Sadly, the UAE and different Gulf states can’t simply export their photo voltaic assets to growing international locations. Nonetheless, they’ll export their pure gasoline to assist reasonably priced low-emissions energy manufacturing in poorer international locations if mixed with donor-financed carbon seize, utilization and storage (CCUS)-equipped gas-fired energy vegetation.
The lead-up to COP 28 supplies a possibility to discover this mechanism to assist low-emissions financial development in poorer international locations — a “gasoline for poverty and local weather” energy proposal.
As I famous in an earlier opinion piece, the selections by the G-7, China and others to halt abroad financing for coal energy vegetation serve vital local weather targets however don’t get rid of growing international locations’ want for extra electrical energy at reasonably priced costs. In keeping with a February Reuters report, the Pakistan authorities has determined, within the face of excessive and unstable pure gasoline costs, to pivot from constructing gas-fired vegetation to extra reasonably priced coal-fired ones however the upper emissions.
This shift is all of the extra unsettling given the devastation Pakistan suffered final 12 months from huge flooding with an depth probably exacerbated by local weather change.
The choice to construct extra coal energy vegetation displays the troublesome dilemma confronted by many poorer international locations: They’re essentially the most susceptible to the impacts of local weather change and but they don’t really feel they’ll afford to forestall investing in reasonably priced energy era and the shorter-term financial advantages it supplies, even when this implies constructing high-emitting coal energy vegetation.
The upcoming COP 28 context would possibly present a means out, one which leverages the internet hosting of the occasion within the gas-rich Gulf area, with the said curiosity of wealthier international locations and multilateral improvement banks to assist poorer international locations within the power transition.
The proposal has two primary components: an enterprise by a Gulf producer to offer pure gasoline at a preferential low value to new “low-emitting” gas-fired energy vegetation constructed with concessional local weather finance in partnering growing international locations.
The preferential pricing builds off of three interrelated Gulf state dynamics: the abundance within the area of gasoline assets, Gulf packages to contribute to the financial improvement of poorer international locations and efforts to decrease emissions from petroleum, comparable to the appliance of carbon seize applied sciences. The gross sales value can be fastened at a concessional stage — e.g., notionally at (and even probably beneath) the price of manufacturing, liquefaction and transport, quite than producing typical market returns.
The subsidy embedded on this construction can be acknowledged as a monetary contribution by the gas-supplying nation to each worldwide improvement and world local weather efforts. This construction may probably even be utilized by rich gasoline international locations from different areas, comparable to probably Norway, concerned with concurrently supporting improvement and tackling local weather change.
The second aspect is the usage of this pure gasoline in gas-fired energy vegetation outfitted with “carbon seize, utilization and storage” applied sciences to provide “low-emissions” electrical energy.
Many international locations have appeared to increase the usage of gas-fired vegetation partly as a result of they emit lower than half the carbon dioxide (CO2) per kilowatt hour (kWh) of a coal plant. However their emissions are nonetheless consequential, probably within the order of 350 grams of CO2/kWh in response to one estimate — a big stage when contemplating the “web zero emissions” targets put out by varied international locations or embedded within the local weather modeling of the Worldwide Vitality Company.
CCUS is one instrument to considerably additional cut back these emissions by 90 p.c or extra. The potential result’s CO2 emissions per kWh which can be so low they could even be termed “near-zero emissions.”
Though CCUS applied sciences have been developed and examined for a few years on energy vegetation, they’ve but to be deployed at a big scale. One cause is that they are costly per ton of diminished CO2 emissions. Consequently, their value would undermine a growing nation’s electrical energy affordability goal.
To beat this hurdle, the CCUS-equipped gas-fired plant would must be financed largely by way of extremely concessional local weather funding, to be supplied notably by the worldwide donor group. There may additionally be a possibility to faucet into carbon markets to fund each capital and working expenditures given the decrease (i.e., averted) emissions from the CCUS-equipped plant as in comparison with the choice of a brand new coal-fired energy plant or a gas-fired one with out CCUS.
There are, in fact, extra complexities to discover. For instance, the plant would wish to have the ability to entry fairly priced choices for CO2 use or storage. As well as, the greenhouse gases (together with methane) emitted in producing and delivering the pure gasoline to the plant would must be restricted to make sure the produced electrical energy stays “low emissions” when contemplating the total worth chain.
Additional evaluation would even be wanted on the pricing and different phrases to make this construction enticing for the pure gasoline provider, the donor group funding the CCUS-equipped plant and the growing nation’s electrical energy customers.
Constructing renewables vegetation throughout the World South is a preferable different to generate fewer emissions — however the worldwide group has to this point been unwilling to offer the substantial funding wanted to assemble one of these extra era capability on the stage growing international locations require. And, as famous earlier, the applied sciences don’t but exist for the Gulf states to export their plentiful solar energy assets, however present discussions about inexperienced hydrogen.
The internet hosting of COP 28 within the Gulf supplies a possibility to assume creatively about mobilize the gasoline assets of that area (and elsewhere) to raised assist each the event wants of poorer international locations and the worldwide local weather effort. This COP 28 “gasoline for poverty and local weather” energy proposal would possibly present some components.
Philippe Benoit has over 25 years of expertise working in worldwide power and sustainability, together with prior administration positions on the World Financial institution and the Worldwide Vitality Company. He’s at present adjunct senior analysis scholar at Columbia College’s Middle on World Vitality Coverage and analysis director at World Infrastructure Analytics and Sustainability 2050.
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