Synergising circular economy and clean energy for sustainable transition

Transitioning to a circular economy is a vital strategy and even a survival necessity to address the challenges of climate change, resource depletion, and biodiversity loss.

A circular economy represents a transformative approach to economic development that prioritises resource efficiency, waste minimisation, and environmental regeneration, unlike the traditional linear economic model, which relies on a “take, make, dispose” approach. Transitioning to a circular economy is a vital and necessary strategy for survival to meet the challenges of climate change, resource depletion, and biodiversity loss. This is especially true in developing countries like India, where growing public expectations and industrial expansion place immense pressure on natural resources.

Advanced economies are aiming to decarbonise by 2050 and India by 2070. The power sector will play a key role in this journey. Adopting the principles of a circular economy in renewable energy integration is crucial for sustainable growth. Traditional fossil-based power generation operating on the Rankine cycle achieves a low efficiency of 30-35 percent while significantly harming the environment. Fossil fuel extraction leads to landscape degradation and biodiversity loss, while mining activities and greenhouse gas emissions contribute to severe pollution. Additionally, the poor quality of coal, characterised by high ash content, results in contamination and complex disposal challenges. However, these environmental and operational issues also offer significant opportunities to implement circular economy principles, promoting sustainable practices and resource efficiency.

Application of circular economy in energy transition

The circular economy is based on three core principles, i.e., designing out waste and pollution by considering sustainability at the design stage, keeping materials in use through reuse and recycling to extend their life and value and regenerating natural ecosystems to achieve a net positive environmental impact.

The power sector plays a pivotal role in advancing the circular economy through several key areas. Renewable energy generation is crucial to achieving net-zero emissions by 2050, requiring the equivalent of the world’s largest solar farm to be added daily. By shifting to renewable sources and applying circular principles, reliance on finite resources and carbon emissions can be reduced. For instance, Spain’s wind farms recycle old turbine blades into construction materials, minimising waste. Grid expansion efforts benefit from circularity by optimising material use and lowering associated costs.

Additionally, closed-loop systems such as Waste-to-Energy (W2E) plants and recycling materials from end-of-life solar panels, wind turbines and batteries enhance sustainability. Sweden’s W2E systems convert 99 percent of household waste into energy, reducing landfill use. Ultimately, integrating circular economy principles into clean energy generation minimises environmental impact and creates new business opportunities in asset recycling. 

Benefits of circular economy in the power sector

The circular economy aims to achieve the triple bottom line of sustainability—people, planet, and profit. Achieving financial results (profit) through efficiency and performance need not be at odds with the goal of serving customers (people) and acting responsibly towards our environment (planet).

Circular economy principles offer significant environmental, economic, and social benefits in the power sector. Material reuse and waste minimisation reduce greenhouse gas emissions and decrease reliance on resource extraction, preserving natural ecosystems. Compliance with environmental regulations becomes more cost-effective.

On the economic front, asset recycling exemplifies innovation, such as using second-hand batteries to store daytime energy, powering the stadium for evening games, and even supporting the local grid. Cost optimisation is achieved through efficient asset and energy management. During the COVID pandemic and geopolitical disruptions, a leading US utility implemented the recycling and reuse of end-of-life transformers and critical components, reducing dependence on imports and fostering local employment.

Forming alliances for sharing critical spares further enhanced supply chain resilience. Socially, circular practices bolster energy security by promoting domestic manufacturing and establishing a robust market for refurbished equipment and spare parts. This approach lowers maintenance expenses, controls emissions, and defers capital expenditures, resulting in cost savings for consumers.

Moreover, adopting circularity stimulates job creation and new business opportunities, fostering economic growth within communities. By integrating circular economy principles, the power sector can achieve a more sustainable, resilient, and equitable energy landscape.

Strategy to accelerate circular economy in energy transition

A multi-pronged strategy is needed to accelerate the circular economy in clean energy transition. Integrating a circular economy in the renewable energy sector offers significant benefits by reducing project costs and emissions through recycling and reusing materials from ageing plants. Effective policy frameworks, including tax incentives, can promote these practices, minimising waste and fostering sustainable development. Public-private partnerships play a crucial role in driving innovation and ensuring shared accountability. Raising public awareness can also encourage the wider adoption of circular principles among communities and organisations.

However, challenges persist, including inadequate recycling infrastructure in many regions, inconsistent policies, and limited incentives to support circular practices. The scarcity of recycling facilities and sustainable sourcing further hampers progress, exacerbated by an unstructured market for recyclable materials. Successful integration requires robust collaboration among government bodies, industries, academia, and communities to build a resilient circular economy during the clean energy transition.

Challenges and risks of integrating circular economy

Integrating a circular economy in the power sector faces challenges, including inadequate recycling infrastructure in many regions and inconsistent policies and incentives. Sustainable sourcing of recyclable materials is limited, and the absence of a stable market structure further hinders progress. Additionally, successful implementation requires strong collaboration among government bodies, industries, research institutions, academia and communities. Addressing these barriers through coordinated efforts and supportive policies is essential for advancing circular practices and achieving a sustainable energy transition.

Case studies and best practices

While the path to achieving a circular economy is fraught with roadblocks, several encouraging innovations are happening all over the world, for example: 

Circular economy in battery energy storage system

East Penn Manufacturing, one of the largest lead battery manufacturers in the world, has applied circularity in the design and manufacture of lead-acid batteries in a way that consumes fewer resources. It developed a process for recycling the acid in used batteries for reuse in new batteries. Also, the industrial wastewater from its manufacturing plant is fully recycled with zero liquid discharge to promote energy and water conservation. 

Circular economy for grid decarbonisation

ENEL, Italy, promotes a circular economy as a grid decarbonisation strategy to increase resilience in the end use of electricity. It has developed a solar photovoltaic park that uses recycled batteries from electric vehicles (EVs) with a storage capacity of 10 MWh to support the local grid. When the grid is overloaded or under shutdown, the energy storage system of recycled batteries supplies power to the local community. ENEL group is also setting up Italy’s first large lithium battery recycling plant, which can recycle 10,000 tons of batteries annually to promote a circular economy.  

Circular economy in Waste-to-Energy conversion

Reliance Industries Limited (RIL) has implemented a circular economy model by repurposing plastic waste. It has set up a Waste-to-Energy plant that converts plastic waste into fuel to power the company’s manufacturing plants. This project minimises waste and reduces the need for fossil fuels.

Conclusion

So, one can say that the circular economy plays a pivotal role in clean energy transition by minimising the depletion of earth’s resources, promoting optimum utilisation and waste minimisation. Reusing materials from decommissioned RE assets, e.g. wind turbine blades, solar panels and batteries, reduces adverse environmental impact. It also stimulates economic growth by creating new jobs in the recycling and refurbishment industry. It encourages the design of products with longer lifespans and higher efficiency, reducing energy consumption and costs, encouraging local production and resource optimisation, and making the community self-reliant and resilient to economic shocks. It provides a vital pathway to achieving energy transition and sustainability. By embracing renewable energy and adopting circularity, the energy sector can significantly reduce environmental risks and drive economic growth.

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Authored by:

K Ramakrishnan, Chief Advisor and Mentor at EnTruist Power

Soubhagya Parija, Senior Principal Consultant (ERM) at EnTruist Power

Jayant Sinha, Senior Principal Consultant (E&U) at EnTruist Power