Global Energy Innovations Are Essential to Meeting Paris Climate Goals

The 2015 Paris Agreement on climate change was hailed as a triumph of multilateral diplomacy. From 2020, when it replaces the expiring Kyoto Protocol, it will shape energy policies around the globe for the rest of this century. It will require global energy innovations at all levels. The implications for humankind—and for how societies and economies are powered—are profound.

Energy systems need to undergo a fundamental metamorphosis, way beyond the transitions that are visibly playing out today.

Reaching for the Sky

For an intriguing glimpse into what such a future world might look like, consider a scenario from Shell, the international oil and gas company, called Sky.

Shell has been publishing long-term energy scenarios for decades. However, its latest Sky scenario for the first time addresses the central target of the Paris Agreement—to limit global warming to "well below 2°C above pre-industrial levels." Shell says that the transformations needed will require "the deployment of disruptive new technologies at mass scale within government policy environments that strongly incentivize investment and innovation."

The Paris Agreement calls for "a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases (GHGs) in the second half of the century." Shell has therefore come up with one possible pathway to achieve this goal of net-zero emissions from energy by 2070: the electrification of other fossil-fueled sectors, such as transport.

An Electrifying Prospect

Many organizations that have examined the implications of the Paris Agreement believe that even the achievement of a zero-emission electricity system would be nowhere near enough. All energy-consuming sectors will need to be rapidly decarbonized.

Transport is expected to remain heavily dependent on liquid hydrocarbon fuels for decades, so, along with the growth of electric vehicles, biofuels will need to play a growing role. In the building sector, homes and businesses will need to move away from the use of natural gas for cooking and heating; electric heat pumps are one of the more efficient replacement options. Similarly, industrial processes, many of which now depend on natural gas, coal, and oil for their energy inputs, will need to turn to energy sources more amenable to decarbonization, with electricity playing an ever-increasing role.

Shell concurs, saying: "One of the most important trends in Sky is electrification—the increasing replacement of fossil fuels by electricity." In the Sky scenario, by 2070 the rate of electrification of final energy more than triples, with global electricity generation reaching nearly five times today's level—despite unprecedented gains in energy efficiency.

What is particularly interesting about Shell's Sky scenario is that this conclusion comes from what is first and foremost a fossil fuels company. Indeed, Shell has begun taking steps to electrify its own business. "We are expanding in the power market, as we expect the energy system to increasingly electrify," says the company.

As humankind places ever-greater demands on its power systems, continuing to transform how power is generated, delivered, and sold will be crucial to making these systems sustainable.

Driving this transformation is the transition from an almost-total dependence on large, centralized generation, transmission, and distribution technologies to a system that also embraces distributed, digitally enhanced, and low-carbon technologies. The distinction between producers and consumers will get increasingly blurred, as power starts to flow in two directions, thanks to digitally controlled networks.

Tangling With New Tech

What kind of disruptive global energy innovations can we expect as the net-zero GHG emissions imperative closes in?

One innovation that's less about technology and more about policy will be a major driver in advancing the technologies capable of mitigating GHG emissions: carbon-pricing mechanisms.

Though such mechanisms are still in their infancy, Shell sees them being adopted by governments globally over the 2020s. This will help to change the consumer mindset so that people prefer low-carbon, high-efficiency energy options. Indeed, Shell emphasizes that carbon pricing mechanisms will be "the most significant emissions-targeted action taken by governments around the world."

Also be on the lookout for accelerations of trends already underway. The Sky scenario projects that renewable electricity sources, such as wind and solar power, will continue their strong growth, with solar PV expanding at around 20 percent per year, exceeding an installed capacity of 6,500 GW by 2035. That leaves another 1,000 GW that needs to be added every year from 2035 to 2070 to meet the Paris climate goal. By around 2055, the scenario shows solar emerging as the dominant, primary energy source.

Shell also sees battery capacity growing quickly, in part due to government funding of new technologies; this will help with the integration of intermittent renewable energy sources to power networks. Onshore and offshore hydrogen electrolysis systems also emerge around the world in Sky, making hydrogen a "material energy carrier."

In the transport sector, Sky illustrates electrification happening faster than many expect. In the scenario, more than half of global car sales are electric by 2030, extending to all passenger vehicles by 2050. Biofuels play a critical role during the transition. The road freight industry hangs on to diesel into the 2050s, because of its high energy density. But even this part of the transport sector eventually transforms, with biodiesel, hydrogen, and electrification all playing a role.

Coming Back Down to Earth

Despite the transformations of policies, technologies, and even mindsets highlighted in the Sky scenario, Shell projects humankind will have a hard time kicking the fossil fuels habit. Even by 2070, the scenario predicts that remaining fossil fuel use leads to emissions of some 15 gigatons (Gt) of carbon dioxide per year, reducing to 11 Gt by 2100. This, says Shell, "is about one-third of today."

As a result, sinks will be needed to remove carbon dioxide from the atmosphere, along with carbon capture and storage (CCS) facilities that mitigate emissions before they're discharged to the atmosphere. Conventional CCS techniques will be applied in power plants that burn a sustainably produced biomass feedstock. The production of materials such as plastics from biomass feedstocks will also likely play a role.

If there's one number in Sky that underscores the scale of the challenge, it's that by 2070, 10,000 large CCS facilities will have been built, despite the fact that there are only a handful in operation today.

Writing the Rule Book

There is a more immediate challenge, however.

The latest round of climate talks—held in the German city of Bonn in May—highlighted just how tough the international community is finding climate change negotiations. It is still far from certain that the Paris Agreement will be implemented from 2020 as planned.

The Paris Agreement was the start of a process rather than a conclusion. It is a high-level document, setting out broad targets and principles. When it comes to the specifics of climate change mitigation, there remain two major challenges to address.

One is to write the rule book that will govern the implementation of the Paris Agreement. The deadline set for this is the end of the UN COP 24 talks in Poland in December. Progress in Bonn was disappointing, so the president of the talks—the Fijian Prime Minister Frank Bainimarama—held an additional session in Bangkok in September. Patricia Espinosa, executive secretary for the United Nations Framework Convention on Climate Change, noted that although no text was completed, progress was made on most issues at the session, according to The Guardian.

The second challenge is that the climate pledges made by individual nations as part of the Paris Agreement process—their Nationally Determined Contributions (NDCs)—do not yet add up to well below 2°C.

The Emissions Gap Report 2017 from the United Nations Environment Programme (UNEP) concludes that "full implementation of the unconditional NDCs and comparable action afterwards is consistent with a temperature increase of about 3.2°C." There is huge pressure, therefore, for nations to ramp up their policy ambition, with the next round of NDCs due in 2020.

The road to Katowice in Poland, where the COP 24 talks will take place, is not going to be an easy ride. The heat is on.