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Energy Technology Perspectives 2012

Tapping technology's potential to secure a clean energy future

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Energy Technology Perspectives 2012

  1. 1. ETP 2012 complete slide deck Slide deck You are very welcome to use the contents of this slide deck as long as you reference them as IEA - Energy Technology Perspectives 2012 Most graphs and the data behind them are available for download from, the required password received upon purchase of the book. For questions please contact the ETP team © OECD/IEA 2012
  2. 2. Table of contents To jump to a specific section: Right click, then hit “open hyperlink” 0. ContextPart 1. Vision, Status and Tools for the Part 4. Scenarios and Technology Roadmaps Transition  11. Electricity Generation and Fuel 1. Global Outlook Transformation 2. Tracking Clean Energy Progress  12. Industry 3. Policies to Promote Technology  13. Transport Innovation  14. Buildings 4. Financing the Clean Energy Revolution  15. Roadmaps  16. 2075: can we reach zero emissionsPart 2. Energy Systems Thinking  17. Regional Spotlights 5. Heating and Cooling  17.1 ASEAN  17.2 Brazil 6. Flexible Electricity Systems  17.x Japan 7. Hydrogen  17.3 China  17.4 European Union  17.5 IndiaPart 3. Fossil Fuels and CCS  17.6 Mexico 8. Coal Technologies  17.7 Russia 9. Natural Gas Technologies  17.8 South Africa  17.9 United States 10. Carbon Capture and Storage Technologies © OECD/IEA 2012
  3. 3. ContextChapter 0 © OECD/IEA 2012
  4. 4. ETP 2012 – Choice of 3 Futures 2DS 4DS 6DSa vision of a sustainable reflecting pledges by where the world is nowenergy system of reduced countries to cut heading with potentiallyGreenhouse Gas (GHG) emissions and boost devastating resultsand CO2 emissions energy efficiency The 2°C Scenario The 4°C Scenario The 6°C Scenario © OECD/IEA 2012
  5. 5. Sustainable future still in reach Is a clean energy Are we on track to Can we get ontransition urgent? reach a clean track? energy future? YES ✓ NO ✗ YES ✓ © OECD/IEA 2012
  6. 6. Recommendations to Governments 1. Create an investment climate of confidence in clean energy 2. Unlock the incredible potential of energy efficiency – “the hidden” fuel of the future 3. Accelerate innovation and public research, development and demonstration (RD&D) © OECD/IEA 2012
  7. 7. Key messages1. Sustainable energy future is still feasible and technologies exist to take us there2. Despite potential of technologies, progress is too slow at the moment3. A clean energy future requires systemic thinking and deployment of a variety of technologies4. It even makes financial sense to do it!5. Government policy is decisive in unlocking the potential © OECD/IEA 2012
  8. 8. Global OutlookChapter 1 © OECD/IEA 2012
  9. 9. Choosing the future energy system To achieve the 2DS, energy-related C02 emissions must be halved until 2050. © OECD/IEA 2012
  10. 10. Decoupling energy use fromeconomic activityReducing the energy intensity of the economy is vital to achieving the 2DS. © OECD/IEA 2012
  11. 11. All sectors need to contributeThe core of a clean energy system is low-carbonelectricity that diffuses into all end-use sectors. © OECD/IEA 2012
  12. 12. A portfolio of technologies is needed Technology contributions to reaching the 2DS vs 4DSEnergy efficiency is the hidden fuel that increases energy security and mitigates climate change. © OECD/IEA 2012
  13. 13. A portfolio of technologies is needed Technology contributions to reaching the 2DS vs 4DS Power generation efficiency and fuel switching Nuclear 3% 8% CCS 20% End-use fuel switching 9% End-use fuel and electricity Renewables efficiency 29% 31%Energy efficiency is the hidden fuel that increases energy security and mitigates climate change. © OECD/IEA 2012
  14. 14. All technologies have roles to play Technology contributions to reaching the 2DS vs 6DS 60 Power generation efficiency and fuel switching 3% (1%) 50 Nuclear 8% (8%) 40 End-use fuel switching 12%Gt CO2 (12%) 30 End-use fuel and electricity efficiency 42% (39%) Renewables 21% (23%) 20 CCS 14% (17%) 10 0 2009 2020 2030 2040 2050 Nuclear is one piece of the puzzle © OECD/IEA 2012 © OECD/IEA 2012
  15. 15. The cost of emitting a tonne of CO2 Marginal abatement cost curve in electricity generation in 2050Marginal abatement costs reach USD 150 in 2050 and increase rapidly as reductions get deeper. © OECD/IEA 2012
  16. 16. Marginal abatement costs change over time Passenger LDV marginal abatement cost curves in 2DSThe marginal abatement costs decrease as learning improves over time. © OECD/IEA 2012
  17. 17. Learning needs to deliver cost reductions Passenger LDV marginal abatement cost curves in 2DS in 2050 under different assumptions on learningFuture marginal abatement cost curves are very sensitive to input assumptions © OECD/IEA 2012
  18. 18. Tracking Clean Energy ProgressChapter 2 © OECD/IEA 2012
  19. 19. Near term action necessary in all sectors Global CO2 emissions under ETP 2012 scenarios © OECD/IEA 2012
  20. 20. Clean energy: slow lane to fast track Cleaner coal power Nuclear power Renewable power CCS in power CCS in industry Progress is too slow in Industry almost all technology areas Significant action is required Buildings to get back on track Fuel economy Electric vehicles Biofuels for transport © OECD/IEA 2012
  21. 21. Fossil fuels continued to dominate Changes in sources of electricity supply, 2000-09 Coal remains the largest source of electricity supply, and met about half of additional electricity demand over the last decade. © OECD/IEA 2012
  22. 22. Renewables provide good news Global renewable power generation 42% 75% 27% Average annual Cost reductions in Average annual growth in Solar PV Solar PV in just growth in wind three years in some countries © OECD/IEA 2012
  23. 23. Fuel economy has improved Vehicle fuel economy, enacted and proposed standards The number one opportunity over the next decade in the transport sector, but few countries have standards in place. © OECD/IEA 2012
