Energy Pdf

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A brief overview of our challenges in managing energy options

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Energy Pdf

  1. 1. Our
Energy
Options Why
New
England
is
well
positioned
for
the
next
energy-led
boom “We’re
borrowing
money
from
China
to
buy
oil
from
the
 Persian
Gulf
to
burn
it
in
ways
that
destroy
the
planet.
 Every
bit
of
that’s
got
to
change.” 





Al
Gore
  2. 2. Sun
-
Energy
-
Food
-
Life The
Sun
provides
our
energy
in
three
major
“cycles”: • The
Long
Cycle:

Fossil
fuels,
fossilized
organic
matter,
 essentially
fossilized
solar
power,
stored
for
million
of
 years • The
Fast
Cycle:

Solar
power
for
the
water
transport,
from
 ocean
evaporation
to
inland
precipitation
 • The
Slow
Cycle:

The
storage
of
fast
cycle
energies
in
 aquifers,
icebergs,
locking
water
for
future
use,
 maintaining
forests
and
topsoils Why
is
it
important? • We
are
increasingly
using
Long
Cycle
energy
(fossil
fuels)
 just
to
feed
and
water
ourselves,
this
is
not
sustainable
  3. 3. Our
Usage
of
Long
Cycle
sources Global
mix
of
primary
energy
in
the
last
150
years 12 Nuclear
 
 5.5% Natural
Gas
 21% Gtoe/yr
=
billions
of
toe
per
year 10 Hydroelectric
 5.4% Nuclear Oil
 
 33% Biomass
 
 11% 8 Coal
 
 24% Gas Solar






















0.1% Hydro “Big
Three” Oil 6 Oil 4 Biomass Gas,Coal 2 
=
78% Coal 0 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 P.
Beretta 50%
of
the
Oil
ever
produced
has
been
consumed
in
the
last
25
years
  4. 4. The
Peak
Oil
Debate • More
than
50%
of
all
the
oil
ever
produced
has
been
consumed
in
the
last
25
years • Production
has
exceeded
discoveries
every
year
since
1984 • Peak
discovery
was
in
1965,
we
were
consuming
5bbl
per
year
and
discovering
 20-30
bbl.

We
now
consume
40bbl
and
discover
5-8bbl • Overall
production
seems
to
have
peaked
in
2006,
exports
of
top
5
exporting
 countries
fell
4.5%
in
2007 • North
Sea
fields
are
down
40-80%
in
the
10
years
past
peak
production,
Mexico’s
 Cantarell
field
is
down
24%
in
the
past
12
months,
Saudi’s
giant
Ghawar
field
will
see
 an
estimated
production
fall
17%
between
2009
and
2013 • One
of
the
largest
recent
finds,
Brazil’s
Tupi
field
is
estimated
at
total
life
capacity
of
 40bbl,
this
is
equivalent
to
one
year’s
worth
of
world
consumption
  5. 5. The
Peak
Oil
Debate
  6. 6. The
Peak
Oil
Debate
  7. 7. So
what
do
we
do? …Or
what
is
the
cost
of
switching
over?
  8. 8. Cost
of
switching
over • Globally
we
have
invested
330Bn
in
the
last
three
years
in
alternatives,
yet
 “renewables”,
like
solar/wind,
don’t
have
a
visible
market
share • More
than
1/2
of
the
world’s
installed
solar
capacity
is
in
Germany,
yet
that
 generates
less
than
1/2%
of
Germany’s
electric
production • The
IEA
estimates
that
by
2030
the
US
will
have
5Bwh
per
year
from
solar,
less
 than
1.5%
of
what
will
come
from
coal • At
$1/3
Trn
for
1%
of
“new”
energy
it
takes
$50
Trn
of
investment
to
replace
fossil
 fuels.

This
correlates
with
IEA’s
estimate
of
$
45
Trn
to
slow
CO2
emissions The
main
routes
open
to
us,
globally,
are
solar
and
nuclear,
wind
in
 certain
markets

  9. 9. Cost
of
switching
over
-
Solar • Photo
Voltaic
(PV)
is
relatively
inefficient
(low
energy
density)
 only
26%
of
the
Sun’s
energy
is
converted
in
single-crystal
PV
 • 40%
conversion
can
be
achieved
in
multi-layer
semiconductors,
 but
these
are
expensive
and
limited
to
space
applications • Most
of
the
cost
of
manufacture
is
in
the
silicon
itself,
which
 today
uses
the
scrap
from
the
semiconductor
industry • There
are
estimates
that
a
massive
building
out
of
solar
over
 the
next
20
years
is
going
to
require
at
least
5
years
worth
of
 fossil
fuel
production
  10. 10. Cost
of
switching
over
-
Nuclear • Nuclear
is
a
relatively
new
source
of
energy,
but
it
has
taken
40
years
 to
reach
6%
of
global
energy
production • There
are
435
operating
reactors
worldwide,
29
under
construction.

 USA
has
103,
France
59,
Japan
55
(+1
in
construction),
Russia
33
(+7) • Of
30+
countries
with
nuclear
plants
the
percentage
of
power
 generated
ranges
from
a
high
of
78%
in
France,
54%
Belgium,
39%
 Korea,
37%
Switzerland,
30%
Japan,
19%
USA,
16%
Russia • India
aims
at
26%
share
from
nuclear
by
2052,
a
10%
growth
per
year.

