Accurate modeling is crucial to understand the energy system and make decisions that will fulfill decarbonization commitments. Unfortunately, prevailing modeling and policymaking is based on ‘Least Cost Generation Capacity Models’ that considers cost without feasibility. Terra Praxis is working with major energy users who have 2030 targets and are making multibillion dollar decisions now that must factor in risk and be optimized for feasibility within uncertainty. It’s not just a matter of if we do this or if we do that, but rather, what can we actually do, and how does that change when a policy, law, price, supply, or customer changes?
Fig. 1. Project Development Risk Factors
Fig. 2. Comparison of land area requirements for meeting current UK oil consumption from hydrogen, wind, solar, or advanced heat sources.
Terra Praxis’ report on Risks to the Energy Transition acknowledges the burgeoning demand for clean energy and identifies significant real-world constraints to delivering it:
Massive Demand: Energy generation and transmission capacity need to triple in the next 27 years.
Heat and Transportation: Infrastructure must be built for clean electricity generation and for growing industrial demand for reliable power, heat, and fuel (e.g., data centers, steel, cement, aviation fuel, shipping).
Land Constraints: There is a discrepancy in energy models between what is considered available land for projects and what is actually developable (see Fig. 1). The amount of land required for solar and renewables to replace current global oil consumption is non-viable. For example, just to replace the UK’s current oil and gas consumption with offshore wind energy would require 136,120 km2 (see Fig. 2).
Public Opposition: Opposition to renewable power projects is becoming more organized and frequent. As more land is converted for projects, land costs increase, projects are pushed further from transmission, capacity factors get worse, and public support declines.
Escalation of Project Costs & Risk: Project costs and risks are likely to escalate, and must be paid with risk capital, which is more expensive and harder to raise than assumed by models.
Logistics, Scale & Speed Required: The simultaneous build out of infrastructure in every country presents unprecedented logistical challenges. Climate models must accurately account for the time required to develop power and transmission projects, and the fact that investments will not start until transmission exists.
Terra Praxis has built a flexible, modular Industry Decarbonization Modeling Platform for analyzing the decarbonization of industry energy consumption (electricity and heat). It includes:
• Optimization of energy architectures at the level of the industry, sector, or country, under technological and policy constraints.
• Transition dynamics, including modeling the year-by-year evolution pathway of energy architectures, that highlight real-world constraints (i.e., delay between investment decisions and capacity deployment).
• Data on a range of technologies (e.g., heat storage, nuclear, renewables, heat pumps, carbon capture, etc.) that compete or synergize with one another.
• A foundational database of energy-intensive industries, including quantification of energy demand, current energy architectures, technology and innovation, compatibility with demand, and growth of industry sectors.
• Advanced methods and tools for modeling “deep uncertainty”, translating uncertainty into risks, and managing these risks.
• A library of visualization tools to facilitate analysis of highly multi-dimensional decarbonization pathways.
With our modeling method, we aim to radically shift climate change decision-making, empowering industries, policymakers, and investors alike.
The following Sankey diagrams produced by Terra Praxis represent the intensity of the yearly energy flows of an industrial site. The site modeled is a chloralkali facility, performing electrolysis of brine to produce chlorine, soda flakes and hydrogen. This site consumes electricity, mostly to power electrolyzers, and heat in the form of steam, which is used to dry soda.
In 2024, the site purchases all of its energy: electricity and natural gas. An on-site Combined Heat & Power (CHP) system burns natural gas to generate combined heat and power flows. The industrial site is subject to the availability of these energies and the volatility of their prices, and emits CO2, including CO2 associated with electricity purchased from the grid.
The following Sankey diagrams produced by Terra Praxis represent the intensity of the yearly energy flows of an industrial site. The site modeled is a chloralkali facility, performing electrolysis of brine to produce chlorine, soda flakes and hydrogen. This site consumes electricity, mostly to power electrolyzers, and heat in the form of steam, which is used to dry soda.
In 2034, the site has transitioned to producing energy on-site through small nuclear reactors. The reactors provide electricity (through the balance-of-plant) as well as heat. The industrial process is unchanged, but the energy supply is now secured, operates at a low marginal cost, and emits very little CO2.
Modeling and analyzing pathways for energy systems is not about an idealized future. It is about the present and the critical decisions that must be made today to ensure the feasibility of decarbonization."
Guillaume Krivtchik, Terra Praxis Senior Energy Modeler