1Network Sustainable Development TU Delft

19 February 2009

Dr. Ruud WeijermarsDr. Ruud Weijermars

Opleidingsdirecteur GeotechnologieOpleidingsdirecteur Geotechnologie

Solving Solving Energy Strategy Energy Strategy

DilemmasDilemmas

2

Ruud Weijermars (Brief CV)

• 1998-Present: Executive Education. Leadership & Strategy Development for Executives in Upstream & Downstream Energy Business. Clients StatoilHydro in MPBE program; Gasunie in GU2012 program.

• 2004-Present: Manage Geotechnology Educational Portfolio (0.5 FTE).

• Published >10 papers dedicated to Integrating & Connecting Technology and Management issues. Published 1 book on Corporate IQ. Client driven research focusing on Management optimization techniques.

• 1978, 1983: BSc & Msc University of Amsterdam, Earth Sciences.

• 1984-1998: Research Scientist & Associate Professor in Structural Geology & Tectonics, Assignments in Uppsala University (PhD), ETH Zurich, UT Texas, King Fahd University of Petroleum and Minerals.

• Published 60 technical papers; two technical monographs.

Technology

Management

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Exploring the Dilemma/Trilemma

What are the best Decisions in energy strategy?

• Non-linear thinking, with aim to balance the proportions of affected systems (two or more, as in a trilemma or "impossible trinity").

• Trilemma of the Earth - “3E Trilemma”:

Optimizing Economy-Energy-Environment System

Economy

Energy Enviro

nment

Product

Quality of Commons

Demand

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Exploring the Dilemma/Trilemma

What are the best Decisions in energy strategy?

• Non-linear thinking, with aim to balance the proportions of affected systems (two or more, as in a trilemma or "impossible trinity").

• Trilemma of the Earth - “3E Trilemma”:

Optimizing Economy-Energy-Environment System

Economy

Energy Enviro

nment

Product

Quality of Commons

Demand

Energy Crisis

Climate

Crisis

Financial Crisis

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Trilemma Solving Challenge

Economy

Energy

Environment

Energy Consumption

Rate

GDP Growth Rate

Impact Rate

I=P*A*T (Ehrlich, 1971)

I - Impact on Environment

P - Population PressureA – Affluence LevelT - Technology

‘Cleanliness’

Ie= S*E*Te (this talk)

Ie - Impact on Environment due to Energy consumpt

S – Size of Economy, Energy ConsumptionE – Implicit Burden of Energy SourceTe - Energy Technology ‘Cleanliness’

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Trilemma Solving Challenge

Economy

Energy

EnvironmentEnergy

Consumption Rate

GDP Growth Rate

Impact Rate1

2

3

I=P*A*T (Ehrlich, 1971)

I - Impact on Environment

P - Population PressureA – Affluence LevelT - Technology

‘Cleanliness’

Ie= S*E*Te (this talk)

Ie - Impact on Environment due to Energy consumpt

S – Size of Economy, Energy ConsumptionE – Implicit Burden of Energy SourceTe - Energy Technology ‘Cleanliness’

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Economic Growth Rates

Economic Growth commonly seen as GDP Growth ->

What are GDP drivers?

• Demographic trends – age, population size and distribution

• Institutional capacity – to allow technology to be implemented• Technology – technological innovation

• Needs affordable and stable energy supply

• GDP per head increases as affluence grows

1

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$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

1820 1870 1913 1950 1973 1998

US Japan China India Africa Latin America

Source: Angus Maddison

GDP per Head1990 dollars

Fuelled by cheap energy, Technology driven (Steam Engine)

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gy World GDP grows with Population Numbers

P opulation billions

0

1

2

3

4

5

6

7

8

1700 1800 1900 2000 2100

World G DP T rillionsR eal Int $ 1990

0

10

20

30

40

50

1700 1800 1900 2000 2100

Fuelled by cheap energy, technology driven (Steam Engine)

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IIASA, Lutz IIASA, Lutz et alet al., 1997, 2001., 1997, 2001

Updated Population Projections

95%95%UncertaintyUncertaintyIntervalsIntervals

Peaking at 9 Billion

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gy Global percentage Growth GDP indicates

slowing(1960-2003)

1970

3.6 Bill 1980

4.5 Bill

1990

5.3 Bill 2000

6 Bill

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gy Financial Crisis: World GDP stops growing!

