CERAWEEK: No silver bullet for power sector's transition to low-carbon future

The transition away from carbon intensive fuels poses a unique commercial challenge for the global power sector with no single dispatchable technology likely capable of replacing natural gas, experts say.

Making the switch from coal to gas-fired power is a first and comparatively straight-forward step – beyond that though, the options for decarbonization are more challenging, panelists speaking from the CERAWeek by S&P Global energy conference in Houston said March 10.

"Listening to our customers and the market, it's clear that we need to make the transition to net zero – how you get there is the puzzle," said Karim Amin, executive board member at Siemens Energy.

For a company like Siemens Energy, experimentation with new technologies is part of their core business. In the US, the company is currently testing a 30% hydrogen blend at one of its 500 MW combined cycle power plants with a roadmap to reach 50% within the next two years and ultimately 100%, according to Amin.

"The technology is not the issue – the issue is feasibility," he said.

Economic feasibility is the main factor that's holding back regulated utilities, said Anuja Ratnayake, managing director, market strategy and intelligence at Duke Energy. For regulated monopolies like Duke, there isn't really an incentive to experiment with new technologies, since existing regulatory and policy schemes in the US don't particularly reward investment in research and development.

"It's misaligned with our purpose of being that least-cost provider that looks after everybody in our jurisdiction," Ratnayake said. According to her, policy has an important role to play in moving forward emerging new technologies like hydrogen, small nuclear reactors, or SNRs, and others.

Competing technologies

As power generators and regulated utilities look for a low carbon replacement for natural gas, green hydrogen a remains a leading candidate, despite cost challenges associated with its production and distribution.

"We recognize a gap that nothing right not can truly fill, other than hydrogen, but the pricing is murky," Ratnayake said. While there's significant potential for the fuel given its zero-carbon footprint and its immediate dispatchability, Ratnayake says hydrogen will need to undergo a major commercial evolution.

"There's no one silver bullet here, you need to look at all the alternatives at hand," said Amin.

With an eye toward repurposing existing coal-fired generation, Siemens Energy is currently experimenting in Germany and other parts of Europe with heat exchange as form of energy storage. The technology uses renewable power to heat a thermal medium which is stored within the coal-fired power plant and later converted back to steam power when its needed.

Another possibility exists in repurposing coal-fired power plants using SNRs. According to Ralph Alexander, executive chairman of the board of directors at Talen Energy, SNR offers the possibility of a plug-and-play replacement option for coal – one that allows nearly every aspect of a coal plant to remain unchanged, except for the fuel.

"We have 1.4 GW of renewables and battery permitting-connection requests in PJM today – since 2018. It's a complete logjam. But if you're already connected, it's a real advantage," Alexander said.