Poyry at 60 provides a platform for debate3 March 2019
Decarbonisation was the topic in November, when Poyry invited industry members to ‘Carbon Clash’, an opportunity to meet and debate (and incidentally celebrate the company’s 60 years in business). The Clash explicitly linked the carbon and waste agendas, at a time when the EU is focusing on a ‘circular economy’, where waste is seen as a resource alongside other renewable resources, like biomass. The debate touched on the increasing use of electricity for heat and what looks increasingly like a major shift in the coming decade: the shift to electric vehicles.
Looking ahead 30 years, chief executive Martin a Porta noted that the global population was expected to increase from 7.8 billion now to 9.6 billion, and their electricity consumption was expected to double in that period. Transport would become a significant consumer of electricity, with a wholesale switch to electric cars that would see 140 million on Europe’s roads by 2040 – nearly half the total. Porta highlighted the importance of that switch, not just for electricity producers but for carbon emissions reduction. There was a double benefit, he said: lighter, and with fewer moving parts, electric vehicles used less energy overall; and the switch to electricity would immediately bring vehicle-use inside carbon trading schemes, which currently do not encompass transport emissions.
The Carbon Clash drew on a year-long Poyry research project that looked at whether total decarbonisation could be achieved using currently existing technologies. The answer was yes – and the task was made much easier if no options were excluded. Fortum chief executive Pekka Lundmark made this point during the discussion, saying “it is very hard to see how you could do a full decarbonisation without nuclear.”
Lundmark also expected hydrogen to be an important energy carrier, replacing fossil fuels for large vehicles and gas for domestic heating. He said, “we will have so much excess wind and solar we will have lots of zero marginal cost power to use to produce hydrogen.”
Richard Sarsfield-Hall made the same argument about carbon capture and storage (CCS). “We found that the more you preclude technologies the more difficult you make it. So if you exclude CCS, that pushes pressure elsewhere. If you don’t allow CCS in the power system to cover periods when there aren’t enough renewables you need more nuclear.” But he noted there was little commitment to new nuclear in Europe.
Along with a key role in industry, where not all processes can be electrified, Sarsfield-Hall said CCS was important to retain a role for carbon-abated gas for periods when renewable generation is at a minimum. Finally, he said the option would keep oil and gas companies onboard and working on decarbonisation. “We need their experience and innovation,” he told Modern Power Systems.
Louis Blumberg brought some experience from California’s carbon market, where he said the system of carbon allowances, which are auctioned, had brought forward unexpected bonuses, including a state fund from auctioning allowances that had been used, among other purposes, to invest $1 billion in developing ‘natural’ climate solutions and in forestry – which chimed with comments from Porta and others commenting on resources. They said more forest would absorb carbon emissions in its own right, as well as providing renewable resources for purposes like biomass generation and replacing plastics.
The ‘clash’ had some good news in the enthusiasm Poyry has found among its staff to find solutions to the problems of decarbonisation. A 20-day internal ‘challenge’ to staff saw 25% of the company’s 5000 employees make a contribution, either submitting ideas, commenting or voting on the best. It resulted in 58 proposals, which have been taken forward in 11 initiatives for development.
Putting a price on flexibility
Richard Pinnock, Poyry’s executive vice president, energy business group, gave an illustration of the changing power industry in which Poyry’s generation customers are now doing business, and the new operating and financial regimes that are emerging. His example is from a utility serving a small group of linked islands in the Philippines previously served largely from fossil fuelled plants but now with a substantial proportion of solar PV. The solar power is given priority and operates at full capacity. In order to manage dramatic fluctuations in solar generation caused by, for example, rainstorms, the system operator required a coal utility to operate at 90% load, so the plants could ramp up to cover load during
low-solar events. The coal utility had to make other arrangements to fulfill the existing power purchase agreements for that part of its output. Now, as a long term solution, the utility aims to provide flexibility as a paid-for ‘ancillary service’ for the system operator, an arrangement that has been used successfully in the power industry in the UK.