Renewable Sources Era Abstract From Bocconi S Magazine 1668851165
Renewable Sources Era Abstract From Bocconi S Magazine 1668851165
Renewable Sources Era Abstract From Bocconi S Magazine 1668851165
ENERGY
sources
The road to the development of renewables is sown
with economic, technical, environmental and social
hurdles that need to be overcome through steady
commitment rather than bold proclamations
by Luigi De Paoli @
P
romoting sustainable development has a much
broader meaning than satisfying energy demand via
renewable sources. However, there is no doubt that
the nexus between sustainability, the fight against climate
change and the replacement of fossil fuels to reduce
greenhouse gas emissions has projected renewable
sources to the top of the agenda of global energy policy.
However, we must not forget that 2021 the weight of
modern renewables in meeting world
energy demand was still only 13.5%
(BP data), while the fossil-fuel triad
(oil, coal and gas) contributed for
82.3%. We are therefore still fully
living in the era of fossil fuels. How
long will it take to fully enter the
new era?
In fact, the first thing to bear in
mind is that transition times are
very long because the energy
system has a strong inertia. For
example, over the last ten years
(2011-2021), the share of renewables
in world energy consumption has grown by only 6% (from decade new photovoltaic arrays and wind turbines would
7.2 to 13.5%) despite strong public incentives. If be put into service reaching the scale of 2700 GW
renewables worldwide still have a relatively modest (million kW) for the STEPS scenario and a staggering
weight, it is because there are sectors where their use is 6600 GW in the NZE scenario. By 2050, the difference
difficult or not very economical: they are the hard-to- in prospective outcomes will be even more gaping
LUIGIDEPAOLI
abate industries, like aviation and shipping, industrial or because it would involve building solar and wind power
Senior Professor,
civilian thermal uses, where replacing fossil fuels is more plants for a total of almost 7700 GW in thirty years in the
Department of Social
difficult. STEPS scenario, rising to 21000 GW in the NZE
Bocconi University
renewables in electricity production was 20%, but 16% of Unfortunately, these figures do not mean much to the
this was due to hydroelectric energy which for more than average person who thus fails to appreciate the extent of
a century has played an important role in electrification. the gargantuan effort required. To get an idea, assuming
But in these ten years the world of renewables has that half of solar power is placed on the roofs of buildings
changed significantly: wind and solar production has (according to EU target recently announced by the
grown enormously, so that green energy now accounts for European Commission for the EU), in the case of the
28% of world electricity production in 2021. sustainable development scenario (SDS), about 75 million
For the future, wind energy and solar energy are called to homes need to install PV panels on theirs roofs by 2030,
play a fundamental role in achieving the goal of "zero and nearly 300 million homes by 2050 (each with an 18
emissions" of carbon dioxide. All scenarios indicate that kW system).
solar and wind power will be decisive in the coming The effort to decarbonize the energy system is therefore
decades, even if the actual development may turn out daunting and does not only concern solar and wind power,
very different from predictions. The International Energy but also other renewable sources, as well as hydrogen, the
Agency (IEA) in its World Energy Outlook of 2021 has development of smart grids, batteries (given that energy
considered four scenarios ranging from the mere must be stored since sun and wind are intermittent) and
continuation of the policies in place (scenario called the diffusion of all technologies that improve energy
STEPS) to the more proactive scenario that aims to efficiency and, where possible, the electrification of
achieve Net-Zero Emissions (NZE) by 2050. processes. The ongoing and prospective transformation of
In the middle there are two scenarios with an the energy system therefore requires massive investments,
intermediate development of renewables, if the policies and the will is there from the point of view of energy
already announced (APS) will be implemented or if more operators, as well as financial actors increasingly oriented
ambitious ones (SDS scenario) will be launched to move towards sustainable investments, provided there is a way
more decisively towards sustainable development. To to recoup the investment in reasonable times and under
understand the effort under way, but also the diversity of conditions of regulatory certainty.
