Fossil fuel power sources producing the equivalent of ten times the global electricity production in 2018 (267 PWh)will become unusable if global heating is to be kept below 2 °C, even if carbon-abatement technologies such as carbon capture and storage, bioenergy, and coal-to-gas conversions are deployed at scale, new research published in Nature Communications has revealed.
At COP26, the Climate Action Tracker announced that the Earth is currently on course to heat by 2.4 °C by 2100. Meanwhile, fossil fuel plants continue to be built and planned.
The authors also found that, if carbon-abatement technologies are not deployed at scale, the amount of fossil fuel assets at risk of being underused or decommissioned increases by up to 69% on average across the different energy system models assessed.
‘If companies continue to invest in fossil fuel-based infrastructure, some of these assets risk stranding even before they are built,’ warns Yangsiyu Lu, lead author and DPhil researcher at the Smith School of Enterprise and the Environment, University of Oxford, and Global China Research Fellow with the Boston University Global Development Policy Centre.
The paper is the first to estimate the effect of the roll-out of carbon-abatement technologies on the risk of ‘stranded assets,’ which are defined as power sources that must be decommissioned or underused in order to keep global heating below 2 °C. It was co-authored by academics at the University of Oxford, University of Barcelona and Boston University.
The findings provide a stark warning to energy companies, that have argued such technologies could substantially reduce the carbon footprint of energy production from fossil fuels.
‘Our results underline a clear stranding risk for investors, plant operators and policymakers,’ affirms Yangsiyu Lu.
‘In the future, it may be possible to use bio-energy or carbon capture and storage to extend the lifetime of fossil fuel assets. Even so, we still forecast that 267 PWh of assets would be stranded in optimistic cases. Furthermore, we do not know if or when these technologies will become widespread,’ adds Francois Cohen, a co-author on the paper and assistant professor of economics at the University of Barcelona.
Dr Steve Smith, co-author and Director of the Oxford Net Zero Initiative, says, ‘Scenarios by the likes of the IPCC and IEA often assume very rapid rollout of low-carbon energy technologies, including things like carbon capture and bioenergy. Estimates of stranded assets often assume all these technologies will be available. To the extent they might not be, stranding will be even higher.
‘Crucially, most of the stranding we project is for projects in the pipeline, not existing plants. The choice is still there to not build this stuff, before it becomes a liability.’
