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Energy trends and technologies
for the coming decades
Steven E. Koonin
March 2007
key drivers of the energy future
• GDP & pop. growth
• urbanisation
• demand mgmt.
Demand Growth
Supply Challenges
Technology and
policy
Environmental
Impacts
Security
of Supply
energy use grows with economic development
energy demand and GDP per capita (1980-2004)
400
US
Primary Energy per capita (GJ)
350
300
Australia
250
Russia
France
Japan
UK
200
S. Korea
Ireland
150
100
50
Malaysia
Mexico
China
0
0
India
Greece
Brazil
5,000
10,000
15,000
20,000
25,000
GDP per capita (PPP, $2000)
Source: UN and DOE EIA
Russia data 1992-2004 only
30,000
35,000
40,000
demographic transformations
world population
10
8
6
4
2
0
1750
1800
1850
1900
1950
1998
2050
2003
N-America
Oceania
N-America
2050
Oceania
Africa
Africa
S-America
S-America
Europe
Europe
8.9
billion
6.3
billion
Asia
source: United Nations
Asia
energy demand – growth projections
Global energy demand is projected to increase by just over one-half between
now and 2030 – an average annual rate of 1.6%. Over 70% of this increased
demand comes from developing countries
Energy Demand (Mtoe)
18,000
Global Energy Demand Growth by Region (1971-2030)
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
1971
OECD
1990
2004
Transition Economies
Notes: 1. OECD refers to North America, W. Europe, Japan, Korea, Australia and NZ
2. Transition Economies refers to FSU and Eastern European nations
3. Developing Countries is all other nations including China, India etc.
2015
2030
Developing Countries
Source: IEA World Energy Outlook
2006
annual primary energy demand 1971-2003
Source IEA, 2004 (Excludes biomass)
growing energy demand is projected
Global Energy Demand Growth by Sector (1971-2030)
130
120
Energy Demand (bnboe)
110
100
90
80
70
60
50
40
30
20
10
0
1971
Key:
2002
- transport
- power
2030
- industry
Notes: 1. Power includes heat generated at power plants
2. Other sectors includes residential, agricultural and service
- other sectors
Source: IEA WEO 2004
energy efficiency and conservation
•
Demand depends upon more than GDP
− Multiple factors - geography, climate, demographics, urban planning,
economic mix, technology choices, policy
− For example, US per capita transport energy is > 3 times Japan
•
Efficiency through technology is about paying today vs tomorrow
− Must be cost effective to be attractive
− May not reduce demand through misuse or in supply-limited situations
US Autos (1990-2001)
Net Miles per Gallon:
- engine efficiency:
- weight/performance:
Annual Miles Driven:
Annual Fuel Consumption:
+4.6%
+23.0%
-18.4%
+16%
+11%
key drivers of the energy future
• GDP & pop. growth
• urbanisation
• demand mgmt.
Demand
Growth
Supply
Challenges
Technology
and policy
Environmental
Constraints
Security
of Supply
• significant resources
• non-conventionals
US energy supply since 1850
100%
90%
80%
Renewables
Nuclear
Gas
Oil
Hydro
Coal
Wood
70%
60%
50%
40%
30%
20%
10%
0%
1850
1880
1910
1940
1970
2000
Source: EIA
global primary energy sources
50%
Nuclear
Hydro
45%
6.3%
6.0%
40%
36.4%
Coal
Oil
27.8%
Oil
35%
Coal
30%
25%
20%
23.5%
15%
Natural gas
10%
5%
0%
Gas
Hydro
Nuclear
1970 1975 1980 1985 1990 1995 2000 2005
global energy supply & demand
(total = 186 Mboe/d)
Nuclear
14Mboe/d
14
Power Generation
Industry
Renewables
5
5Mboe/d
Biomass
2
76Mboe/d
33
45Mboe/d
3
Buildings
8
23Mboe/d
17
Coal
16
10
2
43Mboe/d
Gas
12
6
1
11
56Mboe/d
10
38Mboe/d
Transportation
1
Oil
35
63Mboe/d
Source: World Energy Outlook 2004
37Mboe/d
global energy supply & demand
(total = 186 Mboe/d)
Nuclear
14Mboe/d
14
Industry
Power Generation
11
Renewables
5
5Mboe/d
Biomass
2
45Mboe/d
76Mboe/d
33
3
16
8
23Mboe/d
Buildings
17
Coal
16
10
2
43Mboe/d
Gas
12
6
1
11
56Mboe/d
10
38Mboe/d
Transportation
1
Oil
35
63Mboe/d
Source: World Energy Outlook 2004
37Mboe/d
BAU projection of primary energy sources
’04 – ’30 Annual
Growth Rate (%)
M toe
18,000
16,000
14,000
12,000
10,000
Other
Renew ables
6.5
Biomass &
w aste
1.3
Hydro
2.0
Nuclear
0.7
Gas
2.0
Oil
1.3
Coal
1.8
8,000
6,000
4,000
2,000
0
1980
2004
2010
2015
2030
Total
1.6
Note: ‘Other renewables’ include
geothermal, solar, wind, tide and
wave energy for electricity generation
Source: IEA World Energy Outlook 2006 (Reference Case)
substantial global fossil resources
6,000
Reserves & Resources (bnboe)
Yet to Find
5,000
4,000
Unconventional
3,000
Unconventional
Proven
2,000
Yet to Find
Yet to Find
1,000
Proven
R/P Ratio
41 yrs.
