The Energy Revolution: Is South Africa Future-Ready?
                By Michael Lee
                Founder & Chairman



...
High-Alert Warning from the Future!




“Passive adaptation to a deteriorating
environment is a road to disaster.”
Jamshid...
Is a Fifth World Revolution Inevitable?


Agricultural Revolution     Industrial Revolution          Information Revolutio...
Global energy is about to hit
a brick wall…


            Oil = 35%
            Coal = 25%
            Gas = 21%
         ...
The “Big Three” of Global Energy




     Source: Author’s Own Pie-Chart Based
                 on IEA Data
Estimated “Big Three” Energy Production Peaks
                                                                         Ene...
The Energy Revolution Syllogism

PREMISE 1
Our industrial, globalised society has an absolute dependence upon
an energy or...
The Energy Crunch Defined



At different times during the next two decades, oil, gas
and coal are likely to reach their p...
The Energy Revolution


Most revolutions are turbulent!   Innovation in the
                                   form of cre...
Key Ingredients of the Energy Revolution




   Decreasing oil production
                               Increasing energy...
Some systems are just not sustainable
The End of the Oil Age is Nigh
       Global Oil Supply Projections:2006-2030
                   Measured in Mb/d
        ...
But no one seems to be paying any attention…
         Growth in Global Demand for Oil: 1970-2020
                      Mea...
The peak oil theory and the facts of fossil
  fuel depletion are not part of national
conversations or strategic discussio...
Two Minute Lesson on Peak Oil




Billionaire US oil investor T. Boone Pickens has
stated that the total amount of oil ava...
Two Minute Lesson on Peak Oil


  “The world has now consumed almost half the total
 amount of conventional oil most exper...
Two Minute Lesson on Peak Oil


 It’s half-time!        Peak Oil = midpoint
                          of total extracted
 ...
Two Minute Lesson on Peak Oil




   And the 2nd half will be much
 rougher and tougher than the 1st
              half….
Two Minute Lesson on Peak Oil




    It took 140 years (1859-1999) to consume
    the 1st trillion barrels of oil BUT it ...
Why Creative Destruction will Happen
To the Energy Order…
              Projected Global Supply/Demand Gap Growth Rate
   ...
Weighed on the scale and found wanting…

     Demand UP
                                Some experts see
                 ...
Weighed on the scale and found wanting…

   Demand UP




   An annual growth rate for new
demand of about 1.5 mb/d, added...
Weighed on the scale and found wanting…
   There is still a
  backlog of un-                       Two billion
    electri...
When are we going to pick up the coming
    energy crisis on our radar screens?




Peak oil and the energy revolution are...
Renewables
     & Gas

               Petroleum

Electricity




         Source: 2006 Digest of Energy Statistics
Hydro
    Nuclear      0%
      3%                      Renewables
                                  8%
 Gas
 2%



Crude ...
South Africa’s Energy: Oil

          The SA Oil Balance Sheet:
 Oil production = 195,000 bbl/day (2008 est.)
     country...
South Africa’s Energy: Oil

                   The SA Oil Balance Sheet:

     Transport sector uses 3/4ths (77%) of SA’s...
South Africa’s Energy: Gas

                 The SA Gas Balance Sheet:

Natural gas production = 3.25 billion cubic metres...
South Africa’s Energy: Coal


              The SA Coal Balance Sheet:

South Africa = a coal giant
6th largest coal prod...
South Africa’s Energy: Coal

               The SA Coal Balance Sheet:


75 % of the South African economy is estimated t...
South Africa’s Energy: Electricity

               The SA Electricity Balance Sheet:

    The nominal installed generatio...
South Africa’s Energy : Electricity

                The SA Electricity Balance Sheet:
   Between 1994 and 2000, Eskom co...
South Africa’s Energy: Electricity

               SA Energy Security Masterplan

  The recent upward trajectory of energ...
SA Energy Security Master-plan : Electricity Super-Grid


            SUPERGRID
      TRANSMISSION BACKBONE
           COR...
South Africa’s Energy: Nuclear



                  Koeberg is rated at 1,800 MW
   The abundant uranium resources in th...
The Superpowers are going nuclear!



  China has 20 nuclear power reactors under construction with
   plans to increase ...
The Superpowers are going nuclear!


In his State of the Union address, Obama called for construction of
a new generation...
Energy : evolution or revolution?



