Energy in 30: Trends in reaching global decarbonization goals
Tune in to Energy in 30 hosted by Joan Collins and David Meisegeier. On our ninth episode, "Trends in reaching global decarbonization goals," hear from Mark Allington, vice president, energy in Europe and Asia. With more than 30 years of experience in the industry, Mark provides insight into the long-term goals, challenges, and opportunities faced by the global energy community’s commitment to decarbonization.
Topics in today’s episode include:
- Tackling industrial decarbonization in Europe and the UK
- Carbon capture technology
- Electrification and clean energy trends
- Direct decarbonization support programs and funds
- Consumer participation and measures to impact household choices
Full transcript below:
Joan: Welcome to Energy in 30. We'll use the next 30 minutes to explore how utilities and the industry are reacting to forces that are shaping new offerings for customers in order to meet decarbonization goals.
David: If you're a utility manager, consultant, technology provider, or just curious about energy, we hope to push your thinking about the changes that are happening in the energy industry with me, David Meisegeier.
Joan: And me, Joan Collins. Hi David. How are you doing?
David: Pretty good. How about you, Joan?
Joan: I'm doing good, thanks. Hey, as you know, when I came back from my trip to Ireland this summer after hearing about their aggressive decarbonization goals and heard a lot more from my friends over there talking about the initiatives that they were taking advantage of—it just made me curious, and I wanted to bring in some global perspectives. You suggested we ask Mark Allington from our ICF UK office to join us, and here we are with him today. Well, virtually with him anyway.
David: That's awesome. And I've known Mark for many years and was fortunate enough to have worked with him recently on a carbon reduction and job creation program in the UK called the Green Homes Grant Scheme. For the rest of you, Mark is a vice president at ICF leading our energy activities in Europe and Asia. He has 35 years of low-carbon consulting experience, including 30 years managing large-value sustainable energy programs for the public sector. His experience spans the UK, Europe, Asia, and Africa and for the last decade he's focused on industrial decarbonization for programs in the UK. Mark, welcome to our podcast.
Mark: Yeah, hi David. Hi, Joan.
Joan: Hi Mark.
David: We are excited to have you.
Joan: What a background you have! That's a pretty impressive CV there with all the work that you're doing. And one of the things we like to do in kicking off is ask you what you're currently working on.
Tackling industrial decarbonization
Mark: Well, thanks. That's kind of you to say. Well, at present we have several ongoing programs for the British government that are supporting industrial decarbonization. So we're helping them with product standards for industry and selecting and dispersing funding to demonstration and deployment projects in decarbonization. And we're drawing together our observations in an ICF climate center flagship report on this subject at the moment. Decarbonizing industry is a big challenge and we have a lot of trade offs to work through in that, but it's certainly essential for net-zero.
David: How—and I am not an expert on industrial decarbonization, so I can't even fathom to wrap my head around it. What does it mean? Are these plants and companies on natural gas and you're trying to convert them to electric? What does it mean to be decarbonizing them?
Mark: Well, the sort of industry we're talking about is heavier industry, so producing metals, producing cement, minerals, chemicals, or also food and drink, and pulp and paper—that sort of thing. And industry like this is producing about 16% of UK overall carbon emissions at the moment. So that's about 72 billion tons. In the EU, that's about 20%. And so you can't decarbonize without tackling this sector, and it's quite multifaceted and tricky and complicated, just the sort of thing that we enjoy getting into.
David: Absolutely. Go ahead, Joan.
Joan: Oh, I was just going to say, I think I read somewhere that this was—the work that the government is framing up around this is really a blueprint for having the first low-carbon industrial sector in the world. Do you align with that as well or are you seeing numbers catching up?
