uqei energy express #1 · uqei energy express #1 the modern world energy landscape and ... • 450...

UQEI Energy Express #1

The modern world energy landscape and scenarios, trends, frameworks and choices driving

our energy future – a discussion primer

Professor Andrew Garnett

Director, Centre for Coal Seam Gas and CCS Program

The University of Queensland UQEI Energy Express #1

To set up and start a conversation

To frame and ground discussions about the future


A Primer:

Acknowledgement:

Many thanks to Caroline Stott of UQ Energy Initiative for

considerable assistance pulling together this presentation.

No facts are “inescapable” to the

delusional, the naïve, or those in

And some facts aren‟t facts

And, it turns out in the “energy” conversation

everyone is entitled both to their own opinion and

their own facts (… brilliant).


Inescapable Facts ! (or not ?)

http://www.google.com.au/url?url=http://en.wikipedia.org/wiki/Nile_Delta&rct=j&frm=1&q=&esrc=s&sa=U&ei=A07nU6THPMeC8gWXyIHIAQ&ved=0CBYQ9QEwAA&sig2=BThgyCkFbfioQ90hEBUjgA&usg=AFQjCNFaGC8MpJeH4-IyHutlbtElrqMb-Q

http://www.google.com.au/url?url=http://en.wikipedia.org/wiki/Black_swan&rct=j&frm=1&q=&esrc=s&sa=U&ei=qE_nU7XTK4vl8AXI5IFY&ved=0CCIQ9QEwBQ&sig2=Zv6K8TjcySpvbHFesMClRw&usg=AFQjCNHoNEHDxVwRwOIjI13VBHks9CytAw

Starters …

• The population is growing

• Standards of living / quality of

life do vary and very widely.

• There are very many poor – without access to modern forms

of energy

• Without economic growth more

people will suffer more than they

otherwise would. – World GDP is growing

• Economic growth is a

thermodynamic process

• More energy is being made

available – to increasing numbers

• Provision of energy has

increased living standards

• There are competing food-

energy and water-energy

demands

• Conc‟ns of atmospheric CO2 are

growing

• It is getting warmer and

extremes of weather will likely

be more frequent and less

predictable.


But first: Proof that the World is Mad


Entropy Machines Oft seen around UQ !

And Perspectives Vary (flying?)


Approximately 180 people attended the seminar, when asked only ONE had

NOT been on an international flight in the last year !!

Big Numbers Dominate …

7,252,729,625


(sources: www.worldometers.info and www.reneweconomy.com.au)

http://www.worldometers.info/

Again …

81,876,921


• Annual net population growth

– 224,320 people per day

– 9,347 people per hour

• Australia - 23,559,792 (3.5 mo.)

• Hobart – 216,959 (23 hrs)

• UQ students – 45,000 (4.8 hrs)

(source: www.worldometers.info)

http://www.worldometers.info/

Population 2 billion 4 billion 1 billion 1 billion

Income < $995 $996 - $3945 $3946 - $12195 > $ 12,196

Deaths under 5

(/1000 births) 120 60 24 7

Rate of Natural

Pop’n increase 2.27% 1.27% 0.96% 0.39%

Access to

sanitation 35% 50% 84% 99%

Education (yrs) 7.5 10.3 13.8 14.5

Urbanisation 27% 40% 74% 78%

Cars (per 1000) 5.8 20.3 125.2 435.1

CO2 emissions (t

per capita) 1 3 5 13


~$30,000 Australian min.

wage equiv

Source: National Geographic, 2011

The Spread …

Growth 81.9 million per year

< $995 p.a. for 2 billion


Source: www.thinkm-pesa.com

More numbers …

One in Eight

40%


… people in the world, were estimated to be suffering

from chronic hunger, regularly not getting enough food to

conduct an active life

… of all fruits and vegetables get wasted in India when

they move from grower to consumer. This is mainly due

to lack of refrigerated storage, transport, poor roads …

Crises & Dilemmas


The crises create a real response dilemma of priority & timing:

Source: modified from www.coolrisk.com

Population Growth Abating


Rapid growth in world population is

expected to subside in the next 40

years (red line).

