catalysing energy technology transformations - enerclub

Energy Technology Perspectives 2017 Catalysing Energy Technology Transformations

Juho Lipponen, Head of CCS Unit, Acting Head of ETP DivisionLuis Munuera Energy Analyst ETP Division

IEA© OECD/IEA 2017

Luis Munuera, Energy Analyst, ETP Division

Spanish Energy Club, Madrid, 14 September 2017

Outline

1. IEA & some key energy trendsy gy2. ETP energy modelling 3 Energy Technology Perspectives 20173. Energy Technology Perspectives 2017

© OECD/IEA 2017

The International Energy Agency (IEA)

Founded by 17 OECD countries, including Spain, in wake of 1974 oil crisis to promote energy security, cooperation & stable markets

Leading energy market and technology analysis & data to help governments &Leading energy market and technology analysis & data, to help governments & industry make good energy choices

Increased industry involvement, led by CEO-level Energy Business Council

Management focused on a 3-pillar modernisation programme

“Opening the doors” of the IEA

Broadened approach to energy security

A global hub for clean energy technologies & energy efficiency

© OECD/IEA 2017

IEA global engagement

© OECD/IEA 2017This map is without prejudice to the status of sovereignty over any territory, to the delimitation of international frontiers and boundaries, and to the name of any territory, city or area.

Key trends and starting points

• Global energy markets are changing rapidly• Global energy markets are changing rapidlyRenewables 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 growth1.2B 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

h l b h f f l b l

© OECD/IEA 2017

• There is no single story about the future of global energyFast-paced technological progress and changing energy business models

Global CO2 emissions flat for 3 years – an emerging trend?

30

35Gt

Global energy-related CO2 emissions

20

25

30

5

10

15

5

1970 1975 1980 1985 1990 1995 2000 2005 2010 2014 2015 2016

© OECD/IEA 2017

IEA analysis shows that global CO2 emissions remained flat in 2016 for the third year in a row, even though the global economy grew.

Global CO2 emissions flat for 3 years

10Gt CO2

Average annual GDP growth 2014‐2016

+1.1% +1.8% +6.7%

‐0.2%

+7.4%+2.1% +1.2%

6

82014

2015

2016

% A l CO‐3.1%

2

4% Average annual CO2

growth 2014‐2016

‐1.9%+1.0%

+4.8%

1 1%

Japan

+1.0%

Germany China IndiaUnitedStates

Canada

‐1.1%

© OECD/IEA 2017

Two largest emitters, the US and China, have reduced emissions since 2014, with the main drivers being switching from coal to gas, renewables & nuclear in the power sector

What the IEA does on energy technology

1. Where do we need to go?

2. Where are we today?

3. How do we get there?

© OECD/IEA 2017

The potential of clean energy technology remains underutilised

S l PV d h i dEnergy storage

Solar PV and onshore wind

Other renewable powerElectric vehicles

●On track

Other renewable power Nuclear

Transport – Fuel economy of light‐duty vehicles Energy‐intensive industrial processes

●Accelerated improvement needed

Lighting, appliances and building equipment Energy intensive industrial processes

Carbon capture and storage More efficient coal‐fired power

Building construction Transport biofuels

p g●Not on track

© OECD/IEA 2017

Recent progress in some clean energy areas is promising, but many technologies still need a strong push to achieve their full potential and deliver a sustainable energy future.

EVs are still on track,

Evolution of the global BEV and PHEV stock, 2010-2016

2 000PHEV

BEV

O h

1 000

1 500

cles on the road

sand

s)

Others

Germany

France

United Kingdom

500

1 000

Num

ber o

f veh

ic(Tho

us Netherlands

Norway

Japan

USA

02010 2011 2012 2013 2014 2015 2016

China

EV Growth Rate

© OECD/IEA 2017

The global PEV car stock has reached 2 million units in circulation last year,

EVs are still on track, but need continued support

Evolution of the global BEV and PHEV stock, 2010-2016

200%2 000PHEV

BEV

O h

100%

150%

1 000

1 500

cles on the road

sand

s)

Others

Germany

France

United Kingdom

50%

100%

500

1 000

Num

ber o

f veh

ic(Tho

us Netherlands

Norway

Japan

USA

0%02010 2011 2012 2013 2014 2015 2016

China

EV Growth Rate

© OECD/IEA 2017

The global PEV car stock has reached 2 million units in circulation last year, but sales growth went from 70% last year to 40% this year, suggesting an increasing risk to start diverging from a 2DS trajectory.

