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Decarbonizing global energy systems: technological opportunities and challenges

By Venera N. Anderson

Jan 24 2023 · 20 min read

Illuminem Voices
Energy Transition · Energy Management & Efficiency · Renewables

This article examines the technological opportunities and challenges to decarbonizing global energy systems. The social-technical energy system resembles a spider’s web, where all energy-related matters are complex and interconnected. The modern energy systems are in the midst of decarbonization transition due to technical innovation, the accessibility to specific energy resources, changing costs, public concerns about greenhouse gas (GHG) emissions, and the growing population from the developing nations, which is being lifted out of energy poverty (Saundry, 2021). The Kaya Identity relates the global carbon dioxide (CO2) emissions to population, GDP/population, energy/GDP (energy intensity), and CO2 emissions/energy (carbon intensity). The energy supply switch to lower carbon sources reduces carbon intensity, whereas energy efficiency and energy demand reduction improve energy intensity (Andrews & Jelley, 2017). The improvements in carbon and energy intensities lead to a decrease in CO2 emissions. Based on its specific energy mix, every nation needs to address GHG emissions and meet its Intended Nationally Determined Contribution (INDC) (Saundry, 2021).

The article is divided into four main sections. After the introduction in Section 1, Section 2 outlines a potential “net-zero-carbon-by-2070” decarbonization scenario, which describes electricity and non-electricity solutions to improve carbon intensity. Although non-energy emissions are also important in decarbonization efforts, this discussion assumes only energy-related 2019 CO2 emissions of 36.4 GtCO2 (GCP, 2021). The analysis in Section 3 underscores the relevance of reducing energy intensity in the decarbonization scenario. Section 4 concludes and offers suggestions for alternative scenarios. The following section describes electricity and non-electricity strategies to reduce carbon intensity in the decarbonization scenario.

Carbon intensity (electricity)

Electricity’s portfolio of measures accounts for a 70% share in the decarbonization scenario. Azevedo et al. (2020) emphasize that "no single domain offers greater opportunities for deep carbonization than electric power” (p. 19). Electricity takes 40% of the world's energy. In 2020, coal and gas corresponded to 27.2% and 24.7% shares of global primary energy. Coal, gas, and oil provided 35%, 23%, and 3%of global electricity generation, respectively (Saundry, 2021). In 2019, coal-fired electricity emissions resulted in 10 GtCO2 globally, or about 30% (rounded up from 27.5%) of all energy-related 2019 CO2 emissions (IEA, 2019). This decarbonization scenario accounts for 1) current energy-related fossil fuels emissions and 2) CO2 emissions from the future increase in electricity demand from the industrial sectors, transportation, building-heat electrification, and hydrogen production. Table 1 (Appendix) lays out the low carbon sources to reduce carbon intensity in the electricity sector.

Solar power is significant in reducing global CO2 emissions. Its share of global electricity rose from 0.06% (2008) to 3.2% (2020). The 90% drop in solar PV LCOE (since 2009) and modular nature allow for speedy solar global deployment. Lastly, solar power is suitable for distributed generation in remote areas and developing nations (Chase, 2019; Sahinyazan and Duran, 2021). Therefore, these opportunities will allow solar to constitute 30% of global electricity in the decarbonization scenario, reducing the percentage of electricity coming from coal to 8% and coal-fired electricity emissions by 77.1%. So, a global solar generation increase may reduce global energy-CO2 emissions by 7.71Gt or 23.1%. This calculation assumes that solar is carbon-free but does not account for solar cell/panel production emissions.

However, it would be challenging to increase solar capacity at such a scale. Various issues, such as land/space, supply-chain, cost inflation, and necessity to obtain a semiconductor material with “Goldilocks” bandgap, may hinder quick solar deployability and scalability. The variability of solar generation is also another significant challenge in integration with an electric grid. Thus, solar must pair with other dispatchable power sources, energy storage (pumped hydroelectric storage, batteries, capacitors), smart grid, and other demand response programs. For successful global solar deployment, lower capital costs, regulatory support, and more HVDC transmission lines are needed (Saundry, 2021). Nevertheless, despite potential hurdles, the ongoing trends are favorable to meeting the solar opportunity by 2070.

