This article was originally posted by Forbes.
Marek Kubik, a One Young World Ambassador from the UK, is Market Director at Fluence Energy, a global energy storage technology and services company.
"There is always a well-known solution to every human problem—neat, plausible, and wrong" – H.L. Mencken
It’s a useful adage to apply to a whole range of difficult topics, not least energy policy. Investing in ‘clean coal’ for instance sounds like a perfectly simple policy win for the United States. ‘High-efficiency, low-emission’ (HELE) advanced coal technologies promise to revive a floundering U.S. industry and promote energy independence, potentially with zero emissions, using carbon capture and storage (CCS) technology.
Fellow Forbes contributor Jude Clemente certainly thought so, putting front and center the International Energy Agency’s (IEA) championing of the issue and pointing out that this approach was also originally a part of President Barack Obama’s first-term energy policy.
Yes and no.
First, let’s get facts straight. ‘Clean coal’ for some may conjure images of artisanal, all-natural and American-made goodness, which is certainly the vision the Trump administration has been keen to promote. The reality is whilst the idea of capturing all the emissions from coal is technically feasible, the costs today are still astronomical, doubling a typical power station’s capital and operating costs. The track record for storing emissions safely at any meaningful scale is also far shakier than not generating them in the first place.
An important context is missing here, and that’s what has happened between 2008 and now. Rewind a decade, and a myriad of energy technologies were vying for attention, with policymakers around the globe wary of placing bets. Nuclear, clean coal with CCS, and renewables were all potential pathways to a secure, affordable and low-carbon emission future, and policy initiatives both in the U.S. and Europe took a cautious, ‘all of the above’ approach to tackling the issues of the day.
What has happened since then is nothing short of a landslide in favour of renewables. Solar technology costs have fallen over 85% since 2009. In the same period, coal (not clean coal mind you – just your regular polluting kind) remained flat, and nuclear costs have actually trended upwards.
Suddenly, the playing field looks very different.
Wind and solar in North America are now the cheapest forms of energy bar none on a levelized cost basis; cheaper than gas, nuclear or coal. Solar prices are continuing to drop without a clear end in sight, based on a learning curve of prices falling 20% for every doubling of installed capacity. With only 2% of U.S. energy coming from solar so far, this is a seismic shift that’s far from over.
It’s a trend that the IEA woefully misunderstands, as their annual World Energy Outlook projections embarrassingly demonstrate.
The momentum of this disruption curve is important, because it illustrates the futility of the clean coal movement catching up. There simply isn’t an experience curve for clean coal that matches anything like what we are seeing in renewables.
Research into HELE coal could nudge the efficiency of coal up a point or two, but also reveals the incremental nature of such improvements. Specifically, as the high efficiency part that acronym means coal plant efficiencies of 40% rather than high 30s, it is not going to move the needle on cost competitiveness.
What’s also forgotten is the low emissions part of the acronym – adding carbon capture – reduces the overall efficiency of such coal plants drastically, typically by around 10%. Stopping all the SOx, NOx, particulates and CO2 is a big energy drain in itself. Scrubbing the emissions means burning a lot more coal in the first place.
With renewables a clear leader on cost and carbon issues, the final line of argument for clean coal comes to energy security. Wind and sun, it is rightly pointed out, are intermittent sources of energy – as if this is some kind of ‘gotcha’ moment for the renewables industry that no one has considered. The impact of intermittency, it is claimed, is not factored into the cost of these technologies.
Again, to return to Mencken’s opening witticism, the truth is a little more complex. The electricity system has always required a good degree of backup, particularly as large, centralised nuclear and fossil fuel plants present large and hard-to-absorb losses of generation when they do fail. This security has typically been met by a large fleet of fast starting, low efficiency gas ‘peakers,’ historically running rarely, expensively and only for short windows.
But here again, technology has provided us smarter, cleaner and cheaper ways to manage this issue.
A complementary trend to the decline in renewables prices has been a similar decline in the cost of energy storage technology, with lithium ion battery costs declining 80% since 2010 alone.
The declines have been so pronounced that prominent analysts like Wood Mackenzie increasingly note that battery energy storage is cheaper that fossil fuel peakers on both a capital and operating cost basis.
The evidence of this trend is already mounting. The world’s largest lithium ion battery to date is now under construction in California, having been selected in a head-to-head procurement competition against gas peaker plants. In 2018 and again in 2019, the combined package of renewables and storage set record low prices in Arizona, Nevada and Hawaii, beating out fossil fuel alternatives.
Simply put, all of this points to an exciting and mounting trend. Renewable energy coupled with energy storage is already cheaper, cleaner and as reliable as conventional alternatives – even as the cost trends are still sharply downwards.
As this happens, longer and longer duration energy storage is becoming economic versus conventional thermal solutions, allowing utilities to take a tiered, portfolio approach to meeting peak demand with batteries. Utilities are also recognizing the benefits of super-fast responding, digital technologies for overall grid stability – avoiding the fuel costs, direct emissions and years of planning and permitting that come with traditional fossil fuels.
Our efforts should not be focused on incremental investment into old technology like coal, or even gas as a bridge fuel, but into removing the barriers to rapid electrification, the acceleration of renewables and transforming the grid with energy storage.