Mark: Certainly, the UK is trying to take a lead in certain segments where it's relevant and we have industrial clusters, we have decentralized facilities, and the challenge is quite complicated depending on where you try to implement it. Some industrial processes require really substantial energy. If you think of steel or cement or chemicals production—these need high temperature process heat to reduce the iron ore, to heat the limestone or to crack hydrocarbons. And this is temperatures well over 1,000 degrees Celsius. I don't know the Fahrenheit, I'm afraid David, but it's pretty hot. (Editor's note: 1,832 degrees Fahrenheit).
Joan: He's calculating it quickly.
David: But what fuels are they using to get those temperatures?
Mark: Yeah, so gas is there in some cases, but also coal is needed. So, for example, in steel production—steel is very important for many applications. You need it to build railways and wind turbines and ships and aircraft and so on. For that, you need to produce the primary steel, you need blast furnaces, and they use coking coal, which mixes carbon with the iron ore—and this is at 1,500 degrees Celsius. So you need the carbon to make the steel. So decarbonization for blast furnaces is more about capturing carbon emissions after use rather than using a different fuel. However, once you've got the primary steel, then you can recycle it at the end of life in electric arc furnaces, which can use low carbon electricity. But this isn't the only kind of method. There's a plant in Germany which is now making low-carbon primary steel, and this reduces iron ore using hydrogen. It produces a thing called sponge iron, which is then melted in an electric arc furnace, and that produces the steel. So it's possible, but you still need a little bit of carbon because steel requires carbon.
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Carbon capture technology
David: So new technologies in the making that could help lower carbon creation, but also still needing to capture carbon during the creation of the materials or whatever the plants are creating. Again, it's not my area of expertise, so when we talk about carbon capture, what does that really mean?
Mark: So carbon capture can involve precipitating the carbon emissions in chimneys in plants and recapturing them and reusing it. There are uses for carbon dioxide which are adjacent to... you can build. In the UK we have industrial clusters where you have plants that use the carbon in various forms. If you want to grow plants in hot houses, carbon dioxide is a good feed for that. And so developing clusters where you're capturing carbon and then using it somehow, but a lot of it needs to be stored once it's captured. But I was talking about the high temperature there, but also there's a lot of decarbonization that can happen for lower temperature industrial processes. So if we think of bakeries, for example—there are many of those around—they typically are using about 150,300 degrees Celsius in their ovens and their electrification is a significant option, which is a bit closer to hand than some of the...than hydrogen, for example, which is a bit further downstream in its development to present.
Electrification and clean energy trends
David: Makes sense. So what percentage, and not to put you on the spot, but about what percentage of the UK electric generation would be considered kind of clean?
Mark: Well, this is an area which is moving on quite fast now. I think we have some 20, 30 gigawatts—something like that—of offshore wind energy now. We have days which are completely coal free, which I've worked a long time in this industry and that was a distant dream when I started. So it's really good to see. And electrification—a lot of low-temperature electrification technologies that can be used in industrial decarbonization are already commercially ready. Probably half of current industrial fuel consumption could be electrified when the prices allow and storage and demand side response providing flexibility into the system will help industrial consumers use energy when it's cheapest and when it's cleanest. But the main barrier at the moment is the price, the balance between gas and electricity price.
David: With electricity being more expensive?
Mark: Yeah. So electricity is more expensive. The current situation in Ukraine has focused attention on this quite significantly at the moment, and we are seeing an acceleration in the decoupling of electricity prices from gas prices in Europe. So it's not quite happened yet, but they're moving very fast towards that. And renewable generation is now quite ubiquitous and much the cheapest form. So it's great to see. And we're now starting to see a market environment that will allow the renewable electricity to be used more effectively for low temperature electrification of industrial processes.
Joan: That's really great to hear.
David: Yeah. So you mentioned cost as a potential barrier, at least on the lower intense processes. Is cost kind of globally the number one concern when you think about how to decarbonize industrial processes or are there other factors that companies are concerned about, quality, for example, or anything like that?