Solar PV and Wind are still leading the transition…

Electricity generation of selected renewable power generation technologies

1 200PV

2 400

Onshore Wind

600

800

1 000

Wh 1 200

1 600

2 000

TWh

0

200

400

TW

0

400

800

T

02000 2005 2010 2015 2020 2025

02000 2005 2010 2015 2020 2025

Data Forecast Target

© OECD/IEA 2017

Solar PV and onshore wind electricity generation are expected to grow by 2.5 times and by 1.7 times, respectively, over 2015-20.

… but can’t make up for other low-carbon generation sources

i iTotal renewable power generation by region

35%

40%

12 000

14 000Rest of Non-OECD

BrazilHistorical Forecast Targets

25%

30%

35%

8 000

10 000

12 000

able

Gen

erat

ion

atio

n (T

Wh) India

China

OECD Europe

10%

15%

20%

4 000

6 000

hare

of

Rene

wa

Gen

era OECD Europe

OECD Asia Oceania

OECD Americas

0%

5%

0

2 000

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2025

Sh

Share of renewable generation

Share of renewable generation 2025

in the 2DS

in the 2DS

© OECD/IEA 2017

While renewable power additions keep breaking records, they need to grow much faster to reach the 2DS electricity generation targets. Progress on early-stage technologies also needs to accelerate.

Outline

1. IEA & some key energy trendsy gy2. ETP energy modelling 3 Energy Technology Perspectives 20173. Energy Technology Perspectives 2017

© OECD/IEA 2017

The global challenge: Climbing down the mountain

30

40

Milla

res

“Getting to the top is optional.

Getting down is mandatory.”Ed Viesturs

20

30

CO2

Ed Viesturs

10

Gt

© OECD/IEA 2017

01900 1925 1950 1975 2000 2025 2050

2DS

And technology transitions in the energy sector are slow

Data from Smil (2010) and IEA (2015), 2DS scenario

© OECD/IEA 2017

Material demands…

Industry

Fuel/heat delivery

Space heatingWater heating

Lighting…Fuel conversion

Passenger mobilityFreight transport

Buildings

Freight transport…

Transport

Electricity T&D

© OECD/IEA 2017

ETP-TIMES (bottom-up optimisation)

From now to 2060, in 28-36 regions around the world

© OECD/IEA 2017

How far can technology take us?

Technology area contribution to global cumulative CO reductions

40

Efficiency 40%

Technology area contribution to global cumulative CO2 reductions

Efficiency 34%

Global CO2 reductions by technology area

Reference Technology Scenario – RTS

0 200 400Gt CO2 cumulative reductions in 2060

20

30

CO2

Efficiency 40%

Renewables 35%

Fuel switching 5%

Efficiency 40%

Renewables 35%Fuel switching

Efficiency 34%

Renewables 15%

Fuel switching 18%

2 degrees Scenario – 2DS

10

20

GtC Fuel switching 5%

Nuclear 6%

CCS 14%

5%Nuclear 6%

CCS 14%

Fuel switching 18%

Nuclear 1%

CCS 32%

Beyond 2 degrees Scenario – B2DS

02014 2020 2030 2040 2050

CCS 14%CCS 32%

© OECD/IEA 2017

Pushing energy technology to achieve carbon neutrality by 2060 could meet the mid-point of the range of ambitions expressed in Paris.

The future is electric

Global final electricity demandChange in final electricity

40 000

50 000

Statistics

RTS

2DS

Global final electricity demand demand in 2060

6 000

8 000

30 000

TWh

2DS

B2DS

0

2 000

4 000

Wh

Transport

Agriculture

Services

10 000

20 000

‐4 000

‐2 000

T

Residential

Industry

01971 1980 1990 2000 2010 2020 2030 2040 2050 2060

‐8 000

‐6 000

2DS vs RTS B2DS vs 2DS

© OECD/IEA 2017

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.