possible outcomes, it is sufficient to consider that, starting However, imagining that we can leapfrog in a short time
from 1500 GW of installed power in 2020, in the current towards a world made entirely made of renewable
THE MASTER
sources, and that everything depends on "political will",
is an error that risks deceiving public opinion. The road
to the development of renewables is sown with economic,
“
We need to extend the planning horizon, also using they are going to be the “Next Big Thing”, but at the
the imagination if necessary, to put ourselves in a same time there is a sense that something is
position to reap the benefits that will certainly be still missing to make it all happen. At this
there, even if today we can only intuit them," says moment there is an ever greater dyscrasia
Marco Patuano, president of the A2A Group and between the current state of the art and the
Bocconi Alumnus, of the energy transition. He’s going scenarios towards which macro trends are
through the difficult exercise of drawing up today a ten- inevitably leading under the push of social
year strategic plan for a company operating in a phenomena, geopolitical events,
turbulent sector such as energy today. In the document, technological developments.
presented at the beginning of the year, the largest Italian As A2A group you have recently
multi-utility (which prefers the definition of "Life acquired a sizable wind farm: is this
Company" for itself) allocated €18 billion in the renewable source on which
investments, most of which destined to the development to invest at the moment?
of electricity production from renewable sources, a What other technologies
further sign that green energy is the direction of do you think are the most
development for all firms. promising?
You have worked for a long time in Photovoltaics and wind are
telecommunications; you must be used to more than promising
take the long perspective and confide in technologies, they are a
technological progress... tangible reality. If we talk
Yes, in fact, when today I hear about some about promising technologies,
technologies in the sectors where A2A looking much further, say
operates, such as hydrogen or beyond 2050, I think that the
biomethane, the dawn of the Internet greatest hope comes from the
comes to mind: these are technologies that fusion of the atom. If, on the other
have existed for years, and we are all convinced hand, we broaden the discussion
MARCO PATUANO
Born in Alessandria, 58
from renewable energies only to the world of Net within 10 years, it will be because it is cheaper. I
graduated in Business
interest are found in the world of Carbon Capture, simple: with a liter of fuel you can travel, in the best of
telecommunications in
still an almost impossible mission. Will the disperses more energy by producing heat. It is a very
experience, I remembered
emergencies, even if for many people these are never of electricity, gas and petroleum derivatives), a major
profession of manager. I
those who have to allocate capital for investment, no from the importation of energy. If, as we have said, this
competition”.
have yet been able to touch the advantages of the does not mean that it can really be done, but it does
transition to renewable energy, at least among mean that we have the technology and that in order to
private individuals. find common solutions we must truly become a
That is not entirely true. If we all drive an electric car European Union.
ENERGY
by Franco Ferrari @
I
n the last twenty years, issues related to hydrogen renewable hydrogen is expected, the extension to various
have acquired centrality in the context of EU policy industrial applications (steel, trucks, rail transport) and
on energy and climate, culminating in the adoption of the development of local hydrogen hubs. The
the Commission communication “A hydrogen strategy infrastructure will also need to be adapted, with the
for a climate-neutral Europe” of 8 July 2020. planning of a pan-European hydrogen network and a
FRANCOFERRARI
European policies have not yet produced a complete network of refueling stations. At this stage, the
Senior Professor,
regulatory outcome: at present, in fact, the production, legislation will have to provide for the “completion of an
Department of Law,
circulation and use of hydrogen does not have an organic open and competitive EU hydrogen market,
Bocconi University
discipline. Partial and fragmented regulatory discipline characterized by the absence of a barrier to cross-border
can be found in legislation of various kinds (mainly trade and by an efficient distribution of hydrogen
decisions and regulations) on hydrogen R&D, hydrogen- between the various sectors”.
fueled vehicles and hydrogen distribution Finally, the third phase (2031-2050) foresees the
networks, as well as industrial activities maturity of technologies based on renewable
and hydrogen from renewable sources. hydrogen and their application on a large scale, with
Many point out the need to revise existing
legislation in order to adapt the existing
regulatory framework to the new demands
determined by the European strategy for
hydrogen. It is true, however, that, at least in
relation to the transport sector, the regulatory
interventions have been numerous and far-reaching,
defining a significant corpus perhaps suitable for
merging into an organic and single text.
Faced with this situation, the EU strategy for hydrogen,
starting from quantification of investments between €180
and €470 billion into renewable hydrogen by 2050,
provides a real roadmap for the next 30 years, whichi is
divided into three phases.
The first phase (2020-2024) calls for the installation of
at least 6 GW of electrolyzers for renewable hydrogen
and production of 1 million tons of renewable hydrogen
is expected. On a regulatory level, this first phase should
be characterized by the need to define the regulatory
framework “for a liquid and well-functioning hydrogen
market and on the incentives to supply and demand in
leading markets, also compensating for the cost
differences between the solutions and renewable and
low-carbon hydrogen and adopting adequate rules on
state aid ”.
