Numbers show we’re not as addicted to fossil fuels as you think

Wind turbine

The way we think about how much fossil fuels contribute to our energy mix overplays its utility. That’s because much of the energy from burning fossil fuels is lost as waste heat and noise, or as BloombergNEF’s Colin McKerracher puts it: “just sound and fury, signifying nothing.”

The average efficiency of coal power plants globally is about 33 per cent, according to the World Coal Association. That is, only a third of the energy stored in the black lumps is converted to electricity. Many modern internal combustion engine cars have an efficiency of about 20 per cent, transforming only a fifth of gasoline’s energy into motion.

Why should something as dry and technical as energy-measurement warrant attention? Because misunderstanding it dramatically overplays the difficulty of meeting global clean-energy goals.

Let’s first define the terms. “Primary energy” is the measure of energy as found in nature, say blocks of coal or crude oil. “Final energy” is what’s available for us to use in the form of gasoline or electricity. And “useful energy” is the fraction that’s converted to, for example, move a car or light up a room.

Even though fossil fuels meet roughly 80 per cent of the world’s primary energy demand, they are responsible for only 60 per cent of its useful energy, according to BNEF. Put another way, 20 per cent of the world’s primary energy demand today is met by non-fossil sources—and those sources are responsible for 40 per cent of the world’s useful energy.

BNEF’s 2020 New Energy Outlook offers two main scenarios for the future. The economic transition scenario extends the current trends, where renewables get cheaper and electric vehicles more common, and the climate scenario posits that governments become serious about climate change and push for strong emission cuts.

In the economic transition scenario, by 2050, fossil fuels may still provide 70 per cent of primary energy, 60 per cent of final energy and 55 per cent of useful energy. But if the world were to take serious climate action, BNEF models that fossil fuel’s share of primary energy will fall to 28 per cent.

The projections show that cheaper renewables and electric cars won’t be enough. In the economic transition scenario, the world will still emit as much as 27 billion metric tons of carbon dioxide in 2050, only 16 per cent less than 2019. It has to be close to net-zero emissions by then to meet the most ambitious climate goal under the Paris Agreement to keep warming to less than 1.5 degrees Celsius. Emissions will fall to less than five billion metric tons in the climate scenario—much closer to where they need to be.

It’s not just the emissions that would be different under the two scenarios. In the economics transition scenario, the world in 2050 consumes 679 exajoules of primary energy—that’s the equivalent of 300 million barrels of oil per day. Whereas in the climate scenario the world consumes 574 exajoules, about 15 per cent less.

As the world consumes more energy from renewables in the form of electricity, it manages similar economic output while consuming less primary energy. Generating electricity from solar and wind is highly efficient, and motors inside electric vehicles convert more than 80 per cent of the energy stored in batteries into motion.

Understanding the enormous amounts of wasted energy produced from burning fossil fuels shows why replacing it with cleaner sources may not be as much of a lift as it seems. For example, the coal used to generate electricity makes up 15 per cent of the world’s primary energy consumption today, but only five per cent of its final energy.

Renewables don’t need to replace the wasted heat, which means the task for them is much more manageable. Of course, the wind doesn’t always blow and the sun doesn’t always shine, so replacing coal with renewables isn’t always straightforward. But the magnitude of challenge is smaller than most people think.

“Electrical devices can sometimes offer higher than 100 per cent efficiency,” said BNEF analyst Matthias Kimmel. That might seem odd. How can there be more energy as output than input? But that’s exactly what heat pumps and air conditioners do. They use electricity to shift heat from the outside to inside, or vice-versa, and typically provide three units of energy service for one unit of energy input, meaning an efficiency of 300 per cent.

There’s a complex history behind why “primary energy” drives conversations about energy demand and consumption, said Gniewomir Flis, an energy and climate adviser at the think tank Agora Energiewende. But that history isn’t serving the current moment when the world needs to move away from fossil fuels quickly.

So next time you hear someone say that humanity is addicted to fossil fuels, which provide 80 per cent of our energy, you’ll know what to tell them: Overcoming this addiction is going to be easier than our outdated numbers make it seem.

© Bloomberg LP