Energetika XXISaint Petersburg, 14 November 2019

Prof. Dr. Manfred Hafner- Johns Hopkins University - School of Advanced International Studies (SAIS-Europe) - SciencesPo - Paris School of International Affairs (PSIA),- Fondazione Eni Enrico Mattei (FEEM)

Global Decarbonization:Challenges and Options

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Nov. 2018: The IPCC Special Report on “Global Warming of 1.5°C” presented new scenarios:1.5°C scenarios require halving emissions by ~2030, net-zero by ~2050, and negative thereafter

Towards a Zero Carbon World

An additional 2 bn people worldwide means growing mobility requirements, rising electricity needs for homes and other buildings, and increasing energy supplies to power industry

The World’s population will rise by 25% by 2040,reaching about 9 billion people

5) Energy demand: there is a major shift happening between developed and developing countries

5) Energy demand: there is a major shift happening between developed and developing countries

6) The engine of energy demand growth moves to South Asia

Primary energy demand, 2035 (Mtoe)

China is the main driver of increasing energy demand in the current decade, but India takes over in the 2020s as the principal source of growth

4%

65%

10%

8%

8%5%

OECD

Non-OECDAsia

MiddleEast

Africa

Latin America

Eurasia

Share of global growth2015-2035

480

Brazil1 540

India

1 000Southeast

Asia

4 060

China

1 030

Africa

2 240UnitedStates 440

Japan

1 710

Europe1 370

Eurasia

1 050MiddleEast

Source: IEA, New Energy Policy Scenario

Oil

Advancedeconomies

Developingeconomies

Gas

Advancedeconomies

Developingeconomies

Diverging demand patterns in advanced and developing economies

The increase in demand would be twice as large without continued improvements in energy efficiency, a powerful tool to address energy security & sustainability concerns

Coal

Advancedeconomies

Developingeconomies

IEA New Energy Policies: Change in global energy demand, 2017-2040

-600

-300

0

300

600

900

1 200

1 500

Renewables & nuclear

Mtoe

Advancedeconomies

Developingeconomies

Ren

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Nuclear

Industry

Other

Power

Cars

Other

Petro-chemical

Cars

Power

Other

Power

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Technological progress and digitalization has already revolutionized the international energy markets

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Technological progress is not limited to RES : upstream oil&gas is going digital !

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Oil&Gas Service Companies are partnering with IOCs and NOCs in the digital space to improve reliability and efficiency.

This results in more recoverable resources and lower cost.

The ongoing unconventional Gas and Oil Revolution in the US

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US Total Oil Supply

The US Tight Oil revolution

continues

Different trends in oil & gas import dependency

In the context of a more diversified global gas market, dependence on imported oil and gas rises in many countries,

though the US swims against the tide

Net oil & gas import dependency in selected countries

0%

20%

40%

60%

80%

100%

20% 40% 60% 80% 100%

Oil imports

Gas Imports

United States

ChinaIndia

European Union

Japan

2010

2035

20%Gas Exports

Source: IEA

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High and increasing oil prices are not the norm…

Global Coal demand is expected to flat-line

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Source: BP Energy Outlook 2019

Global Coal demand flat-lines, with falls in China and OECD, offset by gains in India and other emerging Asian countries

China invests heavily in Renewables and Gas to address local pollution

Smog in Beijing !

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Renewable capacity growth by country/region (2000-23)

Annual net electricity capacity additions by source (2001-17)

Source: IEA, 2018

Renewable energies are building up massively

…but we are just talking about the additional generation

Electricity generation growth by fuel (2006-23)

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we need to reduce the existing CO2 emitting power plants

Electrification is ongoing……but still mainly based on coal and gas

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Electricity demand has increased by around 70% from 2000 to 2017, while the power mix remains dominated by coal and gas,

even with growth in renewables

Source: IEA, 2018

Coal in the EU: One Quarter of the electricity –> Three Quarters of the Emissions

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In the EU we have successfully invested heavily in RES, but not significantly reduced coal consumption

(this is bad for the climate, the environment, and human health)

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27 years of climate policy have not delivered !

