Key Skills for Corporate Transition Session 4 PDF

Key Skills for Corporate Transition Session 4 By Sophie Chlela – 20/11/2024 Part 1 Energy systems and climate change What is an energy system? Climate change mitigation. Studying the long-term transition. 2 KEY...

Key Skills for Corporate Transition Session 4 By Sophie Chlela – 20/11/2024 Part 1 Energy systems and climate change What is an energy system? Climate change mitigation. Studying the long-term transition. 2 KEY DEFINITIONS AND CONCEPTS ▪ Energy system: supply energy services to end-users. Amenities: Heating, lighting, ▪ Components : production, conversion, delivery, and use of energy. transportation, and industrial processes ▪ Scope: ✓ Local to Global. ✓ Physical infrastructure and societal elements. ▪ Efficiently deliver the services, maintaining a balance 1. Electrification 2. Reduced fossil fuel use between supply and demand. 3. Integration of carbon ▪ Net zero energy systems. removal technologies 3 ENERGY AND ELECTRICITY Global Energy production and consumption in EJ 4 Source: IPCC Technical Summary of AR6, WG3 ACHIEVING NET ZERO EMISSIONS What does it mean? The PA article 4.1 “as to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century basis of equity, and in the context of sustainable development and efforts to eradicate poverty.” Riahi et al, 2021, Nature Climate Change 5 CLIMATE COMPLEXITY How does the carbon move through the Earth system? Largest emissions coming from ▪ Carbon flows between the atmosphere, biosphere, and fossil fuels combustion ocean. ▪ Land biosphere emissions: ~550 Pg CO₂/yr. ▪ Land biosphere removals: ~560 Pg CO₂/yr. Change in Global Surface Temperature as observed and simulated FF= Fossil fuels, LUE = Land Use Emissions Source: NASA ARSET based on NOAA, 2021 Source: AR6 WGI, IPCC, 2021 6 ANTHROPOGENIC ACTIVITIES ▪ Human activities from different sectors causing climate change and air pollution. ▪ Greenhouse gases presenting varying Global Warming Potential (GWP). ▪ Global emissions of the six Kyoto Protocol GHGs, including international shipping and aviation Source: IPCC, 2022 7 INTERNATIONAL COOPERATION 30+ years of climate change negotiations – Global awareness of the importance of taking charge of and integrating climate issues into all economic and social development policies – Evolution of the political and geostrategic environment of the world Transition to a low carbon and sustainable energy future – GHG mitigation strategies → Decarbonization – Technological and regional impacts of climate policies – Dependent on economic, political and geostrategic interests 8 THE MAJOR ISSUES IN NEGOTIATIONS Loss & damage Mitigation Adaptation Responsability Transparency Skills building Common but Monitoring, Reporting & Capacity building differentiated Verification (MRV) Finance Technology transfer 9 WHAT IS NEEDED? Being the top emitter of emissions, the energy sector is being/has to be transformed. There is not one solution to do so, but rather a mix between technologies, policies and change of behavior from all parts of the economy. ▪ How does this sector reduce its emissions in terms of solutions (renewable energy, energy efficiency, carbon removal)? ▪ What does the policies in the energy sector tell us? ▪ What insights arise when sustainable development is considered? 10 THE MAIN ACTIONS AND SOLUTIONS Source: Figure SPM.7, IPCC, WG3 (2022) 11  ELECTRIFICATION’S PLACE ▪ The production phase of the energy system, the globally ongoing turn to renewable energy sources acts as a major catalyst of electrification. ▪ The transition to renewables promotes energy independence and creates green jobs to boost the economy. CO2 emission reduction per year and per action for the Stated Policies Scenario of the IEA. 12 Source: IEA HOW FAST WILL CLEAN ENERGY TRANSITIONS UNFOLD? Annual energy and electricity demand growth in %, historical and in the Stated Policies Scenario, 2010-2035 560 gigawatts (GW) of new renewables capacity added in 2023. But challenges remain. Heatwaves, efficiency policies and the rise of artificial intelligence (AI) might affect electricity demand. Source: World Energy Outlook, IEA (2024) 13 TECHNOLOGIES FOR ELECTRICITY PRODUCTION 14 Source: Lazard, LCOE+, 2023 THE ECONOMICS OF ELECTRICITY Levelized Costs of Electricity (LCOE) is an indicator of cost-effectiveness 𝐼𝑡 +𝑀𝑡 σ𝑛 𝑡=0 𝑡 (1+𝑟) LCOE = 𝐸𝑡 σ𝑛 𝑡=0(1+𝑟)𝑡 n the plant lifetime t year, t=0 start of the plant construction 𝐼𝑡 the investment expenditures in year t Mt are the running