Is it possible to use green energy cheaply? Jon Herbert considers the factors involved.

In a truly sustainable economy, energy shouldn’t be expensive. However, we all know that renewables are currently costly — a primary argument for those who believe that sticking with fossil fuels in some form or other is unavoidable and inevitable. So is it possible to square the circle?

A number of factors define the answer. Perhaps the first is the question of whether renewables will ever be able to compete with oil, gas and abundant coal on a level playing field.

The answer is that in future there will increasingly not be a level playing field as such. The IPCC’s most recent study, the Synthesis Report has given the clearest warning yet that without an absolute end to the use of fossil-fuels by the end of the twenty-first century — just 86 years away — the Earth will be in the grip of catastrophic warming.

Market makers

Governments have always had the power to set market frameworks as an alternative to unchecked laissez-faire. Energy markets are no different. Legislators can stipulate conditions. It is then up to market suppliers to devise commercial solutions.

There is also tremendous pressure to reduce the price of renewable energy through innovation, working practices and economies of scale. However, the other half of the answer is that if we can’t make it cheaper, let’s use less of it.

Energy efficiency has always been a priority. Now a radical new approach is being taken not only to cut consumption at the margins, but also to reconsider the whole relationship between energy and every part of society, manufacturing, industrial processes and the way that we live.

We have become accustomed to using energy in some form, or many forms, in everything we do, make or own. Can this deeply embedded energy be taken out of the synthetic world we live in? The idea is radical and has been dubbed the “invisible fuel”. In theory, energy never used far outweighs the merits of even ultra-efficient energy that is used. However, there is a long, long way to go on that particular journey.

Answers still blowing in the wind

There is, in fact, a very long list of potential renewable energy sources. As a nation, we tend to oppose the ones that we are most familiar with — onshore and offshore wind and solar in particular.

Onshore wind is relatively efficient, when the wind blows. However, turbines across the landscape are not everyone’s cup of tea. Community Secretary, Eric Pickles, has turned down planning permission for 19 projects worth £500 million in the last year, to the chagrin of Lib Dems in the coalition who say the decisions are being made for political reasons in the run-up to the May 2015 General Election. The Conservative manifesto is expected to contain a moratorium on further onshore wind developments.

However, renewable energy developer Ecotricity has won Court of Appeal permission to launch a legal appeal against the refusal to permit four turbines it wants to install at Black Ditch on the Somerset Levels. Mr Pickles’s decision was made against the recommendation of a planning inspector.

It’s an ill wind

Out at sea, many people believe the offshore wind industry is now all at sea. Despite there being more turbines operating in UK waters than the rest of the world put together, the industry’s future is uncertain. Operators and utility companies are trying to make huge construction and production cost cuts. Even so, it is estimated that the cost of building a modern gas-fired power station is roughly one fifth per unit of electricity of that for putting turbines out into demanding metocean conditions many miles offshore.

Offshore projects have secured guaranteed payments of £155 or more per megawatt hour of electricity produced, three times that of the wholesale power price. However, a Treasury crackdown on the length and size of subsidies is linked to the decision of several large power producers to give offshore wind a miss in their investment plans.

Centrica has pulled out of the £4 billion Celtic Array off Anglesey. RWE Innogy has similarly abandoned its Galloper plans off the Suffolk coast after partner SSE withdrew. However, the Government has identified five further projects that will qualify for subsidy support and will cost around £10 billion to build.

There are still staunch supporters. Scottish Power recently opened its £1.5 billion West of Duddon Sands project near Barrow and expects the new projects coming down the line to stimulate the development of an all-important UK supply chain. Siemens announced earlier in the year that it will build a major new turbine parts plant at Hull, although it recently modified its plans.

Sunshine state

The state of the UK’s solar power sector is similarly precarious at the moment, with a change to the subsidy regime skewed away from sizeable commercial solar projects in favour of small residential solar heating and photovoltaic generation. Environment Secretary Liz Truss has added fuel to the flames, so to speak, by describing large-scale solar farms as “a blight on the landscape”. The same argument has been levelled against crops being raised to manufacture biofuels instead of food production. Farmers and landowners can expect less support henceforth.

The new “contract for difference” (CfD) scheme introduced by Energy and Climate Change Secretary Ed Davey, and paid for by consumers, could nevertheless be used to import solar power from the deserts of North Africa, as described elsewhere in this issue. A contract for difference in finance is a contract between two parties — a “buyer” and a “seller” — stipulating the seller will pay the buyer the difference between the current asset value and its value at the contract time.

Other renewables

Water is some 800 times more dense than air. Even slow moving flows can generate considerable amounts of energy. Three principal forms of hydropower are hydroelectric — large-scale dams, such as the Three Gorges Dam in China, micro-hydro systems that typically produce up to 100 kW and run-of-the-river systems that harness the kinetic energy of rivers and oceans rather than relying on large gravity-fed reservoirs or small weir potential energy drops.

Wave and tidal power are still in their infancy, although some very advanced models are showing exciting potential. Ocean thermal energy conversion is a third source of maritime power and depends on the temperature difference between cold deep water and warm surface water. However, at the moment it has no economic future.