Mark: A big factor is what I mentioned about temperature, really. So electrification is—that area is developing fast, but it's hard to electrify processes that need very high temperatures, and there are some things around the nature of some of those processes like steel, as I mentioned, where you can't get away completely from carbon-based fuels. But hydrogen is coming along and it's small at present. So we have around, I suppose the expectation in the near future is around 10 terawatt hours per year for the UK by 2030 and all focused around industrial clusters, which I'll need to talk about a little bit more in a moment. But by 2050, we would expect hydrogen consumption to be up at beyond 80 terawatt hours. So the government is committed to developing this low-carbon hydrogen economy, but it's not quite there yet and there's a lot of scope for electrification beforehand. And for those processes where you really can't decarbonize, then the carbon capture comes in as a necessary option.
Joan: So it sounds like there's a lot of prioritization, like you were saying. It's quite complex prioritization of the sub sectors. And then what kinds of renewables are associated with those to meet the goals? I can't even fathom where to begin.
Mark: I mean, another factor is location. So I mentioned clusters. So we have steel in two places, really in the UK—so in South Wales and in Yorkshire. And I would say UK industrial emissions as a whole are split fairly evenly between clusters like that and dispersed sites. So you have cement production, for example, is in many locations and clusters and disperse sites—face different challenges when it comes to trying to decarbonize. If you have a lot of industry close together that's generating carbon, you have the possibility for larger-scale integrated investments and to have carbon capture utilization and storage infrastructure nearby.
And also green hydrogen storage potentially from...we have a lot of offshore wind now, as I mentioned earlier, and that is going to expand further. So to just use electrolyzers to convert some of that to hydrogen and then use the hydrogen when you need it within a large cluster for high temperatures. That seems a feasible option. When you've got a dispersed site, it's much harder because you've got to transport the CO2 that you capture, you've got to transport the hydrogen as a fuel. Electrification is something that's a bit more attuned to those dispersed sites if we can overcome this price barrier that I mentioned.
Direct decarbonization support programs and funds
David: So is there—and I never would've thought about it, but it makes a lot of sense when you explain it—is there policy in place around encouraging the clusters?
Mark: Certainly is, yes. So we have direct support to programs in the UK for clusters and increasingly for the dispersed sites as well, and that work concentrates on...Well, first of all, we have carbon pricing, which is we have a UK emissions trading scheme, which has been in place for quite some time—a climate change levy—and these are things that are essentially putting a price on carbon and encouraging the industry owners and financiers to do something about their high carbon use. But then we have a demonstration funding scheme, so ICF is supporting a couple of these: one, which is the Industrial Energy Transformation Fund, is spending about 300 million pounds on large-scale demonstration of different industrial decarbonization approaches. And then we have more specifically on the heat recovery, we have another small program which is deploying existing heat recovery technologies into dispersed industry, and there are quite a few different policy instruments around.
David: So when you look at what's coming down the road, what excites you the most around industrial decarbonization opportunities?
Mark: Yeah, I would say for me, I started out as an electrical and control systems engineer. So I would say the potential that's offered by storage and by intelligent controls that provides flexibility to just match existing energy production and transmission assets better to deliver the energy that we need in the form we want it and when we need it. So this covers, for the short duration, electrical and thermal storage, but also the longer-term inter-seasonal storage, for example, through the green hydrogen that I mentioned. That lets us make best use of all of this renewable generation, which has come on so strongly and gives the chance to make best use of all that renewable capacity to achieve the full potential of decarbonizing our society, including the complicated bits-like industry. So you need to match carefully between supply and storage and end use, but practical solutions are there and are achievable.
David: That alignment between supply and demand seems rather daunting when you think about the speed that we need to really do all of this. Are there any tips or thoughts about how you do that
Mark: I think the short duration stuff is there already, I would say. The longer-term, inter-seasonal storage is the bigger challenge and hydrogen is going to play a significant part in that, but there's time for that. There's a lot of improvement that can happen before we get there. As I mentioned, probably half of industrial fuel consumption—it can be electrified, and even at present we're seeing the decoupling of the renewable electricity charges away from gas. This is going to happen very soon now, I think. The situation in Ukraine has placed a lot of focus on that. So I see a strong future for electrification in the next 10 years. And then moving on to hydrogen and more of the carbon capture technologies as we head more towards the decade after that really.
