SMART CITIES – SMART FINANCING: FORGING RESILIENT ENERGY AND
CLIMATE SOLUTIONSD R . D A V I D J . J H I R A D
C O P E N H A G E N , M A Y 5 , 2 0 1 1
MISSION OF A SMART CITY
• A Smart City must address global energy and climate challenges:• Mitigate global greenhouse gas
emissions through efficient and low-carbon energy technology, and be resilient to climate change impacts
• Minimize petroleum dependence, ensure energy security, and enhance energy reliability
• Attract capital investment into low or zero-carbon technologies
• Reduce global energy poverty
THE RELIANCE ON CCS IN EMISSION REDUCTION SCENARIOS
Source: IEA
THE RELIANCE ON CCS IN EMISSION REDUCTION SCENARIOS
Source: IEA
THE RELIANCE ON CCS IN EMISSION REDUCTION SCENARIOS
In this Scenario almost 2/3 of all fossil fuel generation globally is fitted with CCS by 2050. Is this realistic?
Source: IEA
THE IMPORTANCE OF COAL –RECOVERABLE RESERVES
Source: MIT
COAL – AN ISSUE OF EFFICIENCY
• World wide coal fired power plant average efficiency is 30%(480 gcoal/kWh electricity)
• State of the art Danish “Ultrasupercritical” power plant efficiency can reach 45% plus (320 gcoal/kWh electricity).
• (Nordjylland Power Plant and Avedore Power Plant)• Increase of efficiency of a power plant from 30 to 45%
• reduces the consumption of coal (from 480 to 320 g/kWhe)
• consequently reduces the CO2 emissions by 33%• Future technology development can increase thermal power
plant efficiency to 50%
Increase the efficiency of coal fired power plants
The Sugar Cubes: Relative CO2 index emissions of power plants around the world
Europeaverage
100
World average
136
Denmark
83
USA average
127
COAL – AN ISSUE OF EFFICIENCY
Nordjylland Power Station unit 3
Fuel: Imported coalCoal consumption: 120 t/hrHP-Steam: 972 t/hr/290 bar/582°CIP1-Steam: 886 t/hr/ 80 bar/580°CIP2-Steam: 766 t/hr/ 23 bar/580°CBoiler efficiency: 94.8%Plant net efficiency: 47.1%Availability: > 98%
Vattenfall Nordic, DenmarkStart of operation: 1998Boiler design: BWE
STATE OF THE ART COAL FIRING:
Avedøre II, DONG Energy, Denmark, 1067 t/h
• Burners converted (2002):Gas/Oil => Gas/Oil/ Wood dust
• Burner size: 50 MWth on wood dust• To be used together with gas• Suitable for flexible mechanisms under
the Kyoto Protocol
RETROFIT FOR FUEL CHANGE
LEVELIZED ELECTRICITY COSTS (CENTS/KWH)
0 5 10 15 20 25 30
Wind-Off
Wind-On
Solar PV
Solar CSP
Biopower
Geothermal
Nuclear
NGCC
NGCC-CCS
Coal
Coal CCSBaseload
Intermittents
9-155-9
7-104-7
6-1310
8-10
8-2014-30
4-105-18
National Academy, America’s Energy Future, 2009
SMART ELECTRIC POWER GRIDS
• Reduce peak demand by managing customer behaviour and hence demand
• Balance power reliability and quality needs
• Encourage application of energy efficient technologies
• Improve overall efficiency of the transmission and distribution grid
• Integrate intermittent renewable energy technologies
Source: IEA
DISTRICT ENERGY –“TRI-GENERATION CHP”
District Cooling could greatly increase the energy efficiency of very densely populated cities such as New York City, replacing the need for air conditioning and hence greatly reducing electricity consumption.
Sources: Cenergy and Logstor
EFFICIENCY IMPROVEMENT
32
48
90
0
10
20
30
40
50
60
70
80
90
100
US average USC Coal USC + District energy
Elec
trica
l and
Ther
mal
Effi
cien
cy in
%
Source: Logstor
DRIVERS OF CHANGE: DEMAND SHIFT TO THE EAST
DRIVERS OF CHANGE: EMERGING MARKET VEHICLE OWNERSHIP
SUSTAINABLE MOBILITY IN A SMART CITY
• A Smart City incentivizes and supports:• Non-motorized transport through
prioritization of bicycle and pedestrian infrastructure development
• Transit-oriented development of residential and commercial areas
• Use and efficiency of public transport (e.g. Bus Rapid Transit)
• Affordable transport solutions for everyone
• But puts in place disincentives for:• Individual car use through measures such
as congestion charging, limited parking, and vehicle taxes
• Urban sprawl through proper zoning
THE PROBLEM OF CONGESTION
And higher population density means lower average traffic speed, in turn increasing vehicle fuel consumption
Source: OECD JTRC Source: hofstra.edu
NEGATIVE ECONOMIC IMPACT
-12.0 -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0
Mexico City
Sao Paulo
Buenos Aires
Bangkok
Santiago
Dakar
Land and ParkingCongestionAccidentsNoiseAir PollutionRoad Revenues
10.7
7.1
8.4
5.7
5.9
5.6
1.0
1.6
Source: World Business Council on Sustainable Development, 2001.
THE POST-PETROLEUM CITY AS AN ULTIMATE GOAL ?
