David Hone at Sustentavel 2011
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This document discusses the challenges of transitioning to alternative energy sources and reducing fossil fuel emissions. It makes three key points: 1) Fossil fuel usage continues to rise significantly despite progress in alternative energy, and alternative energy is not growing fast enough to keep up with increasing energy demand. 2) There are physical limits to how quickly new energy technologies can be deployed at scale. Governments need long-term, stable policy frameworks to encourage changes to energy systems over time. 3) A carbon price policy can drive the implementation of emissions reductions projects over time, while complementary policies are needed to support new technologies like carbon capture and storage through research, demonstration projects, and preparation for deployment. However, additional policies
David Hone at Sustentavel 2011
- 1. The Green RacePast experience, learning for the futureDavid HoneSenior Climate Change AdviserGroup CO2
- 2. 2
- 3. Is this really happening?
- 4. Fossil fuel use grows – emissions continue to riseData: BP Statistical Review of World Energy
- 5. Progress is being made in developing alternative energyData: BP Statistical Review of World Energy
- 6. But alternative energy is hardly keeping upData: BP Statistical Review of World Energy
- 7. But alternative energy is hardly keeping upData: BP Statistical Review of World Energy
- 8. The story in the 21st centuryLarge-scalehigh-impacteventsºC6 -5 -4 -3 -2 -1 -0 -Global temperature riseHigherVeryLowFossil energy87.0%market shareFossil energy adds 2.3 btoe p.a.Non-fossil adds 0.3 btoe p.a.Fossil energy86.8% market share1990Data: BP Statistical Review of World Energy
- 9. Energy Technology Deployment(Shell scenario projections also shown)
- 10. “Laws” of Energy DeploymentLaw 1When technologies are new, they go through a few decades of exponential growth, which in the 20th Century was characterized by scale-up at a rate of one order of magnitude a decade (corresponding to 26% annual growth). Exponential growth proceeds until the energy source becomes ‘material’ - typically around 1% of world energy.Law 2After ‘materiality’, growth changes to linear as the technology settles at a market share. These deployment curves are remarkably similar across different technologies.
- 11. Our response is to “adjust” the system and add layer upon layer of policy, which can raise costsEU Emissions Trading System delivers a carbon price into the EU economyCost to society$
- 12. Our response is to “adjust” the system and add layer upon layer of policy, which can raise costsUK Carbon Floor PriceEU Emissions Trading System delivers a carbon price into the EU economyCost to societyRenewable Energy TargetsMember State Coal Policy$
- 13. Our response is to “adjust” the system and add layer upon layer of policy, which can raise costsUK Carbon Floor PriceEnergy Efficiency DirectiveNuclear Energy PoliciesEU Emissions Trading System delivers a carbon price into the EU economyCost to societyUK Carbon Reduction CommitmentRenewable Energy TargetsLocal carbon taxesMember State Coal Policy$
- 14. Our response is to “adjust” the system and add layer upon layer of policy, which can raise costsUK Carbon Floor PriceEnergy Efficiency Directive“Green” politics and policiesNuclear Energy PoliciesEU Emissions Trading System delivers a carbon price into the EU economyCost to societyUK Carbon Reduction CommitmentRenewable Energy TargetsLocal carbon taxesMember State Coal Policy$
- 15. What does this mean ?There are physical limits to the rate at which new technologies can be deployed.
- 16. Governments need to design a robust and long term policy framework with a clear objective to encourage change in the energy system.
- 17. Patience is a virtue.A policy framework to considerBCost of abatement€ / tonne CO2eAbatementMTonne CO2eCAEnergy efficiency measures, land use practices - primarily driven by standards and regulation.Higher cost technologies still moving down the cost curve. Needs a carbon price with additional support.Large scale abatement within the electricity sector, transport fuels and some areas of industry. Needs a carbon price to drive deployment.
- 18. A policy framework to considerBCost of abatement€ / tonne CO2eAbatementMTonne CO2eCarbon price policy drives project implementation from left to right across the abatement curve CA
- 19. A carbon price in the economyGoods and services pass into the economy, with the price of CO2 embedded$CO2Emitters buy allowances from or pay tax to the government$$Revenue passesthrough the treasury and may be used to offset costs to the consumer, e.g. tax reduction.
- 20. New technologies19Discover & DevelopMust be well funded to drive innovation.Demonstration (at scale)A critical step in the early commercialization of a technologyDeploymentDriven by new features and price.Benefit to deployEarlier deployment through demonstration1008060Technology cost4020Alternative product01101001000Number of installations
- 21. New energy technologies – e.g. CCS20Discover & DevelopNeed to refocus and rapidly expand R&D.DemonstrationNo early adopters and high start-up costs so this phase will need help.DeploymentTypically driven by the CO2 marketCO2 priceEarlier deployment through demonstration1008060Technology cost4020Power generation without CCS01101001000Number of installations
- 22. A structured policy approach is needed21
- 23. A structured policy approach is neededBroad energy production and use R&D support
- 24. Even modest first steps are proving very challenging23
- 25. New technology mechanisms evolve (e.g. for CCS)China adopts carbon pricing mechanismsCDM evolves to includes sectorsCDMLinkages develop between all systems and more systems appearForestry mechanismJapan technology standardsNorwegian ETSExpanding EU-ETSEU-ETSDanish-ETSNew Zealand ETSUK-ETSAustralian ETS / carbon priceState and/or Federal carbon pricingGlobal shipping “cap-and-trade”Linking can enable a global carbon market . . . 2000 2005 2010 2015 2020 2025Pre-Kyoto Kyoto Post 2012Linkage framework
- 26. Energy politics and policies in the 21st CenturyReducing emissions needs to remain a clear and unambiguous objective.
- 27. Carbon price mechanisms are effective and can deliver the necessary reductions.
- 28. Layering of additional policies can add to the cost and weaken the carbon price signal.
- 29. A clear long term policy framework is required.
- 30. Complimentary policies can enable new technologies (e.g. CCS) and ready them for deployment.
- 31. Constantly changing the framework undermines its purpose.http://blogs.shell.com/climatechange