The White Paper on Renewable Energy set a 2013 target of 10 000 GWh
from renewable en...
The Energy Revolution: Solar
                             Earth is on the
    Surface temp =
                            s...
AFRICA IS RICH
In a year, solar radiation striking the
      earth is equivalent to 178,000 terawatts




     Yet solar energy accounts ...
Solar power has the potential to provide
   over 1,000 X total world energy consumption




     Yet it provided only 0.02...
Solar energy demand is growing at
               about 25% per annum




(Source: “The Sun: A Biography”, by David Whiteho...
Apollo Solar Energy to Build an All-
Solar Energy City in Anhui Province,
              China




 SOURCE Apollo Solar Ene...
China is looking beyond oil, spending
 $34.6 billion on renewable energy in
2009. They plan to invest $216 billion
    mor...
Global Solar Power Map
Overview of worldwide solar power average Peak Sun Hours
Sub-Saharan Africa
Overview of worldwide solar power average Peak Sun Hours
Is South Africa Future Ready?
Liquid fuels exposure
Problem: High exposure to any oil shortages – would bring transport
an...
Is South Africa Future Ready?
Exposure to Electricity Generation Capacity Gaps &
High Dependence upon Coal

Problem: High ...
We need new generation of
nuclear power stations on our
shores!
And we need more green power!
Thank you for your kind attention!
Any questions please?
Recommended References

1. Post Carbon Institute - http://www.pos...
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Wfs Conference The Energy Revolution By Michael Lee Pdf