Wind power is also critical in the decarbonization scenario. In 2020, wind provided 5.9% of all global electricity generation, and about 9% in the U.S. During 2009-2020, the LCOE of wind power electricity generation dropped nearly 70% (Saundry, 2021). In 2020, China became a leader in deploying over half of the new global wind projects. Due to these opportunities, wind may occupy 25% of global electricity in the decarbonization scenario, the percentage of electricity coming from coal to 16%, and coal-fired electricity emission by 54.3%. Therefore, increasing global wind generation might reduce global energy-CO2 emissions by 5.43Gt or 16.3%. This calculation assumes that wind is carbon-free but does not account for steel and cement emissions.

However, wind faces variable generation/integration into the electric grid, energy storage, transmission, land/space demand, and supply chain difficulties similar to potential problems in global solar deployment. Other issues include suitable geographic positioning, significant investment in research & development, and obstacles on the way to grid parity (without additional financial incentives and government support) (Saundry, 2021). Despite these challenges, wind generation can significantly increase in fifty years.

Hydropower is an old energy source with a new potential to reduce CO2 emissions. Conventional hydropower is a proven, flexible, and dispatchable source of energy. In 2020, hydropower provided 16% of all global electricity. China has the most significant hydropower supply, followed by Brazil, Canada, and the U.S. Hydropower's main potential may be uncovered from tidal and wave energy in the future (Saundry, 2021). Therefore, these opportunities will allow hydropower to constitute 17% of global electricity in the decarbonization scenario, decreasing the percentage of coal-fired electricity to34% and coal-fired electricity emissions by 2.9%. Therefore, an increase in global hydro generation might reduce global energy-CO2 emissions by 0.29Gt or 0.9%. This calculation assumes that hydro is carbon-free but does not account for emissions associated with the construction of hydro-facilities.

There are many challenges, such as economic factors related to construction and retrofitting of existing dams; impact on ecosystems; complicated hydropower policies; dam safety; availability of water resources; suitability of tidal power locations; and hurdles in the commercial development of wave power (Saundry, 2021). Therefore, hydropower has a moderate growth in the decarbonization scenario.

Nuclear power is a vital low-carbon partner in combatting CO2 emissions. In 2020, nuclear power provided nearly 10.1% of global electricity (Saundry, 2021). Due to the growing deployment of renewables, the delay in premature retirement of nuclear facilities and the increase in advanced nuclear generation (through SMRs and thorium fuel reactors) might be prudent for successful decarbonization (GNI, 2015; Saundry, 2021). SMRs may provide off-grid power in developing countries (Andrews and Jelly, 2017). Based on these opportunities, nuclear constitutes 20% of global electricity in the decarbonization scenario, reducing the percentage of coal consumption to 25% and coal-fired electricity emissions by 28.6%. Therefore, increasing nuclear generation worldwide might reduce global energy-CO2 emissions by 2.86Gt or 8.6%. This calculation assumes that nuclear is carbon-free but doesn't account for cement and steel emissions.

Waste disposal, public safety concerns, regulatory compliance issues may hinder nuclear deployment. In addition, traditional nuclear generation in the U.S. faces rising costs, flat electricity demand, a rise in natural gas supply, absence of carbon policy, and, lastly, aging transmission and system constraints (Saundry, 2021). Regardless of such challenges, the ongoing trends are favorable to meeting the nuclear opportunity by 2070.