  24. 24. We must translate ambitions into reality Government and manufacturer Electric Vehicle targets © OECD/IEA 2012
  25. 25. Energy intensity must decline further Progress in energy intensity Significant potential for enhanced energy efficiency can be achieved through best available technologies. © OECD/IEA 2012
  26. 26. Key recommendations 1) Level the playing field for clean energy technologies 2) Unlock the potential of energy efficiency 3) Accelerate energy innovation and public research, development & demonstration Help move clean energy from fringe, to main stream markets… © OECD/IEA 2012
  27. 27. Policies to Promote TechnologyInnovationChapter 3 © OECD/IEA 2012
  28. 28. Key findings  Investment in energy research by IEA governments has been decreasing as a share of total national RD&D budgets, and stands at 4%  Patents for renewable energy technology increased fourfold since 2000, but were concentrated in solar PV and wind  The maturity, modularity and scalability of PV and onshore wind have enabled them to take off  Meanwhile, high capital costs and perceived risks are holding back pre- commercial technologies like CCS, IGCC and CSP, which appear to be stuck at the demonstration phase  Carbon pricing, energy efficiency policy and technology support are the backbone of a least-cost package to achieve 2DS, but the interactions among policies should be managed carefully  Optimum combinations of policies should be based on characteristics of comparable technologies that share similar impediments to development, deployment and diffusion © OECD/IEA 2012
  29. 29. Energy RD&D has slipped in priority OECD R&D spending 25 12% 10% 20 Share of energy RD&D in total R&D 8% 2008 non-IEA country spending 15 4USD billion 6% 10 3 USD billion 4% 2 5 2% 1 0 0% 0 Russia Brazil Mexico South Africa China India 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 Energy RD&D Share of energy RD&D in total R&D © OECD/IEA 2012
  30. 30. Energy RD&D has slipped in priority OECD R&D spending 25 12% 10% 20 Share of energy RD&D in total R&D 8% 2008 non-IEA country spending 15 4 6%USD billion 10 3 USD billion 4% 2 5 2% 1 0 0% 0 South Africa Mexico China India Russia Brazil 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 Energy efficiency Fossil fuels Renewable energy Nuclear Hydrogen and fuel cells Other power and storage technologies Other cross cutting technologies/research Share of energy RD&D in total R&D © OECD/IEA 2012
  31. 31. Energy RD&D has slipped in priority OECD R&D spending50% Defence40% Health and environment30% General university funds Non-oriented20% research Space10% programmes Energy0% 1981 1985 1990 1995 2000 2005 2010 The IEA has called for a twofold to fivefold increase in annual public RD&D spending on low carbon technologies to achieve the 2DS. © OECD/IEA 2012
  32. 32. Clean energy patents have increased sharplysince 2000, driven by solar PV and wind The US, Japan and Germany are the top three inventor countries for most technologies, but China has been catching up. © OECD/IEA 2012
  33. 33. Building from national leadership to promotelow-carbon innovation  Develop a national energy strategy with clear priorities  Increase R&D funding  Create mechanisms to fund capital-intensive demonstration  Design policies to support early deployment and drive private investment  Expand international collaboration © OECD/IEA 2012
  34. 34. There is a wide selection of technology-pushand market-pull policy instruments The use of multiple, integrated instruments may be justified to develop and deploy new and improved technologies. © OECD/IEA 2012
  35. 35. The core policy mix Carbon price, energy efficiency policy and technology support are the backbone of a least-cost package to achieve 2DS. © OECD/IEA 2012
  36. 36. Emission trading systems need to take intoaccount the impact of supplementary policy Over- or under-delivery of supplementary policy targets can lead to significant swings in demand for allowances, and hence greater uncertainty in carbon prices. © OECD/IEA 2012
  37. 37. Early support for new technologies can lowertheir cost But technology learning is not a justification for any level of early support. © OECD/IEA 2012
  38. 38. New technologies take time to scale up Time, as well as cost, is a relevant factor in the justification for early support of emerging technologies. © OECD/IEA 2012
  39. 39. Optimum combination of policies canaccelerate clean energy uptakeNote: The darker the colour, the greater the challenge for the related policy measures Policy measures can be tailored to specific categories of technologies, according to the challenge they aim to address. © OECD/IEA 2012
  40. 40. An energy innovation policy frameworkGovernment should create an environment in which clean energy innovation can thrive and within which policies are regularly evaluated to ensure that they are effective and efficient. © OECD/IEA 2012
  41. 41. Financing the Clean EnergyRevolutionChapter 4 © OECD/IEA 2012
  42. 42. Clean energy investment pays off Additional investment Additional Power investment Industry Transport Fuel savings Residential Commercial UndiscountedTotal savings Fuel savings Biomass 10% Coal Oil - 120 - 80 - 40 0 40 Gas USD trillion Every additional dollar invested in clean energy can generate 3 dollars in return. © OECD/IEA 2012
  43. 43. Clean energy investment pays off USD trillion Every additional dollar invested in clean energy can generate 3 dollars in return. © OECD/IEA 2012
  44. 44. Investment needs to 2020Additional investments in the 2DS, compared to 6DSInvestments in buildings sector dominates in all countries, highlighting importance of energy efficiency © OECD/IEA 2012
  45. 45. Additional investment needs in 2DSAdditional Investments in transport dominate between 2020 and 2050 © OECD/IEA 2012
