Renewable energy vs. low-carbon solutions: What is the difference and how should energy companies invest?
Renewable energy is at the heart of the climate challenge, and key to the solution. It is energy that is available in abundance and replenished naturally. Compared to fossil fuels, renewable energy does not contribute to CO₂ emissions. Clean, sustainable energy is, however, not the same as low-carbon solutions, like carbon capture and storage (CCS) and electrification of oil and gas production, which prolong the life of oil and gas production and ensure the continuation of fossil fuel dependency. Let us explore this difference further.
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What is renewable energy?
Renewable energy is energy derived from natural sources. A key characteristic of renewable energy is that it can be replenished at a higher rate than it is consumed.
What are renewable energy sources?
Renewable energy sources are energy sources that do not emit CO₂ and can be used again and again. The most dominant sources to renewable energy are hydro power and solar and wind energy. In addition, geothermal energy, bio energy and ocean energy (wave, tidal, ocean thermal) are also sources to renewable energy. Compared to fossil fuels, renewable energy sources are plentiful, and it is not possible to run out of them. More importantly, when burned to produce energy, fossil fuels emits greenhouse gases and hence fuels the climate crisis. Renewable energy sources do not emit the same greenhouse gases and create far lower emissions compared to burning fossil fuels.
The promise of solar and wind energy
Solar and wind energy and other renewable energy sources create far lower emissions than burning fossil fuels. Coal, oil, and fossil (natural) gas are non-renewable sources of energy that cannot be replenished. They have existed and been formed over hundreds of millions of years, which means that we will inevitably run out of them. However, solar energy is something that we have in abundance, and the rate at which solar energy is intercepted by the earth is thousands of times greater than the rate at which we can consume it. Therefore, there is great potential for solar technology to supply us with heating, lighting, and electricity.
Similarly to solar energy, wind energy also holds great opportunities, even though the average wind speed varies by location. By using wind turbines either on land (onshore) or in the sea (offshore), it is possible to harness kinetic energy. Onshore and offshore wind energy are continuously explored, and advancing technologies are on the rise. There is much potential for regions all over the world to enable wind energy deployment, as the potential for wind energy exceeds the global electricity production.
The price of solar and wind energy have been slashed the last decade. According to The International Renewable Energy Agency (IRENA), around 86 per cent (187 gigawatts) of all the newly commissioned renewable capacity in 2022 had lower costs than fossil fuel-fired electricity.1
What are the negative impacts of renewable energy?
Although renewable energy does not emit greenhouse gases when consumed, renewable energy can also have a negative impact on nature. The most common effect is the impact that construction of for instance wind energy parks has on biodiversity. In Norway, onshore wind farms have seized untouched and red-listed nature. Namely, a wind farm has been built at Fosen, in Northern Norway, which violates the rights of indigenous people.
Also in Norway, one of the country's first solar parks is being planned in Ringsaker, and seizure of nature is emerging as a challenge. Solar parks require huge areas, and these are often overlapping with farmlands or forest. This puts extra pressure on the biodiversity that at many locations are already under pressure from roads, industry, houses or other construction.
When it comes to offshore wind power, natural values must also be taken into account. This applies both to vulnerable fauna, routes for migratory birds, and breeding areas for fish. When governments and industry plan renewable projects, considerations of the impact on nature and local people have to be at the forefront.
A large scale role out of renewable technologies will also require a lot of metals and minerals used in solar panels and in wind turbines. Naturally, this also comes with a nature and climate footprint. Hence, it's important to also focus efforts of reducing energy consumption, and using energy more efficiently.
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What are low-carbon solutions?
Low-carbon solutions are steps the fossil fuel industry is taking to reduce emissions from operations and products. It is a method for making the production of oil and gas cleaner, but without stopping the production. Equinor lists carbon capture and storage (CCS), blue hydrogen where fossil gas are converted to hydrogen and the CO2 is stored and electrification of oil and gas production as their low-carbon solutions. These measures all have in common that they reduce CO₂ emissions, but at the same time the fossil fuel industry argues that these measures allows for more oil and gas extraction.
List of low-carbon technologies:
- Carbon capture and storage (CCS)
- Blue hydrogen
- Electrification of oil and gas production
Carbon capture and storage (CCS)
Carbon capture and storage (CCS) is a technology that several fossil fuel companies use to capture CO₂ emissions that stem from production. Companies use it for electricity generation and industrial processes. The argument is that this can prevent CO₂ from entering the atmosphere and store it permanently underground. According to Equinor, by storing CO₂ and making sure that it does not escape into the atmosphere, CCS can contribute to reducing emissions and the effects of climate change.
However, there are many factors at play. It is a new technology with an uncertain future that has not been proven at commercial scale. By relying on CCS while continuing to develop new oil and gas fields, we are dependent on the technology succeeding. The risk is pushing the earth to its limits and postponing the hazardous effects of climate change to future generations. In addition, carbon capture and storage requires much energy to develop – energy that we are already at capacity with. There is no guarantee that the captured CO₂ will remain underground, and we need the means to ensure that it is maintained and stored permanently. In IEA's special report on the oil and gas industry's place in transition to a zero-emission society, the IEA concluded with the following: "The industry needs to commit to genuinely helping the world meet its energy needs and climate goals – which means letting go of the illusion that implausibly large amounts of carbon capture is the solution”. That is why CCS is a false solution and we need to instead focus investments on renewable energy.
Low-carbon solutions are not renewable energy, just fossil fuel dependency re-packaged
Low-carbon solutions are not the same as renewable energy. Whereas renewable energy is energy derived from renewable energy resources, which are abundant and replenished naturally, low-carbon solutions are technologies that decrease the hazardous effects of carbon dioxide. In essence, the latter is a method for oil and gas companies to frame their clean energy initiatives while still profiting from fossil fuel production. For instance, you would not need to electrify oil and gas platforms if there was no need to produce oil and gas.
Low-carbon solutions are often funded by carbon offsetting, which is a way for companies to compensate for their CO₂ emissions. Critics argue that it is greenwashing to spend time and capital on trading offsets and investing in low-carbon technologies, while still maintaining fossil fuel exploration and production.
Equinor’s renewable energy projects and investments
Equinor’s position is that as long as there is global demand for energy, the company will continue exploring for new oil and gas. Camilla Aamodt, Equinor’s strategy manager for exploration and production in Norway, argues that the energy transition is dependent on the «financial muscle», which can be achieved by the lucrative oil and gas production.2
Evidence shows that the energy transition is in fact hampered by relying on fossil fuel production, as capital, resources and workforce are tied up instead of supporting the growth in renewable energy. Even though Equinor points out that gas exploration in particular can enable new value chains, such as blue hydrogen development, the renewable energy projects are inevitably halted by continued fossil fuel exploration and production.
A shift away from fossil fuels towards clean, renewable energy is necessary
Equinor continues to spread a false narrative that the implementation of low-carbon solutions, like carbon capture and storage and electrification of oil and gas production, are equivalent to investment in and production of renewable energy. As demonstrated it is not the same, and does nothing to allow for a complete rehaul of the structure in the energy sector. The industry needs to follow and make sustainable investments that provide the capital and innovation to renewable energy technologies, rather than exploring new oil fields or developing low-carbon solutions that are dependent on fossil fuel production.
List of references:
- IRENA (2023) Renewables Competitiveness Accelerates, Despite Cost Inflation
- Equinor Magazine. Can we continue with oil and gas?