The Energy Gang discuss the potential opportunities and challenges for 2023

What Could 2023 Deliver For Energy?

Bi-weekly discussions on the latest trends in energy, cleantech, renewables, and the environment from Wood Mackenzie. Hosted by Ed Crooks.

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Fossil fuels still dominate the world’s energy supplies. Do we need different terminology to talk about what’s happening?

We talk about “the energy transition” all the time. But is that language misleading? 20 years ago fossil fuels were 85% of the world’s energy, today they’re just a few percentage points less. If there is a transition to low-carbon energy, it is happening only slowly, and it needs to move much faster to achieve the climate goals of the Paris Agreement. The world has made huge strides in both the cost and deployment of renewable energy, but can we really say that we are in a transition away from fossil fuels?

Host Ed Crooks is joined by Melissa Lott, a professor at Columbia University’s Climate School, and Amy Myers Jaffe, director of NYU’s Energy, Climate Justice, and Sustainability Lab, to discuss the way the language we use shapes our ideas about energy policy. Amy quotes her Tufts University colleague (and previous guest on the show) Kelly Sims Gallagher: “climate doom and gloom really disregards the progress that's been made”. That progress includes 56 countries, between them responsible for over half of global emissions, passing direct climate mandates to limit greenhouse gases.

But despite all that action, we still get the great majority of our energy from fossil fuels. The gang debate whether the current global shift towards low-carbon energy represents a real "transition", or maybe even a “transformation”. Or is it merely an addition of new energy sources on top of the existing ones such as oil and gas.

Ed, Amy and Melissa debate the feasibility of achieving net zero by 2050, considering the political and economic hurdles ahead. Innovations including carbon pricing, electrification, and advances in renewable energy technologies will play prominent roles in shifting us towards cleaner energy systems. Will they be enough?

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Is there an energy transition?

Conversations from the Gulf Coast Power Association conference. 

This bonus episode of the Energy Gang was recorded live during the spring meeting of the Gulf Coast Power Association in Houston, Texas. Host Ed Crooks is joined by Beth Garza, President of the Gulf Coast Power Association, Frank O'Sullivan, Managing Director for Clean Energy at S2G Ventures, and Ken Medlock, Senior Director at the Center for Energy Studies at Rice University. The GCPA is a nonprofit organization dedicated to promoting a strong energy industry in the Texas and Gulf Coast region.

First up Ed speaks with Beth about the increase in electricity demand in the region. Unlike most of the US, the Gulf of Mexico coastal region has already been seeing growth in demand for electricity over past couple of decades. But now there are signs that this growth is being kicked into a higher gear as a result of a wave of new data centers, manufacturing facilities and LNG plants. We discuss the challenges and opportunities in this new era.

Increasing strain on the Texas grid is one problem. The catastrophic consequences of Winter Storm Uri in February 2021, in part caused by failures in natural gas supply and gas-fired generation, exposed how the system was unprepared for such an event. Beth Garza discusses the changes that have been made in the three years since then, and how the industry can tackle the new challenges facing the grid.

Plus, Frank O’Sullivan and Ken Medlock join Ed on stage for a panel discussion on strategies for integrating new technologies as the demand for power rises. They debate the key trends in electricity demand growth, and the ability of Texas as a deregulated competitive market to respond to these new opportunities and difficulties.

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Rising electricity demand in Texas: the canary in the coalmine for the rest of the US? | Bonus Episode

As half the world heads to the polls, how important will the results be for efforts to cut emissions?

Over half the world lives in a country that will be holding an election this year. The votes come at a time when resistance to the energy transition is building in many parts of the world, as concerns around energy security grow and some of the challenges of decarbonization come into focus. In the US, a finely-balanced election offers voters two sharply differing visions of the energy future. But there are other places around the world where elections could also shape the direction of energy policy, including the EU, where parties that are skeptical of climate action are on course to win an increased number of seats in the European Parliament.

To explore the ramifications of these key elections around the world, host Ed Crooks is joined by Energy Gang regular Amy Myers Jaffe, director of New York University’s Energy, Climate Justice, and Sustainability Lab, and by Vijay Vaitheeswaran, global energy & climate innovation editor at The Economist. The show is recorded live from NYU, as the gang take part in discussions on the outlook for elections and energy policy in 2024.

Together they debate the potential consequences of the US election for issues including permitting reform clean energy tax credits, and look at some other significant votes around the world, in India, Mexico, the European parliament among others.

While other countries are arguing over the right course for energy policy, China is betting big on low-carbon technologies, adding a huge amount of manufacturing capacity in solar, EVs and lithium ion batteries. Those are what the Chinese government calls “the new three” sectors, intended to drive export growth, and they are having a far-reaching impacts on energy all around the world.

The Biden administration has pinned its climate policy on using support for low-carbon energy to incentivize manufacturing investment and create well-paying jobs. But with China adding so much capacity in key sectors, sending prices for products such as solar panels tumbling, the challenges facing that strategy are growing. That is an issue that will play out in elections in the US and elsewhere this year: what does it mean for clean energy globally if China continues to dominate the competition?