  46. 46. Annual additional investments in 2DS Additional investments in non-OECD countries exceed the pledgedclimate finance, but the incremental cost is much less due to fuel savings © OECD/IEA 2012
  47. 47. Power generation: Additional investments in 2DSRenewable energy sources dominate investments in power generation in the 2DS. © OECD/IEA 2012
  48. 48. Power generation: annual investments 2DSIn the 2DS, investments in coal-fired plants do not decline significantly until after 2020. © OECD/IEA 2012
  49. 49. Transport : Additional investments . The cost of decarbonising the transport sector accelerates after 2030 asgreater investments are made in advanced vehicles and low-carbon options in air, shipping and rail. © OECD/IEA 2012
  50. 50. Buildings: Average annual investmentsIn the 2DS, higher investments will be needed for more efficient HVAC systems and building shell improvements. © OECD/IEA 2012
  51. 51. Industry: Total investments to 2050Investments needed in the 2DS are moderately higher than in the 6DS © OECD/IEA 2012
  52. 52. Clean energy investment pays off Additional Additional investment investment Power Power WithFuel savings Industry price effect Industry Transport Without price effect Residential Transport Commercial UndiscountedTotal savings Fuel savings Residential 3% Biomass Commercial Coal 10% Oil Gas - 160 - 120 - 80 - 40 0 40 USD trillion Every additional dollar invested in clean energy can generate 3 dollars in return. © OECD/IEA 2012
  53. 53. Clean energy investment pays off Additional investment Additional Power investment Industry Transport Fuel savings Residential Commercial UndiscountedTotal savings Fuel savings Biomass 10% Coal Oil - 120 - 80 - 40 0 40 Gas USD trillion Every additional dollar invested in clean energy can generate 3 dollars in return. © OECD/IEA 2012
  54. 54. Conclusions Investment in low carbon technologies need to double current levels by 2020, reaching USD 500 bn annually Balance between ensuring investors confidence and controlling total policy costs Need for coordination on energy, climate and investment policies Uncertainty in national regulatory policies and support frameworks remains key obstacle to finance Greater dialogue needed between governments and investors What can be done to incentives a move towards sustainable long term investments? © OECD/IEA 2012
  55. 55. Energy Systems Thinking © OECD/IEA 2012
  56. 56. A smart, sustainable energy system Co-generation Renewable energy resources Centralised fuel production, power and storage Distributed energy resourcesSmart energysystem control H2 vehicle Surplus heat EV A sustainable energy system is a smarter, more unified and integrated energy system © OECD/IEA 2012
  57. 57. The Global Energy system today Dominated by fossil fuels in all sectors © OECD/IEA 2012
  58. 58. The future low-carbon energy systemThe 2DS in 2050 shows a dramatic shift in energy sources and demands © OECD/IEA 2012
  59. 59. Heating and CoolingChapter 5 © OECD/IEA 2012
  60. 60. Heating & Cooling: huge potential Renewable heat Integration with electricity District heating and cooling network Co-generation Surplus heat Heating and cooling account for 46% of global energy use.Their huge potential for cutting CO2 emissions is often neglected. © OECD/IEA 2012
  61. 61. Decarbonising heating and cooling: neglected but necessaryTotal final energy consumption by region as electricity, heat, transportand non-energy uses, 2009 Heating and cooling account for 46% of final energy consumption worldwide. © OECD/IEA 2012
  62. 62. Decarbonising the existing buildings stockIn OECD countries, more than two-thirds of existing older buildings will still be standing in 2050.However, in non-OECD countries, an estimated 52% to 64% of the building stock that will exist by 2050 has not yet been built © OECD/IEA 2012
  63. 63. Large quantities of heat losses can be recuperatedHeat loss in power generation by region, 2009 More then 50% of energy input of thermal power plants is wasted in cooling towers and rivers. © OECD/IEA 2012
  64. 64. District energy networks can reduce CO2 intensityBiomass and a mix of other renewable energy sources make up almost three- quarters of primary energy consumption in 2050. © OECD/IEA 2012
  65. 65. Heat pumps offer great potentialunder the right conditionsElectricity load curve in the high-penetration base and smart case studies Poor installations can increase the costs of decarbonising electricity networks……but smart control coupled with storage could minimise their possible impacts. © OECD/IEA 2012
  66. 66. Heat pumps and co-generation are notconflicting technologies Integrating heat within the energy system can lower costs and help decarbonisation in other sectors © OECD/IEA 2012
  67. 67. Flexible Electricity SystemsChapter 6 © OECD/IEA 2012
  68. 68. Global Electrical Energy Generation Lower electrical energy demand in 2DS even thoughelectricity is larger proportion of overall energy demand. © OECD/IEA 2012
  69. 69. Electricity generation capacityGeneration capacity is higher in the 2DS due to great deployment of variable renewables with lower capacity factors. © OECD/IEA 2012
  70. 70. Electricity system flexibilityPower system flexibility expresses the extent to which a power system can modify electricity production or consumption in response to variability, expected or otherwise. ± MW / time © OECD/IEA 2012
  71. 71. Flexibility needs and resources Existing and new flexibility needs can be met by a range ofresources in the electricity system – facilitated by power system markets, operation and hardware. © OECD/IEA 2012
  72. 72. No “one-time” fits allBalancing of the electricity system needs to address several timeframes for response and duration, impacting choice of technology. © OECD/IEA 2012
  73. 73. The need for flexibility is increasingGW All regions under all scenarios show an increasing need for electricity system flexibility. © OECD/IEA 2012
