The COP26 climate conference held in November 2021 reiterated the need to reduce global greenhouse gas emissions to net zero by 2050, and to stop the average global temperature from rising above 1.5 degrees compared to pre-industrial levels.  

Unfortunately, few people are convinced that that we will meet that target.  Greta Thunburg dismissed the politicians for doing nothing more than saying “bla bla bla” and analysis of the various pledges suggest that a minimum increase of 2.4 degrees above pre-industrial levels is almost a certainty, bringing with it serious climate problems.  

There is no doubt, the task ahead is huge.  But there is good news,  thanks to an emerging technical convergence which is unifying the power sector, transport sector and agriculture sector into one mega electricity sector that feeds off itself, driving down costs for all.  This article explains this convergence. 

Power and transport 

About fifty percent of greenhouse gas emissions come from the power sector, to produce electricity, and from the transportation sector, to move goods and people around.  Thanks to renewables and battery electric vehicles, there is now a very clear path to being vaguely close to net zero for both those sectors.  Globally, more solar and wind energy systems are being installed than fossil fuel based systems and the major car manufacturers are releasing battery electric vehicles that appeal to the mass market.   Demand outstrips supply. More needs to be done. To accelerate this development, governments have to make planning permission and grid connections easier for solar and wind farms and for electric charging stations for vehicles.  Stopping subsidies to fossil fuel companies and switching those subsidies to renewables and battery electric vehicles would also help.  

Steel and cement

The bad news is that the remaining fifty percent of emissions come from the steel, cement and agricultural sectors.  These are much harder to reduce. 

The first two amount to about 18% of global emissions. Steel uses coal to improve purity levels and cement produces CO2 as a by-product in its actual manufacture.  It is hard to get away from producing CO2.  

Agriculture 

Agriculture and food production, which amounts to about 30% of greenhouse gas emissions, are also very hard to decarbonise.  There are two main sources of greenhouse gas emissions in agriculture.  

The first is methane, which is predominantly emitted from the digestive systems of ruminants such as cows and sheep, and from manure.  Methane is a potent greenhouse gas and captures 28 times more heat than carbon dioxide.  

The second source is nitrous oxide, which comes from changes in the soil due to deforestation and crop production.  Nitrous oxide is an even worse greenhouse gas and captures 298 times more heat than carbon dioxide.  

If you look at the sources of emissions in the agriculture and food production sector in more detail you can see that about half comes from deforestation and growing plants for human and animal consumption.  

About a third comes from belching ruminants, land based fish farms and manure.  Finally, about twenty percent comes from the food supply chain, which includes processing, packing, transport and retail outlets. 

There are some relatively easy wins.  For example, stopping eating anything associated with ruminants would help, a lot.  This means taking lamb and beef off the menu and also stopping eating dairy products. If you feel the need to eat meat, chicken and pork are significantly better alternatives, from a greenhouse gas perspective. 

The supply chain could be tightened up, but it will be hard.  Transport, which could be electrified to a major extent, only represents 6% of agriculture emissions.  The remaining 14% is harder to cut. 

So what about the fifty odd percent from deforestation and land use for growing plants?  Given the fact that the global population is increasing and global warming will make farming harder, due to droughts and irregular rainfall, it would suggest that even more deforestation is likely in order to keep up with demand.  That would, in turn, contribute to more nitrous oxide emissions, not less.

Vertical farming to the rescue, eventually

There might be a “get out of jail card”, however;  vertical farming.  Vertical farming is incredibly efficient when it comes to land use.  A four acre vertical farm building can produce the same amount of food as 1,000 acres of conventional farm land. This is due to the fact that vertical farms grow food on multiple levels and they can produce more harvests per year as they are always in the peak growing “season”, with the same amount of light, water and nutrients 365 days per year.  

Vertical farming is also extremely efficient when it comes to water use and typically uses about 3-4% of the water of a conventional farm.  This is because the water is on a closed loop and any water that is not used is simply captured and recycled to be used again.  This makes vertical farming particularly attractive in areas where conventional farming would be near impossible, such as in very arid parts of North Africa and the Middle East.  

There are two additional environmental benefits to vertical farming.  The first is that they do not need pesticides, insecticides and fungicides which can then drift off the farm and into non farming areas, causing problems with wildlife.  Second, unlike conventional farming, it does not release huge amounts of nitrates into the water courses.  Excessive nitrate release creates algae blooms in rivers which eventually drift out to sea, causing large dead zones where fish cannot survive.  

So vertical farming is attractive.  But could we grow rice, wheat and soy in vertical farms at a price point that is competitive with field grown crops? 