During the second phase (2025-2030), hydrogen will
have to take on the role of an essential element in an
integrated energy system, with the installation of at least
40 GW of electrolyzers for renewable hydrogen and the
production of 10 million tons of the fuel. At this
juncture, an improvement in the competitiveness of
the spread of synthetic fuels derived from hydrogen also National Plan for Recovery and Resilience (PNRR)
to aviation and shipping and with the use of biogas to which enables the outlay of sizable sums for investment.
replace natural gas in the production of hydrogen with As part of the legislation related to the PNRR, which
capture and storage of carbon dioxide. within Mission 2 lists hydrogen as an investment item,
To support such a far-reaching transformation, the Union and the PNIEC, the Legislative Decree May 31, 2021,
foresees the need for substantial investments - between no. 77, as converted into the Law of 21 July 2021, no.
€24 and €42 billion by 2030 for electrolyzers, €220-340 108, has included among the works and infrastructures
billion for increasing energy production from renewable necessary to achieve the objectives set out by the
sources and an additional €11 billion for the rollout of PNIEC, the production, transport and storage of
carbon capture and storage technologies, in reference to hydrogen, as well as those functional to the refueling of
which a specific "European Alliance for Clean hydrogen vehicles.
Hydrogen" will be set up, bringing together companies, With the Decree of 27 April 2022, the Italian Ministry
public administrations, research bodies in for the Ecological Transition has, lastly, has approved
implementation of the hydrogen strategy by defining of the regulations for the implementation of the investments
investment projects. envisaged by the PNRR. In particular, €450 million
Individual national experiences, more or less developed have been allocated, so apportioned: €250 million for
in their approaches, find space within the EU the construction of plants for the production of
framework. Italy has attributed a particularly important electrolyzers of European interest; €100 million for the
role to hydrogen in order to achieve the so-called construction of additional electrolysis capacity reaching
"ecological transition starting from the Integrated 1 GW per year of electricity by 2026; €100 million for
National Energy and Climate Plan (PNIEC), published investment programs aimed at developing the production
in January 2020. chain of hydrogen from electrolysis and/or related
The key point towards an energy system that integrates components, including projects for targeted R&D and
hydrogen among its sources is, however, the Italian training of specialized personnel.
by Emanuele Elli @
with offshore wind for General Electric and today in
Zurich I work on waste-to-energy plants for Hitachi
Zosen Inova, mainly developing the small collateral
“
I have always hoped to apply my processes that are connected to the main plant and that
chemical engineering degree to an favor the recycling of materials. Today, in fact, we no
industry that had a higher meaning longer speak of Waste to Energy processes but of Waste to
and purpose than simply business. So I X because an array of metals, salts, new raw materials
immediately tried to deal with renewable can be obtained from the processing of waste. These are
energy and sustainable technologies, very complex infrastructures which are increasingly
because they represent the challenge par inspired by the concept of the circular economy”.
excellence for the future of the planet. Even How is the energy market changing with
if this has meant, so far, that I have always technological innovation applied to the
worked outside of Italy”. No regrets, mind exploitation of renewable sources?
you, in the voice of Giovanna Chiara, Global It is changing a lot but not yet enough to alter the
Sales & Business Development Manager at established equilibrium. In Europe there is already a
ENERGY
GIOVANNA CHIARA
Graduated in chemical
good base for renewables but there is still a lot to do to model that has become established in Nordic countries
point in my career, I
producers are the very same countries that need them from renewables, but where instead electricity from the
business skills to my
energy. Another fundamental chapter is the one related to distinction is not possible and bills are not differentiated.
Why is it so difficult to start the construction of
scientific background,"
the theme of smart grids and batteries which are
change perspectives in
counter solutions and costs will soon consequently drop. moves where there are favorable laws that push
Talking about costs, until now businesses and
approaching the industry
investment in the right direction. Of course, it is to
waste-to-energy plants in
the fuel is available in nature free of charge. PPAs, Power power plants and above all in a solution of the problem of
Japanese corporation
plant builders become exclusive suppliers for companies is the solution to the energy problem, but a plurality of
Deglobalization,
crisis of democracy,
nationalism
and war
are interconnected
trends reshaping
the world.
What is current
geopolitical