  74. 74. Flexibility from power generation Start-up time [hours] Ramp rate [% per min] Time from 0 to full rate [hour] Minimum stable load factor [%] 0 10 20 30 0 50 100 0 10 20 0 20 40 Nuclear HydroCoal (conventional) OCGT CCGT 0 10 20 30 0 50 100 0 10 20 0 20 40 All generation technologies have the technical ability to provide some flexibility. © OECD/IEA 2012
  75. 75. Flexibility from power generation Ancillary Yes servicesprovided? Possible Diesel and CCGT CCGT Co-generation standby Bio-energy Wind PVs Large Micro > 100 MW 1 - 100 MW 1 - 5 kW <50 MW 1 - 100 MW < 100kW Frequency limited if high Reserve possible penetration Reactive Network if high support penetration Grid support from distributed generation should be enabled. © OECD/IEA 2012
  76. 76. Two very different profiles for natural gas use in power generation Power generation from natural gas increases to 2030 in the 2DS and the 4DS. From 2030 to 2050, generation differs markedly.Natural gas-fired power generation must decrease after 2030 to meet the CO2 emissions projected in the 2DS scenario.Notes: Natural gas-fired power generation includes generation in power plants equipped with CCS units. Biogas is not included here. © OECD/IEA 2012
  77. 77. Mode of operation of natural gas plants differs according to scenario Gas increasingly provides base load in the 4DS and peak load in the 2DSThe lowering of the capacity factor threatens the viability of existing plants and detracts from investment in new plants. © OECD/IEA 2012
  78. 78. The demand side flexibility resourceis large and under utilisedAll regions exhibit a significant demand side flexibilityresource – especially for regulation and load following. © OECD/IEA 2012
  79. 79. North American sectoral resourceDemand-side energy efficiency decreases resource. © OECD/IEA 2012
  80. 80. Storage – a game changer or nicheplayer?Existing installations and niche applications will play a definite role in the future, but cost concerns exist for new deployments. © OECD/IEA 2012
  81. 81. Storage technology cost vary widelyApplication specific deployment is key for successful business case development. © OECD/IEA 2012
  82. 82. Methodology – T&D analysis 3 drivers in grid development  Grid extension  Grid renewal  Renewable integration Data sources:  power sector: IEA statistics and ETP 2012 scenarios  T&D grid length and age: ABS Energy Research © OECD/IEA 2012
  83. 83. T&D infrastructure investments inthe 4DS and 2DS are similar ...but sectoral allocation differs © OECD/IEA 2012
  84. 84. 2DS offers new challenges andopportunities for T&D systems Cumulative costs and benefits of smart grids versus conventional T&D systems in the 2DS to 2050 Smart-grids’ costs are substantial, but estimated benefits do exceed investment. © OECD/IEA 2012
  85. 85. Methodology – Smart grids Long-run incremental social costs and benefits compared to a conventional T&D grid Costs - bottom up approach  Technology costs are calculated by multiplying units required, market penetration, and unit cost  component replacement at the end of its technical lifetime.  Data: EPRI, IEE, CER, expert interview Benefits  CO2 savings, capital cost savings, extended lifetime, increased reliability, reduced operational cost.  Methodology from: IEA, EPRI © OECD/IEA 2012
  86. 86. Smart grid benefits exceed costs by a factor of between 1.5 and 4.5..., but direct benefits of investment in one sector may be found in other sectors. © OECD/IEA 2012
  87. 87. Technology choices in electricitysystem flexibility © OECD/IEA 2012
  88. 88. What do we need to do? Barriers? Use systems based approaches – utilise flexibility resources from all parts of the electricity system Learn by doing - increased pilot and demonstration projects will enable of real-world solutions for flexibility Support new technology deployment – develop regulatory and market solutions that allow new technologies and new actors to support system operation Determine regulatory approaches that support conventional and new technologies – and adequately share costs, benefits and risks. © OECD/IEA 2012
  89. 89. HydrogenChapter 7 © OECD/IEA 2012
  90. 90. H2 is a flexible energy carrier H2 is one of only a few near-zero-emissions energy carriers (along with electricity and bio-fuels) with potential applications across all end-use sectors. © OECD/IEA 2012
  91. 91. Energy storage in H2Source: NREL 2009 H2 storage may be cost competitive in the future. © OECD/IEA 2012
  92. 92. FCEV are still expensiveH2 could be used in fuel-cell vehicles such as longer range cars and trucks. © OECD/IEA 2012
  93. 93. Decarbonisation of road transportsaves moneyInvestment in H2 technology decreases savings but opens the way towards sustainability. © OECD/IEA 2012
  94. 94. A pathway for H2 infrastructure roll- outOptimisation of centralised and decentralised H2 production is one of the major challenges. © OECD/IEA 2012
  95. 95. H2 T&D infrastructure investmentsH2 infrastructure to serve a fleet of 500 million FCEVs by 2050 would cost, which equals roughly 1% of total spending in vehicles and fuels. © OECD/IEA 2012
  96. 96. Post 2050: H2 an alternative tobioenergyPost 2050, hydrogen could become an importantenergy carrier in a clean energy system, especially if bioenergy resources are limited. © OECD/IEA 2012
  97. 97. The Future of Fossil Fuels © OECD/IEA 2012
  98. 98. Fossil fuels dominate energy demand … Primary energy demand (EJ) Demand for coal over the last 10 years has beengrowing much faster than for any other energy sources. © OECD/IEA 2012
  99. 99. Non-fossil power generation Electricity generation (TWh) Share of electricity (%) Non-hydro renewables Hydro Nuclear Despite an increasing contribution across two decades, the share of non-fossil generation has failed to keep pace with the growth in generation from fossil fuels. © OECD/IEA 2012
  100. 100. Coal TechnologiesChapter 8 © OECD/IEA 2012