1992 Earth Summit in Rio the Janeiro

24 COPs : (COP1 in Berlin 1995 to COP 24 in Katowitce in 2018)

COP 25 in Madrid 2019),

COP-3: Kyoto (1997),

COP-21: Paris (2015)

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In the EU between 1990 and 2016:- GDP: +54%- Energy use: - 2%- GHG -22%

CO2 emissions in 2017 and 2018 have increased strongly

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Over the last two years, CO2 emissions have increased by more than 500 MtCO2 per year, equivalent every year to the total emissions from international aviation.

The increase in emissions was driven: by higher energy consumption resulting from a robust global economy, as well as from weather conditions in some parts of the world that led to increased energy demand for

heating and cooling.

2014 2015 2016 2017 2018

Source: IEA, 2019

We need to get to zero emissions by 2050 and then negative !

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EU GHG emissions trajectory in a 1.5°C scenario

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Source: European Commission (November 2018) – «A Clean Planet for all: A European long term vision for a prosperous, modern, competitive and climate neutral economy»

LULUCF – Land Use, Land-Use Change and Forestry

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So

So

Decarbonization: More growth, more efficiency, more low carbon

GDP, Primary Energy and CO2 pathway to low-carbon

Decoupling GDPand energy

Decarbonisation of energy mix

2010 2015 2020 2025 2030 2035 2040 2045 20500

50

100

150

200

250

300

350

400

GDP

TPED

CO2 in-tensity (ESCII)

Inde

x 20

10=

100

Source: IEA

Energy transitions have always existed, but they take time…

Source:Vaclav Smil

… and we are running out of time !

Darum geht zu allen Völkern […] und lehrt sie alles zu befolgen was ich Euch geboten habe.

Seid gewiss: Ich bin bei euch alle Tage bis ans Ende der Welt.

Disruptive Change

Source: Campanale, Carobntracker

Digitalization will change our lives and allow further decarbonization

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2-3 April, 2019 - Milan ‘Roadmap towards Total Decarbonization in 2050‘ Workshop

100+ experts attended from all over the world

Drafting & consultation process shared with 150+ experts from key public and private institutions

https://roadmap2050.report/static/files/roadmap-to-2050.pdf

Roadmap 2050: A Manual for Nations to Decarbonize by Mid-Century

Power- Progressive

phase out of traditional sources

- Mix of RE solutions

Industry- Focus on

hard-to-abate segments Cement, Iron and Steel, Petrochemicals

- Direct & Indirect Emissions

Transport- Focus on

Roadways, Railways, Airways and Navigation (short and long haul)

Buildings- Guidelines for

new buildings- Retrofitting

strategies

Promoting policy instruments and technological solutions across energy-intensive sectors to address multiple objectives:

o Decarbonizationo Environmental Sustainabilityo Economic prosperity Poverty reduction➔o Social inclusion “leave no one behind”

Actions interconnectivity

o No single policy or technology can achieve decarbonization by itself

o combined efforts and technology mix to amplify effects and process acceleration

Roadmap 2050: Systemic, inclusive and flexible approach

Renewable energy sources

Zero-carbon technologies

Public-Private investments

Natural and engineered systems

Mitigation-Adaptation strategies

Centralized-Decentralized solutions

Actions in different geographies

R&D activities funded by Public and Private actors

Complementarities

Roadmap 2050: Systemic, inclusive and flexible approach

Roadmap 2050: Six Pillars for Decarbonization

Zero-carbonElectricity

Electrification of end uses

GreenSynthetic Fuels

SmartPowerGrids

MaterialsEfficiency

Sustainableland-use

Power generation from renewables – cost decreases

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Watch China: massive deployment expected for offshore wind, CSP and batteries

Flexibility options

37 Source: IRENA

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Electricity storage:

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Depending on the storage needs there are different solutions

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We need better and cheaper batteries and a tremendous upscaling development

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There are high expectations on further battery developments and deployments Issues:

- upscaling - market concentration- rare earth material,

Smart Grids and Internet of Things (IoT)

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From unidirectional to multidirectional electricity systems.