Consumer participation and measures to impact household choices
Joan: And I know we're talking about industrial decarbonization, but just curious what your thoughts are around consumer participation and some of the measures to impact their choices and other kinds of initiatives to encourage?
Mark: I think in the UK now, the heat and transport decarbonization are probably the main things, and where consumers can get involved is in both of those by making wise choices. We are, I think, soon to see a larger-scale rollout of heat pumps in the UK and that's very necessary. We're already seeing household oil boilers and gas boilers are—fossil fuel boilers, the government wants to phase out essentially for home heating. So we will move to a situation where we have much more widespread heat pumps and electric heating and also eventually hydrogen if it proves worth its salt. But to me, hydrogen is a bit wasted on heating. I think it's a lot more suited to the heavy usage and the high temperature processes that aren't possible to decarbonize by other methods.
David: That seemed like the big challenge.
Mark: Yeah, but it's within our grasp. We have all this offshore wind and that is a magical thing. I think when I started out in the early '90s, we were just starting the first incentives for wind turbines to just move beyond enthusiasts and get onto more pragmatic investors—get the electricity companies interested. And PV panels were just a costly laboratory plaything at that time. Now those technologies are the cheapest source of electricity. They attract the most investments—the ethical investors are getting involved. It makes the best sense to do. Those technologies are now capable of providing half of the UK's grid load on the right day. And we've had many, many days of coal-free generation, so I think we've got all the electricity. Now it's the challenge to...we've shown that that's possible and then it's happened. So now it's about using that low-carbon electricity in a positive way, either directly in decarbonizing processes or by converting it to some other fuel like hydrogen intermediary fuel that can be used when needed rather than depending on when the wind is blowing.
David: Exactly. Yeah.
Joan: Well your optimism is very much appreciated. But with that said, I have to ask you a question that we like to ask all our guests here towards the end. I can't believe the time has already come to this, but if you could do one thing to change the industry, no limits, what would you do?
Mark: I think I would say to just encourage people to celebrate successes, to just encourage replication. As I've just explained, the massive change for the better has happened in renewables, and the next challenge is—the next frontier—is this decarbonization of industry, especially on heat and transport. It's a fascinating field to work in. It's full of complicated challenges and innovative solutions that are going to let society move forward to that net-zero emissions future that we all want. And solutions will be found and they will be deployed at large-scale and it's within the net-zero worlds within reach of the brave, I would say. So yeah, that's how I see things. Complexity is something to be embraced and worked through as a means of keeping things interesting, and then when you achieve communicate, encourage others to replicate, spread the word.
David: Well said. That's really I think easy for naysayers to point to the challenges and say how hard it's going to be and we should push those challenges off to the future. But you're right, we have achieved a lot of successes and articulating those and celebrating them I think is important. So well said. I've really just learned a lot about industrial decarbonization on this call and have thoroughly enjoyed the conversation. So I want to thank you very much for your time, thoughts, and insights.
Mark: Thanks David, and thanks to you as well, Joan. I've enjoyed the conversation and being with you myself. And as I say, net-zero is there for the taking. We can do it and continue the successes that have already happened.
David: Awesome. Well, we're going to have to bring you back once your flagship report on how to decarbonize industry is out so you can share even more tidbits. If you've also enjoyed this conversation, we'd sure appreciate you liking, sharing, and even subscribing to our podcast.
Joan: And thank you also Mark, just for the inspiration. And I can't wait for that report to come out. We'll definitely have to have you back on. And on the note about subscribing to our podcast and listening, David and I are busy brainstorming ideas for around what areas we want to cover and people of interest for 2023, and there might just be a few surprises before year end. So, we thank you for listening and look forward to you tuning into our next Energy in 30.
