Archive for the ‘Energy technology’ Category

Being a climate change adviser

Shell is often cited in climate change discussions, sometimes disparagingly simply because it is an oil and gas company, but increasingly as a company that has recognised that major changes in both the provision and use of energy across the globe will be needed to both meet demand and significantly reduce greenhouse gas emissions. Following from the Paris Agreement, it is hard to see how this won’t be the case. The leadership in Shell regarding climate change has always come from the top. The first major steps were taken in the period 1997 to 2001 when the foundations for change were established by former Chairman Sir Mark Moody-Stuart. He catalysed the necessary focus on the climate issue and had the foresight to establish a carbon trading desk within Shell Trading, just as the Clean Development Mechanism and the EU Emissions Trading system were in their early design stages. In 2005, then CEO Jeroen van der Veer created our CO2 team and gave it high visibility within the company. This eventually led to developments such as the Quest carbon capture and storage project in Canada. Today, we have a new energies business starting up. Our current CEO Ben van Beurden has also championed our position on issues such as government implemented carbon pricing and Shell has recently published scenario thinking on a net-zero emissions energy system of the future.

Within this journey of change, one question I am often asked is how I came into my job in Shell as Chief Climate Change Adviser and what it is like to perform such a role in the oil and gas industry. Some think that I might be a climate scientist, others picture the role as something of a fig leaf. In reality, neither is the case.

I started in Shell like many others, as a chemical engineering graduate in one of the 30+ refineries that Shell had back in 1980. The year in which I interviewed was one where all new chemical engineers were spoilt for choice – graduating classes had shrunk and demand was booming. But Shell offered a great value proposition – a global company with the very real prospect of a global career. My job offer was as a technologist in Geelong Refinery, a ~100,000 bbl/day facility just outside the city of Geelong, Australia and some 70 kms south-west of Melbourne. It was a complex refinery, with reforming, cracking, lube oil manufacturing, chemicals and various hydrotreating units. In the subsequent decade in the Downstream business I also worked in the global offices in The Hague and at Clyde Refinery in Sydney. Towards the end of this time I moved into the supply side of refining where the crude oil purchasing and refinery operating mode decisions are made based in part on linear programme models of the operation and the market it faces. This in turn led me to Shell Trading in London where I spent a decade trading Middle East crudes and managing the chartering of all the crude oil shipping that Shell required. Trading and shipping are at the very core of Shell, not just in terms of its operation as an oil and gas company, but in its DNA as well. After all, only a few hundred metres from where I live today, Marcus Samuel started his own trading business by procuring shells from sailors in the Port of London and making trinkets for people to buy when they visited English seaside towns such as Brighton and Torquay. This tiny enterprise, along with a similar entrepreneurial company in the Netherlands, eventually became the Royal Dutch Shell plc of today.

So twenty years after graduating I found myself with a solid background in what the company did, how the economics of the industry worked and perhaps most importantly how a critical component of the global energy system actually operated. What should I do with this expertise? I had my eye on the various functions in the Corporate Centre of the company and one in particular came up in mid-2001 which looked interesting. It was the role of Group Climate Change Adviser, a relatively new position that Shell had created in 1998 as it took its first steps to manage the business risk presented by climate change. In my interview for the position, my soon to be boss was pleased to meet someone who had worked in the refining business and had a good knowledge of the energy markets and trading. Even then it was clear that the development of policy would involve markets, and pricing, and present a real challenge to the incumbent businesses.

Like most in the company, I had imagined that this would be another 3-4 year assignment, but 16 years later I remain immersed in the climate change issue at Shell, although the role I originally took and the one I have now are worlds apart. Much has happened in that time externally, culminating in the Paris Agreement last December; internally the journey for the company has similarly progressed, although not without some tough questions along the way. Being part of all this over such a long period has been rewarding, a huge privilege and very challenging. It perhaps isn’t where I expected my career to go, but I can only look back and say that I am glad that it did. Some may think that a large corporation means a very restrictive and bureaucracy bound office life, but this is far from reality. I have a broad mandate and considerable freedom to engage externally on climate change, to publish my thinking on the issues that the world faces as it strives to manage emissions, but also to take all this back to colleagues within the company and challenge them as they try to run their businesses. Over time, I have also had considerable opportunity for travel, which has included every continent (yes, Antarctica as well) and over 30 countries.

Glacier calving

From time to time, people considering a career in environmental management ask me where they should start and what steps they might take. I almost never recommend that they start in an environmental role. Rather, building real experience developing new projects, troubleshooting problems in existing facilities and understanding the economics of the energy industry is my steer. My own experience has led me to believe that such a grounding is essential in tackling major issues such as climate change. As a new graduate considering an energy career, these are the sorts of jobs that a company such as Shell will most likely offer. My advice would be to take one, and then look towards the longer journey of change.

Solar deployment rates

There is no doubt that solar PV is deploying rapidly, with 50+ gigawatts of capacity now being added each year to the global energy system. A recent article in the Financial Times discusses the “Great Resource Shift” as it calls the visible energy transition and notes the following for solar in particular;

The amount of solar power installed over the past few years, for example, has exceeded experts’ optimistic predictions . . . . . “It’s a lesson in disruption, in that things can happen very quickly . . . . . And it’s quite difficult to build into most traditional forecasting. We’re now in a situation where the cleaner, alternative technologies are actually comparable or in some cases cheaper than the incumbent technologies so that’s a dramatic change from a few years ago.”

