Category: Energy technology

Reflecting on the IPCC Synthesis Report through new Shell scenarios

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 6th 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 22nd 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 21st 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 22nd 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.

Pathways to 1.5°C

June 11, 2021

In 2018 when the IPCC released their Special Report on 1.5°C, they presented four archetype scenarios to help readers understand that there were fundamentally different approaches to limit long term warming to 1.5°C or below. The scenario pathways are shown below and vary significantly in their approach, time horizon and use of sinks.

Source: IPCC SR15

All four scenarios (P1, P2, P3, P4) are based around the same carbon budget, or total cumulative emissions of 420 Gt from 1.1.2018 consistent with providing a 66% chance of limiting warming to 1.5°C. Whether the carbon budget is aligned with 420 Gt (67th percentile) or 580 Gt (50th percentile), it represents a very limited amount given that annual CO2 emissions are in excess of 40 Gt, so these represent 10-15 years of emissions at current levels. Since this IPCC publication, a further 160 Gt will have been emitted by society by the end of 2021, meaning that the budget is reduced to 260 – 420 Gt.

Source: IPCC SR15

In attempting to align with a very limited carbon budget, the P1 scenario imagines a world of falling overall energy use and a very rapid shift away from fossil fuels. There is no use of geological storage of CO2 and a modest reliance on natural sinks, although in doing so the world must shift away from net-deforestation by the 2040s. By contrast, the P4 scenario sees increasing demand for energy and as a consequence, a much more difficult decarbonisation journey that involves considerable use of sinks in the second half of the century. Notably, the P4 scenario exceeds the carbon budget by quite some amount with peak emissions to the atmosphere of 900 Gt, before reining in the amount to 200 Gt by 2100. This results in P4 being a so-called overshoot scenario, in that the world exceeds 1.5°C during the century before returning to 1.5°C and below by the end of the century.

Source: IPCC SR15

All the above might seem a bit academic, but it became very real recently when the IEA released their 1.5°C scenario and some commentators began comparing it to one of the very few other 1.5°C scenarios, notably Sky 1.5 from Shell.

In fact, the two scenarios are at near opposite ends of the P1 to P4 spectrum.

The IEA 1.5°C scenario looks at the period from 2020 to 2050 and presents a proposal for the problem of containing emissions to a 500 Gt carbon budget (the 580 Gt IPCC number less 80 Gt for the years 2018 and 2019). Apart from recognising that the land based system is likely to reduce this budget by a further 40 Gt over the period (i.e. reducing it to 460 Gt), the analysis limits itself to the energy system and the changes that would be required to meet a 460 Gt cumulative emissions constraint within a 30 year time frame. As is the case in similar scenarios, including Sky 1.5, their analysis assumes rapid electrification of final energy (e.g. electric cars instead of gasoline) and makes use of renewables  and nuclear power generation to produce the electricity. They introduce hydrogen as an energy carrier, make use of bioenergy and include carbon capture and storage (CCS) where fossil fuel remains in use. For the latter, the IEA deploy CCS directly on facilities that use fossil fuels and indirectly through direct air capture for fossil fuel use in applications such as aviation.

All the above steps are well understood, but even given rapid and stretching deployment rates of all technologies, these steps are unlikely to contain emissions to less than 500 Gt in under thirty years. This is because of the expected increase in overall energy use, a consequence of economic growth, the general rise in population and the shift of billions of people from very low energy use lifestyles to at least modest energy use, a simple outcome of development and the provision of basic services like lighting, clean water, food refrigeration and some mobility.

As such, energy modelers looking at a very constrained time frame of 30 years must make the assumption that energy growth can be contained or even fall, as in the IPCC P1 scenario. This is exactly what the IEA have done to meet the carbon constraint. In the 1.5°C Scenario primary energy demand falls from 612 EJ in 2019 to 543 EJ in 2050, a drop of over 10%. Efficiency will certainly help deliver such an outcome and the use of renewable electricity gives the story a big boost as the thermal losses in power stations vanish, although new losses emerge through the use of transmission and storage. But the big story is the widespread assumption of behavioural change across society to reduce energy demand. The chosen measures include steps such as;

  • Ride-sharing in all urban car trips
  • Reducing motorway / freeway speeds to below 100 kph / 60 mph.
  • Increasing temperatures in air conditioned vehicles and buildings.
  • Lowering temperatures in heated buildings.
  • Replacing short flights with high speed rail.
  • Limiting long haul air travel to 2019 levels.

With low energy demand and high deployment rates of new energy technologies it then becomes possible to resolve the carbon budget within a 30 year time frame.