Geothermal represents a significant underutilized low-carbon global energy source, with about 0.1% share of global electricity (Saundry, 2021; Statista, 2021). Geothermal energy has year-round availability to produce base-load power compared to variable wind and solar generation (IRENA,2017, p. 2) and energy security advantage (Andrews and Jelley, 2017). Geothermal is getting more U.S. government support with the vision to increase the deployment from 3 GW to 60 GW by 2050 (Saundry, 2021; DOE, 2019). Saundry (2021) still expects only modest geothermal growth despite such positive developments. Therefore, geothermal may occupy 2% of global electricity in the decarbonization scenario, reducing the percentage of coal-fired electricity to 33%and coal-fired electricity emission by 5.3%. So, increasing global geothermal generation may reduce global energy-CO2 emissions by 0.53Gt or 1.6%. This calculation assumes that geothermal has minimal GHG emissions but does not account for emissions associated with the construction of facilities.

The main geothermal challenges are high drilling and construction costs, geographic and technological limitations, and some thermal pollution that causes public concerns (IEA 2011, Saundry, 2021). Despite these challenges, geothermal generation can significantly increase in fifty years.

Biomass is also essential in decarbonization, consisting of traditional biomass (with the lowest share in the wealthier countries) and modern bioenergy, occupying 7.4% and 5.0%, respectively. In 2018, biomass also was the largest source of renewable energy, with a 9.3% share of the global total primary energy supply (Saundry, 2021), with approximately 2% of global electricity generation (WBA, 2020). The electric power sector uses 9% of all US biomass (wood and waste), providing 1.2% of all energy used in the industry (Saundry, 2021). Biogas may also be a potential low-carbon substitute that can displace some natural gas share in electricity generation in advanced countries (Murray, 2014). However, such an attempt will face implementation difficulties worldwide due to a lack of efficient technologies and infrastructure for the next fifty years. Furthermore, even though waste holds promise in countries such as Japan (70%), Norway (53%), and Switzerland (46%), the remaining ash is a challenge for large-scale deployment. Wood is also a vital bioenergy source but with declining importance due to the land scarcity concern and the increase in the share of other types of biomass energy (Saundry, 2021). Due to such difficulties, the percentage of biomass in the decarbonization scenario will be kept the same, with waste probably taking over the wood share in global electricity generation in the long run.

The substitution of natural gas with carbon capture and sequestration (CCS) for coal is essential in reducing global CO2 emissions. In 2020, natural gas provided 25% of global electricity. IEA (2021) emphasizes that natural gas offers multiple benefits, in particular, significantly less CO2 (about a half less) emissions than coal (Saundry, 2021). CCES (2021) claims that the CCS can capture "more than 90% percent of CO2 emissions from industrial facilities and power plants” (para. 1), thus, further improving carbon intensity. With the vast deployment of renewable and nuclear electricity generation, in fifty years, gas with CCS (4%) can substitute coal in the decarbonization scenario, reducing the percentage of electricity coming from coal to31%,and coal-fired electricity emission by 11.4%. Therefore, replacing gas with CCS for coal might reduce global energy-CO2 emissions by 1.14Gt or 3.4%. This calculation does not account for the construction of natural gas/CCS facilities.

There are considerable challenges to this proposal. First, the global substitution of (25%) gas for (35%) coal in global electricity generation will be difficult since countries outside the U.S. are still being industrialized. For example, China anticipates the peak of coal to occur only before 2030 and the achievement of net-zero emissions before 2060 (Hua and Dvorak, 2021). Second, reducing gas share from 25% to 4% (with CCS) will also be problematic for advanced economies with ample natural gas reserves who plan using it as a partner to renewables in their specific decarbonization strategies. For instance, due to the recent fracking boom of unconventional resources, the U.S. (with a 24% share) is currently the most prominent global natural gas producer (Saundry, 2021). Third, current CCS technologies can only capture about 0.1% of GHG emissions (Saundry, 2021). Thus, due to the aforementioned challenges, the natural gas with CCS decarbonization pathway is arguably the most ambitious yet achievable by 2070.