It is certainly the case that when returning to the IEA World Energy Outlook published in 2006, current solar deployment far exceeds their forecast. In that year, IEA expected 2015 solar to generate some 34 TWhrs of electricity, rising to 238 TWh by 2030. A look at the most recent version of the BP Statistical Review of World Energy shows solar in 2015 at 253 TWh against a global total of 24,100 TWh, i.e. 1%. While this remains low, it is nevertheless nearly an order of magnitude larger that the IEA number for 2015, even though IEA were close with their 2015 total electricity forecast (23,682 vs. 24,098 from BP). The difference in wind generation was only a factor of two, with IEA expecting 449 TWh and the BP 2015 actual coming in at 841 TWh.

IEA WEO 2006 APS Electricity

But not all outlooks took the same view. Back in 2006 Shell was preparing data for the formulation of its previous round of energy scenarios, Blueprints and Scramble. These were released in 2008, but the data is from the same period as the 2006 IEA World Energy Outlook. The Blueprints scenario imagined very rapid deployment of solar, resulting in some 500 TWh in 2015, about double the BP number. Based on current growth rates in solar (~30% per annum but declining in relative terms as the base gats larger) the world may be at this level by 2018.

This rapid deployment has given rise to great optimism regarding the future of solar, yet a deeper look at Blueprints and more recently the solar based Shell scenario Oceans, shows a familiar pattern. In the early years of deployment the relative rate of change is often extraordinarily high, but as the energy source becomes material within the mix this slows, even as absolute deployment rates are maintained. Exponential growth doesn’t continue. Looking back at Blueprints and an article on energy system growth that was published in Nature and written by two members of the Shell Scenario team, we see a potential route forward for solar. The chart below was prepared for that Nature article, but overlaid is the observed growth in solar from 2007 to 2015.

Blueprints solar

A key observation from the chart is that growth becomes more linear as the given energy source becomes a material part of the energy system. By 2050 in the Blueprints scenario solar is around 74 EJ, or nearly 10% of primary energy. By 2100 in the Oceans scenario this has risen to nearly 300 EJ, or about 30% of primary energy. 300 EJ is about 80,000 TWh, which means a 300 fold increase on current solar generation or the equivalent of solar producing over three times the current global electricity consumption. But this takes another 84 years to materialize.

One interesting observation looking back at IEA WEO 2006 is that global emissions of carbon dioxide were forecast at 31.6 billion tonnes in 2015, which is very close to the current data (BP at 33.5 Gt, IEA at 32.1 announced in March). As noted above, total 2015 electricity generation was about 400 TWh above the 2006 IEA projection, with IEA falling short on wind and solar by 611 TWh. One worrying conclusion from this is that while the rapid expansion of wind and solar has certainly added to global electricity production and likely helped many people gain access to electricity before they might have without it, the deployment hasn’t impacted CO2 emissions. This supports the argument that CO2 emissions will really only be impacted through the introduction of government led carbon pricing and not by simply trying to outcompete fossil fuel use with rapid deployment of something else. The latter strategy might result in an energy system that has significant solar and wind, but without significant curtailment of emissions.

IEA WEO 2006 APS CO2

___________________________________________________________

Scenarios are part of an ongoing process used in Shell for more than 40 years to challenge executives’ perspectives on the future business environment. They are based on plausible assumptions and quantification and are designed to stretch management thinking and even to consider events that may only be remotely possible.

____________________________________________________________

 

Infinite solar

An infographic published earlier this year asks the question “Could the world be 100% solar?”. The question is answered in the affirmative by demonstrating that so much solar energy falls on the Earth’s surface, all energy needs could be met by covering just 500,000 km2 with solar PV. This represents an area a bit larger than Thailand, but still only ~0.3% of the total land surface of the planet. Given the space available in deserts in particular and the experience with solar PV in desert regions in places such as California and Nevada, the infographic argues that there are no specific hurdles to such an endeavour.

Solar

However, solar PV is both intermittent and only delivers electricity, which currently makes up just 20% of final energy use. Oil products make up the bulk of the remaining 80%. As I noted in a recent post, even in the Shell net-zero emissions scenario, electricity still makes up only 50% of final energy. In that case, what might a 100% solar world really look like and is it actually feasible beyond the simple numerical assessment?

The first task is of course to generate sufficient electricity, not just in terms of total gigawatt hours, but in gigawatt hours when and where it is needed. As solar is without question intermittent in a given location, this means building a global grid capable of distribution to the extent that any location can be supplied with sufficient electricity from a location that is in daylight at that time. In addition, the same system would likely need access to significant electricity storage, certainly on a scale that far eclipses even the largest pumped water storage currently available. Energy storage technologies such as batteries and molten salt (well suited to concentrated solar thermal) only operate on a very small scale today.

The Chinese State Grid has been busy building ultra-high voltage long distance transmission lines across China and they have imagined a world linked by a global grid (Wall Street Journal, March 30 2016 and Bloomberg, April 3rd 2016) with a significant proportion of electricity needs generated by solar from the equator and wind from the Arctic.