Proven
R/P Ratio
67 yrs.
0
Oil
Gas
Coal
Source: World Energy Assessment 2001, HIS, WoodMackenzie, BP Stat Review 2005, BP estimates
R/P Ratio
164 yrs.
oil supply and cost curve
Availability of oil resources as a function of economic price
Source: IEA (2005)
key drivers of the energy future
• GDP & pop. growth
• urbanisation
• demand mgmt.
Demand
Growth
Supply
Challenges
• significant resources
• non-conventionals
Technology
and policy
Environmental
Impacts
Security
of Supply
• dislocation of
resources
• import dependence
significant hydrocarbon resource potential
800
600
400
800
Gas
200
0
Gas
Resource Potential (bnboe)
Oil
Coal
1200
South America
1000
800
600
400
Coal
400
200
0
Oil
Gas
Coal
800
600
400
1200
200
Asia
Pacific
1000
0
Gas
Coal
Africa
600
600
Middle East
1000
1000
800
800
1200
Oil
1200
800
600
400
200
0
Oil
400
Gas
Coal
200
0
Oil
200
Gas
FSU
1000
400
Resource Potential (bnboe)
0
Europe
600
Oil
200
Gas
Coal
0
Oil
Source: BP Data
1200
1000
Resource Potential (bnboe)
1000
1200
Resource Potential (bnboe)
Resource Potential (bnboe)
North America
1200
Resource Potential (bnboe)
Resource Potential (bnboe)
Oil, Gas and Coal Resources by Region (bnboe)
Gas
Coal
Key:
- conventional oil
- gas
- unconventional oil
- coal
dislocation of fossil fuel supply & demand
3 Largets Energy M arkets
(N.America + Europe + Asia Pacific)
ROW
12%
22%
35%
39%
85%
90%
88%
78%
65%
61%
15%
10%
Consumption
Reserves
OIL
Source: BP Statistical Review 2006
Consumption
GAS
Reserves
Consumption
COAL
Reserves
key drivers of the energy future
• GDP & pop. growth
• urbanisation
• demand mgmt.
Demand
Growth
Supply
Challenges
• significant resources
• non-conventionals
Technology
and policy
• local pollution
• climate change
Environmental
Impacts
Security
of Supply
• dislocation of resources
• import dependence
climate change and CO2 emissions
-
CO2 concentration is rising due to fossil fuel use
-
The global temperature is increasing
-
-
-
-
other indicators of climate change
There is a plausible causal connection
-
but ~1% effect in a complex, noisy system
-
scientific case is complicated by natural
variability, ill-understood forcings
Impacts of higher CO2 are uncertain
-
~ 2X pre-industrial is a widely discussed
stabilization target (550 ppm)
-
Reached by 2050 under BAU
Precautionary action is warranted
-
What could the world do?
-
Will we do it?
