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IEA
© OECD/IEA 2017
Energy Technology Perspectives 2017
Catalysing Energy Technology Transformations
Speakers: Kamel Ben Naceur, Ellina Levina, Samantha McCulloch, Uwe Remme, Raimund Malischek, Luis Munuera,
Araceli Fernandez, Kira West, Tristan Stanley, Jean Francois Gagne
ETP 2017 1st Webinar - June 29, 2017
IEA
© OECD/IEA 2017
Energy Technology Perspectives 2017
Catalysing Energy Technology Transformations
Scene setting
Kamel Ben Naceur, Director, IEA
ETP 2017 1st Webinar - June 29, 2017
© OECD/IEA 2017
Key points of orientation
• Global energy markets are changing rapidly
Renewables supplied half of global electricity demand growth in 2016, and increase
in nuclear capacity reached highest level since 1993
Global energy intensity improved by 2.1% in 2016
Electric car sales were up 40% in 2016, a new record year
• The energy sector remains key to sustainable economic growth
1.2B people lack access to electricity; 2.7B people lack access to clean cooking
Largest source of GHG emissions today, around two-thirds of global total
Largest source of air pollution, linked to 6.5 million premature deaths per year
• There is no single story about the future of global energy
Fast-paced technological progress and changing energy business models
© OECD/IEA 2017
The energy landscape has been shifting
Since 2010, efficiency measures have slowed down growth in global energyconsumption .
Renewables and natural gas account for almost two-thirds of the growth.
Shares in growth in world energydemand
Coal
47%
Oil
16%
Gas
23%
Nuclear
2%
Renewables
12%
Coal
10%
Oil
27%
Gas
31%
Nuclear
0%
Renewables
32%
2000-2010 2010-2016
© OECD/IEA 2017
Global CO2 emissions flat for 3 years – an emerging trend?
IEA analysis shows that global CO2 emissions remained flat in 2016 for the third year in a row, even
though the global economygrew, led by emission declines in the US and China.
5
10
15
20
25
30
35
1970 1975 1980 1985 1990 1995 2000 2005 2010 2014 2015 2016
Gt
Global energy-related CO2 emissions
© OECD/IEA 2017
0
10
20
30
40
2014 2020 2030 2040 2050
GtCO2
Efficiency 40%
Renewables 35%
Fuel switching 5%
Nuclear 6%
CCS 14%
How far can technology take us?
Pushing energy technology to achieve carbon neutrality by 2060
could meet the mid-point of the range of ambitions expressed in Paris.
Technology area contribution to global cumulative CO2 reductions
Efficiency 40%
Renewables
35%
Fuel switching
5%
Nuclear 6%
CCS 14%
Efficiency 34%
Renewables 15%
Fuel switching 18%
Nuclear 1%
CCS 32%
Global CO2 reductions by technology area
2 degrees Scenario – 2DS
Reference Technology Scenario – RTS
Beyond 2 degrees Scenario – B2DS
0 200 400
Gt CO2 cumulative reductionsin2060
© OECD/IEA 2017
The potential of clean energy technology remains under-utilised
Recent progressin some clean energyareas is promising,but many technologies still need a strong
push to achieve their full potential and deliver a sustainable energy future.
Energy storage
SolarPV and onshore wind
Buildingconstruction
Nuclear
Transport – Fuel economy of light-duty vehicles
Lighting, appliancesand buildingequipment
Electric vehicles
Energy-intensiveindustrialprocesses
Transport biofuels
Carbon capture and storage
More efficient coal-fired power
●Not on track
●Accelerated improvement needed
●On track
© OECD/IEA 2017
On-track: Electric mobility is breaking records, but policy support remains critical
The global electric car fleet passed 2 million last year, but sales growth slipped from 70% in 2015
to 40% in 2016, suggesting the boom may not last without sustained policy support
Global electric car fleet
0
500
1 000
1 500
2 000
2010 2011 2012 2013 2014 2015 2016
Numberofvehiclesontheroad
(Thousands)
Others
Germany
France
United Kingdom
Netherlands
Norway
Japan
USA
China
© OECD/IEA 2017
Better grids, more flexible power plants and storage & demand side response will be needed to
integrate larger shares of wind & solar in a secure and cost-effective way
0% 10% 20% 30% 40% 50% 60%
India
Chile
China
Canada
Japan
United States
Australia
United Kingdom
Italy
Germany
Spain
Denmark
% of wind and solar
in 2010
% of wind and solar
in 2016
Share of wind and solar in total electricitygeneration in selected CEM countries
On-track: Wind & solar transforming the power sector: system integration is key
© OECD/IEA 2017
• CCS is happening but is far from on track
The global portfolio of large-scale CCS projects continued to expand,with the first steel plant CCS and
the first (BECCS) plant being deployed, but no new investment decisions have been taken since 2014.
Large-scale CO2 capture projects
0
5
10
15
20
25
30
35
40
45
50
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
MtCO2
Refining
Power generation
Natural gas processing
Iron and steel
Chemicals
Biofuels
Maximum projected capacity
© OECD/IEA 2017
• CCS is happening but is far from on track
CCS investment needs to increase by an order of magnitudeto meet 2025 targets
Large-scale CO2 capture projects
0
50
100
150
200
250
300
350
400
450
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
MtCO2
Refining
Power generation
Natural gas processing
Iron and steel
Chemicals
Biofuels
2DS 2025
Maximum projected capacity
© OECD/IEA 2017
0
10
20
30
40
2012 2015
USD(2016)billion
Private Public Top 3 firms
0
10
20
30
40
2012 2015
USD(2016)billion
Private Public Top 3 firms
Global clean energy RD&D spending needs a strong boost
Global RD&D spending in efficiency, renewables, nuclear and CCS plateaued at $26 billion annually,
coming mostly from governments.
Global clean energy RD&D spending
0
10
20
30
40
2012 2021
USD(2016)billion
Private Public Top 3 firms
Mission
Innovation
Mission
Innovation
Top 3 IT company R&D spenders
Global RD&D spending in efficiency, renewables, nuclear and CCS plateaued at $26 billion annually,
coming mostly from governments.
Mission Innovation could providea much needed boost.