3,263,738,832 (1964)


Source: Shell Scenarios; New Lenses on Future Cities

Urbanisation is key (+2.7 bln by 2050)

Humans Pursuing Benefits


Source: Steffen et al. (2011)

“Reasons to be cheerful, Part 3” –

Ian Dury and the Blockheads, 1979

• Bolshoi Ballet

• Porridge oats

• Carrot juice

• Cheddar cheese and pickle

• Equal voting rights

• Going to the toilet

• Yellow socks

• Cure for smallpox

• Piccadilly circus

• Vincent motorcycles

• ….

http://www.google.com.au/url?url=http://www.geckorecruitment.com/blog/is-the-smiley-face-king-of-email-land/&rct=j&frm=1&q=&esrc=s&sa=U&ei=MPrnU6a8JNbt8AXJw4G4Bg&ved=0CBgQ9QEwAQ&sig2=eNXGSawDmTEdAezgcw6RdQ&usg=AFQjCNFeYoPCLtLDTvwD3w_QojN5tF_00A

Inherent Trade-offs


Source: Steffen et al. (2011)

Trade offs – reasons to be somewhat

less cheerful

• Pollution

• Climate change

• Ecosystem loss

• Income inequality …

http://www.google.com.au/url?url=http://www.dragonashes.com/?attachment_id=419&rct=j&frm=1&q=&esrc=s&sa=U&ei=3fvnU9yjJJK68gW66IKwBA&ved=0CCYQ9QEwCA&sig2=SXghqnSKgVhoPk06xHzlXA&usg=AFQjCNEQAVp2ul0c7Vhy4fx4E9xfev0lUQ

Development and Energy

UQEI Energy Express #1 Source: UN Human Development Index (2013 data); World Bank Annual Per Capita

Electricity Consumption (2011 data); World Bank Population (2013 data)

India

Nepal

Zimbabwe

DR Congo

China

Indonesia

South Africa

Mexico

Iran

UAE

Brazil

Russia

Norway Australia

US Canada UK

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

-2500 0 2500 5000 7500 10000 12500 15000 17500 20000 22500 25000

Hu

man

Develo

pm

en

t In

dex

Annual Per Capita Electricity Consumption (kWh)

Correlation Between Human Development and Per Capita Electricity Consumption

Low human development

Medium human development

High human development

Very high human development

It looks like one element of the challenge is to

enable people to come up towards ~5000 kWh pp pa

Development and Energy and Numbers

UQEI Energy Express #1 Source: UN Human Development Index (2013 data); World Bank Annual Per Capita

Electricity Consumption (2011 data); World Bank Population (2013 data)

India

Nepal

Zimbabwe

DR Congo

China

Indonesia

South Africa

UAE

Russia

Mexico Iran

Brazil

Norway Australia

US

Canada

UK

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

-2500 0 2500 5000 7500 10000 12500 15000 17500 20000 22500 25000

Hu

man

Develo

pm

en

t In

dex

Annual Per Capita Electricity Consumption (kWh)

Correlation Between Human Development and Per Capita Electricity Consumption - Population Overlay

Low human development

Medium human development

High human development

Very high human development 80% 20%

population population

But that‟s a lot of people

and so a lot of power

and so a lot of trade-offs

The Energy Choices Now Being Made

• Globally we currently consume about 12.7 billion tonnes of oil equivalent

• Fossil fuels are used for power generation, transportation and industrial

applications (cement, steel, fertilisers, plastics etc.)


Hydro 6.72% Renewables 2.19%

Nuclear 4.42%

Oil 32.87%

Gas 23.73%

Coal 30.06%

Hydro 6.44% Renewables 0.41%

Nuclear 5.99%

Oil 38.59% Gas

22.35%

Coal 26.22%

1993 (8.3 Btoe) vs 2013 (12.7 Btoe)

• Our energy sources have hardly changed over the last 20 years - the

vast majority of energy consumed is still supplied by oil, coal and gas...

Source: BP Statistical Review of World Energy 2014

Energy “Preferences” (?)

• Evidenced by Usage


SOURCE 2003

Mtoe

2013

Mtoe

(‘03 – ’13)

D Mtoe

Preference in

action

(‘03 – ’13)

%

Oil 3725 4185 460 3rd 12%

Coal 2612 3827 1215 1st 47%

Gas 2345 3020 675 2nd 29%

Hydro 597 856 259 4th 43%

Nuclear 598 563 -35 6th -6%

Renewables 67 279 212 5th 317%

Total World 9944 12730 2786 28%

Fossil fuels (87% in 2013) 8682 11032 2350 21%

Source: BP Statistical Review of World Energy 2014

Striking a Balance or a Critical Chain ?


