global energy perspectives and the role of technology

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Global energy perspectives and the role of technology N. NAKICENOVlC

The provision of affordable and environmentally sound energy services is a prerequisite for further social and economic development in the world. This is a formidable challenge considering that two billion people today are still without access to adequate energy services in the world. This additional need for energy services is going to be voracious and will not be satisfied with the current structure of energy system, with current technologies and certainly not with the current adverse impacts associated with energy, from indoor air pollution and regional acidification to climate change.

Keywords: energy services; energy requirement; energy systems

Die g lobale Energieversorgung der Zukunf t und die Rol le der Technik. Die Bereitstellung von erschwinglicher und umweltfreundlicher Energie ist eine Voraussetzung f~r weltweite soziale und wirtschaftliche Weiterentwicklung. Wenn man bedenkt, dass heutzutage zwei Milliarden Menschen noch immer nicht hinreichend mit Strom versorgt sind, stellt dies eine auSer- ordentliche Herausforderung dar. Der zus~tzIiche Bedarf an Energie ist enorm und wird mit dem gegenw~rtigen Energiesystem nicht gestillt werden k6nnen.

SchlOsselw~rter: Energiebereitstellung; Energiebedarf; Energiesystem

1. The gtobal energy challenge The provision of affordable and environmentally sound energy services is a prerequisite for further social and economic development in the world. This is a formidable challenge considering that two billion people today are still without access to adequate energy services in the world. These two billion are people who generally live Fn poverty and do not have access to clean water, sanitation, education, health care or many other modern infrastructures. They suffer environmental degradation, including indoor air pollution. In addition, the global population is expected to increase between one to six billion people by the end of the century. All of these people will require clean and affordable energy services as well. This additional need for energy services is going to be voracious and will not be satisfied with the current structure of energy system, with current technologies and certainly not with the current adverse impacts associated with energy, from indoor air pollution and regional acidification to climate change.

2, Global hydrocarbons "endowment" The perceptions about global energy resources and renewable potentials have changed dramatically during the last decades. The immanent physical resource limits are no longer considered to be the main constraint of future energy development in the world. Coal resources were known to be vast for a long time. The traditional view is that conventional reserves of "easy" and cheap oil and natural gas in the world are limited; say to some six decades at current consumption levels. This perception is changing because it is a static view of hydrocarbon "endowment" and it is being challenged by many recent assessments (Nakicenovic etal., 1996; Nakicenovic etal., 2000; Rogner et al., 2000). For example, it is now increasingly accepted that unconventional natural gas resources are quite abundant and more widely distributed than those of oil. In addition, the more speculative occurrences of natural gas such as methane hy-

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drates are truly vast and, if ever exploited, could supply any conceivable future energy demands for many centuries to come. Some estimates indicate that this form of methane might represent an energy resource far larger than all other known hydrocarbon energy resources put together. The challenge is to understand the conditions that would make some of the enormous resources become future reserves that could be success- fully exploited.

Table I summarizes past and current consumption levels and estimates of global hydrocarbon energy reserves, resources and additional occurrences. Currently identified global hydrocarbon reserves are estimated at about 48000 EJ. This

Table 1. Global hydrocarbon consumption, reserves, resources and additional occurrences in ZJ (1000 E J). Source: After Nakicenovic et al., 1996; Nakicenovic, GffJbler, McDonald, 1998; Masters et al., 1994; Rogner et al., 2000)

Consumption (~

1860- ~ ._o .~ 1998 1998 ~ ~ ~ ~

n- n- n'm ~ 0

Oil Conventional 4.85 0.13 6 6 12 Unconventional 0.29 0.01 6 16 22 60

Gas Conventional 2.35 0.08 6 11 17 Unconventional 0.03 - 9 26 35 800

Coal 5.99 0.09 21 179 200 140 Total 13.51 0.31 48 238 286 1000

NAKICENOVIC, Nebojsa, Univ.-Prof. Mag. rer. soc. oec. Dr. rer. soc. oec., Technische Universit&t Wien, Institut fl]r Elektrische Anlagen und Energiewirtschaft (E 373), GuBhausstraBe 25-29, A-1040 Wien (E-Mail: naki @ eeg.tuwien.ac.at)

377

N. NAKICENOVIC Global energy perspectives and the role of technology

quantity is theoretically large enough to last more than 150 years at the current global extraction levels. It is five times larger than the cumulative hydrocarbon energy consumption since the beginning of the coal era in the mid-19 m century.

