An oil company released a study showing that renewable energy is cost-competitive with fossil fuels, even without subsidies. The same report suggests that technology alone won't be enough to curtail climate change; policy changes, including carbon taxes, are also necessary.

What?

Take a moment to wrap your head around that, and then we'll look at BP's 2018 Technology Outlook, which highlights some key factors in the effort to curb CO2 emissions.

Five Key Technologies

BP's study was conducted in conjunction with scientists from a variety of research institutes and universities. Its purpose is to inform businesses, researchers, and policy-makers of the current energy situation, the developing technologies, and the costs associated with various solutions to energy usage and its economic and ecological impacts.

The report focuses on five key technologies: energy efficiency, digital systems, renewable energy, energy storage, and decarbonized gas. It also acknowledges that the solution is not entirely technological - some well-placed policy adjustments are also needed.

Energy Efficiency

When a resource is abundant, nobody worries about efficiency. Coal, with its copious stores and massive energy density, fueled the industrial revolution and remains the largest single source of electricity, in spite of the fact that its conversion efficiency is only about 33%. Petroleum drove the automotive industry, even though the efficiency of an internal combustion engine (ICE) is an unimpressive 25%.

The concept of energy efficiency is simple: use less and you need less. If an ICE converts one-fourth of its fuel into movement, then it needs a lot more fuel to go the same distance as a car that's 80% efficient. A poorly insulated building requires more energy to maintain the desired comfort level.

According to Dr. Jonathan Cullen, Leader of the Resource Efficiency Collective in Cambridge University's Engineering Department, technology can improve energy efficiency enough to reduce energy consumption by 40% - that's 217 exajoules, or 60,000 TeraWatt-Hours. (One exajoule is enough to power 26 million North American homes for a year. It's the energy equivalent of 160 million barrels of oil.) These efficiency measures would keep more than 13 billion tons of CO2 out of the atmosphere. (If everything ran at peak theoretical efficiency, those improvements would double; the researchers are engineers, so they provided a practical number rather than a theoretical value.) Among the technologies cited are electric vehicles, heating and cooling systems, LED lighting, and digital controls.

Digital Systems, AI, IoT

In the early 1980s, automobiles were reaching the end of the carburetor era. The mechanically controlled fuel-air mixer was replaced by computer-managed electronic fuel injection. While the carburetor had only one control - throttle position - a fuel-injector engine control unit used sensors to measure temperature, pressure, oxygen levels, and other variables in order to determine the precise ratio of fuel to air, optimizing the engine for the exact conditions at any given moment. The result: better fuel efficiency and fewer emissions. Those microprocessors were crude by today's standards, but they did provide a nice segue to the era of digital control.

Today, we have home automation systems that let us control lighting, temperature, and smart appliances. Like their larger commercial counterparts, building automation systems, these intelligent controllers use sensor data to optimize energy usage under various conditions, increasing the efficiency on the consumer's end. On the production and distribution side, digital systems are also employed to fine-tune the generation and delivery of electricity. Just like Deep Blue, IBM's chess-playing computer, these autonomous smart machines examine the pertinent variables, evaluate several appropriate strategies, and choose the best actions for the situation. Engineers also employ artificial intelligence to design and operate energy production facilities such as wind farms, and the smart grid uses digital control to balance supply and demand, distribute energy more efficiently, improve reliability, and incorporate renewable power at higher levels.

Renewable Energy

In less than a decade, the cost of electricity from solar photovoltaics has decreased by 73% while wind power saw a 23% decline in price. Both are now cost-competitive with fossil fuel electricity production, even without government subsidies, due to improvements in PV efficiency and massive wind projects like Scotland's Hywind offshore wind farm. The study's authors suggest that other forms of renewable energy, including concentrated solar power (CSP), will soon give the dinosaurs a run for their money as well. Because it relies on heat, not light, CSP offers the possibility of storing thermal energy in molten salts, enabling the plant to produce electricity at night. One such facility in Dubai is expected to generate electricity at a cost of $0.07/kWh.

Energy Storage

Shifting the baseload from fossil fuels to renewable sources requires a significant investment in energy storage. Although pumped hydropower and compressed air energy storage are mature technologies, they're dependent on the local geography. Lithium-ion batteries, the "fuel tanks" of most electric vehicles, are also being employed in grid-level energy storage systems to support renewable energy production. The cost of Li-ion technology continues to fall; by 2050, the price is expected to drop from today's $200/kWh to just $50/kWh. Flow batteries and solid-state batteries could also become competitive within the next decade.

Decarbonized Gas

There are some applications for which traditional fuels offer the most feasibility. Rather than abandoning them altogether, BP suggests at least minimizing their negative impact through decarbonization. Carbon capture use and storage (CCUS) absorbs carbon from the post-combustion flue gases, reducing greenhouse gas emissions. Of course, if you don't burn carbon in the first place, then there's no need to remove it, so scientists are creating low-carbon biofuels, which have the added benefit of being renewable. Jet fuel blended with biofuels can reduce an airplane's CO2 emissions by up to 60%.

Policy

The 2018 Technology Outlook concludes by noting that technology is just one part of the solution; policy is the other piece of the puzzle. Why?

If you drive on toll roads, you may have noticed that eighteen-wheelers pay a higher price than family sedans. That's because the semis do more damage to the roads, so they pay higher fees to help cover the cost of repairs. Likewise, CO2 emissions cause damage to the environment, so BP believes that the carbon emitters should pay for the damage they cause in the form of carbon taxes. Corporations are focused on profits, so policies that affect the bottom line will provide the extra incentive to adopt cleaner technologies.

My Take

The 2018 Technology Outlook is an interesting read, and even though the research was sponsored by a fossil fuel company, it seems fairly well-balanced, although I would have addressed microgrids and distributed energy resources in more depth and de-emphasized the continuation of fossil fuel technologies in applications where renewables could handle the bulk of the load. I have to wonder whether BP is endorsing a slow transition away from oil and gas for fiscal, rather than ecological, reasons. On the other hand, human behavior is subject to "psychological inertia," so BP may have applied a more realistic estimate of how long it takes for a technology shift to occur.

One thing seems clear: when a fossil fuel company proposes a carbon tax and a shift to green energy, its executives recognize the reality of climate change, and they understand that their children's future depends on more than a favorable stock portfolio.

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