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The energy transition cannot occur solely through the decisions of individual players who will optimize their own economic interest.
Hello Olivier Sala. So for those who still don't know you, Olivier who are you?
Hello, my name is Olivier Sala, I work at ENGIE, which is a large French energy company and I am in charge of research and innovation at ENGIE.
So you did the right studies, I imagine? What led you there?
What led me there was a passion for energy. I have been working at ENGIE for almost 20 years now because I have always considered energy to be one of the essential things in life.
It is life itself.
I don't know if it's life itself, but it's the basis of all transformation and therefore the basis of the development of human activities. This link between human development and the energy model is one of the subjects that we will discuss today, but the two are very intricate.
At all scales, from the cell to the planet, energy allows transformation and therefore the continuation of existence.
Why do we need an energy transition?
We need an energy transition because we are currently witnessing a situation of global warming that is not sustainable. We all know this, and the latest IPCC report underlines it in an extremely strong way, the speed of global warming we are witnessing is unprecedented.
Even if we totally stopped emitting greenhouse gases which are responsible for warming temperatures, by 2030 we would already see an increase of 1.5 degrees on average. Obviously, this includes quite extreme phenomena: temperature on the Earth compared to the pre-industrial era, so before man began to emit quantities of greenhouse gases due to the extraction of fossil fuels as energy sources.
May I remind you that +1.5 degrees is the first objective that we set ourselves within the framework of the IPCC a few years ago. So we know that it's already done, that we already have consumed all our credit. And so, very strong measures are needed, because all this has great inertia, and it is precisely because it takes time that we have to act quickly. This is not at all counter-intuitive, on the contrary.
What is at stake is the after. The +1.5 degrees, we will have it in any case. The question that arises is that if we do nothing, if we continue at the current rate, in 2100, which is the horizon that is generally analyzed by the IPCC, we estimate that the increase in temperature will be +3.2 degrees.
And that is ultimately a level of cost, of drama, which is such that all the means that we do not implement today, because we consider that it represents too much effort, are ridiculous compared to the potential impact.
What is interesting is that there is a reversal taking place. It’s within the companies that produce energy, which were one of the major causes of the production of greenhouse gases responsible for global warming, or at least within a certain number of them that we find the means to act.
So how do we do it?
Our conviction at ENGIE, and it is also my personal conviction, is that we must act immediately and on a large scale. We are no longer at the stage of the test or the pilot even if each and everyone has a role to play, but we have to look for large-scale solutions. The purpose is to decouple human development from the carbon footprint or emission of greenhouse gases. That is what is fundamental. Otherwise we are doomed.
This decoupling is possible, and doom is not inevitable, since some already ask: do we have to give up human activity in order to survive from a climatic point of view? There are obviously subjects of sobriety, energy efficiency, etc. But it is quite possible, in a certain number of cases, to decouple the two and to continue to have reasonable human activities, with a very low or zero carbon footprint.
That's what we have to look for and it's a profound transformation. I'm not saying it's easy, I'm not saying it won't require effort, that it won't need investment, etc.... It's a challenge of unprecedented magnitude and that's precisely because it will require profound transformations in the way of producing, of transforming, of consuming the energy that it has to be explained, that it has to be shared.
It is very important to encourage support, because it is only thanks to support that there will be a change in behavior and thanks to the change in our behavior, of each one of us and of course of the companies, which have a very important role to play, it is thanks to all this that things will evolve in depth.
Our role in research and innovation, because we are not responsible for everything of course, is to open up new paths, more technological paths, to contribute to this. I do not have a technocentric vision saying that technologies could do everything, I think that collective awareness, the evolution of individual behavior, of companies etc.... is very important. But obviously, being responsible for research and innovation, what interests me is to open up new technological paths because in this way I can contribute concretely. And it is important that everyone ask themselves the question of how he or she can contribute concretely.
What interests me is that you put the plural everywhere. That is to say that before, there was a solution, it could be oil, it could be coal, it could even be, in a way, nuclear power. And you put plurals everywhere, meaning that there are several solutions, therefore complex, and there is no miracle answer.