Estimates of resources and additional occurrences of hydrocarbons are much larger but more uncertain than reserves. Table 1 shows the global resource-base estimate to be about 286000 EJ, with additional occurrences of about a million exajoules of primary energy. Included in the conventional resources are estimates of ultimately recoverable conventional and unconventional resources with some 238000 EJ (Masters et al., 1994; Nakicenovic et al., 2000; Rogner et al., 2000).

The extraction of these enormous sources of energy is likely to be limited by the increasing interference with global geophysi- cal processes such as the assimilative capacity of the environment and climate change. For example, the hydrocarbon resource base and additional occurrences contain more than 25000bill ion tons of elemental carbon (gigatons of carbon, GtC). Hydrocarbon energy reserves correspond to some 1 000 GtC - exceeding the current carbon content of Earth's at- mosphere (with about 800 GtC resulting in atmospheric concentrations of some 370 perts per million volume, ppmv or ppmv). The resource base of conventional oil, gas and coal, with some 3500 GtC is about five times as large as the current atmospheric carbon content. This vast magnitude of hydrocarbon endowment indicates that it will either ever be exploited or the future utilization of hydrocarbons will be associated with carbon capture and storage over geological time periods.

3. R e n e w a b l e e n e r g y p o t e n t i a l s This illustrates that an account of the global energy resources is essential for any assessment of long-term energy perspectives. This is especially the case for renewable energy sources as their current use is an infinitesimal fraction of the ultimate potentials. The energy budget of the Earth itself is dominated by in- coming solar insulation from which most of the renewable energy potentials are derived. There has been a number of assessments that reviewed the ultimate theoretical, technical and economic potentials of renewables in the world (Nakicenovic et al., 1996; Nakicenovic et al., 2000; Rogner et al., 2000). They are summarized in Table 2 and show that diverting only a small fraction of the solar influx to energy use could provide for all conceivable human energy needs and services. However, renewable potentials are limited by numerous factors such as mis- match between power densities and locations of energy supply and demand, possible land-use conflicts, adverse local environmental impacts, capital costs or infrastructure requirements. In addition, new and advanced technologies would first have to be

Table 2. A summary of global renewable energy potentials for 2020 to 2025, maximum technical potentials and annual flows compared with current contribution of renewables to global energy requirements, in EJ per year. (Adapted from: Nakicenovic et al., 1996)

Resource Current Technical Theoretical use a potential potential

Hydropower 9 50 147 Biomass energy 50 > 276 2900 Solar energy 0.1 > 1 575 3900000 Wind energy 0.12 640 6000 Geothermal energy 0.6 5000 140000000 Ocean energy n.e. n.e. 7400 Total 56 > 7600 > 144000000

n.e. not estimated a the electricity part of current use is converted to primary energy with

an average factor of 0.385

developed and deployed at competitive cost to significantly increase the contribution of renewables toward provision of energy services.

There are many types of renewable energy forms, some of which have been used for hundreds or thousands of years. In its modern form, hydropower has been commercially available for 100 years and is today the most important of all modern renewables. In contrast, it is estimated that other new renewables contributed some two percent of global primary energy in 1998, including seven exajoules from modern biomass and two exajoules for all other renewables including geothermal, wind, solar, marine energy and small-scale hydropower. Thus, it is important to note that the potentials of renewables are enormous compared with any conceivable energy needs of humanity, but that the challenge will be to deploy a large number of technologies at competitive costs and expand their markets-shares significantly both because hydrocarbon resources are also abundant and because these technologies are being improved continuously as well.