Biomass uses material from living, or recently living, organisms. This creates a fuel for direct combustion to produce heat, or a resource to manufacture biofuels such as ethanol or biodiesel, including developments to produce enzymes that can manufacture cellulosic ethanol as an alternative to using crops. Wood is the largest biomass energy source used globally today.

Way down inside

Geothermal energy is also a viable source of low-level heat in many parts of Britain, with a working scheme in Southampton and the prospect of one in Newcastle-upon-Tyne. Via deep boreholes, it taps the planet’s original energy of formation (some 20%), plus heat generated from the radioactive decay of minerals (the remaining 80%). Ultimately, the heat used in geothermal energy sources goes all the way down to the Earth’s core 6400km beneath our feet. It is unlikely to run out at any time soon.

Enhanced geothermal systems are a new type of geothermal power technology that doesn’t need natural convective hydrothermal resources. Systems are being tested in France, Australia, Japan, Germany, the US and Switzerland.

There are many carbon-neutral fuels too and they include synthetic methane, petrol, diesel and jet fuel produced by hydrogenating waste carbon dioxide and can even be seen as removing CO2 from the environment.

Even more futuristically, nanotechnology is being used to store solar electromagnetic energy in chemical bonds by splitting water to produce hydrogen. Carbon dioxide is then used to make methanol in an attempt to mimic photosynthesis by utilising a broad band of the solar spectrum and abundant inexpensive materials.

Capturing carbon

An alternative to abandoning fossil fuels is to capture and store permanently the carbon they emit. To date, carbon capture and storage (CCS) technology has been slow to develop. Just two sizeable UK projects are currently under way. The first is the White Rose oxyfuel and CCS demonstration plant with a 426MW gross output being developed in Yorkshire by Capture Power. The second centres on FEED (front-end engineering and design) study funding announced in February 2014 for the next stage of Shell’s Peterhead CCS project in Scotland.

CCS would be a game-changer. In theory it could transform the use of coal reserves, gas and oil, including potentially fracking. It could also make mainstream the use of vast coal reserves lying under the North Sea.

Storage

The intermittency of many renewable energy sources is a problem. Electrical energy is also difficult to store efficiently. Some can be held around high voltage networks. The concept of the hydrogen economy is based on the idea of using cheap abundant energy to split water and store hydrogen as a fuel for later use.

At present, demand on the UK power grid peaks at 60GW but this could increase six-fold as the use of electrical cars and household heating rises. The alternative is to find innovative ways of storing energy. However, size matters. Electricity grids operate more efficiently on average load rather than peak load.

There is an interim solution — distribution. Large power networks can also compensate for fluctuating power use more efficiently than smaller ones. They are able to iron out the effects of local weather on solar and wind renewables. The aim is to increase connectivity, both regionally and with neighbouring nations. Powerful energy networks now connect Europe, from Iceland, Ireland, the UK and France to the Baltic countries, western, central and eastern Europe. The concept is that someone is always generating power somewhere, be it hydropower in Norway, while someone else is consuming energy elsewhere.

And the scale of savings could be huge. Imperial College London’s Energy Futures Lab estimates energy storage technologies in the UK could generate savings of £10 billion each year by 2050.

Smarter grids

Going one step further, when storage can be linked to smart power networks, in which the decision to switch off unused equipment is taken by computers rather than humans, we really could begin to cook on… green energy.

Again, overall demand is not reduced but spread out to avoid peaks that put energy grids under stress.

Smart meters constantly monitor household energy requirements and are linked directly to smart appliances, which could in time begin to make key decisions about energy use. For example, a washing machine can detect and decide the best moment of low grid demand to switch itself on — albeit at 4.14am. Smart meters also are ideal for households and businesses that want to sell energy back into the grid.

When energy storage systems and smart grids are eventually connected up on an international scale, a real global solution will be in the offing. Pilot projects are under way in Germany, Italy, India, China, the US and the UK.

The invisible renewable

Exxon’s vice-president for corporate strategy, Bill Colton, said recently that “the greatest source of energy in the future will be using it more efficiently”.

Renewables may not be the silver bullet that can halt global warming. The role of energy efficiency — the “invisible fuel” — is taking on a new importance. The energy we don’t use can have almost as much impact as the energy we do.

And this is causing a fundamental rethink about the role of energy in everything we do. One implication is that energy is no longer the province of energy companies and central planners. Instead, it is falling into the hands of designers, architects, manufacturers and entrepreneurs. Simple technical innovations can have major repercussions. German research has concluded that EU energy demand in 2050 could be below half of that needed in 1990, saving half a trillion euros every year. Much of the work on energy efficiency is driven by government policy.

One problem is the payback time on investment, which can be several years. However, considering not only the amount of energy and how it is applied in procurement, manufacture and disposal, but also the question of whether the product is necessary in the first place and if a substitute might be acceptable could redefine a basic relationship between mankind and his use of the environment.

As the executive director of the International Energy Agency, Maria van der Hoeven, has pointed out, “The most secure energy is the barrel or megawatt we never have to use.”

First published by Croner-i on 25 February 2015