crucial facts about CO2 science
• The earth absorbs anthropogenic CO2 at a limited rate
− Emissions would have to drop to about half of their current value by the
end of this century to stabilize atmospheric concentration at 550 ppm
− This in the face of a doubling of energy demand in the next 50 years
(1.5% per year emissions growth)
• The lifetime of CO2 in the atmosphere is ~ 1000 years
− The atmosphere will accumulate emissions during the 21st Century
− Near-term emissions growth can be offset by greater long-term
reductions
− Modest emissions reductions only delay the growth of concentration
(20% emissions reduction buys 15 years)
some stabilization scenarios
Emissions
Concentration
social barriers to meaningful emissions
reductions
•
Climate threat is intangible and diffuse; can be obscured
by natural variability
− contrast ozone, air pollution
•
Energy is at the heart of economic activity
•
CO2 timescales are poorly matched to the political
process
− Buildup and lifetime are centennial scale
− Energy infrastructure takes decades to replace
− Power plants being planned now will be emitting in
2050
− Autos last 20 years; buildings 100 years
− Political cycle is ~6 years; news cycle ~1 day
•
There will be inevitable distractions
− a few years of cooling
− economic downturns
− unforeseen expenses (e.g., Iraq, tsunamis, …)
•
Emissions, economics, and the priority of the threat vary
greatly around the world
CO2 emissions and GDP per capita (1980-2004)
CO2 emissions per capita (tCO2 )
25
US
20
Australia
15
Ireland
Russia
10
UK
S. Korea
Japan
Malaysia
5
France
Greece
China
Mexico
India
0
0
Brazil
5,000
10,000
15,000
20,000
25,000
GDP per capita (PPP, $2000)
Source: UN and DOE EIA
Russia data 1992-2004 only
30,000
35,000
40,000
implications of emissions heterogeneities
•
21st Century emissions from the Developing World (DW) will be more important than those from
the Industrialized World (IW)
− DW emissions growing at 2.8% vs IW growing at 1.2%
− DW will surpass IW during 2015 - 2025
DW
E
IW
t
•
Sobering facts
− When DW ~ IW, each 10% reduction in IW emissions is compensated by < 4 years of
DW growth
− If China’s (or India’s) per capita emissions were those of Japan, global emissions would
be 40% higher
•
Reducing emissions is an enormous, complex challenge; technology development
will play a central role
CO2 emissions and Energy per capita (1980-2004)
Emissions and Energy 1980-2004
USA
UK
25.00
CO2 per capita (tonnes)
Coal
France
Japan
Oil
20.00
Gas
China
Brazil
Ireland
15.00
Mexico
Malaysia
10.00
S. Korea
Greece
5.00
India
Current
global
average
0.00
0
Source: UN and DOE EIA
Russia data 1992-2004 only
100
200
Australia
Russia
300
Primary energy per capita (Gj)
400
Thailand
greenhouse gas emissions in 2000 by source
Source: Stern Review, from data drawn from World Resources Institute Climate Analysis Indicators Tool (CAIT) on-line database version 3.0
historical and projected GHG emissions by
sector
Source: Stern Review from WRI (2006), IEA (in press),
IEA (2006), EPA (forthcoming), Houghton (2005).
key drivers of the energy future
• GDP & pop. growth
• urbanisation
• demand mgmt.
Demand
Growth
Supply
Challenges
• significant resources
• non-conventionals
Technology
and policy
• local pollution
• climate change
Environmental
Impacts
Security
of Supply
• import dependence
• competition
some energy technologies
Primary Energy
Sources:
Extraction & Conversion
Technologies:
End Use
Technologies:
•Light Crude
•Heavy Oil
•Tar Sands
•Wet gas
•CBM
•Tight gas
•Nuclear
•Coal
•Solar
•Wind
•Biomass
•Hydro
•Geothermal
•Exploration
•Deeper water
•Arctic
•LNG
•Refining
•Differentiated fuels
•Advantaged chemicals
•Gasification
•Syngas conversion
•Power generation
• Photovoltaics
•Bio-enzyimatics
•H2 production & distribution
•CO2 capture & storage
•ICEs
•Adv. Batteries
•Hybridisation
•Fuel cells
•Hydrogen storage
•Gas turbines
•Building efficiency
•Urban infrastructure
•Systems design
• Other efficiency
technologies
•Appliances
•Retail technologies
There are no “silver bullets”
But some have a larger calibre than others !
evaluating energy technology options
• Current technology status and plausible technical headroom
• Budgets for the three E’s:
− Economic (cost relative to other options)
− Energy (output how many times greater than input)
− Emissions (pollution and CO2; operations and capital)
• Materiality (at least 1TW = 5% of 2050 BAU energy demand)
• Other costs - reliability, intermittency etc.
• Social and political acceptability
we also must know what problem we are trying to solve!
two key energy considerations
– security & climate
Carbon Free
H2 for
Transport
High
Capture &
Storage
Concern over Future
Availability of Oil and Gas
CTL
Conv.
Biofuels
Hybrids
Capture &
Storage
Heavy
Oil
GTL
Adv.