4. H is tor ica l e n e r g y e v o l u t i o n and d e c a r b o n i z a t i o n In contrast to the new renewables, the traditional uses of biomass together make the fourth most important global source of energy after the three hydrocarbons - oil, gas and coal. The global energy system has evolved during the two centuries from a reliance on traditional energy sources to coal, then on oil and more recently on increasing shares of natural gas.

Figure 1 shows the historical substitution of traditional energy forms first by coal and later by oil and gas. This development has resulted in a substantial decarbonization of the global energy system. As Fig. 2 shows, the ratio of carbon emissions per unit of primary energy consumed globally has fallen by about 0.3 percent per year since 1860. The ratio decreased because high-carbon fuels, such as wood and coal, have been continuously replaced by those with lower carbon content, such as gas, and also in recent decades, albeit to a much lesser ex- tent, by nuclear and renewable energy, which contain no carbon (Marchetti, 1985; Nakicenovic, 1996 a, b). Given the abundant hydrocarbon occurrences and vast renewable potentials, the decarbonization can continue for a long time come. Hydrocar- bon sources of energy would need to be "decarbonized" through carbon capture and storage. The challenges for further decarbonization with renewables are not smaller. Most likely both new and advanced hydrocarbons as well as renewables will be needed.

The quality, convenience and efficiency of provision of energy services has vastly improved over the last two centuries.

100

80

6O

P ~ 4o E

.E

Fig. 1.

. . . . . . . . . . . . . . . . . . . . ]

20 f " ~ 1850 1875 Igo0 1925 1950 1975 2000

Substitution of primary energy sources in the world, in percent

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Carbon in tensi ty of."

3 5

3 0

2 5

(J o~ 2 0

1 5

wood = 29.9

c o a l = 25.8

o i l = 20.1

g a s = 15.3

1 0 t I I I i t i i i i i I I i

1 8 5 0 1 9 0 0 1 9 5 0 2 0 0 0

Fig. 2. Decarbonization of global primary energy in grams of elemental carbon (gC) per megajoule of energy (M J)

However, the improvement potential is still very large. Only a fraction of the current global energy use would be required to provide the same energy services if the best state-of-the-art technologies were used. The theoretical improvement potential for both energy and use of other resources is much larger. For example, wider use of modern energy carriers such as energy gases and electricity would promote higher energy efficiencies, better quality of energy services and substantially lower environmental impacts, especially at the level of energy end use. The same is generally true for natural gas as a source of energy and for most of the new renewable resources.

Thus, new and advanced energy technologies hold the promise to provide the growing need for energy services in the world with higher efficiencies and decarbonization rates resulting from zero or close-to-zero emissions both of air pollutants and greenhouse gases (Goldemberg et al., 2000). For example, solar photovoltaics and grid-connected wind installed capacities are growing exceedingly rapidly at rates of 30 percent year. Cor- respondingly, the costs of photovoltaics and wind have been declining rapidly down the learning curves. The capital cost reductions are about 20 percent per doubling of the capacity. Even so, it will likely be decades before these new renewables add up to a major fraction of total global energy needs, because they currently represent such a small fraction (Goldemberg et al., 2000). Likewise, other advanced energy technologies are mostly still in the early stages of development and commercialization in a market place. A rapid expansion of new technologies can be promoted by finding ways to drive down their costs. For example, the "green" pricing of electricity and heat is an immedi- ate policy option already practiced in some industrialized countries to promote early deployment of renewables. Most of all, it is important to find ways to attract investment in these technologies in expectation of achieving buy-downs along the learning curves and eventually also competitiveness with more mature and dominant energy technologies.

However, the emergence of potential conflicts must be avoided among different development priorities. For example, the wider use of biomass for energy services would increase water demands in some regions and perhaps add pressure to scarce fertile land resources. On the other hand, due to their higher efficiencies the vigorous introduction of new renewables to replace the traditional energy practices would "free" land for other purposes while increasing the quality of service and pro- tection of the environment.

