By: Fiona Wild, BHP Billiton
Low emissions technologies are central, and in fact critical, to managing climate change. Simply said, we cannot reach the climate goals being discussed in Paris without technology to transform our economies. Technology and innovation have the potential to improve energy efficiency, increase deployment of large-scale, step-change technologies like carbon capture and storage (CCS), scale up renewables, improve energy storage and increase fuel, vehicle and power station efficiency. However, to reduce global emissions at the scale required, we know that these technologies must be available at lower cost and much faster than the usual commercial timeframes. Industry has a significant collaborative role to play with government, academia and the community to facilitate this step-change.
At the IEA technology day hosted by IETA, insights were provided into the opportunities for mitigation in the energy sector, which currently accounts for two thirds of global greenhouse gas emissions. CCS was described as a ‘must’, as although the relative share of fossil fuels is likely to decrease in the transition to 2°C, they will still be in the mix for decades. CCS is also the only large-scale option to address emissions from certain activities, including industrial processes such as steel-making, and could also deliver net negative emissions technology with BECCS (bio-energy CCS).
Renewable energy has recently taken the leading role in net global power capacity additions. However, there need to be clear strategies to build smart and flexible systems that can incorporate them, increase energy storage and improve demand side management. Reducing methane emissions from oil and gas production could be one of the cheapest and easiest ways to reduce emissions at a scale which is often not appreciated. Similarly, two-thirds of economically-viable energy efficiency improvements are not being realised – offering a significant opportunity that must be pursued with great urgency.
So what needs to be done to unlock this potential abatement? We need both ‘learning by researching’ and ‘learning by doing’ to achieve cost reductions and performance improvements. There must be support for early stage research and development and commercial scale deployment, supported by technology push and market pull.
Technology’s share of overall research and development spend is now lower than 30 years ago. Clearly, there must be a significant ramp-up of investment. Where basic research in low emissions technology is pursued and supported by governments and academic institutions, the focus should be on areas of comparative advantage in research capacity and national interest. However, translating basic research into commercially deployed outcomes relies on business and the promotion of greater collaboration and open innovation. Innovation does not always just pop up by itself - it benefits from good policies to support it.
The IEA says that carbon pricing is a good start, but is not enough for less mature technologies, and hence innovation must extend to new domains including business models, policy frameworks and market designs. Here in Paris, the IEA is calling for a tripling of public investment in technology research and development, competitive financing for ‘first of a kind’ projects and increased collaboration between public and private entities in developed and developing countries. The US Department of Energy identified several collaborative efforts that could help to bring technologies through the ‘Valley of Death’ to commercial scale deployment, including the Clean Energy Ministerial, Mission Innovation and the Breakthrough Energy Coalition.
As an energy and resources company, technology is vitally important to reducing our operational emissions. Working across supply chains offers even greater potential for emission reductions. Our focus is on developing a long term roadmap for our investments that will allow us to play our part in accelerating global deployment of low emissions technologies. When evaluating opportunity areas for potential technology acceleration, we consider the potential for our own skills and expertise to accelerate the change required and the opportunity to leverage our investments with suitable partners, including governments, peers and research organisations. For example, we recently announced a partnership with SaskPower to share lessons learned from their Boundary Dam project, the world’s commercial -scale, coal-fired power station with CCS.
Shifting from a top-down to a bottom-up approach in international climate policy could make global implementation of new low emissions technology more difficult. But the UNFCCC can and should help countries that want to include low emission technologies in their mitigation portfolio. The Paris agreement and its long-term goal are essential to provide a clear signal for private sector investors and the Green Climate Fund could leverage these investments. The case for low emissions technologies is clear, now we just to need to create the enabling environment to bring them to market at the pace and scale required.