Report: HVDC powerlines and green hydrogen are most cost-effective way to decarbonize global energy system –

As countries
move to decarbonize and adopt renewable energy, many are finding it difficult
to do so cost-effectively due to fundamental limitations in solar and wind
resources. For countries to fully decarbonize without breaking the bank, they
must develop renewable energy carriers and build new zero-carbon energy supply
chains, says Lux Research.

In the new
report, “Evolution of Energy Networks: Decarbonizing the Global Energy Trade,”
Lux Research examines renewable energy carriers as well as countries and
companies developing them.

Lux evaluated
the lifetime costs of 15 different renewable energy carriers from electricity,
hydrogen, synthetic methane and ammonia to liquid organic hydrogen carriers
(LOHCs), vanadium and aluminum.

Delivering
energy via land-based infrastructure becomes expensive at long distances as a
result of inefficiencies of powerlines and capital costs of pipelines. However,
delivery via ship is much most cost-effective at long distances.

Lux’s analysis
also found that across all renewable carriers, low-cost solar energy can be
delivered to resource-constrained regions at 50% to 80% lower cost than
generating solar locally.

Lux predicts
the tipping point for deploying renewable energy import infrastructure will be
in 2030, when imported electricity via new HVDC power lines becomes cheaper
than low-carbon natural gas turbines. The next tipping point will occur in
2040, according to the report, when imported liquid hydrogen becomes cheaper
than low-carbon stream methane reformation.

These
predictions allow 10 years for companies to develop partnership and pilot
projects to demonstrate such a transformative energy paradigm. Major
companies like Kawasaki Heavy Industries, Mitsui & Co., Equinor, and Shell
are already developing decarbonized energy trade routes in Europe, Japan and
Southeast Asia.

Tim
Grejtak, an analyst at Lux Research and the lead author
of the report states that, “Countries representing $9
trillion of global GDP cannot meet their energy demands solely through domestic
renewable energy production and will require the import of renewable energy
from more resource-rich countries.”

“Our
analysis shows the expanded buildout of AC and DC powerlines will be the most
cost-effective way of importing low-cost solar energy from distant regions,
though only up to roughly 1,000 km. At farther distances, other renewable
energy carriers like synthetic fuels are less expensive. It’s important to note
that imported energy costs can be competitive against other zero-carbon technologies,
but no current energy carrier can offer costs low enough to completely replace
liquid natural gas (LNG) or oil,” Grejtak adds.