Coordination is essential to achieve a new, green, profitable and secure energy system
Climate targets and energy independence are the catalysts for the transition to renewable energy, but this puts new pressures on our energy system.
Wind power, and especially offshore wind power, is key to developing energy supply, says Brian Vad Mathiesen, professor of energy planning and chair of the advisory board for the CIP Foundation’s project on the hydrogen infrastructure of tomorrow.
He stresses that energy production and energy markets should develop in tandem. And that we have to accept mistakes along the way, because we are navigating through uncharted waters.
He goes on to explain why he chose energy planning as his area of research.
There’s a lot of interfaces. You have to know about technologies and technological development. You have to know about innovation in the area, and then the socio-economic and business-related aspects are crucial too, he says.
Brian is a professor of energy planning at Aalborg University, and his name topped the list of experts most often cited in Danish media in a recent data search by Infomedia, the media database. He is also chair of the CIP Foundation’s advisory board on hydrogen infrastructure of tomorrow.
This all makes a lot of sense when you talk with him. His in-depth and detailed knowledge is coupled with a unique ability to explain and communicate the complexity of energy planning. He can communicate important details and subtleties so that they are easy to understand, but without oversimplifying things.
Energy planning has probably never been more important than right now.
Transforming our energy systems to renewable energy sources is vital. We must electrify transport, heating systems and large parts of industry. And we need renewable energy to produce green e-fuels for aviation and shipping. There is also a huge potential market for Danish production of the hydrogen and hydrogen derivatives required if Europe is to achieve energy independence from Russia.
If the energy we need to produce fuels for ships and aircraft is to come from renewable sources, the demand for electricity will double or triple compared with today. And because Denmark has vast areas of shallow water close to energy-intensive industries in Germany, the Netherlands and Belgium, producing hydrogen from wind-turbine electricity in the North Sea is very attractive, says Brian Vad Mathiesen.
Deployment in tandem
Coordination is the key to securing the required investments while avoiding bubbles and overinvestment. Coordination is also crucial in order to make sure that energy facilities are not established in the wrong place, or at the wrong time. The deployment of new electricity capacity and new electrolysis capacity to produce hydrogen must go hand in hand with maturing the market for hydrogen products.
We can regulate developments through blending requirements, for example, requiring ships and aircraft to use a certain amount of e-fuels. But if the deployment of offshore wind farm capacity is faster than the establishment of electrolysis plants or faster than development of the Power-to-X market, investing in production capacity will be less profitable, Brian Vad Mathiesen points out.
He has analysed existing consumption patterns and plans. And he believes there are limits to how fast we can increase production capacity without causing imbalances in the systems.
Today, our peak demand for electricity is five gigawatts. Compare this with plans for 23 gigawatts of offshore wind and 20 gigawatts of solar wind. In 2030, there will be no domestic buyers for more than 20 gigawatts, and if we produce more than just 10 gigawatts, we’ll have to create a framework to incite private players to take initiative to build more PtX capacity and to grow the PtX market, says Brian Vad Mathiesen.
He also points out that developing the energy system is not a competition between wind, solar and biofuels. We need them all. But wind – and offshore wind, in particular – will be at the heart of the energy system and wind set the pace for deployment of the other renewables.
If we want to increase capacity to meet electricity demand, and at the same time produce the large amounts of hydrogen being talked about, there’s no getting round it: we need wind energy. Wind energy is the only renewable energy source that will do the job in our part of the world. But that doesn’t mean we can’t establish solar farms. Solar farms could meet around 20-25% of our total demand. We can deploy more solar capacity simultaneously with deployment of more wind capacity. The two energy sources complement each other, says Brian Vad Mathiesen.
Continued demand for power plants
But wind and solar energy are not enough. We still need thermal power plants for periods with calm weather. We will be able to run these on biogas and biomass. Instead of being in operation 60-70% of the time, they will only need to run 15-25% of the time. As Brian Vad Mathiesen points out, the price of power mainly follows the price of fuels, and establishment costs only have marginal significance.
The thermal plants can meet the energy demand of the district heating network. In densely populated areas, district heating will still be a sound choice. Even though it will not be possible to run district heating solely on surplus heat from electricity production as in the past, the outlook for district heating is still good.
There are plenty of energy sources for district heating. We’ll deploy more geothermal energy, and then there’s surplus heat from data centres, and large heat pumps will channel electricity into the district heating system, says Brian Vad Mathiesen. What is more, there is an enormous potential for surplus heat from existing industry. We should not let this go to waste.
He is upset about many misunderstandings he sees in the energy debate. Energy is not an innately mobile resource. Cables and pipes are expensive, and transmission losses generate ‘conversion costs’ when one type of energy is converted to another.
Electricity cables are also expensive to produce. So expensive that establishing a submarine cable to transport hydropower energy from Norway to Denmark on windless days is no easy matter. True, we can charge up batteries to fuel our cars, but batteries are not suited for storing electricity over longer periods of time. Batteries fail in terms of both economics and energy-efficiency.
