In recent days, U.S. President Joe Biden has asked Saudi Arabia, Russia and the United Arab Emirates to boost oil production in an effort to lower American gasoline prices and with them inflation. It’s a reminder that despite all the talk of combating climate change, the global economy still runs, largely, on oil, natural gas and coal.
The “refusal of Russia or the OPEC nations to pump more oil” is the reason why we pay more at the pump for our fuel.
The U.S. isn’t alone: India, the world’s third-largest oil consumer, has been vocal in asking for more production. So has Japan, which is ranked fourth and uses nearly as much crude as France, Italy and the U.K. combined.
With its chimneys towering 200 meters above the industrial heartland of England, “West Burton A” power station is a relic of the fossil fuel age. When fired up, its boilers burn thousands of tonnes of coal each day.
After more than 50 years of operation, it will close next year, part of a global transition into green energy sources like wind and solar. It’s only rarely used, but for several days in September, it was this old generating facility that kept the lights on in the U.K.
The West Burton example isn’t unusual. Across the world, fossil fuels are making a remarkable comeback as recovery from the pandemic boosts demand for electricity. For all the green energy promises and plans, the transition to sustainable generation is in its infancy, and the world still relies heavily on fossil fuelled generation. It’s an addiction built up over two and a half centuries, and it runs deep.
In Europe, where electric vehicles are becoming ever more popular, gasoline sales are booming, reaching a 10-year high in some countries. In the developing world, from Brazil to China, natural gas consumption is stronger than ever. The global hunger for energy has collided with constrained supply, itself the result of a tangle of factors, sending power prices surging in many countries.
The situation points to a daunting new phase for the energy transition, with growing tensions among the disparate policy objectives of simultaneously reducing emissions, keeping prices low, and guaranteeing security of supply.
For several years, the world has grown complacent about fossil fuel consumption. From oil to coal, peak demand has been the buzzword, always about to happen, but never actually materializing. Many assumed that the drop in consumption during the pandemic was driven by social changes like work-from-home and the hope of a greener recovery.
But outside jet-fuel, due to the travel restrictions, oil demand is today higher than it was in 2019. The car has returned to city centres as people avoid public transport with the risk of transmission of the Covid Virus.
Many countries are desperate for gas as the fuel that offsets the ups-and-downs of solar and wind in electricity generation. Coal use is also increasing.
The world is living through the first major energy crisis of the clean-power transition. It won’t be the last.
The shortages jolting natural gas and electricity markets around the world are unfolding just as demand comes back from the pandemic. We have faced volatile energy markets and supply squeezes for decades.
What’s different now is that many economies are also undergoing ambitious overhauls of their power systems to sustainable generation but with no easy way to store the energy generated from renewable sources.
The transition to cleaner energy is designed to make those systems deal with climate change and also become more resilient, not less. But the actual switch will take decades, during which the world will still rely on fossil fuels even as major producers are now drastically shifting their output strategies.
It is a cautionary message about how complex the energy transition is going to be.
For example, the U.K. and Europe rely on a very different mix of energy sources. Coal has been cut back drastically, replaced in many instances by cleaner-burning gas. But surging global demand this year has left gas supplies scarce. At the same time, two other sources of power — wind and water — have had unusually low output, thanks to unexpectedly slower wind speeds and low rainfall.
In the throes of fundamental change, the world’s energy system has become strikingly more fragile and easier to shock.
Take the recent turmoil in Europe. After a colder-than-normal winter depleted natural gas inventories, gas and electricity prices soared as demand from rebounding economies surged too fast for supplies to match.
In other words: A strained global gas market triggered Europe’s record-setting spike for electricity prices — and the transition amplified it displaying an ominous sign of the type of shock that could strike around the world.
Even as solar and wind power become increasingly plentiful and cheap, many parts of the world will for decades still depend on natural gas and other fossil fuels as backups.
All this is happening at a time when power consumption is projected to increase 60% by 2050, as the world phases out fossil fuels and switches to cars, stoves and heating systems that run on electricity.
Continued economic and population growth will also drive consumption higher and the surge in electricity demand combined with fuel-price volatility means the world could be looking at unsteady energy markets for a few decades.