At the other end of the spectrum is the Sky 1.5 scenario, which tackles the problem of a limited carbon budget in a very different way. Sky 1.5 looks at the period from 2020 to 2100, an 80 year time frame, and starts with an expectation of rising global energy demand, even assuming significant energy efficiency improvements across society. The growth in population and the demand for energy services, including significant new demand from developing countries for basic services, cannot be contained and energy demand rises. This immediately poses a challenge in that rising demand more quickly consumes the available carbon budget at the front end, when alternative energy technologies and sinks have not been deployed.

Sky 1.5 also recognises that for many energy technologies, the 2020s still remain a period of development and limited deployment and even for more mature technologies such as solar and wind, a period of early growth where change on a global scale will remain limited.

The solution to this approach is to accept that, at least in the short term, the carbon budget may be consumed and the temperature it is linked to (1.5°C in this case) potentially surpassed for a period of time. The subsequent rapid deployment of sink capacity, both manmade in the form of air capture with geological storage and natural as reforestation, then offers the possibility of a period of net-negative emissions later in the century, to redress the imbalance and reduce cumulative carbon dioxide emissions and therefore temperature. This is the approach that Sky 1.5 takes, as do the IPCC P3 and P4 scenarios. Sky 1.5 takes this approach out of necessity, in that the scenario reaches a limit on energy technology deployment and does not foresee a fall in energy demand.

The end carbon budget for both the IEA 1.5°C scenario and Sky 1.5 are similar, but the IEA restricts itself to a thirty year time-frame, whereas Sky 1.5 operates over an eighty year time-frame. Sky 1.5 is also remodeled by MIT within their integrated assessment model to give a temperature outcome, rather than simply using the IPCC central estimate for a carbon budget. The two scenarios are attempting to answer the same question, but take very different approaches to doing so. There is no right or wrong here, just different ways of solving a tough problem.

Note: Scenarios don’t describe what will happen, or what should happen, rather they explore what could happen. Scenarios are not predictions, strategies or business plans. Please read the full Disclaimer here.

Can renewable deployment be exponential?

June 22, 2020

In recent months we have all had to learn quickly about exponential rates of change as COVID-19 spread throughout the world, but as has been seen with the virus itself, exponential patterns typically stop and some other pattern of change emerges. Some mechanism intervenes in the process, typically starving the exponential process of its means for reproduction.

With the urgency around rising levels of carbon dioxide in the atmosphere, there is a desire by many to see renewable energy grow exponentially and quickly back out fossil fuels. Four years ago Fortune magazine reported that American futurist Ray Kurzweil forecast the dominance of solar PV in a little over a decade. Fortune noted the following;

Kurzweil’s basic point, reported by Solar Power World, was that while solar is still tiny, it has begun to reliably double its market share every 2 years — today’s 2% share is up from 0.5% in 2012. Many analysts extend growth linearly from that sort of pattern, concluding we’ll see 0.5% annual growth in solar in the future, reaching 12% solar share in 20 years. But linear analysis ignores what Kurzweil calls the law of accelerating returns — that as new technologies get smaller and cheaper, their growth becomes exponential. So instead of looking at year over year growth in percentage terms, Kurzweil says we should look at the rate of growth — the fact that solar market share is doubling every 2 years. If the current 2% share doubles every two years, solar should have a 100% share of the market in 12 years.

There is no doubt that solar PV has been doubling on a near two year basis. In 2015 global deployment was 230 GW installed capacity and this year it should be approaching 800 GW, which isn’t quite doubling every two years, but is close. But can this rate of change persist? It would imply 10 TW installed capacity by 2030 and 120 TW by 2040, from which enough energy could be generated to about meet all global requirements (~900 EJ in 2040), assuming it could be stored and channeled to the necessary services at the right time and place.

A related issue emerged on Twitter recently when well-known climate and energy expert Glen Peters (@Peters_Glen) took issue with a paper written by two colleagues in the Shell scenario team and published in Nature over a decade ago. In a twelve-tweet discussion Glen challenged the findings;

Will energy technologies grow exponentially until they reach “materiality” & then have linear growth? A common perception, but what does history say? Short answer: Old technologies are growing exponentially (not nuclear), just slower due to crowding out effects! . . . . . The ability for renewables to *displace* fossil fuels (not add to existing supply) will dictate whether renewables can grow exponential beyond “materiality”. If fossil fuels are taken out of the energy system, there is more space for renewables to grow exponentially. There is probably no physical reason why we can’t have 100% renewables, just like we once had 100% bioenergy, 50%-50% bioenergy-coal, etc The only limit is the one in our heads . . . .

There are a number of points here, but the question of exponential growth keeps returning. This isn’t about the level in the energy mix that renewables finally reach, but about the time it might take to get there. Exponential growth, such as that proposed by Ray Kurzweil, ought to be able to deliver a 100% renewable energy system by 2040.