We have a number of energy forms that can be stored, but typically only for specific purposes. We can store hot water for district heating, but we cannot convert this energy to electricity. And when we produce hydrogen for fuels, we incur further costs of new stocks of ammonia or methanol. Using hydrogen on windless days is exorbitant because of the huge conversion losses from electricity to hydrogen and then back to electricity. As a matter of fact, hydrogen or PtX are only a second-best option for areas that cannot be directly electrified. PtX itself implies significant energy losses, says Brian Vad Mathiesen.
Digitalisation is no cure-all remedy
Even though converting from one energy form to another will always come at a cost, we should avoid compartmentalisation, he says. He generally agrees with the many players who believe in the benefits of sector coupling. For example, recovering heat from wastewater or using surplus heat from production processes. These are low-hanging fruit, but they will not be enough to meet the demand for increased capacity and transformation of the entire energy system. However, better coordination and interoperability will yield a number of benefits that we should not deny ourselves.
The green transition will be very costly unless we can think about the different energy sources holistically, and a number of aspects stand out for further examination, says Brian Vad Mathiesen.
Digitalisation can also contribute to a more efficient energy system. But we cannot create the energy system of tomorrow through digitalisation alone. We can operate plants and facilities more efficiently, and digitalisation will give us more knowledge and data to inform decisions regarding optimal siting and design of future energy plants.
Digitalisation is an important tool, but it’s no cure-all remedy. Large infrastructure investments are paramount. For example, we have to look into establishing massive energy plants in the North Sea, Brian Vad Mathiesen explains.
New types of nuclear power are not ready to compete with other renewable energy sources
The professor from Aalborg University belongs to a generation who are unlikely to talk favourably about nuclear power. But he remains analytical and objective in his explanation.
We should distinguish between three types of nuclear power. We have the existing plants already in operation; we have the option of building new plants based on existing technology; and then we can build plants based on new technology.
It might very well be worthwhile extending the service life of existing plants, if the marginal costs do not exceed the costs of deploying new renewable energy.
However, when nuclear power is extolled as the way out of dependence on Russian gas, the argument no longer holds water.
In countries that already have nuclear power, the average establishment time is around 15 years. Besides this are the five or eight years needed to plan and approve the plant. It may be possible to reduce this to 12-15 years, as we gain more experience with nuclear power in Europe and the USA, but this is still a very long time compared with wind power; so it is definitely not a short-term solution. And with the current prices, in 2030 nuclear power will cost three-times as much as wind power,” says Brian Vad Mathiesen.
New technologies have occasionally been introduced. For example, thorium and molten salt reactors. However, despite the publicity surrounding these new technologies, they are not ready to compete with other renewable energy sources
They are only prototypes and still far from being able to meet the same demand as offshore wind already can. This would require operating experience at a far larger scale, and getting is there is likely to be expensive. It’s fair enough if we want to invest in gaining the experience. I’m not against new nuclear power that is safe and inexpensive. But I’ve scoured the international literature, and there’s nothing indicating that these new nuclear technologies will be cheaper than the conventional technology, he says.
He is also sceptical about another new technology; small modular reactors. “Because electricity is still needed to run the turbines. And experience in this area so far is unequivocal: small electricity turbines are far more expensive than bigger ones. But again, perhaps more experience with demonstration plants will prove me wrong,” says Brian Vad Mathiesen.
Not just about the climate
Adding innovation and business development to the equation makes the argument even heavier.
While nuclear power is a technology developed largely outside Danish borders, energy islands and hydrogen islands with wind turbines hold much brighter perspectives, because these areas involve technologies in which Denmark is strong.
Strategic energy planning should always be about more than just the climate and security of supply, stresses Brian Vad Mathiesen.
We’ve always considered the climate, the environment, job creation, the economy and the balance of payments when planning energy systems. The energy system is crucial for all of these elements. It’s important to remember that the value of Danish exports of energy technology now exceeds the value of Danish exports of oil and natural gas at their peak, he says.
The outlook for offshore wind deployment is therefore very good.
I expect that if we act as first movers on e-fuels, for example, we’ll gain valuable knowledge about how to design and operate these facilities. We’ll gain knowledge about the value chain, the cost structure and the risks, and this will give us an opportunity to build, operate and perhaps even own electrolysis plants around the world, explains Brian Vad Mathiesen.
We have to accept that we will make mistakes
According to Brian Vad Mathiesen, there is one thing that the Danish Government and the Danish Parliament will have to accept with regard to the transformation of our energy system.
We can easily expand local district heating networks, introduce more electric cars, and even electrify industry and deploy biogas systems. But as to carbon capture and the deployment of energy islands and large-scale PtX projects in the North Sea, we’re navigating uncharted waters when it comes to deployment at large scale. Not just technologically, but also with regard to the whole issue of how to create a market and secure the right framework conditions. We’ll have to steer a course through all of this at the same time as companies and sector organisations are lobbying for their specific solutions, so there’ll be plenty of input, says Brian Vad Mathiasen.
There’s no way we’ll be able to steer clear of serious mistakes, and we can’t predict when we will make them. But that shouldn’t prevent us from heading towards the tough horizon of totally transforming our energy system, he adds.