I’d like you to explain this plural, this complex, which means that the possible is there.
So there really isn't a miracle solution. And the technological world of energy transition is much larger than the technological world of fossil fuels. And it is not a hazard. It is indeed because there was an unparalleled ease of the liter of oil that we sank collectively, or at least our civilization, in this ease, since the energy density of a liter of oil, its capacity, its ease of use etc.… is such that there was no equivalent.
Once you get out of that world, there is indeed a set of technologies with solutions available right away, solutions that are not yet technologically mature but on which you have to work so that in the medium - long term, they can take over, which will have to be combined in energy systems which will in part be more local than in the past, with balances which will have to be found at local and global level, with an electric part, a non-electric part, with low carbon molecules…
Allow me to briefly outline what the energy transition means and what are the main paths of the energy transition. The first thing, the first step, which is absolutely essential, is the search for efficiency, sobriety, we can use several words, but basically, it is to avoid consuming the energy that is not necessary to consume. Those, in part, are technical questions. For example, if we insulate the dwellings and upgrade them, that represents big investments, but it is absolutely essential. We know that in the new thermal regulations, for example, a new house consumes almost nothing, because it has a type of construction that means that thermal exchanges are much more limited.
Today the heat losses in the housing stock, but also in the tertiary sector, in offices, in supermarkets, wherever you go, are considerable. Basically, for a continent like Europe, 30 to 50% of the energy consumed any given day could be avoided over the next 20 years if we do all the renovations that need to be done. So it is absolutely essential to stop wasting the energy that could be saved. And that represents an order of magnitude between 35 and 50% depending on the uses, according to the geographies etc.… but finally it is considerable. So that means it takes a lot of money, and you will probably have to help. The energy transition cannot occur solely through the decisions of individual players who will optimize their own economic interest. Obviously, political choices are necessary, which is already the case. Laws already exist, there are bills in preparation, energy programming that requires a vision over several years, etc.... This is very important.
Europe has adopted a vision and ambition for reductions of -55% in 2030 to be carbon neutral in 2050. So obviously, a political framework is needed, made up of both constraints and encouragement, aid, etc. to promote this transition. Because even if at the individual level, on your house, you cannot fully reimburse yourself for your renovation and insulation work on your energy bills in the next three, four, five years, what is certain is that at the collective level, we have every interest in you carrying out these energy renovation works. And so it is a good use of public money to encourage, to actually speed up this renovation which, otherwise, if left to its natural pace, is too slow.
That, then, is the first absolutely necessary and possible means.
We are only talking about possibilities here.
The second axis, which is also quite important, is electrification. Electricity is an energy vector, it is not a primary energy, but the interest of electricity is that we will be able to produce it from renewable sources. It is a question both of electrifying the uses that can be electrified and at the same time of replacing the historical means of electricity production, in particular those which are carbon emitters, with renewable sources.
What are renewable sources? It's hydraulics, of course, there are a lot of them, but in a continent like Europe the potential for growth is limited because the sites with potential have been exploited for quite a few years already. There are small things, but it's not huge.
It is wind power, of course, onshore but also offshore, which represents a very big potential since offshore, we have bigger machines with more regular winds. And so, for Europe, I think that is a very important avenue to explore.
Solar energy is today the most competitive source of energy production in the world. Nothing can beat solar and the costs continue to drop. We'll see how far it continues to drop.
With land use competition.
Renewable energies, of course, have consumables that are renewable by definition but use land. This is an important question, particularly for Europe where we are in fairly densely populated areas and where there may be land use conflicts. Moreover, we are working on these subjects at ENGIE, for example on Agri-PV, in which we manage to combine shade houses equipped with transparent photovoltaic panels, which let the light through which is useful for plants and crops, but which produce electricity at the same time and on the same surface.
We do not have quite the same yields as on a conventional photovoltaic park, but on the same surface we do agriculture as before, or even better than before if we find the right combination, and we produce electricity.
