In retrospect, Schmidt believes that the diplomatic fiasco in Copenhagen was primarily driven by fear of economic loss. At the beginning of the year management consultants McKinsey & Company published the second of their much-cited marginal cost curves. This predicted the cost of avoiding 1 tonne of CO2 The equivalent would be in 2030 based on different technologies. "Some of the forecasts were far more pessimistic than what ultimately happened," says Schmidt.
For example, the authors assumed that electric mobility would remain a niche market until at least 2030. However, over 8.5 million electric vehicles have been sold since then – a trend that continues to grow rapidly. Similarly, their projected photovoltaic module costs were undercut in 2030 years ago.
In the 1990s the cost of a PV system that would avoid the production of 1 tonne of CO2 ran to several thousand Swiss francs. Nowadays, PV generation often generates revenue for the electricity it generates. In some cases, the cost of avoiding CO2 emissions is already negative. "You massively underestimated the innovations in clean technology," says Schmidt. This had significant consequences: "None of the politicians at the 2009 conference would commit to expanding this supposedly expensive technology because they feared that their country could lose its competitive advantage."
How technology drives politics
Six years later, Schmidt experienced exactly the opposite at the Paris climate conference. In the meantime, various countries had introduced funding programs for research and development in the field of renewable energy technologies. For example, the feed-in tariffs under the German Renewable Energy Sources Act drove the expansion of solar energy and wind generation. And China invested billions in its own photovoltaic industry. "Many of the politicians at the Paris conference noted that low-carbon technologies would become increasingly competitive and potentially create new industries that employ thousands of people," says Schmidt.
In an acclaimed comment published in Natural energyThis is one of the main reasons why 195 countries ultimately agreed to limit the rise in global average temperature to well below 2 degrees Celsius above the pre-industrial level. In other words, technological innovation can also fuel political ambitions.
To confirm this thesis, Schmidt's parliamentary group analyzed the political debate about the energy transition in the German Bundestag. Using the methods of discourse network analysis, the researchers examined over 800 pages of text from energy policy debates between 1983 and 2013. The results showed how the positions of the political parties on the energy transition in Germany had changed during this period. Securing the energy supply, increasing cost efficiency and reducing environmental pollution were important arguments in parliamentary discourse – as was the desire to build a robust and competitive industry that delivers new energy technologies.
Schmidt believes this important finding could help overcome political divisions: “The more governments recognize that low-carbon energy policies create new economic opportunities, the more willing they are to step up their climate change efforts to give local businesses a competitive advantage. "
According to Schmidt, China – currently the country with the highest annual CO2 Emissions – provides a good example of the feedback mechanisms between policy making and technology that his group has explored in several articles. In recent years, the Chinese government has gradually tightened its climate targets. At the same time, it has used cheap credit to fuel the creation of the world's largest photovoltaic industry. Beijing has also announced medium-term plans to completely convert road traffic to electric vehicles and increased battery cell production through targeted support for a range of systems. In September, China stunned the world when it announced that it wanted to become climate neutral by 2060.
Schmidt argues that these ambitious goals are not only driven by a sudden environmental impact, but also reflect China's determination to become the leading industrial power in the cleantech sector: “In the short term, politicians are much more interested in jobs and competitiveness than in achieving climate goals. “Beijing is taking a shrewd approach to technology funding, following what Schmidt called 'technology smart policy'. This nuanced strategy uses different instruments to support different technologies, depending on their complexity, innovation curve and price development. This is in contrast to the rather dispersed approach of many countries in Europe.
Energy Storage Challenges
So far, Switzerland has decided to drive the energy transition through feed-in tariffs at acquisition costs (KEV) and one-off investment grants for projects in the field of renewable energies. Programs to renovate buildings and promote research and innovation have also been launched. Despite these steps, green energy (excluding hydropower) only accounts for around 4 percent of the current Swiss energy mix. The Swiss government insists that this will increase significantly over the next few years to offset nuclear shutdowns and meet the additional electricity demands caused by the rise in electric vehicles.
Experts argue that the greatest potential for the expansion of renewable energies lies in PV systems. However, feeding large amounts of solar energy into the power grid poses new challenges. With the support of the Federal Office of Energy, ETH researchers use the Nexuse simulation platform to model how the grid must be designed in the future and which economic and political factors will influence its implementation. “The biggest challenge is to constantly maintain the balance between power generation and consumption,” says Gabriela Hug, Nexuse project manager and professor at the Power Systems Laboratory. "PV performance is dependent on weather conditions, so we will likely need technologies that offer cost-effective solutions for long-term energy storage."
Solar panels produce more electricity in summer than in winter. Without seasonal storage – and after nuclear power is phased out – the grid would have to import significantly more electricity in winter, when household consumption is highest. Seasonal storage options include hydropower plants with artificial reservoirs, several of which Switzerland already has. More of these could be installed in places where valley glaciers are retreating due to global warming. Another option is Power-to-X technologies (P2X), with which electricity is converted into more easily storable energy carriers such as hydrogen and synthetic fuels such as methane.
However, many of these technologies are relatively immature and expensive. Alternatively, electricity consumers could even take on a role of load balancing themselves by adapting the use of electric vehicles and washing machines to the requirements of grid stability. This is made possible thanks to the rapid developments in information and communication technology and the increasing accessibility of user data. Electric vehicles and washing machines can only store excess energy for a short time, especially not from summer to winter. Hug argues that the only way to ensure grid stability with a high proportion of renewable energy is to ensure that Switzerland is properly integrated into the European electricity grid.
The control technology is another challenge here: If electricity is generated with the synchronous generators used in nuclear, hydropower and coal power plants, there is more time to modulate short-term imbalances between supply and consumption. In contrast, PV systems cause frequency changes faster, which increases the risk of power outages. This is another area where Hug's research group is currently looking for solutions.
Shifts in the political spectrum
Despite the technical challenges and the threat of an economic recession caused by coronaviruses, Tobias Schmidt is cautiously optimistic about the global energy transition: “The Paris Agreement sparked a race to develop environmentally friendly energy technologies five years ago – and not even Donald Trump's decision to withdraw from the United States from the climate agreement can change this. “He also sees increasing changes in the political spectrum, including in Switzerland. “In 2018 the FDP was still trying to dilute the CO2 Law in the National Council, ”explains Schmidt. This autumn, however, the law was passed by the entire Swiss parliament with the exception of the SVP parliamentary group. "I think that shows how most parties have now come to the same conclusion," says Schmidt. "It's time to prepare for the cleantech race!"
Source: ETH Zurich