Category: Energy Transition

When might fossil fuel phase out happen?

dchone November 27, 2023

In the run-up to COP28 and at the conference itself, a key call by some nations and many observers is to include language in the COP decisions to signal the phase out of fossil fuels. While there is no question that the carbon dioxide emissions from the use of fossil fuels and any leakage of natural gas (primarily methane) to the atmosphere is the main cause of the rising global average surface temperature, is it premature for such a call and should phase-out be the all-consuming drive at this stage of the transition? It is of course the obvious answer to the problem of limiting carbon dioxide emissions to a finite amount, but obvious answers aren’t always the right ones.

Given time, there is little doubt that society will move on from thermal combustion as a source of energy, even though it has been the only large-scale source of energy for millennia. Once that happens there will be little need for fossil fuels. We are in an era of rapid technological change and exciting developments in multiple fields of science, with energy production now tending to move into the quantum realm, as information technology has been doing over the past 70 years. Come back in a century or so and the energy world will likely be very different. But that doesn’t help the immediate problem of emissions mitigation.

To better understand the challenge today, Shell uses scenarios to look at nearer term trends and The Energy Security Scenarios released earlier in 2023 are the perfect tool to shed light on the question of fossil fuel phase out. But first, it is important to look at the reality of where we are today. We still live in a society that is utterly dependent on fossil fuels for the delivery of most energy services, such as lighting, heat, mobility, information transfer and powering rotational equipment (pumps, compressors etc.). The production of most goods either includes fossil carbon directly (e.g. plastics, bitumen, cosmetics, medicines etc.) or requires fossil fuels in the production chain. The transition is under way, but the percentage of fossil fuels in the global energy mix has remained at around 80%, even after a quarter century of sustained effort to shift that dependency. However, the pace of change is accelerating. The current global emissions picture for a world powered mainly by fossil fuels is illustrated below.

Phasing out fossil fuels means finding a substitute for the delivery of every single energy service or manufactured item that exists today. Therein lies the problem – the substitutes don’t exist yet, at least not at a scale that matches the delivery potential of fossil fuels. This starts with very humble items, such as the pencil, which I discussed in a recent blog post but extends through to the entire electricity grid. Solar and wind are here to stay, but the complete set of technologies required to power cities with them all the time, overcoming the inherent intermittency of these energy sources, are still in the early stages of development. Similarly, the technologies to make green hydrogen, green ammonia, sustainable aviation fuels, synthetic hydrocarbons using atmospheric carbon dioxide and green hydrogen all exist but operate on a small or in some cases even pilot scale, whereas global oil production alone fills two 330-metre-long super-tankers every hour.

At a recent refinery technology conference I attended, there was real interest in processes to make sustainable aviation fuels, from relatively straightforward hydrotreating of waste oil to complete synthesis of jet fuel from carbon dioxide and hydrogen. Refiners want to do this, and aviation companies are starting to look for these fuels, but the industry is at the beginning of a long-haul development process to completely replace fossil-based aviation fuel. And if our thoughts then turn to electric or even hydrogen powered planes, these are still on the drawing board. Development and widespread deployment of new energy technologies on a global scale is measured in decades, not in years.

When the Shell scenario team developed The Energy Security Scenarios we thought hard about these timelines for change and considerable research went into understanding when technologies might emerge at scale. Two transition scenarios are presented, Sky 2050 which is largely devoid of headwinds and builds on global mutual interest, and Archipelagos which sees national self interest prevail and act as a drag on the energy transition when compared to Sky 2050. In Sky 2050 which achieves net-zero emissions globally by 2050, fossil fuel use is still commonplace in that year, albeit reduced by nearly two-thirds when compared to today. Substitutes are being found and alternative services delivered, but not fast enough to phase out fossil fuels on a timeline that matches the need for net-zero emissions.

The short answer is that net-zero emissions should take precedence over fossil fuel phase out because it can be achieved more readily and in a shorter time frame. But even net-zero emissions in the shorter term, such as by 2050, will require not just considerable fossil fuel substitution effort but also considerable use of every available carbon removal mechanism. In the Sky 2050 illustration below, remaining emissions (fossil energy and cement) of 8.4 Gt per year in 2050, even after the direct use of carbon capture and storage (CCS), is balanced by carbon removals delivered mainly through land use change, some direct air capture with geological storage (DACCS) and bioenergy production linked with geological storage (BECCS). But as noted, there has been considerable substitution away from fossil fuels as an energy source when compared to now.

A strategy that builds on the notion that all fossil fuel use can be ended by 2050 is likely to fail, whereas one that focuses on net-zero and embraces the seeming ambiguity and apparent messiness of such a solution can succeed. But it is just an interim step towards a world where fossil fuel use has largely ended. By late in the century in Sky 2050, fossil fuel use is a tiny fraction of today and most of that remaining use is as a ready source of carbon for making things, like plastic products. The fossil fuel use for combustion processes is in limited legacy applications where facilities that were built years earlier with CCS are still operating. But direct use of CCS has declined considerably compared to 2050 as industrial concerns use hydrogen, bioenergy and electricity to power their facilities.

Fossil fuel phase-out is a handy catch phrase that attracts interest and seemingly presents a solution to rising global temperatures, but it may not be the best immediate solution. A focus on net-zero and the development of policy instruments to encourage a balance between remaining emissions and various sink technologies and land use practices is where we need to be, but such a framework is proving hard to realize. Nevertheless, the USA is doing it now with a pioneering incentive scheme aimed at both new energy technologies and carbon emissions management; perhaps a trillion US dollars will flow into this full range of transition technologies. And in Australia a carbon farming initiative (CFI) has been running for some years which incentivizes farmers to maximize land carbon stock as an important output from their agricultural activities, such as growing wheat and raising cattle.