© OECD/IEA 2017
Conclusions
• Early signs point to changes in energy trajectories, helped by
policies and technologies, but progress is too slow
• An integrated systems approach considering all technology
options must be implemented now to accelerate progress
• Each country should define its own transition path and scale-
up its RD&D and deployment support accordingly
• Achieving carbon neutrality by 2060 would require
unprecedented technology policies and investments
• Innovation can deliver, but policies must consider the full
technology cycle, and collaborative approaches can help
IEA
© OECD/IEA 2017
Energy Technology Perspectives 2017
The Global Outlook
Samantha McCulloch,Eric Masanet
ETP 2017 1st Webinar - June 29, 2017
© OECD/IEA 2017
The Global Outlook
• Despite significant shifts in the global energy landscape, energy and
climate commitments fall short of achieving long-term goals
• An optimised, cost-effective pathway to 2°C or below requires
technology innovation across a portfolio of clean energy technologies
• Rapid and aggressive deployment of clean energy technologies could
deliver a carbon-neutral energy system in 2060
However, this would require a fundamental and immediate shift in current action
© OECD/IEA 2017
Cumulative energy sector CO2 budgets: 2DS and B2DS
The 2DS requiresaround 740 GtCO2 of cumulative emissions reductionsto 2060, relative to the RTS
Cumulative emissions are 36% lower in the B2DS compared with the 2DS
0
10
20
30
40
2014 2020 2040 2060 2080 2100
2DS B2DS
GtCO2
0
300
600
900
1 200
Cumulative 2015-2100
GtCO2
© OECD/IEA 2017
Primary energy demand in the RTS and 2DS
More than half of primary energy demand is from renewables in the 2DS
The share of fossil fuels falls from 81% today to 35% in 2060 in the 2DS
0%
20%
40%
60%
80%
100%
0
200
400
600
800
1 000
2014 Fossil Non-fossil 2060 2014 Fossil Non-fossil 2060
RTS 2DS
EJ
Biomass and waste Hydro Other renewables Nuclear
Natural gas Oil Coal Share of fossil fuels
© OECD/IEA 2017
Cumulative CO2 emissions reductions by sector and technology: RTS to 2DS
Action is required across all energy supply and demand sectors
0 50 100 150 200 250 300 350
Power
Transport
Industry
Buildings
Transformation
GtCO2
Renewables
CCS
Fuel switching
Energy efficiency
Nuclear
© OECD/IEA 2017
Remaining CO2 emissions in the 2DS and B2DS
The remaining CO2 emissions in industry and power must be targeted for the B2DS
Negative emissions are necessary to achieve net-zero emissions in 2060
- 5
0
5
10
15
20
25
30
35
40
2014 2020 2030 2040 2050 2060
GtCO2
B2DS
- 5
0
5
10
15
20
25
30
35
40
2014 2020 2030 2040 2050 2060
GtCO2
Other transformation Power Transport Industry Buildings Agriculture
2DS
The power sector is virtually
decarbonisedby 2060;
Industry (57%) and transport(36%) are
the largestsources of emissions in 2060
© OECD/IEA 2017
The fuel mix to generate electricity is vastly different to today
The average carbon intensity of power generation falls from around 520 gCO2/kWh today to
below zero in the B2DS
0%
20%
40%
60%
80%
100%
RTS 2DS B2DS
2014 2060
Electricitymix
Fossil w/o CCS Fossil with CCS Nuclear Bioenergy with CCS Renewables
© OECD/IEA 2017
Enhanced buildings efficiency could improve system flexibility
Efficiency technologies can provide the same level of comfort while reducing energydemand despite
doubling floor area.
112 EJ157 EJ123 EJ
2014
(123 EJ)
RTS 2060
(157 EJ)
B2DS 2060
(112 EJ)
31% 54% 61%
Electricity ElectricityElectricity
37%
24%
3%
5%
Electricity
31%
Fossil fuels Traditional biomass Renewables Other Electricity
Energyuse in the buildings sector under differentscenarios
© OECD/IEA 2017
Electrification of the transport sector reduces reliance on fossil fuels
The transportation sector already experiences technological change,
but won’t shed its oil dependencywithout assertive policies.
Vehicle sales and technology shares under different scenarios
Heavy-Duty Vehicles (millions)Light-duty Vehicles (millions)
0
40
80
120
160
200
2015 RTS - 2060 B2DS - 2060
0
5
10
15
20
25
2015 RTS - 2060 B2DS - 2060
© OECD/IEA 2017
Availability of sustainable bioenergy a critical factor
Around 145 EJ of sustainable bioenergyis available by 2060 in all decarbonisation scenarios,
but is used differently between the 2DS and the B2DS.
0%
10%
20%
30%
40%
50%
60%
0
25
50
75
100
125
150
RTS 2DS B2DS
2014 2060
EJ Bioenergy use by sector
Power Fuel transformation Agriculture Buildings Industry Transport % BECCS
© OECD/IEA 2017
Bridging the 2DS gap: Policy actions
• A significantly strengthened and accelerated policy response is
required for any low-emission scenario
• Overarching policy priorities:
 Enhanced support for technology innovation
 Alignment of long-term climate strategies and near-term
policy action
 Improved integration of policy measures across the energy system
IEA
© OECD/IEA 2017
Transforming Electricity
Systems
Uwe Remme,RaimundMalischek and Luis Munuera
ETP 2017 1st Webinar - June 29, 2017
© OECD/IEA 2017
The future is electric
Electricity becomes on a global level the largest final energy carrier in the 2DS and B2DS, with the electricity
share in final energy use more than doubling compared to today, up to 41% in the B2DS in 2060.
0
10 000
20 000
30 000
40 000
50 000
1971 1980 1990 2000 2010 2020 2030 2040 2050 2060
TWh
Statistics
RTS
2DS
B2DS
Global final electricity demand
Change in final electricity
demand in 2060
-8 000
-6 000
-4 000
-2 000
0
2 000
4 000
6 000
8 000
2DS vs RTS B2DS vs 2DS
TWh
Transport
Agriculture
Services
Residential
Industry
© OECD/IEA 2017
-10 000
2014 2020 2030 2040 2050 2060
Decarbonising electricity
Renewables dominate electricity generation in the 2DS and B2DS. Thanks to bioenergywith CCS, the
average global CO2 intensity falls below zero after 2050.
Other
Wind
STE
Solar PV
Biofuels and waste
Hydro
Nuclear
Coal with CCS
Coal
Oil
Natural gas with CCS
Natural gas
CO2 intensity
- 100
0
100
200
300
400
500
600
gCO2/kWh
Global electricity generation B2DS
0
10 000
20 000
30 000
40 000
50 000
60 000
TWh
Generation mix
0%
20%
40%
60%
80%
100%
RTS 2DS B2DS
2014 2060
Renewables
Bioenergy with CCS
Nuclear
Coal with CCS
Coal w/o CCS
Gas with CCS
Gas (incl.oil) w/o CCS
© OECD/IEA 2017
Power sector key for deep decarbonisation of the energy system
The power sector provides around 40% of the cumulative CO2 reductions across all sectors to move from the
RTS to the B2DS, with renewables being responsible for more than half of the reductions in the power sector.
CO2 reductions in the power sector in the B2DS relative to the 2DS
© OECD/IEA 2017
How much investments are needed in the power sector?
Total investments of USD 61 trillion are needed in the B2DS in the power sector, an increase of USD 23
trillion compared to the RTS and USD 6 trillion to the 2DS.
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
Statistics RTS 2DS B2DS RTS 2DS B2DS RTS 2DS B2DS RTS 2DS B2DS
2015 2017-2030 2031-2040 2041-2050 2051-2060
USDbillion
Electricity networks
BECCS
Renewables
Fossil CCS
Nuclear
Gas w/o CCS
Coal w/o CCS
Average annual investments
© OECD/IEA 2017
Renewables: Becoming the dominant electricity source
Renewables cover almost 75% of all electricity demand in 2060, account for 53% of the cumulative power
sector CO2 reductions in the B2DS and require 78% of the cumulative investment needs for power generation.
© OECD/IEA 2017
CCS: Slow progress today, but huge potential in the future
CCS provides 20% of the cumulative CO2 reductions in the B2DS (relative to the RTS), with BECCS accounting
for more than 40% of the cumulative reductions from CCS and for half of the CCS investment.
© OECD/IEA 2017
Nuclear: Doubling of global capacity in the B2DS
With its share reaching 15% by 2060 in the B2DS, nuclear provides around 10% of the cumulative CO2
reductions to move from the RTS to the B2DS and requires 5% of the power sector investments in the B2DS.
© OECD/IEA 2017
Opportunities for policy action
• Approachesto technological innovation have to be tailored to the development status of specific
low-carbon power technologies. RD&D has to take an integratedview of power systems in its design
and operation, exploringstronger linkages among electricity, heat and mobility.
• Strong carbon pricing policies are needed. On their own, however, carbon prices are unlikely to be
sufficientto deliver the necessaryinvestment in time or at scale. Carbon prices should be complemented
by technology support measures to reduce investment risks.
• With both increased electrification and greater supply from VRE sources, opportunities to boost
the flexibility and reliability of electricity systems should be explored and exploited. Assessment of
the potential should be based on local conditions and roadmaps for implementation.
• Coal-fired power generation without CCS becomes unsustainablein the 2DS and B2DS by 2040-
45, increasing the risk that coal plants built in the near term become stranded assets. At a
minimum, new coal plants that are built should be CCS-ready. Fosteringresearch for higher capture rates
at coal-firedplants equippedwith CCS may extend their use under more stringentclimate targets.