costs (fixed and variable) 𝐸𝑡 is the electricity generation in kWh in year t r discount rate 15 DECREASING COSTS OF WIND AND SOLAR Cost increase in PV utility scale: A 34% hike in France and Germany, for example, while Greece saw an estimated 51% cost increase driven by rising PV module and commodity prices at the end of 2021 and into 2022. Some of this variability represents the normal variation in individual project costs, but it is clear commodity and labour cost inflation had a significant impact on some markets. Source: IRENA, 2023 Source: Lazard, LCOE+, 2023 16  17 By Nikos Kopidakis - National Renewable Energy Laboratory (NREL), Golden, CO, Public Domain, https://commons.wikimedia.org/w/index.php?curid=126894974 UTILITIES INDUSTRY AN INTRICACY OF MARKETS AND REGULATION 18 CURRENT SITUATION AND FUTURE PATHWAYS Socio-economic implications ▪ Income and Wealth Distribution. ▪ Consumer Behavior and Preferences. ▪ Institutional and Policy Factors. ▪ Environmental Awareness and Concerns. ▪ Economic Development and Energy Consumption. https://doi.org/10.1016/j.gloenvcha.2015.01.004 19 EXAMPLE OF ENERGY MIXES France Total Energy Supply by source in 2021 United States Total Energy Supply by source in 2021 For the Electricity mix: Rte eCO2 mix website ▪ France emissions: 260.57 MtCO2 https://www.rte-france.com/en/eco2mix/power-generation-energy- ▪ USA emissions: 4257.63 MtCO2 source Source: Data from IEA Energy Statistics, 2023 20 EXAMPLE OF ENERGY MIXES China Total Energy Supply by source in 2020 Brazil Total Energy Supply by source in 2020 ▪ China emissions: 10053.32 MtCO2 ▪ Brazil emissions: 386.01 MtCO2 Source: Data from IEA Energy Statistics, 2023 21 ANOTHER EXAMPLE Costa Rica Total Energy Supply by source in 2021 But the electricity generation mix: fully renewables ! ▪ Costa Rica emissions: 6.6 MtCO2 Source: Data from IEA Energy Statistics, 2023 22 ENERGY EFFICIENCY Improving energy efficiency is a key strategy in sustainable energy management and environmental conservation. 𝐸𝑛𝑒𝑟𝑔𝑦 𝑜𝑢𝑡𝑝𝑢𝑡 𝜂= 𝑇𝑜𝑡𝑎𝑙 𝑒𝑛𝑒𝑟𝑔𝑦 𝑖𝑛𝑝𝑢𝑡 Energy star and Efficiency standards, building design, behavioral changes, renewable energy systems… Industries Transportation 23 MEASUREMENT OF ENERGY EFFICIENCY Smart meter deployment decisions in Europe following Global energy intensity improvement by sector in the Net Zero Scenario, 2000-2030 the cost-benefit analysis (CBA) recommended by the European Commission (2012/148 / EU) energy per unit of GDP Source: Ecofys, 2018 Source: IEA, 2023 24 TRANSITION AND INNOVATION Energy storage types By Daniel Williams1978 - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=68489756 25  This Photo by Unknown Author is licensed under CC BY- ELECTRIC VEHICLES ND Global electric car stock, 2013-2023 Different types of chargers Slow Chargers: Slow, better for battery health. 3 to 4 amps: 12hours Fast Chargers: Fast, convenient. 20 amp charger: 2-4 hours Smart chargers: Monitor battery voltage, temperature, and charge state in real-time PHEV= Plugin hybrid electric vehicle 26 BEV= Battery Electric Vehicle CRITICAL MINERALS DEMAND FOR THE ENERGY TRANSITION Source: IEA 27 CARBON DIOXIDE REMOVAL APPROACHES 28 Source: State of CDR, 2024 BIOMASS FEEDSTOCKS Biomass: organic matter derived from photosynthesis (absorption of atmospheric carbon dioxide by plants). It includes: Arable crops Wood Primary waste (straw, forest residues, sawdust, grass clippings, press clippings, etc.) Organic waste from urban activities (municipal waste, biosolids from wastewater treatment) or from livestock (manure) Algae (macro- and micro-) ✓ Bioenergy represents around 60% of the total renewable energy in the EU in 2019. ✓ Stabilization of carbon in the forests and soils. ✓ Energy Security and Sustainable development. 29 BIOENERGY CARBON CAPTURE AND STORAGE Biomass supply costs are affected by: Estimated Levelized Cost of Electricity ▪ productivity or yields per hectare, ▪ Transportation (distance from roadside), ▪ Fertilizer additions, ▪ Processing, harvest cost etc… Carbon capture costs adds $52/MWh to electricity generation costs Costs of BECCS: 100 – 200 US$/tCO2 30 DEFINING NATURAL CLIMATE SOLUTIONS (NCS) Responsible Management of land Conservation agriculture, (Griscom et al. 2017) agroforestry, biochar, etc… Avoid emissions Protect Manage Reforestation, coastal Land-based solutions involve different sectors: Restore wetland restoration Forests and ecosystems Agriculture Energy Global mitigation potential across ecosystems (cost-effective potential achieved at