As COP28 gets underway, the fossil fuel phase out discussion may get very heated, and while it is an important discussion to be had, it should not become a distraction to the shorter-term goal of net-zero emissions, which will require a major emphasis on the development of carbon removal practices and technologies.

Note: Shell Scenarios are not predictions or expectations of what will happen, or what will probably happen. They are not expressions of Shell’s strategy, and they are not Shell’s business plan; they are one of the many inputs used by Shell to stretch thinking whilst making decisions. Read more in the Definitions and Cautionary note. Scenarios are informed by data, constructed using models and contain insights from leading experts in the relevant fields. Ultimately, for all readers, scenarios are intended as an aid to making better decisions. They stretch minds, broaden horizons and explore assumptions.

The pencil problem

dchone October 9, 2023

Many years ago the well know economist Milton Friedman made a short film about pencils that continues to resonate today. While the film can be interpreted as simply a defence for capitalism, which Friedman was famous for defending, it nevertheless does make a good point about the complexity of the world we live in. The manufacture of an item as simple as a pencil requires such a wide range of resources, skills, machines and knowledge that no one person could easily craft a pencil as refined as the product we can buy for not very much money in a local shop or online.

The steps to make a pencil are many, but at least the basics are outlined in this short video.

What is missing however, from both Friedman’s and the manufacturing video, is any reference to the energy (and hydrocarbon materials) required and where that energy (and hydrocarbons) might come from. There’s almost an underlying assumption that the energy is just there, available in abundance. But the complexity of the system to deliver the pencil relies entirely on a complex energy system that we are collectively now trying to change. Unfortunately a rhetoric has emerged that this change will be both simple and quick, yet neither are true. The energy system that delivered the pencil took over 150 years to evolve, and it continues to do so even without the more recent changes related to renewable energy. But the pencil that emerges has CO₂ emissions related both directly and indirectly to its manufacture, largely because of the energy system used to power the manufacturing steps, which of course is why that energy system needs to change. However, that energy system is only there because we need pencils, and other manufactured goods and energy services.

Within the pencil the most visible material is wood, which is often cedar as noted in the above video. While this is entirely natural, sourcing it requires considerable amounts of energy to fell trees, transport the logs, cut and shape the wood, then move the final wood pieces to the pencil manufacturing plant. While some of this energy is electricity, there is considerable use of diesel for transport.

The pencil lead is noted as being a mixture of graphite and clay, baked at over 800°C in a furnace. The world’s largest graphite producers are China, Madagascar, Mozambique and Brazil, so there will almost always be considerable transport involved, probably by sea using marine fuel oil or marine diesel. As well as the energy used in the mining and refining process, baking the graphite with clay will likely require natural gas. But there is also synthetic graphite as an alternative. Synthetic graphite is produced through a complex process of baking petroleum coke at very high temperatures. Synthetic graphite can have a purity of over 99% carbon, and it is used in manufactured products where extremely pure material is required, which includes pencils.

Then there is the glue. Modern wood glues are largely synthetic, made from petroleum-derived plastics like polyvinyl acetate (PVA). Almost all vinyl acetate monomer is now produced via the vapor-phase reaction of ethylene and acetic acid over a noble-metal catalyst, usually palladium. The reaction is typically carried out at 175–200 ºC and 5–9 bar pressure. The ethylene might come from an ethane cracker, such as the Shell facility in Pennsylvania which uses the ethane in natural gas to produce ethylene for the further manufacture of chemicals and plastics (like polyethylene). But along the way considerable energy is required for the synthesis process, also coming from fuels such as natural gas, but some electricity as well which could be sourced renewably.

The ferrule at the end of the pencil is made of aluminium, which is also an energy intensive mining, refining, electrolysis based process with multiple transport steps. Much of this requires liquid fuels and natural gas, although the electrolysis step often uses renewable electricity in places of abundance, like Iceland. However, the electrolysis currently requires graphite in the anode and cathode, with the anode being consumed during the electrolysis process (producing CO₂) and needing constant replacement.

Finally there is the pencil eraser, which may be made from natural rubber sourced from a country such as Malaysia and transported on ships using marine fuels. But much of the global rubber industry is now based on synthetic rubber, which derives from yet another complex chemical process. Synthetic rubber production begins with the refining of oil or other hydrocarbons. During the refining process, naphtha is produced. The naphtha is then used to produce monomers such as styrene and isoprene, which are necessary for the production of synthetic rubber. The most common synthetic rubber is styrene-butadiene rubber (SBR) derived from the copolymerization of styrene and 1,3-butadiene.

The paint used to decorate the pencil may also have various components in it derived from crude oil and the manufacturing process will require energy as well.

So far I have only discussed the pencil itself, but there is an enormous dependency on milling machines, cutting devices, refineries, pipes, ships, trucks, tanks, storage depots, roads, trains and various other pieces of infrastructure, many of which are made of steel and therefore require iron ore mining and coal fired smelting for production. And all the roads used for transport, including the final delivery of the pencil to a shop or to a home to fulfil an online order, are largely made of bitumen, derived from crude oil.

While the pencil itself is a relatively simple implement, as Milton Friedman points out it requires the cooperation of thousands of people to produce. But it also requires the operation of hundreds of different mining, chemical and energy production facilities, not to mention factories making machines, trucks, ships and other pieces of equipment. All of these run on energy and most will use coal, oil or natural gas to do so. Only a fraction have been fully converted to renewable power, although many more may use some renewable energy as part of the electricity the facility uses or the final delivery may be in an electric van. Some of the processes required to ultimately make a pencil may not yet have an alternative that doesn’t use oil or natural gas as a feedstock for the carbon in the final product.

