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Clean Energy Supply

The Geysers, a dry steam geothermal field in California, U.S.A., with a net generating capacity of about 725 megawatts of carbon-free electricity - enough to power 725,000 homes, or a city the size of San Francisco. Source: National Renewable Energy Laboratory.
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Nearly 60% of global electricity is currently generated using fossil fuels. Nuclear energy constitutes 15% and renewable energy constitutes approximately 25% (IEA 2020). Of this 25%, nearly 85% of renewable electricity is produced from hydropower. A clean energy transition will rely on a massive, rapid expansion of reliance on renewable and low-carbon sources to supply electricity. 

Electricity generation as a percentage by source. Source: International Energy Agency

NUCLEAR ENERGY

Nuclear energy is able to generate carbon-free electricity. Most projections looking at clean energy supply feature nuclear energy in varying proportions (IEA 2019). However, nuclear energy has several safety concerns. Sequestering the radioactive waste generated by nuclear reactors has long posed a challenge. Additionally, human error or natural disasters have created dreadful nuclear accidents that have affected hundreds of thousands of people over long timeframes. Nevertheless, careful planning and execution of nuclear projects can enable these resources to contribute to a clean energy economy by acting as a reliable base-load electricity resource and providing for a more manageable pace of transition to a system dominated by renewable energy.

HYDROPOWER

Hydropower is currently the most common renewable resource with a contribution of nearly 16% of global electricity supply. Hydropower functions on fairly simple technology with water stored at elevated heights (having high potential energy), then released to turn a turbine and generate electricity. Several countries such as Brazil, China and India rely heavily on hydropower. Hydropower is predicted to play an important part in the energy transition. The IRENA 2040 energy supply projections lay out a future in which hydropower would supply 12% of global energy. 

Hydropower installations should be approached, however, with great attention to limiting socio-ecological damage. Climate change is drying up rivers and lakes, and drastically altering the hydrology of landscapes on which hydropower facilities have been built (Congressional Report, 2015). Additionally, hydropower facilities disrupt ecological processes such as salmon spawn. Finally, both the initial flooding of valleys to form reservoirs, and hydropower accidents can have devastating social and ecological effects (Sayano-Shushenskaya hydropower accident). There is a demonstrated history of energy injustice in the siting of hydropower reservoirs against Indigenous and underrepresented peoples (Hoffman 2017Zhao et al. 2020). 

SOLAR AND WIND

Renewable energy sources such as solar and wind energy are poised for exponential growth, and can achieve substantial reductions in global greenhouse gas emissions. Solar energy, for instance, has a life-cycle emissions value of 70g CO2/kWh (life-cycle emissions) as opposed to upwards of 900g CO2/kWh (combustion emissions) that coal power produces. The cost of solar energy has fallen significantly over the last decade, lowering utility-scale solar development costs from above $5/Watt to a little over $1/Watt (Wood Mackenzie Animated Graph). In the same period, capacity installations of solar PV have also increased substantially. Wind power prices also reduced considerably in the last two decades.

The costs of new electricity from onshore wind and solar PVs are falling below the cheapest fossil fuel alternatives. Source: IRENA 2019

IEA’s Sustainable Development projections for 2040 estimate that wind and solar energy would make up approximately 40% of global energy supply in 2040 (IEA Interactive Graph). Concentrating solar power (CSP) is a form of solar energy generation where focusing mirrors direct solar rays onto a collector that contains a working fluid (such as molten salt). CSP can be combined with thermal storage systems to improve their capacity factor.

POLICIES

While most renewable energy resources are technologically mature and have increasingly competitive economics, their continued installation can be accelerated through a robust policy framework. Policy measures can take many forms including economic incentives, mandates for renewables in energy portfolio, or through research and development grants. These can help overcome some of the barriers facing renewables such as high capital costs, transmission and siting bottlenecks, and unequal economic playing fields. The Union of Concerned Scientists provides additional detail on the largest roadblocks to renewable energy integration.

The Narwal Curve and the 21st Century Energy Transition

Fossil resources receive large subsidies in the form of tax breaks, stimulus payments, and preferential zoning considerations. The International Monetary Fund identified that global fossil fuel subsidies stand at $5.2 trillion (IMF, 2019). If comparable subsidies are not extended to renewable resources, or curtailed for fossil resources, they are not competing on an even economic playing field.

Likewise, current energy market structures have a major shortcoming in that costs associated with environmental externalities are not accounted for. For instance, fossil fuels produce carbon dioxide and other pollutants that cause local and global environmental degradation, and are not taxed for the harm they cause (LSE, 2018). A price on carbon that accounts for some or all damages can serve as an economic mechanism to discourage the use of fossil resources and encourage further adoption of clean energy sources. Analysis by the Rhodium Group indicates that carbon pricing is an especially effective means of driving down emissions in the electricity sector, though the study also found that a carbon tax of $50/ton C would be insufficient to limit warming to 2°C by 2100. Thus, a carbon pricing system with an appropriate starting price and with well-defined yearly appreciation would be critical in continued energy decarbonization (Columbia SIPA 2018).

Greenhouse gas emissions scenarios for the U.S. – BAU v. nation-wide carbon pricing of $50/ton C. The greatest emissions savings are projected in the electricity sector. Source: Columbia SIPA

Carbon pricing can be implemented as a tax or through other approaches. A cap and trade (or emissions trading system) program has an overall cap on carbon emissions and creates tradable permits that allow emissions. Emitters who reduce their emissions below allotted levels can sell remaining permits to others who may struggle to adequately reduce their emissions owing to technological or financial constraints. California has a carbon trade program, and its step by step explanation can be viewed here

There are also cap and invest programs that distribute emissions permits through auctions, the proceeds of which are reinvested in clean energy programs. The Regional Greenhouse Gas Initiative (RGGI) in the U.S. is an example of the cap and invest program (Regional Greenhouse Gas Initiative). The E.U. has also established that at least 50% of the proceeds of auctioning are invested in climate and clean energy (European Commission). Hybrid carbon pricing programs can combine a cap and a tax, providing a more balanced approach to managing uncertainties when setting prices or emission quantities on strict tax or cap programs (Harvey, 2018)