Assume temporary contraction…

P opulation billions

0

1

2

3

4

5

6

7

8

1700 1800 1900 2000 2100

World G DP T rillionsR eal Int $ 1990

0

10

20

30

40

50

1700 1800 1900 2000 2100

Fuelled by cheap energy, technology driven (Steam Engine)

?

IIASA, Lutz IIASA, Lutz et alet al., 1997, 2001., 1997, 2001

?

World Population Clockhttp://www.ibiblio.org/lunarbin/worldpop

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When people make Money… What do they spent it on?

GDP Growth Effects

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1800 1850 1900 1950 2000

Km

/day

-cap

10-1

10-2

100

101

102

Met

er/d

ay-

cap

100,000

10,000

1,000

100

10

All modes

Buses + cars

Rail

2-Wheelers

Horses

Air

TGV

Railways

Waterways

Growth in Motorized Mobility(km/day per capita, data for France)

(1800-2000)

Gruebler, 2001

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Source: UN and DOE EIARussia data only for 1992-2004

energy use grows with economic development

US

Australia

Russia

BrazilChina

India

S. Korea

Mexico

Ireland

Greece

France

UKJapan

Malaysia

energy demand and GDP per capita (1980-2004) – 25 step time series

0

50

100

150

200

250

300

350

400

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000

GDP per capita

Pri

mary

En

erg

y p

er

cap

ita (

GJ)

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Energy Consumption Rates

Energy Consumption drivers & choice sources:

• Primary supply – availability and acceptability• Final price – fixed costs, transmission & downstream costs, taxes• Versatility & quality – potential applications

Observations

• Still dominated by Fossil Energy Resources• Phasing in of alternatives required• Challenges in matching Supply & Demand for Fossil Energy to fill the Transition Gap

2

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gy World Primary Energy Consumption by Fuel

1970-2030

0

50

100

150

200

250

300

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Oil

Natural GasCoal

38%

25%

8%Renewables

Nuclear

24%

5%

Share of WorldTotal

History Projections

(qu

ad

rillio

n

Btu

)

International Energy Outlook 2005

2030

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gy Start & Growth of North Sea Oil Production

UK Fields

0

60

80

100

120

140

1975 1980 1985 1990 1995 2000 2005 2010

Cummulative Production 20 billion barrels (Gb)

Expected Production 5 to 7 Gb

40

20

Million

ton

s o

il a

nu

ally

1st Oil Shock

11

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0

60

80

100

120

140

1975 1980 1985 1990 1995 2000 2005 2010

Cummulative Production 20 billion barrels (Gb)

Expected Production 5 to 7 Gb

2 Gb

22

33 44

0

20

40

60

80

2nd Oil Shock

Nym

ex O

il P

rice

1st Oil Shock

Real Price

Nominal Price

4011

20

Million

ton

s o

il a

nu

ally

1st Gulf War

2nd Gulf War

Start & Growth of North Sea Oil Production UK Fields

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Oil passing Life-cycle Peak

Natural Gas passing Life-cycle Peak

World Oil & Gas Production Trends

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2003 2010 2020

8%

11%

24%

15%

5%

33%

4%

8%

11%

14%

21%

10%

23%

6%

9%

10%

21%

8%

30%

16%

525 - 560

456

590 - 640

National production for domestic use

Algeria

Norway

Netherlands

Russia

other non-EU imports

other EU imports

Supply Gap

advanced projects

billion m³ per year

LNG share10% 15% 17%

EUProduction

145

185-220

100

-120 Norway

Nig

eria

25-60

Middle EastLibya

15-40Central

Asia

85-1

15

16-3512-25

5-10

15-2

0 Egypt

Alg

eria

Natural Gas Security & Transportation ChallengesBalance 2010-2020

Projected Demand

Expected Supply

Russia

billion m³ per year

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Suppliers bargaining power (gas finite and scarcity)

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Primary Russian Pipelines to EU

But Even Gas is Finite

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Heart problems…

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Transition from Fossil Energy to Renewable Recources