The job ahead is to convert all of these, or rebuild them, to facilities that don’t use coal, oil products or natural gas for energy. In our recently released Sky 2050 scenario, the near 80 years between now and the end of the century sees a world largely achieve this, but at a pace of change that is unprecedented. In the Sky 2050 scenario, in the year 2100, fossil fuels make up less than 5% of primary energy demand, with a good portion of that going into products like pencils rather than being used for energy. But this is not the case at all in 2050, when fossil fuels are still about a third of primary energy and therefore emissions from their use must be managed through land use mechanisms and geological storage of CO₂. This is what net zero is all about, since zero use of fossil energy is much more a 22^nd century possibility than it is a 21^st century reality.

Note: Shell Scenarios are not predictions or expectations of what will happen, or what will probably happen. They are not expressions of Shell’s strategy, and they are not Shell’s business plan; they are one of the many inputs used by Shell to stretch thinking whilst making decisions. Read more in the Definitions and Cautionary note. Scenarios are informed by data, constructed using models and contain insights from leading experts in the relevant fields. Ultimately, for all readers, scenarios are intended as an aid to making better decisions. They stretch minds, broaden horizons and explore assumptions.

A rush to renewables isn’t enough; managing fossil fuel emissions is essential as well

dchone June 26, 2023

A guest post by my scenarios team colleague Richard Baker – Senior Energy Adviser

There is widespread consensus that a marked decline in the use of all oil and gas over the coming decades is required if the world is to meet the goals of the Paris climate accord. Any discussion of technology that is perceived as prolonging investment in their usage is invariably greeted with condemnation. Recently, in the run-up to COP28 in the UAE, the incoming COP President, Sultan Ahmed Al-Jaber, was criticized in some sections of the media for stating that the world needs to focus on tackling emissions from fossil fuels rather than simply eliminating their use.¹

But technologies that reduce emissions from oil and gas play a critical role in a transition to net zero and the incoming COP President was correct to address this. To understand why, Shell’s recently published Sky 2050 scenario provides a useful framework. In this scenario, net-zero emissions (NZE) is reached in 2050. Although the temperatures in the scenario rise to 1.7ºC, as modeled by MIT, negative emissions in the second half of the century result in a temperature rise of 1.2ºC above the pre-industrial average in 2100.

Sky 2050 does not make unrealistic assumptions about near-term oil and gas production or a rapid decline in demand for oil and gas. Global demand is yet to start declining and it is difficult to envisage upstream projects already operating or currently under development being paused or canceled. To that end, the Sky 2050 scenario sees demand mostly plateau this decade, but then rapidly decline in the 2030s and 2040s, with oil at 45 mb/d (million barrels per day) and natural gas at 1.9 Tcm (trillion cubic meters) by 2050, which are both slightly less than half of today’s levels. A demand led trend towards zero oil and gas by 2050 isn’t realistic as we are still far from having a complete set of technologies to replace all the uses for oil and gas.

In fact in Sky 2050 it isn’t until 2100 when the world has largely left the era of fossil fuel energy behind, although even then oil and gas are still used for making things, from solvents to plastic water bottles.

While Sky 2050 in 2050 clearly shows a reduction from today, this is nowhere near zero. Instead, Sky 2050 relies on significant use of industrial carbon capture and storage and negative emissions that use a combination of technological and natural sinks to reach net-zero emissions. The technological storage of carbon dioxide is significant by 2050 and beyond; in Sky 2050, the size of the carbon capture utilization and storage (CCUS) industry is ultimately bigger than the natural gas industry today in terms of the volumes of gas handled and direct air capture (DAC) plays an ever more prominent role in the second half of the century.

Yet moves to capture and store carbon dioxide emissions are not universally popular. Some argue that it gives the industry carte blanche to carry on producing at today’s levels. But continuing to invest in the industry, including emission reducing technologies, is not the same as maintaining or growing production.

Reservoir decline rates are hard to quantify as they are rarely left without any intervention to simply decline. Rates of 4-5% are often quoted, but this usually includes drilling additional wells or installing pumping equipment, and the true rate is probably higher. But even using a 4-5% decline rate from now would give production levels of 23-30 mb/d in 2050 for oil and 0.9-1.2 Tcm for gas, significantly below the demand levels modelled in Sky 2050.

This gap will need to be filled by ongoing investment. Objections to new projects often raise the International Energy Agency’s (IEA) landmark Net Zero study as evidence, but the report is usually misquoted. The report does not say that no investment in oil and gas is required, but instead states that “no new oil and gas fields are required beyond those that have already been approved for development” and the required investment levels reported, which average $500 billion per year this decade, are more or less what the industry is currently spending. Even in the 2030’s, the IEA calculation of required spending levels of $300 bln per year is considerable. And the context behind the IEA statement is almost never included. The scenario from which the statement emerges not only requires a huge investment in new energy systems but very importantly, a world making significant efforts to reduce overall energy demand, through important changes in behaviour (e.g. cycling more, not flying etc.), extreme efficiency measures in the built environment and even some energy austerity. Most of that isn’t happening or at best, isn’t happening fast enough or in a sustained way.

Whether the required oil and gas investment could be focused only on existing fields, or if new developments are required, is a matter of debate. A cursory glance around the world today would find no shortage of oil and gas assets with large resources that are struggling to maintain production, even when incentivized by the recent uptick in oil prices. For many countries, geopolitical and local factors are restricting investment, and in some cases the technical expertise previously provided by international oil companies is lacking.

So how is the industry responding? There are two pathways playing out.

