Disputing claims that a 2°C pathway to Net Zero is not preferable
In this article, I am going to use what I have learnt from writing my first book ‘Planet Zero Carbon' to counter Schalk Cloete’s thesis that a 2.5°C objective is preferable, and the 10 reasons he provides to discredit renewables as being a practical replacement for fossil fuels
While I agree with much of what Norwegian energy system modeller Schalk Cloete has to say about the task of reducing emissions and enabling positive development, I am setting his general thesis as a placeholder for the many right-wing commentaries that have started to emerge regarding the energy transition. I should probably add that many of the criticisms being aired are often grounded in solid fact, and are voiced with good reason — however the technical nature of the approaching transition and the speed of it’s ongoing development is in my opinion still not generally acknowledged.
Here I will use Schalk’s 10-point thesis as it is eloquently outlined in his article ‘The 10 Great Challenges Facing Variable Renewable Energy’.
First of all, I would like to make it clear that I do not think getting to 100%-renewable-energy-only by 2050 is going to be achievable. I don’t think this is possible for many reasons, and rather that the alternatives to a 'renewables-only' outlook present a far more practical and resource-efficient answer to the pressing need to reduce emissions than the dogmatism that drives much of the current debate. As I outline in great detail — and without the burden of a commercial bias as most net zero scenarios carry today (eg IEA, IRENA or BNEF for example) — we can achieve approximately 50–60% renewables within the total energy mix by 2050, but the remaining percentage is not going to be easily met by bioenergy (IEA & IRENA) or continued electrification/post-combustion CCS/massive carbon offsetting or similar: all of which try to maintain oil revenues to the greatest extent possible.
Schalk Cloete, despite his strong focus on societal 'upliftment' as he puts it, maintains a strong preference for today’s primary fossil fuel — oil — despite all the negative effects of this system that are endlessly discussed today. It’s main qualities as he perceives them are it’s cost, it’s transportability, it’s storability, it’s simplicity of procurement and it’s helpfulness in advancing social goals.
Within my book I show that in fact, while oil has historically been very profitable, the past decade (not including post-2021) has shown that this profitability has rapidly declined; to the extent that oil prices went negative for a period during the middle of the pandemic, and that once-revered oil giant Exxon has now been excluded from the S&P 500 after 100 years of trading. What this highlights is that beyond oil’s inherent volatility as a tradable commodity lies a new reality: it is not cheap in many regions, and less expensive alternatives are now visable on the horizon. Reinforcing this outlook, governments are increasingly trying to legislate and regulate the use of oil into the background (and ultimately restrict its widespread use altogether, eventually) — meaning that whatever the case, oil use is going to decline. This sits very much at odds with Cloete’s depiction of oil as the savior of societal advancement, and while I share his opinion that battery-electric vehicles will not do much to overcome oil’s dominance of the overall transport system, he conveniently overlooks it’s main competitor — hydrogen — within this article, as he also does elsewhere.
This, ultimately, is where he goes wrong; because as we are starting to find, the otherwise 'perfect' fossil energy system he describes could indeed be superceded due to a whole host of qualities that he neglects mention. In summary, a definite bias towards fossil fuel emerges, and while he disparages the current obsession with batteries (and for the most part, I am in agreement) he seemingly overlooks hydrogen completely, except for one or two articles dating back to 2020.
For this article, I will try to include some of these less-mentioned components of the transition, as they are not just omitted within the general debate out of error, but as I show (and will show in detail in my next book) the most practical pathways to net zero have many detractors and there are a number of reasons that these pathways are not discussed; being either commercial, ideological or otherwise.
So; to focus on Cloete’s thesis of the impracticality/impossibility of an energy transition led by renewables, I will start with his first point — the value decline of renewable energy owing to it’s intermittency, and the need for back-up. By 'value factor' Cloete is referring to profitability, and how initially high levels of profitability have declined as the percentage of renewables increases on the grid. To counter this, I would simply point to a fossil alternative — hydraulic fracturing — and look at the profitability of the industry as it has progressed. Yes, fracking has produced a lot of oil and gas; but the profitability of the industry has been incredibly low, despite the general fanfare. In fact, the industry barely made any profit for the first decade¹, with investors consistently being told that profits were 'just around the corner’. While it’s true that conventional oil production within mature fields is generally inexpensive and without significant risk, this is not at all the case for hydrofracturing, which very rarely meets its own production costs — or indeed for the many other types of oil production such as deep-water, arctic or tar sands production in Canada.
The second challenge Cloete lists is ‘wide spatial variability poorly correlated with demand’. This is actually quite an easy one, as Cloete seems to forget that oil is not widely available on the planet, and in most cases needs to be produced (& refined) very far away from where it is used. In fact, it’s worth mentioning that many fossil fuels are not available to domestic economies at all, and therefore need to be imported: far from not being conveniently located, they are not even available within most national boundaries. This has led to many unforeseen consequences; such as various wars fought over oil, precisely because of it’s geographic limitations. Although renewables are available in most locations for low cost, here Cloete explains that they are not practical to transport for long distances. I have read many reports regarding this, and we will see what happens — but I think the general consensus today is that for long distances, hydrogen is going to be the primary vector by which renewably-produced energy travels; either as a gas, a liquid or in combination with an LCOH or as ammonia. As a gas, there is no reason that hydrogen will cost much more to deliver than oil or CH4, and distances up to a few thousand km can and are being accommodated. What Cloete avoids specifically here is that a universal energy type replacing natural gas, oil, kerosene, bunker fuel, coal and others will reduce in cost exponentially by economies of scale — both in unit cost and in delivery.
