Why produce all that electricity, only to convert it into hydrogen or ammonia? And why ammonia?
Hydrogen is an efficient means to store energy, but with many drawbacks. Transporting liquid hydrogen directly, for example, requires storing the gas at -233C. It turns out that ammonia is also a very efficient means to store energy. Ammonia’s energy density by volume is 1.7x that of liquid hydrogen, and it’s more easily stored and transported as well. Japan intends to use hydrogen and ammonia fired systems for power generation. Mitsubishi is also developing 100% ammonia fired turbines intended for deployment in 2025.
The big drawback to ammonia is the Haber-Bosch process used to produce it at industrial scale today. We use vast amounts of ammonia globally, mostly for fertilizer. Indeed, we could not feed the planet without the Haber-Bosch process. However, the Haber-Bosch process consumes large amounts of energy (1-2% of world energy), takes natural gas as an input to generate hydrogen (3-5% of global production), and emits CO2 directly as a byproduct. “Green ammonia” production uses water electrolysis to generate hydrogen instead of natural gas, which eliminates the emission of CO2, and powers the Haber-Bosch process by renewable electricity. It still consumes large amounts of electricity, but generated from renewable sources instead. Hence the need for a power generation plant capable of powering the entire continent of Australia!
Lastly, there are still many possible efficiencies around the production of ammonia. For example, promising work is underway to produce ammonia using reverse fuel-cell processes directly from water and nitrogen gas. No electrolysis, no Haber-Bosch process, very low energy requirements.
Perhaps one day ammonia will help us to both power and feed the planet, without the emissions downside it creates today.
BP’s 70th annual Statistical Review of World Energy came out this past week. This data-rich documents is 70 pages of detailed, country by country, statistics about world energy capacity, production, and consumption with commentary. Here are some of the highlights.
Consumption
Due to COVID-19, last year saw the largest decline in energy consumption since World War 2. Consumption fell by 4.5%, primarily due to the shutdown of the transportation industry. Oil consumption fell by 9.2%, while natural gas fell only 2.3%. But renewables — solar and wind — had their best year ever as capacity increased by 50%. BP themselves were surprised by this, saying “we materially underestimated the growth of wind and solar power over the last five years”. But before we break out the bubbly, let’s put that in context. Even with that super result, renewables are still a small fraction of the global energy mix. Non-emitting energy (Nuclear, Hydroelectric, Solar and Wind) are still just 16.8% of the overall energy mix.
The world is finally weaning itself off coal. Coal generation declined by 405 TWh, which was almost directly correlated to the 358 TWh increase in solar and wind generation. We are truly seeing coal-fired generation being phased out in favor of renewables.
On a country by country basis, the biggest global consumers of energy were the United States (87.79 EJ) and China (145.46 EJ), or 15.8% and 26.1% of global energy consumption. Nobody else comes close, except if you start to combine regions. All of Europe, for example, consumed 77.15 EJ, a little less than the USA. It’s also worth noting that the United States consumed 15.8% of the global energy supply, but has just 4.25% of the population. China consumed 26.1% of the worlds energy, but has 18.5% of the population.
Globally, each human on the planet averages annual consumption of 71.4 Gigajoules (GJ) of electricity. However, Canadians (361GJ), Qataris (594 GJ), Saudi Arabians (303 GJ), Emeratis (423 GJ), and Australians (218 GJ) all are good examples. Or maybe it’s just the weather. Singapore has no natural resources, and Singaporeans use an astonishing 583.9 GJ per person of energy annually, second only to Qataris.
Emissions
Global carbon emissions from energy use also fell, and even more dramatically than energy use itself. Carbon emissions fell by 6.3%, while energy consumption declined by just 4.5%.
Among the big economies, the US generates 18.3% of its energy from non-emitting sources, China 15.7%, and Europe 28.8%. China is still heavily dependent on coal, and Europe has been helped out by a favorable shift to renewable plus the fact that a whopping 36% of France’s energy comes from nuclear. Canada, often in the news because of it’s foot-dragging on emissions targets, does surprisingly well with 35.4% of it’s energy coming from non-emitting sources. This is due to the outsize impact of the country’s hydro-electric industry. Canada, with fewer than 40 million people, is the second largest producer of hydro-electric power globally, only surpassed by China.
