Europe’s renewable energy sector is “not ambitious enough” to deliver the massive quantities of clean power needed to green the supplies of the largest industrial users, warned the continent's chemicals industry group.
Marco Mensink, director general of the European Chemical Industry Council (CEFIC), claimed the growing success of the wind and solar sectors in striking power purchase agreements (PPAs) with technology and retail giants contrasts with the handful of such deals in industries such as chemicals, steel and paper.
“For some reason it’s not really happening yet for large industry,” Mensink told the RE-Source event on corporate renewable energy procurement in Amsterdam, pointing to policy, infrastructure and pricing as among the obstacles that need tackling if that is to change.
But the CEFIC chief told the industry event that the sheer quantity of power needed to shift his members’ chemical plants from processes based on fossil fuels to those using zero-carbon electricity and green hydrogen “requires more than removing a few barriers.
“You’re not ambitious enough. If we want to meet the net [climate] neutral agenda, we’re going to need three and a half times the current German electricity demand extra in renewables. Three and a half times Germany for a hydrogen and electricity-based chemical industry.”
That figure rises to five times current German demand when the steel sector is added in, said Mensink, whose body represents the likes of BASF, Wacker Chemie, Novartis and Bayer. “You’re going to electrify not only chemicals and steel, you’re going to electrify houses and cars, and eventually planes and trucks, at the same time over the next [decades].”
A 2017 study released by CEFIC estimated that up to 4,900TWh of zero-carbon power would be needed for net-neutral European chemical production by 2050, more than double IEA projections of the entire available supply by then.
Renewable power producers also need to exercise “self control” over pricing as demand for clean power balloons, added Mensink. “We need it at prices that allow us to compete with a US based on shale gas – which is cheap and plentiful for the US chemical industry.”
Industries such as chemicals and steel are wrestling with the challenges of securing green power supplies and moving their processes to clean alternatives.
The Nordic aluminium sector blazed a trail for heavy industrial renewable PPAs in Europe last year when Norsk Hydro and Alcoa tied up 2.2GW of deals.
Swedish utility Vattenfall and partners from the country’s metals industry on Thursday claimed progress in a plan to pioneer ‘fossil-free’ steel production, clearing a $20m investment to construct a subterranean storage facility.
The partners calculate that switching to clean-energy production of steel and iron has the potential to reduce Sweden’s total carbon emissions by 10%.