The original paper that Glen Peters refers to was written by Martin Haigh and Gert Jan Kramer, so I took the question to Martin for further discussion. He noted that much of the background work to their Nature paper concerned the supply industry constraints related to production of materials required for deployment, but they had only limited space in their article to go into the necessary detail with graphs and charts.

So in practice, ongoing exponential deployment of solar is unlikely to happen because of stranded solar PV production facilities. Let me explain using two simple scenarios. In both cases the goal is to supply global energy demand with solar PV (putting aside the technical issues related to actually doing this) and global demand is rising from the current level of about 600 EJ by 1% per annum. The basic model I have developed also assumes that a field installation lasts for 35 years and that newer cells have improved efficiency over older models.

In an exponential scenario, solar PV rises at the rate described above, but this must be supported by investment in manufacturing facilities. By the time global demand is met in 2040, the world would have PV manufacturing capacity of 18,000 GW per annum, doubling from 9000 GW per annum just three years earlier. Even building the production facilities at this rate is questionable. But most of this capacity would then become stranded assets as demand for new solar PV would collapse. There would be residual demand for the newest most efficient modules replacing older modules, but this wouldn’t keep the industry going. In reality, this scenario wouldn’t happen as investors would see the coming over capacity problem and back away, therefore starving the exponential process of its means of reproduction.

In an investment scenario, solar PV rises exponentially in the early years, but then starts to shift away from the exponential case as investment in PV cell manufacture tapers. The result is a much slower rise towards meeting demand, but the investors in manufacturing don’t end up with stranded assets. In this example, manufacturing levels out at around 3000 GW per annum, one sixth of the above. Once solar PV generation meets global demand, the industry remains roughly balanced as it caters for both growth in energy demand and replacement of older installation. For much of the deployment period, growth is linear, not exponential.

Exponential Scenario

Charts shown are for illustration purpose only

In the latter part of the century, some additional cell manufacturing capacity would be warranted, rising to around 4000 GW per annum due to the increasing replacement requirement. This would close the energy supply gap that is starting to appear after 2080.

But the outcome of the investment scenario is a 30 year delay in meeting the goal of 100% of global energy demand supplied by solar PV. This then challenges the other goal behind the requirement for very rapid deployment of new energy infrastructure; the need to limit warming to 1.5°C.

Aviation futures

February 18, 2020

The aviation industry accounts for nearly one billion tonnes of carbon dioxide emissions annually against a global total in excess of 40 billion tonnes, which means it is around 2.5% of total emissions. However it is a high growth sector without obvious alternative energy carriers, implying that as other emissions fall and aviation continues to rise, its fraction of the total increases rapidly. Should global emissions fall by 50% in the same time that aviation doubles, then that fraction becomes ten percent.

Perhaps for the reasons given above, there is a particular focus on aviation emissions, far more so than a sector such as steel where emissions are currently much higher and will likely continue to be for many years. Additionally and unlike sectors such as steel and cement which are seen as essential elements for the provision of basic services such as homes and clean water, some people view aviation as a luxury which isn’t entirely necessary for modern society, hence the calls for limiting air travel as a means of limiting emissions from the sector. I don’t see rationing as a realistic pathway forward; the ability to traverse the globe in under a day has become too valuable.

Energy System Services - Sky 2020

The aviation sector will need to find another way forward. The current focus is on sustainable aviation fuels, such as those made from waste and sustainably harvested biomass, or perhaps even synthetic hydrocarbon fuels derived from processes that chemically combine hydrogen (from electrolysis of water using renewable energy) and carbon dioxide (from direct air capture). This latter route is currently very costly given the state of the variety of technologies required  and large scale use of biomass always raises questions around its origin, the overlap with agriculture for food and the emissions that might arise from land use to create the biomass. Nevertheless, both these routes are worth pursuing.

But what other options might exist for the industry in the decades ahead?

Apart from balancing the emissions from aviation with some form of atmospheric carbon dioxide removal (from growing trees to direct air capture and geological storage), other routes would have to involve a shift away from hydrocarbon based fuels.

One possibility that is currently gaining favour is the development of electric propulsion, with the plane using battery storage for the electricity. This is also problematic due to the very low energy density of batteries when compared to hydrocarbons, a subject I discussed in an earlier posting. Battery electric planes might emerge for very short haul flights (e.g. London City Airport to Rotterdam, a flight I take quite a few times each year), but it is improbable for longer haul travel due to weight constraints. Today, 80% of the aviation industry’s emissions come from passenger flights longer than 1,500km, which means that a long-haul alternative technology needs to emerge.