The first is that existing fields are attracting investment to maintain production, but there is also some new field development underway. The IEA report also goes on to say that ‘minimizing emissions from core oil and gas operations should be a first-order priority for all oil and gas companies’. Many operators are doing just that, seeking ways to reduce their own production emissions, including the electrification of facilities (and generating that electricity from renewable sources) and aiming to eliminate flaring, amongst others. And there is widespread effort underway to clamp down on fugitive methane emissions with techniques such as drone technology, but particularly from aging infrastructure where such initiatives are helping to identify the worst culprits. The counter argument is that for oil, where 85-90% of most emissions come at the point of combustion in a car, plane, or ship’s engine, reducing intensity in the upstream has a relatively small impact on reducing total emissions. But given that Sky 2050 sees 250 Gt of CO₂e emissions from oil use in the next 27 years, addressing 10-15% of the issue still adds up to 25-40 Gt, equivalent to global emissions from a single year.

The second pathway is the focus on developing carbon capture and storage for the so-called Scope 3 emissions, or the emissions from the actual use of oil and gas. Many such projects are in the pipeline but there is also real innovation emerging. For instance, Occidental plan to inject CO₂ captured directly from the air into reservoirs in a technique known as Enhanced Oil Recovery. The company claims that more CO₂ is injected than is subsequently released when the fuel is combusted, and regulators agree; oil produced via this method will qualify for the low-carbon (45Q) tax credit. For now, it’s the only project under development, but if successful, it may provide a blueprint for others to follow. For gas, where combustion tends to be more concentrated in a power plant or industrial unit, there is significant scope for point source capture and there are many projects in development, although not yet on a par with the scale in Sky 2050.

It’s often said that CCUS is an unproven technology when, in fact, the capture and re-injection of CO₂ have both been practiced for decades. According to the IEA, of the 40 Mt captured in 2021, around 75% was captured from oil and gas operations. The question is whether commercial drivers, including carbon taxes, can help deliver the scale envisaged in Sky 2050. The issue with carbon capture and storage has never been the technology, but always the business model to support the investment.

While in Sky 2050 there will be reduced demand for oil and gas in sectors that can be electrified, like transport, by mid-century there will still be sectors of the economy that are using oil and gas because the alternatives are not deploying at sufficient scale. The demand from these sectors is greater than natural decline alone would allow, requiring further oil and gas investment.

Dr Al-Jaber was right to point out that the production that remains will need to be as low carbon as achievable, while a global negative emissions industry needs to be built. These two parts of a burgeoning carbon management industry will require continuous investment as well as policy support. The challenge for the upstream oil and gas sector is to deliver both and that could even mean a combined production and carbon capture sector that is bigger in the second half of the century than the stand-alone oil and gas production sector today.

^[1] https://www.nytimes.com/2023/05/03/climate/un-climate-oil-uae-al-jaber.html

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.

Business schools and climate change

dchone February 6, 2023

For quite a few years now I have found myself in front of a class of MBA students at a number of different institutions giving a talk on climate change and the energy transition. Each has their own take on how to tackle the subject. Some leave it up to me but at Harvard University the talk was entitled ‘The Future of Fossil Fuels in the Energy System’ and the session included a presentation from a well placed analyst in the finance sector. One common feature is the high level of interest in the class and the diverse and sometimes difficult range of questions that come my way. As such, the sessions are always enjoyable and something of a highlight of my job.

But another common feature is that my lecture was typically part of a module within the course that is optional and as such often populated by students who may have worked in the energy industry or have a close association with it. At least until recently, I didn’t get the impression that the bulk of the students saw energy and climate as pivotal to their future business success. But that appears to be changing.

In my experience, one of the leading business schools in promoting the climate issue as a much more important component of an MBA course is Tuck School of Business at Dartmouth College in Hanover, New Hampshire. I am particularly fortunate to have spoken there in person a few times, although more recently it has been a Zoom experience for the students. Professor Anant K. Sundaram leads in this area for Tuck and he and Robert Hansen are to be commended for elevating the subject further, with the publication in January of The Handbook of Business and Climate Change.

The Handbook is a weighty document, some 560 pages long, and covers a swathe of subjects from decarbonising electricity and managing aviation to carbon pricing, green bonds and ESG investing – to name but a few of the many subjects. Sundaram and Hansen haven’t written the book in entirety themselves, but instead sought out numerous authors to write the various chapters. I was honoured when Professor Sundaram asked me to write one of the opening chapters, helping set the scene for the book.

After some thought, I decided to call the chapter ‘The End of Combustion?’, perhaps to challenge the orthodoxy that is emerging around the future role of fossil fuels throughout society. In the chapter I explore the transition pathways that have appeared in recent years and where they may be taking us and the extent to which fossil fuel use might end by 2050. Regular readers of this blog may notice a few extracts from my posts or should at least recognise some regular themes. Perhaps not surprisingly the chapter raises the issue of natural and engineered carbon sinks and the many challenges society faces in creating a vast industry that few seem to actually want yet many recognise we desperately need.

This may not be a book for everyone and as a university textbook it’s unlikely to appear on the New York Times Best Seller list, but as an aide for business school students it should prove invaluable. Accelerating the energy transition will require all of the skills that a good business school seeks to impart on its students and all of the talented people that graduate as well. ‘Energy and climate change’ is no longer an optional module for the interested, but an essential part of a business background. There isn’t a company in the world that doesn’t use energy in one form or another and there’s unlikely to be a company that isn’t impacted by the transition or climate change or both.

Thanks to Tuck and Dartmouth for leading the way. And in case you missed it above, here is the link to the handbook and here is a Chapter 1 teaser link along with the detailed contents.

Can the energy transition help EU energy needs?

dchone August 11, 2022

As the EU grapples with the challenge of displacing Russian oil and gas and meeting immediate needs as Russian supplies are cut, the question of the scale and speed of the energy transition emerges. How fast can Russian supplies be displaced by the transition itself?

