Category: Energy statistics

Reflecting on the IPCC Synthesis Report through new Shell scenarios

dchone March 23, 2023

After a year of work, with a few hints along the way offered via this blog, the Shell scenarios team launched The Energy Security Scenarios this week. This is the team I am proud to be a member of and our new scenarios offer a very different perspective on the world in a time of challenging circumstances. With an almost identical release date, the IPCC 6^th Assessment Synthesis Report also landed this week. The scenarios also offer a new lens through which to view the IPCC findings.

The Energy Security Scenarios are built on the foundation of a world in which a security mindset is becoming pervasive, be it national security based on military threats, energy security following a year of supply disruption and price volatility, economic security as we watch the banking system being challenged by some defaults or climate security as the global average surface temperature continues to rise and impacts are becoming more visible. How countries respond to energy price volatility and supply disruption is highly variable, but nevertheless a pattern has emerged that ties together disparate responses such as India buying Russian crude oil and the USA pumping billions of dollars into direct air capture. These behaviours form part of an archetype framework that underpins our new scenarios. This foundation also offers some colour to the energy story we tell, with our archetypes classified as Innovation Wins, Green Dream, Surfers and Great Wall of Change.

Two key drivers shape the stories that we explore, notably the call at COP26 in Glasgow to deliver net-zero emissions globally by 2050 and deep cuts in emissions by 2030 and the response to the Russian invasion of Ukraine which has stressed the global energy system over the past twelve months. As a result, two new scenarios emerge which embrace both drivers, but prioritise them differently as the world moves forwards. We look out not just to 2030 or 2050, but all the way to 2100 and even draw one surprising conclusion about what the 22^nd century has to offer. These are stories that describe a world locked in an energy transition not only driven by cooperative change as called for by many, but instead trending towards a world of more intense competition as countries seek to shore up their energy system for the 21^st century. The scenarios are Sky 2050 and Archipelagos. Both scenarios see the energy transition accelerating, but at different paces. In Sky 2050 climate security is the priority, whereas in Archipelagos there is more attention to ongoing energy security.

Highlighting the increasing pace of the transition is the recognition of an inflection point in this decade as fossil fuels begin to lose market share in primary energy, finally shifting away from the 80% role they have played for many decades. The pace in Sky 2050 is about twice that of Archipelagos, but both represent a trend break.

Meanwhile, the IPCC is very focussed on the diminishing carbon budget and the rapidly narrowing opportunities for limiting warming to 1.5°C. In the Synthesis Report they broadly conclude that action will be insufficient to contain warming below 1.5°C in the near term, which points to an overshoot outcome and therefore the need to recover the situation later in the century. This is similar to the pathway visible in Sky 2050, which does see global emissions start to fall in the 2020s and net-zero emissions reached in 2050, but nevertheless the surface temperature rises above 1.5°C in the mid-2030s. However, a burgeoning new direct air capture industry, borne out of initiatives such as the Inflation Reduction Act in the USA, appears in Sky 2050. It grows to such an extent than in combination with extensive change in land management practices, from forestry to farming, as much carbon dioxide is removed from the atmosphere between 2050 and 2100 as has been added from now to 2050. The result is that by 2100 surface temperature warming in Sky 2050 has returned to today’s levels, with the potential for climate restoration during the 22^nd century.

The IPCC make the case that only a drastic reduction in near term emissions can avoid passing 1.5°C, with CO2 emissions needing to fall by 48% by 2030 relative to 2019 levels. These numbers will become higher with each passing day that emissions do not reduce. The table below comes from the Synthesis Report released on Monday and outlines what must happen in the seven years to 2030, then to 2035, 2040 and 2050.

Source: IPCC 6th Assessment Report – Synthesis

In The Energy Security Scenarios we do not see the scope for such large near term action reductions, with Sky 2050 achieving a reduction of around 12% by 2030. In Archipelagos emissions are higher in 2030 than in 2019. Although the Synthesis Report calls for immediate reductions, the IPCC note that of their modelled scenarios, only a small number of the most ambitious global modelled pathways limit global warming to 1.5°C by 2100 without exceeding this level temporarily. The IPCC state the following:

Global warming will continue to increase in the near term (2021-2040) mainly due to increased cumulative CO2 emissions in nearly all considered scenarios and modelled pathways. In the near term, global warming is more likely than not to reach 1.5°C even under the very low GHG emission scenario (SSP1-1.9) and likely or very likely to exceed 1.5°C under higher emissions scenarios. In the considered scenarios and modelled pathways, the best estimates of the time when the level of global warming of 1.5°C is reached lie in the near term.

