With climate change now at the forefront of public debate – and the future economic benefits of endeavours such as the Scotwind initiative increasingly apparent – the Net Zero Technology Centre in Aberdeen is successfully convincing the country’s business community that investment in emission-reducing technologies can allow Scotland to lead the world on both carbon neutrality and the future of energy production.
ANTICIPATING the future has never been more important than today. This is true at all levels, planetary, country, organisational and even individual.
Having foresight is a much-needed business capability that must be translated into business strategy.
The Horizon Scanning team at the Net Zero Technology Centre is helping companies in the energy sector navigate these trends and drivers to help build business strategies.
Information from government policies, think tanks, NGOS, industry reports, and projects, combine to provide foresight and enable us to identify potential industry trends that drive the energy transition.
The aim is to understand the key drivers that are shaping the near future, and translate them into businesses strategies. Many interrelated trends are at play, these are likely to be key for the net zero future.
Closing in on net zero
THE world is not on course to limit global warming to 1.5°C, and even a 2°C target currently looks out of reach. COP26 made a good step forward but also highlighted this gap and asked all countries to return with revised commitments for COP27. As a result, climate change is now at the forefront of the public agenda, and we must maximise this momentum.
The building blocks are in place, but we need rapid change to spur an upheaval of our energy system in line with the 1.5°C target. We need greater efficiency, electrification, and developments in hydrogen, carbon capture and storage (CCS), and direct air capture (DAC) technologies.
Governments and investors are committing to this by putting their money where their mouth is.
For example, a coalition formed in Glasgow made up of over 450 financial institutions in 45 countries, with assets worth £95 trillion, has pledged to ensure all assets are aligned with net zero emissions. At the same time, the transition represents an opportunity for many businesses, and Bill Gates expects the emergence of climate technology to generate “eight to ten Teslas, a Google, an Amazon and a Microsoft”.
However, just one-eighth of the world’s population is responsible for half of the world’s carbon emissions. The remaining 6.5 billion do not have the same access to energy, and fossil fuels are often the cheapest and fastest option for developing nations. So, whilst we attempt to reduce the world’s carbon emissions, we must keep improving the standard of living in these regions.
As a developed nation, the UK can invest in technologies to reduce emissions and show the world the way. The Offshore Wind Sector Deal has committed £48 billion in investment in UK infrastructure, and the Climate Change Committee (CCC) says the
Path to Net Zero requires over 75GW by 2050. In addition, Crown Estate Scotland announced the results of their first ScotWind Leasing round this week, pledging a multi-billion-pound supply chain investment in 17 Scottish offshore wind projects.
This will be a key enabler of Scotland’s energy transition ambition and kickstart Scotland’s global leadership in deploying large-scale floating wind and its associated supply chain and technologies. The North Sea Transition Deal lays the foundation for collaboration to deliver a Net Zero UKCS, again, where Scotland leads, the rest of the world will need to learn from and follow.
INVESTMENT in hydrogen and CCS will be vital to decarbonising the manufacturing sector. The UK’s Hydrogen Strategy, published in August last year, identified hydrogen as a key solution in decarbonising hard-to-abate sectors, including chemicals, cement, steel and iron.
Hydrogen also plays a crucial role in decarbonising aviation, with electric and hydrogen-powered aircraft used for shorter flights. British Airways and Shell are building a plant at Heathrow Airport to turn household and forestry waste into syngas for long-haul flights.
The use of hydrogen fuel cells is also expanding in heavy goods vehicles, buses and trains, with over 300 hydrogen vehicles currently on UK roads, including the fleet of zero emission hydrogen buses being used across Aberdeen. The UK Government is anticipating low carbon hydrogen demand of up to 6TWh from the transport sector by 2030. The sale of electric vehicles is soaring, with 28% of all car sales either fully electric or hybrid.
In the electric vehicle (EV) market, the decision by various governments, including the UK, to ban the sale of new petrol diesel car from 2030’s provided certainty to manufacturers and investors that this was a key focus area. As a result, technological development has accelerated, and manufacturers have created new models to meet market demand.