The two charts below show the current situation. Prior to the Russian invasion of Ukraine, oil and gas supplies from Russia and into Europe contributed to about 40% of overall European demand, with local production making up much of the balance in the case of gas, but just about half the balance in the case of oil. In the case of gas, the flow to Europe is about a quarter of Russian supply, but for crude oil and oil products it’s nearly half.

Both charts show that European production has declined over twenty years and in the case of oil reached an apparent plateau around 2012. It’s unlikely that local production increases could make up for the cut in Russian supplies, so that leaves three immediate options;

Immediately cut overall energy demand, which in turn could translate to a reduced need for Russian supply.
Find supplies elsewhere.
Accelerate the energy transition to reduce the overall need for oil and gas in the energy mix.

While it’s clear from recent announcements that the EU strategy will embrace all three options in the short term, the longer term strategy will almost certainly rest with the transition itself. But such a transition could well take all of this decade, and probably longer, to complete.

Gas supply is perhaps the more problematic issue, as supply is less flexible globally than oil due to pipeline constraints, LNG capacity (the availability of shipping, liquefaction and regassification facilities) and long term storage. While gas has become a flexible commodity in the 21^st century, it still remains easier to reorganise, redirect and store oil. However, gas may be faster to displace than oil from an energy transition perspective.

The gas chart above also shows how the rapid deployment of wind energy across Europe could be used to offset Russian gas requirements, but it’s a journey that takes the best part of a decade. This assumes a compounding growth rate in wind deployment of 10% per year, slightly above current levels of 8%, but equivalent to the growth rate from 2010 to 2017. However, with a much larger installed base, 10% growth in 2029-2030 means installing some 50 GW of wind in that year versus the 15 GW installed in 2017 and again in 2021. So the annual installation rate has to at least triple. Of course wind isn’t the only technology, there is solar PV as well, at least for the southern latitudes of Europe.

Further to the above, if rapid growth in renewables is focussed entirely on displacing Russian gas or filling the void left by the absence of Russian gas, less progress will be made in displacing the current use of coal in the EU. This could make meeting the EU 55% by 2030 emissions reduction goal more challenging, as eliminating coal for a given electricity production can deliver twice the emissions reduction versus the same shift for gas.

By contrast, displacement of Russian oil through the energy transition looks to be a slower process, although it may turn out to be less necessary. Oil is a more flexible commodity in terms of source and destination, although there could still be pinch points in the system, for example inland east European refineries tied to Russian crude via pipelines. The largest portion of EU oil demand is for transport and within that the capacity for replacement in the 2020s sits with electrification of passenger vehicles, vans and city buses. Alternatives for larger trucks, ships, barges and planes are not yet mature enough for fast large scale deployment.

If we assume a very rapid deployment of electric vehicles (EV), to the extent that all new sales are electric by late in the 2020s (a rate faster than the current goal of 2035 for all EV sales), only about 50 million tonnes per year of oil is displaced by 2030, or about a fifth of the oil that comes from Russia. This is because of the time it takes to turnover the exiting stock of vehicles. Within Europe there are some 250 million passenger cars (Source: Eurostat), but new car sales are in the range 12-16 million vehicles per year, so in eight years only about half the total stock will be replaced anyway. With EVs currently comprising about 10% of new sales, albeit that share growing rapidly, replacing even half the total vehicle stock with EVs will take longer.

In the end, a rapid energy transition can contribute significantly to the EU weaning itself off Russian oil and gas, but this won’t happen in the next few years. By the end of the decade significant progress can be made, especially for gas, but it will likely be well into the 2030s before the same is achieved for oil.

Could the transition drive emissions up?

dchone July 12, 2022

One question that comes up quite regularly about the energy transition is the amount of energy, and therefore emissions, required for the transition itself. This is the energy required for making solar PV modules, wind turbines, batteries and so on. Further up the supply chain there is also the energy required for the additional minerals, such as the lithium, nickel, cobalt and copper found in an electric vehicle (EV). These not only have to be mined, but also go through extensive industrial transformation and refining processes to make the actual materials required for the end use. Today, most of these processes use oil, coal and gas for energy, giving rise to carbon dioxide emissions.

Perhaps the most energy intensive part of the energy transition is the manufacture of lithium-ion batteries, now being widely deployed in EVs. Some commentators have even questioned the effectiveness of the EV as a mitigation route, particularly when the battery is made in China (currently a heavy reliance on coal for energy) and the vehicle is driven in a country with a high electricity emissions intensity (e.g. a country like Poland still largely dependent on coal fired power stations). The problem with this argument is that transitioning in a series of steps (e.g. first decarbonise the electricity supply, then start deploying electric cars) would take decades longer than transitioning in parallel steps (i.e. decarbonising the electricity supply at the same time EVs are deployed). Nevertheless, the parallel approach could drive up emissions in the short term, the question is by how much?

The manufacture of batteries for EVs provides a good example of the problem. In a recent article, MIT report that the Tesla Model 3 holds an 80 kWh lithium-ion battery and the CO₂ emissions for manufacturing that battery would range between 3120 kg (about 3 tons) and 15,680 kg (about 16 tons), depending on the manufacturing location. The article notes that the vast majority of lithium-ion batteries—about 77% of the world’s supply—are manufactured in China, where coal is the primary energy source. That means most batteries are currently made with CO₂ emissions at the higher end of the range, although as battery factories spring up across the world and particularly in the EU and US, that picture will change.