In the case of overshoot, i.e. temporarily exceeding 1.5°C, they also note that the application of large scale carbon dioxide removal (CDR) technologies and practices is required to progressively reverse the overshoot situation. However, they also note that any overshoot brings with it the added risk of long term irreversible changes in the global ecosystem.

In short, the Synthesis Report paints a concerning picture of the world exceeding 1.5°C and taking on the associated climate risks. While the report makes every attempt to say that the possibility of not doing so still exists, there is little solid content to argue that this is achievable, a finding backed up by the analysis presented in The Energy Security Scenarios. The temperature outcomes for Sky 2050 and Archipelagos are presented below. The assessments were made by the MIT Joint Program using their climate model and also reported with the release of the Shell scenarios. You can also explore the scenario data here.

The Energy Security Scenarios complement the IPCC Synthesis Report well in that Sky 2050 sets out a very clear and unambiguous pathway to 2100, that both recognises the near term prospect of overshoot and the steps to take to more than redress the situation. By contrast, Archipelagos sets out a plausible pathway forward based on current tensions, but also shows that even under trying circumstances the world may find that 2.2°C is now the upper maximum for warming. While 2.2° is not considered safe territory by IPCC, the Archipelagos outcome is well positioned at the lower end of the range of outcomes that IPCC consider, which exceed 4°C in the worst case. Archipelagos is a story of global political headwinds buffeting the transition, but not to the extent that it slows in comparison with today. Quite the opposite – the pace increases as security concerns and competition drive the system away from fossil fuels.

You can find more on The Energy Security Scenarios here, which I would encourage readers to explore. But if you don’t have the time right now, this short video introduction may be of interest.

Digging deeper into the Sky scenario

dchone April 8, 2019

About a year ago Shell released the Sky Scenario. Sky is designed to explore a challenging but technically possible pathway to achieving the objectives of the Paris Agreement, reaching net-zero emissions from energy use by 2070 and an 85% chance of limiting global surface temperature warming to below 2°C in 2100. The scenario also showed the additional action required to limit warming to 1.5°C in 2100 (with a 50% probability). It’s an optimistic vision – effectively involving the “rewiring” of the global economy in just 50 years – but one which is possible technologically, industrially and economically.

Along with the Sky story came a detailed spreadsheet with much of the data behind the scenario available for analysis. Now, that data is available in an online tool to allow for simple selection, extraction and viewing. In addition, Sky highlights and key milestones are also presented through charts and graphs.

For example, say you wanted to look at the development of hydrogen as an energy carrier for heavy industry in Europe. That data can be extracted in three simple steps;

Select Europe from the world map.

2. Select Total Final Consumption as the topic of interest.

3. Select Heavy Industry as the subtopic.

And then a chart will appear showing the final energy split for heavy industry in Europe through to 2100 in the Sky scenario. In this case, hydrogen consumption is the pink bar and it can be seen growing in the second half of the century, partly replacing some remaining coal and natural gas consumption. This could be hydrogen in iron ore smelting, a process now just staring development.

A comparison chart can be added, for example showing how European heavy industry compares with Africa. The charts will be set to the same scale for easy visualisation. In the Sky scenario it can be seen that African heavy industry exceeds the energy consumption of its European counterpart in about 2060, with hydrogen consumption growing rapidly.

Another feature is the Signposts interactive tool, allowing exploration of key events and signposts, by region, as CO2 emissions shift over time. The chart below illustrates CO2 emissions for China and the cursor is highlighting the expansion of wind power to over 1,000 GW by 2043.

To find out more, just explore the interactive tool on the Shell Scenario website.

You can also join Wim Thomas, Chief Energy Advisor on 10th April 11.00am (BST) / 12.00 (CET) for a webinar on Sky and provide a virtual tour of the new online tool. Please also share this invitation to others who might find the content useful and interesting.

Click here to register to this webinar

Note: Scenarios are not intended to be predictions of likely future events or outcomes and investors should not rely on them when making an investment decision with regard to Royal Dutch Shell plc securities. Please read the full cautionary note in http://www.shell.com/skyscenario.