• BECCS in power generation needs to be demonstrated on a commercial scale to gain experience.
RD&D for BECCS in the power sector should focus on improvingthe efficiencyof smaller plants, which
are likelyto be requireddue to constraints on bioenergy sourcing.
© OECD/IEA 2017
A different need for power sector infrastructure in deep decarbonisation scenarios
Investments in power sector infrastructureaccelerate in the final decade to 2060
0
200
400
600
800
1 000
1 200
1 400
1 600
Generation T&D Generation T&D Generation T&D
2016 2017-2050 2050-60
BillionUSD/year
Other non-OECD
Middle East and Africa
Other developing Asia
Latin America (excl. Chile)
India
China
Other OECD
EU
US
© OECD/IEA 2017
Where distribution networks are hubs for smartness and integration
Investment in distribution networks needs to break from historic trends in the short-term
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
50
100
150
200
250
300
350
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2020
2025
2030
2035
US(2015)billion
Distribution
Transmission
Share of
distribution
© OECD/IEA 2017
Infrastructure becomes more distributed
Batteries experience a huge scale-up in the B2DS, with EV battery markets leading other sectors in size
Installedbattery storage and costs under various scenarios
0
100
200
300
400
500
600
700
800
900
1000
0
10 000
20 000
30 000
40 000
50 000
60 000
2000 2015 2030 2045 2060 2015 2030 2045 2060
2DS B2DS
USD/kWh
GWh
All other
sectors
EV batteries
Battery costs,
2DS
Battery costs,
B2DS
© OECD/IEA 2017
Smart infrastructure can make demand part of the solution
Smart EV charging infrastucture, smart meters and remote load control devices have a huge potential
for low cost flexibility – but there are uncertainties on diffusion and scale-up
0
Gigawatts
Hours
2060
2045
2030
Today
2060
With standard charging
With smart charging
© OECD/IEA 2017
While the impact of storage could be disruptive, it remains highly uncertain
Globally installed non-pumped hydro
electricity storage (GW)
0
50
100
150
200
250
2016 2020 2025
GW
non-PHS Storage Pumped Hydropower Storage
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2011 2014 2016
GW
Globally installed electricity storage (GW)
Positive market and policy trends supported a year-on-year growth of over 50% for non-pumped hydro storage
But near-term storage needs will remain largely answered by existing or planned pumped hydro capacity
IEA
© OECD/IEA 2017
Advancing the Low-Carbon
Transition in Industry
Araceli Fernandez and Kira West
ETP 2017 1st Webinar - June 29, 2017
© OECD/IEA 2017
Translating the climate challenge into industrial terms
Significant transformations would be needed in all industrial sectors to achieve a 40% and 75% reduction of
direct CO2 emissions by 2060 in the 2DS and the B2DS respectively compared to current levels
0
2
4
6
8
10
12
2014 2020 2030 2040 2050 2060
GtCO2
Other industries
Pulp and paper
Aluminium
Chemicals and
petrochemicals
Cement
Iron and steel
RTS total
2DS total
B2DS total
Global direct industrial CO2 emissions
Note: Direct net CO2 emissionsincludeenergy-related and processemissions.
© OECD/IEA 2017
Current global industrial energy trends are not on track
The annual pace of improvement in aggregated industrial energyintensity over the last 15 years would
need to triple and almost quadrupleto align with the 2DS and B2DS by 2030
0
1
2
3
4
5
6
0
30
60
90
120
150
180
2000 2005 2010 2014
Historical
EJ
0
1
2
3
4
5
6
0
30
60
90
120
150
180
2030 2030
2DS B2DS
GJ/USDthousand
Other renewables
Waste
Biomass
Heat
Electricity
Natural gas
Oil
Coal
Global final industrial energy consumption and aggregated industrial energy intensity
Note: energy use related to blastfurnaces and coke ovensis include in crude steel final energy use.Petrochemicals feedstocks energyis includedin HVC final energyuse.
© OECD/IEA 2017
What are the specific challenges for key materials production?
Decoupling direct CO2 emissions from production of key materials is needed in the B2DS
Global final energy consumption and direct net CO2 emissions by product
0
1
2
3
4
0
10
20
30
40
50
2014 RTS 2060 B2DS
2060
2014 RTS 2060 B2DS
2060
HVC Crude Steel
GtCO₂
EJ
Waste
Biomass
Imported heat
Electricity
Natural gas
Oil
Coal
Net directCO₂
emissions
0
1
2
3
0
4
8
12
16
2014 RTS 2060 B2DS
2060
2014 RTS 2060 B2DS
2060
Cement Ammonia
GtCO₂
EJ
Note: energy use related to blastfurnaces and coke ovensis include in crude steel final energy use.Petrochemicals feedstocks energy is includedin HVC final energyuse. Direct net
CO2 emissionsincludeenergy-related and processemissions.
© OECD/IEA 2017
How can the industrial low-carbon transition be realised?
A number of strategies contributeto industrial emissions reductions – there is no silver bullet
0 20 40 60 80 100
Gt CO2 cumulative reductions in 2060
0
2
4
6
8
10
12
2014 2020 2030 2040 2050 2060
GtCO2
Material efficiency
Fuel and feedstock
switching
Energy efficiency and BAT
deployment
Innovative processes and
CCS
RTS total
B2DS total
Global direct industrial CO2 emissions
© OECD/IEA 2017
Energy efficiency leads the way in mid-term energy savings
Energy savings from deploying BAT and efficiency measures enable reducing global energy intensities
of crude steel and ammonia by 33% and 10% respectively already by 2030 in the B2DS compared to RTS
0.0
0.4
0.8
1.2
1.6
0
5
10
15
20
25
2014 2030 2060 2030 2060
RTS B2DS
tCO2/tcrudesteel
GJ/tcrudesteel
Energy
intensity
CO2
intensity
Global aggregated energy and direct net CO2 intensities by product
0.0
0.6
1.2
1.8
2.4
3.0
0
5
10
15
20
2014 2030 2060 2030 2060
RTS B2DS
tCO2/tammonia
GJ/tammonia
© OECD/IEA 2017
Global material production projections under different contexts
Wider implementation of material efficiency strategies leads to reduced demand for materials, as well
as to increased shares of secondaryroutes of production in the B2DS
0 150 300 450 600 750
2014
RTS 2060
B2DS 2060
2014
RTS 2060
B2DS 2060
PulpAluminium
Primary
Recycled
Recovered
fibre pulp
Virgin wood
pulp
Source:IEA EnergyTechnologyPerspectives, 2017
0 1 000 2 000 3 000 4 000 5 000
2014
RTS 2060
B2DS 2060
2014
RTS 2060
B2DS 2060
2014
RTS 2060
B2DS 2060
Chemicals
Crude
steelCement
Product (Mt)
Clinker
Cement
additives
Primary
Secondary
HVC
Ammonia
Methanol
© OECD/IEA 2017
Finding alternative sustainable production routes
Deployment of enhanced catalytic processes and greater reliance on lighter fossil and biomass-based
feedstocks deliver carbon emissions reductionsin high-value chemicals production
Global high-value chemicals production by process technology in the B2DS
0
50
100
150
200
250
300
350
400
2014 2020 2030 2040 2050 2060
HVC(Mt)
Naphtha catalytic cracking
Bioethanol to ethylene
Methanol to olefins
Gas oil steam cracking
LPG steam cracking
Propane dehydrogenation
Propane steam cracking
Ethane steam cracking
Naphtha steam cracking
HVC demand
© OECD/IEA 2017
CCS: a cross-cutting strategy of increasing importance in B2DS
Key energy-intensive industrial sectors approachthe 70-80%level of CO2 emitted being captured and
stored by 2060 in the B2DS
Global CO2 captured and stored as a share of total emitted direct CO2
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2020 2025 2030 2035 2040 2045 2050 2055 2060
B2DS - CHEMICALS
2DS - CHEMICALS
RTS - CHEMICALS
B2DS - CEMENT
2DS - CEMENT
RTS - CEMENT
B2DS - CRUDE STEEL
2DS - CRUDE STEEL
RTS - CRUDE STEEL
© OECD/IEA 2017
Regional differences matter
The deployment of different process routesdepends on regionally specific factors, such as availability
of raw materials, existing capacity, domestic productdemand,energy costs and policy contexts
0 100 200 300 400 500 600 700 800 900
China
India
OECD
Russia
Brazil
China
India
OECD
Russia
Brazil
China
India
OECD
Russia
Brazil
B2DS-2060RTS-20602014
Mt hot metal/year
Blast furnace
EAF - DRI
EAF - scrap
Smelt reduction
Global hot metal production in the iron & steel sector by process route and region
© OECD/IEA 2017
Recommended measures to support the industry low-carbon transition
• Standards and incentives for energy efficient equipment implementation and process integration measures should be
put in place regardless of the scale of decarbonisation required. Removal of fossil energy price subsidies.
