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  1. 1. MANAGING GLOBAL EMISSIONS – ELECTRICITY IS THE WAY FORWARD Dr. Hisham Khatib Honorary Vice Chairman, World Energy Council ABSTRACT Electricity, as an energy carrier, is most important in managing emissions. Globally electricity use is growing at a higher rate than primary energy use and gradually emissions from electricity production may exceed half primary energy emissions by the middle of this century. Emissions from electricity production are easier to deal with by CCS technologies because these emissions are concentrated at one site, i.e. the power station. Correspondingly any strategy for containing and managing emissions that does not have electricity production at its center of interest will be missing the target. 1. INTRODUCTION Electricity use is growing at a rate much higher than total primary energy use. Electricity share in final energy use is going to continue to grow because electricity is versatile, clean to use and easy to distribute and control. As important, it is now established that electricity has better productivity in many applications than most other energy forms1, 2. This situation has led to the wider utilization of electricity and its replacement of other forms of energy in many applications. Demand for electricity is now growing globally at a rate almost one and a half to two times that of demand for primary energy sources. With the types of technologies and applications that already exist, there is nothing to stop electricity's advancement and its increased share of the energy market. Saturation of electricity use is not yet in sight, even in advanced economies where electricity production claims more than half of primary energy use. Other than for the transport sector, electricity can satisfy most human energy requirements. It is expected that, by the middle of the 21st century, almost 70% of primary energy utilization in some industrialized countries will be delivered by electricity3. The International Energy Agency (IEA) estimate that the share of electricity in total final energy consumption will increase in all the services sector in all regions of the world. Overall the share of electricity in total final energy consumption worldwide is projected to rise from 16% in 2004 to 20% in 2030. While the share of electricity in total energy consumption is expected to grow from 40% now to 42% in 2030 (see following Table One) 4. Demand grows most rapidly in households, underpinned by 1
  2. 2. strong demand for appliances, followed by the services sector. In absolute terms, industry is expected to remain the largest final consumer of electricity throughout the projection period, but its share in final electricity demands is projected to fall. 2. ELECTRICITY AND ENERGY In 2007 it is expected that world electricity generation will amount to 18 850 TWh, rising to 33 750 TWh in 2030, this indicates an annual compounded growth rate of 2.56%. This average hides the fact that growth is expected to exceed 3% annually during the next few years falling to 2.1% over the 2020 -2030 period.4,5 Total primary energy use in 2007 is expected to be 11 300 million tons oil equivalent (MTOE)6, in 2030 it is likely to be 17 000 MOTE, indicating an annual compounded growth rate of around 1.78%. Therefore electricity demand is expected to grow at a rate of 44% higher than primary energy use. This is significant. Correspondingly it is emissions from electricity production that are going to significantly affect global emissions of greenhouse gasses. Any treatment of emissions that does have electricity generation as its center of interest will be missing the right issue. World CO2 emissions from power plants are projected to increase by 55% over the period 2008 -2030, at a rate of 2% per year. Power generation is now responsible for 41% of global energy –related CO2 emissions. This share rises to 44% in 2030, mainly because of the growing share of coal in electricity generation. China and India together account for 58% of global increase in CO2 from power generation over 2004 – 2030, because of their strong reliance on coal. In 2030, emissions from power plants in China and India will be greater than those from power plants in the OECD. Almost all of the increase in power sector emissions in China and India combined can be attributed to coal –fired generation. TABLE ONE Electricity and Global Energy 2004 2010 2020 2030 Total Primary Energy use (MTOE) 10 600 12 100 14 500 16 700 Electricity in Final Energy use 16.1% 17.0% 18.2% 19.1% Electricity use of Primary Energy 39% 41% 41.6% 42% Contribution to global CO2 emissions 41% 42% 41.6% 42% 2
  3. 3. 3. ELECTRICITY AND CLIMATIC CHANGE Long term future of energy, that is energy use in 2030, is not difficult to predict. Energy systems have very strong inertia, decisions made today will shape the way and extent we use energy within next few decades. It is not easy, however to predict the very long term energy futures. By very long term I mean energy futures existing at the end of the 21st century. There are many factors influencing this: economic growth and its stamina, complimentarity between the economy and energy use, availability of resources, public acceptance of nuclear energy, technological change particularly in developing cheaper renewables as well as dealing with carbon. All of this is gradually being influenced by impending environmental global agreements, local legislation and increasing influence of the environmental lobby. This paper will make very quick look into this long term energy futures through analyzing the above factors and make a long term prediction to year 2050 and another version that looks into 2100 (see Figure One). There are three significant factors that are going to shape our future energy scene: (1) Fossil fuels will continue to dominate our energy future, till the end of this century. Coal, as infeed for electricity production,will remain important. (2) Containing emissions, environmental awareness and enforcement will determine (to an extent) the technologies, forms and magnitudes of our energy use. (3) Electrification is the way forward. It will greatly improve the modalities and efficiency of energy use, incorporation of renewables, nuclear, new energy forms, cleaner transportation, etc. 4. ENERGY AND THE GLOBAL ECONOMY The main factor that drives increase in energy use is economic growth. Whilst energy and economic growth were strongly coupled in the past this relationship is gradually being weakened through better energy efficiency. Improving energy efficiency will continue to be the key to the extent of future energy use. The relationship is simple: Annual growth in energy use (%) = Economic growth (%) minus improvement in energy efficiency (%). 3
