Innovation in energy for a sustainable future

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António Coutinho, Executive Board Member, EDP Commercial, was one of the keynote speakers at the 9th Annual Global Energy Summit.

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Innovation in energy for a sustainable future

  1. 1. Innovation in EnergyFor a sustainable futureLondon Business SchoolNovember 30th 2012 António Coutinho EDP Comercial
  2. 2. Agenda The case for innovation in energy Pathways for the future Innovation and Sustainable Development at EDP 2
  3. 3. Agenda The case for innovation in energy Pathways for the future Innovation and Sustainable Development at EDP 3
  4. 4. Innovation needed to tackle the key energy challengesKEY ENERGY CHALLENGES Abundant• Increased energy consumption - Population growth - Economic development The world• Limited availability of resources needs energy Affordable and or more expensive that is:• Global warming and the need to reduce GHG emissions Clean 4
  5. 5. Population will grow 50% between 2000 and 2050
  6. 6. A case for energy hunger… The wealthiest bilion is responsible for 50% of energy consumption… While the poorest takes less than 4%
  7. 7. Economic development and human development highly correlatedwith energy consumptionSource: www.gapminder.org 7
  8. 8. We need more energy The population will grow 50% between 2000 and 2050… Energy consumption is projected to grow 100%
  9. 9. Fossil fuels allowed a huge jump in the human developmentPre Industrial Revolution Farming Current farming ERoEI ~ 1 a 5 ERoEI ~ 40 a 60Fonte: Kurt Cobb, The Net Energy Cliff, Energy Bulletin, 2008 9 9
  10. 10. Oil ERoREI has been reducing dramaticallyOil exploration by early XX Deep water oil exploration 1900: ERoEI > 100 2010: ERoEI < 10 10 10
  11. 11. It takes a lot of oil to raise cattle!Source: National Geographic 11
  12. 12. Energy prices highly correlated with food prices Food price index vs. oil price Index, $/bbl 12
  13. 13. Known reserves of fossil fuels exceed what the atmospherecan handleIEA “the door to 2°C is closing” Without further action, by 2017 all CO2emissions permitted in the 450 Scenario will be “locked-in” by existing power plants, factories, buildings, etc
  14. 14. Agenda The case for innovation in energy Pathways for the future Innovation and Sustainable Development at EDP 14
  15. 15. Main trends: 1 Energy Efficiency Breakdown of GHG abatement drivers Gt of CO2, 2005-2030E Key characteristics of Energy Efficiency Lowest-cost CO2 abatement technology Greater security of supply Key to economic recovery • Job creation – labor intensive activity • Value creation – avoids fossil fuel importsSource: IEA - World Energy Outlook 15
  16. 16. Main trends: 2 Decarbonization EU carbon-free power generation mix %, 2000-2050 47% 49% 59% ~100% • Renewable energy will need to keep growing consistently 30% CCS • Strong regional differences: ― Highest RES penetration in Iberia & 19% Nuclear Scandinavia ― Strong share of nuclear in France 25% ― CCS mostly located in Central & Eastern Europe 29% 32% 51% RES • Emissions only allowed for peaking units 34% working few hours 20% 15% 2000 2010 2020E 2050ESource: IEA - Key World Energy Statistics (2009); 2050 values calculated as average of 5 European studies’ forecasts (Eurelectric, PWC, ECF, New Energy Era) 16
  17. 17. Main trends: 3 Electrification Share of electricity in final energy demand Major arguments for electrification %, Europe 43% • Electric vehicles • Electricity based end-use • Heat pumps Higher efficiency technologies are much more efficient than fossil fuel based 21% • Multiple zero carbon power generation technologies already exist at competitive costs 11% Easier decarbonization • Economies of scale: power emits at generation plants, fuels emit at consumption points (many more) 1973 1 2007 1 2050E1. Values for OECDSource: IEA - Key World Energy Statistics (2009); 2050 values calculated as average of 5 European studies’ forecasts (Eurelectric, PWC, ECF, New Energy Era) 17