• Investment de-risking mechanisms fostering the development of innovative low-carbon technologies to ensure that a
viable portfolio of low-carbon industrial process technologies will be ready in the post-2030 timeframe.
• Develop public‐private and cross‐sectoral partnerships to effectively design and deploy integrated solutions that
minimise carbon emissions along the overall product value chains while maintaining competitive advantages.
• Refunding schemes upon product return, followed by improvement of post‐consumer scrap collection and recycling
rates. Valorise post‐consumer scrap as raw material or for electricity or heat generation instead of landfill disposal.
• Integrated assessments mapping local energy resources and demands are needed to identify cost-effective energy
supply strategies, suiting both local and national needs. Strategic heating and cooling planning can help to identify
cost-effective opportunities for industrial excess heat recovery.
• Collect technology-specific energy performance statistics should be encouraged, to enable more detailed evaluation of
industrial energy and CO2 footprints.
• In a B2DS scenario, policy action to support the low-carbon transition would need to occur earlier and support a more
rapid scale-up and deployment of innovative low-carbon technologies than in the 2DS .
IEA
© OECD/IEA 2017
Unlocking the potential of carbon
capture and storage
Tristan Stanley
ETP 2017 1st Webinar - June 29, 2017
© IEA 2017
CCS in the 2DS and B2DS
CCS is applied across the economyin 2DS, capturing 6.8 GtCO2 in 2060.
In the B2DS, the amount of CO2 captured in 2060 is 60% higher.
0
2
4
6
8
10
12
2014 2020 2030 2040 2050 2060
GtCO2capturedandstored
2DS
Power Industry Other transformation
0
2
4
6
8
10
12
2014 2020 2030 2040 2050 2060
B2DS
© IEA 2017
CCS gets off to a slower start in the 2017 2DS than in the 2016 2DS
Early deployment of CCS is lower due to the lack of projects entering the pipeline;
but by 2050, the amountof CO2 captured each year is back to almost the same level
0
1
2
3
4
5
6
7
ETP 16 ETP 17 ETP 16 ETP 17 ETP 16 ETP 17 ETP 16 ETP 17
2020 2025 2030 2050
GtCO2captured
Other transformation Power Industry
© IEA 2017
What Changes in CCS from the 2DS to the B2DS
• More – The amount of CO2 being captured and needing transport and storage is
significantly larger
• Wider – The greater penetration of CCS, particularly in industry, means CO2 will
be captured in much more isolated locations, presenting a challenge for
transport and storage
• Smaller – CO2 is captured from more diluted and smaller sources. With present
technologies, this comes with a significant cost penalty. Innovation is needed to
improve the performance of capture technologies with small and diluted sources
of CO2.
© IEA 2017
CCS in power sector – B2DS
Generation from coal and gas is almost exclusively from plant with CCS by 2060 – unabated fossil fuel
capacity exists, but has few operating hours.
0%
20%
40%
60%
80%
100%
0
0.5
1
1.5
2
2.5
2030 2045 2060 2030 2045 2060 2030 2045 2060
Generationcapacity(TW) Bioenergy with CCS
capacity
Bioenergy capacity
Natural gas with CCS
capacity
Natural gas capacity
Coal with CCS capacity
Coal capacity
Share of power generation
with CCS
© IEA 2017
Coal and gas retirements
Even with CCS retrofits available, there are significant early retirements of gas and coal in both the 2DS
and the B2DS
0
100
200
300
400
500
600
Coal Gas Coal Gas Coal Gas Coal Gas Coal Gas Coal Gas Coal Gas Coal Gas
2025 2030 2035 2040 2045 2050 2055 2060 2015-2060
Early retirements CCS retrofits
GW
2DS
B2DS
© IEA 2017
With higher capture rates, CCS with gets more hours
The B2DS calls for higher capture rates lowering the remaining emissions from generation with CCS
0
500
1 000
1 500
2 000
2 500
3 000
2014 2020 2025 2030 2035 2040 2045 2050 2055 2060
TWh
B2DS capture rate 95%
B2DS capture rate 92%
B2DS
© IEA 2017
Industrial applications of CCS
CCS in the industrial sector more than doubles when moving to a 2DS as other optionsare increasingly
exhausted
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2020 2030 2040 2050 2060
GtCO2captured
2DS
Cement Iron and steel Chemicals Pulp and paper
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2020 2030 2040 2050 2060
B2DS
© IEA 2017
CCS penetration in the production of key materials
Share of final productswith CCS applied at some point in their production
0%
20%
40%
60%
80%
100%
2015 2025 2035 2045 2055
ShareofproductionwithCCS
Steel
RTS 2DS B2DS Share of production which is not low carbon through other routes
0%
20%
40%
60%
80%
100%
2015 2025 2035 2045 2055
Cement
0%
20%
40%
60%
80%
100%
2015 2025 2035 2045 2055
Primary chemicals
© IEA 2017
Increased penetration of CCS in industry will present infrastructure challenges:
• Early CCS projects are likely to be along CO2 transport corridors
• As CCS penetration increases, more isolated facilities will need access to CO2
transport
• Policy and regulation will need to account for facilities without easy access to
CO2 transport
CCS in industry
© IEA 2017
BECCS in the B2DS
While bioenergydemand is the same as in the 2DS,
the B2DS relies heavily on BECCS to generate negative emissions.
0
1 000
2 000
3 000
4 000
5 000
6 000
2030 2045 2060 2030 2045 2060
2DS B2DS
GtCO₂captured
Industry Bioenergy Power Bioenergy Other transformation Bioenergy
© IEA 2017
• In the B2DS, CO2 is captured from
smaller and less concentrated
sources.
• Innovation and technological
improvements needed to reduce
costs of capturing from these
sources – an RD&D focus for a B2DS
world
CO2 captured from smaller and more diluted sources in B2DS
- 4
- 2
0
2
4
6
8
10
2DS B2DS 2DS B2DS 2DS B2DS
Low concentration,
small
Low concentration,
large
High concentration
GtCO2/yr
CO₂ captured Total net CO₂ produced
© IEA 2017
An infrastructure approach
• The scale of the transport and storage requirements are such that single end to
end projects won’t get us there
• CO2 transport and storage infrastructure is of public value over and above its
commercial value at present
• Public sector leadership will be critical given the lack of commercial drivers for
transport and storage development and to overcome the “chicken and egg”
problem.
© IEA 2017
Policy recommendations
Storage development and transport infrastructure should be a priority for
governments
• In the near term, governments should focus on developing storage resources
strategically located near clusters of emissions point sources.
• Governments should also consider mechanisms to commercially insulate CO2
capture from CO2 storage and vice versa.