Sector Coupling – Power-to-Gas (or Power-to-X)

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The high capex need to be compensated by technological improvements

Sector Coupling – Grid-to-Vehicles-to-Grid

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Source: www.cenex.co.uk

Deployment of electric vehicles is expected to surge => huge opportunity for grid flexibility. Use of vehicle batteries for grid services involves some issues , e.g.:

o impact of high frequency cycles on battery life, o massive need of vehicle grid connection

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Source: Global CCS Institute

… but strong challenges remain about: Upscaling, Costs, Public acceptability.

CCS/CCU allows to decarbonize fossil fuel use

BECCS – Bio Energy and Carbon Capture and StorageDACCS – Direct Air Carbon Capture and Storage

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BECCS and DACCS act as carbon sinks: BECCS: energy generation but high land use DACCS: high energy consumption but low land use (interesting if low electricity

prices)

• BECCS: CO2 is absorbed by photosynthesis in plants.

• Bioenergy allows to produce electricity.

• CO2 is then captured after combustion, and then stored underground.

• DACCS: CO2 is captured from ambient air with chemical absorbtion and is then stored undergroung

In order to go to net-zero CO2 we need to address all sectors

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Industry and Transport (and buildings) are more difficult to decarbonize… but we need to decarbonize also those !

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(32%)

(25%)

(36%)(12%)

(22%)

(40%)

Difficult sectors/sub-sectors to decarbonize are:

- Industry (cement, iron & steal, chemicals & petrochemicals)

- Transport (heavy duty road vehicles, shipping and aviation)

- Buildings (refurbishing old buildings [1bn], net-zero buildings for new buildings [+1bn by 2050])

Source: IEA (2017)Energy Technology Perspectives

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Source: Energy Transition Commission (2019)

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Hydrogen can be produced out of Natural Gas or out of electricity:- Steam Methane Reforming + CCS - Pyrolysis (Methane cracking) - Electrolysis using zero carbon electricity

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Individual behavioral changes can also make a change

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Internalizing externalities !

But also:

individual behavioral changes can make the

difference:

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Source: CE Delft

- bicycle,- public transportation,- car sharing,- Etc.

Conclusions (a few words on Governance)1) We need to decarbonize (zero carbon by 2050 and then negative) and we are

running out of time !

2) We need «just», «inclusive» and «holistic» approaches to create «ownership» for all stakeholders, in order to avoid back-lashes, carbon leakages, etc. (We need to tackle the socio-economic and international dimension of the Energy Transition)

o People (including the poor, creating awareness, schools, Fridays for Future) -> behavioural changeso Companies -> public corporate responsibilityo Countries -> we need a convincing narrative finding winning arguments for all

developed and emerging countries [decarbonization will bring about vast co-benefits of public health, especially through reduced air pollution],

consumer and producer countries [e.g. H2] poorest countries (e.g. Sub-Saharan Africa) are not the problem, they can be given added flexibility

3) Market mechanisms alone seem not to deliver => we may need mandates with pricing as accompanying measures o Create a competitive market place for Innovation, provide public-private R&D for priority challenges, but

mandates for deploymento E.g: phasing out of incandescent light bulbs, coal Power Plants, o E.g. “The Montreal Protocol” of 2012: Ending the Reign of Fluorocarbonso Mandates: Low Carbon Standards not picking Technologies

(eg: mandate full fuel cycle «low carbon vehicle standards», not «electric cars»)

4) We may need to seriously think about «Adaptation» and how to help the poor countries

Thank you very much for your attention

manfred.hafner@feem.it