The world is on a renewable high.
The renewables, euphoria has been sweeping the world for over a decade and visions of a carbon-free, sunshine- and wind-powered world has captured the imagination from policymakers to the populace, alike. While the intentions are well-meaning, this can, however, turn out to be a dangerous obsession which can lead to grave climate and economic consequences. We must be, therefore, realistic in our ambitions and look at harnessing a more practical, diversified and bandwagon neutral approach to carbon abatement based on science and sound economics rather than hyperbole, wishful thinking and rhetoric.
Let us take the most obvious case. The world is obsessed with eliminating “dirty” fossil fuel-based power generation and replacing it with solar and wind at much lower costs. There are a few fundamental fallacies with this obsession.
Continuously available and reliable power is the lifeblood of a working economy. This means that quality power should not only be accessible but should be available 24X7 at affordable levels. The intermittent and uncertain nature of solar and wind power means that to make it available, we either have to have grid-scale battery storage for backup or continue to have conventional sources such as peaking gas plants or thermal power stations as backups.
Battery technology, with all its improvements, is nowhere near providing that scale of storage. Apart from the sheer engineering challenges, the costs of such storage are daunting. Let’s say you want to make New Delhi totally renewable with a minimum 24-hour backup on grid-scale storage. Delhi consumes about 6 gigawatt (GW) of power on the average — so that’s about 144 million kilowatt hour (Kwh) for 24 hours. Even if grid-scale storage was possible and the cost were to drop to $100 per Kwh, one will need to sink $15 billion in battery storage just for a 24-hour backup today. Power consumption in New Delhi is growing rapidly, and it is safe to assume that Delhi will touch global norms in about 20 years resulting in consumption of more than 20 GW. That means $60 billion in storage alone. If you expand this to the four-largest Indian metros, you are talking about $150 billion for a day’s storage in these four cities. In fact, an Energy and Environmental Science analysis found that a 12-hour grid-scale backup in the US will cost close to $2.5 trillion or so. Additionally, the renewable plants will need to be provisioned for excess capacity for battery storage, driving up the capital costs further. Unless there is a battery miracle, grid storage is clearly unfeasible.
Further, hauling wind or solar power to the grid increases transmission costs as these solar and wind plants are usually located in remote areas. The costs of power increase further because the grid needs to be re-engineered and the “stranded costs” of existing conventional power assets displaced by renewables, will also need to be borne by ratepayers. And this is without even addressing the socio-economic costs of the massive land requirements, that wind and solar impose due to its low power densities.
Energy pundits rationalise grid parity of renewables by comparing the Levelized Cost of Electricity (LCoE) of renewables with non-renewables. But, an LCoE-based comparison is misleading because it misses these key points by which renewables impose costs on the electricity generation system that needs to be covered and are eventually reflected in actual retail prices. In fact, Germany’s ‘Energiewende’ transition to renewables has imposed record-breaking retail electricity prices at about Rs 23 per Kwh. Such power prices will break the back of the economy of a developing country such as India and can consign billions of people in the developing world to a life of poverty and darkness.
Renewables are a good energy complement, but we need accelerated investments in innovation and in advanced power systems — like high efficiency, low emission (HELE) thermal and potentially nuclear power – so that 24X7 power is available, overall greenhouse gas (GHG) emissions is minimised, and costs are affordable.
Similarly, the transportation sector globally generates about 15 per cent of the GHG. While electric vehicles will eventually replace the internal combustion engine, the fact is that there are only a few million electric cars compared to a billion plus gasoline-based vehicles on the road. The transition to electric vehicles will thus be arduous as charging infrastructure, cost structures and stranded investment affect work over the long haul. We dont have a clear answer today on the fuel substitutes for container ships and airplanes, which powers our global commerce and trade. While liquified natural gas (LNG) as a bunker fuel is increasingly a good substitute, we don’t have an answer for airplanes. We do not have energy substitutes for global transport with comparable energy densities of “dirty” oil, around which the entire transportation ecosystem was engineered over the past 100-plus years.
It is time to get out of our renewable high, if we want to really address the global climate change problem.