A global energy crunch is causing winter energy bills to skyrocket and adding to an already tense geopolitical situation. Pandemic-fuelled economic chaos and ongoing supply chain woes have rendered the energy industry unable to keep up with increasing demand which has bounced back with a vengeance as the world came out of isolation after the first waves of Covid-19.
As Europe has tried to move away from coal and oil, the continent has become increasingly dependent on natural gas, seen as an affordable and lower-emissions stepping-stone on the way to decarbonization. This reliance on liquefied natural gas has increased the European Union’s dependence on gas-rich Russia. Putin has capitalized on this geopolitical chokehold by keeping gas supplies to Europe tight in order to advance his own political aims on the continent, including pushing to get the Nord Stream 2 natural gas pipeline greenlit, allowing Russia to pump LNG directly to Germany while bypassing Ukraine.
Clearly, this hiccup in the global energy industry is not only a result of the chaos wreaked by the novel coronavirus pandemic. It is also part and parcel of what will inevitably be a bumpy road toward global decarbonization. “As with every other rupture in the global economy, [the energy crunch] suggests that the world might be breaking into a new regime,” the Atlantic recently reported. “After 12 years of crisis recovery and too-small government deficits, a decade when depressed demand was the world’s biggest problem, we are suddenly bursting into a world of tight supplies.”
Weaning the global economy off of fossil fuels presents a major problem, the solution to which is going to be tricky at best. Fossil fuels have offered the world a great degree of energy security, which the green energy transition will complicate before the world is able to stabilize and adjust to a “new normal.”
The alternative, of course, is seen by many as worse. Continuing to burn fossil fuels at anything close to the historic levels is not an option. The world is at a crossroads and the window to curb global greenhouse gas emissions quickly enough to avoid catastrophic climate change is closing rapidly. The urgency and totality of the need to decarbonize is inevitably going to cause bumps in the road, and this global energy crunch is likely just the beginning. In the long run, however, it’s the only viable option.
And there are ways to make the transition a whole lot smoother. Energy storage is one of the most essential and sure-fire ways to decarbonize without seriously compromising energy security and independence (read: how to circumvent the Russia problem). Zero-emissions, renewable energy sources like solar and wind are great for generating clean power, but they are intermittent. Unlike coal, oil, and natural gas, which can be burned on cue to match demand, solar and wind can only be generated when the wind is blowing and the sun is shining. Energy storage allows this energy to be held in reserve until it is needed, feeding the energy back into the grid when necessary.
Despite the essential nature of this service, the energy storage sector is still in its infancy. But it’s expected to grow at a breakneck pace in the coming years. “Within the next five years, the International Energy Agency (IEA) expects global energy storage capacity to expand by 56% to reach more than 270 GW by 2026, driven by a growing need to create flexible electricity systems which rely more on renewable sources,” the Guardian reported earlier this month.
This promises major returns for those who get in on the ground floor and any start-ups who can find new, innovative, and efficient ways to store energy. The sector is on fire with technological advances and experimentation. “Well-established lithium-ion batteries are expected to dominate,” reports the Guardian, “but their capacity is measured in hours rather than days. New energy technologies, which can store energy for longer periods, have found renewed favour within the power industry as the winter energy crisis has unfolded.”
Some of the most promising and buzzed-about long-range storage options are gravity storage, concentrated solar power storage, green hydrogen, and cryogenic batteries. Gravity storage could allow hilly regions to hold and release water to spin turbines like much larger dams, but on a much smaller and less ecologically disruptive scale, as no rivers need to be involved. When there is surplus energy production, the water is pumped to the top of the hill. When there is surplus demand, it is released. Concentrated solar power storage holds onto energy as heat in the form of molten salt, and is already being tested in pilot projects in the sunny Nevada desert. Green hydrogen has historically been costly and not energy-efficient, but as it becomes cheaper and easier to produce with technological advances, burning this fuel which leaves behind nothing but water vapor is becoming a more attractive and viable option. Finally, ‘cryogenic batteries’ chill air to a liquid form. When needed, the liquid is turned back to gas, spinning a turbine.
While these technologies are in their nascent stages, they are extremely promising steps forward that can hold energy for much longer than traditional batteries, and without the need for non-renewable lithium. In the not-too-distant future, one or all of these energy storage technologies could keep your lights on and your home heated, global gas crunch be damned.
By Haley Zaremba for Oilprice.com
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