Where can the world get the energy it needs?

dchone November 30, 2017

A new tool from the Shell Scenarios Team provides new and unique insights

Those who follow my blog postings will have noted that I regularly use energy data, typically extracted from sources such as the IEA, the US Government EIA and even other energy industry company databases. The data I use is often resource based, such as in my piece, Infinite Solar, a bit over a year ago. Now, that data is available in the new Global Energy Resources (GER) database from the Shell Scenarios team.

This database provides an overview of resource potential across gas, oil, coal and renewable energy types, fossil and non-fossil, including oil, gas, coal, hydro-electricity, biomass and biofuels, geothermal, wind and solar.

A user-friendly interface allows for quick comparisons of data across countries and regions, as well as aggregation regionally and globally. You can access it on computers, tablets and smartphones, and the full database is also downloadable as an Excel spreadsheet.

The underlying data has been compiled using a rigorous research process combining raw data with expert assessment. The oil and gas database was constructed from analysis of external source data. It is supplemented by Shell’s extensive knowledge and technical assessment of sub-surface resource potential.

The renewables database was developed through a collaboration between the Shell Scenarios team and Ecofys, a Navigant company and leading international energy and climate consultancy. It seeks to reflect a realistic assessment of resource potential rather than the perspective of technical potential that commonly characterizes academic literature. The dominant renewables, wind and solar, were evaluated on a grid-cell basis, providing a detailed analysis spanning the globe.

The GER database underpins energy transition outlooks developed by the Shell Scenarios team. These include our “New Lens Scenarios” (2013) and our recent work, “A Better Life with a Health Planet – Pathways to Net-zero Emissions” (2016).

Our analysis suggests that there is no lack of potential energy resources to support a decent quality of life for the 10 billion people expected to live on the planet towards the end of the century. However, differences in resource distribution will result in local and regional constraints, creating a myriad of energy consumption, production, and international trade patterns. These patterns trigger complex policy and socio-economic choices around the energy transition which will ultimately govern successful (or failed) transitions towards a net zero emissions world.

We hope that you find the GER database valuable, whether for quick investigations or for more systematic analyses of this most fundamental pillar of the global energy system, namely the distribution of energy resources across our world.

www.shell.com/scenariosenergymodels

www.shell.com/scenarios

Note:

The Scenarios are a part of an ongoing process used in Shell for 40 years to challenge executives’ perspectives on the future business environment. We base them on plausible assumptions and quantifications, and they are designed to stretch management to consider even events that may only be remotely possible. Scenarios, therefore, are not intended to be predictions of likely future events or outcomes and investors should not rely on them when making an investment decision with regard to Royal Dutch Shell plc securities. It is important to note that Shell’s existing portfolio has been decades in development. While we believe our portfolio is resilient under a wide range of outlooks, including the IEA’s 450 scenario, it includes assets across a spectrum of energy intensities including some with above-average intensity. While we seek to enhance our operations’ average energy intensity through both the development of new projects and divestments, we have no immediate plans to move to a net-zero emissions portfolio over our investment horizon of 10-20 years.

Disclaimer: Scenarios are not intended to be predictions of likely future events or outcomes and investors should not rely on them when making an investment decision with regard to Royal Dutch Shell plc securities. Please read the full cautionary note in www.shell.com/scenarios

Behind the scenes of the Shell scenarios

dchone September 11, 2017

Shell has been a pioneer in developing scenarios to explore the future and deepen its strategic thinking for nearly 50 years. In the 1990s, the company started sharing scenarios externally to contribute to the public dialogue on the collective challenges and choices faced by business, government and society. Over the years I have written many posts that incorporated thinking from Shell Scenarios, with the 2016 publication ‘A Better Life With A Healthy Planet: Pathways to Net-Zero Emissions’ featuring in numerous recent articles. Now, for those interested in the formulation of the Shell scenarios, a behind the scenes look is available through two new publications and an on-line database.

Underpinning the scenario stories is robust modelling and my colleagues in the Shell Scenarios team have now published details of the methodology, explaining how scenarios are quantified, how energy pathways are modeled and how much energy resource could realistically be available. The new materials help to bring further transparency and understanding in the analysis.

