Based on extensive industry interviews and detailed modelling, 5G-enabled use cases can reduce carbon emissions in the energy industry by almost 1% by 2030. How - and what - should telcos, the energy sector and governments do to achieve this?
The chartpack for this report is available to download as an additional file
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Transitioning towards a carbon-neutral world
Carbon reduction targets have been set at global, regional, and many national levels to tackle climate change. The Paris Agreement was the first universal, legally binding global climate change agreement. Adopted in December 2015, close to 190 countries agreed the long-term target to limit the increase in global average temperatures to 2 degrees Celsius above pre-industrial levels. The EU also has a binding target to cut emissions to at least 40% below 1990 levels by 2030, as well as achieving at least a 32% share for renewable energy and at least a 32.5% improvement in energy efficiency.
This report will focus on the way in which technology, in particular 5G, can enable individuals, businesses, the energy industry and governments to accelerate the transition to zero carbon emissions.
This analysis is based on desk research, an interview programme and survey with industry leaders, as well as detailed economic modelling to quantify the benefits that 5G can bring, and the contribution it can make to achieving carbon emissions targets.
A framework for thinking through the carbon emissions challenge
The main mechanisms through which technology (including 5G) can reduce carbon emissions arising from our consumption of energy, fall under one of three categories:
- Green electricity generation: increasing the proportion of electricity generated from renewable energy sources
- Transition to electricity: as electricity becomes greener, moving away from energy that is directly delivered through combustion of fossil fuels towards delivery through electricity
- Energy efficient consumption: reducing the amount of energy required to achieve the same outcomes – either by not consuming energy when it is not needed or doing so more efficiently
A framework for outlining the key mechanisms for reducing carbon emissions
Source: STL Partners
Greener electricity generation
Generating ‘greener’ electricity is a fundamental part of any carbon emissions reduction strategy. Energy analysts forecast that it will still take decades for a substantial amount of the grid to be powered by renewable energy sources. The chart below demonstrates the current prevalence of coal and gas in our electricity networks, with some contribution from nuclear and hydropower. By 2030, we will need rapid growth of wind and solar, but it only becomes a significant proportion of world supply by 2040.
Forecasts predict that future electricity generation will come from growth in solar and wind
Renewable energy generation must grow enough to meet three challenges:
- Replace current electricity generation from fossil fuels
- Provide electricity to power directly supplied by fossil fuels as these transition to electric power (see transition discussion below)
- Meet future demand arising from economic growth.
Moving from fossil fuels to wind and solar energy presents new challenges for balancing the electricity supply system. Due to the variable nature of these renewables (it’s not always sunny or windy) and our limited ability to store energy (with current battery technologies), the growing dependence on renewables means that supply cannot be controlled to meet demand. New business models enabled by millions of connected devices (washing machines, electric vehicle chargers) will allow us to reverse the market model such that demand meets supply.
Further in this report we describe in more detail how 5G networks will enable the acceleration of greener energy supply by:
- Improving the cost competitiveness of renewables (in particular, by reducing operating costs).
- Ensuring that renewables can contribute to the bulk of our energy needs, by supporting new business models ensuring energy demand across millions of appliances is managed in response to the fluctuating nature of renewables supply.
Transition to electricity
The second major mechanism to reduce carbon emissions is transitioning to using electricity as the primary source of energy for applications that currently rely on fossil fuel combustion. The two big transitions are the move from:
- fossil-fuelled cars and trucks to electric vehicles
- gas boilers to electric heat pumps.
Using electricity to power these appliances and processes is more energy efficient than burning fossil fuels and can therefore deliver an overall reduction in energy use and carbon emissions even if the grid is only partly ‘decarbonised’.
However, this will create a seismic change in energy consumption. Taking the UK as an example, the energy used for heating space and water is almost double that used for total electricity consumption in the country. Space and water heating is largely fuelled by gas today. Meanwhile, transport used over two exajoules of energy in 2018. Shifting these to electricity will put unprecedented burden on our electricity networks.
Comparing UK energy consumption for space heating, water heating and transport to total electricity consumption (2018)
Source: UK National Statistics
As well as the need to meet demand with supply discussed above, the other consequence of moving away from fossil fuels is that it may be more difficult to keep the electricity grid stable. Historically, turbines from traditional power generation stations have provided inertia, which has helped to maintain a buffer when demand for power changes over a short time. Power station turbines’ rotational inertia effectively absorbs and releases energy in response to fluctuating demand, resulting in grid frequency variations. To keep the grid stable and mitigate blackouts, frequency needs to avoid deviating by more than 1-2% from the target of 50 or 60 Hertz. Removing traditional thermal turbine generation means that solutions must be developed to provide highly-reliable sub-second responses – precisely the type of requirements for which 5G was developed.
5G networks can enable the acceleration of this transition from direct fossil fuels to increasingly renewable electricity by:
- Improving the performance and cost-effectiveness of electric-powered alternatives (for example, by making electric vehicles much cheaper to buy and as convenient to refuel as fossil fuel vehicles through optimised battery lease-and-swap networks)
- Providing high-reliability, low latency connectivity to the energy suppliers and users committed to maintaining stable frequency across the electricity grid
- Ensuring that renewables can contribute to the bulk of our energy needs, by supporting new business models ensuring energy demand across millions of appliances is managed in response to the fluctuating nature of renewables supply (for example, by charging electric vehicles or heating domestic hot water when renewable supply is at its peak).
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