Fuels for the future
Jeroen van der Veer
864 words
26 June 2009
The Courier-Mail
English
Copyright 2009 News Ltd. All Rights Reserved
The right energy programs will drive us to a cleaner future, writes Jeroen van der Veer
'By 2030 we will need to invest $5.5 trillion solely in renewable energy'
WE STAND at the early dawn of a new energy future. It will be powered by alternative energy and cleaner fossil fuels.
If governments adopt the right rules and incentives, by the middle of this century renewable sources will provide nearly 30 per cent of the world's energy. Society will be on the road towards sustainable mobility.
The world's highways will rumble and whir with vehicles powered by all manner of energy: petrol, diesel (yes, still there), electricity, biofuels, natural gas and hydrogen.
Conventional diesel and petrol cars will go increasingly far on every litre of fuel; biofuels will account for up to 10 per cent of liquid transport fuel.
Our Shell scenario-makers think that by 2020 up to 15 per cent of new cars worldwide could be hybrid electrics, some of them capable of plugging in to recharge their batteries.
After 2030, fuel-cell vehicles powered by hydrogen will be a small but growing part of the fleet. By 2050, more than a billion extra vehicles are expected on the worlds road's -- more than double today's total.
Greater variety of fuel choices will be a boon for consumers. Different fuels will be stronger in different regions. In South America, biofuels will likely predominate. In Brazil, ethanol from sugar cane already supplies more than 40 per cent of demand for petrol.
China, meanwhile, plans to expand production and use of hybrid and electric vehicles, tapping its vast coal deposits to generate power.
As more vehicles go electric, the environmental footprint of power generators will become even more important.
Wind, solar and hydro power will account for 30 per cent of electricity generation by 2030, up from about 18 per cent today. Many new coal-fired power plants are expected to capture CO2 emissions and store it safely underground, rather than pump it into the atmosphere.
Plants increasingly will turn coal into a gas, rather than burn it. They will then burn the gas to generate power, or use it as raw material for a variety of chemical products, while CO2 will be captured and stored. Such integrated plants will begin to resemble refineries.
Likewise, refineries can convert heavy oils to gas -- and use the gas to produce hydrogen -- and generate heat and electricity, while capturing and storing the CO2. Indeed, fossil fuels, coal, oil and natural gas, will continue to provide more than half the world's energy in 2050.
So, while the world races to build up alternative fuels, it must also find new sources of fossil fuels, including unconventional ones such as oil sands. And we must accelerate efforts to make fossil fuels cleaner. None of this will be easy, or cheap. Industry and government regulations must change on a huge scale and at an unprecedented pace.
The International Energy Agency says by 2030 we will need to invest $5.5 trillion solely in renewable energy. That's like buying more than 18,000 Boeing 747 jumbo jets at $300 million apiece (only about 14,000 have been built since its introduction in 1970).
Billions more must go into upgrading electricity transmission networks to handle increased demand and the on-and-off power generated by wind and solar.
Much of this money will come from private companies, but governments will need to continue using tax credits and other incentives to encourage the growth of renewables.
They are still small relative to the world's overall energy needs. Including hydro power, renewables account for about 7 per cent of global energy.
Wind currently supplies about 1 per cent, with approximately 70,000 turbines.
Biofuels now also supply about 1 per cent.
New energy sources generally take at least 25 years to reach significant scale.
To illustrate the challenge, in the case of wind, the world will need another million to 1.5 million turbines, covering an area nearly the size of France, to reach 10 per cent of the electricity generated by 2030.
That means expanding today's worldwide turbine production of about 15,000 a year to just under 100,000 a year by 2030.
Energy companies are already preparing for the future, increasing production of natural gas, the cleanest fossil fuel, investing in renewables, such as sustainable biofuels, and researching ways to capture CO2 and store it safely underground.
But the size of the challenge means that government should do its part to encourage society's shift to a new energy system. For instance, new technologies with great promise to reduce CO2 emissions will require initial government support to achieve quickly the scale necessary to have real impact.
One critical step is to put a price on greenhouse gas emissions -- doing so in all leading countries, not just a few.
Competition among energy sources will drive innovation, keep energy affordable and increase global energy security. The race is on.
Jeroen van der Veer is the departing chief executive of Royal Dutch Shell.