Keeping Green Energy Grounded
Keeping Green Energy Grounded
Originally Appeared in PEI Infrastructure Investor, April 2020
Infrastructure investors can drive decarbonisation. But achieving a more sustainable system that meets the growing demands of urbanisation requires a diverse energy mix, writes InstarAGF’s Gregory Smith.
There is significant scope to find innovative new opportunities and solutions within existing energy systems that can also disrupt or be a catalyst for change in other infrastructure
The United Nations Intergovernmental Panel on Climate Change warned in 2018 that keeping global warming to a maximum of 1.5 degrees Celsius must be a priority. Without drastic climate action by 2030 – including a 45 percent reduction of carbon dioxide emissions – we will resign hundreds of millions of people to a more extreme risk of natural disasters and poverty. With global communities increasingly turning to renewable energy but still overwhelmingly relying on fossil fuels, these adaptations to form as well as function will play a key role in combating emissions. According to the US Energy Information Administration, renewables are expected to account for less than 15 percent of that country’s energy sup-ply, even by 2050. That leaves more than 75 percent of energy demand to be filled by fossil fuels. Given the crit-ical changes that need to be made in the next decade to respond to climate change, the sustainability of our en-ergy grid will not only be defined by the heights our green technology can reach, but the progress we can make within our least renewable sectors.
GREENING THE FULL VALUE CHAIN
Transitioning to long-term sustainability
The prevailing understanding of sustainability places the importance on an asset’s operations or energy source. Although the proliferation of renew-able technologies will play a key role in the global energy transition that is currently underway, we will also need to understand the manufacturing, construction, operations and end-of-lifecycle environmental footprint of such technologies from a long-term perspective. How many emissions will construction create? Will the physical structures be reusable or recyclable after operations? For example, we are only now gaining insight into the larger environmental impact of wind energy. While much of the wind tower itself can be recycled, the turbine blades, designed with fiberglass to withstand intense airspeeds, pose a much larger logistical and environmental problem for disposal. As earlier installations reach the end of their lifecycle, the American Wind Energy Association reports that municipal landfills are currently the safest, most economical solution to store these massive structures. The economic and technical burden of dismantling, transporting and re-purposing the fiberglass blades ultimately falls on municipalities, with landfills like the one in Casper, Wyoming, already account-able for 870 blades in addition to regular volumes of waste. A National Public Radio report estimates that more than 720,000 tons of turbine blade material in the US will require disposal over the next 20 years.
Sustainability across the full lifecycle and value chain must include a longer-term mindset and a balance between investing in and transitioning to new energy systems
Solar energy faces a similar problem, with panels built to contain toxic chemicals including lead and cadmium. The toxicity of these materials means that, unlike turbine blades, landfill disposal is not a viable solution as any damage could lead to contamination of the surrounding soil. Researchers at the Electric Power Research Institute estimate that for every 1.8 million solar panels there will be around 100,000 pounds of cadmium, a pollutant classified by the US Environmental Protection Agency as a human carcinogen. With the International Renewable Energy Agency projecting solar panel waste reaching 78 million metric tons globally by 2050, the next few decades will see substantial pressure and opportunity around end-of-life solutions for this environmental challenge. Broadening our understanding and overall capacity for sustainability across the full lifecycle and value chain must include a longer-term mindset and a balance between investing in and transitioning to new energy systems while improving the safety, integrity and sustainability of existing ones.
Teaching old energy systems new tricks
Decarbonising our energy system will require a new approach to sustainable energy infrastructure, prioritising projects that move communities towards fewer emissions and greener solutions, while finding ways to revitalise growth and innovation within even traditional energy sectors. The value will come through modernisation, not abandonment. New technologies can be applied to traditional energy sources, such as the recent discovery by researchers at the University of Sydney of a new material to redefine how we refine crude oil. This new material has the potential to reduce carbon dioxide emissions re-leased during the refinement process by up to 28 percent, an essential step forward for a world that still needs fossil fuels. There is significant scope to find innovative new opportunities and solutions within existing energy systems that can also disrupt or be a catalyst for change in other infrastructure. For example, the World Economic Forum cites water availability as the next decade’s biggest risk, above even climate change. Despite this need, a study from the National Academy of Sciences found that less than three-tenths of one percent of total water use in the US involves recycling. Surprisingly, produced water, a by-product of oil and gas extraction, is being re-used at an average rate of approximately four percent in the US, which, according to IHS Markit, in-creases the overall water recycling rate by around 133 times. Produced water pipeline and reuse infrastructure significantly improves the environmental footprint of the oil and gas sector and offers the potential for shared technology and expertise that can conserve an essential resource and strengthen a community’s resilience.
Much more needs to be done across the lifecycle of our energy infrastructure if we are to meet the competing demands of our cities and our natural environment
In a similar fashion, new investment and sustainability opportunities are arising elsewhere across the traditional energy spectrum, including the capturing and processing of flared gas as regulatory authorities in a number of jurisdictions increasingly clamp down on the burning of the gas byproduct that results from energy exploration and production. Such gas capture initiatives dramatically reduce carbon emissions from the oil and gas sector. Further, the industry has pivotally shifted in how resources are transported, with the move towards pipelines significantly reducing greenhouse gas emissions. When delivering high volumes of oil and bitumen across long distances for example, pipelines produce less emissions than rail by between 61 and 77 percent, according to a 2016 study at the University of Alberta. Technology changes what is possible for us to create in the future while enabling us to dramatically improve, modernise and green our current energy infrastructure. We can see where we are and where we want to be. But we need to apply a new, more holistic definition of what constitutes a sustainable energy system, including a clearer and longer-term understanding of the impacts of current and emerging green technologies, and an inclusive view of the potential opportunities and innovation within traditional fossil fuel-based sectors.
InstarAGF Asset Management Inc.
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