OJ-AH932B_CGRID_16U_20160330062113

But could this idea be expanded to a grid which supplies all the electricity needs of the world? A practical problem here is that for periods of the day at certain times of the year the entire North and South American continents are in complete darkness, which means that the grid connection would have to extend across the Atlantic or Pacific Oceans. While the cost of a solar PV cell may be pennies in this world, the cost of deploying electricity from solar as a global 24/7 energy service could be considerable. The cost of the cells themselves may not even feature.

sunmap

But as noted above, electricity only gets you part of the way there, albeit a substantial part. Different forms of energy will be needed for a variety of processes and services which are unlikely to run on direct or stored electricity, even by the end of this century. Examples are;

  • Shipping currently runs on hydrocarbon fuels, although large military vessels have their own nuclear reactors.
  • Aviation requires kerosene, with stored electricity a very unlikely alternative. The fuel to weight ratio of electro-chemical (battery) storage, even given advances in battery technology, makes this a distant option. Although a small electric plane for one person for 30 minutes flight has been tested, extending this to an A380 flying for 14 hours would require battery technology that doesn’t currently exist. Still, some short haul commuter aircraft might become electric.
  • While electricity may be suitable for many modes of road transport, it may not be practical for heavy goods transport and large scale construction equipment. Much will depend on the pace and scope of battery development.
  • Heavy industry requires considerable energy input, such as from furnaces powered by coal and natural gas. These reach the very high temperatures necessary for processes such as chemical conversion, making glass, converting limestone to cement and refining ores to metals. Economy of scale is also critical, so delivering very large amounts of energy into a relatively small space is important. In the case of the metallurgical industries, carbon (usually from coal) is also needed as a reducing agent to convert the ore to a refined metal. Electrification will not be a solution in all cases.

All the above argues for another energy delivery mechanism, potentially helping with (or even solving) the storage issue, offering high temperatures for industrial processes and the necessary energy density for transport. The best candidate appears to be hydrogen, which could be made by electrolysis of water in our solar world (although today it is made much more efficiently from natural gas and the resulting carbon dioxide can be geologically stored – a end-to-end process currently in service for Shell in Canada). Hydrogen can be transported by pipeline over long distances, stored for a period and combusted directly. Hydrogen could also feature within the domestic utility system, replacing natural gas in pipelines (where suitable) and being used for heating in particular. This may be a more cost effective route than building sufficient generating capacity to heat homes with electricity on the coldest winter days. It is even possible to use hydrogen as the reducing agent in metallurgical processes instead of carbon, although the process to do so still only exists at laboratory scale.

But the scale of a global hydrogen industry to support the solar world would far exceed the global Liquefied Natural Gas (LNG) we have today. That industry includes around 300 million tonnes per annum of liquefaction capacity and some 400 LNG tankers. That amounts to about 15 EJ of final energy compared to the current global primary energy demand of 500 EJ. In a 1000 EJ world that we might see in 2100, a role for hydrogen as an energy carrier that reached 100 EJ would imply an industry that was seven times the size of the current LNG system. But hydrogen has 2-3 times the energy content of natural gas and liquid hydrogen is one sixth the density of LNG (important for ships), so a very different looking industry would emerge. Nevertheless, the scale would be substantial.

Finally, but importantly, there are the things that we use, from plastic water bottles to the Tesla Model S. Everything has carbon somewhere in the supply chain or in the product itself. There is simply no escaping this. The source of carbon in plastics, in the components in a Tesla and in the carbon fibre panels in a Boeing 787 is crude oil (and sometimes natural gas). So our infinite solar world needs a source of carbon and on a very large scale. This could still come from crude oil, but if one objective of the solar world is to contain that genie, then an alternative would be required. Biomass is one and a bioplastics industry already exists. In 2015 it was 1-2 million tonnes per annum, compared to ~350 million tonnes for the traditional plastics industry.

Another source of carbon could be carbon dioxide removed directly from the atmosphere or sourced from industries such as cement manufacture. This could be combined with hydrogen and lots of energy to make synthesis gas (CO +H2), which can be a precursor for the chemical industry or an ongoing liquid fuels industry for sectors such as aviation. Synthesis gas is manufactured today on a large scale from natural gas in Qatar and then converted to liquid fuels in the Shell Pearl Gas to Liquids facility. Atmospheric extraction of carbon dioxide is feasible, but remains as a pilot technology today, although some companies are looking at developing it further.

The solar world may be feasible as this century progresses, but it is far from the simple solution that it is often portrayed as. Vast new industries would need to emerge to support it and each of these would take time to develop. The LNG industry first started in the early 1960s and is now a major part of the global economy, but still only carries a small fraction of global energy needs.

The new Shell publication, A Better Life with a Health Planet: Pathways to Net Zero Emissions, shows that in 2100 solar could be a 300 EJ technology, compared to 2.5 EJ energy source today. This is in a world with primary energy demand of 1000 EJ.

 

Scenarios are part of and ongoing process used in Shell for more than 40 years to challenge executives’ perspectives on the future business environment. They are based on plausible assumptions and quantification and are designed to stretch management thinking and even to consider events that may only be remotely possible.