  18. 18. Electric mobility: a powerful tool to increase efficiency and reduce emissions Global efficiency in the use of primary energy Specific emissions for different transportation techs %, 2009 and 2010 for Portugal gCO2/km, 2009 and 2010 for Portugal 80% Point equivalent to the 350 generation with CCGT FCEV - electrolysis 70% BEV 300 60% 250 BEV with CCGT 50% more efficient than CNG 200 BEV 40% 150 Gasoline 30% Diesel FCEV - SMR FCEV - SMR Diesel 100 CNG 20% Gasoline FCEV - and CNG 50 10% electrolysis 0% 0 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 1 0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 1 Efficiency of the electricity USA and China EU PT generation system PT EU USA China Specific emissions in electricity generationSource: ACAP, Eurelectric, DPE analysis 18
  19. 19. Main trends: 4 Grids Instruments What they allow • Dilute local intermittency in a larger system • Reduce need for backup capacity Transport • Take advantage of countries’ comparative grids advantages in regard to renewable resources Large-scale • Combine technologies with complementary integration of seasonality (solar, wind) intermittent • Mature and cost-efficient technology renewables • Facilitate adoption of energy efficiency Distribution • Allow integration of micro-generation smart grids • Enabler of electric mobility and distributed storage 19
  20. 20. Main trends: 5 Going Distributed • Thermal storage • Batteries Distributed Distributed • Electric mobility Generation Storage Technology• PV generation• Micro CHP• Micro wind turbines Distributed Energy Management • Smart meters Systems • Standby killers • Heat pumps 20
  21. 21. Grid parity is around the corner Levelized cost1 Costs of a rooftop solar PV system <100 kW xx (€/MWh) €/Wp, 2006-2012 380 143 5.0 4.4 4.3 3.6 -64% 2.9 2.4 1.8 2006 2007 2008 2009 2010 2011 2012 Innovation has and will continue to be key in cutting the cost of solar generation1. Assuming FOM 20 €2010/kW; load factor 1.400 equivalent hours; WACC 9%Source: BSW-Solar PV Price Index 5/2012 21
  22. 22. Agenda The case for innovation in energy Pathways for the future Innovation and Sustainable Development at EDP 22
  23. 23. EDP’s strategy answering the main trends Renewable Electric Energy Mobility Smart grids Energy efficiency 23
  24. 24. EDP’s research in deep wind offshore has been considered a leading exampleworldwide, having attracted several leading entities in the field UK Wind Offshore Partnership Wind Float Project Moray Firth 1.5 GW Inch Cape 0.9 GWEDPR is leading the development of up to 2.4 GW of EDP recently installed a wind floating turbine in wind offshore projects with a 60% stake northern Portugal coast First wind offshore project in the world without Joint development of wind offshore project in UK any heavy load support 24
  25. 25. InovGrid as the #1 project in Europe by the European Commission Benefitting consumers and offering a technological leap forward in network service and capabilitiesOperational EfficiencyEnergy EfficiencyService QualityRenewable EnergyElectric Vehicles • 31,300 smart meters are being commercially tested in the Portuguese city of Évora • Expansion to the 6 million Portuguese client base set to start soon... • First pilot project in Brazil replicating the same technology with be concluded also in 2012 25
  26. 26. SaveToCompete as an innovative program privately funded topromote Energy Efficiency in B2B 26
  27. 27. Kakuma: a pioneer example from a “nowhere land” to a place to live• Project developed in Kenya in a partnership with the UNHCR (UN Refugee Agency)• 10 projects with significant impacts in the community• EDP invested 1.3 million euros invested•Benefiting 77.000 refugees, 11 institutional buildings, 15 schools and 2 hospitals Before Now 27 27
  28. 28. Main takeaways • Technology and innovation are needed to meet energy consumption growth in a sustainable way • Going forward, the main trends in energy systems involve energy efficiency, decarbonization, electrification and going distributed • EDP is strongly committed in promoting innovation and sustainable development pursuing opportunities aligned with the main trends 28

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