  4. 4. Since the beginning of this century such relationship is outlined in Table Two. TABLE TWO Energy Utilisation (2000 – 2006) Average annual real economic growth 4.5 % Average annual energy use 3% Annual improvements in efficiency 1.5 % During the past many years energy efficiency has greatly improved and there is scope for more future improvements. Efficiency improvement will be the vehicle for containing emissions. That is where electricity is important, because it is possible and easier to improve efficiency of electricity conversion (which is presently very low) than to attempt other measures. 5. ELECTRICITY EFFICIENCY It is in electricity efficiency that great strides can be achieved, in electricity use, as well as in electricity generation. This has been taking place slowly over the past few years but such an improvement can be accelerated. Usually, and on the average, less than 30% of the heat content of electricity infeed fuels reaches users in the form of electricity. Losses make up, on the average, two thirds of the energy conversion to electricity. Average electricity generation efficiency 39% Losses inside the power station (auxiliaries) 2-8% of electricity For coal firing 6-8% For natural gas 2-3% Losses in transmission networks 1-5% Losses in the distribution network 6-15% Average losses 18% of electricity Average efficiency reaching users 30% -32% 4
  5. 5. There is wide scope for improvement, particularly in efficiency of electricity generation. The following Table Three shows development of electricity generation during the last many years in various countries. TABLE THREE Efficiency of Fossil Fuel Power Stations7 OVERALL YEAR EFFICIENCY % COAL % GAS % OIL % 1990 33% 30% 38% 38% 2000 38% 35% 42% 39% 2006 39% 36% 45% 39% Tremendous efficiency improvements, of almost 0.5% percentage points annually, has taken place during the 1990s, due to switching to natural gas and growing popularity of combined cycle plant (CCGT) where high efficiencies in the 50% region or higher, 60% are obtainable. However the return to firing local coal in the past few years, particularly in countries rich in coal (US, India or China) has moderated this trend. Gradually, with improvements in efficiency of coal firing power stations, electricity generation efficiency is likely to improve year after another. Most efficient counties in electricity generation are: Japan, UK, Nordic countries, these efficiencies range on the average of 42% for coal to 52% gas. Existing technologies utilizing best practices will allow generation efficiencies to go as high as 47% for conventional coal-fired power plants (ultra –supercritical units) and 60% for natural gas combined cycle plants (based on net calorific heat value of gas). If the electricity generation efficiency of efficient countries are attained world wide, this means reducing emissions by as high as 1300 million tonne CO 2.If best practices are adopted this means a reduction as high as 2100 million tonne CO 2. This is significant. Presently global CO2 emissions are around 27 000 million tonne. Possible improvements in power generation will reduce these by 5% -7%. Prospects for the future are much higher. All this without resorting to carbon capture and storage (CCS), which is easier in case of power generation than in any other activity. However in case of applying CCS, it is agreed that by 2050 almost 60% of the emissions released by power sector should be captured; and consequently more that 90% of the coal – fired electricity would be generated from newly built plants with CCS. It is expected that after an initial deployment of CCS in developed countries, rapid uptake in developing countries will follow 8. 5
  6. 6. 6. CONCLUSIONS A major component in managing future emissions is related to the role of electricity as an energy carrier. Electricity can reduce emissions through many contributions: 1) There is a wide scope for improving efficiency in energy conversion to electricity. This is improving now slowly at an average of 0.5 percentage points every year. Future technologies can speed this up. 2) Electricity is more efficient in energy utilisation in many applications, mostly in industry, but increasingly in new forms of utilisation like transport (hybrid cars, etc.) 3) One of the main positive features of electricity is that pollution and emissions take place in a concentrated form in one site, that the power station, where it will be more easy to deal with. 4) Technology for carbon capture and storage (CCS) are still in their infancy. But they are improving and becoming recognised. This coupled with the above fact, that emissions from electricity production is concentrated in one site, will able cleaner electricity production in the not far future. 5) Cleaner forms of energy – nuclear, renewables, etc. can be more easily exploited in the form of electricity. Therefore to summarize, any strategy for reducing and managing global emissions must have efficiency in electricity production and utilisation as its center of interest. 6
  7. 7. Figure One 7
  8. 8. REFERENCES 1- KHATIB, H: "Economic Evaluation of Project in the Electricity Supply Industry" (IEE, 2003) 2- JARET, P: "Electricity for Increasing Energy Efficiency", EPRIJ. ,April 1992, 17 (3) 3- GERHOLM, T.R.:" Electricity In Sweden-Forecast to the Year 2050" (Vattenfal, Sweden, 1991) 4- IEA, " World Energy Outlook, 2006", OECD / IEA, Paris 2006 5- DOE-EIA" International Energy Outlook 2007" Washington DC, May 2007. 6- "BP Statistical Review of World Energy" British Petroleum, UK, June 2007 7- Graus, W.H.J., et.al, "International Comparison of Energy Efficiency of Fossil Power Generation ", Energy Policy, 35 (2007) 8- Kavouridis, K., et. al." Coal and Sustainable Energy Supply", Energy Policy, Manuscript JEPO –D-07-00328 8