the sun to produce electricity
Wind turbines: Generating electricity by converting the kinetic energy from wind
Hydropower: Producing electricity from the gravitational force of falling or flowing water
Geothermal energy: Harnessing the Earth's heat to generate electricity
Biomass and bioenergy: Converting organic matter into electricity and heat
2. Energy Storage Systems
Battery storage: Storing energy from renewables or off-peak periods in lithium-ion, solid-state, flow batteries, or other advanced battery technologies
Pumped hydroelectric storage: Storing energy by pumping water uphill into reservoirs and releasing it during peak demand
Compressed air energy storage: Storing energy by compressing air into underground caverns and releasing it to generate electricity
Thermal energy storage: Storing heat or cold in materials like molten salts, concrete, or ice for later use in generating electricity
3. Grid Modernization and Smart Grids
Advanced grid management systems: Utilizing digital technology and real-time data to optimize grid operations, maintain stability, and balance supply and demand.
Demand response programs: Encouraging customers to reduce or shift their electricity use during peak demand periods.
Microgrids and distributed energy resources: Creating smaller, localized grids with diverse energy sources that can operate independently or in conjunction with the main grid.
Grid-scale energy storage: Large-scale deployment of energy storage systems to stabilize the grid and support the integration of intermittent renewable energy sources.
4. Power-to-X Technologies
Power-to-gas: Converting excess electricity from renewables into hydrogen or other gases, which can be stored and used later for electricity generation or in other sectors like transportation and industry.
Power-to-liquids: Using excess renewable electricity to produce synthetic fuels or chemicals.
5. Advanced Nuclear Power
Small modular reactors (SMRs): Developing compact, factory-built reactors with improved safety and cost-efficiency.
Advanced reactor designs: Researching and developing new reactor technologies, such as molten salt reactors, high-temperature gas-cooled reactors, and fusion energy, that offer increased safety, efficiency, and reduced waste.
6. Carbon Capture, Utilization, and Storage (CCUS)
Carbon capture: Capturing CO2 emissions from fossil fuel-based power plants and other industrial sources.
Utilization: Converting captured CO2 into valuable products like chemicals, fuels, or building materials.
Storage: Safely and permanently storing captured CO2 in geological formations.
Policy changes needed
1. Phasing Out Fossil Fuel Subsidies
Phasing out fossil fuel subsidies involves reducing or eliminating financial support provided by governments to the production, consumption, and distribution of fossil fuels, such as coal, oil, and natural gas. Redirecting these subsidies to clean energy alternatives and energy efficiency improvements can accelerate the transition to a low-carbon energy system.
2. Implementing Carbon Pricing Mechanisms
Implementing carbon pricing mechanisms is a critical strategy for incentivizing the reduction of greenhouse gas emissions and promoting investment in cleaner technologies. Carbon pricing mechanisms, such as carbon taxes and cap-and-trade systems, assign a cost to carbon emissions, making it more expensive for businesses and individuals to emit greenhouse gases. This encourages the adoption of low-carbon alternatives and drives innovation in clean energy solutions.
3. Investing in Renewable Energy and Clean Technologies
Investing in renewable energy and clean technologies is crucial for accelerating the transition to a low-carbon energy system and decarbonizing the electric grid. Increasing public and private investment in research, development, and deployment of clean energy technologies, such as renewable generation, energy storage, advanced nuclear power, and carbon capture and storage, can help drive innovation, reduce costs, and improve the performance of these technologies.
4. Strengthening Grid Infrastructure
Strengthening grid infrastructure is essential for facilitating the transition to a low-carbon energy system and decarbonizing the electric grid. Upgrading and modernizing the electricity grid enables the integration of a higher share of renewable energy sources, increases energy efficiency, and improves the overall resiliency of the grid. Investing in grid infrastructure ensures a reliable and secure electricity supply while supporting the large-scale deployment of clean energy technologies.
5. Encouraging Distributed Energy Resources and Microgrids
Support the development and deployment of distributed energy resources (DERs), such as rooftop solar panels, small-scale wind turbines, and microgrids that can enhance grid resilience and flexibility.
If you enjoyed this article, share it with your network and subscribe to Warming Up to Climate Tech. This publication is brought to you by Inbound Growth Co - content for climate-focused brands.