The answer, today, is no.  Not a hope.  

Vertical farms are relatively new and most existing farms are only able to sell salads and herbs at a premium to field grown crops.  They would need to improve their economics by a factor of about 100 in order to grow rice, wheat and soy.  

Why vertical farming economics will improve 

But improving the economics of vertical farming by a factor of 100 is actually a realistic target.  If you take the production costs of a modern vertical farm and split it into 100 units, 80 units comes from electricity, which is predominantly consumed by LED lights, 15 units comes from labour and 5 units comes from everything else, including water, seeds and nutrients.  

The good news is that a significant drop in the electrical cost is possible by reducing the purchase price of electricity and improving the efficiency of the lights.  

In the UK, the average price of grid electricity is around 12-16 pence per kilowatt hour.  In sunny parts of the world it is possible to generate electricity from solar farms using private wires, bypassing grid costs, at around 1.5 pence per kilowatt hour.  Over the next ten to fifteen years, as solar and wind become even more efficient, that cost will go to below 1 pence per kilowatt hour in sunny and windy areas and will drop to less than 3 pence per kilowatt hour in places such as the UK.   So you can see how that 80 units of cost related to electricity could drop to less than 8 units of cost, over time. 

The second component of the electricity cost is the consumption of electricity.  LED lights for vertical farms are a relatively niche market, compared to LED lights for regular lighting needs in homes and businesses.  As a result, they are more expensive to buy and are less efficient.  The most advanced LED lights can be found in mobile phone displays.  They have millions of LEDs which are both very bright and consume very little power. Changes in the overall LED market trickle down into the vertical farming LED market.  For example, the cost of buying LED lights for vertical farms has dropped by a factor of 6 in the last three years.  The light output has increased by more than 70% and the efficiency has improved by 33%.  If you were to just look at the efficiency improvement you could estimate that in ten years that 80 units of cost related  electricity could drop to less than 8 units of cost.  That reduction, combined with renewables means that the overall cost for electricity could go from 80 units to less than 1 unit in ten years.  This would bring the overall cost of vertical farming from 100 units to 21 units. 

The next major cost for a vertical farm is labour.  Here too you can see the benefits of scale and efficiency.  Farm 1, owned by Fischer Farms, a UK based vertical farming company, needs 3 growers for 3,200m2 of growing space.  The company’s second farm, which is under construction, needs 7 growers for 25,000m2 of growing space.  The extension to the second farm will see the farm increase to 10 growers for 50,000m2 of growing space.  That is a 4.7x improvement in efficiency, taking that 15 units of cost down to 3.2 units of cost.  Over the next ten years the efficiency will improve further, making it possible to drive this cost down to less than 1 unit of cost.   This would mean that the overall cost would drop from 100 units to 7 units, assuming no improvement in water efficiency, seed and nutrient costs. 

The final key driver for improving vertical farm economics is by improving yields.  Over the past two years Fischer Farms has increased the yield of some of its crops by a factor of five, using the same seeds.  It has done this by creating a climate that is more and more perfect for growing crops. In this new Eden, crops have everything they want.  The perfect light, the perfect water, the perfect air speed, the perfect nutrients.  There is a lot more that can be done and it is plausible that over the next ten years yields could improve by a factor of ten.   

Multiply the cost and yield improvements to each other and you can see the economics of vertical farming improving by a factor of 100 in a ten to fifteen year period.  

Convergence, a mega electricity sector of power, transport and agriculture

What is happening is a really fascinating piece of convergence. Historically the transport sector, which used oil to produce petrol and diesel, and the energy sector, which used coal and natural gas to produce electricity were completely separate.  This is changing.  The transport sector is being electrified.  Cars have batteries which can be charged using electricity.  Renewables generate electricity directly from the wind or the sun and are increasingly using batteries to help manage their intermittent nature.  The more people buy electric cars the larger the battery market gets.  This, in turn drives down the cost of batteries for energy storage for the electricity sector.  The more batteries there are for the electricity sector the cheaper batteries will be for cars.  Both sectors reinforce each other.  

Vertical farms link the agriculture sector to the new transport and power sector. Cheap batteries and renewables make vertical farming cheaper.  This expands the market for vertical farming which, in turn, create more demand for renewables and batteries, which makes those costs lower for vertical farming.  Round and round it goes. 

All three sectors, representing about 80% of global greenhouse gas emissions, are starting to converge.  This is exciting. The question is whether it will converge fast enough to meet the 1.5 degrees target set at COP26 in 2021.