Professor Sir David MacKay FRS

  • Comments Off on Professor Sir David MacKay FRS

I was sad to hear of the recent death of Professor Sir David MacKay. I had met him at a few events over the years, but his real impact on me was through his book Sustainable Energy: without the hot air.

14226

Hopefully everyone who reads this blog has also had the opportunity to read David’s book, if not I can highly recommend it. It is free to download here. The book is a wonderful tour of energy use, written in a language that everyone can understand. Most importantly, it seeks to challenge and correct the many assertions made about how quickly and easily we can change the energy system or how easy it would be to power everything from a particular source. Professor MacKay took exception to the loose talk and poor reporting around energy issues and sought to rectify it. In the opening lines of his book he notes;

Perhaps the worst offenders in the kingdom of codswallop are the people who really should know better – the media publishers who promote the codswallop – for example, New Scientist with their article about the “water-powered car.”

That single sentence sets the tone for a very entertaining and thoroughly informative deep dive into all things energy related, with the maths to back it up. He even delves into climate science and offers a wonderful analogy for why atmospheric carbon dioxide is rising when anthropogenic flows of the gas are so much smaller than natural flows (trees etc.). He compares the atmosphere to passport control at an airport!!

But the calculation that has stuck in my head over several years relates to hydroelectricity in the United Kingdom. I don’t know why I remember this story in particular, I am no more a hydroelectricity enthusiast than I am a nuclear enthusiast, but his explanation was just so elegant. Many people imagine that because it rains quite a bit in the UK that we ought to be able to power much of the country with hydro, particularly in Scotland where it is also quite hilly. Professor MacKay’s simple calculation involved the land area of the UK, the average rainfall, the average elevation and the wildly optimistic assumption (just to silence the optimists) that we would catch every drop of rain and then all the potential energy within that water as it drops from the point at which it initially hits the ground until it gets to sea level. The absolute upper limit for hydro comes out at less than 10 kWh/person/day, but the more realistic figure is <2 kWh/person/day. This is against energy demand of around 200 kWh/person/day. Actual hydro in the UK is just 0.2 kWh/person/day.

Sadly we have lost an inspiring energy enthusiast and an entertaining writer and speaker. RIP Professor.

Rapid progress for electric vehicles?

  • Comments Off on Rapid progress for electric vehicles?

The last few weeks have brought great excitement for electric vehicle (EV) enthusiasts with the announcement of the Tesla Model 3 and the subsequent filling of its order book with over 250,000 vehicles. With costs coming down and vehicle range improving, there appears to be real consumer interest in EVs, including battery electric, plug-in hybrid and hydrogen fuel cell types. The International Energy Agency has been following the development of EVs for some time now and an excellent info-graphic is available with a variety of useful deployment statistics for the period up to and including 2014.

IEA EV Infographic

But how quickly would EVs have to deploy to align with the ambition of the Paris Agreement, i.e. having the passenger vehicle sector reach nearly zero direct emissions early in the second half of this century? Such an outcome would be required to be on track to well below 2°C, with a shot at 1.5°C.

In the last 2-3 years EV growth rates have been in the range 50-100% per annum, but this is quite typical of a new technology with a very small base. As the base increases, year on year percentage growth slows down quickly, even as absolute production continues to increase.

The first goal for EV deployment is to reach an installed base of 20 million vehicles by 2020, or about 2% of the global fleet. This is the target set by the Electric Vehicle Initiative of the Clean Energy Ministerial, a global energy/environment Minister forum to promote policies and share best practices to accelerate the global transition to clean energy. The initiative seeks to facilitate the global deployment of EVs, including plug-in hybrid electric vehicles and fuel cell vehicles.

By the end of 2015 the global EV stock was heading towards 1.5 million , which gives just 5 years to produce another 18-19 million cars. That will require year on year growth rates of around 50% per annum into the 2020s, resulting in additional new production of some 1-2 million vehicles per annum, i.e. to reach total annual production of 6-7 million vehicles per annum in 2020 itself.  According to the IEA info-graphic, production in 2014 was around 300,000 per annum.

If growth at such rates could continue, with additional new production surpassing 4 million per annum throughout the balance of the 2020s and into the 2030s, then by 2035 the global EV stock could be at 500 million vehicles, or nearly a third of the total expected fleet. By this time absolute annual EV growth may be slowing, influenced by an outlook that sees EV production approaching that of global passenger vehicle production. This is assuming that there is no consumer resistance to EVs, even amongst those who love the roar of a finely tuned high powered internal combustion engine (ICE).

But even if production of EVs completely eclipses that of ICE vehicles, there remains the generational timespan to turn over the entire fleet. Even in Europe, the age distribution of vehicles is very broad, so we shouldn’t expect ICE vehicles to disappear overnight. The average age has also been rising, up from 8.4 to 9.7 years in Europe over the last decade. There is also a wide distribution, for example in the Netherlands in 2012, 41% of the passenger vehicle fleet was over 10 years old, but for the same year in Poland it was 71%.

