Energy Transitions: CSUR Webinar Talks Power Future, Reasonable Mid-Century Expectations

Every energy source — renewables, fossil fuel-based, or other — has significant benefits while also carrying significant costs and risks, both economic and environmental, says Brad Hayes, president of Petrel Robertson Consulting Ltd.

There is no one energy source that is environmentally benign and meets growing global energy demands as the world transitions to cleaner power production.

“Climate change is an important issue, but on a global sense it’s not the only issue,” he told a recent Canadian Society for Unconventional Resources (CSUR) webinar. “There are billions of people more concerned with other things, particularly about achieving a modern way of life. That’s not to try and minimize the importance of climate change or how some people feel about it, but at the end of the day it’s one issue among many.”

According to Hayes, there exist two competing ‘realities’ regarding energy transition. The first one is a measured, gradual transition driven by market forces, which is what is actually happening now and includes innovations in oil and gas markets. As for the second reality, it calls for more transition urgency due to climate change. It is primarily driven by strong, rapid policy interventions and taxation to force investment and energy use along a different trajectory.

However, he told the CSUR webinar, any pathway to a goal of making the economy fossil fuel free by mid-century must lay out physical mechanisms and actions, and in Canada the amount of infrastructure that would be required in the next 30 years to meet such decarbonization goals would be on the order of 33 to 101 new massive hydroelectric dams — something that is not possible and would be met with a large degree of opposition by various groups even if it were.

 “We are not going to be carbon free by 2050, not because we lack the will, but because it’s physically impossible when one considers all the work that needs to be done, the investments that need to be made, and the convergence of the energy systems we have in place today.”

Further, he added, simply because something is renewable does not make it automatically better for all concerned. “We have to think about all the costs and all the benefits. Much more importantly than anything else, we must improve and have clear and effective communication.”

Unpredicted, impactful events such as pandemics or natural disasters will occur, in the future noted Hayes, and energy systems must contain flexible surplus capacity so that if something gets knocked out, then the network has a backup. Society must “overbuild things” to make the grid highly reliable, and fossil fuels will remain important for many decades, as humanity cannot meet the energy availability goals of everyone worldwide without them.

“Indeed, we’re going to continue to need them even in developed nations for some decades to come. Today’s energy networks are complex, and tomorrow’s will be more complex with alternative energy supplies and more storage, and these things take decades to develop.”

He added: “We have to proceed in a logical fashion. We have to balance humanity’s needs and the environmental impacts. We need solid, focused fundamental science and engineering. We must recognize realistic timelines to build infrastructure. To develop new technology, we must think critically and we really have to look at cost-benefit analysis.”

Like renewables? Then invest in renewable companies

The notion that oil and gas companies should become renewable energy companies is “a bit misguided,” according to Hayes. If investors want to see more renewable energy, he said, then those investors should invest in renewable firms rather than expect hydrocarbon producers to make a shift away from what they do well.

“A lot of oil majors are sticking with the game because they understand and they believe the energy transition will be measured and there will be significant oil and gas markets decades from now, and that will sustain them.”

In order to appease these investors, though, Hayes noted that many companies have set “net-zero” targets, utilizing carbon sequestration and offsets. “It’s not like they’re not going to be producing oil and gas [in] 30 years. They’re going to be producing a lot. But they’re going to be saying, ‘Yes, we’ll sequester a bunch more CO2, we’ll plant a bunch more forests and we’ll do whatever else like that, and we’ll do the math and it’ll come up to net-zero.’”

Storage needed for renewables to flourish

The grid needs electricity all the time, and not just intermittently, which means storage capacity is essential for renewables such as wind and solar to flourish in the energy transition, Hayes told the CSUR webinar.

“We need storage at all different scales, including very short term to cover off when we’re heavily reliant on solar. If a cloud goes over the sun and we drop solar generation for a short period of time, we need some battery or storage capacity to come onstream. At other times, we need it during long periods of cold or cloudiness or things like that.”

If that storage capacity is not in place, he said, then jurisdictions actually must dump excess renewables energy generated when they do not need it, as is routinely the case for California or Ontario, the latter of which often sells power cheaply or even pays jurisdictions such as Michigan to take it off the grid.

“When we solve the storage technology issue, it has to be developed to meet certain site requirements, lengths of time and so on, and there are many, many different ways we can go about it — batteries, pump hydro, compressed air, underground energy storage. Many of these things are being developed, but the current capacity for storage is tiny.

“It’s only now beginning to come to the attention that new renewable projects are being built not just with renewable energy source generation, but also with attached storage to help level out the intermittency.”

Backup generation capacity is also necessary to ensure adequate power is always available, Hayes added. In Alberta, for example, that backup generation capacity comes from two sources — coal and natural gas.

“We’re on the [energy transition] pathway, but it’s a pathway that’s taking a lot longer than 20 years or so. The idea that all we have to do to get there faster is spend more money on renewables is absolutely, categorically wrong. We need to develop technologies to get there, and you can’t race technologies.”