lessons from historical energy transitions for green...
TRANSCRIPT
Lessons from Historical Energy Transitions for Addressing Climate Change and
Sustainable Development
RITE International Symposium 2012, Tokyo, February 7, 2012
Energy Transitions: Past
Source: adapted from V. Smil, 1994
Energy Transitions: Present (unfinished business)
Source: Global Energy Assessment (GEA) KM1, 2012 (in press)
UK Energy History A positive feedback loop driven by energy service demand & innovation
Uk Population and GDP
1
10
100
1000
10000
1800 1825 1850 1875 1900 1925 1950 1975 2000
Mill
ion
popu
latio
n, B
illio
n U
S$2
005
GD
P
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
US
$200
5 G
DP
per
cap
ita
Population Million
GDP Billion US$2005
GDP/capita US$2005/cap
UK efficiency of energy service provision
0.1
1
10
100
1800 1825 1850 1875 1900 1925 1950 1975 2000
GJ P
E p
er
GJ o
r p
er
serv
ice level
heating-domestic GJ PE/GJ
power-average GJ PR/GJ
transport-passengerGJ/10e3pass-km
lighting GJ/10e6 lumen-hrs
Uk energy service prices (per current GJ FE)
1
10
100
1,000
10,000
100,000
1800 1825 1850 1875 1900 1925 1950 1975 2000
US
$2005/G
J or
per
units
serv
ice le
vel
heating-domestic $/GJ
power-industry $/GJ
transport-passenger $/500pass-km
transport-freight $/250 ton-km
lighting $/5000 lumen-hrs
UK energy service (final energy) demand
0
2
4
6
8
1 9 17 25 33 41 49 57 65 73 81 89 97 105 113 121 129 137 145 153 161 169 177 185 193 201 209
EJ
light
freight-transport
passenger-transport
(mechanical) power
heat-industry
heat-domestic
1800 200019001850 1950
Population and Income Innovation and LbD:
efficiency of end use
+Market growth and LbD:
cost of energy services Energy service demands
Source: Global Energy Assessment (GEA) KM1, 2012 (in press)
UK – Transitions in Energy Services for Light 1.0
Δt= -126 yrs
Δt= -76 yrs Δt= -25 yrs Δt= +25 yrs
Δt= +76 yrs
Source: Grubler (in press) based on Fouquet, 2008.
Energy Transitions - Climate Protection & Sustainability
• End-use (efficiency) and consumer benefits are key
• Innovation is key but needs to be leveraged systemically and stably
• Deep uncertainty requires risk hedging (adaptation) and innovation portfolio approach
• Powerful patterns: scaling, experimentation, learning
Importance of Energy End-use
• Least efficient part of energy system
• Vast improvement potentials
• Dominant in terms of installed capacity
• Dominant form of energy investment (and GDP & employment multipliers!)
Capacity of US Energy Conversion Technologies
GW (rounded) 1850 1900 1950 2000
stationary thermal (furnaces/boilers) 300 900 1900 2700
end-use mechanical (prime movers) 1 10 70 300
electrical (drives, appliances) 0 20 200 2200
mobile animals/ships/tra ins/a ircraft 5 30 120 260
end-use automobiles 0 0 3300 25000
stationary thermal (power plant boilers) 0 10 260 2600
suppply mechanical (prime movers) 0 3 70 800
chemical (refineries) 0 8 520 1280
TOTAL 306 981 6440 35140
Energy end-use = 30 TW or 87% of all energy conversion technologies
= 5 TW or 50% when excluding automobiles
Source: GEA KM24, 2012
World Energy Technology Innovation Investments (Billion $)
innovation market diffusion
(RD&D) formation
End-use & efficiency >>8 5 300-3500
Fossil fuel supply >12 >>2 200-550
Nuclear >10 0 3-8
Renewables >12 ~20 >20
Electricity (Gen+T&D) >>1 ~100 450-520
Other* >>4 <15 n.a.