Masdar City Concept in Abu Dhabi
BUS RAPID TRANSIT COMPONENTS
• Dedicated lanes and bus stops with easy access
• Local, Express and Feeder Services
• Tickets integrated across whole system and affordable for general public
• Reliable user information system
• Clean buses with low emissions, e.g. using CNG
• Integrated into zoning to enable transit-oriented hubs
ELECTRIC VEHICLES
• Electric Vehicles are entering the main stream
• Range anxiety largely unjustified in urban context
• But they still face many problems:• Battery life• Only as clean as plant that
generated electricity• No solution to congestion
problem
OTHER TRANSPORT OPTIONS –“PIE IN THE SKY”
Dubai Metro: Driverless train underground and on viaducts
Intelligent cars communicating with each other could increase road capacity
Google invested of $1m in pedal-powered monorail technology
Fuel Cell-powered cars as part of a hydrogen-based economy
COPENHAGEN: A TOD MODEL CITY
• The greater Copenhagen “Five-Finger-Plan” is a great example of Transport-Oriented Development (TOD)
• Envisaged in 1947• 5 “fingers” of railway
extending from city center• Housing built along railway,
no further than 1km from nearest station
• Green wedges in between fingers
Source: Danish Ministry for the Environment
DENMARK’S ENERGY DEVELOPMENT
0
0,2
0,4
0,6
0,8
1
1,2
0
50
100
150
200
250
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Qua
drill
ion
BTU
Billi
on U
SD
Nominal GDP bil USD
Total Primary Energy Consumption (Quads)
0
20000
40000
60000
80000
100000
120000
140000
0
1000
2000
3000
4000
5000
6000
7000
8000
1980 1985 1990 1995 2000 2005
Heat
Pro
duct
ion
in TJ
Elec
trici
ty O
utpu
t in
GW
h
Municipal waste
Primary solid biomass
Wind
Heat Production (right Axis)Sources: EIU, IEA, and EIA
EMERGING ECONOMIES WILL NEED THE MOST INVESTMENT
$33 trillion of investment is needed in global energy-supply infrastructure to 2035,with just over half going to power generation
0 1 2 3 4 5 6 7
OECD North AmericaChina
OECD EuropeLatin America
AfricaIndia
Other AsiaMiddle East
RussiaOther E. Europe/Eurasia
OECD Pacific
Trillion dollars (2009)
Power Infrastructure
Oil EPT
Gas EPT
Coal Mining
Biofuels
Cumulative investment in energy-supply infrastructure in the New Policies Scenario
HOW MUCH INVESTMENT WILL GO INTO RENEWABLES?
In the New Policies Scenario, cumulative investment in renewables for electricity totals $5.7 trillion over 2010-2035; another $335 billion goes into biofuels
Cumulative investment in renewables in the New IEA Policies Scenario, 2010-2035
0 300 600 900 1 200 1 500
China
European Union
United States
India
Brazil
Japan
Russia
Canada
Indonesia
Billion dollars (2009)
ElectricityBiofuels
WHY DO WE NEED SMART CITIES? – RISE OF MEGACITIES
More megacities mean higher population densities
Source: S.A.P.I.E.N.S.
1.4 billion people lack access to electricity – achieving universal modern energy access requires investment of only $36 billion per year over the next two decades
NUMBER OF PEOPLE WITHOUT ACCESS TO ELECTRICITY (MILLION)
INVESTMENT NEEDS FOR UNIVERSAL MODERN ENERGY ACCESS BY 2030
Achieving the more ambitious goal of universal modern energy access by 2030 requires investment of only $36 billion per year over the next two decades
GETTING SWF INVOLVED
ENGAGE SOVEREIGN WEALTH FUNDS(SWF’S)
\.
In October 2010, Columbia University organized a conference focusing on the uniqueaspects of SWFs and long term, state owned investors.
• The conference took an innovative approach: it provided a forum for debate between investors,academics, and policy makers on the global benefits SWFs present
• More than 30 funds representing more than $7 trillion attended
• A second conference will take place in 2011 in Paris (Oct 17th and 18th) with:• Confirmed keynote addresses by Professor Joseph Stiglitz and Vice President Al Gore• New themes: barriers to SWF investment, monetization of long term horizon, sustainableInvestment • Working sessions, which will provide opportunities for in depth discussion
• New partners are supporting the project (The Rockefeller Foundation is hosting a private seminar in May 2011) and we are planning a 2012 conference in Beijing in 2012.
Sov Sovereign Wealth Funds and Long-Term Investors
Sovereign Wealth Fund Research Initiative
SWFs and Long-Term Investors
State Oil Fund of the Republic of Azerbaijan
Pension Reserve Fund Chile
PREVI
New Zealand Superannuation Fund
PREDICA
TIAA-CREF
OMERS
National Fund for Hydrocarbon Reserves MauritaniaAbu Dhabi Investment AuthorityAbu Dhabi Investment Council
Caisse des Depots et ConsignationsAustralian Future Fund
Government Pension Fund Global Norway
Caisse de depot et placement du Quebec
Kuwait Investment AuthorityGIC
Cassa Depositi e Prestiti
Namibian Government Investment Pension Fund
Korea Investment corporation
Central Bank of Brazil
International organizations
Sovereign Wealth Fund Research Initiative
International Organizations
Oxford SWF Project
Rockefeller Foundation
Roubini Global EconomicsClinton Climate Initiative
Environmental Defense Fund
International Monetary Fund
Carbon Disclosure Project
International Finance Corporation
Bruegel
United Nations
NEXT STEPS
• Assemble a core of SWFs willing to allocate a fraction of theirassets to triple bottom line investments
• Establish an International Low Carbon Investment Fund, with adeal flow of tens of billions of dollars in the first year
• Establish a supranational umbrella structure to monitor,regulate, and guide SWF triple bottom line investments
• Identify a high-profile personality to support the idea• Build off the working session that involved six major funds at
the Columbia University conference in October 2010
Top Related