While today’s power generation sector has largely focused around generation of electric power, it will increasingly be feeding a more diverse set of users and products, including storage and fuels. This will require those in the power industry to more broadly understand these factors and how they will influence the power generation sector.
Energy: Sources, Consumers, and Carriers
Today’s energy system includes three major subsystems: (A) energy sources (oil, solar, etc.), (B) infrastructure and carriers for moving these energy sources, and (C) energy consumers. Particularly significant shifts in the energy sector over the last decade have occurred in energy sources, reducing the carbon intensity of electricity. Major U.S. energy consumers include transportation, buildings, and industrial sectors.
It is the movement of energy which is the focus of this article. In large part, the electric, gas, and liquid transmission/distribution systems constitute the internal “plumbing” of the energy system and have enormous construction costs, land use, regulatory, and right-of-way issues that are associated with them . Currently, the energy system is dominated by two largely independent, multi-trillion dollar carrier systems: (A) electricity, and (B) hydrocarbon fuels. Today, roughly 40% of energy is carried via electricity, and 60% via fuels. Figure 1 provides an overlay of the US electricity and natural gas transmission infrastructure, providing a feel for the density of these networks. While electricity increasingly utilizes low carbon energy sources, fuels do not. Fuels are chemical-based energy carriers with high energy densities that make long-range transportation possible. Today they are almost completely based on extracted fossil fuels, such as natural gas or crude oil. These systems leverage millions of miles of pipelines, a significant petrochemical manufacturing base, and serve a global user network, including vehicles, industrial processes, and building heating.
There are three options for decarbonizing energy carriers. The first is to use electric power derived from decarbonized energy sources, such as solar or nuclear. The second is to continue using the same naturally occurring hydrocarbons in combination with large-scale carbon capture. These strip the CO2 from the plant exhaust or the air and then store it underground. The third option is to use decarbonized chemical energy carriers, or renewable synthetic fuels – this option will lead to significant interconnects with the power generation industry that do not exist today
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Synthetic fuels are an energy storage medium like fossil fuels but are manufactured. A variety of synthetic fuel options have been proposed, including hydrogen, methane, ammonia, methanol, or synthetic gasoline; very rough approximate costs are summarized in Table 1, alongside costs of conventional fuels. A convenient way to organize these candidate fuels is whether they (a) can or cannot “drop-in”, without requiring changes to the existing distribution infrastructure and users (e.g., do you need to change out your car or home furnace?), and (b) contain a carbon atom or not. Regarding the latter point, some groups have, in addition to or as a means of reducing our climate change impact, argued that society should move “beyond carbon”; i.e., that carbon-based energy carriers should have no future role. Of course, it is entirely possible to have a society that mitigates its climate impact while using carbon atoms as energy carriers, by capturing emitted CO2 and recycling it, much as plants do.
Consider some representative examples. Hydrogen, H2, is probably the most commonly proposed option, and so is worthy of special attention. It contains no carbon atom, and, outside of the 1,000 miles of hydrogen pipelines in the US, it cannot “drop-in” to existing gas pipelines at appreciable levels (more on that later). It is one of the lowest cost synthetic fuels to be generated on an energy basis and can be produced by the electrolysis of water. A particularly robust hydrogen infrastructure exists around the chemicals industry, as a feedstock produced from natural gas. Outside of that, infrastructure is much more limited; for example, under 400 vehicular transport refueling stations exist globally, with less than 100 of these in North America.
A second example of a carbon-free energy carrier is ammonia, NH3 . Its key advantage over hydrogen is its much higher energy density, and so it can be used directly, or as the intermediate carrier for transporting hydrogen over long distances. Ammonia production for fertilizer is one of the largest chemical industries globally. As with hydrogen, however, broad-based pipeline infrastructure is relatively limited outside of two major pipelines in the U.S. that deliver ammonia to the Midwest.
Consider next examples of synthetic fuels that contain carbon atoms, which could include ethanol, methanol, methane, or a gasoline or aviation gas substitute. If they are “drop-in” substitutes, such energy carriers would use the existing hydrocarbons infrastructure, which in the U.S. alone includes 115,000 gasoline stations, 2.4 million miles of pipeline, and 275 million vehicles. Renewable hydrocarbons can be manufactured using power from renewable electricity; with this approach, the chemical energy carrier essentially acts as an energy storage medium.