  1. 1. The Energy Revolution: Is South Africa Future-Ready? By Michael Lee Founder & Chairman Towards a 2030 vision for South Africa
  2. 2. High-Alert Warning from the Future! “Passive adaptation to a deteriorating environment is a road to disaster.” Jamshid Gharajedaghi, Systems Thinker and Futurist
  3. 3. Is a Fifth World Revolution Inevitable? Agricultural Revolution Industrial Revolution Information Revolution 10,000-8,000 BC 18th-19th Century AD 1950-2000 Hunter- Gatherer Agricultural Industrial Information Society Society Society Society Globalization 1945- Energy Revolution :2015 -? Ecological Global (Post- Society Industrial) Society
  4. 4. Global energy is about to hit a brick wall… Oil = 35% Coal = 25% Gas = 21% Total = 81% World Primary Energy Consumption
  5. 5. The “Big Three” of Global Energy Source: Author’s Own Pie-Chart Based on IEA Data
  6. 6. Estimated “Big Three” Energy Production Peaks EnergyWatchGroup “Crude Oil: the Supply Oil 2006-2010 Outlook”, October 2007 www.energywatchgroup.org Association for the Study of Peak Oil & Gas (ASPO) 2015-2040* “ The Peak and Decline of Natural Gas (i.e. long plateau World Oil and Gas followed by steep Production” decline) www.peakoil.net EnergyWatchGroup “ Coal: Resources and Coal 2025 Future Production”, July 2007 www.energywatchgroup.org *The International Energy Agency expects gas production to peak between 2020-2030 World Energy Outlook 2007
  7. 7. The Energy Revolution Syllogism PREMISE 1 Our industrial, globalised society has an absolute dependence upon an energy order made up primarily of the Big Three fossil fuels: oil, gas and coal. PREMISE 2 During the period 2010-2030, we will move into an era of irreversible depletion of fossil fuels and diminishing economic returns for their associated industries. CONCLUSION Therefore our society has to find a new energy order to prevent socio-economic collapse scenarios.
  8. 8. The Energy Crunch Defined At different times during the next two decades, oil, gas and coal are likely to reach their peak of world production, resulting in relatively rapid declining supplies of energy and a growing incapacity to meet escalating global demand for key energy sources. These fossil fuel resources are reaching their peaks at a time of unprecedented growth in demand for energy.
  9. 9. The Energy Revolution Most revolutions are turbulent! Innovation in the form of creative destruction is the driving force of material progress..
  10. 10. Key Ingredients of the Energy Revolution Decreasing oil production Increasing energy demand Climate change & Creative destruction of fossil fuel environmental pressure energy order : 2010-2030
  11. 11. Some systems are just not sustainable
  12. 12. The End of the Oil Age is Nigh Global Oil Supply Projections:2006-2030 Measured in Mb/d 90 80 70 60 50 40 Mb/d 30 20 10 0 2006 2020 2030 Source: Author’s Own Graph Based on EnergyWatchGroup Data & Projections (“Crude Oil: the Supply Outlook”, October 2007 www.energywatchgroup.org )
  13. 13. But no one seems to be paying any attention… Growth in Global Demand for Oil: 1970-2020 Measured in Mb/d 120 100 80 60 40 20 0 1970 1979 2008 2020 Source: Author’s Own Chart Based on IEA Data (“Oil Market Report”, 10 July 2008 - http://omrpublic.iea.org)
  14. 14. The peak oil theory and the facts of fossil fuel depletion are not part of national conversations or strategic discussions in South Africa – they have not entered our vocabulary or national consciousness!
  15. 15. Two Minute Lesson on Peak Oil Billionaire US oil investor T. Boone Pickens has stated that the total amount of oil available every day in the world is 85 million barrels but if every vehicle on the world’s roads filled up on a given day it would use up 78 million barrels of oil, close to the world’s total daily production.
  16. 16. Two Minute Lesson on Peak Oil “The world has now consumed almost half the total amount of conventional oil most experts estimate will ever be available for recovery…. The overwhelming majority [of published studies] put the world's original endowment of recoverable oil at no more than about 2,400 billion barrels; the average estimate is 2,000 billion barrels. Cumulative worldwide consumption had exceeded 900 billion barrels by the end of 2003.” Association for the Study of Peak Oil and Gas (ASPO)“The Peak and Decline of World Oil and Gas Production”
  17. 17. Two Minute Lesson on Peak Oil It’s half-time! Peak Oil = midpoint of total extracted and extractable oil reserves on earth
  18. 18. Two Minute Lesson on Peak Oil And the 2nd half will be much rougher and tougher than the 1st half….
  19. 19. Two Minute Lesson on Peak Oil It took 140 years (1859-1999) to consume the 1st trillion barrels of oil BUT it will only take 30 years (2000-2030) to consume the 2nd trillion barrels
  20. 20. Why Creative Destruction will Happen To the Energy Order… Projected Global Supply/Demand Gap Growth Rate Expressed in units of mb/d 100 Supply Gap 80 60 Oil Demand 40 Oil Supply 20 0 2008 2020 Source: Author’s Own Graph Based on Forecasts by IEA (“Oil Market Report”, 10 July 2008 – http://omrpublic.iea.org and CERA “Finding the Critical Numbers: What Are the Real Decline Rates for Global Oil Production?” quoted in “New Fields May Offset Oil Drop” Wall Street Journal, 17th January 2008
  21. 21. Weighed on the scale and found wanting… Demand UP Some experts see world production dropping to 76-77 The world’s demand mb/d by 2011 for primary energy is set to increase by 60% up to 2030 IEA forecasts that worldwide oil demand Production DOWN could exceed 100 mbd by 2020, with ¾ of that due to transport growth