Biofuels
Vehicle Efficiency
(e.g. light weighting)
C&S
Arctic
Ultra
Deep
Water
Enhanced
Recovery
CNG
Dieselisation
Key:
- supply side options
- demand side options
Low
Low
Concern relating to Threat
of Climate Change
High
the fungibility of carbon
Primary Carbon
Source
Syngas Step
Conversion Technology
Syngas to Liquids (GTL) Process
Natural
Gas
Diesel
Coal
Naphtha
Lubes
Syngas to Chemicals Technologies
Methanol
Syngas
(CO + H2)
Hydrogen
Biomass
Others (e.g. mixed alclohols, DME)
Extra
Heavy
Oil
Syngas to Power
Combined Cycle Power Generation
Fossil
So
W
oo y
dp
ulp
W
Ed
he
ib
at
le
fa
ts
M
ea /o ils
t /P
ou
l tr
y
Bi
Co
om
t
as ton
Bi
om
s
as tod
ay
sp
ot
en
tia
l
200
Co
rn
Pa
pe
r
700
Ls
Fuel
NG
as
ol
ine
Di
es
el
Na Coa
tu
l
O
ra
th
lg
er
as
pe
tro
leu
m
G
Annual US Carbon (Mt C)
what carbon “beyond petroleum”?
Agriculture
Biomass
↑1000
600
500
400
300
15% of Transportation
Fuels
100
0
as
ol
ine
Di
es
el
2000
500
Na Co
al
t
O
th ura
er
l
pe gas
tro
leu
m
NG
Ls
Co
rn
Pa
pe
r
W Soy
oo
dp
ulp
W
he
at
Ed
i b Ric
le
fa e
ts
M
ea /o ils
t /P
ou
l tr
y
Bi
C
om ot
to
Bi
a
om s s n
as tod
s p ay
ot
en
tia
l
G
Annual World Carbon (Mt C)
what carbon “beyond petroleum”?
Fuel
Fossil
Agriculture
Biomass
↑5300
↑
1500
1000
15% of Transportation
Fuels
0
Big!
biofuels today
Food Crops for Energy
• 2% of transportation pool
• (Mostly) Use with existing
infrastructure & vehicles
• Growing support worldwide
• Conversion of food crops into
ethanol or biodiesel
− US Corn ethanol economic for
oil > $45 /bbl
− Brazilian sugarcane economic
for oil > $22/bbl
Flex Fuel Offers in Brazil
key questions about biofuels
• Costs
− Biofuel production costs
− Infrastructure & vehicle costs
• Materiality
− Is there sufficient land after food needs?
− Are plant yields sufficiently high?
• Environmental sustainability
− Field-to-tank CO2 emissions relative to business as usual?
− Agricultural practice – water, nitrogen, ecosystem diversity and robustness,
sustainability, food impact
• Energy balance
− More energy out than in?
− Does it matter?
corn ethanol is sub-optimal
• Production does not scale to material impact
− 20% of US corn production in 2006 (vs. 6% in 2000) was used to make
ethanol displacing ~2.5% of petrol use
− 17% of US corn production was exported in 2006
• The energy and environmental benefits are limited
− To make 1 MJ of corn ethanol requires 0.9 MJ of other energy
(0.4 MJ coal, 0.3 MJ gas, 0.04 MJ of nuclear/hydro, 0.05 MJ crude)
− Net CO2 emission of corn ethanol ~18% less than petrol
• Ethanol is not an optimal fuel molecule
− Energy density, water, corrosive,…
• There is tremendous scope to improve (energy, economics, emissions)
optimizing biofuels requires fusing the
petroleum and agricultural value chains
Petroleum Value Chain:
Transport
Refining
Blending
Cultivation
Harvest
Process
Distribution
Germplasm
Cultivation
Harvest/
Transport
•Species
•Yield / Morphology
/ Development
•Chemistry
•Unnatural products
•Stress tolerance
• / Bio-overhead
•Safety
•Tillage
•Planting
•Fertilizer
•Water
•Pest control
•Crop rotation
•Sustainability
Exploration
Production
Agricultural Value Chain:
Germplasm
Biofuels Value Chain:
•Optimal catchment
•In-field processing
(e.g., pelletizing)
•Transport energetics
•Storage
•Waste utilization
Processing
•Cellulose (bugs/
enzymes/ chems)
•Microbial engineering
•Plant integration
/ optimization
•Co-products
•Role of gasification
A real fuel
•Blends
•Additives
•Distribution
•Engine mods
BP Energy Biosciences Institute to pursue
these opportunities
• Dedicated research organization to explore application of
biology and biotechnology to energy issues
• Sited at University of California – Berkeley and it’s
partners, University of Illinois Urbana-Champagne and
Lawrence Berkeley National Laboratory
• Open “basic” and proprietary “applied” research
