The role of the price of CO2 in the Energy transition

The role of the price of CO2 in the Energy transition
19 Dec 2018

Putting a price on carbon is an important step, and many in the private sector firmly believe which governments must go in that way to effectively approach climate change – The World Bank

What price must have the CO2 gas to leave out?

Last October 2018 we saw how coal and gas combined cycle acted in support of Spanish electrical system. The funny thing is that this has been going on in recent years. But, according to the government’s plans, this situation may end because, as we know, coal has its days numbered and the gas will be increasingly penalized by the increase in the price of CO2 emissions.

spanish-energy-mixIn December 2018, the UN in its Environment section published the annual disparity report on global emissions, in which 3 scenarios are proposed based on global warming objectives: less than 1.5ºC, 1.8ºC and 2ºC. In addition, the UN talks about urgent and unprecedented measures if we want this to not get out of hand.

On the other hand, the trend of global warming in the period 2014-2017 has been stagnant, being alarmed the increase experienced in this 2018. With these data, it is stated that only 40% of the countries will have achieved their emissions targets in 2020. This report talks of 3 fronts to mitigate the adverse data: effective policies on renewable, efficient transport and forestry.

Instead the study reveals that only 10% of the CO2 emitted globally is penalized with a tax effective enough to encourage not issued. Therefore, in order to achieve the goal of less than 2ºC of global warming, it is estimated that the value of the penalty is between 34-68 € / Ton CO2.

co2-price-increasing

Remember than 1 GWh produced with natural gas emits 202 Ton CO2, more than double if we do with coal. Doing accounts, and knowing the current competitiveness of the gas compared to other ways of generating, we can advance that in penalization ranges above 70 € / Ton CO2, it would not be profitable to generate electricity. Therefore, it is very possible that these plants had to be transformed to renewable gas, such as hydrogen.

In conclusion, I would like us to reflect on these data and we answer these questions. Without policies of penalization to the polluting technologies, a country like Spain will be able to realize a real energetic transition? Did you know the CO2 market and how it works? Do you see it right?

I invite you to leave comments.

Thank you!

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Juan Carlos García Abril
Juan Carlos García Abril

Socio fundador de Letter Ingenieros y actual Director Ejecutivo. Ingeniero experto en Eficiencia Energética con más de 10 años de experiencia. Apasionado de la programación y siempre luchando por cuidar un poco de nuestro medio ambiente para que puedan disfrutarlo nuestros hijos en un futuro... Founding partner of Letter Ingenieros and current Chief Technology Officer. Energy Efficiency expert engineer with over 10 years of experience. Passionate about programming and always struggling to take care of our environment so that our children can enjoy it in the future ...

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