One possibility is to use hydrogen directly as a fuel, either in a fuel cell configuration which essentially means an electric plane, or in a jet turbine engine in the same way planes use fuel today. The latter route means that planes could still attain the speeds and altitude of current jets. Hydrogen is well suited to a gas turbine engine.

Hydrogen isn’t weight constrained as an energy carrier, but volume considerations may prove challenging. A new airframe shape would likely emerge as a result.

 

Jet A-1

 Current Li-Ion Battery Emerging Li-Metal Batteries

Liquid Hydrogen
Energy MJ/kg

42.8

 ~0.7 ~2 120
Energy MJ/litre 37.4 ~2 ~4

8

Today, the development of hydrogen for aviation appears limited, with the BBC reporting a decade ago that there was no future for the fuel, despite proof of concept. Cost seemed to be the major issue, but today the cost of renewable electricity has fallen sharply and electrolysis to produce hydrogen is seeing a resurgence of interest.

A trawl through various online resources reveals that hydrogen jet turbines have been demonstrated for over 60 years. The first such flight was a modified B-57 Canberra Bomber, with one jet engine powered by liquid hydrogen from a cryogenic wing suspended tank (shown below)

diagram-of-a-hydrogen-fuel-system-on-nacas-martin-b-57b-canberra-ce9f7f

Source: NASA

In the 1980s Tupolev modified a Tu-155 to act as a test vehicle for a variety of alternate fuels, which included liquid hydrogen. The Tu-155 first flew on 15 April 1988. It used hydrogen fuel and later liquified natural gas (LNG). It flew until the fall of the Soviet Union and is currently stored at Ramenskoye Airport near Zhukovskiy. The cryogenic tank was stored in the main fuselage of the plane, in part due to the volume constraint noted above.

TU-155-Liquid-Hydrogen-Aircraft-Design-Tupolev-2009

Source: Tupolev

In the mid to late 1950s Lockheed proposed a concept reconnaissance aircraft that operated on liquid hydrogen and a design was also proposed for a Lockheed L-1011 passenger plane some years later. This was in response to the oil shocks of the 1970s.

Lockheed Hydrogen ConceptLockheed Hydrogen

lh2-l-1011

Source: Lockheed

Despite over sixty years of on-off development of hydrogen powered flight, hydrocarbon fuels remain the only energy carrier for commercial aviation. Today, the industry faces a long term challenge that may require it to revisit shelved technologies, applying new concepts and materials to the variety of issues that couldn’t be fully solved in the decades past. In the Sky Scenario, we imagine that the first hydrogen intercontinental flight takes place in the mid to late 2040s, with a new generation of planes entering service from about 2050. Even then, it takes decades more for this to become a mainstay within aviation, but then could well be the only technology of the 22nd century. In the interim in Sky, biofuels and removal technologies (bioenergy with CCS in Sky or BECCS) are used to deliver a net-zero emissions aviation system.

 

Is Direct Air Capture the future?

May 25, 2019

Almost all scenario thinking that relates to the goal of net-zero emissions during the second half of this century has to consider the role of negative emission technologies. These are mechanisms and approaches which result in the removal of carbon dioxide from the atmosphere and its sequestration in the biosphere (e.g. trees) or lithosphere (i.e. geological storage). This is necessary because we are very unlikely to see out the century with a complete end to fossil fuel use, industrial processes and land change practices all of which lead to the release of carbon dioxide into the atmosphere. Further, the application of carbon capture and storage on facilities such as cement plants and steel mills won’t deal with remaining emissions from mobile sources such as aviation and shipping so removal elsewhere must be done to balance these remaining sources. In addition, many scenarios utilise negative emission technologies as a way to correct the overshoot of goals from earlier in the century, effectively mopping up carbon dioxide released earlier.

There are a number of ways in which carbon dioxide can be removed from the atmosphere, with the simplest being an expansion of the biosphere through reforestation. But as was illustrated in the Shell Sky scenario, even very large scale reforestation isn’t sufficient to balance ongoing fossil fuel use. Global reforestation of some 700-800 million hectares of land (an area the size of Brazil) shifted the outcome in 2100 from 1.75°C (midpoint of a range reflecting uncertainty) to 1.5°C, which required a sink of some 10 Gt carbon dioxide per annum (current fossil fuel use results in some 32 Gt of carbon dioxide emissions – Source: IEA).

In addition to reforestation, the Sky scenario utilises CCS for industrial facilities and incorporates bioenergy production with carbon capture and storage (BECCS) to act as a negative emission technology (see illustration below), giving a total geological based sink of about 10 Gt per annum. BECCS hardly exists in practice today but a 1 million tonne per annum facility is operating in the USA. The technology is well understood and effectively a commercial proposition given the right CO2 pricing system.