The World Energy Model is a core tool in exploring the evolution of energy demand in different countries and in different sectors, helping the scenario developers to maintain system consistency, under varying assumptions in policy, economy, technology and consumer choices. Shell’s World Energy Model is designed to put numbers to long-term scenario stories of the transformation of the energy system, at a detailed country level in a consistent and holistic framework. It can model energy demand “top down” based on consumers’ energy service needs. The model also uniquely charts energy choices of consumers and producers; and covers other key elements like efficiency and prices, and outcomes such as emissions. There are 75 different specific scenario-based inputs spanning six key drivers including population, economic growth, environmental pressures, technology, resources available and people’s choices. It has a large repository of historical data from 1960 on both energy demand and the drivers. It runs in yearly time-steps, as far as 2100 if required.

Together with Shell’s Global Supply Model, it is possible to coherently examine the impacts in one part of the world made by changes in another. This latter model is a top-down model which allows the company to form its own view of long-term oil and gas production potential. The data is collated from a range of external data providers combined with Shell internal sources and analyses to build a Shell view of future production potential. This also allows analysis of key uncertainties and enables rapid quantification of different production scenarios for strategic studies and for the wider analysis of the global energy system.

The Global Energy Resources (GER) database provides a comprehensive overview of all available fossil fuel resource and renewable energy potential per country . You can access data in the GER and read more about the Shell Energy Models by visiting www.shell.com/scenariosenergymodels.

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.

Drivers behind flattening CO2 emissions

dchone March 29, 2017

The International Energy Agency (IEA) recently reported that carbon dioxide emissions from energy use remained flat in 2016, the third year in a row. This is a noticeable departure from the 21^st century trend which has seen global carbon dioxide emissions rise by some 40% in just 14 years. The Guardian reported this story and added the by-line “International Energy Agency report puts halt in emissions from energy down to growth in renewable power”. But the story within the energy system has more facets than this (Data sourced from the BP Statistical Review of World Energy).

Although global growth hasn’t been outstanding in recent years, it has nevertheless chugged along at around 2.5-3%. Energy use has also increased, albeit at a lower rate of some 1% per annum. This is at the lower end of the expected range of energy vs. GDP, but it is probably too early to say that this represents a longer term shift in this relationship. However, this could be the case if efficiency improvements can outpace economic development or at least come close.

Renewable energy is growing rapidly, although this is mainly in the area of electricity generation. From 2014 to 2015 solar and wind generation increased globally by about 200 TWh, which was nearly equal to the overall growth in electricity generation for that year. As an aside, BP reported that the overall electricity growth rate in 2015 was down on 2014 (2.4%) and remained well below the 10-year trend (2.8%). This is slightly concerning as electrification of the energy system is a key requirement for long term emissions reduction. Electricity generation needs to be accelerating compared to overall energy demand growth.

Although the 2016 data isn’t available yet, BP reported that coal use declined globally in 2015 vs. 2014 by 1.8% and natural gas use increased. While most of this could be attributed to the USA and Canada, China also saw a notable coal decline along with growth in natural gas use. The global coal use reduction is equivalent to nearly 300 million tonnes CO2, or about 0.8% of global emissions. Any replacement with natural gas would result in about half the emissions. This is very noticeable in the USA where coal use fell in 2015 by 13%, natural gas use grew by 3% (but against a larger absolute use), oil demand increased by 3%, but emissions declined by 2.6%.

Coal use is declining for a number of reasons;

The surge in natural gas production in the USA in particular, triggering the closure of older coal fired power stations that cannot meet new environmental regulations.
Air quality concerns in China, leading to a shutdown of coal fired industry and power generation around the major cities.
Some mothballing or closure of overcapacity in metallurgical industries in China.
The impact of a modest carbon price in a number of jurisdictions and some government imposed moratoriums on new coal generation construction (e.g. Canada).

However, coal use continues to increase sharply in a number of developing countries such as Vietnam, the Philippines, Malaysia, India, Colombia and Indonesia. Current expectations are that this will continue.

Oil use continues to increase, with BP reporting a global rise from 2014 to 2015 of 2%.

The final story is therefore one of several parts and it would appear that this trend has continued into 2016 although further data will be required for verification;

Global growth is modest, but energy use increases are trending at the lower part of the expected rise for this level of economic growth.
Coal use is declining, with natural gas filling much of the gap but at lower emissions.
Renewables are growing quickly, covering most of the increase in electricity generation, but not quite all.
Oil demand continues to increase, with its growing emissions being offset by the reduction in coal use.