The consequences will likely range from periods of energy-driven inflation, exacerbating income inequalities, to the looming threat of power outages and lost economic growth and production, with the crisis and its spill-over being felt across the world with industries losing production, disruption to food supplies and snarling of supply chains.
In China, even as the government pushes to ramp up renewable power, the industrial economy still relies heavily on fossil fuels: coal, gas and oil. And when its factories started humming again during the pandemic rebound, the country simply didn’t have enough fuel.
Chinese manufacturing contracted in September for the first time in 19 months, suggesting that soaring energy costs have become the biggest shock to strike their economy since the beginning of the pandemic.
China’s government is now vowing to stabilize the situation by procuring more overseas coal and liquefied natural gas. That puts the nation in direct competition with Europe, threatening to starve the European continent of fuel and worsen that crisis.
Wind and solar power production have soared in the last decade. But both renewable sources are notoriously fickle — available at some times and not at others. And electricity, unlike gas or coal, is difficult to store in meaningful quantities. That’s a problem, because on the electrical grid, supply and demand must be constantly, perfectly balanced. Throw that balance out of whack, and blackouts result.
So far, coal and natural gas plants have served as the stable backup that wind and solar power need.
One of the biggest obstacles ahead will be storing power generated by intermittent wind and water sources. Solutions do exist, but it will be years before they are available at the scale on which they’re needed.
Australia and California are plugging massive batteries into the grid to keep power supplies steady when the sun sets on solar plants.
Many countries have pinned their hopes on hydrogen, seeing it both as a way to store energy and as a fuel for transportation and industry.
Hydrogen can be split from water using machines called electrolysers powered by renewable energy, whenever it’s abundant. The process produces no greenhouse gases. The hydrogen can then be burned in a turbine or fed through a fuel cell to generate electricity — all without carbon emissions. And unlike oil, gas and coal, such “green hydrogen” can be produced most anywhere there’s water and strong sun or wind.
The first wave of green hydrogen plants is still in planning stages. Many of the potential users — heavy industries and utility companies — are still studying whether the solution will work for them. The point, at which hydrogen could underpin our global energy system, if it arrives, is likely years away.
The current demands and price spikes have served as a reminder that even as the world is trying to build a new energy system, it’s still reliant on the old one.
“It’s not just about capacity of the amount of power we can get onto the network; it’s about the flexibility and the ability to deliver that power at the right time.
New Zealand faces the same issues as the rest of the world with the only major difference being that most of the baseload generation in NZ is produced from Hydro or Geothermal power stations with natural gas & coal fired generation used to smooth out the peak load demands.
The government has made a commitment to phase out the use of fossil fuels over the short term and to replace them with electricity use in transportation, industrial processing and home energy usage. At the same time they have committed to developing sustainable generation of electricity so as to eliminate the use of fossil fuels in generation.
The increase in use of electricity will bring with it a serious need for upgrading of our generating capacity to meet the increased demand and given that we are currently struggling to meet the demand when the lake levels are low, we are again like the rest of the world reliant on fossil fuels to make up the difference.
In our case we have a depleting resource in our stocks of natural gas which are predicted to run out within the next few years and the government has committed to stop further oil and gas exploration. As we saw in August this year we are now vulnerable to power blackouts when the hydro lake storage levels are very low with major rolling blackouts only being avoided by burning imported coal from Indonesia at the Huntly power station.
New Zealand is importing around one million tonnes of coal a year from Indonesia and if the Huntly power station was required to burn coal full time at its maximum capacity then it will consume around three million tonnes per year.
Given the predictions for global warming from climate change and the recent history of lower rainfall into the hydro storage lakes we could quite conceivably be faced with the need to burn large amounts of coal just to keep the lights on.
Sustainable generation (Wind & Solar) will not produce a reliable level of baseload generation as it is dependent on the weather conditions prevailing at any given point in time.
The situation points to a daunting new phase for the energy transition, with growing tensions among the disparate policy objectives of simultaneously reducing emissions, keeping prices low, and guaranteeing security of supply. The pace of the effort could even be at risk if soaring prices dent public support for climate policies.
