You know, for a long time now, there's been hope around nuclear fusion and its role in achieving sustainable clean energy, and recent breakthroughs in fusion energy development has only encouraged this optimism.

Yet while it appears fusion is on the right path to becoming a reality and will change the world in very prolific ways someday, I don't see that happening with any material impact until at least mid-century.

Then the question often posed by my clients is, ‘what can we do in the meantime to bridge where we sit today to a world being powered with clean and carbon-free power?’

I’m Todd Bowie, a former Navy nuclear engineer with a degree in chemistry and a member of our Energy and Natural Resources practice. Prior to consulting, I was part of the US Navy Energy Office, where I focused on developing renewable fuels, alternative energy, and energy efficiency programs. Now at Oliver Wyman, I consult companies on how they can define their business model to balance the energy trilemma, tackling issues around energy security, equity, and sustainability.

Given the stable supply of fuel for the US power grid, much of my conversation and focus tends to be on the latter two elements of the energy trilemma, ensuring that energy supply is affordable while helping to drive decarbonization.

When looking at the power ecosystem, it's segmented by power generation, transmission, and distribution. In the US, natural gas or fossil fuel makes up more than one third of the power generation, easily outweighing the use of renewable energy sources.

While many organizations are working towards net zero targets, the reality is that infrastructure currently isn't there to accommodate a full switch to renewable energy.

So, what can be done to lower today's emissions without compromising supply and therefore affordability of energy?

With nuclear fusion still a long way away from making any material difference, there are more mature options available to aid in emissions reduction, but their applications are not a one-size-fits-all solution.

Renewables — solar and wind power — are amongst obvious options, and we're seeing hydrogen emerge as a flexible clean fuel source for power plants as well. However, these renewable sources come with their own challenges. Upscaling hydrogen, for example, requires a number of infrastructure upgrades to transport, store, and burn this fuel in gas turbines, and at this point, the maximum amount of hydrogen that's been demonstrated is 44% after modifications. This does not even account for the need to develop blue and green hydrogen production facilities to supply sufficient amounts for new use cases, as the majority of hydrogen is consumed in industrial processes such as refining and fertilizer production.

It very well may mean that building out the production and transmission infrastructure necessary to burn a more expensive fuel, at least in blue hydrogen’s case, since it uses natural gas and carbon capture technology, does not make as much sense as alternative solutions.

What's more, the US has a number of gas burning power plants that still have more than half their useful life remaining and are critical to grid stability and reliability. Strictly replacing these assets with other types of generation, including potentially hydrogen compatible platforms, would be massively expensive to the tune of over $800 billion and require an enormous expansion of the manufacturing base. One alternative is to employ carbon capture technology, which offers the ability to drastically reduce emissions while using these assets through the end of their planned life.

Of course, we're now seeing regulations evolve to support businesses in funding such improvements. Take the Inflation Reduction Act or IRA, for instance. Various tax incentives that were previously only available to renewable power sources have now been expanded to focus on reducing emissions without favoring specific fuel types. Such incentives could provide up to between $25 and $40 per megawatt hour in incentives back to generators, making it much more economical to install carbon capture equipment.

The bottom line is that a multi-pronged approach is necessary for businesses to reach emissions reduction targets while ensuring energy affordability. While fusion could potentially enable the next generation of clean technology to power us in the back half of the century, a pragmatic solution to selecting the best power source options for specific situations will be necessary to ensure we can retain reliable and affordable power while decarbonizing today's energy sector.

I'm Todd Bowie, and this is my take on the path to power decarbonization.

This transcript has been edited for clarity