Renewables

Non-Conventional Oil Potential excluded

Transition Gaps

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Solids

Liquids

Grids

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1920 1930 1940 1950 1960 1970 1980 1990 2000

Per

cen

t

SolidsCoal + Traditional renewables

LiquidsOil, Bitumen

GasNatural Gas

Shift in Relative Share of Primary Energy Carriers(1920-2000 USA Data)

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Illustrative Energy Supply Projection

Scenario C1

Scenario C2

1850 1900 1950

0

20

40

60

80

100

2000 2050 2100

1850 1900 1950

0

20

40

60

80

100

2000 2050 2100

Oil

Gas

Oil

Gas

Coal

Other

Solar

Traditional renewables

Other

Nuclear

Solar

Biomass

BiomassNuc.

Traditional renewables

Hydro

Hydro

Coal

Perc

ent

Perc

ent

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gy Scenario Characteristics

Half Millennium Span

SE

ref

1800 SE T 1900 SE T 2000 SE T 2100 SE T 2200 2300

Populatn (billion)

250Mill

1 1.6 6 9 8 8

GDP(trillion$)

0.5 4 2 1872

36 2144

72 1.4201

100 120

Primary Energy(ExaJoule or 1018J)

1 13 13 40 40 440 440 500 500 400 400

Coal %Oil &Methan %Nuclar %Renew %

100

5---

95

0.65

12.5

1.5

0.08

60101-

29

244

0.4

11.6

0.040.252.5

0.09

24382558

10516711022

35.2

0.010.00

50.010.040.02

1515121038

75756050

190

0.010.010.010.020.00

5

10--

2070

5--

2570

Historic Facts Future Guess

Ie - Impact on Environment due to Energy consumption

S – Primary Energy TotalE – Implicit Burden of Energy SourceTe - Energy Technology ‘Cleanliness’

Ie= S*E*T

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gy Scenario Characteristics

Half Millennium Span

SE

ref

1800 SE T 1900 SE T 2000 SE T 2100 SE T 2200 2300

Populatn (billion)

250Mill

1 1.6 6 9 8 8

GDP(trillion$)

0.5 4 2 1872

36 2144

72 1.4201

100 120

Primary Energy(ExaJoule or 1018J)

1 13 13 40 40 440 440 500 500 400 400

Coal %Oil &Methan %Nuclar %Renew %

100

5---

95

0.65

12.5

1.5

0.08

60101-

29

244

0.4

11.6

0.040.252.5

0.09

24382558

10516711022

35.2

0.010.00

50.010.040.02

1515121038

75756050

190

0.010.010.010.020.00

5

10--

2070

5--

2570

Historic Facts Future Guess

Ie - Impact on Environment due to Energy consumption

S – Primary Energy TotalE – Implicit Burden of Energy SourceTe - Energy Technology ‘Cleanliness’

Ie= S*E*TBut where in the Value Chain lies the Real Burden of Impact of each Primary Energy source?

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How does Energy Flow through our Economy?

US Energy Flow -1999Net Primary Resource Consumption 104.3 Exajoules (US takes 25% of Global Energy Consumption!)

77.2104.3

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Earthlings 2008

Consumpions

Over the Year

Per Person/ Year

Per Person/ Day

Total Primary Energy

440 ExaJoule

76.7 billion Joules

210,000 KJoules

Coal 6.5 billion tons

1 ton coal 2.8 kg Coal

Oil 30 Giga bbls

4.6 bbls or 734 liters oil

2 L Crude

Gas 115 trillion cf 3.2 tr cub m

492 cub m 1.34 cub m Gas

What is your share?What can you Do to reduce?

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gy Environmental Impact Rates

Impact drivers:• Ecological footprint growth of industrialization• Population growth• Primary Energy Sources, as mixes shift• Final Energy Conversion Technology

Observations• Our principal focus often neglects Tragedy of Commons• Environment bears the burden of our presence & actions• We need to act• Technological innovation can help improve cleanliness• Improving ESAT is only one step

3

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Acceleration of Fossil Energy Consumption Global Change Crisis

Present Focus on CO2 but Sulfur Oxides also Bad for our Health;

Nitrogen Oxides

Carbon Intensity tC/GJCoal OilMethan

25.820.115.3

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0

100

200

300

400

500

600

700

1980 1990 2002 2010 2020 2030

Mt

of C

O2

0

30

60

90

120

150

million

Oil CO2 emissions Vehicle stock (right axis)

Vehicle Stock and Emissions in China

China’s vehicle stock alone will quadruple in the next 30 years, leading to a threefold increase in

CO2 emissions

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China’s coal consumption resultsin 5.5B tons CO2 emissions annually

China’s Production and Consumption of Coal

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Quality of Commons (+ or - ?)