• If transport and storage are available and are sufficiently de-risked, governments
can put in place the combination of regulation and support necessary to drive
the uptake of CO2 capture.
© OECD/IEA 2017
www.iea.org
IEA www.iea.org/statistics

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ETP 2017 Webinar - Part I

  • 1. IEA © OECD/IEA 2017 Energy Technology Perspectives 2017 Catalysing Energy Technology Transformations Speakers: Kamel Ben Naceur, Ellina Levina, Samantha McCulloch, Uwe Remme, Raimund Malischek, Luis Munuera, Araceli Fernandez, Kira West, Tristan Stanley, Jean Francois Gagne ETP 2017 1st Webinar - June 29, 2017
  • 2. IEA © OECD/IEA 2017 Energy Technology Perspectives 2017 Catalysing Energy Technology Transformations Scene setting Kamel Ben Naceur, Director, IEA ETP 2017 1st Webinar - June 29, 2017
  • 3. © OECD/IEA 2017 Key points of orientation • Global energy markets are changing rapidly Renewables supplied half of global electricity demand growth in 2016, and increase in nuclear capacity reached highest level since 1993 Global energy intensity improved by 2.1% in 2016 Electric car sales were up 40% in 2016, a new record year • The energy sector remains key to sustainable economic growth 1.2B people lack access to electricity; 2.7B people lack access to clean cooking Largest source of GHG emissions today, around two-thirds of global total Largest source of air pollution, linked to 6.5 million premature deaths per year • There is no single story about the future of global energy Fast-paced technological progress and changing energy business models
  • 4. © OECD/IEA 2017 The energy landscape has been shifting Since 2010, efficiency measures have slowed down growth in global energyconsumption . Renewables and natural gas account for almost two-thirds of the growth. Shares in growth in world energydemand Coal 47% Oil 16% Gas 23% Nuclear 2% Renewables 12% Coal 10% Oil 27% Gas 31% Nuclear 0% Renewables 32% 2000-2010 2010-2016
  • 5. © OECD/IEA 2017 Global CO2 emissions flat for 3 years – an emerging trend? IEA analysis shows that global CO2 emissions remained flat in 2016 for the third year in a row, even though the global economygrew, led by emission declines in the US and China. 5 10 15 20 25 30 35 1970 1975 1980 1985 1990 1995 2000 2005 2010 2014 2015 2016 Gt Global energy-related CO2 emissions
  • 6. © OECD/IEA 2017 0 10 20 30 40 2014 2020 2030 2040 2050 GtCO2 Efficiency 40% Renewables 35% Fuel switching 5% Nuclear 6% CCS 14% How far can technology take us? Pushing energy technology to achieve carbon neutrality by 2060 could meet the mid-point of the range of ambitions expressed in Paris. Technology area contribution to global cumulative CO2 reductions Efficiency 40% Renewables 35% Fuel switching 5% Nuclear 6% CCS 14% Efficiency 34% Renewables 15% Fuel switching 18% Nuclear 1% CCS 32% Global CO2 reductions by technology area 2 degrees Scenario – 2DS Reference Technology Scenario – RTS Beyond 2 degrees Scenario – B2DS 0 200 400 Gt CO2 cumulative reductionsin2060
  • 7. © OECD/IEA 2017 The potential of clean energy technology remains under-utilised Recent progressin some clean energyareas is promising,but many technologies still need a strong push to achieve their full potential and deliver a sustainable energy future. Energy storage SolarPV and onshore wind Buildingconstruction Nuclear Transport – Fuel economy of light-duty vehicles Lighting, appliancesand buildingequipment Electric vehicles Energy-intensiveindustrialprocesses Transport biofuels Carbon capture and storage More efficient coal-fired power ●Not on track ●Accelerated improvement needed ●On track
  • 8. © OECD/IEA 2017 On-track: Electric mobility is breaking records, but policy support remains critical The global electric car fleet passed 2 million last year, but sales growth slipped from 70% in 2015 to 40% in 2016, suggesting the boom may not last without sustained policy support Global electric car fleet 0 500 1 000 1 500 2 000 2010 2011 2012 2013 2014 2015 2016 Numberofvehiclesontheroad (Thousands) Others Germany France United Kingdom Netherlands Norway Japan USA China
  • 9. © OECD/IEA 2017 Better grids, more flexible power plants and storage & demand side response will be needed to integrate larger shares of wind & solar in a secure and cost-effective way 0% 10% 20% 30% 40% 50% 60% India Chile China Canada Japan United States Australia United Kingdom Italy Germany Spain Denmark % of wind and solar in 2010 % of wind and solar in 2016 Share of wind and solar in total electricitygeneration in selected CEM countries On-track: Wind & solar transforming the power sector: system integration is key
  • 10. © OECD/IEA 2017 • CCS is happening but is far from on track The global portfolio of large-scale CCS projects continued to expand,with the first steel plant CCS and the first (BECCS) plant being deployed, but no new investment decisions have been taken since 2014. Large-scale CO2 capture projects 0 5 10 15 20 25 30 35 40 45 50 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 MtCO2 Refining Power generation Natural gas processing Iron and steel Chemicals Biofuels Maximum projected capacity
  • 11. © OECD/IEA 2017 • CCS is happening but is far from on track CCS investment needs to increase by an order of magnitudeto meet 2025 targets Large-scale CO2 capture projects 0 50 100 150 200 250 300 350 400 450 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 MtCO2 Refining Power generation Natural gas processing Iron and steel Chemicals Biofuels 2DS 2025 Maximum projected capacity
  • 12. © OECD/IEA 2017 0 10 20 30 40 2012 2015 USD(2016)billion Private Public Top 3 firms 0 10 20 30 40 2012 2015 USD(2016)billion Private Public Top 3 firms Global clean energy RD&D spending needs a strong boost Global RD&D spending in efficiency, renewables, nuclear and CCS plateaued at $26 billion annually, coming mostly from governments. Global clean energy RD&D spending 0 10 20 30 40 2012 2021 USD(2016)billion Private Public Top 3 firms Mission Innovation Mission Innovation Top 3 IT company R&D spenders Global RD&D spending in efficiency, renewables, nuclear and CCS plateaued at $26 billion annually, coming mostly from governments. Mission Innovation could providea much needed boost.