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2024 is a year of elections. What will they mean for clean energy?

Big power users are getting together to accelerate the development of advanced clean energy technologies.

The hottest topic in energy right now is the expected surge in demand for electricity. Data centers for AI, new factories, and electric vehicles are driving power consumption higher in the US, after about 15 years of stagnation. Solar and wind power can meet some of that increased demand, but many users, including data centers, want clean electricity round the clock. So there is a new urgency in the need for new clean energy technologies, including advanced nuclear, next-generation geothermal, low-carbon hydrogen, and long duration storage.

Unlike wind and solar, these emerging technologies have not yet been deployed at scale, and they are generally have much higher costs. There is a chicken-and-egg problem: costs will only come down as these technologies scale up, but companies are reluctant to deploy them because they are too expensive.

Now Google, Microsoft and Nucor have come up with an idea that could be at least part of the solution. They are collaborating on new commercial structures to help new clean energy technologies scale up and reduce the risk for investors.

To discuss that plan, host Ed Crooks is joined by regular guest Dr Melissa Lott, professor at the climate school at Columbia University, and Michael Webber of the University of Texas at Austin. Michael is also chief technology officer at Energy Impact Partners, which is a $3 billion venture fund that invests in some of these emerging technologies. Together they debate the consequences of that surging demand for electricity, and the role of new technologies in avoiding disastrous outcomes for our international climate goals.

They also talk about another promising source of clean energy: natural hydrogen, which is found in geologic reservoirs rather than being made from water or from methane. The US Geological Survey estimates there could be 5 trillion tons of natural hydrogen in rocks around the world; a vast, untapped energy reserve that could significantly contribute to meeting global low carbon hydrogen needs.

Given that a world with net zero emissions could use about 500 million tons of low-carbon hydrogen a year, that is a very exciting resource base. But is it really plausible that natural hydrogen could be viable as a significant contribution to clean energy supplies? The energy gang has some answers.

There’s an urgent need for innovative solutions to tackle rising energy demand. Join the discussion on X – we’re @theenergygang

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Everyone is worrying about rising demand for electricity. Do Microsoft and Google have an answer?

AI isn’t just threatening to take our jobs, it’s also draining our electricity.

Data centres centers used to have power demand measured in the tens of megawatts. Now they are in the hundreds of megawatts, and the new ones that are being proposed have demand in the thousands of megawatts: gigawatts. At the Distributech conference in Feburary, Harry Sideris of Duke Energy said it used to be a big deal when they had a customer wanting to add 10MW or 20MW of load. Now they have several planned data centers for AI needing 1000MW each. How is this additional demand being met?  

The good news, from a climate point of view, is that part of the answer is going to be a lot more solar and wind power, and energy storage. The bad news is that, according to the plans that US utilities are setting out, there are going to be more gas-fired power plants, too. US gas-fired generation capacity is on course to rise by 25% over the next 15 years, and although those plants will increasingly be used mainly to back up variable solar and wind power, they still mean that the chances of achieving net zero emissions from electricity by 2035 look slim. 

On this episode of Wood Mackenzie's The Energy Gang, Ed Crooks is joined by Amy Myers-Jaffe, Director of NYU’s Energy, Climate Justice and Sustainability Lab, who returns to the show to explore the feasible paths to net zero in light of increased energy demand. Also joining this week is Samantha Gross, Director of the Energy Security and Climate Initiative at the Brookings Institution. Together they debate the outlook for electricity demand, and take stock of the implications for theclimate goals of the Paris Agreement.

One big question: Is it time to give up on the objective of limiting global warming to 1.5 degrees C? The world looks like crossing that threshold soon. In fact, on one measure, we have already crossed it. The 1.5 degrees C limit has been seen as essential to avoid the worst effects of climate change. But John Kerry, who just stepped down as President Joe Biden’s climate envoy, said recently that the world was on course for more like 2.5 degrees of warming. Many businesses still have alignment with a 1.5 degree scenario as one of their climate goals. Ed, Amy and Samantha discuss whether it’s time to face reality and set new goals that are more likely to be achievable. 

And finally, more evidence that despite all the negative commentary around EVs, on a global scale the industry is doing just fine. In China, sales are surging and prices are falling. Sales of what China calls “new energy vehicles” – that is, battery electrics, plug-in hybrids, and fuel cell vehicles – were up 37.5% in the first two months of 2024 compared with the same period of 2023. In that period – January and February of 2024 – those New Energy Vehicles took 33.5% of the car market. The prices are on the way down too. Reuters has calculated that BYD has cut the prices of its EVs by an average of 17%. This seems like great news for cutting emissions and eventually decarbonizing road transport. But what does it mean for the car industries in other countries?

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What Could 2023 Deliver For Energy?

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