Guest View: We Must Act Now: Innovation via Renewables, Gas and Grids

Actis invests across the energy sector in renewable power generation, high growth distribution businesses and also high efficiency gas generation projects.

We work with many of the leading technology companies across these investments and in this article we have asked two General Electric (“GE”) leaders to give their view on the role of gas powered generation as a catalyst for large scale deployment of renewables.

GE is uniquely positioned in that they design and manufacture wind turbines, gas turbines, transformers, inverters and many other key components for the generation of electricity.

We Must Act Now: Innovation via Renewables, Gas, and Grids is Key to Accelerating the Energy Transition.

The global challenge of climate change has never been more urgent or real. While the world races to meet carbon reduction goals, approximately 800 million people worldwide remain without access to reliable and affordable electricity today, while demand for electricity is set to grow by 50% or more in the next two decades according to the International Energy Agency (IEA).

Put simply, access to energy is a human right and GE believes we must decarbonise power generation and ensure the sustainability, reliability and affordability of electricity for all – through a decade of action.

We believe that accelerated and strategic deployment of renewables and gas power along with modernising the grid can help change the global trajectory of climate change, enabling substantive reductions in emissions quickly while continuing to accelerate technologies for low or near zero-carbon power generation. While the challenge is daunting, the opportunity afforded to us to make real changes to our power generation supply is equally apparent.

Decarbonising power generation is a foremost priority as the power sector currently produces about 40% of global carbon emissions, the largest of any sector. Changes we make now, not decades from now, are critical for our planet – especially as our collective carbon budget is declining every day, month, and year. Additionally, as other sectors – such as transportation, heating, and heavy industry – look to increasing electrification as part of their own efforts to reduce carbon emissions, power generation must be rapidly decarbonised to ensure a net positive effect for our climate.

Our approach within power generation is clear: first, we must continue to grow renewables while strengthening our infrastructure to achieve a cleaner energy future – faster. Renewables are the fastest growing source of new power generation capacity and technology. We can and must grow renewable energy fast and affordably, looking to expand new opportunities in wind, solar, hydro and nuclear energy to produce as much carbon-free electricity as possible.

Secondly, we see additional benefits when growing renewables alongside energy-efficient natural gas power, which can be deployed both quickly and at scale. Gas power is a force multiplier for renewables, providing the lowest carbon-emitting dispatchable support for the inevitable extended periods when renewables alone are not able to meet demand.

By allowing us to support periods of days without renewable resources – common during season shifts or severe weather events – gas power will enable deeper, more rapid, renewables penetration and sustain grid reliability, while second order problems such as grid resilience, inertia and decongestion are addressed.

Gas-fired power plants have high availability and provide dependable capacity for minutes, hours, days or weeks at a time precisely when required. To keep electricity supply and demand in balance, renewable energy is complemented by dispatchable backup power such as natural gas power plants, complemented with other energy storage media such as batteries. Balancing can also be achieved through broader regional connectivity of the grid and better management of the demand side, again facilitated by an increasingly complex grid.

Despite massive growth in the deployment of wind and solar capacity in recent years, increases are not occurring at the pace or scale needed to decarbonise the electricity generation sector and meet the goals of the Paris Agreement. Gas must be part of the solution both short and longer-term and has been the technology that has driven the highest amount of carbon intensity reductions over the last two decades as renewable capacity additions have been accelerating.

According to the IEA, coal-to-gas switching is the quick win for emissions reductions, for example, the U.S. power sector has cut its carbon emissions by 33% since the peak in 2007, mainly by replacing coal with gas generation and building out renewable capacity.  There is potential in today’s power sector to immediately reduce up to 1.2 Gt/yr of carbon emissions by running existing gas-fired plants harder and reducing coal use commensurately.

There is additional opportunity to reduce coal emissions by retiring existing coal-fired capacity and replacing it with renewable energy and new, high efficiency combined cycle gas capacity. If replaced fully by gas power, this would almost immediately bring down global power sector emissions by 10% and total energy-related carbon emissions by 4%.