Putting all the above together in a single chart, a very rapid and accelerated switch from ICE to EV could look something like the picture below. For the sake of the calculation, I have assumed the global fleet topping out around 1.7 billion vehicles in the 2060s, a number which is highly uncertain. For instance, just as EVs are beginning to make progress in the market, autonomous vehicles are possibly offering a completely different model for car ownership, which could see far fewer cars in the global fleet. The prospect of a much smaller market could start to send ripples through the entire investment chain, slowing the uptake of EVs considerably. Equally, if personal motoring progresses rapidly in developing countries, the fleet could be much larger in the second half of the century, which may also argue for an older fleet with ICE vehicles remaining on the road for much longer.

EV Stock

Simply because of fleet growth and existing production which currently totals 65-70 million vehicles per annum, maximum ICE stock isn’t reached until well into the 2020s, topping out at about 1.2 billion vehicles vs. 900 million today. ICE numbers return to current levels in the mid-2030s, but then decline to very low levels by the 2060s.

There are many other unknowns to factor in, such as the supply chain for the EV. Current battery technology calls for lithium, but prices over the last 18 months have risen. Some Chinese Lithium Hydroxide prices have risen over 100% in the last year but some market observers have noted the volatility and uncertainty surrounding this.

With the Tesla 3 appearing on the streets in 2017, but many other models from various manufacturers also being shown, the years ahead will only get more interesting for the passenger vehicle market.

The Connected Man

Back in September 1971, an article appeared in Scientific American on energy use. It remains very current today. Earl Cook was attempting to look at the limits to energy use and how that energy might be provided in a modern society. The article starts with the chart below that shows potential demand from various stages of human development.

Earl Cook Diagram

Today, we see human society spread right across the chart with substantial parts of the world in one of the versions of Agricultural Man, whilst many of us are in Technological Man. Global energy use stands at some 600 EJ, or about 80 GJ per person per annum whereas in 1971 the number was around 60 GJ. There are significant regional, national and even sub-national differences, with the USA at around 300 GJ and India at 30 GJ as two examples. It is also important to recognise that the Earl Cook chart applies more to the individual archetypes, rather than to national averages. At any point in time, the national average may include people in several categories and the individual demand may not be fully reflected in the national average if imports exceed exports in quantity or carbon intensity or both.

Cook pondered about where this energy might come from and what the limits of supply might be. Although resource constraint was a popular topic at the time (and another article in the same edition of the journal was by peak oil enthusiast M. King Hubbert), Cook concluded that environmental constraints may be more limiting than the resource itself. Although his focus was on more local environmental issues, his overall thinking was close to the mark as society now faces real constraints on emissions of carbon dioxide.

Yet we are far from done in terms of progression from Primitive Man to Technological Man.

Further on, Connected Man, which perhaps didn’t feature in Cook’s 1971 thinking, offers a very different outlook. Such a concept poses a real challenge – will Connected Man use even more energy than Technological Man with the introduction of a new Information category in the bar chart and further expansion within the other categories? Or perhaps Connected Man can break the trend above and bring such efficiency to the other categories that overall energy use per person falls, even as development progresses? That would be unprecedented (N.B. The Connected Man energy numbers are notional and for illustration purposes only).

Earl Cook Diagram (Connected Man)

Connected Man is starting to appear today, with the prospect of 20 billion connected devices comprising the Internet of Things as early as 2020. A trillion connected devices by 2050 would be a reasonable extrapolation from that; it represents less than 15% growth in such devices per annum. It may be much more than this, but the energy demanded by these is unlikely to be trivial, even as efficiency improves.

The real question is what such connectivity offers to the energy system as a whole? Can it also lower the energy use of Industrial Man as well as offering the prospect of leapfrog to a much lower energy demand end state than might have been anticipated for Technological Man? That might have a profound impact on expected global demand later in the century even as we collectively progress to Connected Man. Nevertheless, while 21st century efficiency will very likely temper eventual energy use per capita, particularly against Cook’s 1970s estimates, the premise of rising energy demand at a global level still stands.

Earl Cook Diagram (Connected Man +)

Solar thermal by the numbers

Early in February the King of Morocco, HE Mohammed VI, opened the first phase of what will eventually become a major solar energy facility in the centre of the country. On the same day, the King also laid the foundations for Phase 2. The project is a remarkable piece of engineering, with tracking parabolic mirrors reflecting and concentrating sunlight into a heating loop, which then transfers the energy into steam and ultimately electricity from turbines. The system also includes a molten salt energy storage system which provides 3 hours of turbine operation once the sun has set.

Noor Solar

The Noor Ouarzazate Concentrated Solar Complex is being developed 10 kms north-east of the city of Ouarzazate at the edge of Sahara Desert about 190 kms from Marrakesh. Phase One of the project involves the construction of a 160MW concentrated solar power (CSP) plant named Noor I, while Phase Two involves the construction of the 200MW Noor II CSP plant and the 150MW Noor III CSP plant. Phase Three will involve the construction of the Noor IV CSP plant.

The original cost of Noor I was estimated at about $1.1 billion, but various reports show that upwards of $2 billion has been spent, although a proportion of this must be for overall site development, roads, infrastructure etc. which will benefit all of the phases. A description of Phase II can be found on the World Bank website, with an estimated cost of $2.4 billion for construction and $300 million as a cost mitigation mechanism (i.e. to lower the cost of the electricity produced during the initial years of operation).