• Initial focus on the entire biofuels production chain
− Smaller programmes in Oil Recovery, hydrocarbon
conversion, carbon sequestration
• Involvement of BP, academia, biotechnology firms,
government
• $500M, 10-year commitment; operations commencing June
`07
evaluating power options
power sector
High
Solar
Concern over Future
Availability of Oil and Gas
Unconventional
Gas
Hydrogen
Power
Nuclear
Wind
Biomass
Coal
Hydro
Geothermal
Gas CCGT
Key:
- power generation options
- supply option
Low
Low
Concern relating to Threat
of Climate Change
High
electricity generation shares by fuel - 2004
Oil
6.67%
Nuclear
15.74%
Hydro
16.14%
Biomass
1.30%
Gas
19.60%
Other
2.13%
Wind
0.47%
Geothermal
0.32%
Coal
39.73%
Source: IEA WEO 2006
Tidal/Wave
0.01%
Solar
0.02%
Fossil energy source
Source: BP Estimates, Navigant Consulting
Low/Zero carbon energy source
Solar (Retail Cost)
Wave / Tidal
Biomass
Gasification
Offshore Wind
Onshore Wind
Nuclear
Hydrogen Power
Coal $40/ tonne
Hydrogen Power
Gas, $4/ mmbtu
Coal $40/ tonne
CCGT, gas
$4/ mmbtu
Cost of Electricity Generation
9% IRR ($/MWh)
levelised costs of electricity generation
225
200
175
150
125
100
75
50
25
0
Renewable energy source
impact of CO2 cost on levelised Cost of
Electricity
160
Solar PV
140
~$250
120
Cost of Electricity
($/MW-hr)
Conventional
Coal
Area where options
multiply
100
Natural Gas
($5/MMBTU)
80
CCS
Onshore Wind
60
Nuclear
40
$0.35/gal or 5 p/l
20
0
0
20
40
60
80
CO2 Cost ($/tonne)
Source: IEA Technology Perspectives 2006, IEA WEO 2006 and BAH analysis
Notes: 1) Add solar 2) $40/tonne CO2 cost or tax is $0.35/gallon of gasoline or $0.09 (or 5p)/litre
100
120
potential of demand side reduction
Low Energy Buildings
Urban Energy Systems
• Buildings represent 40-50% of final
energy consumption
• 75% of the world’s population will be
urbanised by 2030
• Technology exists to reduce energy
demand by at least 50%
• Are there opportunities to integrate
and optimise energy use on a city
wide basis?
• Challenges are consumer behaviour,
policy and business models
likely 30-year energy future
•
Hydrocarbons will continue to dominate transportation (high energy density)
− Conventional crude / heavy oils / biofuels / CTL and GTL ensure continuity of supply at
reasonable cost
− Vehicle efficiency can be at least doubled (hybrids, plug-in hybrids, HCCI, diesel)
− local pollution controllable at cost; CO2 emissions now ~20% of the total
−
Hydrogen in vehicles is a long way off, if it’s there at all
− No production method simultaneously satisfies economy, security, emissions
− Technical and economic barriers to distribution / on-board storage / fuel cells
− Benefits are largely realizable by plausible evolution of existing technologies
•
Coal (security) and gas (cleanliness) will continue to dominate heat and power
− Capture and storage (H2 power) practiced if CO2 concern is to be addressed
− Nuclear (energy security, CO2) will be a fixed, if not growing, fraction of the mix
− Renewables will find some application but will remain a small fraction of the total
− Advanced solar a wildcard
•
Demand reduction will happen where economically effective or via policy
•
CO2 emissions (and concentrations) continue to rise absent dramatic global action
necessary steps around the technology
• Technically informed, coherent, stable government policies
− Educated decision-makers and public
− For short/mid-term technologies
− Avoid picking winners/losers (emissions trading)
− Level playing field for all applicable technologies
− For longer-term technologies
− Support for pre-competitive research
− Hydrates, fusion, advanced [fission, PV, biofuels, …]
• Business needs reasonable expectation of “price of carbon”
• Universities/labs must recognize and act on importance of
energy research
− Technology and policy
Questions/Comments/Discussion