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The Way Towards Economic Decarbonization: A New Energy Reality

Alternative Energy

Since 2014, the International Energy Agency has been observing a remarkable development: despite continuing growth in the global economy, worldwide energy-related carbon dioxide emissions are staying flat. This turning point in emissions signals more than the decoupling of economic activities, writes Lisa Davis, Chairman and CEO of Siemens Corp in the U.S.: it reflects a transition in the basic power generation landscape.

We are seeing an accelerating and intensifying shift towards electricity and the economic breakthrough of new energy sources and solutions. But as with any change, this shift must be built on a viable economic foundation. Future societies will demand a stable and resilient energy system providing clean and affordable energy. As social values and the generation landscape continue to change, the right balance is still to be found.

Decarbonization is gaining momentum

Decarbonization is advancing both in energy usage and in power generation. We are observing a growing, cross-sector shift away from primary energy towards electricity, as the increasing electrification of industries is promising greater flexibility and efficiency. Power generation is projected to increase around 78% by 2040, while primary energy demand will grow by just 33% in the same period. Incorporating advanced technologies will unleash major CO2 saving potentials in all kinds of industries.

At the same time power generation experiences a growing share of renewable energy sources. With competitive feed-in tariffs, they have evolved from an idealistic concept to a viable business model, promoting the idea that a decarbonized energy system can in fact become reality. The strong trend towards environmentally friendly energy is continuing, renewable energies will reach a 32% share in the energy mix by 2040.

An increasingly decarbonized energy future, however, must target not just the economic advance of renewable sources but also their integration into the various existing energy systems around the globe. Soaring demand requires energy systems to utilize available energy more efficiently and to be balanced more economically than is generally the case today.

Exploiting digitalization to increase efficiency and flexibility

To handle the escalating divergence between supply and demand, balancing efforts will have to rely on traditional fossil power generation. Modern gas-fired power plants are the ideal solution for complementing fluctuating renewables and will continue to play a vital role in the energy mix for the coming decades. Here, digitalization has opened up new opportunities along the entire value chain. Enhanced design and analytics capabilities and closed-loop data utilization are paving the way for further improvements in all areas, from design to operation and service.

Flexible gas turbines like the new HL-class from Siemens with ramp-up capacities of 85 MW per minute can react quickly to changing load demands and help harmonize the grid. With efficiency levels above 63%, they also achieve low LCOEs, enabling them to operate competitively while reducing the ecological footprint.

The new HL-class gas turbine from Siemens can react quickly to changing load demands and help harmonize the grid.

Exploiting decentralized and diversified energy opportunities

In addition, energy systems will have to exploit new opportunities to efficiently bridge the gap resulting from unevenly distributed producers and consumers. Apart from enhancing the infrastructure itself to better respond to demand, converting surplus electricity into other resources like syngas or heat can also increase the flexibility of power use.

Battery systems can stabilize and increase the efficiency of local power networks, like one of Siemens’ solutions does on the small island of Ventotene, Italy. There, the Italian utility ENEL is able to reduce fuel consumption by nearly 15% and slash the operation time of its generators by more than half. Current electrolyzer systems can also swiftly capture wind or solar energy in the lower megawatt range. The resulting hydrogen can be fed into the gas network, used for mobility or in the chemical industry. Sector coupling provides new choices for using energy when and where it is needed most and where it can be used most efficiently.

Cohesive collaboration to harmonize the energy system

Shaping and merging digitalization and decentralization opportunities to achieve a harmonized energy system is the key to economic decarbonization. Most of the necessary technologies are already available or at an advanced stage of development. The challenge remains to find the right balance in the energy system, so participants can not only coexist but support each other’s strengths and profitability.

Politics, industry and society need to jointly initiate the decisive measures and share responsibility for their implementation. Most countries have set energy goals and are adopting modern technologies to boost efficiency and reliability and reduce CO2 emissions. In order to drive or even accelerate energy transitions, regulatory and social support are essential. This requires a long-term political commitment to ensure a sustainable energy supply. One must provide stable framework conditions and secure incentives that benefit all sides – and encourage the necessary investment environment.

We’re aiming for a new energy era that is cleaner, but also more interconnected than ever. Everyone has a role to play and the responsibility to achieve this sustainable transition.

energy collective

13 Comments on "The Way Towards Economic Decarbonization: A New Energy Reality"

  1. deadlykillerbeaz on Wed, 4th Oct 2017 9:05 am 

    Gas stations could install a power plant fueled by gasoline to generate electricity and have electricity to charge EVs. Wouldn’t have to pump so much gas into cars, just make electricity from the gasoline.

    Bridging the gap.

  2. Antius on Wed, 4th Oct 2017 10:59 am 

    According to this article, our energy future is about shifting all energy end uses to electricity and shifting all electricity generation to gas turbines, with wind and solar used to reduce the fuel bill. This will achieve a modest decarbonisation at the expense of growing complexity within the energy system.

    The problem is that wind and solar power will always be more expensive than the natural gas that they displace and the EROI of natural gas is gradually declining. So it is difficult to see this as a sustainable solution.

