Wednesday, January 3, 2024

Boston Consulting Group Chair On Technology and Decarboniszation

Two snippets, one where he's right, one where he's wrong.

From the Wall Street Journal, January 3, 2024:

Sustainable Energy Goals Require Public Investment in Emerging Technologies, BCG Chair Says
‘The technologies that are so far from being economic today—those things will not work without substantial government investment,’ BCG Global Chair Rich Lesser says

In December, more than 190 governments at the United Nations climate conference approved an agreement calling for a transition away from fossil fuels to combat global warming.

The COP28 conference was widely viewed as a turning point in the fight against global warming. The effort will require a massive amount of technology, but much of it is too expensive and won’t come down in price without public subsidies and investment, said Boston Consulting Group Global Chair Rich Lesser.  

Lesser, a former BCG CEO, led the consulting company’s delegation to COP28, where BCG served as the principal strategy and action partner, working with public-, private-, and social-sector leaders on priority issues to accelerate climate action and advance adaptation and resilience. Lesser also is chief adviser to the World Economic Forum’s Alliance of CEO Climate Leaders. He spoke with The Wall Street Journal about the role of technology in the shift away from fossil fuels. Here are edited highlights of the conversation:

WSJ: What role will technology play in implementing the COP28 agreement?

Rich Lesser: I think the sense of urgency in the world continues to grow…Right now, if you look at the full range of technologies we need, about 55% of those technologies—the most obvious is solar, wind, a lot of the battery technologies—they are now cost-competitive. But if you assume interest rates are going to moderate, and that was certainly the signal out of the Fed, they don’t have to come all the way back down to zero for these technologies to be well in the money and affordable. So that’s good. The technologies we need to keep making progress this decade are mostly available to us....

Climateer here, the statement that wind and solar are cost competitive is incorrect.

The competitiveness is only true if you ignore the intermittency issue. If you want reliable electricity you still need backup supply of some sort. And whether that is baseload and peaker natural gas or baseload nuclear or baseload coal the redundancy costs money.

The other two answers to the reliability question are storage, usually batteries but also pumped storage, flywheels etc. or grid buildout and interconnections over a large enough area that there is always sunshine and/or cool breezes. Again, that costs money.

There are some who try to finesse the issue by saying it is just a cultural conceit to expect the 'leccy to be there when you want it but frankly, that availability is one of the greatest features of the current [!] system. Back to the Journal:

....WSJ: Looking further ahead, are the technologies affordable? 

Lesser: To get to 2050, we have to go to net-zero, not just to go down a lot from where we are now. Then we have about 30% of technologies that are not close to affordable yet. The rest are somewhere in-between, a little too expensive but they’re not way too expensive. 

That third bucket you just hope continues to get better, but the second bucket, which is incredibly important, requires funding and support and investment and a positive environment.

WSJ: What does the third bucket include?

Lesser: If you’re in a state with a lot of sunshine, or you’re using batteries for a certain purpose, it works, it’s economic. But if you take those technologies to a different location or need them for a different application, you can’t quite make the economics work yet. I mean, it’s obvious the ones that are way way off, you know, the carbon capture and things like that. Solar and wind are the ones that are most frequently seen as affordable.

WSJ: And the second bucket?

Lesser: I won’t be exhaustive, but long-duration energy storage, hydrogen, so we can use it in industrial processes and ammonia for fertilizers, carbon capture and storage technology so we can help utilities and the industrial economy, direct air capture so we can both fill in the gap of the things you just can’t decarbonize and eventually so we can pull extra carbon out of the air back into the ground—those technologies are all way too expensive today. That is why it is so important we invest substantially and quickly in these technologies to lower their cost and make them scalable in the decades to come....


Hard to argue with the points in that last paragraph, though the idea of sucking carbon dioxide out of the air is just so inefficient at present, mainly because the amount of CO₂ is so tiny, the daily average at Mauna Loa yesterday was 422.37 parts per million i.e. 1 molecule in every 2500, meaning you have to move a lot of air across your extraction technology. 

That takes energy and the cheaper the energy the better. But that is at cross purposes with raising the price of energy to make renewables more cost competitive.