Cloete’s third challenge is that public resistance to renewables and infrastructure will be the problem. This is widely debatable but I think most of the realities of this argument have been explored; and in fact in the case of the US for example the opposite has proven true - as land becomes desertified due to climate change, the siting of wind turbines has increased property values as local economies are guaranteed an income. Other factors such as offshore wind, co-location of crops/pasture and solar, HVDC running along transport arteries underground and similar innovations will erode the basis of this argument over time.
Cloete presents system complexity as his forth challenge, and here there are a few points to mention. The first is that intermittency of supply is in fact very similar to intermittency of demand: electricity for example is used in large quantities in the morning and during the 6–9pm peak in most countries, while not at all at night. This means that gas turbines are constantly switching on and off to meet this demand, and intermittency (within an electricity supply context) is far less of a big deal than many people think it is. In relation to the entire energy system (as transport and industry start to decarbonise) I think that similarly, complexities relating to VRE will be overcome. However, I would also like to mention at this point that (as I mentioned earlier) I do not think that renewables alone are going to get us to net zero within such a short timeframe. So what I outline in detail (and what is already happening) is that a large percentage of our energy supply is going to come from low cost decarbonised natural gas initially. There are two primary factors which I believe will make the decarbonised energy system a lot less complex — the first is having basically only two energy carriers; electricity and hydrogen, rather than the 5–6 different kinds of fossil fuels we have today, and their inherent incompatibilities. The second factor is that a hydrogen gas grid (as is being planned and built as we speak by EU network transmission system operators (ENTSOs) under specific EU regulation) means that rather than shipping and trucking coal, oil, kerosene etc; everything goes into the pipeline network, which is far less expensive than electricity grids (10–100x less ; 97% of the EU gas grid is already hydrogen ready) which also provides short term storage, just like gas is stored in line pipes today.
His fifth challenge is the need to 'electrify everything’. I think this is false, and that the majority of fossil fuel use will switch to hydrogen. For example, hydrogen will be replacing 30% of coal used for EU steel production by 2030. Gas boilers will switch to 'hydrogen-ready’, and/or people may prefer heat pumps if they consider the system less expensive. Industry use cases will in most cases be easier to convert to hydrogen, and for transport applications, I think hydrogen is going to be an obvious choice: hydrogen is already 25–40% cheaper than petrol for passenger vehicles, and will compete with diesel trucks, planes and other transport modalities well before 2030 — at this stage being cheaper than coal, as mentioned. The fact that a pipeline network will deliver the fuel only reduces costs further.
His sixth challenge is in relation to material intensity and waste; however for most of the system this is just going to be steel for electrolysers and fuel cells, and plastic for pipelines etc. In a more battery-centric system, rare earth availability might be more of an issue; however I do not believe that batteries are going to progress much beyond light vehicles and peak load storage. For wind turbines, synthetic magnets are already being produced, and similar innovations are to be expected. Certainly, with much of transport, heating and industry running on stored hydrogen, the system will not differ very much from todays requirements. For number seven, Cloete presents supply chain inefficiencies. I believe that within a renewables + hydrogen economy, the world will in fact be much less prone to price volatility; and this is (albeit unwillingly) described within IRENA reports such as 'The Geopolitics of Hydrogen’. Rather than a small number of producers dictating prices and availability, anyone will be able to produce electricity or hydrogen. It’s worth mentioning that hydrogen can be produced from a vast range of inputs: renewables, fossil fuel such as natural gas, nuclear, biomass (via pyrolysis), thermal energy such as geothermal or
concentrated solar, plastics and waste.. the list goes on. It is cheap to produce hydrogen if infrastructure to transport it exists. Electricity similarly is far less constrained than oil — and obviously doesn’t require complex and expensive refineries.
Number eight is 'scale-down costs of the old economy’. This really is not true for hydrogen in most cases: for example combustion engines can be converted quite easily and at low cost, as a French initiative hopes to showcase; 10,000 trucks are planned to be retrofitted to hydrogen dual-fuel per year by 2030, meaning that normal operation can continue if hydrogen refueling is not available. Gas turbines for power are similarly being converted to hydrogen; as are aircraft, ships, boilers and cookers using gas, and the entire pipeline and storage system as mentioned previously. Electric options are also available, and so everyone should be happy. The ones who are going to lose are those heavily invested in most of the oil-based infrastructure that is required today, such as oil rigs, oil pipelines, tankers and refineries, as I will explore in detail in my new book. The stranded asset risk here is obviously vast; and realistically, this is not even so much a risk as an eventuality. As such, we are therefore witnessing an extreme backlash against hydrogen today for precisely this reason: those heavily invested in oil and unable to adapt in sufficient time are set to lose an unspeakable amount of capital, with the situation getting steadily worse over time.
He mentions infrastructure as challenge number nine; I think most of what I detail previously covers this, however electricity grids are certainly going to need upgrading, and this is underway.
His tenth point is the social perspective; and the ability of this system to bring positive change. Here, I think he is forgetting about the very well known issue of the 'oil curse’, where despite countries having large reserves of oil; somehow the benefits of this resource do not filter down to society. I very much believe that within a system where resources are spread evenly, the benefit of the resource is available for all, being far more equitable when not reserved only for a limited number of shareholders as the current situation stands. In this light, therefore, you could almost say that Schalk has got the situation precisely wrong: widely available renewable energy, converted to hydrogen via the simple electrolysis process, offers far more equality, stability, and security than a system run by corporate interests who maintain a monopoly system that even today leads to massive price volatility — not to mention the massive, terrifying existential risk brought by climate change.
It is a shame, but somehow, the proponents of fossil fuels too easily believe their own lies: the system must change, and will — within an increasingly short period of time.