We need to acknowledge that energy transition is a necessity, and we must accelerate it — but it’s not a flick of a switch. The transition from the use of fossil fuelled generation will require a large amount of thermal generation in the interim to allow time for the transition to occur without suffering regular rolling blackouts.
Given the huge increase in demand for electricity that will result from the government’s current policies around the use of fossil fuels, NZ will require a massive investment in both sustainable generation and also in transmission networks to allow distribution of the supply throughout the country.
For facilities that produce the same generation capacity (as fossil fuels generation) from solar and wind generation, experts have predicted that they will require the following:
The increased demand resulting from government policies almost guarantees the need for a sustained or even increased demand for thermal generation of electricity, and such demand given the lack of spare transmission network capacity, will need to be generated close to the area of demand with the largest such area being the Auckland region.
The truth being that without thermal generation we will have massive ongoing power cuts, every time the water levels drop in our hydro lakes and the wind doesn’t blow.
The truth also is that by importing coal from Indonesia we are actually producing worse effects (greater amounts of greenhouse gas emissions from dirtier coal and effects from shipping and transporting coal by road) on the environment than if we were to mine the coal here in NZ.
This then results in the need to run the Huntly power station at peak capacity for much longer periods than at the present time and taking into account the failing natural gas supply reserves leads to the need for burning of coal.
New Zealand currently has two choices when we consider the burning of coal for thermal generation:
Current government climate change related policy has effectively decimated the coal mining industry in NZ and therefore the need to import coal which is currently coming from Indonesia. We have a lot of coal in NZ but government policy means that it will not be mined; we will just keep importing coal and exporting the environmental problems that come with mining.
We need to come to grips with reality. Stopping the use of coal fired industrial processes and banning any further oil and gas exploration is not helping save the planet it is in fact making it worse when you factor in the detrimental effects from the transportation of alternative fuels.
But here in New Zealand we have another option that will allow us time to develop adequate levels of sustainable generating systems while still producing enough electricity to keep the lights on without the need to import dirty coal from Indonesia.
Instead of filling our landfills with waste we can use that waste to produce power by incineration. Given the latest technology available, the relatively simple engineering needed to transform the Huntly Station to use waste, the availability of area for the processing of the waste, the existing transmission network and the existing rail network into the site, there will be less harm done to the environment from using waste as a fuel than there is from importing and using coal.
According to the Waste Hierarchy, the recovery of energy from waste is the next preferred method after recycling. Disposal to landfill is the least preferred method of waste management, yet it is the most widely used in Third World countries, and is current best practice in New Zealand.
The Auckland region produces approximately one and a half million tonnes of waste per year that mostly goes into landfills.
The government has committed to stopping the use of fossil fuels and converting to electricity use instead and given this focus on the use of electricity to replace the use of fossil fuels the demand for electricity is going to increase exponentially.
New Zealand currently does not have the capacity in sustainable generation of electricity to stop the use of thermal generation outright. If the hydro lake levels drop significantly due to weather effects and the wind doesn’t blow at that time then we will need to rely on thermal generation or see rolling blackouts as happened in August this year.
We don’t currently have the infrastructure available to rely on sustainable generation at all times and without the use of thermal generation there will be times when the demand for electricity will outstrip supply and then we will be again faced with rolling blackouts.
By using waste incineration at Huntly Power station we can achieve the following benefits;
We have the capability to renew the generation system at the Huntly Power station to accommodate thermal generation from incineration of waste; we have availability on the boundary of the Huntly Power station, of rail sidings and we have large areas of government owned land where the infrastructure could be sited to accommodate the sorting of the waste streams into separate recyclable and incineration resources.
There are no compelling reasons not to use waste incineration when compared to the environmental effects from burning imported dirty coal, but until we have the capacity to do so then we should be using coal mined in New Zealand as this would at least remove the environmental costs of transport by sea from Indonesia.
It would also be the honest option instead of trying to hide behind weasel words designed to hide the fact that we are still using coal fired thermal generation to keep the lights on but exporting the detrimental environmental effects.
Andy Loader. Peter Buckley.