  101. 101. Key findings Coal demand and generation of electricity from coal both need to fall by more than 40% to meet the 2DS. Substantial numbers of old, inefficient coal power plants remain in operation. The increasing use of widely available, low-cost, poor-quality coal is a cause for concern. Supercritical technology, at a minimum, should be deployed on all combustion installations. Research, development and demonstration of advanced technologies should be actively promoted. To achieve deeper cuts, CCS offers the potential to reduce CO2 emissions to less than 100 g/kWh. It is important to reduce local pollution for coal. © OECD/IEA 2012
  102. 102. Coal is abundant and widely available Coal reserve (Gt) Brown coal Hard coalSufficient coal reserves exist for an estimated 150 years of generation at current consumption rates. © OECD/IEA 2012
  103. 103. Reducing emissions from coal is critical Reducing non-GHG emissions is also important to maintain or improve air quality locally. © OECD/IEA 2012
  104. 104. Policy and regulation play a major role Electricity generation from coal (TWh) Policy and Regulation Coal Coal with CCS Electricity reduction in the 2DSEncourage reduction of generation from inefficient plantsand switching from coal to gas, renewables and nuclear. © OECD/IEA 2012
  105. 105. CO2 intensity must also be reduced 2010 2050(4DS) Technology development CO2 emissions (Gt) Policy and regulation 2050(2DS) Electricity (TWh)Technology development coupled with targeted policies and regulation are essential to realise the 2DS target in 2050. © OECD/IEA 2012
  106. 106. Couple efficient plant with CCSRaising plant efficiency: reduces emissions of CO2, and reduces the cost of CCS. Subcritical Supercritical Ultra-supercriticalCO2 intensity(gCO2/kWh) Advanced-USC 90% With CCS Efficiency (LHV, net) If CCS is applied to an average subcritical plant, its efficiency would drop by one-third. © OECD/IEA 2012
  107. 107. Adoption of best practice technology isneeded to raise average efficiency Capacity (GW) Potential for capacity growth in coal-fired powergeneration is seen mostly in non-OECD countries such as China and India. © OECD/IEA 2012
  108. 108. Reducing CO2 emissionsGlobal electricity generation 1. Subcritical from coal (TWh) 3. Plants with CCS 2. USC 2. Supercritical 1. Reduce generation from least efficient plant 2. Increase capacity of more efficient plant 3. Deploy CCS © OECD/IEA 2012
  109. 109. Carbon lock-in must be avoidedTo meet the 2DS, generation from subcritical plants would cease before end of their natural lifetimes. Including construction Capacity (GW) plans up to 2015 Existing plants built before 2000 Generation from subcritical units should be reduced;future capacity additions should be supercritical or better. © OECD/IEA 2012
  110. 110. Development of advanced technology is essential Advanced USC 700oC Demonstrations are being planned from 2020 - 2025Steam temperature (°C ) Ultra-supercritical Supercritical Subcritical Ultra-supercritical plants are currently operated in various countries including China. © OECD/IEA 2012
  111. 111. Opportunities and recommendations Technologies to address the environmental impacts of sharply increased coal use must be used. Increasing the average efficiency of global coal-fired power generation plants will be essential over the next 10 to 15 years:  Deploy supercritical and ultra-supercritical technologies  Minimise generation from older, less efficient coal plants  Accelerate development of advanced technology. CCS must be developed and demonstrated rapidly if it is to be deployed widely after 2020. Finally, there must be a shift away from reliance on coal. In a truly low-carbon future, coal will not be the dominant energy source. Strong policies will be essential if these goals are to be met. © OECD/IEA 2012
  112. 112. Natural Gas TechnologiesChapter 9 © OECD/IEA 2012
  113. 113. Key findings Increasing production of unconventional gas leads to an improvement in energy security in many regions. Continuous technology improvement at each stage of unconventional gas exploration and production is essential In the 2DS: • Natural gas will retain an important role in the power, buildings and industry sectors to 2050. • The share of natural gas in total primary energy demand declines more slowly – and later (after 2030) – than other fossil fuels. • Natural gas acts as a transitional fuel towards a low- carbon energy system. © OECD/IEA 2012
  114. 114. Unconventional gas rises in importanceThe share of unconventional gas of total gas supply continues to increase in both 4DS and 2DS. © OECD/IEA 2012
  115. 115. Continuous technology improvement isessential Continuous technology improvement at each stage of exploration and production goes hand in hand withreducing the environmental impact of those processes. © OECD/IEA 2012
  116. 116. Maturity of technology and experiencecan differ widely Technology needs and solutions should be adapted according to experience and geographical location. © OECD/IEA 2012
  117. 117. Natural gas is the second-largest sourceof primary energy in 2050Although the share of fossil fuels in total primary energy production declines by 2050, the share of natural gas declines least. © OECD/IEA 2012
  118. 118. Power sector is the dominant consumerof natural gasNote: For power, including co-generation, and for commercial heat, gas contribution represents gas input to the plantsTo achieve the 2DS, natural gas consumption needs to be reduced strongest in the power sector. © OECD/IEA 2012
  119. 119. Two very different profiles for naturalgas use in power generationNote: Natural gas-fired generation includes generation in power plants equipped with CCS units. Biogas is not included.Natural gas-fired power generation must decrease after 2030 to meet the CO2 emissions projected in the 2DS. © OECD/IEA 2012
  120. 120. Natural gas as a transitional fuel Power generation from natural gas increases to 2030 in the 2DS and the 4DS. From 2030 to 2050, generation differs markedly. 4DS 4DS 2DS 2DS 10 000 10 000 7 500 7 500 TWh 5 000 5 000 2 500 2 500 0 0 2009 2020 2030 2040 2050 2009 2020 2030 2040 2050 OECD Non-OECD Natural gas-fired power generation must decrease after 2030 to meet the CO2 emissions projected in the 2DS scenario. © OECD/IEA 2012