5. Induced techno log ica l c h a n g e Many of the global energy scenarios in literature foresee such developments and a transition towards a larger role of renew-

able sources and carbon capture and storage in the long run, by 2050 and beyond. Virtually all the global energy scenarios por- tray a significant expansion of new renewables and other advanced technologies along classic diffusion patterns of slow initial growth followed by more rapid expansion. Many of these scenarios show that bullish future markets for renewable options will not materialize without up front investments in research, development, demonstration (RD & D) and initial niche market applications during the next decades. New technologies are generally more expensive compared with other energy alternatives and large private and public investments in these new technologies would be required to achieve a "buy-down" the learning curve. Technological progress is a result of human in- genuity, it is a human-made resource that is renewable and cumulative. Innovation, especially the commercialization of novel technologies and processes, requires continual investments of effort and money in RD & D. Technology diffusion, in turn, depends on both RD & D and learning by doing. Some advanced energy technologies associated with new renewables and new hydrocarbons - such as hydrogen production, distribu- tion, and end use - would be radical innovations that are not likely to result from incremental improvement of current technologies and will thus require up front investments in RD & D and initial niche markets applications during the next decades. The reduction of costs and improvement of performance of new renewables is a prerequisite in many of these scenarios for their widespread adoption and affordability especially for those people now excluded from provision of commercial energy services.

Figure 3 shows an impressive example of technological learning from a developing country - ethanol production from sugar cane in Brazil. When the program started in the aftermath of the oil crisis, methanol was about three times more expensive than crude oil at about 150 US$ per barrel of oil equivalent (bbl) even though oil was at a historically high price. Over the last 20 years, the costs of alcohol have decreased enormously, at some 30 percent per doubling of accumulated output. This is typical of cost buy-downs for many energy technologies, from photovoltaics to wind mills and gas turbines. Today, ethanol prices appear to be competitive with gasoline in Brazil. In February 2003, the alcohol price was about 1.50 Rials per liter compared with gasoline at about 2.25 Rials per liter. It should be mentioned that gasoline also includes some alcohol and that there is a hefty gasoline tax. This means that the two fuels are roughly competi-

o0

150- loo i

F 01978

0

Source: Goldemberg, 1996 Producer price

30 % cost reduc t ion for each doub l ing of c u m y p r o d u c t i o n

Oil price

1985 ' 1988 1990 ' 1995 10 20 30

Cumulative production 106 bbl

?

Fig. 3. Learning curve for ethanol production from sugar cane expressed in US dollars per barrel of oil (bbl) equivalent as a function of cumulative production since 1978 indicating a 30 percent price reduction per doubling of cumulative production; crude oil price is also shown on the same scale; the cumulative difference between the two curves corresponds to about 2 billion US$ investment to bring ethanol prices to competitive levels with crude oil

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tive. Nevertheless, the future is highly uncertain, it is by no means clear whether alcohol will remain to be competitive. The reason for showing the impressive learning curve in Fig. 3 is that the improvements did not occur for free - the accumulated difference between the oil and alcohol prices, the light and the dark curves, shows that Brazil invested at least an estimated 2 billion US$ to achieve this competitiveness. To achieve the competitiveness of the other advanced technologies that play important roles in IPCC scenarios will also require large investments world wide, however, their costs would still be relatively low compared to the alternatives of not developing competitive new technologies.

6. G loba l e n e r g y p e r s p e c t i v e s A strong conclusion for a whole range of sustainable energy strategies is that a substantial increase in RD& D for new energy technologies as well as for technology transfer is needed especially for providing affordable energy services during the 21 ,t century. Otherwise most clean, efficient fossil and renewable technologies may not reach competitiveness with traditional options. Significant improvements in new technologies are required as traditional technologies have a decided advantage in that they are well suited to current lifestyles despite their adverse impacts on human health and the environment. This in- herent advantage is strengthened by the fact that energy-re- lated public RD & D efforts are declining throughout the OECD countries with the notable exception of Japan (Goldemberg et al., 2000). However, this is not an appeal to return to the type of exclusively public expenditure programs on energy RD & D of the past decades. The paradigm has shifted now towards a bal- ance between publicly and privately funded basic research and towards far more reliance on incentives to promote private RD & D and market applications, for example, through new insti- tutional arrangements, tax and regulatory incentives for innovation. Concentrated public and private efforts are required with dedicated long-term commitments.