  • 13. © OECD/IEA 2017 Conclusions • Early signs point to changes in energy trajectories, helped by policies and technologies, but progress is too slow • An integrated systems approach considering all technology options must be implemented now to accelerate progress • Each country should define its own transition path and scale- up its RD&D and deployment support accordingly • Achieving carbon neutrality by 2060 would require unprecedented technology policies and investments • Innovation can deliver, but policies must consider the full technology cycle, and collaborative approaches can help
  • 14. IEA © OECD/IEA 2017 Energy Technology Perspectives 2017 The Global Outlook Samantha McCulloch,Eric Masanet ETP 2017 1st Webinar - June 29, 2017
  • 15. © OECD/IEA 2017 The Global Outlook • Despite significant shifts in the global energy landscape, energy and climate commitments fall short of achieving long-term goals • An optimised, cost-effective pathway to 2°C or below requires technology innovation across a portfolio of clean energy technologies • Rapid and aggressive deployment of clean energy technologies could deliver a carbon-neutral energy system in 2060 However, this would require a fundamental and immediate shift in current action
  • 16. © OECD/IEA 2017 Cumulative energy sector CO2 budgets: 2DS and B2DS The 2DS requiresaround 740 GtCO2 of cumulative emissions reductionsto 2060, relative to the RTS Cumulative emissions are 36% lower in the B2DS compared with the 2DS 0 10 20 30 40 2014 2020 2040 2060 2080 2100 2DS B2DS GtCO2 0 300 600 900 1 200 Cumulative 2015-2100 GtCO2
  • 17. © OECD/IEA 2017 Primary energy demand in the RTS and 2DS More than half of primary energy demand is from renewables in the 2DS The share of fossil fuels falls from 81% today to 35% in 2060 in the 2DS 0% 20% 40% 60% 80% 100% 0 200 400 600 800 1 000 2014 Fossil Non-fossil 2060 2014 Fossil Non-fossil 2060 RTS 2DS EJ Biomass and waste Hydro Other renewables Nuclear Natural gas Oil Coal Share of fossil fuels
  • 18. © OECD/IEA 2017 Cumulative CO2 emissions reductions by sector and technology: RTS to 2DS Action is required across all energy supply and demand sectors 0 50 100 150 200 250 300 350 Power Transport Industry Buildings Transformation GtCO2 Renewables CCS Fuel switching Energy efficiency Nuclear
  • 19. © OECD/IEA 2017 Remaining CO2 emissions in the 2DS and B2DS The remaining CO2 emissions in industry and power must be targeted for the B2DS Negative emissions are necessary to achieve net-zero emissions in 2060 - 5 0 5 10 15 20 25 30 35 40 2014 2020 2030 2040 2050 2060 GtCO2 B2DS - 5 0 5 10 15 20 25 30 35 40 2014 2020 2030 2040 2050 2060 GtCO2 Other transformation Power Transport Industry Buildings Agriculture 2DS The power sector is virtually decarbonisedby 2060; Industry (57%) and transport(36%) are the largestsources of emissions in 2060
  • 20. © OECD/IEA 2017 The fuel mix to generate electricity is vastly different to today The average carbon intensity of power generation falls from around 520 gCO2/kWh today to below zero in the B2DS 0% 20% 40% 60% 80% 100% RTS 2DS B2DS 2014 2060 Electricitymix Fossil w/o CCS Fossil with CCS Nuclear Bioenergy with CCS Renewables
  • 21. © OECD/IEA 2017 Enhanced buildings efficiency could improve system flexibility Efficiency technologies can provide the same level of comfort while reducing energydemand despite doubling floor area. 112 EJ157 EJ123 EJ 2014 (123 EJ) RTS 2060 (157 EJ) B2DS 2060 (112 EJ) 31% 54% 61% Electricity ElectricityElectricity 37% 24% 3% 5% Electricity 31% Fossil fuels Traditional biomass Renewables Other Electricity Energyuse in the buildings sector under differentscenarios
  • 22. © OECD/IEA 2017 Electrification of the transport sector reduces reliance on fossil fuels The transportation sector already experiences technological change, but won’t shed its oil dependencywithout assertive policies. Vehicle sales and technology shares under different scenarios Heavy-Duty Vehicles (millions)Light-duty Vehicles (millions) 0 40 80 120 160 200 2015 RTS - 2060 B2DS - 2060 0 5 10 15 20 25 2015 RTS - 2060 B2DS - 2060
  • 23. © OECD/IEA 2017 Availability of sustainable bioenergy a critical factor Around 145 EJ of sustainable bioenergyis available by 2060 in all decarbonisation scenarios, but is used differently between the 2DS and the B2DS. 0% 10% 20% 30% 40% 50% 60% 0 25 50 75 100 125 150 RTS 2DS B2DS 2014 2060 EJ Bioenergy use by sector Power Fuel transformation Agriculture Buildings Industry Transport % BECCS
  • 24. © OECD/IEA 2017 Bridging the 2DS gap: Policy actions • A significantly strengthened and accelerated policy response is required for any low-emission scenario • Overarching policy priorities:  Enhanced support for technology innovation  Alignment of long-term climate strategies and near-term policy action  Improved integration of policy measures across the energy system
  • 25. IEA © OECD/IEA 2017 Transforming Electricity Systems Uwe Remme,RaimundMalischek and Luis Munuera ETP 2017 1st Webinar - June 29, 2017
  • 26. © OECD/IEA 2017 The future is electric Electricity becomes on a global level the largest final energy carrier in the 2DS and B2DS, with the electricity share in final energy use more than doubling compared to today, up to 41% in the B2DS in 2060. 0 10 000 20 000 30 000 40 000 50 000 1971 1980 1990 2000 2010 2020 2030 2040 2050 2060 TWh Statistics RTS 2DS B2DS Global final electricity demand Change in final electricity demand in 2060 -8 000 -6 000 -4 000 -2 000 0 2 000 4 000 6 000 8 000 2DS vs RTS B2DS vs 2DS TWh Transport Agriculture Services Residential Industry
  • 27. © OECD/IEA 2017 -10 000 2014 2020 2030 2040 2050 2060 Decarbonising electricity Renewables dominate electricity generation in the 2DS and B2DS. Thanks to bioenergywith CCS, the average global CO2 intensity falls below zero after 2050. Other Wind STE Solar PV Biofuels and waste Hydro Nuclear Coal with CCS Coal Oil Natural gas with CCS Natural gas CO2 intensity - 100 0 100 200 300 400 500 600 gCO2/kWh Global electricity generation B2DS 0 10 000 20 000 30 000 40 000 50 000 60 000 TWh Generation mix 0% 20% 40% 60% 80% 100% RTS 2DS B2DS 2014 2060 Renewables Bioenergy with CCS Nuclear Coal with CCS Coal w/o CCS Gas with CCS Gas (incl.oil) w/o CCS
  • 28. © OECD/IEA 2017 Power sector key for deep decarbonisation of the energy system The power sector provides around 40% of the cumulative CO2 reductions across all sectors to move from the RTS to the B2DS, with renewables being responsible for more than half of the reductions in the power sector. CO2 reductions in the power sector in the B2DS relative to the 2DS
  • 29. © OECD/IEA 2017 How much investments are needed in the power sector? Total investments of USD 61 trillion are needed in the B2DS in the power sector, an increase of USD 23 trillion compared to the RTS and USD 6 trillion to the 2DS. 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 Statistics RTS 2DS B2DS RTS 2DS B2DS RTS 2DS B2DS RTS 2DS B2DS 2015 2017-2030 2031-2040 2041-2050 2051-2060 USDbillion Electricity networks BECCS Renewables Fossil CCS Nuclear Gas w/o CCS Coal w/o CCS Average annual investments
  • 30. © OECD/IEA 2017 Renewables: Becoming the dominant electricity source Renewables cover almost 75% of all electricity demand in 2060, account for 53% of the cumulative power sector CO2 reductions in the B2DS and require 78% of the cumulative investment needs for power generation.
  • 31. © OECD/IEA 2017 CCS: Slow progress today, but huge potential in the future CCS provides 20% of the cumulative CO2 reductions in the B2DS (relative to the RTS), with BECCS accounting for more than 40% of the cumulative reductions from CCS and for half of the CCS investment.
  • 32. © OECD/IEA 2017 Nuclear: Doubling of global capacity in the B2DS With its share reaching 15% by 2060 in the B2DS, nuclear provides around 10% of the cumulative CO2 reductions to move from the RTS to the B2DS and requires 5% of the power sector investments in the B2DS.
  • 33. © OECD/IEA 2017 Opportunities for policy action • Approachesto technological innovation have to be tailored to the development status of specific low-carbon power technologies. RD&D has to take an integratedview of power systems in its design and operation, exploringstronger linkages among electricity, heat and mobility. • Strong carbon pricing policies are needed. On their own, however, carbon prices are unlikely to be sufficientto deliver the necessaryinvestment in time or at scale. Carbon prices should be complemented by technology support measures to reduce investment risks. • With both increased electrification and greater supply from VRE sources, opportunities to boost the flexibility and reliability of electricity systems should be explored and exploited. Assessment of the potential should be based on local conditions and roadmaps for implementation. • Coal-fired power generation without CCS becomes unsustainablein the 2DS and B2DS by 2040- 45, increasing the risk that coal plants built in the near term become stranded assets. At a minimum, new coal plants that are built should be CCS-ready. Fosteringresearch for higher capture rates at coal-firedplants equippedwith CCS may extend their use under more stringentclimate targets. • BECCS in power generation needs to be demonstrated on a commercial scale to gain experience. RD&D for BECCS in the power sector should focus on improvingthe efficiencyof smaller plants, which are likelyto be requireddue to constraints on bioenergy sourcing.