So, allow the writer that I am to salute this very pretty shade house word. That is to say, with light, we make shadows. That is not only recycling, but metamorphosis.
Absolutely. In France, we are lucky to have a significant part of our electricity mix produced from nuclear power, emitting little or no carbon. However, in the next ten or fifteen years, the probability that our nuclear fleet in Europe will increase is very limited, given the fact that some countries have decided to phase out nuclear power irretrievably. So in fact nuclear power will continue.
France is quite proactive on nuclear power, but we can already see that maintaining and extending the fleets is important. The new nuclear is a good idea in the long term, but it will take a long time, we can clearly see it on the new units. And so what will increase in power considerably is photovoltaics and wind power. You need to keep a number in mind. All over the planet today, at the end of 2022, there was one terawatt of photovoltaic power installed – one terawatt is what we ever installed until the end of 2022.
It is estimated today that at the end of 2025, there will be two terawatts installed on the planet. So that means that we will have done in three years as much as what had been done so far. And it is believed that in 2030 one terawatt will be installed on the planet in one year only.
As we see an acceleration of climate change, we must break this acceleration by accelerating the means implemented.
Absolutely ! And only renewables can give us that. The rise of renewables comes with a different way of managing electricity, because renewables have a form of intermittency, which is quite natural. Photovoltaic produces when there is sun, which is not a surprise. And so we are going to see the emergence or the rise of the notions of storage to manage to buffer, via batteries and different forms of energy storage, and also of flexibility management.
Before, electricity consumption was, if I may say so, fatal, as they say in the business, that is to say the guy who came home in a cold snap in February at 7 p.m. and who turned on his convector, was costing the electrical system a fortune because, at all costs, the new means of production had to be turned on, whatever its impact in financial terms, in carbon terms, so as not to cause the system to collapse. Because the electrical system is such that if there is not a perfect balance at all times between supply and demand, everything collapses and no one can afford it to collapse.
I think that should be a thing of the past and that an increasingly important part of the demand for energy consumption must integrate a part of flexibility, by playing on the inertia and the displacement of consumption . I take this example, but this particular customer is not the one with the greatest potential for flexibility compared to manufacturers etc.… But he has an electric hot water tank, and this electric hot water tank , typically, one can switch its consumption to a time when electricity is not in a peak situation. There is also the thermal inertia of his home and so rather than heating at 7 p.m., he should perhaps have heated at 4 p.m. and at 7 p.m., at the time of the peak, his convector would have been turned off.
This intelligence, this common sense will have to be integrated for real into the system. We are moving from a world where energy was completely centralized, with passive consumers, to a world where there are balances to be found and where consumers will be more active. They will also be producers themselves, with PV panels on their roofs, and they will be contributors to the storage system because they will undoubtedly have an electric vehicle which will allow them to store energy, etc....
The electric vehicle is a very good example. Transport represents a significant part of our fossil energy consumption today. It is believed that on all light vehicles, electrification with batteries is the best option. It comes with other complexities, but it is by far the best option over the next 15-20 years. And so typically, it will increase power consumption. That's why it's important to achieve the efficiency we were talking about earlier to allow the rise of renewables with the ability to manage the variability inherent in renewable energies.
That's the second pillar.
So third axis, Olivier.
So effectively, there is a third axis which is the deployment of low-carbon molecules. Why this third axis? It is also essential and it is somewhat parallel to the other two. Reducing consumption, electrification from renewables, and molecules. Why is this essential? Because there are a number of human activities that we do not know how to decarbonize with electricity. Heavy mobility, for example, is not at all suitable. We can discuss where heavy mobility begins. A bus, it's still okay, a small truck, it's okay, a 38-ton semi-trailer, it's very complicated.
And if you take a container cargo ship …
With 15,000 containers…
We cannot decarbonize this transport from Shanghai to Rotterdam with lithium-ion batteries using electricity, it is not possible. Or else the container ship would have to carry only batteries. It's an activity, he could go back and forth, but it's not of much interest. And so, in these cases, electricity has its limits. It shows limits, because it is very difficult to transport. It can only be stored in batteries which have an energy density which is not great, which are very heavy. And so we need low-carbon molecules.