BECCS

Balance 2070

Apart from reforestation and BECCS, another technology exists to remove carbon dioxide from the atmosphere, known as direct air capture (DAC). This technology captures the carbon dioxide from the very low concentration in the atmosphere and then makes it available for use or geological storage (DACCS). A small demonstration plant is running in Iceland as part of a much larger geothermal power complex and I was fortunate to be able to visit it a few weeks ago.

32800866357_5803e05a8e_z

Sitting within the ON Power Geothermal facility sits a single Climeworks air capture unit. It takes in air with a carbon dioxide concentration of some 410 ppm (ambient atmospheric conditions) and vents air with a concentration at about 100 ppm. An amine system acts as the sorbent and 4-6 times per day the unit recharges itself by using geothermal energy to heat the amine sorbent and release the carbon dioxide under controlled conditions.

47691592062_28b25ab15a_k

33867290088_a9ca492fa2_z

That carbon dioxide then joins a larger carbon dioxide stream (from the geothermal plant) and is injected into the subsurface where it reacts with various minerals to form carbonates, effectively fixing itself into the geology.

47691557062_b372c8a8ed_z

32800854817_7e97184369_z

This single unit captures and stores approximately 50 tons per annum of carbon dioxide, which is about enough to balance the emissions of eight Icelanders, but only three American citizens. This is very much a pilot unit for demonstration and proof of concept purposes, with plans by Climeworks for scaling the technology.

In the Sky Scenario we chose to use BECCS rather than DACCS as our negative emission technology because BECCS is visible and scalable today. This is because all the related processes and practices like biomass collection and use, geological storage and carbon dioxide transport are all scalable or have been scaled. As such, a scaled systems approach for BECCS could be envisaged in the decades ahead. In the case of DACCS, the scope is potentially huge, but the development pathway for this technology probably has some way to go. This is illustrated by the debate underway in academic circles about the cost of DACCS. DAC is challenged simply by the vast quantity of air that must be processed to extract every ton of carbon dioxide. Today, BECCS can be visualised as a cost effective technology whereas that is not yet the case for DACCS.

Ultimately DAC may also have another use, that being the manufacture of synthetic fuels and materials. Even if society eventually stops extracting fossil fuels, it’s very unlikely that we will stop using hydrocarbons, they are just too useful. But manufacturing them from scratch needs a source of carbon and a source of hydrogen, both of which could come eventually come from renewable energy powered processes. For carbon, it would be DAC and for hydrogen it would be electrolysis of water. Combined and with enough energy, you can make pretty much anything. But scaling this technology is a daunting prospect, which I wrote about a few years ago with reference to the manufacture of synthetics Jet A1 for aviation. All of these technologies will also require years or perhaps decades of development to see significant cost improvements emerge.

It was fascinating to see this technology in action, albeit at a very small scale. Whatever finally emerges, it probably won’t look anything like the plant in Iceland, but we shouldn’t underestimate the ability to innovate in the face of real need and commercial opportunity. It will likely take a long time, but later in the century it may well be the case that planes are flying on air in more than one sense.

Further reading: For a very comprehensive look at greenhouse gas removal technologies, a recent report from the Royal Society is worth a look.

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.

 

A new pathway to Paris

February 6, 2019

A new book that outlines a pathway to meet the 1.5°C goal of the Paris Agreement has been released for open access online , but is also available in hard copy from March 7th on Amazon. The work has been conducted by various academic institutions and is largely sponsored by the Leonardo DiCaprio Foundation. The route chosen is to meet all energy needs with renewables such as wind, solar and hydroelectric with the consequent phase-out of fossil fuel use for all energy needs by 2050. Carbon capture and storage (CCS) is not considered as an option, but natural sinks play an important role through large scale land restoration and reforestation. So rapid is the proposed transition that emissions fall sharply from next year (2020) and fossil fuel consumption is reduced by 60% in just a decade. An important additional component is an overall reduction in energy demand through a very strong efficiency drive.

LDC Book Rapid Decarb

There are six major components to the transition, with the first five relating to objective of 100% renewables for all energy use;

  1. Increased capacity to generate electricity mostly through solar and wind power, enabling the electrification of all energy uses including power, heating, transportation, and even industrial uses.
  2. Increased storage capacity in the form of battery arrays and pumped hydroelectric (which uses excess generation to pump water up to a reservoir releasing the energy when needed).
  3. Improved energy efficiency – decreasing overall energy consumption, especially in the developed world, by making buildings, cities, and vehicles more efficient.
  4. Re-purposing the existing gas pipeline and storage infrastructure to deliver hydrogen produced by renewable sources.
  5. A gradual retraining of the energy workforce to participate in the burgeoning green economy.
  6. Land restoration and reforestation to meet negative emissions requirements.