  • 34. © OECD/IEA 2017 A different need for power sector infrastructure in deep decarbonisation scenarios Investments in power sector infrastructureaccelerate in the final decade to 2060 0 200 400 600 800 1 000 1 200 1 400 1 600 Generation T&D Generation T&D Generation T&D 2016 2017-2050 2050-60 BillionUSD/year Other non-OECD Middle East and Africa Other developing Asia Latin America (excl. Chile) India China Other OECD EU US
  • 35. © OECD/IEA 2017 Where distribution networks are hubs for smartness and integration Investment in distribution networks needs to break from historic trends in the short-term 0% 10% 20% 30% 40% 50% 60% 70% 80% 0 50 100 150 200 250 300 350 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2020 2025 2030 2035 US(2015)billion Distribution Transmission Share of distribution
  • 36. © OECD/IEA 2017 Infrastructure becomes more distributed Batteries experience a huge scale-up in the B2DS, with EV battery markets leading other sectors in size Installedbattery storage and costs under various scenarios 0 100 200 300 400 500 600 700 800 900 1000 0 10 000 20 000 30 000 40 000 50 000 60 000 2000 2015 2030 2045 2060 2015 2030 2045 2060 2DS B2DS USD/kWh GWh All other sectors EV batteries Battery costs, 2DS Battery costs, B2DS
  • 37. © OECD/IEA 2017 Smart infrastructure can make demand part of the solution Smart EV charging infrastucture, smart meters and remote load control devices have a huge potential for low cost flexibility – but there are uncertainties on diffusion and scale-up 0 Gigawatts Hours 2060 2045 2030 Today 2060 With standard charging With smart charging
  • 38. © OECD/IEA 2017 While the impact of storage could be disruptive, it remains highly uncertain Globally installed non-pumped hydro electricity storage (GW) 0 50 100 150 200 250 2016 2020 2025 GW non-PHS Storage Pumped Hydropower Storage 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 2011 2014 2016 GW Globally installed electricity storage (GW) Positive market and policy trends supported a year-on-year growth of over 50% for non-pumped hydro storage But near-term storage needs will remain largely answered by existing or planned pumped hydro capacity
  • 39. IEA © OECD/IEA 2017 Advancing the Low-Carbon Transition in Industry Araceli Fernandez and Kira West ETP 2017 1st Webinar - June 29, 2017
  • 40. © OECD/IEA 2017 Translating the climate challenge into industrial terms Significant transformations would be needed in all industrial sectors to achieve a 40% and 75% reduction of direct CO2 emissions by 2060 in the 2DS and the B2DS respectively compared to current levels 0 2 4 6 8 10 12 2014 2020 2030 2040 2050 2060 GtCO2 Other industries Pulp and paper Aluminium Chemicals and petrochemicals Cement Iron and steel RTS total 2DS total B2DS total Global direct industrial CO2 emissions Note: Direct net CO2 emissionsincludeenergy-related and processemissions.
  • 41. © OECD/IEA 2017 Current global industrial energy trends are not on track The annual pace of improvement in aggregated industrial energyintensity over the last 15 years would need to triple and almost quadrupleto align with the 2DS and B2DS by 2030 0 1 2 3 4 5 6 0 30 60 90 120 150 180 2000 2005 2010 2014 Historical EJ 0 1 2 3 4 5 6 0 30 60 90 120 150 180 2030 2030 2DS B2DS GJ/USDthousand Other renewables Waste Biomass Heat Electricity Natural gas Oil Coal Global final industrial energy consumption and aggregated industrial energy intensity Note: energy use related to blastfurnaces and coke ovensis include in crude steel final energy use.Petrochemicals feedstocks energyis includedin HVC final energyuse.
  • 42. © OECD/IEA 2017 What are the specific challenges for key materials production? Decoupling direct CO2 emissions from production of key materials is needed in the B2DS Global final energy consumption and direct net CO2 emissions by product 0 1 2 3 4 0 10 20 30 40 50 2014 RTS 2060 B2DS 2060 2014 RTS 2060 B2DS 2060 HVC Crude Steel GtCO₂ EJ Waste Biomass Imported heat Electricity Natural gas Oil Coal Net directCO₂ emissions 0 1 2 3 0 4 8 12 16 2014 RTS 2060 B2DS 2060 2014 RTS 2060 B2DS 2060 Cement Ammonia GtCO₂ EJ Note: energy use related to blastfurnaces and coke ovensis include in crude steel final energy use.Petrochemicals feedstocks energy is includedin HVC final energyuse. Direct net CO2 emissionsincludeenergy-related and processemissions.
  • 43. © OECD/IEA 2017 How can the industrial low-carbon transition be realised? A number of strategies contributeto industrial emissions reductions – there is no silver bullet 0 20 40 60 80 100 Gt CO2 cumulative reductions in 2060 0 2 4 6 8 10 12 2014 2020 2030 2040 2050 2060 GtCO2 Material efficiency Fuel and feedstock switching Energy efficiency and BAT deployment Innovative processes and CCS RTS total B2DS total Global direct industrial CO2 emissions
  • 44. © OECD/IEA 2017 Energy efficiency leads the way in mid-term energy savings Energy savings from deploying BAT and efficiency measures enable reducing global energy intensities of crude steel and ammonia by 33% and 10% respectively already by 2030 in the B2DS compared to RTS 0.0 0.4 0.8 1.2 1.6 0 5 10 15 20 25 2014 2030 2060 2030 2060 RTS B2DS tCO2/tcrudesteel GJ/tcrudesteel Energy intensity CO2 intensity Global aggregated energy and direct net CO2 intensities by product 0.0 0.6 1.2 1.8 2.4 3.0 0 5 10 15 20 2014 2030 2060 2030 2060 RTS B2DS tCO2/tammonia GJ/tammonia
  • 45. © OECD/IEA 2017 Global material production projections under different contexts Wider implementation of material efficiency strategies leads to reduced demand for materials, as well as to increased shares of secondaryroutes of production in the B2DS 0 150 300 450 600 750 2014 RTS 2060 B2DS 2060 2014 RTS 2060 B2DS 2060 PulpAluminium Primary Recycled Recovered fibre pulp Virgin wood pulp Source:IEA EnergyTechnologyPerspectives, 2017 0 1 000 2 000 3 000 4 000 5 000 2014 RTS 2060 B2DS 2060 2014 RTS 2060 B2DS 2060 2014 RTS 2060 B2DS 2060 Chemicals Crude steelCement Product (Mt) Clinker Cement additives Primary Secondary HVC Ammonia Methanol
  • 46. © OECD/IEA 2017 Finding alternative sustainable production routes Deployment of enhanced catalytic processes and greater reliance on lighter fossil and biomass-based feedstocks deliver carbon emissions reductionsin high-value chemicals production Global high-value chemicals production by process technology in the B2DS 0 50 100 150 200 250 300 350 400 2014 2020 2030 2040 2050 2060 HVC(Mt) Naphtha catalytic cracking Bioethanol to ethylene Methanol to olefins Gas oil steam cracking LPG steam cracking Propane dehydrogenation Propane steam cracking Ethane steam cracking Naphtha steam cracking HVC demand
  • 47. © OECD/IEA 2017 CCS: a cross-cutting strategy of increasing importance in B2DS Key energy-intensive industrial sectors approachthe 70-80%level of CO2 emitted being captured and stored by 2060 in the B2DS Global CO2 captured and stored as a share of total emitted direct CO2 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2014 2020 2025 2030 2035 2040 2045 2050 2055 2060 B2DS - CHEMICALS 2DS - CHEMICALS RTS - CHEMICALS B2DS - CEMENT 2DS - CEMENT RTS - CEMENT B2DS - CRUDE STEEL 2DS - CRUDE STEEL RTS - CRUDE STEEL
  • 48. © OECD/IEA 2017 Regional differences matter The deployment of different process routesdepends on regionally specific factors, such as availability of raw materials, existing capacity, domestic productdemand,energy costs and policy contexts 0 100 200 300 400 500 600 700 800 900 China India OECD Russia Brazil China India OECD Russia Brazil China India OECD Russia Brazil B2DS-2060RTS-20602014 Mt hot metal/year Blast furnace EAF - DRI EAF - scrap Smelt reduction Global hot metal production in the iron & steel sector by process route and region
  • 49. © OECD/IEA 2017 Recommended measures to support the industry low-carbon transition • Standards and incentives for energy efficient equipment implementation and process integration measures should be put in place regardless of the scale of decarbonisation required. Removal of fossil energy price subsidies. • Investment de-risking mechanisms fostering the development of innovative low-carbon technologies to ensure that a viable portfolio of low-carbon industrial process technologies will be ready in the post-2030 timeframe. • Develop public‐private and cross‐sectoral partnerships to effectively design and deploy integrated solutions that minimise carbon emissions along the overall product value chains while maintaining competitive advantages. • Refunding schemes upon product return, followed by improvement of post‐consumer scrap collection and recycling rates. Valorise post‐consumer scrap as raw material or for electricity or heat generation instead of landfill disposal. • Integrated assessments mapping local energy resources and demands are needed to identify cost-effective energy supply strategies, suiting both local and national needs. Strategic heating and cooling planning can help to identify cost-effective opportunities for industrial excess heat recovery. • Collect technology-specific energy performance statistics should be encouraged, to enable more detailed evaluation of industrial energy and CO2 footprints. • In a B2DS scenario, policy action to support the low-carbon transition would need to occur earlier and support a more rapid scale-up and deployment of innovative low-carbon technologies than in the 2DS .