Total >50 <150 1000 - <5000
non-OECD ~20 ~30 ~400 - ~1500
non-OECD share >40% <20% 40% - 30%
* hydrogen, fuel cells, other power & storage technologies, basic energy research
Source: GEA KM24, 2011
Innovation Systems
• Change requires systemic approach invoking all innovation phases and processes: - R&D, niche markets, diffusion, obsolescence - learning, actors/institutions, resources, technology (hardware+software)
• Important biases at all stages: R&D: supply side bias (nuclear, fossil) niche markets: supply side bias (solar/wind) diffusion: huge distortions via fossil fuel subsidies obsolescence: “grandfathering” of old/”dirty”
• Few systemic approaches & successes
The Space of ETIS
R&D Niche Markets
Diffusion Phase-out
End use (energy services)
Conversion (to fuels/electricity)
Supply (Resource extraction)
Innovation life cycle stage
Ene
rgy
syst
em
co
mp
on
en
t
(te
chn
olo
gie
s)
Levels of investment & capital depreciation
Current Public ETIS Policy Focus (policy-induced resource mobilization, billion US$2005)
Source: Wilson et al., (in press)
US Solar Thermal Virtuous Development Cycle 1982-1992
Source: GEA KM24, 2012 based on G. Nemet, 2011
Japan: Efficiency Improvements Top-Runner Standard vs Actual Achieved
“Top-Runner”: Joint industry-government dynamic standard setting that incentivizes innovation
Source: GEA KM24, 2012
Patterns of Technological Change
• Learning (unlearning): improvements contingent on market deployment (with uncertain outcomes) Importance of granularity and continuity (knowledge depreciation)
• Scaling (5 phases in all successful technologies) Importance of prolonged early experimentation at small unit scales
• Catch up (late-starters with faster diffusion) Importance of learning and international technology collaboration
Post Fossil Energy Supply Technologies Cost Trends
Source: GEA KM24, 2012
Explaining the Doubling Price (750 to 1500 $/kW) of US Wind Turbines (US$/kW)
2002-2008 2009-2010
Endogenous +376 -37
Labor costs* +91 +12
Warranty/Profits** +101 -98
Scaling-up +184 +57
Exogenous +219 -53
Material/energy costs +83 -38
Currency fluctuations +136 -15
Residual +155 -105
Total price change +750 -195
Source: Bolinger&Wiser, 2012. * denotes potential underestimates (accounting for residual)
Learning rates and cumulative experience (# of units produced/sold) for energy technologies
category technology data for: cumulative production (units) learning
# exp period rate
energy Transitors World >1 10^18 1960-2010 40
end-use DRAMs World >1 10^11 1975-2005 16 - 24
Automobiles World >2 10^9 1900-2005 9 - 14
Washing machines World >2 10^9 1965-2008 33 ±9
Refrigerators World >2 10^9 1964-2008 9 ±4
Dishwashers World >6 10^8 1968-2007 27 ±7
Freezers (upright) World >6 10^8 1970-2003 10 ±5
Freezers (chest) World >5 10^8 1970-1998 8 ±2
Dryers World >3 10^8 1969-2003 28 ±7
Hand-held calculators US >4 10^8 early 1970s 30
CF light bulbs US >4 10^8 1992-1998 16
A/C & heat pumps US >1 10^8 1972-2009 18 ±1
Air furnaces US >1 10^8 1953-2009 31 ±3
Solar hot water heaters US >1 10^6 1974-2003 -3
average for end-use technologies 10^9 20
energy
supply PV modules World >1 10^10 1975-2009 18-24
Wind turbines World >1 10^5 1975-2009 10-17
Heat pumps S, CH <1 10^5 1982-2008 2 - 21
Gas turbines World >4 10^4 1958-1980 10-13
Pulverized coal boilers World >6 10^3 1940-2000 6
Hypropower plants OECD ~5 10^3 1975-1993 1
Nuclear reactors US, France <1 10^3 1971-2000 -20 - -47
Ethanol Brazil <1 10^3 1975-2009 21
Coal power plants OECD <1 10^3 1975-1993 8
Coal power plants US <1 10^3 1950-1982 1 - 6
Gas pipelines US <1 10^3 1984-1997 4
Gas combined cycles OECD <1 10^3 1981-1997 10
Hydrogen production (SRM) World >1 10^2 1980-2005 27
LNG production World >1 10^2 1980-2005 14
average for suppy technologies 8
average for supply, excluding nuclear 1210^4
Knowledge Depreciation Rates
Degree of technological obsolescence (rate of innovation)
De
gre
e o
f kn
ow
led
ge s
tock
tu
rno
ver
(po
licy
& h
um
an c
apit
al v
ola
tilit
y)
Knowledge Depreciation Rates (% per year) empirical studies reviewed GEA KM24 (2012) and
modeled R&D deprecation in US manufacturing (Hall, 2007)
Degree of technological obsolescence (rate of innovation)
De
gre
e o
f kn
ow
led
ge s
tock
tu
rno
ver
(po
licy
& h
um
an c
apit
al v
ola
tilit
y) PV Japan:
30% Wind US:
10%
Engineering
designs US:
<5%
Service
industries:
95%
Aircraft,
Liberty ships
manufct. US:
40%
Chemicals,
Drugs:
15-20%
Computers:
32%
Electrical,
Machinery:
32-36% Miscell.
