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Statkraft Finds A Ray Of Sunshine Inside The Clouds Of War

Norway’s Statkraft has issued its annual sustainability report and finds reasons to hope that Europe will survive its latest energy crisis.

We all know Russia’s war of aggression against Ukraine is causing havoc in the world’s energy markets, particularly in Europe, which allowed itself to be seduced by the promise of cheap Russian natural gas for decades. Now the chickens have come home to roost and Europe is facing a long, cold, dark winter. But in its latest energy assessment, Statkraft, Norway’s largest supplier of electricity, most of it from hydro power, sees some good coming from all this disruption.

In particular, it says the scales have now fallen from the eyes of European leaders, allowing them to see clearly for the first time that relying on Russia for anything other than ballet is a fool’s game. The future for all nations is renewable energy created within their own borders and solar, says Statkraft, will lead Europe to the Promised Land of abundant, affordable, and secure electrical energy.

Statkraft has created a very detailed 42-page report to explain its latest findings, and while it is beautifully done and we would love to reproduce the entire document, in an effort to keep our readers’ eyes from glazing over, we will endeavor to cover just its most salient points.

Statkraft Low Emissions Scenario 2022

Espen Wiboft, one of the lead authors of this year’s report, says, “We are actually more optimistic on behalf of the climate than we were in the scenario from 2021. Although Europe is in the middle of a very serious energy crisis we see positive trends when we look further ahead, beyond the point when we gradually overcome this crisis.”

“We see more solar power, more wind power, more electrification and more use of hydrogen. This means that the emissions in 2050 are likely to be slightly lower than what we predicted last year. The trends we have seen in previous years have only been reinforced.”

“It is perhaps difficult to be optimistic at present, but Statkraft’s Low Emissions Scenario shows that we do not need to choose between solving the ongoing energy crisis or the climate crisis, and we see several positive long-term trends despite the current global situation.”

“In the past, the climate crisis was the biggest driver for using more renewable energy. Over time, costs have fallen, and renewable energy sources have become a cost-effective alternative to fossil energy. This year, the energy crisis has highlighted the importance of having a reliable power supply and energy security, and this has become a powerful driver for further development,” says Wiborg.

Never before has so much been invested in renewable energy as in 2022. The energy crisis in Europe and the need for a secure power supply serve as catalysts. The green transition will now take place at a much faster pace, and the plans are more ambitious,” Statkraft says.

“It’s primarily Europe’s extreme dependence on gas and its need to import fossil energy that have caused the current energy crisis. The scarcity of fossil gas, resulting from Russia’s reduction in gas exports, has driven prices to historic highs. Gas prices are exceptionally high and have increased by several hundred per cent since the beginning of 2021. The gas prices have affected power prices directly, but they have also impacted the price of food and other goods,” Wiborg adds.

The solution to the crisis involves expanding renewable power capacity and electrifying the industry, transport, and buildings sectors with clean, renewable energy that is also cheap. Electrification uses energy efficiently, reduces carbon dioxide emissions, and reduces dependence on fossil energy sources.

Every country should reduce its dependence on power from fossil energy sources. At the same time, the exchange of renewable energy between countries is important for flexibility. When there is little wind or little sun, flexible hydro power can be used. Solar and wind power can complement each other, and in sunny and windy periods, hydro power can be stored. Good cooperation within Europe is necessary to succeed in the energy transition. Renewable energy not only cuts emissions, it is also efficient and cheap. And it provides security of supply, says Wiborg.

Statkraft Scenario Highlights Challenges

A geopolitical world characterized by rivalry and conflict can make it more difficult to coordinate the global response to climate change. The green transition will happen much more slowly in less developed parts of the world, Statkraft says.

Solar panels, wind turbines, batteries, electric vehicles, and the infrastructure that delivers the electricity are completely dependent on specific metals. “There are ample metal supplies globally, but supply chains for metals that are critical for the energy transition are concentrated in a few countries,” Wiborg points out. This can create challenges.

One example is the solar power value chain, where China controls over 80% of the metals required, and that is expected to grow to nearly 95% in the coming years. To ensure access to critical metals, it will be important to diversify supplies to several countries and to recycle metals. The EU and the US have recently laid out a strategy for this and have set targets to develop their own capacity.

Here Comes The Sun

After 2035, solar will be the world’s largest source of energy and increase to 21,000 TWh by 2050 — enough to meet 80% of the world’s energy needs. The global power demand will more than double towards 2050, and solar and wind power will cover around two-thirds of that demand.

