Roadmap to decarbonisation
A look at the roadmap towards decarbonisation by charting new pathways in the global energy sector.
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In the quest for decarbonisation, the world is facing a huge challenge today. To combat climate change, we must meet the objectives of the Paris Agreement by limiting global warming to 1.5ºC. The journey towards achieving net-zero emissions by 2050 requires trillions of dollars of investment in technologies and infrastructure for low-carbon fuels and electrification to create new pathways for the global energy sector.
To meet the goals set in the Paris Agreement, it is estimated that low-carbon fuels will have to make up more than 10% of the total energy consumption worldwide. Hydrogen is slated to play a vital role in decarbonising energy needs that cannot easily be directly electrified in shipping, aviation, and heavy industries. It can be used either as a direct clean fuel, which upon combustion emits only water, or as the key building block for other clean fuels like ammonia and methanol.
The demand for low-carbon hydrogen is estimated to exceed 500 MMTPA in 2050, representing a six-fold increase in current demand. This will require an unprecedented need for investments in highly efficient and flexible solutions.
Emerging from the Covid-19 pandemic, which was accompanied by a decrease in CO2 emissions from 2019 to 2020 of 7-8%, we are faced with the reality that CO2 emissions must be reduced by nearly 6% year-on-year to achieve the targets in the Paris Agreement. Although the targets for low-carbon fuels and direct electrification are relatively clear, getting there will require a considerable build-up of renewable energy globally. The IEA estimates it will require double the current annual addition of renewable energy for the global energy pool. These investments exclude those needed for a similar expansion of the electricity grids to carry extra energy and distribution to additional customers.
Imagine that in 2050, about a billion electric vehicles (EVs) will be on the roads every day. Then, imagine the charging infrastructure to support that. We will need:
- Policies and frameworks that both encourage the development of infrastructure through numerous partnerships in the public and private sectors and jointly support de-risking
- Space to install renewable energy capacity from solar and wind, with appropriate allocations/approvals
- Development and support for the frameworks needed to trade across borders and to enable the distribution of renewable power to the sectors required, thereby achieving the required energy mix in 2050, i.e. energy directed to both electrification and low-carbon fuels routes
The recently implemented US Inflation Reduction Act of 2022 is an excellent example of a framework that aims to encourage further development in clean energy via a tax credit scheme, and is expected to have a significant impact on the development of clean energy projects in the US. Indeed, we have already received positive feedback from partners and clients, stating that this will further boost their projects moving forward.
Innovation and scale are key
Besides the massive build-up needed for renewable energy and low-carbon fuels, a parallel, continuous effort in technological innovation is needed to reach the net-zero target. The cost of renewable power has come down significantly in recent years. This trajectory must continue with a focus on production hubs, where economies of scale are being pursued on an entirely new mega-scale, both onshore and offshore. For instance, new energy islands, planned in the North Sea offshore the coast of Denmark, are targeting 10 GW capacity for each project. Such scale would require 670 windmills, each standing 270 metres tall, filling the space of more than 60 soccer fields.
Such mega-projects will capture the advantage of the better wind conditions offshore and, by going really big, make it feasible to have an artificial island made for low-carbon fuels production or even a floating setup. Mega-projects for solar power or a combination of both are now frequently announced and needed to ensure enough renewable power going forward. The latter has been boosted by all the major International Oil Companies (IOCs) embracing the energy transition.
In 2050, it is estimated that three-quarters of the world’s hydrogen demand will be supplied via electrolysis. The rest will be by a combination of fossil-based production routes with CCS added plus some nuclear and methane pyrolysis. Other not yet commercialised routes will take up an unknown part of the mix.
KBR is collaborating with partners across the hydrogen value chain, addressing all the routes mentioned above, to continuously enhance existing technologies and commercialise new technologies. We are working with several global electrolyser producers on balancing the electrolysis plant, modularisation, and smart construction when scaling up and using advanced control tools for optimising the output.
KBRs proprietary K-Green technology features advanced process control (APC) and digital solutions that adapt to the intermittency of renewable power, allowing for optimal production of green hydrogen and downstream conversion into ammonia. These will be key to the efficient conversion of renewable power to hydrogen and downstream products. Intermittency is less of a concern when renewable energy is in the form of hydropower.
The cost of electrolysis will come down due to further advances in stack production, smart engineering, and scaling up. The levelised cost of hydrogen produced via electrolysis will approach that of fossil-based hydrogen via the SMR route (with CCS) by 2030 (about a 50% reduction from that of today) and is expected to be well below 2 USD/Kg H2 by 2050.
Two major routes to low-carbon hydrogen
In the longer term, the electrolysis route will become the main source of hydrogen (often referred to as green hydrogen), but in the shorter term the carbon intensity of hydrogen production from natural gas or other fossil feedstocks via SMR reforming can also be reduced using carbon capture. Hence, there will be a period where we see both new builds of fossil-based plants and upgrades of existing plants with carbon capture and advanced forms of heat exchange. As such, reforming will likely contribute 20-25% of the total hydrogen market in 2050. These plants are often referred to as blue hydrogen plants and can be designed to capture close to 100% of the CO2 that would otherwise be released into the atmosphere.
KBR is heavily involved in developing and delivering technology for the blue hydrogen market. Besides offering blue hydrogen via our proven SMR plus KRES technology scheme with various CO2 capture options, we are working with partners on further advancements in CO2 capture technologies and usage of the CO2 captured. This is vital, as these advancements will be key to lowering the carbon footprint of existing assets that today have no or limited carbon capture.
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