Electricity demand

Ch i fi l l i i

4 000

6 000

8 000

Transport

Change in final electricitydemand in 2060

40 000

50 000Transport

Agriculture

4 000

‐2 000

0

2 000

4 000

TWh

Agriculture

Services

Residential

Industry10 000

20 000

30 000

TWh

g

Services

Residential

‐8 000

‐6 000

‐4 000

2DS vs RTS B2DS vs 2DS

y

0

10 000

RTS 2DS B2DS

2014 2060

Industry

© OECD/IEA 2017

Enhanced energy efficiency in buildingsEnergy use in the buildings sector under different scenarios

2014(123 EJ)

RTS 2060(157 EJ)

B2DS 2060(112 EJ)

Electricity ElectricityElectricity

112 EJ157 EJ123 EJ 31% 54% 61%

Fossil fuels Traditional biomass Renewables Other Electricity

© OECD/IEA 2017

Efficiency technologies can provide the same level of comfort while reducing energy demand despite doubling floor area.

Can we push up the low-carbon power deployment pace?Average capacity additions in different periods in the B2DSg p y p

2030‐2060

Last year

2017‐2030

Last Decade

0 100 200 300 400 500 600 700GW per year

Fossil CCS (Incl.BECCS) Nuclear Hydro Wind Solar PV Other renewables

© OECD/IEA 2017

Recent successes in solar and wind will have to be extended to all low-carbon solutions, and brought to a scale never experienced before.

Decarbonising electricity

Global electricity generation B2DS Generation mixOther

Wind

STE500

600Global electricity generation B2DS

50 000

60 000Generation mix

80%

100%Renewables

Bioenergy with CCS

Solar PV

Biofuels and waste

Hydro

Nuclear

300

400

gCO2/kW

h

30 000

40 000

TWh

40%

60%Nuclear

Coal with CCS

Nuclear

Coal with CCS

Coal

Oil0

100

200

0

10 000

20 000

20%

Coal w/o CCS

Gas with CCS

Gas (incl. oil) w/o CCS

‐10 0002014 2020 2030 2040 2050 2060

Natural gas with CCS

Natural gas

CO2 intensity‐ 100

00 0%RTS 2DS B2DS

2014 2060

© OECD/IEA 2017

Renewables dominate electricity generation in the 2DS and B2DS. Thanks to bioenergy with CCS, the average global CO2 intensity falls below zero after 2050.

Power sector key for deep decarbonisation of the energy systemCO2 reductions in the power sector in the B2DS relative to the 2DSCO2 educt o s t e po e secto t e S e at e to t e S

© OECD/IEA 2017

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.

How much investments are needed in the power sector?

Average annual investments

1 600

1 800

2 000

n

Electricity networks

BECCS

Average annual investments

800

1 000

1 200

1 400

USD

billion

Renewables

Fossil CCS

Nuclear

200

400

600

800Gas w/o CCS

Coal w/o CCS

0

200

Statistics RTS 2DS B2DS RTS 2DS B2DS RTS 2DS B2DS RTS 2DS B2DS

2015 2017‐2030 2031‐2040 2041‐2050 2051‐2060

© OECD/IEA 2017

Total investments of USD 65 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.

Renewables: Becoming the dominant electricity source

© OECD/IEA 2017

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.

CCS: Slow progress today, but huge potential in the future

© OECD/IEA 2017

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.

Nuclear: Doubling of global capacity in the B2DS

© OECD/IEA 2017

With its share reaching 15% by 2060 in the B2DS, nuclear provides around 10% of the cumulative CO2reductions to move from the RTS to the B2DS and requires 5% of the power sector investments in the B2DS.

Infrastructure needs for the transformation

1959 2014 2060?

© OECD/IEA 2017

Systems Integration is essential for a sustainable energy future

Centralised fuel production,power and storagepower and storage

© OECD/IEA 2017

We need to move away from a one-directional energy delivery philosophy

Renewable energy resourcesCo-generation

Systems Integration is essential for a sustainable energy future

Centralised fuel production,power and storagepower and storage

Distributed

Smart energysystem control

Distributedenergy resources

EVSurplus heat

H vehicle2

© OECD/IEA 2017

EV

We need to move away from a one-directional energy delivery philosophy to a digitally-enhanced, multidirectional and integrated system that requires long-term planning for services delivery.