Following the IPCC 1.5° Special Report last October (SR15), it is clear that the lowest risk pathway in terms of climate impact is one that sees emissions fall rapidly, with minimal temperature overshoot before the end of the century. The book effectively follows the pathway P1 (no CCS, rapid fall in fossil fuel use) set out in SR15, although they make more extensive use of land sinks than P1.

IPCC SR15

Source: IPCC SR15

The IPCC P1-P4 archetype pathways can be categorized in terms of final energy demand and their use of sinks (both natural and artificial, e.g. bio-energy with CCS or BECCS), which also allows a comparison with the Shell Sky Scenario that featured in SR15.

SR15 P1 to P4 with Sky

Sky is akin to the SR15 P4 pathway, in that the additional energy demand they both foresee leads to extensive use of sinks to balance overall emissions and deliver a 1.5°C outcome. Within the Sky scenario efficiency plays a major role in curbing demand, but final energy demand still rises throughout the century (see chart below), albeit coming close to a plateau from 2080. This is driven primarily by the demands of some 2-3 billion people moving from modest income to middle income. In addition, there are a further 2-3 billion people moving from little income to modest or even middle income. Even with a major efficiency push, energy demand just doesn’t fall that easily, unless of course consumers hold back in their demand for energy services, e.g. travelling by air.

Sky Final Energy

Sky, like P4, doesn’t see emissions falling until about 2030 in that this is the minimum time the scenario requires to build the necessary political and technical capacity to introduce carbon prices, ramp up production of various technologies and at least begin developing further out technologies such as hydrogen use for metallurgical smelting.

But the new pathway proposed in the publication seemingly allows no time for such change. As noted, under that pathway emissions fall sharply from 2020, yet we are currently in a period of sharply rising emissions (according to an analysis by the Global Carbon Project, 2018 emissions are estimated to have risen by 2.7% compared to 2017). While such a fall would be an ideal outcome and for a better than 50% chance of being below 1.5° is probably required, the difficult question that must nevertheless be answered is by what process this happens? In the Sky Scenario it was proposed that rapid ratcheting of NDCs throughout the 2020s could lead to emissions beginning to fall by 2030.

GCB 2018 Emissions
A further challenge is the decision by the authors not to employ any form of CCS and also phase out all fossil fuel use by the 2050s. For sectors such as aviation, the likely energy source in 2050 will still be hydrocarbon liquids, even if new engine technologies have begun to appear. Some planes that will be flying in 2050 are being built now and there is no line of sight to an alternative technology, so presumably the current generation of planes will continue to be built for several decades.

With no CCS, it means that the fuels must be synthetically produced, either from biomass or by chemical conversion of hydrogen (generated by electrolysis of water using solar energy) and carbon dioxide (extracted from the air), such that they have a net-zero impact on atmospheric carbon dioxide. But these synthesis technologies hardly exist today, although parts of the possible process do (the Shell synthetic fuel plant in Qatar which uses natural gas as the starting point). Just meeting aviation and marine needs with synthetic fuel plants in 2050 would require some 100 large scale facilities, starting from a current position of zero (or perhaps two, if the synthesis reactors in the handful of existing facilities were re-purposed).

A 100% renewable energy world will still require an energy carrier that isn’t electricity, for example for intense heat in certain combustion applications. Hydrogen could be such a carrier and could also be used for energy storage as well as having a role in liquid fuel synthesis. But the scale of a global hydrogen industry to support the renewable energy world would far exceed the global Liquefied Natural Gas (LNG) industry we have today. The LNG 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 completely new energy system in 2050, a role for hydrogen as an energy carrier that reached 50 EJ would imply an industry that was four times the size of the current LNG system. The current LNG system has emerged over a period of 60 years; building a system four times the size in 30 years seems unlikely.

There is no doubt that the 1.5°C Paris pathway outlined in the book is an incredibly ambitious one, but it may even be beyond the bounds of the possible. It will take some time to review the full publication, so I hope to report back in the coming weeks on various aspects of the story presented.

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.

Timing for new technologies

November 1, 2018

Over the past fortnight I have been fortunate to present the Sky Scenario to a number of different audiences in Doha, Delhi, Singapore and Canberra. Irrespective of the audience and location, questions always emerged around rates of transition in Sky and more often than not the question referred to the emergence of a hydrogen economy. In all cases, there was surprise that the emergence in the scenario is not as fast as expected.

Hydrogen Economy

Sky Scenario Hydrogen Economy

Hydrogen is an important energy carrier in Sky and its presence solves many issues associated with hard to abate sectors. This includes aviation, heavy industry and road freight. For example and as noted in a recent post, hydrogen can be used instead of coal for reducing ores to metals in the metallurgical industry. But within Sky, these solutions take some decades to emerge and don’t really grow to meaningful scale until well into the second half of the century.