The path to carbon-free electricity is also tricky due to the "electrification of everything" trend, which involves the emissions from the future increase in electricity demand from transportation, the industrial sectors, building-heat electrification, and hydrogen production. End-use sectors are fundamental drivers of indirect electricity-related emissions. Thus, the increase in demand in such sectors might negatively affect decarbonization. If fossils are eliminated too quickly during the transition, the generation costs might rise substantially. Therefore, the speedy and large-scale deployment of nuclear with renewables and very cheap energy storage is necessary for successful electricity decarbonization (Saundry, 2021).

Due to dependence on petroleum-based fuels, the transportation sector faces hurdles in lowering its CO2 emissions. Global road transport consumes 49.3% of the petroleum (Saundry, 2021). In 2020, transportation sector CO2 emissions were 7.3 billion metric tons, with 41% share allocated for light vehicles, resulting in about 3 billion metric tons (Statista, 2021). Suppose petroleum’s light vehicle’s transport share is cut by half and replaced with an equivalent amount of electric energy. If the global EV market share increases from 4.2% (Saundry, 2021) to 24.7%, the percentage of light vehicles' transport energy use coming from petroleum will fall by 28.9%, and petroleum’s transportation emissions will fall 20.5%. Therefore, increasing the share of electric vehicles might reduce global petroleum-CO2 emissions by 1.24 billion metric tons. This calculation does not account for emissions associated with the steelmaking and the construction of batteries.

To reduce CO2 emissions, buildings and industrial sectors need to obtain decarbonized electricity and heat (Andrews and Jelley, 2017, p. 417). Decarbonization of heat is particularly important in industrial sectors, where hydrogen will play a central role in the decarbonization scenario. For instance, hydrogen is "well-suited to address 30 percent of GHG emissions and could ultimately satisfy 15 to 20 percent of energy demand" (Hellstern et al., 2021, p. 9). Hydrogen can be produced as green (carbon-free source), grey (fossil fuels), or blue (gas with CCS) (Saundry, 2021). Hydrogen can be burned directly for heat applications in various industrial processes, such as refining, chemicals, cement production, and steelmaking (The Economist, 2021). The most successful decarbonization of cement and steel emissions (8% and 6%, respectively, of global GHG) may happen as a combination of electric and green hydrogen energy (Saundry, 2021). However, the challenge to create hydrogen infrastructure will match this tremendous opportunity in its magnitude.

Carbon intensity (non-electricity)

Whereas 70% of the decarbonization scenario is allocated for electricity solutions, 30% will be outside direct electricity supplies. Hydrogen from power (40%), biofuels (30%), fossils with CCS offset (15%), solar heat (5%), geothermal heat (5%), and other renewable fuels (5%) comprise the range of solutions in Table 1 (Appendix). These percentages represent different demands that would be difficult to meet with electricity proposals or be less expensive with non-electricity solutions.

Clean hydrogen (both green and blue) can complement other carbon-free technologies and energy efficiency improvements in the decarbonization scenario. Besides heating applications, hydrogen can be used as an industry feedstock (steel and fertilizers), global travel (synthetic fuel for aviation and shipping), and long-distance ground transportation (fuel for long-range vehicles, heavy trucks, and trains) (McKinsey, 2021). Hydrogen storage (fuel cells) can especially be helpful in decarbonization. However, large-scale deployment challenges include hydrogen infrastructure, energy-intensive production, and considerable cost (Saundry, 2021).

Biofuels are also crucial in decarbonizing transportation. Developed and developing economies will use bioethanol and biodiesel in the short-term scenarios. However, by 2070, advanced cellulosic biofuels will prevail in developed economies, especially as a fuel for heavy-duty trucks. Currently, production challenges prevent broad commercialization, although new technologies might make such biofuels more competitive (Saundry, 2021; Hoffman et al., 2021). Therefore, until electrification or hydrogen gain dominance, advanced biofuels will serve as “drop-in-fuel” in transportation decarbonization (Gross, 2020, p.15).

