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Understanding What’s Wrong with Energy
(& GDP Growth) in 5 Minutes
Nicolas Meilhan
Principal Consultant, Frost & Sullivan
...
2
Evolution of world primary energy consumption
- Million tons of oil equivalent , 1860 to 2012 -
What is the energy of th...
BrazilMexico
Switzerland
Belgium
IndiaSpain
Italy
Sounth KoreaNetherlands
United
Kingdom
France
Japan
Germany
China
United...
Are we really running out of oil?
Knowing whether we’ll still have fossil fuels in 2100 is not the issue – the critical is...
Houston, we have a problem
Higher cost new oil projects require $80/bbl+ oil price to be profitable while oil demand (henc...
Is shale gas the energy of the future?
In the short term maybe in the US with as high as 40% of gas demand in 2013, in
the...
85%
66%
47%
41%
38% 37%
31%
30% 29% 28%
23%
20% 19%
16%
11%
9% 9%
7% 6% 6%
1%
6 45 5 284 51 20 34 30 24 333 26 18 134 159 ...
What could be the energy of the future then?
Fossil fuels share in primary energy mix will decrease only modestly, from 85...
9
What is the real energy of the future then?
The one we will not use!
Note : koe = kilogram of oil equivalent ; best avai...
Nicolas Meilhan
Principal Consultant
Energy & Transportation Practices
(+33) 1 42 81 23 24
nicolas .meilhan@frost.com
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Understanding What's Wrong with Energy (& GDP Growth) in 5 Minutes

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Transcript of "Understanding What's Wrong with Energy (& GDP Growth) in 5 Minutes"

  1. 1. Understanding What’s Wrong with Energy (& GDP Growth) in 5 Minutes Nicolas Meilhan Principal Consultant, Frost & Sullivan April 2015
  2. 2. 2 Evolution of world primary energy consumption - Million tons of oil equivalent , 1860 to 2012 - What is the energy of the past? Oil remains by far the main source of world energy, but has lost market share to gas and coal. Sources: Shilling et al., 1977, et BP Statistical Review, 2013 30% 27% 22% 8% 6% 4% 2% 80% Biomass Nuclear Natural gas Coal Oil Hydro Wind, solar & geothermal
  3. 3. BrazilMexico Switzerland Belgium IndiaSpain Italy Sounth KoreaNetherlands United Kingdom France Japan Germany China United States 0 500 1000 1500 2000 2500 0% 20% 40% 60% 80% Exportsofgood&services(bn$) Electricity production from coal (% of total electricity production) 3 Isn’t coal the energy of the past? Yes it is as it fuelled the industrial revolution during the 18th century. But it might as well be the energy of the future as it could surpass oil as the most primary energy used by 2030 Source: World Bank Coal currently provides 40% of the world's electricity needs, accounts for 40% of CO2 emissions and as much as 60% of CO2 emissions increase since 2000 1 % 5 % 10 % 15 % 20 % 25 % 30 % 35 % 40 % 0 % 45 % 50 % Exports vs. Electricity production from coal - Top 15 exporting countries*, 2011 - Electricity production from coal - % of total electricity production in 2012 - R2 = 0.7 * Energy exports excluded
  4. 4. Are we really running out of oil? Knowing whether we’ll still have fossil fuels in 2100 is not the issue – the critical issue is for how long we will have affordable oil to fuel our economy (and our cars..) Source : Pierre-René Bauquis, Jean-Marie Bourdaire, Patrick Brocorens Energy density of energy vectors used in transport Energy density Specificenergy 4 1kg of oil contains as much energy as in 100 kg of batteries Liquid fuels extraction simulation - From 1900 to 2100 - It's not the size of the tank which matters, but the size of the tap Extractioninbillionsofoil barrelsperyear
  5. 5. Houston, we have a problem Higher cost new oil projects require $80/bbl+ oil price to be profitable while oil demand (hence GDP per capita) contracts when oil price surpasses $102 in the US and $120 in China 5 Economic Recession vs. Oil Price Four of the last five global recessions were preceded by an oil shock Breakeven price of for various US plays (single well) tight oil Economicbreakeven(US$/bbl) •US shale oil cost $50 to $80/bbl to produce •Kashagan oil field need $125/bbl to be profitable Source: The Oxford Institute for Energy Studies Mars 2014, Douglas-Westwood Associates
  6. 6. Is shale gas the energy of the future? In the short term maybe in the US with as high as 40% of gas demand in 2013, in the longer term probably not in Europe with only 10% of gas demand in 2030 6 Bird’s eye view of a Texas shale gas field - Click on the image- Source : Google maps
  7. 7. 85% 66% 47% 41% 38% 37% 31% 30% 29% 28% 23% 20% 19% 16% 11% 9% 9% 7% 6% 6% 1% 6 45 5 284 51 20 34 30 24 333 26 18 134 159 325 248 2852 2266 200 474 271 Solar Wind Geothermal & Biomass Biofuels Hydro electric Can’t we just use renewable energies like our ancestors did in Middle Ages? Countries which inherited large significant forests, hydraulic or geothermal potential might get close to it – for others, it will be much more difficult unless consumption significantly decreases 7 Primary energy consumption (Mtoe) Share of renewable energies in primary energy consumption of selected countries - 2013, in % - EU average = 11% WW average= 9% Sources: BP Statistical Review of World Energy 2014, Frost & Sullivan analysis Mtoe figures for power generation are converted on the basis of thermal equivalence assuming 38% conversion efficiency in a modern thermal power station Iceland Costa Rica BrazilNorway New Zealand Sweden FinlandAustria Canada Denmark ChinaPortugal Italy Spain France Japan Germany USASwitzerland United Kingdom South Korea
  8. 8. What could be the energy of the future then? Fossil fuels share in primary energy mix will decrease only modestly, from 85% in 2013 to 80% in 2035, the new renewables share increasing from 3% in 2013 to 8% in 2035 Mtoe Evolution of world primary energy consumption - Million tons of oil equivalent & % , 1965 to 2035 - Source: BP Energy Outlook 2035
  9. 9. 9 What is the real energy of the future then? The one we will not use! Note : koe = kilogram of oil equivalent ; best available technology in 1995 Source: Bernard Multon, ENS Cachan ; Commissariat au plan Sector koe / person In 1995 koe / person Best techno (1) Comments Housing Heating 740 300 • Norms Kitchen devices 35 25 • Best equipment Other devices 70 35 • Standby systems Tertiary Heating 415 200 • Norms Specific usages 90 50 • Standby systems Food 360 250 • 50% saving on cold and cooking Industry Intermediary products 625 450 • Recycling, eco processes Equipments 150 130 Transports Persons 490 250 • 4 liters / 100 km vehicles Goods 315 200 • Truck power reduction, rail freight Total 3290 1890 • Almost 50% energy reduction with no real change in comfort…not enough but a good start ! • But we have a strong inertia issue due to installed base replacement speed… Standby of electrical devices…5 to 6 TWh in France : almost one nuclear reactor !
  10. 10. Nicolas Meilhan Principal Consultant Energy & Transportation Practices (+33) 1 42 81 23 24 nicolas .meilhan@frost.com
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