The initial 160 MW project has a net capacity of 143 MW, producing some 370 GWh of electricity output. This equates to a capacity factor of nearly 30% which is high for solar, but reflects the nature of the location and the energy storage mechanism using molten salt. Nevertheless, in terms of total annual output, this is similar to building a 60 MW gas turbine, although the gas turbine would always be limited to 60 MW, whereas the solar facility can output at higher levels through much of the day when businesses are open and drawing on the grid.

By the end of Phase 2, total capacity of the facility will be over 500 MW, at a capital cost of some $5 billion (although The Guardian puts this at $9 billion). Annual generation will amount to some 1500 GWhrs per annum. The per capita consumption of electricity in Morocco is around 1 MWhr, so this represents electricity for 1.5 million people. In the case of the USA, it would offer power to only 130,000 people. Phases 1 and 2 will occupy a land area of some 1900 hectares (about 4.4 by 4.4 kms)

The justification for the project is interesting and can be found in one of the documents on the World Bank project site. Carbon pricing figures strongly although there are no immediate plans for a robust carbon pricing system to be implemented in Morocco. The report concludes that Concentrated Solar is not economic on the basis of conventional cost-benefit analysis (the economic rate of return is negative over the anticipated 25-year horizon of the project); the economic benefits are taken as the avoided costs of the next best thermal alternative, which is CCGT using imported LNG. To be economic at the (real) opportunity cost of capital to the Moroccan government, the valuation of CO2 would need to be US$92/ton of CO2 (calculated as switching value, i.e. NPV of zero), or US$57/ton of CO2 when calculated as the Marginal Abatement Cost (MAC). The justification for the project is largely on the basis of macro-economic benefits for Morocco (jobs, technology transfer etc.) and global learning curve benefits.

The project is situated near a reservoir and is quite water intensive. Phase 1 is water cooled, but this is not the case for the later phases. However, there is ongoing water use for cleaning of the solar reflectors. For Phase 1 alone, the water use during operation represents 0.41% of the average yearly contribution to the Mansour Ed Dahbi Reservoir in the wet years, and 2.57% of the lowest recorded yearly contribution to the reservoir. The estimated total wastewater flow to be discharged to the evaporation ponds (visible in the foreground of the picture) is 425,000 m3/year.

Finally, there is the important aspect of emissions reduction. The Noor I CSP plant is expected to displace 240,000 tonnes a year of CO2 emissions. Based on the generation of 370 GWhrs per annum, this assumes an alternative energy mix of natural gas, some oil generation and a proportion of coal. For natural gas alone with its lower carbon footprint, the displacement could fall well below 200,000 tonnes. But like all such projects, this is displacement of CO2 which may result in a lower eventual accumulation. It is not direct management of CO2 such as offered by carbon capture and storage.

The Moroccan CSP is a fascinating project, but even more so as the numbers are put down on paper. With COP22 taking place in that country in November we are bound to hear more about it.

One million tonnes of CO2

The first week of November sees Shell officially open its first major carbon capture and storage (CCS) facility, the Quest project. It is in Alberta, Canada and will capture and store about one million tonnes of carbon dioxide per annum. Construction commenced back in September 2012 when the Final Investment Decision (FID) was taken and the plant started up and began operating for the first time in September of this year, just three years later. It is one of only a handful of fully integrated carbon capture and storage facilities operating globally. There are now many facilities that capture CO2 but mainly linked to Enhanced Oil Recovery which provides an income source for these projects.  Quest has dedicated CO2 storage, developed in an area some 65 kms from the capture site at a depth of about 2 kms.

Quest Construction

The Quest income source is not based on EOR; it has been able to take advantage of the government implemented carbon price that prevails within Alberta. Although the current carbon pricing mechanism has an effective ceiling of $15 per tonne CO2 which isn’t sufficient for CCS, let alone a first of its kind, it nevertheless provides a valuable incentive income to operate the facility which has been built on the back of two substantial capital grants from the Provincial and Federal governments respectively. A supplementary mechanism also in place in Alberta provide credits related to the carbon price mechanism for the early years of a CCS project, providing additional operating revenue for any new facility.

Canada, as it turns out, has become a global leader in CCS. The Quest facility is the second major project to be started up in Canada is as many years, with the Saskpower Boundary Dam project commencing operations this time last year.

As noted, Quest will capture and store approximately one million tonnes of carbon dioxide per annum. It demonstrates how quickly and efficiently large scale CO2 management can be implemented once the fiscal conditions are in place. Quest, which is relatively small in scale for an industry that is used to managing gas processing and transport in the hundreds of millions to billions of tonnes globally, demonstrates both the need for continued expansion of the CCS industry and the importance of carbon pricing policy to drive it forward. This single facility far surpasses the largest solar PV facilities operating around the world in terms of CO2 management. Take for example the Desert Sunlight Solar Farm in California, currently the fourth largest solar PV power station in the world. According to First Solar, it displaces 300,000 tonnes of CO2 annually, less than a third of that captured and permanently stored by Quest.

A key difference though is the use of the word displace. Alternative energy projects don’t directly manage CO2, they generate energy without CO2 emissions. But, as I have noted in previous postings and in my first book, the release of fossil carbon to the atmosphere is more a function of energy prices and resource availability. This means that even when a project like Desert Sunlight operates, the CO2 it notionally displaces may still be released at some other location or at some other time, depending on long term energy prices and extraction economics. There is no doubt that the CO2 is not being emitted right now in California, but that doesn’t necessarily resolve the problem. Quest, by contrast, directly manages the CO2 from fossil fuel extraction.

