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What is the energy of the future?

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What is the energy of the future?

  1. 1. What is the Energy of the Future? Nicolas Meilhan Principal Consultant, Frost & Sullivan January 2017
  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. 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 Electricity production from coal - % of total electricity production, 2013 - 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 % 100 %
  4. 4. What do we use this energy for? Transport is almost exclusively based on oil, while industry relies on massive coal and gas usage * Including non-energetic use Sources: BP Energy Outlook 2035, IEA World primary energy consumption mix - % of million tons of oil equivalent, 2013 - 4 Hydroelectricity + Nuclear Energy + Renewables Natural gas Industry* Transport Agriculture, residential, commercial & public service Oil Coal 46% 17% 36% 95% 12% 21% 39% 28% 13% 25% 28% 34% 19% 22% 31% 28% 34% 2% 3%
  5. 5. Why do we use that much coal to produce electricity? Ask the top 15 exporting countries (who accounts for 80% of exports globally) – they probably know the answer * Energy exports excluded Source: World Bank 5 Goods & Services Exports vs. Electricity production from coal - Top 15 exporting countries*, 2013 - India Brazil Mexico Switzerland Belgium Spain Italy South Korea The Netherlands UK France Japan Germany China USA 0 500 1,000 1,500 2,000 2,500 0% 10% 20% 30% 40% 50% 60% 70% 80% Exportsofgood&services(bn$) Electricity production from coal (% of total electricity production)
  6. 6. Why do we use oil for transport? 1kg of oil contains as much energy as in 100 kg of batteries Source : Pierre-René Bauquis, Richard Heinberg Energy density of energy vectors used in transport Energy density Specificenergy 6 “If the building of the Great Pyramid required 10,000 people working for 20 years, then the petroleum based energy used in the US on an average day build 100 Great Pyramids” Richard Heinberg
  7. 7. Are we really running out of fossil fuels? Knowing whether we’ll still have fossil fuels in 2100 is not the issue – the critical issue is for how long we will have affordable oil to fuel our economy (and our cars..) Liquid fuels extraction simulation - 1900 to 2100 - 7 “It's not the size of the tank which matters, but the size of the tap” Jean-Marie Bourdaire Extractioninbillionsofoil barrelsperyear Source : Jean-Marie Bourdaire, Patrick Brocorens
  8. 8. 8 Do we really need affordable oil to fuel our global economy? Four of the last five global recessions were preceded by an oil shock Economic Recession vs. Oil Price Source: Steven Kopits, June 2009, Douglas Westwood, Oil: What price can America afford?, EIA, NBER Oilprice(US$/bbl)
  9. 9. 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 $100 in the US and $120 in China 9 Breakeven prices for non-producing oil fields Breakevenprice(US$/bbl) Source: Rystad Energy, Morgan Stanley, U.S. Global Investors Cumulative peak production (millions barrels per day)
  10. 10. 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 10 Bird’s eye view of a Texas shale gas field - Click on the image- Source : Google maps
  11. 11. Is space that important when it comes to energy? Energy surfacic density must be considered when looking at the energy of the future – The less space we have, the less choice we have! Source: David MacKay, a reality check on renewables 11 Energy surfacic density
  12. 12. 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 Source: BP Energy Outlook 2035 Mtoe Evolution of world primary energy consumption - Million tons of oil equivalent & % , 1965 to 2035 - 12
  13. 13. 88% 67% 50% 45% 40% 38% 33% 32% 29% 27% 25% 24% 17% 17% 15% 11% 10% 10% 8% 7% 1% 6 47 5 53 293 21 28 34 330 26 17 24 134 152 321 3014 191 239 448 2281 277 Solar Wind Geothermal & biomass Biofuels Hydro 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 13 Iceland Costa Rica Brazil Norway New Zealand Sweden FinlandAustria Canada Denmark ChinaPortugal Italy Spain France JapanGermany USA Primary energy consumption (Mtoe) Share of renewable energies in primary energy consumption of selected countries - 2015, in % - EU average = 12% WW average= 10% Switzerland United Kingdom South Korea Mtoe figures for power generation are converted on the basis of thermal equivalence assuming 38% conversion efficiency in a modern thermal power station Sources: BP Statistical Review of World Energy 2014, IEA
  14. 14. What will life after fossil fuels look like? It will be pretty difficult without strong energy savings 14 Mtoe figures for power generation are converted on the basis of thermal equivalence assuming 38% conversion efficiency in a modern thermal power station Potential renewable energy production - Million tons of oil equivalent per year - 453 2 000 Additional Hydro 140 Biofuels 2 850 Biomass Total Renewable 7 Gtoe 2 263 Wind power 10 000 226 Geothermal power 1 000 ? Total 20 Gtoe [TWh] [Mtoe] 688 3 040 Current Hydro 453 2 000 Solar power 15 compared to 2013  20 billions panels of 1m2 15 compared to 2013  cover 0,5 million km2) 25% of forests exploited at 3 toe/ha  9.5 million km² dedicated 8 billion people at 2.5 toe/year? 10% of current arable land at 1 toe/ha  1.4 million km² dedicated Source: Philippe Bihouix, BP Statistical Review of World Energy 2014, Frost & Sullivan
  15. 15. 15 What is the real energy of the future then? The one we will not use!
  16. 16. Nicolas Meilhan Principal Consultant Energy & Transportation Practices (+33) 1 42 81 23 24 nicolas .meilhan@frost.com

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