 China
has
4
plants,
plans
a
five-fold
increase
by
2020
and
yet
will
 achieve
only
4%
share • USA
has
potential
for
15-20
new
plants
by
2020,
it
takes
10
years
to
 bring
a
plant
to
operation
  11. 11. Cost
of
switching
over
-
Nuclear US
Perspective








 • US
capacity
=
100
Gigawatt • Utilization
rate
90%,
up
from
75%
in
the
mid
90s
  12. 12. Global
Financial
Impact






 
 • World
oil
expenditure
is
now
8%
of
GDP.

It
was
4%
last
year
and
1%
in
1998 • Energy
inefficient
countries
will
suffer
more,
particularly
those
operating
with
a
 predominant
low
capital
to
labor
ratio
(low
wage,
low
productivity) • Asia
is
vulnerable,
higher
energy
prices
reduce
trade
surpluses.

Indonesia
has
 said
that
at
$140
bl
internal
subsidies
will
use
56%
of
in
FX
reserves • According
to
the
IEA
China
will
overtake
US
energy
consumption
in
2010.

 Energy
demand
is
growing
5%
faster
than
GDP,
decreased
coal
production
 (expected
-40%
over
20
years)
will
cost
$100B
in
energy
imports • Since
July
2008,
Oil
exporters
hold
more
US
Treasuries
than
Japan.

There
is
 a
transfer
of
wealth
from
Asia
to
the
Middle
East
/
Russia
  13. 13. Global
Financial
Impact






 
 Asia’s
predicament,
increase
in
standard
of
living
increases
energy
 consumption
faster
than
GDP
  14. 14. Global
Financial
Impact
-
Developed
economies


 
 
 • US
Debt
at
500%
of
National
Income
is
unsustainable
and
will
slow
down
 investment
in
new
energies.

One
bright
spot
is
the
US’
ability
to
pay
energy
 imports
with
grain
exports
(44%
of
world’s
grain
exports,
2008
best
crop
ever)
 • Japan
still
the
5th
largest
trade
surplus
(after
Germany,
China,
Russia
and
 Saudi
Arabia)
and
by
far
the
most
energy
efficient
country,
should
be
able
to
 afford
energy
investment • Europe
relatively
well
positioned,
Germany
and
France
combine
surpluses
and
 “fossil
fuel
efficiency”,
should
be
able
to
afford
new
energy
grid.
UK
wind
power
 potential.
Complications:
Spain’s
9.5%
current
account
deficit,
Germany’s
 unwinding
of
Nuclear.

 • Scandinavia,
already
well
on
renewables
(60%
in
Norway)
  15. 15. Global
Financial
Impact
-
Oil
Exporters





 
 • Middle
Eastern
oil
consumption
growing
fast,
4.7%
in
2007 • Saudi
Arabia
now
biggest
oil
consumer
per
capita
at
more
than
38
barrels
per
year • 22%
of
Saudi
Arabia’s
production
stays
home,
up
from
16%
in
past
seven
years.
 • Over
the
next
5
years,
4%
pa
domestic
demand
growth
and
2%
production
decline
 are
expected
to
reduce
Russian
exports
by
50% • ROW
(
World
-
OPEC
and
former
Soviet
Union)
peaked
in
2003,
accounts
for
 13.7%
of
world
reserves
but
has
to
make
up
for
41%
of
world
production,
at
 increasingly
higher
production
costs
  16. 16. Cost
of
switching
over






 
 • The
scale
of
investment
is
not
unprecedented: • Manhattan
project
0.25%
of
GDP • NASA
peaked
at
0.75%
of
GDP • Vietnam
war
cost
9%
of
GDP,
Korean
war
14%,
WW
II
38% • Estimate
for
alternative
new
energy
is
an
investment
similar
to
 Vietnam
but
over
10-20
years • Level
of
social
effort
is
comparable
to
German
reunification
that
 was
paid
with
a
2.25%
surtax
  17. 17. Summary • The
debate
between
near
term
(pessimistic)
and
long
term
(optimistic)
fossil
 fuels
peak
is
irrelevant
in
the
world’s
time
scale,
we’re
“there” • We
can
expect
major
macroeconomic
trends
towards: • 
Gradual
shift
of
manufacturing
towards
energy
efficient
consumers • 
Continual
transfer
of
wealth
to
energy
exporters • 
Gradual
shift
of
spending
from
consumer
discretionary
to
energy
trades • The
problem
is
large
enough,
potentially
a
25%
hit
on
GDP,
to
require
an
 uncommon
level
of
leadership
and
social
involvement
  18. 18. A
Role
for
New
England • The
country
is
clearly
taking
consciousness
of
the
energy
challenge • Progress
towards
a
solution
will
come
from
the
private
sector
as
much
as
from
 the
public
sector • Massachusetts
is
among
the
most
advanced
states
in
energy
policy • Universities,
Government
funded
Research
and
Venture
Capital
in
the
Boston
 area
are
very
active
in
new
energy,
example
of
Biotech
industry Look
for
opportunities
in:

 
Regulatory
affairs.

Semiconductors.
 Intelligent
controls.
Systems
integration.
Information
and
 Communication
technologies
in:
Smart
grids
(networking),
road
 transport,
smart
building.

Energy
efficiency,
“behind-the-meter”….. Pierre
Jean TechPoint
Ventures pjean@techpointventures.com

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