The end result is that flattening in global emissions that has been seen for three years now.

Doing the energy maths

dchone October 5, 2016

In a recent Guardian article, columnist George Monbiot takes on the Governments who have signed and are in the process of bringing the Paris Agreement into force, arguing that their actions are not aligned with limiting warming of the climate system to the extent the agreement requires. The argument presented revolves around the ongoing development of fossil fuel resources.

Like many commentators in this space, the climate maths used is completely aligned with our current knowledge of the science, as presented by the IPCC in their 5^th Assessment Report. This maths is a simple subtraction of current cumulative emissions (about 600 billion tonnes of carbon since the start of the Industrial Revolution) from the level which corresponds to 1.5°C (about 750 billion tonnes) or 2°C (about 1 trillion tonnes). That difference, when compared with currently producing coal mines and oil / gas wells argues against developing further such resources as this will take us past the Paris goals, assuming the current mines and wells are produced to depletion.

But this discussion, along with many similar presentations, presents only half the story. As well as recognising the important climate maths, we also have to do the energy maths. This then becomes a more complex narrative, in that it requires both an analysis of current and future energy demand and a view on the expected rate of deployment of a new energy system to replace it. It means meeting demand so as to cater for an increasing population, raising current global living standards and driving economic growth as underpinning realities; i.e. delivering not just the 500 EJ we currently use each year, but the likely 1000 EJ we will collectively use each year later in the century.

George Monbiot places no expectation on the deployment of carbon capture and storage (CCS), which implies that the energy system he proposes must actually be zero emitting so as to limit the accumulation of carbon dioxide in the atmosphere and meet the Paris objectives. But the industrial world we live in is built on processes such as iron ore smelting and cement manufacture, both of which are inherently carbon dioxide emitting. There is also no line of sight to technologies that could replace hydrocarbons in services such as aviation; so we need to be able manage carbon dioxide directly. Deploying carbon capture and storage in the energy system therefore becomes a critical part of the solution set. It can be attached to industrial processes directly or used indirectly to offset the emissions that might come from a source such as aviation.

CCS is a reality today, even though deployment remains limited. The technology isn’t vapour ware as claimed by George Monbiot; in fact it has been proven at scale. One example is the Shell Quest facility in Canada, which was built within budget in just three years after the final investment decision was taken. It has now celebrated a year of operation at design capacity and stored 1 million tonnes of carbon dioxide some 2-3 kilometres down in the Basal Cambrian Sandstone formations found under large parts of Alberta. The issue with CCS is not the technology or the ability to construct a single facility at scale, but the development of a suitable set of economic support mechanisms to support further large scale demonstration and infrastructure development so that CCS can be ready to be deployed as required. That requires real policy work.

Climate science, future energy demand, likely energy system technologies, the reality of CCS and overall energy infrastructure deployment rates are just some of the factors that must be brought together to attempt a full analysis of the climate issue that confronts us. In recent months I have worked with colleagues in the Shell Scenario Team to do just that and we have published a new report which I have posted blogs about a number of times over the summer period.

“A better life with a healthy planet: Pathways to net-zero emissions” attempts to answer the tough questions which George Monbiot has rather glossed over. It pictures an energy system that does reach net-zero emissions, even as some fossil fuel production continues, but to meet the demand from sectors such as aviation, shipping, petrochemicals manufacture and heavy industry where renewable energy alternatives either don’t exist or are unlikely to be effective. The solution is more complex than “replacement with renewable energy and low-carbon infrastructure” as suggested by George Monbiot, simply because of the broad range of goods and services that come from oil, gas and coal. An end picture of the emissions outcome is presented in the publication and shown below – sitting alongside this will be an electricity system several time larger than today, largely powered by wind, solar, nuclear, hydro and various other technologies. It is likely to take much of this century to get there.

“The New Lens Scenarios” and “A Better Life with a Healthy Planet” are part of an ongoing process – scenario-building – used in Shell for more than 40 years to challenge executives’ perspectives on the future business environment. We base them on plausible assumptions and quantification, and they are designed to stretch management thinking and even to consider events that may only be remotely possible. Scenarios, therefore, are not intended to be predictions of likely future events or outcomes, and investors should not rely on them when making an investment decision with regard to Royal Dutch Shell plc securities.