Electric ferries will be utilised for shorter trips in the shipping industry, while hydrogen and ammonia are alternative options for long-haul shipping. Biofuels are the main focus in this sector, with Maersk testing a blend made up of 20% used cooking oil for a three-month roundtrip from Rotterdam to Shanghai. Unitrove is also delivering the world’s first liquid hydrogen bunkering facility for fuelling zero emissions ships.
Heating our homes
OUR domestic heat will also transition to a combination of heat pumps and hydrogen (which will reuse the existing gas infrastructure). Gas boilers will be banned from new housing in 2025, and by 2035 they won’t be on sale anymore. Gas Network
Operators have created a sector roadmap to transition to hydrogen, with demonstration and testing projects underway, beginning with testing up to 20% hydrogen.
The transition for our homes doesn’t stop at heating. The construction industry is developing low carbon cement, while carbon-negative materials from biochar (made of 90% atmospheric carbon) may be used in construction, interiors and furniture. There are also opportunities to reuse many construction materials, including iron and steel. Newly built homes could reduce their CO2 footprints by up to 70% in the construction phase by reusing these materials.
All of these technologies are evolving, but the pace is too slow. The International Energy Agency (IEA) clearly states that the development of most clean energy technologies is lagging behind.
The emergence of a new economic paradigm
SUSTAINABILITY has shot to the top of the agenda for senior management and is now a corporate priority. This change has been aided by the profile of COP26, a heightened consciousness created by the rising number of natural disasters, and increased media reporting. The likely introduction of carbon border taxes, starting in the UK and EU, will bring new approaches to supply chains and manufacturing.
Workers and customers alike are demanding change from businesses of all shapes and sizes.
Customers are demanding sustainable products, while the ‘Great Resignation’ over the past year has illustrated that people want to work for companies that are a force for good – a recent IBM survey found that 71% of people want to work for environmentally sustainable companies. Therefore, businesses must prioritise sustainability and promote this externally to become attractive to talented people.
The United Nation’s Sustainable Development Goals are becoming mainstream and a pillar for businesses at all levels, beyond just climate change. We’ve also seen a massive shift in investors’ priorities, and sustainability will be an essential criterion to attract investment, both by 2030 and 2050. As a result, purpose-driven businesses will flourish.
Gone are the days when gross profit was the only useful success metric. Larry Fink, Chairman and CEO of BlackRock, said that the net zero effort requires a transformation of the entire economy, and big pension funds have pulled the plug on fossil fuel investment without a credible net zero roadmap.
This year is likely to be a monumental one for climate related policies and commercial models, from CCUS and hydrogen to heating, constructions etc. That will be crucial to stimulate and guide investment and businesses.
WHILE digital technology has come a long way, the best is yet to come. The development of Mark Zuckerberg’s Metaverse may be the next major workplace shift and virtual spaces and ‘offices’ could lead to greater collaboration around the world.
Accenture, for example, bought 60,000 virtual reality headsets to help onboard new staff during the pandemic from the privacy of their own homes.
Many companies are investing in digital technologies, increasing their use of artificial intelligence, machine learning and robotics. Distributed ledger/blockchain technologies are expanding beyond Bitcoin, and quantum computing is making early but significant progress, with a landmark joint investment of £210 million from the UK Government and IBM.
Agile mindset is key
AS government and policymakers spark the creation of these new markets, organisations must be agile enough to adjust and transform, embracing technology and innovation and making decisions based on trusted data and analysis. The mindsets of customers, workers and investors have shifted and will continue to do so. Companies that can embrace change, and adjust accordingly, will thrive. During these times of change, risk and opportunity, agile must become a mindset.
Founded in 2017, the Net Zero Technology Centre was created as part of the Aberdeen City Region Deal, with £180 million of UK and Scottish government funding to maximise the potential of the North Sea. To date the Centre has co-invested £192 million in technologies which have the potential to generate £10-15 billion in gross value added (GVA) to the Scottish economy, screened over 1450 technologies, completed 89 field trials, with a further 36 planned or already live and have progressed more than 23 technologies to commercialisation
For all the latest Sports News Click Here