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After a century of reliance upon fossil fuels, the world is now changing to more diverse systems of energy production, increasingly employing renewable energy technologies. According to the International Energy Agency (IEA) current energy trends are patently unsustainable, socially, environmentally and economically. Fuel cells can contribute to energy efficiency, they can be powered by a variety of sustainable fuels and, in conjunction with hydrogen, can store intermittent sources of renewable energy.
Until 2030 the I.E.A. projects that oil will remain the leading energy source. The era of cheap oil is over, but price volatility will remain. To avoid abrupt and irreversible climate change, we need a major decarbonisation of the world’s energy system. Limiting temperature rise to 2˚C will require significant emission reductions in all regions and technological breakthroughs.
If we continue with business as usual, which is the IEA’s reference scenario, it is estimated that cumulative $26 trillion investment will be needed in global energy by 2030. However, in order to limit C02 concentrations to 450 parts per million (ppm) and the global temperature rise to 2˚C, investment will be required in low or zero carbon power generation, energy efficient equipment, appliances and buildings, which would add over $9 trillion to up front capital costs by 2030. In addition consumers will have to pay more for improved technologies but this will be partly offset by savings from energy efficiency. There will also be the benefit of improved energy security. Increased public and private spending in the near term would be essential, but it is not certain that the technology shift required to keep C02 concentrations to 450 ppm will be achievable, so there is a risk of global temperatures rising by 3˚C. The IEA believes that it is within the power of all governments, of producing and consuming countries alike, to steer the world towards a cleaner, cleverer and more competitive energy system. Time is running out and the time to act is now. www.iea.org
Role of fuel cells
During past decades, when oil was cheap and abundant, there was no market for energy saving technologies, but as the price of oil rises and governments attach a cost to damaging emissions, fuel cells will become competitive in many new roles. Flexible fuel cells can provide electricity and heat in buildings, or power for transport; they come in all shapes and sizes from watts to megawatts; and can be powered efficiently from most renewable energy sources. Alongside batteries and flywheels, hydrogen fuel cell systems store intermittent supplies of energy, from small automotive applications, to residential units providing electricity and heat, up to industrial plants powered largely by indigenous fuels.
Wider economic implications
The United Nations Environment Programme (UNEP) and leading world economists launched the Green Economy Initiative in London last month. UNEP believes that mobilizing and re-focusing the global economy towards investment in clean technologies and natural infrastructure is the way to achieve real growth, combat climate change and trigger an employment boom in the 21st century.
Achim Steiner, Executive Director of UNEP, explained that the financial, fuel and food crises the world is now experiencing are in part a failure of governments to intelligently manage markets and are partly due to the decline of nature-based assets, coupled with an over-reliance on finite fossil fuels. For example, forest ecosystems are vast, natural 'utilities' that for a fraction of the cost of man made machines store water and carbon, stabilize soils, sustain indigenous and rural livelihoods and harbour genetic resources to the value of trillions of dollars a year. The aim of the Green Economy Initiative is to help governments make better choices and send the right market signals to investors, entrepreneurs and consumers world-wide so that we move from extracting resources from the planet to managing and re-investing in it. Fuel Cell Power believes that investment in fuel cells could contribute to meeting several of the aims of the Green Economy Initiative.
Priorities for the Green Economy Initiative
The sectors likely to generate the biggest transition in terms of economic returns, environmental sustainability and job creation are:-
- Clean energy and clean technologies including recycling
- Rural energy, including renewables and sustainable biomass
- Sustainable agriculture, including organic.
- Ecosystem infrastructure, including reduced emissions from forest degradation
- Sustainable cities including planning, transportation and green building
Hilary Benn, Secretary of State for the UK Department for Environment, Food and Rural Affairs, who hosted the launch in London, said, "The green technological revolution needs to gather pace, as more and more of the world’s jobs will in future be in environmental industries. Britain is committed to building a green economy at home and abroad: it will be good for business, good for the environment and good for development.”
Old economy failing
Pavan Sukdhev, a senior banker from Deutsche Bank who is seconded to UNEP to lead research into the green initiative, said that the economic models of the 20th century are now hitting the limits of what is possible. However, investments will soon be pouring back into the global economy and the question is whether they go into the old, extractive, short-term economy of yesterday or a new green economy. Mr Sukdhev, who leads the UN study entitled The Economics of Ecosystems and Biodiversity (TEEB), said that the economic cost of environmental degradation is projected to exceed every year the total losses from the present global credit crunch.
Energy production from fossil fuels is a major cause of environmental damage, as it is largely responsible for climate change, air pollution and the acidification of the oceans. It is up to the industrialised nations to take the lead with clean, efficient technologies which can be powered from a variety of indigenous and sustainable sources. The projected increase in C02 emissions by 2030 is expected to come mainly from developing countries fuelling their economic growth with fossil fuels. Benign energy technologies, such as fuel cells, will conserve resources and help to contain further environmental degradation.