The requirement to provide alternative energy (i.e. without CO2 emissions) needs to grow, but we shouldn’t imagine that such action, by itself, will fully resolve the climate issue. That will come through the application of carbon pricing mechanisms by governments, driving the further expansion of both the alternative energy and CCS industries as a result.

A video about the Quest project, made by the constructors, Fluor, is available here.

From sunlight to Jet A1

In a world of near zero anthropogenic emissions of carbon dioxide, there remains the problem of finding a fuel or energy carrier of sufficiently high energy density that it remains practical to fly a modern jet aeroplane. Commercial aviation is heading towards some 1 billion tonnes of carbon dioxide per annum so doing nothing may not be an option.

Although planes will certainly evolve over the course of the century, the rate of change is likely to be slow and particularly so if a step change in technology is involved. In 100 years of civil aviation there have been two such step changes; the first commercial flights in the 1910s and the shift of the jet engine from the military to the commercial world with the development of the Comet and Boeing 707. The 787 Dreamliner is in many respects a world away from the 707, but in terms of the fuel used it is the same plane; that’s 60 years and there is no sign of the next change.

Unlike domestic vehicles where electricity and batteries offer an alternative, planes will probably still need hydrocarbon fuel for all of this century, perhaps longer. Hydrogen is a possibility but the fuel to volume ratio would change such that this could also mean a radical redesign of the whole shape of the plane (below), which might also entail redesign of other infrastructure such as airport terminals, air bridges and so on. Even the development and first deployment of the double decker A380, something of a step change in terms of shape and size, has taken twenty years and cost Airbus many billions.

h2airplane

For aviation, the simplest approach will probably be the development of a process to produce a look-alike hydrocarbon fuel. The most practical way to approach this problem is via an advanced biofuel route and a few processes are available to fill the need, although scale up of these technologies has yet to take place. But what if the biofuel route also proves problematic – say for reasons related to land use change or perhaps public acceptance in a future period of rising food prices? A few research programmes are looking at synthesising the fuel directly from water and carbon dioxide. This is entirely possible from a chemistry perspective, but it requires lots of energy; at least as much energy as the finished fuel gives when it is used and its molecules are returned to water and carbon dioxide.

Audi has been working on such a project and recently announced the production of the first fuel from their pilot plant (160 litres per day). According to their media release;

The Sunfire [Audi’s technology partner] plant requires carbon dioxide, water, and electricity as raw materials. The carbon dioxide is extracted from the ambient air using direct air capture. In a separate process, an electrolysis unit splits water into hydrogen and oxygen. The hydrogen is then reacted with the carbon dioxide in two chemical processes conducted at 220 degrees Celsius and a pressure of 25 bar to produce an energetic liquid, made up of hydrocarbon compounds, which is called Blue Crude. This conversion process is up to 70 percent efficient. The whole process runs on solar power.

Apart from the front end of the facility where carbon dioxide is reacted with hydrogen to produce synthesis gas (carbon monoxide and hydrogen), the rest of the plant should be very similar to the full scale Pearl Gas to Liquids (GTL) facility that Shell operates in Qatar. In that process, natural gas is converted to synthesis gas which is in turn converted to a mix of longer chain hydrocarbons, including jet fuel (contained within the Audi Blue Crude). The Pearl facility produces about 150,000 bbls/day of hydrocarbon product, so perhaps one hundred such facilities would be required to produce enough jet fuel for the world (this would depend on the yield of suitable jet fuel from the process which produces a range of hydrocarbon products that can be put to many uses). Today there are just a handful of gas-to-liquids plants in operation; Pearl and Oryx in Qatar, Bintulu in Malaysia and Mossel Bay in South Africa (and another in South Africa that uses coal as the starting feedstock). The final conversion uses the Fischer Tropsch process, originally developed about a century ago.

Each of these future “blue crude” facilities would also need a formidable solar array to power it. The calorific content of the fuels is about 45 TJ/kt, so that is the absolute minimum amount of energy required for the conversion facility. However, accounting for efficiency of the process and adding in the energy required for air extraction of carbon dioxide and all the other energy needs of a modern industrial facility, a future process might need up to 100 TJ/kt of energy input. The Pearl GTL produces 19 kt of product per day, so the energy demand to make this from water and carbon dioxide would be 1900 TJ per day, or 700,000 TJ per annum. As such,  this requires a nameplate capacity for a solar PV farm of about 60 GW – roughly equal to half the entire installed global solar generating capacity in 2013. A Middle East location such as Qatar receives about 2200 kWh/m² per annum, or 0.00792 TJ/m² and assuming a future solar PV facility that might operate at 35% efficiency (considerably better than commercial facilities today), the solar PV alone would occupy an area of some 250 km² , so perhaps 500 km² or more in total plot area (i.e. 22 kms by 22 kms in size) for the facility.