Hydrogen in Sky

This then raises the question of the rate of deployment of a new energy technology. Historically, new energy technologies can take 30 years to move from first application to meaningful deployment, which in turn may be as little as one percent of the system. It is only when such a level is reached that the true future potential of the technology starts to become apparent. The analysis behind this finding was conducted by members of the Shell Scenario team back in 2008-2009 and subsequently published in Nature magazine (No Quick Switch to Low-Carbon Energy – Nature 462 – 3 Dec 2009 – Kramer and Haigh).

As an example, solar PV (photovoltaic cells) started its long journey back in the late 1970s and is only now building towards 1% of global energy demand, although within the electricity sector its contribution is approaching 4%. That is a 30+ year journey to scale. Wind has followed a similar path. Electric vehicles have had many false starts, including a large scale false start around the turn of the last century which was soon eclipsed by the Ford Model T. The pathway for nuclear was exceptional; it emerged from projects in the Second World War and developed quite rapidly from the early 1960s, but has remained largely static during this century at 5% of the global energy mix. The time from the first nuclear reactor in 1942 to 1% of global electricity generation was only 20 years.

But why so long? Take for example the potential application of hydrogen in iron ore smelting instead of the traditional use of coal. The chemistry of the process is well understood, but not a single demonstration of the process exists. However, a consortium of northern European companies have announced the planned construction of a pilot plant, with a view to have an operational process by 2035. Should this be successful, the first commercial scale plant may then be considered, which in turn will take some time for design, funding, decision and then construction. Future deployment by other companies may rest on a ‘wait-and-see’ decision following the start-up of such a first facility.

While the number of large blast furnaces in the world is in the dozens, it would still take many years to replace them all. In Sky, the heavy industry sector that utilises hydrogen begins to emerge after 2045, which aligns with the above consideration of suitable process designs being ready by the late 2030s and construction proceeding from that point in time. Between 2055 and 2080 the sector grows by a factor of six, which represents a rapid transition to the new technology.

The same may be true of a sector such as aviation, but possibly with an even later start. Aviation is completely dependent on energy dense hydrocarbon fuels, although there is some discussion of electric planes for very short haul routes. Hydrogen might emerge as a fuel for long-haul aviation and in Sky, we imagined that this would be the case. There has been some research over the years, but apparently very little at the moment. A Google search in the UK throws up a 2010 BBC report that notes hydrogen propulsion had been shelved completely by plane makers in favour of biofuels and continued efficiency improvements, although the same search also reveals a company in Singapore attempting development of a small test plane. While synthetic hydrocarbon fuels of some description may win the day in aviation, there is always the possibility of another contender emerging, but probably not yet. In Sky a first intercontinental hydrogen prototype flies in the 2040s, but scaled investment and use of hydrogen in aviation doesn’t commence in earnest until the 2050s. This is perhaps the earliest such deployment could be envisaged given the current state of development.

The thinking around transition timing discussed above is built into the Sky scenario, but it has also been pushed where possible to obtain the fastest possible transition. Big systems take time to change and major investments in emerging energy technologies come with caution and a lower appetite for risk. One aspect favouring this transition is the potential fragmentation of the energy system into smaller systems, including microgrids, local processing of waste and biomass (where local collection favours a smaller scale business model) and perhaps even technologies such as small modular nuclear reactors. Each of these can be built with smaller individual investments, negating the more cautious big investment approach.

 

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 www.shell.com/skyscenario.

 

Has climate change run its course??

June 14, 2018

A curious article appeared in the Wall Street Journal recently, written by Steven Hayward from the University of California, Berkeley, arguing that the climate change issue had run out of political steam.

The author notes early on;

A good indicator of why climate change as an issue is over can be found early in the text of the Paris Agreement. The “nonbinding” pact declares that climate action must include concern for “gender equality, empowerment of women, and intergenerational equity” as well as “the importance for some of the concept of ‘climate justice.’

Hayward claims that the descent into the abyss of social-justice identity politics represents the last gasp of a cause that has lost its vitality. But it’s hard to agree with this as a piece of evidence in favour of the argument. Climate change is a problem related to the global commons, so confronting it and finding a way forwards will always require the broadest range of actors and at least some consideration of all views. Further, the Paris Agreement itself doesn’t actually seek gender equality, it simply lays out what the Parties to the Agreement must do to manage emissions and adapt to change. The above references to gender equality come from the accompanying Decision text, in effect the preamble to the Agreement which sets out the context and provides instructions for implementation. Given the range of governments and interest groups involved in the Paris Agreement, it is hardly a surprise that inclusive language appears in the Decision text, but the Agreement text remains almost completely untouched by such wording.

