Renewable energy production: What’s the harm?

Part 2:

In part 2 of our renewable energy overview: Biomass, Geothermal and an interesting new entrant.  

 

Biomass

Biomass is a clean and renewable energy source, where plant materials are burned, and the energy released is processed into several usable formats.  However, burning biomass releases carbon monoxide, carbon dioxide, nitrogen oxides and harmful particulates into the atmosphere.  If not captured and recycled, these pollutants could exceed the number of pollutants released by fossil fuels.  In addition, land used for growing biomass feedstock can impact the amount available for agricultural production.

For biomass to be carbon neutral, or even carbon reducing, then there is a fine balance to be struck between usage and replacement.  Tree and agricultural stocks have to be sustainably managed and the burning of waste materials carefully managed to ensure control of the pollutants.

With advances being made in the methods and types of burning process, such as pyrolysis, and in the production of biomass feedstocks, such as growing switch grass on sub optimal land, the Renewable Energy Association’s June 2019 report suggests that bioenergy could triple from the levels we see today to 16% by 2032.  Another report from International Renewable Energy Agency (IRENA) suggests that biomass could provide 60% of global renewable energy by 2030.

 

Geothermal

On the whole, there are minimal emissions from geothermal energy operations.  Environmental impacts vary depending on the technology used to generate electricity and the type of cooling system used.  The bigger environmental impact is in the siting of the operation. Geothermal plants, by their definition, need to be in places of ecological and geological interest, so great care needs to be taken to protect the integrity of these sites.

The most common type of geothermal power plant (hydrothermal), is located near geologic “hot spots” (hot molten rock close to the earth’s crust that produces hot water). Alternatively, enhanced geothermal systems (hot dry rock geothermal), where the earth’s surface is drilled in order to reach additional geothermal resources, into which water is then pumped and heated by the geothermal resource, also allows access to geothermal energy.

The plants differ based on the type of technology used to convert the geothermal resource into electricity, such as direct steam, flash, or binary. In addition, they will have different types of cooling technology -water- and air-cooled.

Environmentally, in addition to the location, the main concern is the release of hydrogen sulphide, a gas that smells like rotten eggs at low concentrations, and the disposal of some geothermal fluids, which may contain low levels of toxic materials.

 

Storage

In the coming weeks we will be writing in-depth blogs for each of the top 5 renewable energy sources, but we wanted to finish this brief overview with a new entrant that we like the look of: Gravitricity.

A Scottish firm has come up with a staggeringly simple way of harnessing the power of gravity to store electricity by using the principle of the winding mechanism on an old clock and a disused mine shaft.  The idea is designed to solve issues caused by peaks and troughs in demand by storing electricity and releasing it back into the grid when needed, without the need for Lithium batteries and all the environmental issues they bring. 

With ambitions future plans to convert abandoned mine shafts across the UK, South Africa, Finland, Poland and the Czech Republic and the prospect of an operational prototype by 2022, investment interest is growing and we, for one, will be keeping a close eye.

 

Conclusion

With sustainable investment at the forefront of many portfolio managers’ minds, investment managers are providing more opportunities for the environmentally conscious and companies with well-defined ESG (Environmental, Social, and Governance) investing policies. Blackrock recently made ESG a central part of its investment decision making process in order to try and better identify risks and opportunities.

In my view, by having an ESG strategy, companies could have access to c.$15 trillion (ACF estimate) during 2020 currently held in, or invested by, sustainable investments funds.

 




Anda Onu

Anda has worked with ACF for over 4 years and is part of ACF’s Sales & Strategy team. She has a degree in life sciences from Romania’s leading university, has worked in research labs and continues to volunteer on ecology projects in her spare time.

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