  3. Bob on Wed, 4th Oct 2017 11:57 am 

    A successful transition to solar electric will keep the lights on but that is about all. It is very difficult to do much else with electric. Try to produce, say, iron or steel pipes for sewer systems with electric power. It can’t be done, even with a rich imagination. Or try smelting steel to create car bodies for your electric cars. Not going to happen. How about ore mining? How are we going to power the ore crushing machinery with electric? Aluminum smelting? We need to face the facts: solar can keep the lights on; that is about it. That would probably keep civilization together and that would be the achievement for solar. You can also kiss you comfy AC goodbye. Welcome to the new world.

  4. peakyeast on Wed, 4th Oct 2017 12:17 pm 

    Obviously the only thing that is not part of the solution is to do away with the extremely wasteful structures of society – like commuting, forbidding obscene size private vehicles and tourism using aeroplanes and so forth… All easy things to change which would actually make a big difference. We are stuck in luxury lifestyles and stupid societal constructs.

  5. drwater on Wed, 4th Oct 2017 2:45 pm 

    “Flexible gas turbines like the new HL-class from Siemens with ramp-up capacities of 85 MW per minute can react quickly to changing load demands and help harmonize the grid. With efficiency levels above 63%, they also achieve low LCOEs”

    Wow – That’s impressive.

  6. Boat on Wed, 4th Oct 2017 5:39 pm 


    You’re wrong. Do you know how to google? Set up a Gmail account for free. You can then go to google news and personalize it for free. Choose wind, solar, oil news, nat gas, transmission line and refinery news. Among data you will encounter is the price per MW hr from green energies and FF energies. Son, you got a lot to learn.

  7. Boat on Wed, 4th Oct 2017 5:46 pm 


    Today’s nat gas turbines are a perfect fit for today’s grid. By the time renewables get to 50-60 percent stage old nat gas turbines, nuclear and coal will have lost much of their market share.

  8. rockman on Wed, 4th Oct 2017 5:52 pm 

    Baez – I’ll let one of our local gear heads quantify that plan but I doubt small scale gasoline electricity generators provide much if any advantage. Might be even less “green” then burning gasoline directly in your car.

    I’m not sure decarbonization + growth is the right dynamic to znticipate at this point in time. At least to any significant level. Maybe eventually but first the focus would more likely be a static carbonization + growth. Might not be representative of all situations but one I understand well: Texas. First, it is a significantly growing economy and as such electricity demand has been growing for sometime and is projected to continue for some decades. The Texas expansion of wind power wasn’t done to replace existing fossil fuel powered infrastructure but to stop adding to it. So no decarbonization per se but no added carbon growth.

    As we just discussed elsewhere per ton of coal burned Texas power plants produce significantly less of all the nasty combustion products as the northeast power plants. Which is due to being newer as well as continuing upgrades. OTOH for many of the older northern power plants where there was very little (let alone shrinking) economic growth it may have been difficult to muster support to replace or upgrade their plants. By their analysis doing so would be a poor “investment”.

    So again for those who argue that building out wind power (and potentially solar) isn’t as economic as building NEW fossil fuel powered plants need to explain how the Texas world class wind power was built instead of fossil fuel plants. It certainly isn’t because Texas is so concerned about the environment. LOL. First, Texas wind was built out by private companies with a profit motive. Whatever leverage was gained from any tax breaks etc those investments are still required to be profitable operations for the next 20+ years.

    Decarbonization may result as much from economic decline in some areas leading to a decline in electricity demand then switching to renewables. In other growing areas, fossil consumption may not increase thanks to renewable expansion. But the big question is how many areas will REPLACE fossil fuel consumption by building out NEW renewable sources. That seems to be the “decarbonization” the article wants to project. IOW there are projections that X coal plants will be decommissioned over the next few years. But in each case why? A) replaced by renewable source. B) replaced by NG sourced power. C) just no longer needed.

    Very different implications between those 3 possibilities. Especially when anticipating the future.

  9. Anonymous on Wed, 4th Oct 2017 6:10 pm 

    Oil hit a 4 handle today. And that’s with record demand.

  10. Boat on Wed, 4th Oct 2017 6:42 pm 


    From 2000 to 2014 Texas has dropped their co2 emissions. This happened during solid growth. As more wind and solar are added you can expect fewer emissions even though more growth is expected. Several coal plants will be closed over the next few years because they are simply losing money. Your right, it’s all about the money.

  11. Sissyfuss on Wed, 4th Oct 2017 6:46 pm 

    Instead of selling semi automatic assault rifles that can be automated to drugged out old white guys I say we sell really powerful laser beam rayguns to out of work millenials and tell them to go at it on the refineries. That will speed up the transition uber quick.
    Very Earth Firstian.

  12. Michael J. Palmer on Thu, 5th Oct 2017 8:02 am 

    Lisa, Like they said in “Oklahoma”

    “They have gone about as fur as they can go.”
    P.S. When I make my first Trillion, I want a Photo with you shaking hands with me.

    Your article is elegant.

  13. J. H. Wyoming on Thu, 5th Oct 2017 5:29 pm 

    On this site there is an article about the increase in oil consumption globally, then this article about how the transition to renewables is occurring, i.e. decarbonization.

    I’m just wondering something. Is Jevons Paradox biting us in the arse again? That is, are renewables/electrification simply being added on to jack the system up to power even more growth? If so, then there may not be a decarbonization, but simply a leveling off. But here’s the thing; if we continue to burn this much FF it doesn’t stop CC. It also doesn’t make us any less reliant on FF, just that much more vested in all forms of energy.

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