We are eager to find out what the world will look like when children born today reach adulthood.
Fortum calls itself a “next generation energy company”. Their aim is to create sustainable energy and solutions that improve life for present and future generations. We are going to find out what this means in practice.
We sit down with Chief Technology Officer Heli Antila, D.Sc., to discuss the world and energy. Antila has a long history in the energy sector. As a researcher she has specialized in the optimization of energy production. She is devoted to finding smart and innovative ways to bring people energy with less emissions and resources.
The earth’s population is still growing, and the average standard of living is on the rise. The levels of greenhouse gas emissions caused by this growth are unsustainable, and sharp reductions are needed. We should be able to decouple economic growth from the increase in emissions.
Our big question to Antila is: are our days numbered, or is renewable energy going to save us?
Antila admits that the situation is far from simple.
“Currently, there are still hundreds of millions of people who don’t even have access to electricity,” Antila explains. “Meanwhile, those people who have reached a certain standard of living are unlikely to be willing to let go of all that comfort. That said, in spite of all the good efforts made, it looks like the demand for energy is not going to diminish.”
This doesn’t sound too promising. Antila, however, seems surprisingly positive. Perhaps what’s on the horizon is not all doom and gloom after all?
Renewables and CO2-Free Energy Are on the Rise
PRIME is wondering whether we should turn off our computers and stop heating our houses in the winter. Antila says this is not going to be necessary.
“In my opinion, it is possible to maintain the current standard of living in a sustainable way,” Antila says. “The world will definitely need to cut back on emissions, and the quicker and more efficiently it is done, the better. It is a tremendous challenge. Yet carbon-free society is by no means a utopia.”
“What we need to achieve is a significant increase in the production of CO2-free and renewable energy. Then we need to learn to distribute and consume that output in a smarter way.”
According to Antila, the recent growth and development of new energy technologies has been very positive. Markets already exist in which the competitiveness of wind and solar has risen tremendously in comparison to that of conventional sources of energy.
“In addition, there are myriads of interesting start-ups out there. I am positive that something groundbreaking will sooner or later emerge,” says Antila.
PRIME asks about emerging economies such as China and India, both big polluters with a rising demand for energy. We learn that both countries are already making significant investments in renewable energy.
“China ranks number one in the renewables sector, and in fact managed to reduce its emissions in 2014,” Antila reveals. “India is investing heavily as well, especially in solar. We are talking about solar farm projects with a production capacity of hundreds of megawatts each. Interestingly, countries like China and India are less likely to be doing this in an effort to combat climate change. Instead, it is the local pollution and its effects that are driving the change.”
Economy: the Problem Becomes the Solution
Pollution caused roughly 670,000 premature deaths in China in the year 2012 alone. Pollution ruins people’s health and, consequently, the country’s economy. Hence the rush.
Economy. It’s where it all seems to boil down to. What caused the problem in the first place may become the solution as well. Right?
“To be honest, I find it hard to believe that a sufficiently ambitious global political decision on emission reduction will be made early enough to save us completely from the consequences of climate change,” Antila admits. “That said, we believe the solution lies in technological development and economics where the transition from conventional sources of energy to renewables has been made profitable.”
“A lot depends on what is the mechanism that guides this change,” Antila elaborates. “In my opinion, global carbon pricing and market could become the solution. China, for instance, already has seven regional pilots ongoing and most probably will introduce national carbon market in 2016. If realized, this would be the world’s biggest carbon trading market.”
“In an ideal situation, however, we would have a global system of carbon trading. This can be achieved by gradually linking the operational and emerging regional trading schemes. There is a long way to go, but eventually we will get there.”
The Potential of Flexibility
Antila has good news for those worrying about rising electricity bills.
“In the future, there will be more and more electricity output that is intermittent,” she points out, referring to wind and solar. “That is why we need flexibility. The new demand for flexible products and services will give customers a more central role in the energy market.”
This is where energy storage technology – or batteries – comes into the picture. The technology is currently driven forward by the development of the electric car industry. Smart energy usage, on the other hand, is going to become mainstream thanks to advanced Industrial Internet solutions.
“Fortum already offers its customers the chance to buy electricity in prices that vary depending on the hour and smart systems that help them optimize their consumption of electricity,” Antila reveals. “In the future, dynamic pricing will be developed even further. We are promoting flexibility, because getting this right is going to be one of the keys to the success of renewable energy: flexibility brings balance to the system and helps reduce losses.”
What about the intermittency? Can we rely on a system based solely on renewable energy? We’re not sure if we’re going to be ok with too many power outages…
For Antila, the solution is hydropower and the potential that lies in it.
“Hydropower has the potential to push the breakthrough of wind and solar,” Antila says, “because it is extremely flexible and can therefore provide peaking power as well as support for these intermittent sources of energy. This is a message we are trying to get across.”
“Hydropower is often facing fierce opposition owing to the environmental effects it can have on a local scale. I find this worrying, because in my opinion the role of hydropower in battling climate change – a most pressing global issue – could be pivotal.”
Fortum’s Vision of Solar Economy
Fortum believes that the future energy system will be based on emissions-free and inexhaustible energy sources and on the overall efficiency of the energy system. Solar electricity and other forms of energy such as hydro, wind, wave, and bioenergy, will be the most important forms of energy production in the future.
Fortum is also studying the potential of solar energy. It is investing in large- and small-scale solar, in R&D around solar, as well as in customer solutions for solar micro production.
“We have been promoting our vision of Solar Economy for about five years now,” says Antila. “I still remember how my first presentations were met with comments like ‘Have you gone mad?’ or ‘You can’t be serious!’ Then at some point people started coming to us and tell us we were visionaries. By now, that vision has become mainstream. People have begun to believe in it, and the investments are rising rapidly.”
“In fact, the surface area needed to power up the entire world with solar is not that large at all: around 40% of Finland, for instance. You may compare that with the size of the Sahara Desert, which is more or less the size of Europe!”
Unsurprisingly, there are plenty of bottlenecks holding back the growth of solar. Examples quoted by Antila include the current lack of infrastructure that would enable power transfer between regions – the technology for efficient transmission already exists, but one cannot just build transmission lines and networks everywhere one pleases.
“Then we have the question of jobs,” Antila adds. “It is really hard to make a decision on shutting down, for instance, a coal mine that employs 10,000 people. And what about companies with old assets? Surely they would like to keep using their old power plants for as long as possible.”
“That said, some painful decisions will certainly have to be made. We need to find the right kind of market mechanism, a robust and extensive emissions trading system that can create a smart and reasonably cost-efficient way for the transition from the old to the new. At the same time, we need bigger markets with fewer bottlenecks in order to drive this system forward.”
Once again, Antila sounds positive, even when she talks about the challenges.
“I’ve been working in this field for quite some time already,” she points out. “I have a strong feeling that the wheels of new development are already turning.”
Text and Image by Industrial PRIME
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