>20%
OECD
nuclear R&D:
10 – 40%
France
breeder reactors:
50-60%
High
High
Low
IEA Energy R&D Trends: Boom-and-Bust Cycles (Million $PPP2010)
BRIMCS: ~18,000
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
1970 1980 1990 2000 2010
Ene
rgy
R&
D 2
01
0 U
S$ (
PP
P)
USA
EU-6
Japan
rest-IEA
Robust Patterns in Technology Growth
• Distinct phases: Long experimentation (3 decades) at small unit scale before successful scale-up
• Market size and growth periods related: big hits require time (many decades)
• Advantages of late-adopters: learning and acceleration, but need integration into knowledge networks
5 Phases in Scaling-up of a Technology: Example Coal Power Plants (Source: C. Wilson, 2009)
World coal power plants
0
250
500
750
1000
1250
1900 1925 1950 1975 2000
cu
m G
W in
sta
lled
0
10
20
30
40
GW
cap
acit
y a
dd
ed
cum capcity GW
cap. additions GW
World Coal Fired Power Plants
0
500
1000
1500
1900 1925 1950 1975 2000
MW
0
20
40
60
80
100
120
140
160
180
200
nu
mb
er
avg size
max size
scale frontier
numbers built
1: build many (small) units
2: scale-up units:
2.1. at frontier
2.2. average
3: build many (large) units
4: scale-up industry
5: grow outside core markets
(globalize)
Market Size (normalized index) vs Diffusion Speed (Δt) of Energy Technologies
Source: C. Wilson, 2009, e-bikes courtesy of Nuno Bento, IIASA, 2011
Scaling patterns Past and Scenarios (GGI) (8 Scenarios: A2r/B1/B2 * base/670/480)
• Scenarios are more conservative as durations (and extents) increase
• Again: closer relationship just for power techs historically
dotted black line
1.E+00
1.E+01
1.E+02
1.E+03
1.E+04
1.E+05
1.E+06
1.E+07
0 25 50 75 100 125
No
rmal
ise
d K
(in
de
x)
Δt (yrs) of cumulative total capacity
Cumulative Total Capacity (OECD): normalised K vs ΔtALL TECHS: HISTORICAL & SCENARIOS - semi-log
SCENARIOS (All Techs)
Historical (Core)
Historical (Core) -POWER only - no WIND
Expon. (SCENARIOS (All Techs))
Expon. (Historical (Core))
Expon. (Historical (Core) - POWER only -no WIND)
Mixed Impact of Policies
• Significant “de-acceleration” since 1970s (inconsistent policy “push and pull”)
• Success stories when policies are: aligned, patient, systemic, and dynamic e.g. Japan, Brazil vs. US
• Systemic underinvestment in end-use and efficiency: ALL actors
• ETIS increasingly global, but too few international tech cooperation
World – Historic Primary Energy Transitions (changeover time Δt: 80-130 years)
World Primary Energy Substitution
0
25
50
75
100
1850 1875 1900 1925 1950 1975 2000 2025
Perc
en
t in
Pri
mary
En
erg
y
traditional biomass
coal
modern fuels:
oil, gas,
electricity
World Primary Energy Substitution
0
25
50
75
100
1850 1875 1900 1925 1950 1975 2000 2025
Perc
en
t in
Pri
mary
En
erg
y
traditional biomass
coal
modern fuels:
oil, gas,
electricity
Begin of energy policy focus:
Δt’s >2000 yrs
Source: GEA KM24, 2011
Δt -130 yrs
Δt -80 yrs
Δt +90 yrs
Δt +130 yrs