Creating tomorrow’s energy systems, today

The International Energy Agency (IEA) has predicted that renewable energy spending will surge in 2022, increasing by 12 percent to hit $1.4 trillion.

This is a marked increase on the average growth rate of clean energy in the five years following the signing of the Paris agreement in 2015, which was just 2 percent, so should be cause for celebration.

Much of the growth predicted by the IEA is in response to the continued fallout from the Covid-19 pandemic and Russia’s invasion of Ukraine, as policy makers around the world look to increase energy security. However, around half of the increase is due to rising prices rather than investments into new capacity, so we should take stock before popping the champagne.

Of most concern is that despite this investment, we are still not on track to reach net zero emissions by the middle of this century. In response to this, the executive director of the IEA Fatih Birol called for a ‘surge in investment to accelerate clean energy transitions.

At Wärtsilä we are calling for more significant and urgent investment, and greater planning to ensure that we can meet our long-term decarbonisation goals to deliver the change we need.

Delivering today while planning for tomorrow

There is no time to waste in addressing the energy transition. The urgency of the challenge

 is building, as we can see from more frequent extreme weather events, such as the heatwaves in India and Pakistan and freak hail storms in Germany and Mexico City recently. As energy is a major driver for decarbonisation, we need to deliver the solutions to achieve clean energy systems, today.

At Wärtsilä we are a world leader in power system optimisation and have modelled the energy systems of over 145 countries around the world. Some countries have already achieved a higher share of renewable energy generation, some are yet to start the transition, and many are somewhere in between. Our modelling shows that the optimal path to a 100% renewable energy system, which is cheaper, faster and has the lowest emissions, is to combine the rapid deployment of renewable energy with flexible generation based on energy storage and highly efficient grid balancing engine technology.

 The private sector has already stepped up to the plate. In the US for example, private investment into clean-energy assets reached a record $105 billion last year. However, the invisible hand of the market can’t do it all alone - to meet a challenge of this magnitude we have to see the public and private sector working hand in hand. Regulations and permitting will play a key role in tackling the climate crisis and significant capital investment is needed urgently to accelerate the transition.

At the same time, it is essential to think beyond the usual four-to-five-year political cycles and to create a vision of our energy future in 2050. From there you can scope out the key steps needed to achieve that vision.

The good news is that the steps for decarbonising energy systems are similar anywhere in the world. Our Front-loading Net Zero report, published for COP26 last year, outlines a blueprint for decarbonisation. Using detailed modelling of six different markets – from Germany, to India and California – with vastly different socioeconomic dynamics, distinct energy systems, and challenges to overcome, the report show that countries can all follow the same five steps to decarbonisation, with technologies that are already available.

The first, most urgent step is to add a significant amount of renewables. We currently stand at around 30% of renewable energy globally, but the IEA’s World Energy Outlook predicts that will double by the end of this decade if we are to decarbonise by 2050. Wind and solar are the cheapest forms of electricity generation and will help to rapidly bring down energy sector emissions.

Step two will see significant investments in flexibility, in the form of energy storage and flexible balancing engines, to support the increased amount of renewable energy. From that point we can begin to retire inflexible legacy plants – step three on our route to net zero.

As countries continue to add renewables, supported by flexibility solutions, into the 2030s and 40s, they will build the conditions to produce sustainable hydrogen-based fuels. These can be cost effectively used as long-duration energy storage to supply power during periods of low renewable generation, which is step four. Now we have created energy systems capable of running on 100% renewables, our final step is to retire fossil fuels for good.

California dreamin’

California is at the vanguard of the renewable transition and the California Public Utility Commission (CPUC) recently announced plans to reduce greenhouse gas emissions to 35 million metric tons (MMT) by 2032, creating an 86% emissions-free power generation.

The sunshine state, which is home to 40 million people and the world’s fifth biggest economy,

is a fantastic example of the public and private sectors working together to accelerate decarbonisation.

California is delivering short term measures to ramp up renewables and the flexibility required to deliver renewable energy 24/7, and has implemented key policy changes to deliver on its long-term plan and achieve net-zero by 2045.

At Wärtsilä we recently announced a portfolio of projects with clean energy developer and operator Clearway Energy Group. That includes one of the largest co-located PV+storage facilities in California, at 482 MWac of solar PV and 275 MWac / 1.1 GWh of energy storage.

Ambitious projects such as this demonstrates the role of solar and storage in creating low-cost and secure clean energy at scale today, to create a greener tomorrow.

Developing island grids

We have also seen island nations, who are most at risk to the impacts of climate change, embracing renewables and the integration of energy storage.

 Hawaii last year set the ambitious goal to cut carbon emissions from power generation 70% by 2030 and outlined a clear plan in order to deliver that change.

 A key focus for decarbonising islands is on delivering resilient microgrids, founded on renewables and storage, which will deliver three key benefits: lower electricity costs and tariffs; lower emissions as compared to thermal power generation or gas generation; and improved electricity stability.

 For that reason, we are really excited to be delivering two projects, comprising 75 MW / 300 MWh (megawatt hour) of energy storage, at Clearway Energy Group’s Mililani I Solar and Waiawa Solar Power facilities on the Island of Oahu in Hawaii.

Beyond decarbonisation

The argument for renewables and storage now transcends the need to decarbonise.

The industry-wide volatility caused by conflict in Europe has exposed the interconnectivity between energy supply, energy security, sovereignty and decarbonisation.

It is therefore clear that power system optimisation is needed today more than ever. By investing in renewables and flexibility today, you can ensure low cost, reliable, domestic energy for decades to come, rather than increasing your exposure to volatile energy markets which are dictated by factors beyond your control.