We also need low-carbon molecules in situations where complete electrification risks leading to consumption peaks, which I was talking about earlier, which become very complicated to manage. Sometimes the "a little more" in electricity is the enemy of the good because the peak becomes too high depending on the configurations of the electrical system.
These low-carbon, decarbonized, green molecules, we can call them what we want, are of two kinds. On the one hand, there are molecules that come from biomass, so basically from plants, organic waste, etc. This is called biogas, biomethane. There are several technologies to do this, but the most classic is to put organic waste in a methanizer, a kind of large container. We put it in a container because it is important that there is no oxygen. We add the small bacteria that eat the biomass, and which by eating the biomass, emit gas. This gas, after filtering and recovering it is methane. And this methane is identical to the natural gas that we extract underground, and therefore we can use it.
It's very clear. So we multiply everywhere thousands, tens of thousands, hundreds of thousands of these “stomachs” everywhere.
Exactly. And you know, bacteria are quite formidable animals, which have catalysts in their bodies that we are trying to reproduce elsewhere in chemistry, but extremely efficient and which allow to produce methane in particular, but not only, and this is extremely promising.
Moreover, the ENGIE group strongly believes in the development of biomethane because it is very complementary and we are using local loop energy. Biomethane is really a territorial solution with local inputs without using raw materials that come from the other side of the world, etc.
That is key because the new configuration of energy is its decentralization. They are no longer huge power plants.
The second family of green, carbon-free, renewable molecules are molecules made from hydrogen. Hydrogen is an atom found everywhere, it is the most common atom in nature, in the world, in our body. Hydrogen gas, which is H2, is not found so much in its natural state because it is very reactive, so it is very difficult to find. So we have to produce the hydrogen that we use. Today, there is already a large use of hydrogen for industrial processes, in particular for the refining of petroleum products or to produce fertilizers. Nitrogen fertilizers are made from ammonia which is made from hydrogen. To fully understand the issue behind this, behind the 230 million tons of nitrogen fertilizers that feed the planet today, without nitrogen fertilizers today, we cannot feed the planet.
It should be understood that the hydrogen that is used today has a carbon footprint of 820 or 830 million tonnes of CO2 equivalent. It is considerable. Why? Because this hydrogen is gray hydrogen, produced from fossil sources, natural gas, sometimes worse, with steam reforming and therefore it is a very CO2-emitting hydrogen production.
So the first subject is to replace this gray hydrogen with renewable green hydrogen which will be produced from the electrolysis of water for which we use renewable electricity. We’re back to the challenge of increasing the power of renewable electricity that we will extract from the water molecule H20. We will separate hydrogen and oxygen to obtain renewable hydrogen. It is also a subject in which the ENGIE group as well as research invests a lot, to substitute this gray hydrogen.
But in addition to that, hydrogen will make it possible to decarbonize these human activities which are difficult to electrify, either directly by using hydrogen, or by recombining hydrogen with something else to produce what is called e-fuel. We can manufacture synthetic fuels, we can manufacture synthetic natural gas which is exactly the same as the natural gas that we extract underground, what we call e-methane. E-methane is CH4, it is the same molecule. You can use it without changing anything and it does not emit CO2 if you produce it in a renewable way. We can make ammonia, I was talking about it for fertilizers, with a zero carbon footprint. You can make kerosene with a zero carbon footprint, if you have a source of carbon that is biogenic or captured directly from the air. So the hydrogen will play a pivotal role in these critical applications that we will not be able to decarbonize easily through electrification.
So if we sum up, there is the diversity of means, the diversity of the possible that exists and the responsibility at all levels, of each one, of the State, of the companies, the prosumers.
There is another point which is crucial, as we have seen, with the awareness of public opinion of dependence on countries which are not necessarily managed by the nicest people. So how can we couple this need to get out of the curse of global warming with the other curse which is that of dependance?
Is it illusory or not?