Another important conclusion from the analysis of global energy scenarios is that far-reaching technological improvements are central to the transition towards sustainable development and thus need to be developed and disseminated throughout the energy system - including the decentralized systems and end users. Perhaps this is not surprising because end use is the least efficient part of the whole energy system. These possible developments have two important implications. First, they weaken the argument for extensive RD & D investment in large, sophisticated, "lumpy", inflexible technologies such as fusion power and centralized solar thermal power plants. Im- provements in end-use technologies, through which millions, rather than hundreds, of units are produced and used, are more amenable to standardization, modularization, and mass production, and hence to benefit from learning-curve effects (resulting in cost reductions and performance improvements). Second, in- stitutional arrangements governing final energy use and supply are critical. The deregulation, reregulation, and liberalization of electricity and other energy markets can create incentives in this direction; service packages can be tailored to various consumer preferences, especially because traditional consumers can sell electricity back to the grid. But liberalization could discourage long-term RD & D by emphasizing short-term profits. This is a source of some concern in the context of the need to develop "new" renewable and other advanced energy technologies in order to improve the energy services available throughout the world.

Finally, technology may be more important in determining the structure of future energy systems and services than any other of the main driving forces such as population growth or

economic development (Nakicenovic et al., 2000). Neither can social and economic development issues be seen in isolation of technological change. There is growing evidence that alter- native technological developments can lead to fundamentally different future energy systems structures and services, that they are "path dependent" as the result of the cumulative nature of technological learning processes.

Figure 4 captures some of these salient characteristics of the future energy systems across scenarios. It shows cumulative carbon emissions along the horizontal axes ranging from some 700 to more than 2500 GtC between now and the end of the century. Scenarios that foresee a rapid decarbonization in the world coupled with vigorous introduction of new renewables and often also carbon capture with advanced hydrocarbon technologies occupy the lower portion of the range. Often these also incorporate a transition towards a more sustainable future in general. On the other extreme are scenarios that continue to rely on coal and other carbon-rich sources of energy as well as lifestyles that are resource and materials intensive. These two extreme ends of the range of future carbon emissions show di- vergence across scenarios that are both path-dependent in that they diverge in time as a result of cumulative choices that together lock the future evolution of the energy system in one or the other direction. The most important driving force of these al- ternative developments across scenarios are technology choices. Early investment in new and advanced technologies result ceteris paribus more rapid diffusion of these technologies so that their role increases in the future energy systems.

Figure 4 also shows the enormous uncertainties that sur- round the future atmospheric carbon dioxide concentrations from these emissions, from 400ppmv on the low end to 900 ppmv on the other extreme by 2100. The resulting global mean surface temperature change ranges are even larger from less than one degree Celsius to almost seven. What is more significant is that there are large overlaps in climate consequences for different emissions.

The future worlds that are associated with decarbonized energy systems would be fundamentally different from those with carbon-intensive ones. The differences would not be limited to climate change but would also extend to many other spheres of human activities, form social and economic development to lifestyles. This also means that the time available for embarking on an appropriate and sustainable long-term development path might be a limiting resource. Due to the relatively slow capital turnover in energy systems, it might take half a century to re-

Global mean surface temperature change °C 1 2 2.5 3 4 5 6

J

2

0 <100 1000 2000 3000

IPCC SRES scenarios cumulative emissions 1900 - 2100 in GtC

Vulnerability: • • .... low ~ high Fig. 4. Major climate change uncertainties - cumulative carbon dioxide emissions across the range of Intergovernmental Panel on Cli- mate Change scenarios (Nakicenovic et al., 2000), the resulting atmospheric concentrations and global mean surface temperature change in °C based on MAGICC model (Wigley, Raper, 1997)

380 e&| elektrotechnik und informationstechnik


place most of the technologies and some of the infrastructures by the new ones. Also, lack of early investments in new and advanced technologies might result in long-term development paths that might be very difficult to avert should they prove to be unsustainable and unviable.