Decarbonising power generation is a foremost priority as the power sector currently produces about 40% of global emissions

Gas-fired power can also serve as a low to zero-carbon destination technology for tomorrow through innovations including hydrogen fuels and carbon capture. Full decarbonisation of gas-fired power generation is on the horizon and GE and our customers are delivering pilot projects to demonstrate the importance of these cutting-edge innovations to the fight against climate change. The development of programs and supportive policy for hydrogen fuels, CCUS technologies, and methane abatement pilot projects are the subject of GE position papers available here , and will ensure solutions to combatting climate change are developed rapidly and in a way that is optimum for a specific region or country.

To help facilitate such growth, GE is working with our customers to deliver the carbon-free future that countries and consumers demand, with a focus on four key areas:

Building, servicing, and maintaining a global fleet of renewable energy assets

GE Renewable Energy manufactures and installs leading edge equipment for new onshore and offshore wind farms, services and re-powers the global wind energy fleet, deploys advanced solar and storage assets, and builds new and upgrades existing hydropower plants.

Reducing the cost of renewable energy

Already, electricity costs from new renewable energy capacity are less expensive in many markets than electricity costs from new conventional, fossil fuel-based power plants – without subsidies. We want to make it even more cost-effective so everyone everywhere can afford cleaner energy.

GE Renewable Energy is introducing new onshore and offshore wind turbines that capture more energy from the same amount of wind, driving down costs even further. GE’s Haliade-X turbine, the world’s most powerful off-shore wind turbine built today, can generate 67 gigawatt hours annually – enough to provide the equivalent electricity needed to power 16,000 European homes for a year – while also withstanding harsh offshore conditions.

Making renewable energy function as reliably as traditional power generation sources

Everyone agrees renewable energy must be integrated into the grid, but few fully appreciate that the grid was not designed to accommodate generating assets that operate the way wind and solar systems do. Battery energy storage can be a key solution for the future, but it is not the only answer.  Our hydro-pumped storage technology creates long duration storage, far longer and larger than batteries, giving system operators the flexibility to address the variability of wind and solar by providing reactive power support and overcoming imbalances in supply and demand to complement the role we describe for gas power.  GE Renewable Energy is also increasing ‘system capacity factors,’ in part through hybridisation of solar, wind and batteries so that power from wind and solar farms can be used in a more dispatchable manner.

Ensuring grid resiliency and efficiency while maintaining grid reliability even as more renewable energy come online

The grid is being pushed beyond its capacity in many countries around the world. The 600,000 miles of transmission lines in the United States, for example, are increasingly vulnerable to weather and myriad other impacts, causing power outages that cost billions of dollars each year. And it is hampering essential progress toward a cleaner energy future. Our Grid Solutions team helps our customers accelerate the energy transition by providing them with both the hardware and the cutting-edge digital tools to deliver affordable, reliable and accessible electricity.

According to the IEA, coal-to-gas switching is the quick win for emissions reductions

Modernising the grid is crucial to ensuring resiliency and enabling more renewable energy. We believe this requires both physical upgrades to support the increasing share of renewable energy and increase efficiency and resilience, as well as digital improvements to increase overall capacity, reliability, and security.

Technology innovation in renewable energy, efficient gas-fired power, and grid will help drive the energy transition and combat climate change. When combined with action and proper policy frameworks, combatting climate change is possible. GE is committed to working with countries, companies, and communities at every stage of the energy transition using these three critical technologies to reduce carbon emissions and secure our collective future.

Differences in available resources and technological capacity will mean not every community will move at the same speed –but we all must work together, beginning immediately, to confront this urgent global threat. Power generation represents a significant opportunity to utilise technologies we have today –while pursuing innovations and breakthroughs vigorously – to take aggressive climate action together.

No company, country, or community can do this alone; we must win together.

¹ https://www.iea.org/data-and-statistics/charts/global-energy-related-co2-emissions-by-sector

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Actis invests across the energy sector in renewable power generation, high growth distribution businesses and also high efficiency gas generation projects. We work with many of the leading technology companies across these investments and in this article we have asked two General Electric (“GE”) leaders to give their view on the role of gas powered generation as a catalyst for large scale deployment of renewables.

GE is uniquely positioned in that they design and manufacture wind turbines, gas turbines, transformers, inverters and many other key components for the generation of electricity.