Renewable energy is expected to make up 30 percent of the world’s energy by 2024, according to the International Energy Agency, and most of this is driven by solar and wind projects that continue to be rolled out at a startling pace.

But how is the market really moving? And what do companies need to stay ahead of it?

To answer those questions, BaxEnergy interviewed an expert in energy supply chains, exporting and energy transition. Stuart Broadley is Chief Executive of the Energy Industries Council (EIC). Prior to joining EIC in 2016, Mr Broadley enjoyed a successful 25-year career leading global O&M businesses in oil & gas, power and renewables with Rolls-Royce, Wood, Senvion and Hoerbiger. In 2019, he was invited to become a Fellow of the Energy Institute.

Q: What is your vision about current renewable energy technologies and projects? In which direction do you think they are going?

A: In the last ten years, especially since COP21 focused the world on limiting planetary temperature growth, governments have kick-started their journeys to net zero, utilizing the most available technologies in the easiest sector to decarbonize, namely power generation.

Governments and companies have focused on technologies that have now become commoditized, up-scaled and available globally, this is why hydroelectric, solar PV and onshore and offshore wind technologies have grown much faster than other technologies.

The vision for the coming years is therefore two-fold. Firstly, that these types of established renewable power generation technologies become even more widely adopted on a truly global basis, and quickly. Today, still only a minority of the world’s power generation comes from these proven renewable technologies, hence providing unprecedented market potential, with very few barriers to growth, and of course delivering reduced emissions and preparing for enhanced electrification.

Secondly, especially for those countries that have successfully addressed their power generation emissions like the UK, the harder-to-decarbonize sectors need technologies to also become widely accepted, scaled, and commoditized. These sectors include transport, heat and industry. For these, there is still a long way to go, perhaps with the exception of electric vehicles, spearheaded by Elon Musk, a leader who has risen to the top of both the dot com bubble and now the net zero bubble!  

Q: Everywhere we look, hydrogen is being advertised as the next big thing, but it comes with many issues. So, why do you think hydrogen is receiving such a strong momentum?

A: That’s a really good question and I’m going to give three responses.

Firstly, hydrogen is a subset of what is widely termed energy transition, which is a “hyper-topic”, a neologism I created. To me, a “hyper-topic” is a forefront topic which becomes a huge focus of industry conferences and may, or may not, actually result in widespread adoption. In energy terms, hyper-topics of recent years have included decommissioning and digital, both of which have so far failed to provide the dreamed-of growth and wealth for the supply chain. Hydrogen still has that potential too, to fail to live up to the hype.

Secondly, there is of course growing interest by investors to look at the portfolio of their investments under the banner of ESG, driving the huge green finance trend we see now, away from emitting industries like oil & gas, and the sheer number of new hydrogen projects being announced has whipped up great excitement in the investment community.

Thirdly, there is a debate still to play out, that is taxing policy makers, re the direction of travel of hydrogen – namely, blue or green. The oil industry is best placed, with its existing skillsets and infrastructure, to provide blue hydrogen at real pace and scale, using technologies like steam methane reforming to produce hydrogen, but needing to store the resultant CO2. From a supply chain point of view, this option makes a lot of sense as companies will be able to apply most of their existing products and services quickly, minimizing the time between oil drop off and hydrogen uptick.

However, consumers and activists are signaling a preference for green hydrogen, using electrolysis powered by renewable energy sources, negating the need for CO2 storage. This option is seen as more authentically green but is also assumed to be more expensive, and to be harder to scale up. The supply chain would also have further to go, and more to invest, to adapt to green hydrogen.

Q: So, from what you have said so far, which technology do you think will be implemented the most and the sooner?

A: EIC projects data provides the answer to this. The net zero market that will be the most active, with the most projects and the highest value, for the next five years at least, will be mature renewable power generation technologies like wind, solar and hydroelectric. Without these technologies, transport, industry and homes cannot access green electrification, so countries and companies have to start from there. Also, considering that most countries are still early in the adoption of renewable power, there is huge wealth to be grabbed there.

Next is CCUS, or carbon capture utilization and storage. Beyond the need for CCUS for blue hydrogen production, there are countless industries and transport systems that will continue to emit harmful gases and will be forced by carbon taxes or legislation to collect those emissions, possibly as soon as the next five years. This provides a massive market opportunity for innovators across the spectrum, as demonstrated by Elon Musk who recently issued a $100m prize for the best new carbon capture technology. Where CCUS and electrification are uneconomical or unpractical, then hydrogen will of course play a role.

Perhaps the most exciting area of all is energy storage. Wind and solar farms only produce when its sunny or windy obviously, and often over-produce at those times and have to curtail, so there’s still a huge opportunity for the owners of those farms to apply efficient and cost-effective means of storing excess power to level out their business models, stabilize the grid and meet growing energy needs at much lower cost. Whether at utility or distributed scale, there are many technologies being touted as the answer to this energy storage conundrum, but which one(s) will win out? This alone is a multi-trillion-dollar market still there for the taking.

Q: Ultimately, do you have any suggestion or advice for companies you want to share with us?

A: I want to conclude saying that this is a very interesting but still uncertain time for companies, and indeed for the world. Investors need to be careful to spread their portfolio, not betting the farm on one green technology alone. Policy makers need to go faster to move beyond the sound bites of policy statement to the hard graft of policy implementation. And this has to happen across all corners of the world.

As a business leader, if you are still not seeing net zero as a route for growth, which will come soon, at least start with the basics – implement your own net zero policy, measure your carbon footprint, engage your staff in sustainability, and learn the language of energy transition. Make sure you are prepared for when your clients start to demand this of you, or risk losing their business. If they haven’t asked for it yet, it’s only a matter of time.