The biggest absolute GHG emitters are (in order) China with 9,899.3 megatonnes, the United States (4,457.2), Indonesia (2,302.3), and Russia (1,482.2). Nearly a third of all emissions are from China. This is no surprise, given China’s massive energy appetite, but it’s still sobering nonetheless. Let’s put these into context, though. The US, with 330M people, is a much bigger emitter, per capita, than China. If the Chinese were to pollute the way America does, then their emissions would be close to 19,000 megatonnes. And all of Europe, which is a population of roughly half of China, emits just 3,596.8 megatonnes.
Geopolitics
The geopolitical world of energy stands out clearly in this report.
The United States is well established economically, and has small reserves of oil (68.8M barrels), about 6.7% of the worlds gas reserves (12.6 trillion cubic metres), and almost a quarter of the worlds coal reserves (248,941 million tonnes). At current rates of consumption, the US will exhaust its oil in about 10 years, and gas in 15 years. The US is the “Saudi Arabia of coal”, but most of that resource will stay in the ground.
China, by contrast, sits on a paltry 26M barrels of oil, 8.4 trillion cubic meters of gas, and 143,197 million tonnes of coal. China uses less oil annually than the US, but has only about 4 years reserves remaining. The country uses less than half the gas of the United States today, and thus has 25 years of reserves remaining. And they burn a lot of coal to generate power.
Consequentially, the US is a net exporter of oil and gas. In contrast China imports nearly all the oil and gas it needs to meet its energy needs, and China’s energy needs are growing at a blistering 3.8% annually.
The Chinese have been reluctant to give up coal electric generation, as the one energy source they have in abundance is coal. It is the one tool they have which gives them a measure of energy independence. It should therefore be unsurprising that China now leads the world in renewable power generation (#1 in hydroelectric, solar and wind), and new renewable capacity additions (in 2020 China accounted for 36% of new global solar capacity, and 38% of new global wind capacity). China has no choice. They cannot continue to generate electricity with coal. The global trend toward net-zero emissions means that Chinese companies risk being cut off from global export markets unless they can show that the carbon footprint of the products they sell is acceptable to their customers. Moreover, China cannot continue using coal to generate electricity at home without polluting its already fouled air even more.
It should also come as no surprise that 44% of the electric vehicles manufactured and sold in the world were sold in China. China is completely dependent on foreign oil. They cannot satisfy the growing appetite for vehicles domestically without an alternative to gasoline. They also cannot build the economy they want without the logistics in place to move goods from one location to another. They need electrified transportation more than any other economy globally.
Nuclear
Nuclear was a surprise. The top producer of nuclear energy in the world today is the United States, despite the unpopularity of nuclear domestically. 31% of the nuclear in use today is in the USA (7.39 EJ), although it is declining. The next largest producers of nuclear energy were China (3.25 EJ) and France (3.14 EJ). Few countries globally are adding nuclear capacity, the most notable exception being China, where nuclear (pre-COVID) was growing at a rate of 16.7% annually. Again, unsurprising that China would be building this capacity.
Conclusions
There are three inescapable conclusions in BP’s numbers.
The first is that there is little economic incentive in the west (Europe and North America) to replace fossil fuel generation. The energy demands of the west’s stable economies are growing slowly, having shifted most manufacturing overseas. The western economies’ focus on emissions are largely domestic politics, centered around climate change risk management. To make the transition from fossil fuel to renewable energy will require deft political skills, regulatory frameworks, and a continuation of the economic incentives we have seen.
The second is that Asia-Pacific, having become the center of global manufacturing, must navigate growing their energy use carefully. Global supply chains originate in Asia-Pacific, today. Consequently the region has a ravenous appetite for energy, but must find ways to meet that appetite and grow consumption while managing and reducing GHG emissions. Expect to see this region lead renewable energy deployment globally for some time, as they deal with the double incentive of managing climate change risk, while rapidly growing economies to satisfy western consumers needs.
