This article is based on the 3rd episode of the Energy Situation Room Podcast. Listen to the full conversation here:
As the Director of Sustainability and Future Plant Concepts at Wärtsilä Energy, Rasmus Teir’s focus is on the radical, yet necessary, shifts coming to our power systems. We're moving from a focus on natural gas as a transition fuel to the ultimate goal: a system powered by sustainable, carbon-free fuels.
The decisions being made today regarding policy and investment will determine the shape of our energy systems for the next 20 to 40 years.
Here is his take on the roadmap and the fuels that will power it.
Over the last 25 years, thermal power generation has seen a significant migration from coal to natural gas. This shift has been driven by both better economics and cleaner emissions.
Crucially, gas-based engine technologies are essential for managing the growth of renewables. Wind and solar are intermittent, and traditional coal plants simply cannot cope with the demand for flexibility, the need to ramp up and down quickly, often taking days to start or stop. Modern engines act as balancing power, quickly following load demand to stabilise the system.
If we agree that we must decarbonise and replace fossil fuels, the fundamental underlying consensus is this: renewables need to become the backbone of the new energy system.
The final 20 – 30% of system decarbonisation will rely on sustainable fuels, often called e-fuels, which are produced sustainably out of clean electricity.
The fundamental building block for nearly all these future fuels is hydrogen.
This enables the possibility of using excess renewable energy (for example, from a massive solar plant) to create a storable, transportable fuel, rather than relying solely on long, super-complex transmission lines.
The technology for a hydrogen future is already available. At Wärtsilä, we develop engine technology that can run on pure hydrogen. Other alternatives, like fuel cells (which act as a "reverse electrolyser" making water and electricity from hydrogen and oxygen), are also available.
However, future fuels are currently more expensive than fossil fuels. To level the playing field and achieve widespread adoption, long-term policy is essential.
Assets like stationary power plants have economic lifetimes of 20, 30, or even 40 years. Owners need a clear path for investment. I personally lean towards implementing a step-wise incentive or “reprimand” scheme. This could involve, for example, carbon taxes on fossil fuels. This type of policy allows asset owners to plan for the future, perhaps by acquiring technology that is "future-ready" and can be converted later.
Ultimately, there is no "silver bullet" solution. Achieving the cost optimum requires high-level planning and modelling, on both a national and regional level, to guide us toward a mix of different alternatives, including e-fuels and bio-based fuels.
Given that the future requires a "hybrid setup" of renewables and flexible power, which specific policy or investment (whether it's grid reinforcement, flexible capacity tenders, or carbon taxing) do you believe should be the single, highest priority for governments today to accelerate this transition?
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