Bringing together a few assumptions about battery manufacture, EV deployment and embedded CO₂ in both manufacture of EV batteries and driving EV cars, it is possible to get a back-of-the-envelope view of the scale of the issue. I will assume the following;

EV production rises from current levels (some 7 million vehicles per year) to all EV production globally by the mid-2030s (i.e. no more internal combustion engine cars are built after that time). This is an aggressive transition, but probably the minimum that is required for a 1.5°C goal.
Higher CO₂ emission battery manufacture is currently at 77%, but the share declines to 40% by 2060 and the higher CO₂ emissions also fall by 75% over the same timeframe as the manufacturing system decarbonises.
Lower CO₂ emissions manufacture is therefore 23% now, but rises to 60% by 2060 and the manufacturing CO₂ emissions fall to zero by 2050. Decarbonising industry to such an extent will require a variety of technologies, with carbon capture and storage playing a critical role.
The 80 kWh battery delivers 300 miles of range and the average vehicle travels 10,000 miles per year.
The electricity supply which EVs use is on average 0.4 tonnes CO₂ per MWh now, falling to zero by 2060. The actual global average grid intensity is higher than 0.4 today, but EVs tend to be driven in lower intensity regions at the moment, e.g. the EU, California etc.
An EV produced today has a 15 year life.
The EV mitigates emissions from internal combustion engine vehicles at a rate of 120 gms/km. As a simplification, this doesn’t change throughout the calculation. It assumes that smaller cars are replaced earlier and that the average fleet efficiency of internal combustion vehicles improves over time.
The battery represents a net increase in car manufacturing emissions with other emissions in the manufacturing process about the same for both EVs and internal combustion vehicles.

The calculation is for net-emissions, which is;

[Battery manufacturing emissions] + [Indirect EV emissions during driving] – [Gasoline / Diesel emissions backed out by EVs] = Net Emissions

What we see from the charts below is that global passenger car emissions rise before they start falling when net-emissions cross the zero line. This happens in 2035. Clearly the year in which this happens depends on the assumptions made, with the CO₂ from internal combustion vehicles not being used being a key determinant. For example, if this is raised to 180 gm CO₂/km, the crossover point is around 2030.

The outcome certainly points to the longer term benefit of the EV transition, with global cumulative emissions over 25 Gt lower in 2060 than they would otherwise be. This is a material reduction when thinking about a 500 Gt carbon budget for 1.5°C. However, it also highlights an issue with the current global goal to reduce emissions by 45% by 2030 relative to 2010, as set out in the Glasgow Climate Pact; the EV revolution that we are currently in the midst of is unlikely to contribute to that reduction. If anything, it could make the task even more difficult.

In a post some time back I noted that the only real opportunities for change which could make a material difference to global CO₂ emissions by 2030 are where replacement technologies are already being manufactured at scale or where governments are prepared to create social change. This quickly reduces the options to only three major opportunities:

Significantly curtailing coal-fired power generation through replacement with renewables;
Replacing internal combustion engine vehicles with electric vehicles; and
Ending deforestation.

Passenger vehicle emissions account for 4 Gt, or 10%, of global CO2 emissions today. If change in this sector can’t deliver any net reductions by 2030 and potentially adds to global emissions, then it calls into question any possibility of a 45% reduction in 8 years. Almost perversely, if EV production could be ramped up in the short term, the problem for 2030 gets worse while the longer term net global cumulative emissions picture gets better.

None of the above is to meant to argue against an EV transition, it is clearly the right way to go. But like many other aspects of the energy transition, it is more complex than it looks.

Plunging into Islands?

dchone March 13, 2022

I, no doubt like you, am deeply concerned about Russia’s war against Ukraine and horrified at the resulting loss of life and humanitarian crisis enveloping millions of people. The protection of people should be everyone’s primary focus. But we are also seeing the impact of the situation on the world’s energy supply.

Just over a year ago the Shell Scenarios team launched the Energy Transformation Scenarios. The set of scenario stories looked at three possible pathways forward, built on societal trends that we saw emerging from the pandemic in our earlier work, Rethinking the 2020s. Those trends, illustrated below, were Wealth First, Security First and Health First, described as follows;

Wealth first: A focus on wealth and economic recovery, but this results in a late start to the rapid transition required to reach net-zero emissions around the middle of the century. Rather, the energy required to support growth in the 2020s comes from conventional sources. This led to the Waves scenario.
Security first: National sentiment shifts inwards and security issues prevail. The transition slows along with economic growth. Domestic energy resources prevail and while some countries proceed with a transition, the global pace of change required for the Paris Agreement just isn’t there. This thinking underpins the Islands scenario.
Health first: The pandemic leads to structural change across society, significant green investment and a realization that the broader health and well-being of society is fundamental. In this context the goals of the Paris Agreement are met under the Sky 1.5 scenario.

Islands always struck me as being a rather dystopian view of the world, but it emerged from a robust scenario development process as a very possible world. In more recent publications, such as our Singapore Sketch, it has been featured and discussed but not particularly emphasized. Both Waves and Sky 1.5 seemed more in tune with the times. Yet here we are, looking at the prospect of a world becoming very distracted from the energy transition by security issues.

While Islands is framed in the context of the pandemic and how it is dealt with, it nevertheless points to trends that are becoming visible in the world order as each day passes. As a nationalistic islands-type mentality takes hold in the scenario, growth in the global economy begins to stagnate, and efforts to address the climate challenge slow. Islands involves the triumph of the nation state and nationalism, while the forces behind globalization weaken. It is a more challenging economic environment where technology innovation and its diffusion are slow, and efforts to address climate change fragment. Geopolitics are re-calibrated and shift in tandem with increasing attention on national security and trade barriers. Security of energy supply and domestic socio-economics dominate agendas.

Even in Europe, with its strong focus on climate action, efforts to reduce emissions slow in Islands, particularly compared to Sky 1.5. Coal in primary energy remains high through to 2050 and the electric vehicle revolution stalls badly with no significant uptake until the late 2030s.