Statkraft’s Low Emissions Scenario 2022 concludes that, although challenging, it is possible for the EU to achieve the goal of becoming completely independent of Russian gas by 2030. Within the same timeframe, the EU will reach its own emissions reduction targets and increase the proportion of renewable energy to around 65%. In the Low Emissions Scenario, annual emissions will be reduced by more than 60% by 2050.

Statkraft believes the Earth is heading for 2º C of global warming on its current trajectory. We are at 1.2º C already and the effects are severe, from rising seas to more powerful storms to massive flooding and forest fires to punishing droughts. If we get to that 2º plateau, we will be in deep doodoo for sure. To try to keep the a 1.5º C target, the pace of global climate policy must increase significantly. These five steps could make that more likely.

  • Solar — Solar panel technology is constantly improving, and power production from solar energy will grow rapidly and become the largest energy source from 2035. The panels of the future can be mounted on buildings, on water surfaces and in fields. Panels can be installed so that tractors can drive under them and harvest crops that benefit from the partial shade provided by the panels.
  • Electrification — Electrification will continue in the industry, buildings and transport sectors. Sales of electric cars will continue to increase. Batteries will become increasingly cheaper, and in a few years electric cars will cost roughly the same as cars with internal combustion engines. The global passenger car fleet will be fully electric by 2050, with some hydrogen cars in the mix.
  • Efficient and smart energy use — Direct use of renewable electricity is efficient use of energy. We will get more out of the energy through more efficient buildings, more heat pumps and more efficient use of materials. We will see savings measures that reduce energy costs for households and businesses in both the short and long term. Electricity for heating homes or charging electric cars can be shifted to times of the day or night when electricity production is high. This creates room for more variable, renewable power production.
  • Wind — Onshore and offshore wind power will continue to increase in scope. Many countries are focusing on offshore wind, with anchored turbines and, in the long term, floating ones. By 2026, wind turbines outside China will have a capacity of as much as 16 MW each. This means that after one hour in full operation, a turbine can produce around four times the equivalent of the annual electricity consumption of an average European household.
  • Green hydrogen — Hydrogen produced using renewable electricity will be more competitive than blue and grey hydrogen after 2040. Green hydrogen will become an important solution for industry and long distance transport, which require too much energy to be electrified. Fossil fuel will be replaced, and green hydrogen will be used for long-distance transport. Many ships will run on ammonia. For planes, replacement fuels known as e-fuels, such as e-methanol, are promising solutions. E-fuels are synthetic fuels produced with the help of electricity generated solely from renewable sources.
  • Hydropower — Hydropower is currently the world’s largest renewable energy source. In addition, it is the largest in terms of energy storage, contributing a whopping 99.9% of total storage capacity. Hydropower is one of the few solutions that can meet the flexibility requirements in power supply over long periods, such as entire days and weeks. It will continue to play a major role in the global energy system until 2050. Efforts continue to get more power out of existing hydro power plants.

The Takeaway

You may quibble with some of Statkraft’s rosy predictions, which often rely on international cooperation. As China rattles its sabers in the direction of Taiwan and Russia contemplates the nuclear option, some may question exactly how much cooperation should be factored in to future projections.

One thing is fairly clear, however. China may or may not be heading back to the bad old days of Mao and the horrors of the Cultural Revolution, but there is no denying it has a lock on much of the battery and solar panel technology (and soon wind turbines, too). If the dependence on OPEC has taught us nothing else, it is that over-reliance on one country like Saudi Arabia often leads to armed conflict.

War may be part of the DNA of the human species — it certainly seems as though it is — but geopolitics aside, it is an excuse to unleash billions of tons of climate warming emissions. On that basis alone, the world cannot afford more conflicts. Substituting wars fought over lithium, or cobalt, or nickel, or any other natural resources for wars fought over oil, is not a strategy for a sustainable planet.

The sun provides all the energy human civilization could every possibly need. It only makes sense to harness it as quickly as possible. Common sense and good judgment, however, are in short supply on Earth at the moment. We are, sad to say, our own worst enemy, or as Walt Kelly put it so brilliantly in his cartoon strip Pogo, “We have met the enemy and he is us.”

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Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. He is proud to be "woke" and doesn't really give a damn why the glass broke. He believes passionately in what Socrates said 3000 years ago: "The secret to change is to focus all of your energy not on fighting the old but on building the new."


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