  22. 22. Weighed on the scale and found wanting… Demand UP An annual growth rate for new demand of about 1.5 mb/d, added to the production depletion rate of Production DOWN about 3 mb/d, could result in the global supply/demand gap widening by approximately 4.5 mb/d p.a.
  23. 23. Weighed on the scale and found wanting… There is still a backlog of un- Two billion electrified people live schools, clinics without & houses in SA electricity In 1990, only In 1990, fewer about 30% of than 10% of households rural homes had access to had access to electricity electricity Energy Poverty
  24. 24. When are we going to pick up the coming energy crisis on our radar screens? Peak oil and the energy revolution are not on the national agenda : the national energy summit of 2007 made no mention of fossil fuel depletion.
  25. 25. Renewables & Gas Petroleum Electricity Source: 2006 Digest of Energy Statistics
  26. 26. Hydro Nuclear 0% 3% Renewables 8% Gas 2% Crude Oil Coal 19% 68% Primary Energy Supply – 2004 Source: 2006 Digest of Energy Statistics
  27. 27. South Africa’s Energy: Oil The SA Oil Balance Sheet: Oil production = 195,000 bbl/day (2008 est.) country comparison to the world: 42 Oil consumption = 583,000 bbl/day (2008 est.) country comparison to the world: 29 Oil imports = 490,500 bbl/day (2007 est.) country comparison to the world: 25 (Oil = SA’s largest single import) Oil proven reserves = 15 million bbl (2009 est.) country comparison to the world: 86 Source: CIA World FactBook
  28. 28. South Africa’s Energy: Oil The SA Oil Balance Sheet: Transport sector uses 3/4ths (77%) of SA’s petroleum products! South Africa has limited oil reserves and about 95% of its South crude oil requirements are met by imports from the Middle East and Africa (Saudi Arabia, Iran, Kuwait, the United Arab Emirates, Yemen, Qatar, Iraq, Nigeria, Egypt and Angola). The Energy Security Master plan highlights liquid fuels as a key vulnerability, estimating the economy would, in the case of total fuel supply disruption, lose at least R925 million a day
  29. 29. South Africa’s Energy: Gas The SA Gas Balance Sheet: Natural gas production = 3.25 billion cubic metres (2008 est.) country comparison to the world: 53 Natural gas consumption = 6.45 billion cu m (2008 est.) country comparison to the world: 54 Natural gas imports = 3.2 billion cu m (2008 est.) country comparison to the world: 40 Natural gas proven reserves = 27.16 million cu m (2006 est.) country comparison to the world: 102 Source: CIA World FactBook Limited natural gas reserves exist around the South African coast.
  30. 30. South Africa’s Energy: Coal The SA Coal Balance Sheet: South Africa = a coal giant 6th largest coal producer with 5.5% of world’s coal reserves reliable supplier of high-quality steam coal world’s leader in coal-to-liquids (CTL) technology (Sasol) [Secunda plant produces 150,000 b/pd of synthetic fuel] Exports about 30% of its annual coal production (of which 80% to Europe) 68% of our primary energy supplied from coal
  31. 31. South Africa’s Energy: Coal The SA Coal Balance Sheet: 75 % of the South African economy is estimated to be coal-energy driven About 40-50 years of coal mining left (Waterberg region where half of remaining reserves are located), BUT X New reserves will probably be more expensive to mine X Many mines approaching end of their economic life
  32. 32. South Africa’s Energy: Electricity The SA Electricity Balance Sheet: The nominal installed generation capacity is 42 011 MW CIA World FactBook ranks SA 16th in world for annual electricity production Eskom generates about 96% of SA electricity needs Most plants are coal based, with one nuclear power station and the balance being hydro and gas Industrial and mining sectors use 2/3rds of our national electricity usage Anticipated electricity growth demand projected at 1 500MW p.a.
  33. 33. South Africa’s Energy : Electricity The SA Electricity Balance Sheet: Between 1994 and 2000, Eskom committed itself to connect 2,5 million houses. That commitment was exceeded by 750 homes, one year ahead of target. By the end of 2006 the national grid reached 73% of the population. In urban areas about 85% of households now have access to electricity, whereas the figure in rural areas is around 50 %. A target date of 2012 for 100% access by households, schools and clinics to electricity. Source World Energy Council http://www.worldenergy.org/publications October 2009 quoted in SA The Good News
  34. 34. South Africa’s Energy: Electricity SA Energy Security Masterplan The recent upward trajectory of energy consumption and demand has put the transmission infrastructure under tremendous pressure. Additional 40 000MW electricity has to be generated by 2025 while existing capacity has to be upgraded By 2050, Eskom’s coal-fired fleet (assuming a 70% share of total capacity) would exceed 90 000MW in a business-as-usual scenario. Reliability standard for power generation should be the “1 day in 10 years” standard. This means only one day blackout in 10 years will be an acceptable standard.
  35. 35. SA Energy Security Master-plan : Electricity Super-Grid SUPERGRID TRANSMISSION BACKBONE CORRIDORS Generation Supply Node The main power corridor backbone
  36. 36. South Africa’s Energy: Nuclear Koeberg is rated at 1,800 MW The abundant uranium resources in the country present a strategic opportunity for SA to introduce diversity in base load electricity generation capacity. Nuclear energy presents a viable alternative to coal, leading to a significant reduction in greenhouse gas emissions. The 2007 energy summit concluded that renewable energy and nuclear have a huge potential for reducing emissions. Government has recently taken a decision to invest in nuclear power generation including the development of a nuclear industrial base. The Energy White Paper encourages a diversity of both supply sources as well as primary energy carriers.