Criteria for Energy Carrier Policy Decisions
What should the energy carriers of a decarbonized society be? While an “all the above” strategy makes a lot of sense on the energy sources side, such an approach on the energy carrier side does not, due to the significant requirements in constructing energy distribution systems and infrastructure, and ensuring compatibility with end users. Economic and engineering considerations around production costs and efficiencies are key to these decisions. Indeed, if were developing our energy systems from scratch, these considerations would probably drive the decisions. However, the biggest drivers for major infrastructure decisions will likely be politics and historical inertia. Given this hypothesis, we argue that that energy carriers should satisfy the following considerations:
- Minimize effects on users. First, this point should be differentiated from cost considerations, as a turnover of the existing user base will influence overall societal costs. Our point here is that challenges to transitioning to new energy carriers is not only techno-economic, but also social and political. Given the multi-decadal nature of this transition, coupled with the regular turnover in decision making bodies, this implies that solutions that minimize disruptions will be those that are most resistant to political churn.
- Incrementally deployable. The hypothesis behind this point is that the path to decarbonization will involve gradual transitions and renewal of pipelines and electric transmission lines, potentially over multiple decades. Stated differently, we hypothesize that society will not unify around the multi-trillion dollar expenditures needed for a short term, large scale infrastructure turnover. Thus, any solution must work when deployed incrementally, and it should be capable of obtaining reasonable adoption levels even while it is partially deployed; i.e., it should not require large economies of scale to ensure uptake, as is typically the case in, for example, telecom networks or e-commerce platforms. Indeed, a key reason for the steady progress in renewable electricity sources is that they offer a “drop-in” electricity source which can be incrementally deployed, which plugs into the well-developed U.S. electricity system. Their use doesn’t require an independent electricity infrastructure and doesn’t force consumers to swap out their lights and electric heaters to use them.
Now, consider how these considerations reflect on chemical energy carriers. Non-drop-in options, like hydrogen, ammonia, or ethanol satisfy these requirements at low concentrations in existing energy carriers. For example, the legacy automobile fleet can utilize ethanol levels up to about 10% before requiring modifications. Similarly, the existing fleet of natural gas fired power plants can operate with hydrogen levels of up to about 5%. However, such energy carriers cannot be used in significant concentrations without modifying users/carrier infrastructure. In the case of hydrogen, for example, this is due to embrittlement concerns in pipelines or flame flashback in low NOx gas turbines or heaters. Research and development around hydrogen must focus on enabling incremental deployment and minimizing disruptions to users.
Synthetic drop-in hydrocarbons (i.e., synthetic gasoline) satisfy both criteria. They can plug into the nation’s existing distribution infrastructure and adoption requires no changes to the user base, such as cement manufacturing, automobiles, or home water heaters. The underlying technology can be developed in modular form and deployed incrementally, reducing capital risk and leveraging learning curves to reduce unit costs. Moreover, no large scale buildouts of transmission and distribution infrastructure are needed to ensure uptake. A convenient ancillary benefit would be facilitating the transition of chemicals and plastics productions from its current primary fossil fuel feedstock today. Finally, from a purely political standpoint, such an approach minimizes disruption to a number of vested political interests. The key challenge for synthetic drop-ins is that they are more expensive to manufacture than, say, hydrogen production – this can be seen in the cost table.
Moreover, it is not clear that a proper public debate about the role of drop-in hydrocarbons is occurring, as their deployment seems to be less understood at the policymaker level than options like electrification or hydrogen – indeed, we even see resistance from environmental advocacy groups in deploying renewable natural gas projects. This is probably due to the incorrect perception that a decarbonized society must be based upon carbon-free fuels. For example, several countries have implemented or are discussing mandatory phase outs of internal combustion engines, as opposed to letting markets determine the optimum path to decarbonizing transportation. Further education of decision makers on drop-in fuels is important, in order to ensure the most informed decision making process.
While many questions remain and whatever the exact energy carrier sector looks like, it is clear that the electric power industry will find growing engagement and interconnections with the fuels industry.
About the author: Tim Lieuwen is Founder and CTO of Turbine Logic. He is also Regents’ Professor, David S. Lewis, Jr. chair and the executive director of the Strategic Energy Institute at Georgia Institute of Technology. He is a member of the National Academy of Engineering.
Matthew Realff is the David Wang Senior Faculty Fellow in the School of Chemical & Biomolecular Engineering and the associate director of the Strategic Energy Institute and Renewable Bioproduct Institute at Georgia Tech.