And finally, the two remaining superpowers of the world, China and the United States, are quite different in their approaches.
America is divided. America has a substantial fossil fuel export business, many politicians support that business, and American free speech rights permit climate deniers to manipulate the public by spreading disinformation about the severity of the climate crisis, and the value of solutions being proposed. The fossil fuel lobby is strong! However, America has the luxury of being able to dither simply by virtue of the fact that it has secure domestic energy resources, and business seems to be stepping into the leadership vacuum in a way that Washington is apparently not able to.
China, in contrast, has a more immediate crisis and as a result seems to have a more unified approach. The Chinese don’t have the energy independence that America has. As a result, they are simply “getting on with it”, rapidly deploying renewables, building electrified products and industry, and making plans to decarbonize generation by taking their coal plants off line. The pace at which China is weaning itself off coal is slower than some in the west want, yes, but it is happening.
The inescapable conclusion is that China is playing a “long game”, building expertise that will serve it well for generations. The rest of the world already buys much of its wind and solar generation capability from China. It’s not hard to see how cars and batteries will be next.
One tends to think of energy poverty as a developing nation problem. It’s true, after all, that the vast majority of those without access to energy (759M people) are in developing countries like Nigeria, Pakistan, the DRC, Ethiopia and India. For context, the entire generating capacity for sub-saharan Africa is approximately 58GW, spread across a population over a billion people. Annual electricity consumption is about 488 kWh per person, or about 5% of the United States. 600M people have no access whatsoever.
But is it just a developing country problem?
Dr. Nock challenged listeners to think about energy poverty in a different way. Are you energy poor if you live in a developed country? What if you spend a significant portion of your pay check on the power bill? Put on extra sweaters instead of turning the heat up in the winter? Or, as we have seen recently, suffer the extreme effects of a heat wave due to the high cost of electricity for cooling? Maybe even end up hospitalized, or dead.
Renewable energy, especially solar, is frequently put forward as an answer to energy poverty in the developing world. Off grid solutions promise to decentralize generation, and bring power to places that utilities can’t or won’t serve. Renewable energy also offers a route to weaning the developing world away from fossil fuels, coal especially.
In the developed world, rooftop solar is often seen as a way to reduce the power bill. However, some in California say that rooftop solar households are disproportionately wealthy and white, and have put the burden of the cost of the energy transition onto the shoulders of the poor. “Utilities are cynically playing the equity card”, they claim. The numbers seem to back them up, as wealthy households reap the double benefits of subsidies, and reduced utility costs.
Transitioning to a clean, renewable and global energy economy holds out huge promise. Let’s make sure we get the equity part of that promise right, and lift the neediest up at the same time. After all, if 1.1 billion poor Africans live in countries that are burning coal and oil to generate power, it won’t matter what we here in the west do. The planet will still get hotter.
The energy industry is building zero carbon capacity, and this will be a key factor in the effort to decarbonize global supply chains. Should we expect to see the entire grid become zero carbon? That’s probably unrealistic, for now.
For starters, there will always be a need for a reliable energy source that can be turned off and on at will. Large scale energy storage solutions, such as massive battery systems, will get us part of the way there. However, unless new technology, or new nuclear installs, bring us the instantaneous generation that fossil fuels offer it’s unlikely fossil fuels will go away completely. We will need fossil fuel or nuclear generation, and then appropriate abatement strategies.
In addition to the reliable energy source need, the grid itself is constructed around a paradigm of centralized generation, and then transmission to substations, and then homes. It’s a forward feed system that presumes we will truck fuel to generation sites, generate power, and then distribute the power forward for consumption. The impact of this is that generation tends to be placed close to consumption sites, in order to minimize transmission losses. But you can’t truck the wind, or the sun, to a convenient place to generate power. The other challenge is reverse flow. Feeding energy bi-directionally into the grid from what are today’s consumption sites creates a whole new set of problems. It’s likely the grid itself will need to be updated.