Energy Security

Environment Economics

1. Secure it

•Secure the supply

• If not, diversify supplies & technologies

•Once OK …

2. Reduce the

costs

•Make it affordable

• If not seek competition in sources and suppliers &/or regulate prices

•Once OK …

3. Protect the

environment

• Improve local environmental performance

•(so long as this does not jeopardise 1 & 2 above)

• Improve global (GHG) performance if you can afford it

•(or at least position for future different mix)

HoE

Supply Interruption gets politically sensitive

- QUICKLY


Nobody likes it but it’s just plain

unacceptable when it’s not there – it

hits the fan very quickly !

http://www.theheraldng.com/wp-content/uploads/2013/01/no-fuel.jpg

http://starconnectmedia.com/wp-content/uploads/2014/03/fuel_queues.jpg

Energy Use – Tomorrow ?


• WEO scenarios for global primary energy demand and related CO2 emissions:

• Note WEO scenarios represent what is happening, what should happen and

what we would like to happen in order to mitigate climate change i.e. • Current Policies Scenario: Assumes no material changes to current policies.

• New Policies Scenario: Takes account of broad policy commitments and plans.

• 450 Scenario: Sets out an energy pathway consistent with the goal of limiting the

global increase in temperature to 2°C / 450 ppm CO2. Source: IEA World Energy Outlook 2013

Energy Use Under “New Policies”


Installed capacity

by source Electricity

generation by

source

Risk Management Our Approaches ?


April 2nd, 1801. When ordered to

disengage: Horatio Nelson raises the

telescope to his blind eye at the Battle

of Copenhagen - ‘I see no ships’:

Communicating the Risks is Hard


• Some risks are important and urgent, other important and becoming urgent.

• Some consequences are already here, others are coming

• In the long run we‟re all … and so on

Source: www.coolrisk.com

Why Risk Management


• Why we are (or should be)

reconsidering our choices…

Source: IPCC, 2013: Summary for Policymakers

RCP Representative Concentration Pathways

GHG emissions

RCP2.6 – peak 2010-2020

RCP4.5 – peak 2040

RCP6.0 – peak 2080

RCP8.5 – cont. rise

Addressing the (GHG) Risk


• World energy-related CO2 emissions abatement in the New Policies Scenario

relative to the Current Policies Scenario - those bloody wedges

Source: IEA World Energy Outlook 2013

• Theoretical options for reducing emissions…

Example: Carbon Capture & Storage

• The CCS wedge – 450 ppm

scenario – NP ~ 1/3 challenge of the initial 450

scenarios

– By 2035, 22% of 14.8 Gt CO2 by CCS

– SO use CCS to abate 3.3 Gt in ~21 years

– Density (supercrit.) ~500kg/m3 m

– Volume = 6,600 million m3

– Volume = 41.5 billion bbls to find

– Abatement rate needed ~155 Mt pa

– Current injection est. <10Mt pa

– Volume rate to add

– ~ 310 million m3 pa

– ~ 1,950 million bbls pa

– ~ A 5 million bbl / day province/venture…

What might this look like ..

• Simple Activity Analogue I – In 2013 the world produced about 90

million bbls oil per day • Rig count est.2,590 (oil only)

• On the face of it ~1/18h of the activity level is

needed for CCS

• Rig count needed est. ~140

• Actual for CCS in 2014: 0-10

• Simple Activity Analogue II – China oil production ~ 4.5 million bbl/day

• Rig count >300 (est. oil only)

• Critical supplies ? – O&G demand projected at 7,500 land

rigs in 2015 (~ doubling)

– Est. global build rate ~270 / yr

– Driven by Unc. O&G and ~$100/bbl


(source; Baker Hughes Worldwide Rig Count; O&G Journal; Bloomberg)

What About a Shift to Gas ?

• Good News from the US ?

• Encouraging ?


Numbers again …

$4.20


• Excellent coffee at Nano‟s

(source: www.energy.gov.ab.ca, www.eia.gov)

or

~1 Gigajoule of gas at Henry Hub

278 kilowatt-hours of electricity

45.5 kilograms of coal

30 litres propane

http://www.energy.gov.ab.ca/

http://www.google.com.au/url?url=http://www.unpackit.org.nz/takeaway-coffee-cups/&rct=j&frm=1&q=&esrc=s&sa=U&ei=9jroU7WdD8Hh8AW8-oG4BA&ved=0CBYQ9QEwAA&sig2=FvqIVeRa5HMnU93ac0mgXA&usg=AFQjCNHgS2Zo6cXN3x3P--9Jdd-9QOCgIQ


US Fuel – Security & Economy

• A US government report expects that the United States will become self-sufficient in oil

production by the year 2037. (US EIA, 2014)

• Energy-related emissions of carbon dioxide, the greenhouse gas that is widely believed to contribute

to global warming, have fallen 12% between 2005 and 2012 and are at their lowest level since

1994, according to a recent estimate by the Energy Information Administration (WSJ, April 2013)

• As the U.S. has reduced its coal consumption, it has increased its coal exports to Europe, which

rose 23% in 2012 from a year earlier … chief executive of French power group GDF Suez SA, says

that European utilities imported and burned that coal, raising carbon-dioxide emissions from

power plants in Europe (WSJ, April 2013)

And Stranded Reserves – whose ?