  • 50. IEA © OECD/IEA 2017 Unlocking the potential of carbon capture and storage Tristan Stanley ETP 2017 1st Webinar - June 29, 2017
  • 51. © IEA 2017 CCS in the 2DS and B2DS CCS is applied across the economyin 2DS, capturing 6.8 GtCO2 in 2060. In the B2DS, the amount of CO2 captured in 2060 is 60% higher. 0 2 4 6 8 10 12 2014 2020 2030 2040 2050 2060 GtCO2capturedandstored 2DS Power Industry Other transformation 0 2 4 6 8 10 12 2014 2020 2030 2040 2050 2060 B2DS
  • 52. © IEA 2017 CCS gets off to a slower start in the 2017 2DS than in the 2016 2DS Early deployment of CCS is lower due to the lack of projects entering the pipeline; but by 2050, the amountof CO2 captured each year is back to almost the same level 0 1 2 3 4 5 6 7 ETP 16 ETP 17 ETP 16 ETP 17 ETP 16 ETP 17 ETP 16 ETP 17 2020 2025 2030 2050 GtCO2captured Other transformation Power Industry
  • 53. © IEA 2017 What Changes in CCS from the 2DS to the B2DS • More – The amount of CO2 being captured and needing transport and storage is significantly larger • Wider – The greater penetration of CCS, particularly in industry, means CO2 will be captured in much more isolated locations, presenting a challenge for transport and storage • Smaller – CO2 is captured from more diluted and smaller sources. With present technologies, this comes with a significant cost penalty. Innovation is needed to improve the performance of capture technologies with small and diluted sources of CO2.
  • 54. © IEA 2017 CCS in power sector – B2DS Generation from coal and gas is almost exclusively from plant with CCS by 2060 – unabated fossil fuel capacity exists, but has few operating hours. 0% 20% 40% 60% 80% 100% 0 0.5 1 1.5 2 2.5 2030 2045 2060 2030 2045 2060 2030 2045 2060 Generationcapacity(TW) Bioenergy with CCS capacity Bioenergy capacity Natural gas with CCS capacity Natural gas capacity Coal with CCS capacity Coal capacity Share of power generation with CCS
  • 55. © IEA 2017 Coal and gas retirements Even with CCS retrofits available, there are significant early retirements of gas and coal in both the 2DS and the B2DS 0 100 200 300 400 500 600 Coal Gas Coal Gas Coal Gas Coal Gas Coal Gas Coal Gas Coal Gas Coal Gas 2025 2030 2035 2040 2045 2050 2055 2060 2015-2060 Early retirements CCS retrofits GW 2DS B2DS
  • 56. © IEA 2017 With higher capture rates, CCS with gets more hours The B2DS calls for higher capture rates lowering the remaining emissions from generation with CCS 0 500 1 000 1 500 2 000 2 500 3 000 2014 2020 2025 2030 2035 2040 2045 2050 2055 2060 TWh B2DS capture rate 95% B2DS capture rate 92% B2DS
  • 57. © IEA 2017 Industrial applications of CCS CCS in the industrial sector more than doubles when moving to a 2DS as other optionsare increasingly exhausted 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 2020 2030 2040 2050 2060 GtCO2captured 2DS Cement Iron and steel Chemicals Pulp and paper 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 2020 2030 2040 2050 2060 B2DS
  • 58. © IEA 2017 CCS penetration in the production of key materials Share of final productswith CCS applied at some point in their production 0% 20% 40% 60% 80% 100% 2015 2025 2035 2045 2055 ShareofproductionwithCCS Steel RTS 2DS B2DS Share of production which is not low carbon through other routes 0% 20% 40% 60% 80% 100% 2015 2025 2035 2045 2055 Cement 0% 20% 40% 60% 80% 100% 2015 2025 2035 2045 2055 Primary chemicals
  • 59. © IEA 2017 Increased penetration of CCS in industry will present infrastructure challenges: • Early CCS projects are likely to be along CO2 transport corridors • As CCS penetration increases, more isolated facilities will need access to CO2 transport • Policy and regulation will need to account for facilities without easy access to CO2 transport CCS in industry
  • 60. © IEA 2017 BECCS in the B2DS While bioenergydemand is the same as in the 2DS, the B2DS relies heavily on BECCS to generate negative emissions. 0 1 000 2 000 3 000 4 000 5 000 6 000 2030 2045 2060 2030 2045 2060 2DS B2DS GtCO₂captured Industry Bioenergy Power Bioenergy Other transformation Bioenergy
  • 61. © IEA 2017 • In the B2DS, CO2 is captured from smaller and less concentrated sources. • Innovation and technological improvements needed to reduce costs of capturing from these sources – an RD&D focus for a B2DS world CO2 captured from smaller and more diluted sources in B2DS - 4 - 2 0 2 4 6 8 10 2DS B2DS 2DS B2DS 2DS B2DS Low concentration, small Low concentration, large High concentration GtCO2/yr CO₂ captured Total net CO₂ produced
  • 62. © IEA 2017 An infrastructure approach • The scale of the transport and storage requirements are such that single end to end projects won’t get us there • CO2 transport and storage infrastructure is of public value over and above its commercial value at present • Public sector leadership will be critical given the lack of commercial drivers for transport and storage development and to overcome the “chicken and egg” problem.
  • 63. © IEA 2017 Policy recommendations Storage development and transport infrastructure should be a priority for governments • In the near term, governments should focus on developing storage resources strategically located near clusters of emissions point sources. • Governments should also consider mechanisms to commercially insulate CO2 capture from CO2 storage and vice versa. • If transport and storage are available and are sufficiently de-risked, governments can put in place the combination of regulation and support necessary to drive the uptake of CO2 capture.
  • 64. © OECD/IEA 2017 www.iea.org IEA www.iea.org/statistics