Nilar Industry Highlights – Stepping Back Emissions to Step Forward

Stepping Back Emissions to Step Forward

The Paris Agreement marked a turning point; there was widespread recognition that global warming was increasing too quickly, and that expeditious CO2 emission reduction was imperative. The goals set from country to country were ambitious and aggressive, but they reflect the urgency of the situation and the desire to improve. Globally, CO2 has risen approximately 20 ppm per decade since 2000; for perspective, that is ten times faster than the sustained CO2 rise during the prior 800,000 years. Emissions at these levels has caused a rapid increase in the global average surface temperature, as shown in this figure compiled by the Intergovernmental Panel on Climate Change (IPCC) of the United Nations.  Measured relative to the “pre-industrial period”, the temperature reached a 1°C change by 2017, with an additional half degree projected to occur within less than 25 years. Any temperature increase can be linked to multiple affects to humans and nature and the ambitions of the Paris Agreement has been to keep the temperature well below 2°C while also adapting to the inevitable 1.5°C world.

Fossil fuels have been one of the main drivers of greenhouse gas emissions. With the many proposed pathways to remain below 1.5°C, the one consistency is that coal needs to be phased out. There are devastating effects on public health and the environment from mining and burning coal in addition to its effects on the global scale. The emissions specific to coal need to drop significantly by 2030 to coincide with multiple other changes in order for the 1.5°C goal to even be feasible. Referencing the IPCC Report on global warming, Carbon Brief compiled all the proposed scenarios to achieve 1.5°C through fossil fuel reduction in the figure below. According to this figure, coal emissions will need to fall by 67-78% this decade.  The dotted line represents the expected emissions without any new intervention.

In general, many areas around the world are pledged to phase out of coal and there has already been progress. In the middle of 2020, there are officially three countries within Europe that have become coal free through the shutdown of their remaining coal power plants. Belgium initiated the trend in 2016, with Austria and Sweden following behind.  According to the Europe Beyond Coal campaign, there are now 10 countries within Europe that are coal free, with thirteen others having announced phase-out plans for coal by 2030.  Other European countries are still working out ideas and planning legislation but may join these commitments.

One of the largest contributors to coal emissions is China, responsible for 28% of the global emissions. In September 2020, they committed to reaching their emission peak in 2030 and move towards carbon neutrality by 2060. In China, coal consumption had declined from 2013 to 2017, but then trended upward as the government tried to stimulate industrial growth. The pandemic did slow this growth temporarily, but the bounce back in the second half of the year led to CO2 emissions from energy production, cement making and other industrial uses that were 4% higher than the 2019. Despite this, the announced strategy is monumental, and China’s consequent five-year plan will lay out the complete transformation of the Chinese economy needed to achieve the necessary economic, industrial and environmental changes. China is already a leader in the manufacture of clean energy technologies, which may be an instrumental factor in the transition.

As coal is phased out and renewable energy systems increase, there is a need for a stability for the grid.  Coal served as a source for steady power generation, with the ability to guarantee supply. It is cheap and, with its maturity, involves well understood technology making it a formidable supply. In the short term, combined cycle gas turbines are a realistic alternative that can fill the gap at lower cost and lower CO2 emissions. However, to align with the ambitious and aggressive international goals for expeditious CO2 emission reduction, renewable sources will need to address the shortcomings. Renewable sources are plagued with their intermittency, so energy storage is essential to help fill in these much-needed roles.

Coal had been a stabilizing force for the wholesale and balancing market prices due to its steady generation. To avoid the inevitable volatility in these prices with increased renewable penetration, energy storage can be used for wholesale arbitrage and balancing. Storage time shifting will also allow predictable power generation profile to better align with the typical energy demand profile. The flexibility and dispatchability of energy storage will be the key to a full coal phase out. Furthermore, there is an opportunity here to push sustainable energy sources forward through forward-thinking policies and regulations, which can lead to much-needed job creation.

At Nilar, we see these changes not only as a step forward for the environment but also as a step towards the economic recovery that is urgently needed globally. As emissions are reduced, there will be an increased effort in recyclability and designing towards a circular economy, which we embrace in our battery development. As new systems are implemented, there will be continuous innovation towards improving performance and efficiency. Ultimately, energy storage will be one of the building blocks to the future.