These trends may feel extreme in that, for example, there is already a visible shift towards electric vehicles in Europe. But scenarios are designed to push thinking to extremes, not forecast the future. Importantly, because they aren’t forecasts, we shouldn’t sit back and just imagine that Islands in now inevitable. Rather, we should take heed of the signals it is giving. There is the very real possibility of domestic security issues enveloping the world and slowing the energy transition, particularly if governments choose a path of rearming and shoring up their own borders. But other outcomes are also possible.

Sky 1.5 is built on strong international cooperation, which could be a possible silver lining in the current crisis. We imagined when developing the story that such cooperation emerged through actions related to the pandemic, but actions in response to the Russian invasion of Ukraine could also bolster the focus required for a major energy transition. What is hard to imagine is a rapid energy transition when governments are also deeply focused on security matters. That is perhaps the underlying Islands story.

Creating a 21st century energy hub in Singapore

dchone February 17, 2022

About a year ago the Shell Scenario Team released the Energy Transformation Scenarios, which looked in detail at possible pathways the world might take in this century as society responds to climate change and other pressures. The scenarios were built on earlier work that focused on the more immediate changes that society could see in the 2020s as a result of the pandemic. But the global story is just the tip of the iceberg; there is a wealth of national and regional detail below the surface of the Energy Transformation Scenarios thanks to the team’s energy modelling capacity.

One region that is of particular importance to the energy system is Asia and within the region Singapore is a key oil products supply and distribution hub. Given its unique geographical location and history as a major trading port, Singapore supplies some 20% of global marine bunkers, 3% of aviation fuel and exports a sizeable portion of the oil products used throughout the region.

*Singapore is a major oil products supply hub today (Source: Shell analysis of various data sources)*

But as the energy system shifts and oil products are replaced with electricity and fuels such as hydrogen, how might Singapore adapt to the transformation and what might this mean for its role as an oil products supply and distribution hub? To help people think about these key questions for Singapore, Shell has released a new Scenario Sketch, Singapore: A 21^st Century Energy Hub. The Sketch makes extensive use of the regional and country data within the Energy Transformation Scenarios, setting out three possible scenarios for the region.

These scenarios are not forecasts, predictions or plans, but possible pathways that could emerge if certain trends take hold. Only one scenario meets the goals of the Paris Agreement, which implies that very deliberate steps will need to be taken to ensure the goals are met. Scenarios can help craft our thinking about the future and catalyse the actions required to shape a particular outcome.

The three scenarios are known as Waves, Islands and Sky 1.5 and they reflect the underlying trends that can be seen across society as a result of the pandemic.

Waves: A focus on wealth and economic recovery, but this results in a late start to the rapid transition required to reach net-zero emissions around the middle of the century. Rather, the energy required to support growth in the 2020s comes from conventional sources. The transition is rapid from the 2030s, with a clear focus on ending fossil fuel use rather than directly managing emissions. Net-zero emission is reached around the end of the century.
Islands: National sentiment shifts inwards and security issues prevail. The transition slows along with economic growth. Although the transition eventually takes hold, net-zero emissions is not reached until well into the 22^nd century.
Sky 1.5: The pandemic leads to structural change across society, significant green investment and a realisation that the broader health and well-being of society is fundamental. In this scenario the goals of the Paris Agreement are met.

All three scenarios see the role of electricity expanding, for example in transport, the further emergence of biofuels and the introduction of hydrogen as an energy carrier for certain applications. But the time lines are very different. However, these shifts in the energy system all challenge the supply and distribution model that Singapore has established for oil products and tend to favour local production. This is certainly the case for electricity, but may also be true for biofuels where feedstocks are available on a local level and hydrogen should electrolysers become the preferred mode of production. However, hydrogen supply may also lend itself to a distribution model if significant renewable electricity is available in a particular area, although this is not currently the case for Singapore.

The more immediate change for Singapore comes in the aviation and marine sectors, where airlines and shipping companies are beginning to plan and implement strategies to make use of sustainable fuels and develop possible roadmaps for hydrogen as a future energy carrier. Although progress is slow in Islands, both Waves and Sky 1.5 see early developments. This opens up the prospect of Singapore leading the way in supplying such fuels, maintaining its role as a supply hub.

In Sky 1.5 another opportunity emerges for Singapore through Article 6 of the Paris Agreement. A feature of Sky 1.5 is significant activity to develop carbon removals, both through reforestation and carbon capture and storage technologies. The use of removals to balance continued use of fossil fuels in some sectors is an important part of the global strategy for limiting warming to below 1.5°C in 2100, but catalysing the investment required for removals and directing the benefit to emitters requires a carbon trading market to emerge. With it’s strong history as a commercial and financial centre, Singapore could lead the way here, particularly as the region holds significant opportunity for removals and Singapore itself is a centre for the two sectors that may make greatest use of them, namely aviation and marine.

*Singapore could become a major carbon trading hub*

A feature that does emerge across the stories is just how long Singapore may find itself as an important regional distributer of oil products, even as the transition gather pace. The Asian region is still developing rapidly, with some 2 billion people (ASEAN and China) moving from modest to middle income and making use of a broader range of energy services in the process. Immediate growth in the region will draw heavily on existing energy sources and services, given their availability and scalability. Only in the fastest of transitions is this trend overcome with new energy sources scaling quickly enough to match new demand.

Where Singapore stands as an energy hub in 2050 and beyond has yet to be established. But now is the time for the bold decisions necessary to create the best possible future. Scenario analysis is a useful tool for understanding new trends and directions. We hope this publication helps inform readers about an otherwise uncertain future and positions them for the journey ahead.

Also check out the scenario infographic here.