There is an issue of raw materials with the energy transition, since de facto, we are going to leave a dependence which is that of the supply of fossil fuels of which Europe, since coal, was no longer producing for a long time. On the other hand, the energy transition, and in particular these means of production of renewable electricity and storage, all this equipment is built from raw materials with which Europe is rather poorly endowed.
When we analyze the raw materials needed for large equipment, photovoltaics, wind power, batteries, electrolysers, etc.… we realize that the deposits are indeed more or less well distributed on the planet and obviously, some are very concentrated, and the extraction capabilities even more so.
That is to say that there is lithium in Europe, probably, but the lithium mines are not in Europe today, rather in Chile.
It is both dispersion and acceptability.
Obviously. And we must be aware that the mining activity today is one of the most polluting that exists. But when we make projections on the volumes of raw materials we will need, in relation to the current mining extraction capacity existing on the planet, and I am not even talking about the question of the asymmetries, namely who produces what in relation to who will consume what, and these asymmetries are major, we see that for a certain number of raw materials, it will not work. And why do we know it's not going to work? This is because it takes at least seven to eight years to build a new mine, much longer probably in Europe with regard to social acceptability. Pragmatism and intellectual honesty compel me to say that no energy source, whatever it is, is completely neutral in terms of impact. So, you have to be aware of this impact. You have to control it, you have to reduce it as much as possible. And that is why the lever of efficiency, of sobriety remains absolutely relevant in all cases. Yes, there is a raw material subject, it is identified. To give you an example, I was talking about 2030 and the terawatt-peak that will be installed that year. It is considered that, given the photovoltaic technologies that we should have by that time, 42% of the world's silver production for that year will have to be allocated to the construction of these photovoltaic panels. So what does that mean? This means that there will undoubtedly be tensions between supply and demand, because silver is not only used to make photovoltaic panels in the world and therefore it leads to price volatility etc.... and indeed, to this question of the geopolitics of energy in a world where it will be more based on resources and raw materials than on fossil fuels.
What strikes me listening to you is that this energy transition is also an upheaval in our relationship to time, since we have seen it clearly, it takes urgency and it takes time. Second, it is a relationship with space. We let everything go in globalization. Now, we are swinging in a kind of illusion of personal self-sufficiency. And so we are in an upheaval which has probably never had an equivalent in human history.
And then, in the face of these upheavals that cause anxiety, are you still optimistic? Because the population is not and therefore they refuse to see that there are possibilities because the possibilities require effort. The possible is linked to the effort. Always !
For us at ENGIE and for me personally, we are aware that this is a major challenge, that it will be complicated, that it will take a lot of effort, that the story is not completely written, we are going to invent it. We are going to write it, the page is still partly blank, but it is possible, there are ways to get there, there are paths to trace to get there, and it would be a great danger to switch from a state of denial which was deadly to a state of dejection in which we could say to ourselves: finally, it's already screwed up because, given the inertia, as I told you earlier, we already have 1.5 degrees, whatever we do for the 2030s. And then we are only a small part of the emissions, there are other big countries in the world which emit much more than us. So in the end, what we do has no impact, etc. In short, a kind of abatement or renunciation which would also be deadly because, as the IPCC underlined it in its last report, reality is that yes, we are in a situation of alert, we cannot say the opposite, but at the same time, there are solutions and the solutions require us to act quickly, they require us to act strong.
It's possible. I think optimism is more than a state of mind, it's a duty. Because “luck smiles on prepared minds”, as Pasteur said. And so, optimism is also about drawing opportunities that we will build and that we will seek. At ENGIE, we are convinced of this, we are opening the technological paths to do so. So, it's not just us, it's not just technology, once again, but we see solutions and we think optimism is an absolute necessity. We have to fight against pessimism, against a kind of “no future”.
In French, we could say: as there is no hope, we might as well burn our last cartridges for our last evenings, etc. It would be absolutely irresponsible. It is not too late to act, quite the contrary.
This shift from denial to despair that you have described is true. And against that, there is only one answer, it is that of the possible. It is a kind of pleonasm, when we say to live the possible, because the possible is to live it.
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