  37. 37. The Superpowers are going nuclear! China has 20 nuclear power reactors under construction with plans to increase their nuclear capacity six-fold over the next decade. There will be 12 such reactors built in India over the next seven years. Plans to build a total of 150 nuclear reactors across East and South Asia as a whole are currently in the pipeline.
  38. 38. The Superpowers are going nuclear! In his State of the Union address, Obama called for construction of a new generation of clean nuclear power plants, pledging more than $8bn of federal loan guarantees to begin building the first US nuclear power stations for 30 years: "To meet our growing energy needs and prevent the worst consequences of climate change, we'll need to increase our supply of nuclear power. It's that simple.” Nuclear energy has the greatest potential of all the clean alternatives. In a case study done on a 500-megawatt nuclear power plant, it was found that 250,000 homes could be powered for just several pounds of waste, that nuclear plant would emit 4.1 million less tons of CO2 over the course of a single year than a coal-fired plant.
  39. 39. Energy : evolution or revolution? The White Paper on Renewable Energy set a 2013 target of 10 000 GWh from renewable energy sources. But this has not factored in the drastic impacts of fossil fuel depletion. If we have one of the world’s best potential markets for solar power why is less than 1% of the total electricity generated in South Africa based on renewable energy resources? When are we going to truly harness and harvest our sunny skies?
  40. 40. The Energy Revolution: Solar Earth is on the Surface temp = sun’s life support 6000 ºC; core Every second a system temp = 15 million million tonnes of degrees mass is converted into energy Power unleashed at centre is equivalent to 80 billion hydrogen bombs To equal the sun’s exploding every energy output for just second. one second, it would be necessary to detonate a 150 million km hydrogen bomb every from earth lies a second for 3200 years! nuclear power station in space
  41. 41. AFRICA IS RICH
  42. 42. In a year, solar radiation striking the earth is equivalent to 178,000 terawatts Yet solar energy accounts for less than 0.1% of total global primary energy demand (Source: “The Sun: A Biography”, by David Whitehouse, p.198)
  43. 43. Solar power has the potential to provide over 1,000 X total world energy consumption Yet it provided only 0.02% of the total in 2008 (Source: “The Sun: A Biography”, by David Whitehouse, p.198)
  44. 44. Solar energy demand is growing at about 25% per annum (Source: “The Sun: A Biography”, by David Whitehouse, p.198)
  45. 45. Apollo Solar Energy to Build an All- Solar Energy City in Anhui Province, China SOURCE Apollo Solar Energy, Inc. Apr 19, 2010
  46. 46. China is looking beyond oil, spending $34.6 billion on renewable energy in 2009. They plan to invest $216 billion more over the next five years. SOURCE , Bloomberg New Energy Finance report. Apr 2010
  47. 47. Global Solar Power Map Overview of worldwide solar power average Peak Sun Hours
  48. 48. Sub-Saharan Africa Overview of worldwide solar power average Peak Sun Hours
  49. 49. Is South Africa Future Ready? Liquid fuels exposure Problem: High exposure to any oil shortages – would bring transport and tourism sectors to a grinding halt; dependence on volatile foreign supplies of oil Solution? Vast public/private expansion and modernisation of national, regional and local rail networks; investment in electric & hybrid cars; step up CTL operations? Build larger petroleum reserves. National Energy Policy Short of Foresight on Fossil Fuel Energy Crunch Problem : National energy policies and papers do not reference fossil fuel depletion – it is not a challenge or an obstacle, rather IT IS THE END OF AN AGE Solution? We need a radical energy policy review taking into account fossil fuel depletion rates and developing our own SA Oil Depletion Protocol (ODP) Solution? We need an energy revolution
  50. 50. Is South Africa Future Ready? Exposure to Electricity Generation Capacity Gaps & High Dependence upon Coal Problem: High exposure to electrical power shortages from 2011 Problem: Extreme dependence of economy on coal Solution? We need massive public and private investment in solar power in rural and urban areas to finally provide for long-term energy security - South Africa must go solar! Solution? Build more nuclear power stations to meet long-term shortfall and to prepare for Peak Coal Solution? Drive systems efficiencies and energy savings Solution? Change unsustainable consumer patterns and incentivise measures like house insulation, solar heating, lift clubs, etc Solution? We need an independent national energy indaba to plan the transition from fossil-fuel dependent economy to a new energy order based on renewable and nuclear energy
  51. 51. We need new generation of nuclear power stations on our shores!
  52. 52. And we need more green power!
  53. 53. Thank you for your kind attention! Any questions please? Recommended References 1. Post Carbon Institute - http://www.postcarbon.org/ 2. Association for the Study of Peak Oil and Gas (ASPO) http://www.peakoil.net 3. EnergyWatchGroup www.energywatchgroup.org International Energy Agency http://www.iea.org 4. Oil Depletion Analysis Centre (ODAC) http://odac-info.org/peak-oil-primer 5. Digest of Energy Data – 2006 6. Energy Summit SA 2007 7. Guidelines for Development of Renewable Energy in SA 8. Energy Security Masterplan – 2007-2025, Department of Minerals and Energy - http://www.dme.gov.za

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