Start with energy efficiency
According to studies by the McKinsey Global Institute, better energy efficiency could contribute up to half the reductions in projected C02 emissions required to keep atmospheric concentrations at 450 ppm, which experts expect would keep the global temperature increase at or below 2˚C. McKinsey estimates that $170 billion per year investment in energy efficiency until 2020 would be required, at an average internal rate of return of 17%. Sectors covered are residential and commercial buildings, transport and industry. Residential and commercial buildings employ 35% of global end-use energy demand, transport 16% and industry uses nearly half, with 47% global energy demand. Major impacts could be made by investing in large scale combined heat and power (CHP) in industry, particularly for developing countries, where two thirds of the proposed $170bn/year investment would be made. Energy efficiency could provide potential investments with the highest internal rate of return, but further finance will be required for innovative low carbon technologies. www.mckinsey.com
Distributed not centralized energy
The internet pioneer, Robert M Metcalfe, who invented the Ethernet, advises energy innovators to learn from his experience. During the early years on the internet, computing resources were centralized, the bigger the computer the better! They learned too slowly that cheap and clean communications would be distributed. The world needs energy solutions on a large scale, but be careful of demands for scale early in the process of technological innovation, as it usually refers only to mature technologies already in the hands of the status quo. We need to make energy cheap, clean and really abundant, but this is unlikely to come from centralized power stations. Innovators have to start small and grow new technologies, driving them down steep cost curves. www.SciAmEarth3.com
UK CHP by 2010
Last year the UK Department of Environment (DEFRA) estimated that the economic potential for additional combined heat and power (CHP) in the UK by 2010 would be up to 8.2 gigawatts electricity capacity (GWe), which would save 44 terawatt hours (TWh) primary energy per annum. This investment would be at the market discount rates of 15% for industry and buildings and 9% for community CHP. However, if the discount rate for community CHP were reduced from 9% to 6%, the annual primary energy savings could be more than doubled.
As nearly all of the CHP is expected to be powered by natural gas, it will favour CHP if the electricity price rises in comparison with gas The Government is providing some incentives for the introduction of CHP but more could be done to encourage investment in CHP which would be feasible at a lower internal rate of return. The Government could give a lead, projecting costs over a longer period, twenty to thirty years for micro wind energy collectors or solar panels. For potential users of micro-CHP, the retail price for many electricity customers is already over 30p/kWh for the first 1000 kilowatt hours (kWh) per annum, which makes micro wind energy collectors or solar panels more cost competitive. The use of fuel cells with hydrogen storage will make it practical to store intermittent energy from renewable sources. Also, with their high electricity to heat ratio, fuel cells will be suitable for providing heat and power in future well insulated buildings.
Small as well as large
Under the Renewables Obligation, customers will be paying about £1 billion per annum, mainly to a few large energy suppliers. In comparison, several small engineering companies developing fuel cells, micro wind energy collectors, energy storage systems, or electric vehicles are struggling to develop technologies which would require a small percentage of this financial support. The Stern Review recommended that about 1% of UK GDP should be invested in our low carbon energy infrastructure, equivalent to about £12 billion per annum. This would bring employment benefits from the resurgence of the British engineering industry and costs will come down as large scale production is achieved
Micro - CHP as important as large scale electricity generation
Last month, a House of Lords report recommended ways in which the UK could meet the EU’s target for 15% of energy to come from renewable sources by 2020. It states that micro-generation and renewable heat should be considered to be as important as large-scale electricity generation and grants should be increased accordingly. The report recommends that the UK should first commit to an energy reduction target, such as 20% by 2020, with a strategy specifying how this could be achieved by spring 2009. Fuel Cell Power proposes that ‘pump priming’ by the Government, would enable micro CHP to make a substantial contribution to demand reduction and would facilitate the introduction of renewables. Small scale renewables will contribute to electricity, heat and transport fuels, with batteries, hydrogen fuel cell systems and other innovative devices storing off peak power. This will reduce the need for back up power from the grid and smart meters will ensure that the energy is applied most effectively. www.parliament.uk
Major problem transport
This autumn, Cambridge Econometrics predicted that the Government will miss by a wide margin the legally binding EU target of a 15% contribution of renewables to the UK’s overall final energy needs by 2020. A major barrier is higher emissions from the transport sector, which are expected to contribute over a quarter of the UK’s C02 emissions by 2020. To make real progress towards the 15% target will clearly require major, innovative policy measures that promote a step change in the level of renewable deployment in the UK. www.camecon.com
Finance for development
The late Dr Francis Tom Bacon, who developed the first practical working fuel cell for use in the Apollo space programme, said that more support was needed for development. Although the Government now allocates increasing amounts to university R & D, there is a big gap between this and the finance required to bring energy saving and renewable technologies to market. At present fuel cells have no commercial application in Britain and support is needed to build up engineering capacity. We have a good core of expertise with fuel cells and renewable energy technologies and several of the regions are setting up excellent projects with hydrogen fuel cells. This could form the basis of an international clean energy infrastructure and enable the UK to supply fuel cells and related energy technologies to emerging global markets.
Fuel Cell Power,
November 2008 |