The author also argues that ‘most national governments are backing away from forced-marched decarbonization’, a claim that is difficult to align with what can be observed in the world. Certainly, the intended actions set out by national governments fall short of the actions required to see global emissions immediately fall, but as each day passes small steps forward are being made, quite the opposite of backing away. Various carbon taxes, vehicle mandates, coal levies and assorted carbon related policies continue to emerge, albeit at levels not yet sufficient for major change, but nevertheless still being implemented. In the United States, a new tax credit has been legislated which will offer direct support for carbon capture and storage and may well result in substantial developments over the coming decade.

The author then states that the high cost of action will ultimately lead to the undoing of the issue, yet here again the evidence does not support the proposition. The cost of many of the energy technologies required over the coming decades has fallen dramatically, or is in the process of falling. Solar PV, offshore wind, batteries and even carbon capture and storage have all seen cost reductions, with some renewable power generation technologies now out-competing fossil energy systems. As recently as the publication of the Wall Street Journal article itself, a group involved in the development of air capture of carbon dioxide announced a steep fall in cost to as little $100 per tonne of CO2. While air capture remains a nascent technology, such articles and findings are becoming increasingly common across a broad range of mitigation technologies. Even for CO2 capture and storage technologies which will always be seen as an immediate cost to society, that cost over time will remain small when compared to the total cost of providing energy for the global economy.

Nevertheless, there may be one aspect of climate change that is over, although the author didn’t mention it in the article. Such is the change in energy technology costs over the past decade in combination with an underlying growth in low carbon and air quality related energy policies,  that the potential extent of change in the climate itself could now be limited. In other words, the prospect of runaway change might have passed.

While the policy landscape is far from complete in terms of meeting the goals of the Paris Agreement, the IEA New Policies Scenario indicates that global emissions have little remaining upside before reaching a plateau. In the Shell Oceans scenario, which sees widespread adoption of solar as costs fall, a plateau in global emissions in the 2030s is followed by a gradual fall from 2040 to 2060, with an acceleration thereafter towards net-zero emissions shortly after 2100. While these scenarios do not encompass sufficient change to meet the goals of the Paris Agreement, they nevertheless indicate that energy system emissions could fall to very low levels simply through the combination of technology development and some policy implementation.

This has important implications for the climate system. Early scenarios published in the IPCC 3rd Assessment Report included cases such as the A1F1 and A2 scenarios, which saw CO2 emissions rise towards 100 Gt per annum late in the century, but with the  more optimistic scenario (A1T) seeing a plateau and then slow fall in emissions that is similar to, albeit even a little above, what now looks very plausible. A1T sees a temperature rise of just over 2.5°C in 2100, with a range from several models of 1.8-3.3°C.

High fossil fuel use scenarios such as A1F1 and A2 led to the very real concern of not just 3-4+°C temperature rise by 2100, but conceivably 5-6+°C of temperature rise or possibly more, which in turn could result in changes in the climate that would be very difficult or even impossible to manage and adapt to. This in turn led to climate alarmism, which the author of the Wall Street Journal article compares to a continually blaring car alarm which people then ignore.

In 2009 the MIT Joint Program on the Science and Policy of Global Change published an analysis of climate policy targets under uncertainty. The analysis demonstrated that even a modest attempt to mitigate emissions could profoundly affect the risk profile for equilibrium surface temperature. They looked at five mitigation scenarios, from a ‘no mitigation action’ approach to a very stringent climate regime (Level 1, akin to a 2°C case). In the ‘no mitigation action’ approach, mid-range warming by the end of the century is some 5°C compared to the late 20th century, but with a wide distribution, which means that there is a small probability of warming up to 8°C or more – an unacceptably high outcome even when accounting for the small probability that it might occur. But even modest mitigation efforts, while not shifting the mid-range sufficiently for an outcome close to 2°C, nevertheless radically change the shape of the distribution curve such that the spread narrows considerably, with the highest impact outcome dropping by some 3-4°C. As mitigation effort increases and the mid-range approaches 2°C, the distribution narrows further such that the highest possible outcome is limited to 3°C.

Mitigation uncertainty analysis

Quite possibly, through the current actions of governments, the advance of technology and the first steps along the path laid out by the Paris Agreement, the ‘no mitigation action’ outcome is now off the table and the future risk profile is quite different to the one faced in 2001 when the IPCC 3rd Assessment report was published. While this is good news, it isn’t yet cause to stop and celebrate, given that there is now greater clarity on long term impacts such as sea level rise, which could be several metres even at 2+°C. But it could usher in a more matter-of-fact debate about climate change and mitigation, without the background cacophony.

Arguably, the space between 1.5 and 3°C may be where the real story now lies.

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.