A different need for power sector infrastructure in deep decarbonisation scenarios

1 400

1 600 Other non‐OECD

Middle East and Africa

600

800

1 000

1 200

SD/year

Other developing Asia

Latin America (excl. Chile)

India

0

200

400

600

Generation T&D Generation T&D Generation T&D

Billion

US

China

Other OECD

EUGeneration T&D Generation T&D Generation T&D

2016 2017‐2050 2050‐60 US

© OECD/IEA 2017

Investments in power sector infrastructure accelerate in the final decade to 2060

Where distribution networks are hubs for smartness and integration

60%

70%

80%

250

300

350

Distribution

30%

40%

50%

150

200

250

S (2015) billion

Transmission

0%

10%

20%

0

50

100

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 20 25 30 35

US

Share ofdistribution

200

200

200

200

200

200

200

200

200

200

201

201

201

201

201

201

202

202

203

203

© OECD/IEA 2017

Infrastructure becomes more distributed

Installed battery storage and costs under various scenariosInstalled battery storage and costs under various scenarios

700

800

900

1000

50 000

60 000All other sectors

400

500

600

700

30 000

40 000

USD

/kWh

GWh

EV batteries

Battery costs,

100

200

300

400

10 000

20 000

U 2DS

Battery costs, B2DS

002000 2015 2030 2045 2060 2015 2030 2045 2060

2DS B2DS

© OECD/IEA 2017

Batteries experience a huge scale-up in the B2DS, with EV battery markets leading other sectors in size

While the impact of storage could be disruptive, it remains highly uncertain

Globally installed non pumped hydro Gl b ll i ll d l i i (G )Globally installed non-pumped hydro electricity storage (GW)

200

250

3,5

4,0

Globally installed electricity storage (GW)

150

200

W2,0

2,5

3,0

GW

50

100

GW

0 5

1,0

1,5

G

02016 2020 2025

non-PHS Storage Pumped Hydropower Storage

0,0

0,5

2011 2014 2016

© OECD/IEA 2017

Positive market and policy trends supported a year-on-year growth of over 50% for non-pumped hydro storageBut near-term storage needs will remain largely answered by existing or planned pumped hydro capacity

Smart infrastructure can make demand part of the solution

2060

With standard charging

watts

2045

2030

Today

Gigaw

2060

With smart charging

0 Hours

© OECD/IEA 2017

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

Transmission investment needs to be scaled up, particularly international interconnectors

Central AmericaCentral AmericaEurope and North Africa

h

© OECD/IEA 2017

This map is without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area

Rigorous analysis of current technology and potential deployment trends in key regions

South East Asia North East Asia

Investment in transmission grids needs to accelerate to reach COP goals

Transmission investment needs to be scaled up, particularly international interconnectors

© OECD/IEA 2017

Transmission will account for 40% of all electricity grid investment needs; half of all transmission lines will have to be replaced between now and 2040

Can we change the landscape of transport ?Vehicle sales and technology shares under different scenarios

Sales of Light-duty Vehicles (millions)

200

2 500

3 000

B2DS stock of LDVs

F l ll

80

120

160

1 500

2 000

2 500

lion vehicles

Fuel cell

Battery electric

Plug‐in electric

Hybrids

0

40

80

2015 RTS 2060 B2DS 20600

500

1 000

2015 2060

Mil CNG/LPG

Diesel ICE

Gasoline ICE

2015 RTS ‐ 2060 B2DS ‐ 2060 2015 2060

© OECD/IEA 2017

The transportation sector already experiences technological change,but won’t shed its oil dependency without assertive policies

Heavy duty transport: no easy routes

© OECD/IEA 2017

Capillary lines are a mature technology than needs policy driven rollout whereas fuels cells still need innovation and R&D but less infrastructure

Can we produce enough sustainable biomass ?Bioenergy use by sector

125

150

Transport

gy y

75

100

EJ

Industry

Buildings

25

50 Agriculture

Fuel transformation

0RTS 2DS B2DS

2014 2060

Power

© OECD/IEA 2017

Around 145 EJ of sustainable bioenergy is available by 2060 in all our decarbonisation scenarios, but gets used differently between the 2DS and the B2DS.