This is certainly not inconceivable, but it is far larger than any solar PV facilities in operation today; the Topaz solar array in California is on a site 25 square kms in size with a nameplate capacity of 550 MW.  It is currently the largest solar farm in the world and produces about 1.1 million MWh per annum (4000 TJ), but the efficiency (23%) is far lower than my future assumption above. At this production rate, 175 Topaz farms would be required to power a refinery with the hydrocarbon output of Pearl GTL. My assumptions represent a packing density of solar PV some four times better than Topaz (i.e. 100 MW/km² vs 22 MW/km²).

All this means that our net zero emissions world needs to see the construction of some 100 large scale hydrocarbon synthesis plants, together with air extraction facilities, hydrogen and carbon monoxide storage for night time operation of the reactors and huge solar arrays. This could meet all the future aviation needs and would also produce lighter and heavier hydrocarbons for various other applications where electricity is not an option (e.g. chemical feedstock, heavy marine fuels). In 2015 money, the investment would certainly run into the trillions of dollars.

What to make of recent emission trends?

  • Comments Off on What to make of recent emission trends?

Recent news from the International Energy Agency (IEA) has shown that the rise in global CO2 emissions from the energy system stalled in 2014. This was unusual on two counts – first that it happened at all and second that it happened in a year not linked with recession or low economic growth as in 1992 and 2009. In fact the global economy expanded by about 3%.

Information is scant at this point, but the IEA have apparently determined this using their Sectoral Approach (below, through to 2014), which has been flattening for a few years relative to their Reference Approach (following chart, ends at 2012). The Reference Approach and the Sectoral Approach often have different results because the Reference Approach is top-down using a country’s energy supply data and has no detailed information on how the individual fuels are used in each sector. One could argue that the Reference Approach is more representative of what the atmosphere sees, in that apart from sequestered carbon dioxide and products such as bitumen, the whole fossil energy supply eventually ends up as atmospheric carbon dioxide. The Reference Approach therefore indicates an upper bound to the Sectoral Approach, because some of the carbon in the fuel is not combusted but will be emitted as fugitive emissions (as leakage or evaporation in the production and/or transformation stage). No information has been provided by the IEA at this point as to the Reference Approach data for 2013 and 2014.

Global Energy System Emissions

Reference vs. Sectoral IEA

Putting to one side this technical difference, the flattening trend does represent a possible shift in global emissions development and it has certainly got many observers excited that this may well be so. If this is the case, what is driving this change and what might the outlook be?

It is clear that many governments are now intervening in domestic energy system development. There are incentives and mandates for renewable energy, enhanced efficiency programmes and some level of carbon pricing in perhaps a quarter of the global energy system, albeit at a fairly low level. More recently in China there has been a strong government reaction to air quality issues, which has given rise to some reduction in coal demand, particularly around major cities. But there is another factor as well and that is price – it is perhaps the overwhelming factor in determining fossil fuel usage and therefore setting the level of emissions. Price drives conservation, efficiency, the use of alternatives and therefore demand. Many of the aforementioned energy policy initiatives have been implemented during the recent decade or so of sharply rising energy prices.

A chart of the oil price (2013 $, as a proxy for energy prices) and global CO2 emissions going back to 1965 illustrates that big price fluctuations do seem to have an impact on emissions. Although emissions have risen throughout the period, sharp energy price excursions have led to emissions dips and plateaus as energy demand is impacted and similarly, price falls have led to resurgence in emissions. This isn’t universally true – certainly from 2004 to 2008 the very strong demand from China in particular was seemingly unaffected by the rising cost of energy, although the end of that period saw a global recession and a very visible dip in demand.

Oil price vs. Emissions

The latter part of 2014 brought with it a sharp reduction in energy prices (2015 is illustrative in the chart at $55 per barrel). With a much lower fossil energy price, demand may rise and the incentive for efficiency and the deployment of alternatives could well be impacted, although there may be some lag before this becomes apparent. The combination of these factors could therefore see emissions take yet another jump, but it is too early to see this in the data. 2015 emissions data might show the first signs of this.

There is of course continued upward pressure on emissions as well, such as the growth in coal use that is now underway in India. Over the three year period to the end of 2014, coal capacity increased from 112 GW to nearly 160 GW. This is the equivalent of some 300 million tonnes of CO2 per annum. By contrast, a five year period from 2002 to 2007 saw only 10 GW of new coal capacity installed in that country. Although India is installing considerable solar capacity, coal fired generation is likely to continue to grow rapidly. One area of emissions growth that is not being immediately challenged by a zero emissions alternative is transport. The automobile, bus, truck and aviation fleets are all expanding rapidly in that country.

The other big uncertainty is China, where local air quality concerns are catalysing some restructuring in their energy system. Certain factories and power plants that are contributing most to the local problems around cities such as Beijing and Shanghai are being shut, but there is still huge development underway across vast swathes of the country.  Some of this is a replacement for the capacity being closed around the cities, with electricity being transported through ultra high voltage grids that now run across the country. Gas is becoming a preferred fuel in metropolitan areas, but some of that gas is being synthetically produced from coal in other regions – a very CO2 intensive process. The scale of this is limited at the moment, but if all the current plans are actually developed this could become a large industry and therefore a further signifacnt source of emissions.

As observers look towards Paris and the expectation of a global deal on climate, the current pause in emissions growth, while comforting, may be a false signal in the morass of energy system data being published. Ongoing diligence will be required.