It is important to note that Shell’s existing portfolio has been decades in development. While we believe our portfolio is resilient under a wide range of outlooks, including the IEA’s 450 scenario, it includes assets across a spectrum of energy intensities including some with above –average intensity. While we seek to enhance our operations’ average energy intensity through both the development of new projects and divestments, we have no immediate plans to move to a net-zero emissions portfolio over our investment horizon of 10-20 years.

Solar deployment rates

dchone August 30, 2016

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.

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.

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.

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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.

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Do we focus too much on electricity?

dchone July 28, 2016

A recent article posted on the GreenMoney e-jounal site argues that society is moving rapidly into a period of structural (and possibly abrupt) decline in fossil fuel use. The story, like many which argue along similar lines, draws on the current upward trend in renewable electricity deployment, noting that “Renewable energies have become too economically competitive for fossil fuels to contend with . . . “.

While this may be true at the margin when generating electricity, what does it mean for the energy system as a whole? Oil, gas and coal make up 80% of primary energy use (Source: IEA World Balance 2013), although it is often argued that this isn’t a representative picture as a significant percentage of the energy in fossil fuels is wasted as heat loss in power plants, which wouldn’t be the case for a technology such as solar PV. However, moving past primary energy and looking instead at final energy (i.e. the energy which we use to generate energy services such as mobility – so gasoline is a final energy whereas crude oil is primary energy) we see that oil products, natural gas and fuels such as metallurgical coal still make up two thirds of energy use, with electricity and heat comprising just over 20% of the mix. The balance is biofuels (comprising liquid fuels and direct use of biomass) and waste (IEA Sankey Chart for 2013).

Today electricity is generated primarily from coal and natural gas, with nuclear and hydroelectricity making up most of the difference. In 2014 the world generated 23,536 TWhrs of electricity, of which wind was 706 TWhrs (3%) and solar 185 TWhrs (<1%). Wind grew at 10% and solar at nearly 40% compared to the previous year (Source: BP Statistical Review of World Energy). This contrasts with an overall growth in electricity generation of 1.5% per annum. It is certainly possible to imagine a world in which solar and wind grow to dominate electricity production, but then we also need to imagine a world in which electricity grows to become the dominant final energy for renewables to dominate the energy system overall.

This is one of the key subjects that is dealt with in a recent Shell publication that I have worked on during this year; A Better Life With a Healthy Planet – Pathways to Net-Zero Emissions. For me, the most telling outcome of the scenario analysis and energy system modelling work behind the publication was that even in the latter part of the century when a net-zero carbon dioxide emissions state might be reached, electricity still only makes up ~50% of final energy. This means that 50% of final energy is something else!

The scenario presented shows a world that still requires several types of final energy to meet its needs. For example, liquid hydrocarbons still dominate in shipping and aviation, even as road passenger transport is hardly serviced by hydrocarbons at all. For road freight transport, a three way split has emerged between electricity, hydrocarbons and hydrogen.

Industry remains a large user of thermal fuels throughout the century, with key processes such as cement, chemicals and metallurgical process all dependent on their use for the foreseeable future. Electrification makes significant inroads to other types of industry, but this is far from universal. Hydrogen is a potential thermal fuel of the future, but processes might have to be modified significantly to make use of it. For example, it is possible for hydrogen to act as the reducing agent in iron smelting, but today this is a pilot plant scale research project.

Even the manufacture of hydrogen might take two routes, with competition through efficiency and cost determining the eventual winner. The first is the conversion of natural gas to make hydrogen, with the resulting carbon dioxide captured and geologically stored. Alternatively, hydrogen can be produced by electrolysis of water with renewable energy providing the necessary electricity.

Of course the continued use of fossil fuels to meet the needs of hydrocarbons in transport, industry and even power generation means extensive deployment of carbon capture and storage (CCS).

Meeting the aim of the Paris Agreement and achieving a balance between anthropogenic emission sources and sinks (i.e. net zero emissions) is a complex challenge and not one that can necessarily be serviced by wind and solar, or for that matter electricity, alone. Rather, we potentially end up with a more diverse energy system, much larger in scale than today, with a set of new processes (CCS), new industries (hydrogen based) and new sources (solar PV).

Professor Sir David MacKay FRS

dchone April 22, 2016

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.

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.

The Connected Man

dchone April 6, 2016

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.

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).

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 21^st 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.