What Investment Would NP Require


All renewable techs,

nuclear and biofuels Transmission and

distribution for the power

sector

Share of fossil fuels is

declining mainly due to

increases in energy

efficiency

Source: IEA World Energy Investment Outlook 2014

Current Patterns


(sources: IEA var and www.ediweekly.com)

Share of fossil fuels

not declining so far

http://www.ediweekly.com/

• Various national, regional and international initiatives have been established

to address climate change:

Effective Organisation for Change ?


Source: Keohane & Victor (2011)

Maybe the focus should have been energy ?

What about the MDG’s ?

• The Millennium Development Goals (MDGs) “the most successful global anti-poverty

push in history”.

• Most MDG targets conclude at the end of 2015, world leaders have called for an

ambitious long-term sustainability agenda to succeed the MDGs (and address

unfinished business).

• Sustainable Development Goals (SDGs) to address pressing global sustainable

development challenges like environmental degradation and promote sustained and

inclusive economic growth in poor countries if poverty eradication is to be irreversible.

• Notably, Goal 7 is focused on energy, conspicuously missing from the MDGs


GOAL 7:

Ensure access to affordable,

reliable, sustainable, and modern

energy for all.

http://www.google.com.au/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=H6oR2AMaEbsd0M&tbnid=CNB4BDAcvPH9OM:&ved=0CAUQjRw&url=http://www.un.org/apps/news/story.asp?NewsID=45308&ei=FezVU922LIjk8AWng4LIAg&bvm=bv.71778758,d.dGc&psig=AFQjCNGtDHmMg3Zj7NJH8-xtnOJE-zTqRg&ust=1406614882385230

The FF Challenge & the Emerged Positions


Acknowledgement: Robert Socolow Princeton Environmental Institute Private communication – Chris Greig

Is climate change

an urgent matter?

A nuclear and/or

renewables transition

unmotivated by

Climate Change

Renewables &

nuclear advocates

live here

► 2oC is readily

achievable

REALITY?

► 3+ oC

is a really tough

challenge

Most industry, policy

makers and public

are still here

(►5oC ?)

NO YES

NO

YES

Are fossil fuels hard to replace?

• Bringing this to a close …


Recapping: Inevitability of Growth

• Current rate of population increase

– 81.9 million p.a.

• Another 2.7 billion in cities by 2050

• Global (electricity)

– Current (2012) installed capacity – 5,520 GW ~ 0.75 kW per person

• Just to „stand still‟ we need to install

– > 60 GW / year or 1.2 GW/week

– Good news > 4 GW/week („10-‟11)

• though mostly coal ?


(source: www.eia.gov)

Target 5,000 kWh pp pa (electricity)

• UK levels of use (electricity only) ~ 5,000 kWh pp pa

– UK population ~ 64.11 million

• UK installed generating base supporting this ~ 93 GW

– UK installed capacity ~1.46 kW per person

• Global installed generation base ~ 5,520 GW

– Global installed capacity ~ 0.75 kW per person

• Global installation needed to match (inst.) UK ~ 10,500 GW

– Extra needed = 5,000 GW (excludes population growth effect)

– Assume a 25 year ramp up ~ 3.8 GW / week (excludes retirements)

– Additional required for annual pop‟n growth ~ 2.3 GW / week

• Assuming 25 years to bring global population to UK levels

requires the installation of 6.1 GW per week

– 2010 – 11 the world achieved 4.7 GW per week


(source: www.eia.gov)

• Consider energy supply needs for development for the vast majority – Long run risk not vs. but and short run certainty

• Understanding what it takes to make the wedges real – what can be engineered, procured and constructed (EPC) in a constrained world (supply & other)

– And … at what rate

– What are the „blockers‟ to major efficiency improvements from existing supply and demand

• Consider where financing and capital is really going

• Consider the installed base (& reserves) and who owns them

• Consider – what mitigation is doable … and adapt to the rest – and note that adaptation is also EPC constrained.

• Do we even understand the solution space ?

• What role Universities and R&D ?

• Consider risk and communication of risk


Wrap-up: Discussions to be Deepened

THE END - THANK YOU


uqei energy express #1 · uqei energy express #1 the modern world energy landscape and ... • 450...

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