  121. 121. Mode of operation of natural gas plants differs according to scenarioGas increasingly provides base load in the 4DS and peak load in the 2DS. Note: Generation from gas-fired plants equipped with CCS is not includedThe lowering of the capacity factor threatens the viability ofexisting plants and detracts from investment in new plants. © OECD/IEA 2012
  122. 122. Natural gas becomes a ‘high-carbon fuel’ after 2025CCGTs are the most efficient natural gas-fired power generation plants, with a CO2 intensity almost half that of the best coal- fired plant. The global average CO2 intensity from natural gas-fired power generation falls below the carbon intensity of CCGTs in 2025. © OECD/IEA 2012
  123. 123. Gas technologies in the power sector are essential to achieve the 2DSContinuous technology improvement will be necessary toachieve efficiency increases and to reduce the cost of CCS. © OECD/IEA 2012
  124. 124. Efficiency improvement plays an important role State-of-the-art CCGT has reached 60% efficiency, while some emerging technologies have the potential to reach 70%. Whether open-cycle or combined-cycle, larger capacityplants are generally capable of achieving higher efficiencies. © OECD/IEA 2012
  125. 125. Gas-fired power generation complements variable renewables Both OCGT and CCGT are sufficiently flexible in their responses to meet unexpected variations in demand. OCGTs are less costly and have a smaller footprint, but are much less efficient than CCGTs. © OECD/IEA 2012
  126. 126. Biogas and CCS are essentialcomponents of a low-carbon futureIn the 2DS, 40% of the electricity generated from gas comes from natural gas with CCS and biogas. © OECD/IEA 2012
  127. 127. Opportunities and recommendations Regulation to mitigate the potential for environmental risks associated with production of unconventional gas must be introduced. Gas-fired technologies to provide flexibility for power generation will be essential over the short term. Over the next ten years, gas will displace significant coal- fired power generation – though it should be noted, natural gas-fired generation will itself need to be displaced in the longer term to decarbonise the power sector still further. First-generation, large-scale gas plants with CCS need to be demonstrated and deployed. © OECD/IEA 2012
  128. 128. Carbon Capture and StorageTechnologiesChapter 10 © OECD/IEA 2012
  129. 129. The technology portfolio includes CCS Emissions (GtCO2) 20% 29% 8%Carbon capture and storage (CCS) contributes one-fifth of total emissions reductions through 2050 © OECD/IEA 2012
  130. 130. CCS must grow rapidly around the globeCO2 Captured (GtCO2) In the near term, the largest amount of CO2 is captured in OECD countries; by 2050, CO2 capture in non-OECD countries dominates © OECD/IEA 2012
  131. 131. CCS is applied in power and industryNote: Capture rates shown in MtCO2/yearThe majority of CO2 is captured from power generation globally, but in some regions CO2 captured fromindustrial applications dominates © OECD/IEA 2012
  132. 132. CCS in power generationPhoto: Vattenfall © OECD/IEA 2012
  133. 133. Three CO2 capture routes in powerPost-combustion • Fossil fuel or biomass is burnt normally and CO2 is CO2 capture separated from the exhaust gas Pre-combustion • Fossil fuel or biomass is converted to a mixture of hydrogen and CO2, from which the CO2 is separated CO2 capture and hydrogen used for fuelOxy-combustion • Oxygen is separated from air, and fossil fuels or biomass are then burnt in an atmosphere of oxygen CO2 capture producing only CO2 and waterAt the present time, none of the options is superior; each hasparticular characteristics making it suitable in different power generation applications © OECD/IEA 2012
  134. 134. Three CO2 capture routes in powerAt the present time, no one route is clearly superior to another; each has particular characteristics thatmake it suitable in different cases of power generation fuelled by coal, oil, natural gas and biomass. © OECD/IEA 2012
  135. 135. Capture technologies are ready Pre- Post- Oxy- Inherent Other combustion combustion combustion Gas Concept. Pilot Pilot Concept. (CLC)Electricpower Coal Pilot Pilot Pilot Concept. (CLC) Biomass Concept. Concept. Concept. Fuel Pilot Pilot processingIndustrial applications Iron and steel Pilot (Hisarna, Ulcored) Pilot Pilot Demo (FINEX) Commercial (DRI, COREX) Biomass Pilot Demo Commercial conversion Cement Concept. Pilot Pilot manufacture (Carbonate looping) High-purity Pliot Commercial sourcesNumerous routes to CO2 capture are in pilot-testing or demonstration stages forpower and industrial applications; some are commercially available today © OECD/IEA 2012
  136. 136. No one technology is a clear winner, yet… Coal Natural gasCapture route Post-combustion Pre-combustion Oxy-combustion Post-combustionReference plant without capture PC IGCC PC NGCCNet efficiency with capture (LHV, 30.9 33.1 31.9 48.4%)Net efficiency penalty (LHV, 10.5 7.5 9.6 8.3percentage points)Relative net efficiency penalty 25% 20% 23% 15%Overnight cost with capture 3 808 3 714 3 959 1 715(USD/kW)Relative overnight cost increase 75% 44% 74% 82%LCOE with capture (USD/MWh) 107 104 102 102Relative LCOE increase 63% 39% 64% 33%Cost of CO2 avoided 58 43 52 80(USD/tCO2)Applying CCS to a power plant will likely increase the LCOE by one- to two-thirdsdepending on the type of plant, relative to a similar power plant without CCS © OECD/IEA 2012
  137. 137. CCS is expected to be cost-competitive © OECD/IEA 2012
  138. 138. CCS is applied to coal, gas and biomassIn 2050, 63% of coal-fired electricity generation (630 GW) is CCS equipped, 18% of gas (280 GW) and 9% of biomass (50 GW) © OECD/IEA 2012
  139. 139. Generation from CCS equipped plants growsPower plants with CCS produce 15% of electricity in 2050, while fossil-fueled plants without CCS produce only 10% © OECD/IEA 2012
