Network of climate technologies hold promise of large-scale emissions reduction, report says
Collectively, 12 categories of climate technologies could potentially reduce as much as 90 percent of total man-made greenhouse-gas (GHG) emissions if deployed at scale, according to a recent report published by McKinsey & Co.
“The interdependency among these technologies is very high, meaning that they must scale together,” says the report, entitled Preview: What would it take to scale critical climate technologies? “These technologies will need not only to be proven technically (as many already have), but also to become commercially viable.”
And, most importantly, says McKinsey, the search for sustainable technology solutions to drive decarbonization will need to be pursued at the same time that utilities, for instance, will be aiming to reach goals around affordability and energy security.
The report, which is based on data from McKinsey Sustainability Insights Global Marginal Abatement Cost Curve, is a preview of a full report on climate technologies that McKinsey plans to publish in 2024. It highlights the potential of these 12 climate tech categories along with their different maturity levels, the key scaling mechanisms, and some paths to overcoming scaling challenges.
“To spur innovation and reduce costs, our analysis suggests that climate tech investments would need to grow by about 10 percent each year and reach approximately $2 trillion by 2030, equivalent to about 1 percent to 2 percent of global GDP,” the report says.
Daily Energy Insider highlights five of the 12 categories, as well as what McKinsey says are their challenges to scale and some suggested solutions listed in the report. They are:
- Renewables — Renewable energies underpin many of the others but will not achieve net-zero goals on their own. Most energy production technologies that use renewable resources include solar, wind, hydro, geothermal, biomass, solar photovoltaics (PV), and onshore and offshore wind turbines. Challenges include preventing a slowdown in deployment in multiple geographies. Medium- and long-duration storage integration and slow-moving grid modernization, as well as long-term materials supply and access, among other issues, also need to be addressed. Specific technological innovation is required to further reduce costs of renewable generation.
- Nuclear — Traditional nuclear fission technologies, or nuclear reactors, are commercially mature technologies. Challenges include high construction costs and cost overruns, unresolved questions of long-term storage of waste and spent-fuel storage in several regions, and the need for faster innovation to reduce technological costs. A few scale-up solutions are to standardize licensing requirements for plant construction, which can help avoid delays and additional costs, and ramping up coordination between industry and governments to address skilled-labor shortages through capability building.
- Energy storage — Large-scale energy storage will be needed as renewable energies scale up. Technologies include lithium-ion battery systems for short- and medium-duration energy storage, as well as other electrochemical, thermal, mechanical, and chemical systems for long-duration energy storage. A portfolio of storage technologies will likely be needed. This will differ by country and depend on local geological conditions and the extent of grid balancing required.
- Batteries — Batteries have achieved strong growth recently and are expected to continue growing by 25 percent year over year until 2030. Battery cell costs have been reduced by a factor of 10 over the past decade, allowing battery electric vehicles (EVs) to get close to cost competitiveness with conventional combustion-engine vehicles. To further scale, batteries require substantial investments along the end-to-end value chain, including raw-material mining and refining, active material manufacturing, and production equipment, among others, McKinsey says. Near-term technology innovations need to focus on improvements in energy density and fast-charging capability.
- Carbon capture, utilization, and storage (CCUS) — These technologies capture CO₂ emitted by industrial processes at point sources, such as power generation facilities, and then transport it, convert it, or store it long term. They are also required for the production of low-carbon hydrogen from natural gas. Cost reductions will be required, as CCUS does not offer direct monetization routes and represents an added cost for industrial and power players. Capture technologies, such as new liquid solvents, solid adsorbents, membranes, and cryogenic techniques, each could reduce energy use and, ultimately, costs. To scale up further, CCUS requires a clear regulatory and permitting environment for pipelines and storage.
The remaining seven climate technology categories listed by McKinsey are: heat pumps; hydrogen; sustainable fuels; engineered carbon removals; technologies supporting natural climate solutions; circular technologies; and technologies to produce alternative proteins.
“The deployment of mature climate technologies that avoid, reduce, or capture emissions and can replace carbon-intensive incumbent technologies has accelerated significantly in the past decade, often outpacing expectations,” according to the report. “Scaling of these climate technologies is now more critical than ever as countries seek to reach climate goals of limiting global warming to well under 2°C above pre-industrial levels, a goal that 196 nations committed to in the legally binding 2015 Paris Agreement on climate change.”
McKinsey also noted that the 12 technology categories are not exhaustive; the report focuses on those with the highest potential for carbon abatement to date.
“We do not cover technologies with no direct abatement contributions — for example, adaptation and water and biodiversity technologies — or abatement measures from no- or low-cost technology, including enhanced energy efficiency through use of efficient appliances and behavior shifts,” the report says.
And while climate technologies have advanced rapidly, there is a gap between technical readiness and commercial maturity, McKinsey reports.
“Based on our analysis, only 10 percent of abatement potential from climate technologies comes from those that are already fully commercially mature and in global deployment,” states the report.