Exploring the Strategy for reducing Impact of Energy Choices

Focus is Energy Technology Innovation

Economy & Policy

EnergyTechnology

Product

Demand

1800

1900

2000

2100

2200

Environment

Wood

+C

oal

+C

il

+ G

as

+

Ren

ew

ab

les

+ B

ette

r?0.5 billion people (1500 AD)

1 billion people1.6 billion people

6 billion people9 billion people

Vision of the

Future

Year 2300

What do you Think?

Speed of Innovatio

n

X billion people

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Letter Horse Hay Agriculture Sunlight

TelegraphSteam

LocomotiveCoal Coal mine Coal fields

Interntet, Mobile Phone

ICE Automobile

Gasoline Oil refinery Crude oil

Convergence Energy, Mobility

InformationHydrogen

Natural gas / fossils

SMR, decarbonization

Electrolysis

Sunlight

Wind

Uranium

1770s

1870s

1970s

2070s

Energy Services Through Time

Biomass

Electricity

Electricity

Electricity

David Scott, 2004

Exploring the Strategy

Focus is Energy Technology Innovation

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Now

5-10 Years

10-20 Years

20-100 Years

Current Focus

– Existing, proven technologies

– Focus on low-cost / high-impact technologies

Time

Energy Potential

Smart Metering

Solar Farms

Solar Water Heaters

Wave Energy

ILLUSTRATIVE

Wind Farms

Efficient Lighting

Conventionals

Tommorow’s Focus

– ‘Novel’ Technologies

The Near Future

– Technologies in concept development stage

The Medium-Term Future

– Technologies yet to be improved

Geo-thermal energy

Solar Panels

New Technologies

Renewables Technology Challenges- Supply & Efficiency Visions -

The Far Future

– Technologies yet to be discovered

300 Years +

Wind Mills

Home Insulation

Transport Efficiency

Local Power Generation

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Geotechnology Vision for Education (*)

• Integrate new research fields (**) into the curricula.

• Focus on broad AND deep education; Counter HR potential of emerging countries (BRIC).

• Leave pure technocratic fields to emerging countries; aim to educate resource managers.

• Further integrate and broaden curricula to make them more relevant & attractive for a wider usergroup.

(*) Outcome of Geotechnology Brainstorm Day, 12-01-2009

(**) e.g., Non-Conventionals & Certain Renewables such as Geothermal Energy

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gy DAP - Delft Aardwarmte Project.

TuDelft krijgt geothermie

AD

C

2 km

2 km

B

•Initiatief van de studenten

•4,9 Miljoen m3 gas per jaar besparing voor TU Delft.

•4000 ton Co2 besparing

•Boren in december 2009

AcquitBusiness Developmentbv

AcquitBusiness Developmentbv

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Experiences in the lifetime operation of

a geothermal systembyGregory Bahlen (BSc)

Education and student Key in the process.

Layering and properties of the

Delft Sandstone Formation

by

Jeroen van Eldert (BSc)

Drilling hazards for the DAP geothermal wellsbySteven Leijnse (BSc)

Doublet Spacing for the “Delft

Aardwarmte Project”

by

Chris A. den Boer (BSc)

Integrated Reservoir ModelbyPeter F. Smits (MSc)

Geothermal Energy in the TU DelftbyRoeland Jan Dijkhuis (BSc)

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Contact details

Sustainable and innovative solutions, integrated in research and education, for CO2 neutral heating

using geothermal energy

Delft Aardwarmte Projectp/a Mijnbouwkundige

Vereeniging

Stevin weg 1

2628 CN Delft

Nederland

Tel +31 (0)15-2782566

Bank: 24.91.74.103

KvK: 27307367

dap@tudelft.nl

www.tudelft.nl/dap

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