  140. 140. Natural gas is not a panaceaThe global average CO2 intensity from power generation falls belowthe carbon intensity of CCGTs in 2025 in the 2DS; CCS can play a role in reducing emissions from gas © OECD/IEA 2012
  141. 141. CCS is deployed globally for powerGeneration capacity (GW) In OECD North America, almost all coal-fired and 36% of gas-fired generation is CCS equipped; nearly two-thirds of coal-fired generation in China is equipped with CCS © OECD/IEA 2012
  142. 142. Retrofitting CCS to coal-fired generation The more than 1 600 GW of installed coal-fired generation emitted almost 9 GtCO2 in 2010; more than 350 GW were added in the past five years. In most general terms, larger, more efficient (i.e. younger) plants are suitable for retrofit: today, 471 GW of coal-fired plants are larger than 300 MW and younger than 10 years In the 2DS, 150 GW of supercritical and ultra- supercritical capacity are retired because they are uneconomic for retrofit due, and 100 GW of coal are retrofitted with CCS © OECD/IEA 2012
  143. 143. Retrofitting CCS to coal-fired generation In the 2DS, through 2050: 700 GW of subcritical capacity is retiredIn most general terms, larger, more 150 GW of uneconomic efficient (i.e. younger) plants are supercritical and ultra- suitable for retrofit supercritical are retired 100 GW of coal are retrofitted withSource: IEA, 2012 CCS © OECD/IEA 2012
  144. 144. CCS in industrial applicationsPhoto: BP © OECD/IEA 2012
  145. 145. Industrial applications of CCS Some industrial processes Industrial processes suited produce highly concentrated to CCS CO2 vent streams; capture from these “high-purity” sources is Dilute exhaust Concentrated relatively straightforward streams vent streams e.g. blast furnaces and cement e.g. gas processing, NH3 and Other industrial applications kilns ethanol production require additional CO2 separation technologies to Post-combustion concentrate dilute streams of CO2 The same CO2 separation Oxy-Combustion technologies applied in power generation can be applied to Pre-combustion industrial sources © OECD/IEA 2012
  146. 146. Cost of CCS in industry varies widelyA wide range of abatement costs through CCS exists in industrial applications © OECD/IEA 2012
  147. 147. Industrial applications play an important roleCO2 Captured (GtCO2/y) Non-OECD countries account for 72% of cumulative CO2 captured from industrial applications of CCS between 2015 and 2050 – China alone accounts for 21% of the global total © OECD/IEA 2012
  148. 148. Industrial applications vary by region Note: Capture rates shown in MtCO2/yearThe predominant industrial application of CCS will vary by region and over time © OECD/IEA 2012
  149. 149. Negative emissions from BECCS Bio-energy with carbon capture and storage (BECCS) can result in permanent net removal of CO2 from the atmosphere, i.e. “negative CO2 emissions” In BECCS, energy is provided by biomass, which removed atmospheric carbon while it was growing, and the CO2 emissions from its use are captured and stored through CCS BECCS can be applied to a wide range of biomass conversion processes and may be attractive cost- effective in many cases Biomass must be grown and harvested sustainably, as this significantly impacts the level of emissions reductions that can be achieved © OECD/IEA 2012
  150. 150. Where is CO2 storage needed? Note: Mass captured shown in GtCO2Between 2015 and 2050, 123 Gt of CO2 are captured that need to be transported to suitable sites andstored safely and effectively. Storage sites will need to be developed all around the world. © OECD/IEA 2012
  151. 151. Total investment for CCS: 3.6 trillion USD © OECD/IEA 2012
  152. 152. Transport and storage challenges Storage Transport Fundamental physical processes and  Most straightforward and well-known engineering aspects of geologic storage step in the CCS chain are well understood  Pipeline and ship (or barge) are the Suitable geologic formations must have only practical options at scale sufficient capacity and injectivity, and  In 2010, over 60 MtCO2 were prevent CO2 (and brine) from reaching transported through a 6 600 km the atmosphere, sources of potable pipeline network in the United States groundwater and other sensitive  Cost of transport is generally low, but is regions in the subsurface a function of distance, capacity, and Storage assessments suggest that the terrain available global pore space resource is  Transport by ship or barge is generally sufficient to store 123 GtCO2 more expensive than by pipeline over Storage cost of storage is highly short distances variable: US cost estimates for onshore saline aquifers range from less than USD 1/tCO2 to over USD 20/t of CO2 stored © OECD/IEA 2012
  153. 153. Recommended actions for the near term The gap between the current trajectory for CCS and the 2DS can be bridged, but concerted policy action is necessary from both industry and all levels of government1. Government must assess the role of CCS in their energy futures, develop suitable deployment strategies for CCS and a clear timeline to develop enabling regulations2. Government and industry must redouble efforts to demonstrate CCS at a commercial scale in different locations and technical configurations—including large-scale CO2 storage projects © OECD/IEA 2012
  154. 154. Recommended actions for the near term3. Government must implement appropriate and transparent incentives to drive CCS deployment; long-term climate change mitigation commitments and policy actions are necessary4. Government must develop enabling legal and regulatory frameworks for demonstration and deployment of CCS, so that lack of regulation does not unnecessarily impede or slow deployment5. Government and industry must develop clear, accurate information on the geographic distribution of storage capacity and associated costs for storing CO26. Government and industry increase emphasis on CO2 transport and storage infrastructure development so that integrated CCS projects can be successful7. All parties must engage the public at both policy and project levels. A lack of transparency and a two-way flow of information from early stages can be fatal for CCS. © OECD/IEA 2012