Other non-electricity sources will accommodate various energy demands. First, fossils with carbon offset will be most useful as non-electricity solutions in developing economies with the rising industrial needs and energy demand from growing populations. Second, solar heat (concentrated solar power) is a proven technology with a storage advantage over PV systems. However, solar thermal would probably still be a small part of the solar opportunity due to its high cost. Third, geothermal heat will probably be necessary for residential and commercial systems with close access to geothermal sources (Saundry, 2021). Other renewable fuels (new solutions by 2070) will occupy the last small share of the non-electricity solutions. The following section addresses energy efficiency strategies to reduce energy intensity in the decarbonization scenario.

Energy intensity

Energy efficiency will lessen the energy burden of the global population and economic growth and smooth out the decarbonization transition. Energy efficiency refers to obtaining the same energy services with reduced energy consumption, whereas reduced energy consumption is connected to energy conservation (Saundry, 2021). The improvement of energy efficiency and decrease in energy demand can reduce the energy intensity in Kaya's Identity, and consequently, lessen CO2 emissions (Andrews and Jelley, 2017). Global and US primary energy consumption has been increasing for decades due to population growth and rising affluence. At the same time, global aggregate energy intensity was nearly one-third less in 2015 than in 1999. This convergence occurred due to technological progress in energy efficiency and the global economic system (Saundry, 2021).

Saundry (2021) mapped Pacala and Sokolow (2004)’s strategies on Kaya’s Identity. In so doing, the four wedges to improve energy intensity focus on the efficiency in 1) power plants, 2) buildings, 3) vehicles, and 4) miles traveled. First, the efficiency-related policies and improvements in the power sector can bring substantial efficiency gains to all electricity end-use sectors. Andrews and Jelley (2017) believe that “enhanced energy efficiency and electricity decarbonization could reduce CO2 emissions by around 75%” (p. 418). Efficiency measures, such as energy-efficient chemical separations (chemicals) and electric arc furnaces (steel), can lower energy use in industrial sectors. Second, electricity demand management (such as Advanced Metering Infrastructure) holds a lot of promise in the buildings sector. However, the growth in the number and size of buildings and the buildings' age may lower energy efficiency gains. Third, fuel efficiency measures in transportation are helpful to improve energy intensity despite the 23% total rebound effect for doubling the fuel economy standard (Saundry, 2021). Overall, the decarbonization scenario also recognizes the “grocery cart problem” and accounts for rebound (direct and indirect) effects of all energy efficiency and conservation measures.


This article shows that, given many opportunities, uncertainties, interdependencies, and tradeoffs, the decarbonization of global energy systems is a complex issue. The proposed decarbonization scenario presents one possible “net-zero-carbon-by-2070” pathway based on a set of general observations, which recognizes the global energy diversity. It also acknowledges that growth (economic and population) will be the most crucial factor in developing nations with underdeveloped energy infrastructure. Hopefully, these economies will attempt to meet the increasing energy demand with the portfolio of low carbon energy resources to prevent the growth of global CO2 emissions.

New proposals will also appear as energy technologies continue to improve and develop. For example, this analysis does not consider algal biodiesel or nuclear fusion as large-scale decarbonization solutions by 2070. However, some enthusiasts hope that fusion might be on the electric grid in the 2030s (Petroni, 2021). Lastly, due to significant decarbonization challenges perhaps, a longer deployment time might be necessary to scale promising low-carbon energy technologies. The longer time horizon may also reduce the costs of infrastructure efforts and energy efficiency retrofits and lessen the risk of supply-chain bottlenecks for related technologies.




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About the author

Dr. Venera N. Anderson is a global strategy advisor on sustainability and climate issues. She creates and implements innovative solutions that address the world’s most pressing issues, such as climate change, economic development, and humanitarian challenges. She is a member of the Harvard Business Review Advisory Council. Venera is a co-author of the "Touching Hydrogen Future" book (2nd edition). She is also an International Expert at Women in Green Hydrogen, a global network which strives to increase the visibility and amplify the voices of women working in the green hydrogen sector, and a Speaker at Tech Up for Women and the Wall Street Green Summit about her vision for coastal U.S. green hydrogen hubs.

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