Therefore, there is a clear need to improve the efficiency of energy use, improve the environmental compatibility of fossil technologies, shift to energy sources with lower environmental impacts such as natural gas, or shift away from fossil to new renewable sources and perhaps also nuclear power. The development of clean energy carriers and infrastructures is a prerequisite for the provision of energy services to the masses and the achievement of longer-term development and environment goals.

References

Goldemberg, J. etal. (2000): World energy assessment overview. Energy and the Challenge of Sustainability, World Energy Assess- ment Report. Goldemberg, J., Anderson, D., Holdren, J. P., Jeffer- son, M, Jochem, E., Nakicenovic, N., Reddy, A. K. N., Rogner, H.- H. et ai. (eds.), UNDP, UNDESA, WEC, New York, NY, USA.

Marchetti, C. (1985): Nuclear plants and nuclear niches. Nuclear Science and Engineering 90: 521-526.

Masters, C. D. et. al. (1994): World petroleum assessment and analysis. Proc. of the 14 th World Petroleum Congress, Stavanger, Nor- way. Chichester: Wiley, UK.

Nakicenovic, N. et al. (1996): Energy primer. Watson, R. T., Zinyowera, M. C., Moss, R. H. (eds.): Climate change 1995: Impacts, adap- tations and mitigation of climate change: scientific-technical ana-

lyses. Contribution of Working Group II to the Second Assessment Report of the Intergovernmental Panel on Climate Change. Cam- bridge: Cambridge University Press, UK.

Nakicenovic, N. (1996a): Decarbonization: Doing more with less, Technological Forecasting and Social Change 51 (1): 1-17.

Nakicenovic, N. et al. (1996b): Freeing energy from carbon. Daedalus 125 (3): 95-112. (Published in: J. A. Ausubel and H. D. Langford (eds.): Technological trajectories and the human environment. National Academy Press, Washington, DC, USA, pp. 74-88. Pub- lished also in Chemical Industry, Journal of the Federation of Chemists and Technologists of Yugoslavia 53 (12): 1999, 434- 441. Reprinted as RR-97-4, International Institute for Applied Sys- tems Analysis, Laxenburg, Austria.)

Nakicenovic, N., A. GrL~bler and A. McDonald (eds.) (1998): Global energy perspectives. Cambridge: Cambridge University Press, UK.

Nakicenovic, N. et al. (2000): Special report on emissions scenarios of the intergovernmental panel on climate change. Cambridge: Cam- bridge University Press, UK.

Nakicenovic, N. et al. (2000): Energy scenarios. Energy and the challenge of sustainability. World Energy Assessment Report. (Gol- demberg, J., Anderson, D., Holdren, J. P., Jefferson, M., Jochem, E., Nakicenovic, N., Reddy, A. K. N., Rogner, H.-H. et al. (eds.), UNDP, UNDESA, WEC, New York, NY, USA.)

Rogner, H.-H. et al. (2000): Energy resources. Energy and the challenge of sustainability. World Energy Assessment Report. (Gol- demberg, J., Anderson, D., Holdren, J. P., Jefferson, M., Jochem, E., Nakicenovic, N., Reddy, A. K. N., Rogner, H.-H. et al. (eds.), UNDP, UNDESA, WEC, New York, NY, USA.)

Wigley, T., Raper, S. (1997): Model for the assessment of greenhouse gas induced climate change (MAGICC). Version 2.3. The Climate Research Unit. University of East Anglia, UK. •

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