  155. 155. Electricity Generation and FuelTransformationChapter 11 © OECD/IEA 2012
  156. 156. Energy and CO2 impacts ofelectricity generation Other transformation AgricultureOther transformation Agriculture 2% 5% 2% 6% Buildings 9% Buildings 15% Power Transport Power Transport 38% 20% 38% 18% Industry Industry 21% 26% Total primary energy Total energy-related use: 509 EJ in 2009 CO2 emissions: 31.4 Gt in 2009Power sector accounted in 2009 for almost 40% of global primary energy use and energy-related CO2 emissions. © OECD/IEA 2012
  157. 157. Past trends in power generationGlobal electricity generation by fuel Incremental generation 1990-2009 4 000 non-OECD OECD 3 500 3 000 2 500 TWh 2 000 1 500 1 000 500 0 Coal Gas Renewables NuclearIncrease in electricity generation over the last two decades largely covered by fossil fuels, but strong growth rates for renewables . © OECD/IEA 2012
  158. 158. Age distribution of existing power plantsAgeing infrastructure is the challenge in many OECD countries, whereasemerging economies have to cope with a growing demand for electricity. © OECD/IEA 2012
  159. 159. Carbon lock-in must be avoided Including construction Capacity (GW) plans up to 2015 Existing plants built before 2000 To meet the 2DS, generation from subcritical plants would need to cease before end of their technical lifetimes. © OECD/IEA 2012
  160. 160. Electricity demandLiquid fuel demand is stabilised at today’s level in 2050 in the 2DS, largely due to efficiency improvements and electrification in the transport sector. © OECD/IEA 2012
  161. 161. Electricity demand Incremental final electricity demand between 2009-2050 in the 2DSStrong growth in electricity demand in emerging economies across all sectors, whereas in OECD countries consumption is driven by electrification of the transport and buildings sector. © OECD/IEA 2012
  162. 162. Low-carbon electricity: a clean core Global electricity generation in the 2DS 45 000 Other 40 000 Wind 35 000 Solar 30 000 HydroTWh Nuclear 25 000 Biomass and waste 20 000 Oil 15 000 Gas with CCS 10 000 Gas 5 000 Coal with CCS 0 Coal 2009 2020 2030 2040 2050 Renewables will generate more than half the world’s electricity in 2050 in the 2DS © OECD/IEA 2012
  163. 163. Electricity generation scenarios 100% 4DS 19% 80% 36% 13% Renewables 60% 12% Nuclear 3% Fossil w CCS 40% Fossil w/o CCS 67% 49% 20% 0% 2009 2050 100% 2DS 19% 80% 13% 57% Renewables 60% Nuclear Fossil w CCS 40% Fossil w/o CCS 67% 19% 20% 14% 9% 0% 2009 2050In the 2DS, global electricity supply becomes decarbonised by 2050. © OECD/IEA 2012
  164. 164. Power generation; Nuclear Global installed capacity Without further action, nuclear deployment in 2025 will bebelow levels in the 2DS, although a majority of key countries remain committed to nuclear. © OECD/IEA 2012 © OECD/IEA 2012
  165. 165. Average annual capacity additions Hydro Nuclear CSP 2030-50 PV 2020-30Wind, offshore 2010-20Wind, onshore 2006-10 Biomass Gas with CCS Coal with CCS 0 20 40 60 80 100 120 GW per year Massive acceleration of deployment of low-carbon power technologies is needed over the next four decades. © OECD/IEA 2012
  166. 166. All technologies have roles to play Electricity demand savings and renewables are eachresponsible for one-third of the cumulative CO2 reductions in the power sector in the 2DS. © OECD/IEA 2012
  167. 167. All technologies have roles to play Technology contributions to reaching the 2DS 60 Power generation efficiency and fuel switching 3% (1%) 50 Nuclear 8% (8%) 40 End-use fuel switching 12%Gt CO2 (12%) 30 End-use fuel and electricity efficiency 42% (39%) Renewables 21% (23%) 20 CCS 14% (17%) 10 0 2009 2020 2030 2040 2050 Nuclear is one piece of the puzzle © OECD/IEA 2012 © OECD/IEA 2012
  168. 168. All technologies have roles to play 600 550 500Gt CO2 450 400 350 300 4DS Electricity Fuel switching Nuclear 14% CCS 18% Wind 14% Solar 12% Other 2DS savings 28% and efficiency renewables 9% 5% Electricity demand savings and renewables are each responsible for one-third of the cumulative CO2 reductions in the power sector in the 2DS. © OECD/IEA 2012
  169. 169. Key technologies to reduce CO2 in the power sector Geothermal Ocean 1% 0.4% Wind 13% Solar Electricity savings 11% 38% Biomass 4% Cumulative reductions in the power sector of 474 Gt between Hydro 2009 and 2050 in the 2DS 4% (relative to the 6DS) Nuclear Fuel switching and 13% CCS efficiency 12% 4%Renewables provide more than one third of the cumulative reductions needed to decarbonise electricity supply in the 2DS. © OECD/IEA 2012
  170. 170. Electricity generation mix 100% 13% 9% 12% 11% 19% 25% 34% 80% 19% 24% 36% Nuclear 60% Renewables 57% 71% 3% 63% 49% Fossil w/ CCS 40% 67% 68% Fossil w/o CCS 49% 20% 14% 7% 7% 9% 13% 12% 10% 0% 6DS 4DS 2DS 2DS-NoCCS 2DS-hiRen 2DS-HiNuc 2009 2050 0 USD trillion -5 -10 -15 Cumulative additional costs rel. to 6DS -20 -25 -30 4DS 2DS 2DS-NoCCS 2DS-hiRen 2DS-HiNucOther technology portfolios reach the same reduction as in the 2DS, but, with the exception of the 2DS-hiNuc variant, at higher costs. © OECD/IEA 2012
  171. 171. There are many routes to decarbonisation Regional electricity mixes in the 2DS in 2050 US 4% 24% 22% 6% 15% 18% 12%South Africa 2% 23% 24% 2% 28% 16% 6% Russia 5% 8% 28% 28% 1% 14% 17% Mexico 20% 10% 8% 7% 21% 19% 15% India 19% 14% 17% 16% 21% 6% 7% EU 2% 6% 22% 13% 10% 29% 18% China 7% 21% 24% 14% 10% 15% 9% Brazil 2% 5% 0% 60% 6% 7% 19% ASEAN 25% 14% 5% 18% 6% 10% 22% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Fossil w/o CCS Fossil w CCS Nuclear Hydro Solar Wind Other renewables Portfolios to decarbonise the power sector depend on regional challenges and opportunities. © OECD/IEA 2012