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1 December 2015

The path to a low carbon future

Ahead of COP21, a panel of experts discussed the challenges of removing carbon from electricity generation

By Edf Energy

Decarbonising electricity generation is not a key enabler of low-carbon growth, said Philippe Benoit, head of the Energy Efficiency and Environment Division at the International Energy Association (IEA). “It is,” he insisted, “the key enabler.”

Benoit was speaking at an expert panel session, convened by EDF Energy earlier this month ahead of the forthcoming UN climate conference in Paris – the 21st conference of the parties or COP21 as it is more commonly known. Decarbonising electricity: a key enabler of low-carbon growth, brought together government, industry and academy to discuss the how and why of a lower carbon future.

Why decarbonise

“We have to focus on everything,” said Claude Nahon, director of sustainable development at EDF Group, pointing to efforts to keep global temperature rises below 2° between now and 2050 “Time is short. We have to decarbonise the economy and we have decarbonise the electricity mix.” While this remains the case, a priority on electricity generation is borne out of practicality: if electrification is to increasingly support other industry sectors – including transport, heating and manufacturing – then it is imperative to clean up the source. In other words, it makes little sense to power society on electricity generated from coal.

According to IEA figures, energy represents 66 per cent of greenhouse gas emissions and of that 40 per cent comes from electricity power generation – the single largest contributor. “Electricity is critical and central to the decarbonisation effort,” Benoit said. It must overtake oil as the main source of energy by 2050. That would mean an 8 per cent increase in consumption which in turn necessitates much cleaner generation.

Today, the IEA estimates, two thirds of electricity generation comes from fossil fuels with about a quarter from renewables. For targets to be met about 70 per cent needs to come from renewables and what does come from fossil fuels would need to be supported by CCS (carbon capture and storage). Nuclear would play an increasing part too, said Benoit. Its role in production would rise from 11 per cent today to 17 per cent by 2050.

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Renewables and nuclear

If that is the direction of travel, the next question is how do governments and industry get there? In his introduction to the debate, EDF Energy’s chief executive officer Vincent de Rivaz emphasised the important role for business in tackling climate change and the leading part already played by EDF Energy in the UK as the largest low-carbon generator: “[Since 2008] we have achieved significant carbon savings through energy efficiency and through stewardship of our nuclear stations.” Paul Ekins, director of the UCL Institute of Sustainable resources at University College London, summed up the approach: “Efficiency first with carbon pricing to neutralise the rebound effect and then it’s a mix of lowcarbon energy supply of which renewables and nuclear are probably the most important.”Of the two, he said renewables was the star player. “The cost reductions we’ve seen in renewables were unprecedented and unpredicted.”

“Nuclear has not experienced the same cost reduction and that is a huge challenge. Nuclear needs to come down in cost if it is to be deployed at the scale.”

Katrina Williams, director of international science and resilience at the Department for Energy and Climate Change, said nuclear was important not just in terms of volume of supply but in the nature of the base load. “It provides a proven low-carbon technology which gives continuous supply at large scale,” Williams said pointing to October’s agreement to create the UK’s first new power plant in 20 years – the Hinkley Point C plant in Somerset – as evidence of the government’s commitment to nuclear. The £18bn project will be led by EDF and China’s main nuclear operator, China General Nuclear Power.

The price of carbon

EDF’s Claude Nahon, pointed to France’s use of nuclear as a means of decarbonising electricity generation. In May 2015, EDF’s production created just eight grammes per kilowatthour (kWh). “So we know that it’s feasible to produce electricity with very low carbon intensity.” However, she insisted the possibility of a low-carbon future must be matched by the right incentives. Companies needed clarity and assurances. “We need high carbon pricing in Europe and we need it now,” she said. “What’s happened with a low carbon price in Europe has been a shift from gas to coal.”

Paul Ekins agreed that a mechanism needed to be in place to encourage correct behaviours. He prefers a carbon tax. “Lots of countries have them,” he said. “Sweden has a carbon tax of about €100 per tonne across its household sector. It gives significant exemptions for industry. France has introduced a carbon tax. The UK has a carbon price floor on the electricity sector. So these things do exist.

“What I’d like to see come out of [the UN climate conference in] Paris on this is a club of carbon pricing countries and corporations. The World Bank is trying to organise such a thing, so it’s not a pipe dream.”

Philippe Benoit cautioned against prescribing carbon pricing as a cure-all. “In developing countries – like China, Indonesia, India, Brazil, Mexico, South Africa – state-owned enterprises … operate under the influence of governments where profit maximisation is not necessarily the objective.”

Katrina Williams agreed that a variety of solutions are required. “Different mechanisms work in different circumstances. Within Europe there’s a particular issue around the EU ETS [Emissions Trading Scheme]. My personal view is that it’s actually a good mechanism but the price is set at the wrong level.”

Asked about the likely impact of decarbonisation efforts in Paris – where initial emissions estimates among 150 countries suggested that temperature increases could reach 2.7° by 2050 – Williams said: “It’s a good news story because we actually have commitments on the table. Would I want to rest my laurels on 2.7°? Absolutely not, given what that means for the world, but this could be a big step in the right direction.”

The EDF Energy Expert Panel debates took place at One Birdcage Walk, London on 4 November 2015.