Can we produce materials more sustainably ?Energy use and direct CO2 emissions in various industrial sectors under different scenarios

10

12

250

300Other industries

Pulp and paper

4

6

8

100

150

200

Gt C

O2

EJ

Aluminium

Chemicals and petrochemicals

0

2

4

0

50

100

Cement

Iron and steel

2014 2030 2060 2030 2060

RTS B2DSDirect CO2 emissions

© OECD/IEA 2017

Effective policies and public-private collaboration are needed to enable an extensive roll out of energy and material efficiency strategies as well as a suite of innovative technologies.

A challenging task ahead for CCS

A t f CO t d d i i

10 000

12 000Rest of world

EU

Amount of CO2 captured under various scenarios

6 000

8 000

Mt C

O₂

EU

IND

CHN

2 000

4 000CHN

MEA

USA

20

40

Mt C

O₂

02030 2060 2030 2060

Today 2DS B2DS

USA0Today

© OECD/IEA 2017

CCS is happening today,CCS is happening today, but needs to be ramped up hundreds of times to achieve long-term goalsThe role for CCS varies based on local circumstances.

Opportunities for policy action

• Approaches to technological innovation have to be tailored to the development status of specific• Approaches to technological innovation have to be tailored to the development status of specific low-carbon power technologies. RD&D has to take an integrated view of power systems in its design and operation, exploring stronger linkages among electricity, heat and mobility.

• Strong carbon pricing policies are needed. On their own, however, carbon prices are unlikely to be St o g ca bo p c g po c es a e eeded. O t e o , o e e , ca bo p ces a e u e y to besufficient to deliver the necessary investment 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 unsustainable in the 2DS and B2DS by 2040-45 increasing the risk that coal plants built in the near term become stranded assets At a45, 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. Fostering research for higher capture rates at coal-fired plants equipped with CCS may extend their use under more stringent climate targets.

• BECCS in power generation needs to be demonstrated on a commercial scale to gain experience.

© OECD/IEA 2017

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 improving the efficiency of smaller plants, which are likely to be required due to constraints on bioenergy sourcing.

Conclusions

• Early signs point to changes in energy trajectories helped by• 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• 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-• Each country should define its own transition path and scaleup its RD&D and deployment support accordingly

• Achieving carbon neutrality by 2060 would require• Achieving carbon neutrality by 2060 would require unprecedented technology policies and investments

• Innovation can deliver but policies must consider the full

© OECD/IEA 2017

Innovation can deliver, but policies must consider the full technology cycle, and collaborative approaches can help

Global clean energy RD&D spending needs a strong boost

40

ion 40

ion

Global clean energy RD&D spending

40

ion Mission Mission

Top 3 IT company R&D spenders

20

30

D (201

6) billi

20

30

D (201

6) billi

20

30

D (201

6) billi

InnovationInnovation

0

10

2012 2015

USD

0

10

2012 2015

USD

0

10

2012 2021

USD

2012 2015

Private Public Top 3 firms

2012 2015


2012 2021


© OECD/IEA 2017

Global RD&D spending in efficiency, renewables, nuclear and CCS plateaued at $26 billion annually, coming mostly from governments.

Global RD&D spending in efficiency, renewables, nuclear and CCS plateaued at $26 billion annually,coming mostly from governments.

Mission Innovation could provide a much needed boost.

IEA Technology Collaboration Programmes (TCPs)

Spain participates in 17 TCPs:Spain participates in 17 TCPs:38 TCPs five groups: Spain participates in 17 TCPs:- Cross‐cutting: 1- End use and energy efficiency: 7- Fossil fuels: 3

Spain participates in 17 TCPs:- Cross‐cutting: 1- End use and energy efficiency: 7- Fossil fuels: 3

38 TCPs, five groups:• Cross‐cutting activities (2)• End use and energy efficiency (14)

F il f l (5) Fossil fuels: 3- Renewables: 6 Fossil fuels: 3

- Renewables: 6 • Fossil fuels (5)• Fusion power (8)• Renewable energy and hydrogen (9)

Close to 6,000 experts

More than 2,000 topics to date

Nearly 300 public or private organisationsNearly 300 public or private organisations

52 countries

38 Technology Collaboration Programmes

4 i t t l i ti

© OECD/IEA 2017

4 intergovernmental organisations

This map is without prejudice to the status of sovereignty over any territory, to the delimitation of international frontiers and boundaries, and to the name of any territory, city or area. Experts from countries shown above participate in activities of the Technology Collaboration Programmes.

catalysing energy technology transformations - enerclub

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