Shell’s scenarios, including this Singapore Sketch, are not intended to be projections or forecasts of the future and they are not Shell’s strategy or business plan. When developing Shell’s strategy, our scenarios are one of many variables that we consider. Ultimately, whether society meets its goals to decarbonise is not within Shell’s control. This Singapore Sketch is based entirely on the data and findings of the Shell Energy Transformation Scenarios, released in February 2021. Please read the full cautionary note at: http://www.shell.com/investor and http://www.sec.gov

Battery trends

dchone August 2, 2021

Two key advantages of fossil fuels are the energy density of the fuel itself and the ease of storing energy that a molecule based fuel offers. Most homes have a huge energy store sitting in the car gasoline tank in the garage, or perhaps in an LPG / propane tank in another part of the house. The ease of storage makes transport relatively simple, with everything from passenger cars to A380 planes dependent on the need to carry fuel with them. But as the shift away from fossil fuels gathers pace and electricity grows in importance as the energy carrier of choice, one critical technology emerges that we all already use but will grow in size and scale – battery storage. We need batteries to store electricity for portable use and to store electricity at city level scale to manage the power grid, particularly as intermittent renewable sources become prevalent.

Battery technology dates back to around 1800, but domestic batteries were made popular over 100 years ago with the introduction of the AA battery in 1907 by the American Ever Ready Company, following on from their successful D cell flashlights. Today, we use batteries for a variety of household devices, but battery use across society is set to expand rapidly as the energy transition gathers pace. Further, as battery technology improves, these handy energy stores are making their way into more and more devices and applications.

In 2010, global battery production was less than 5 GWh, but with the arrival of the electric car and the growth in grid storage, production in 2020 was nearly 400 GWh (Source: Wood Mackenzie). There is also a significant and growing pipeline of Gigafactory projects, with manufacturing capacity around 1.3 TWh by 2030 based on known and expected projects. But what about the demand potential?

Numerous auto manufacturers have signalled their intent to bring internal combustion engine (ICE) passenger car manufacturing to an end, with dates between 2030 and 2040 often cited for the full switch to electric vehicles (EV). As a stretch, let’s assume that all passenger ICE production ends by 2035, which by then might mean 70 million EVs produced globally per year. If each car requires an 80 kWh battery, then that’s 5.6 TWh of new capacity required each year. Although recycling of batteries and battery components will eventually change the manufacturing landscape, that won’t be the case in the first half of the 2030s. At that time the availability of material for recycling will be the result of production today, which is a tiny fraction of our assumed production in 2035.

Grid storage requirements are a significant unknown. In a report published earlier this year by the research firm Frost & Sullivan, they predict additional global grid battery storage capacity additions will likely reach 135 GWh (0.14 TWh) in the next nine years from the 8.5GWh annual capacity additions that were recorded last year. But capacity additions are scaling rapidly, with the much talked about Tesla installed 100 MWh facility in South Australia in 2016 now easily eclipsed by multiple 300-400 MWh projects. In a 2020 study released by RethinkX, they estimated that for areas of the United States, a shift to 100% wind and solar would require some 40-90 average demand hours of battery storage. In 2020 US electricity demand was 4300 TWh, which would imply around 30 TWh of battery storage. However, it is possible that there is overlap between grid storage and EV storage, which by 2035 might have reached 12 TWh sitting in US garages and at charging points (assuming at least 50% EV penetration by then).

Assuming a rapid transition, the US alone might need 20-25 TWh of installed storage capacity by 2035, with global installed capacity perhaps reaching 100 TWh by that time. That would require a 35% year-on-year expansion of battery production capacity for the next 15 years as shown in the chart. That means in 2035 global battery production is close to 100 times current levels. It also requires manufacturing capacity in 2030 of 8 TWh, six times that of the current project pipeline for new facilities.

Batteries require particular minerals and chemistry, which today consist of lithium, nickel and cobalt in the current generation of Li-Ion batteries. The chemistry of batteries is the subject of extensive research, which points to much lower requirements for these minerals per kWh of storage. A recent analysis by the European Federation for Transport and Environment (Transport & Environment (2021), From dirty oil to clean batteries) states that over the period 2020 to 2030 the average amount of lithium required for a kWh of EV battery drops by half (from 0.10 kg/kWh to 0.05 kg/kWh), the amount of cobalt drops by more than three quarters, with battery chemistries moving towards a lower cobalt content (from 0.13 kg/kWh to 0.03 kg/kWh). For nickel the decrease is less pronounced – around a fifth – with new battery chemistry moving towards a higher nickel content as a fraction of the total, but still a decline per kWh (from 0.48 kg/kWh to 0.39 kg/kWh).

On the basis of the 2030 numbers above, production of 20 TWh (20,000 GWh in the chart above) battery storage per year in the early 2030s would need;

Metal	Early 2030s additional annual demand, million tonnes	Current global production, million tonnes	Required increase in global production
Lithium	1.0	0.09	10 times
Cobalt	0.6	0.15	4-5 times
Nickel	7.8	2.7	4 times

This is a significant step-up in metals production, with history pointing against achieving it.

Metals supply could well become a limiting factor in the energy transition given the potential demand for electricity storage. These levels of production increase are feasible over time, but in the space of 10-15 years they represent double to triple the historical trend, although that is true for almost everything in attempting to reduce emissions by 40+% in a decade. The above analysis also doesn’t account for other demands on batteries; from vans and trucks, small ships, barges, small planes, household and commercial devices and so on.

Equally, we shouldn’t discount innovation and different directions of travel. Apart from a slower energy transition, other factors that might influence the outcome are a more rapid evolution of battery chemistry towards more widely available minerals and/or a shift away from chemical batteries to other storage and balancing solutions in the electricity grid. However, don’t expect to see a truly novel solution scale sufficiently in just a decade. The first commercial Li-Ion battery was marketed in 1991 and has taken 30 years to scale to current levels. it was based on research and development over the previous 20 years.

In any case, the decade ahead could well be a period of rapid change and expansion for the global mining industry.