The IEA’s solar PV projections are more misleading than ever

The IEA is still grossly underestimating solar PV in its modelling

This post is a quick update of previous analysis.

Back in 2013 I pointed out how far from reality the IEA’s projections of renewables deployment were.  They persistently showed the rates of installation of renewables staying roughly constant over the following 20 years at whatever level they had reached at the time of the projection being made.  In reality, rates of installation were growing strongly, and have continued to do so (see chart).  Rates of installation are now a factor of nearly four times greater than the IEA was projecting back in 2013 – they were projecting installation rates of about 28GW for 2018, where in fact around 100 GW were installed in 2017[1] and an estimated 110GW in 2018.

I have returned to the topic since 2013 (see links at the bottom of this post), as have many others, each time pointing out how divorced from reality the IEA’s projections are.

Unfortunately, the IEA is continuing with its approach, and continuing to grossly understate the prospects for renewables.  Auke Hoestra has recently updated his analysis of the IEA’s solar PV projections to take account of the latest (2018) World Energy Outlook New Policies Scenario (see link below chart – in addition to chart data his post also contains a valuable commentary on the issue).  The analysis continues to show the same pattern of obviously misleading projections, with the IEA showing the rate of solar PV installation declining from today’s rate until 2040.  Of course eventually the market will mature, and rates of installation will stabilise, but this seems a long way off yet.

IEA projections for solar PV in successive World Energy Outlooks compared with outturn

http://zenmo.com/photovoltaic-growth-reality-versus-projections-of-the-international-energy-agency-with-2018-update/

In 2013 I was inclined to give the IEA the benefit of the doubt, suggesting organisational conservatism led to the IEA missing a trend.  This no longer seems tenable – the disconnect between projections and reality has been too stark for too long.  Instead, continuing to present such projections is clearly a deliberate choice.

As Hoekstra notes, explanations for the disconnect have been advanced by the IEA, but they are unsatisfactory.  And as renewables become an ever-larger part of the energy mix the distortions introduced by this persistence in misleading analysis become ever greater.

There is no excuse for the IEA persisting with such projections, and none for policy makers taking them seriously.  This is disappointing when meaningful analysis of the energy transition is ever more necessary.

Adam Whitmore -21^st January 2019

https://onclimatechangepolicydotorg.wordpress.com/2013/10/08/why-have-the-ieas-projections-of-renewables-growth-been-so-much-lower-than-the-out-turn/

https://onclimatechangepolicydotorg.wordpress.com/2015/02/27/the-ieas-central-projections-for-renewables-continue-to-look-way-too-low/

https://onclimatechangepolicydotorg.wordpress.com/2015/06/27/the-ieas-bridge-scenario-to-a-low-carbon-world-again-underestimates-the-role-of-renewables/

https://onclimatechangepolicydotorg.wordpress.com/2017/09/26/underestimating-the-contribution-of-solar-pv-risks-damaging-policy-making/

[1] The BP Statistical Review of World Energy shows a total of 87GW installed in 2017 https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2018-renewable-energy.pdf

Satellite data can help strengthen policy

Advancing satellite technology can improve monitoring of emissions.  This will in turn help make policies more robust.

There are now around 2000 satellites in earth orbit carrying out a wide range of tasks.  This is about twice as many as only a decade ago[i].   Costs continue to come down, technologies are advancing and more organisations are making use of data, applying new techniques as they do so.   As progress continues, satellite technologies are positioned to make a much larger contribution to monitoring greenhouse gas emissions.

Tracking what’s happening on the ground

Satellites are critical to tracking land use changes that contribute to climate change, notably deforestation.   While satellites have played an important role here for years, the increasing availability of data is enabling organisations to increase the effectiveness of their work.  For example, in recent years Global Forest Watch[ii] has greatly increased the range, timeliness and accessibility of its data on deforestation.  This in turn has enabled more rapid responses.

This is now extending to other monitoring.  For example, progress on construction projects can be tracked over time.  This enabled, for example, monitoring the construction of coal plant in China, which showed that construction of new plants was continuing[iii].

Monitoring operation and emissions

As the frequency with which satellite pictures are taken increases, it becomes possible to monitor not only construction and land use changes, but also operation of individual facilities.  For example, it is now becoming possible to track operation of coal plant, because the steam from cooling towers is visible[iv].  This can in turn allow emissions to be estimated.

More direct monitoring of emissions continues to develop.  Publicly available data at high geographic resolution on NOx, SOx, particulates and in the near future methane[v] are becoming increasingly available[vi].   For example, measuring shipping emissions has traditionally been extremely difficult, but is now becoming tractable, at least for NOx.

Measuring methane is especially important.  Methane is a powerful greenhouse gas with significant emissions from leakage in natural gas systems.  Many of these emissions can easily be avoided at relatively low cost, leading to highly cost-effective emissions reduction.

Monitoring CO₂

CO₂ is more difficult to measure than other pollutants, in part because it disperses and mixes in the atmosphere so rapidly.  However, some of the latest satellites have sophisticated technology able to measure CO₂ concentrations very accurately[vii].  These cover only quite small areas at the moment but are expected to scale up and allow more widespread direct monitoring.  The picture below shows a narrow strip of the emissions from a coal plant in Kansas, based on data from the Orbiting Carbon Observatory 2 (OCO‐2) satellite.  These estimates conform well with reported emissions from the plant.

Figure 1:  Satellite data showing CO₂ emissions for a power plant in Kansas

Note: the red arrow shows prevailing wind direction.

Space agencies around the world are now exploring how such monitoring can be taken further.  For example, the EU has now asked the European Space Agency to design a satellite dedicated to monitoring CO₂.  It is expected to be operational in the 2020s.[viii]

Work is also underway to improve data analysis, so that quantities of emissions can be attributed to individual plants.  Machine learning holds a good deal of promise here as a way of finding and labelling patterns in the very large amounts of data available.  It is likely soon to be possible to monitor emissions from an individual source as small as a medium size coal plant, taking account of wind speed and direction and so forth.

Implications

These developments will make actions much more transparent and subject to inspection internationally.  Governments, scientists, energy companies, investors, academics and NGOs can monitor what is going on.  Increasingly polluters will not be able to hide their actions – they will be open for all to see.  This is turn will make it easier to bring pressure on polluters to clean up their act, potentially including, for example, holding countries to account for their Nationally Determined Contributions (NDCs) under the Paris Climate Agreement.

Improved transparency and robust data are not in themselves solutions for reducing climate change.  Instead, they play an important role in an effective policy architecture.  And the do so with ever increasing availability and quality.  This gives cause for optimism that policies and their implementation can be made increasingly robust.

Adam Whitmore – 12^th September 2018

Thanks to Dave Jones for sharing his knowledge on the topic .

[i] https://www.ucsusa.org/nuclear-weapons/space-weapons/satellite-database#.W5Y-7ZNKhcA, https://allthingsnuclear.org/lgrego/new-update-of-ucs-satellite-database,

[ii] https://www.globalforestwatch.org/about

[iii] See here http://www.climatechangenews.com/2018/08/07/china-restarts-coal-plant-construction-two-year-freeze/ for examples

[iv] https://twitter.com/matthewcgray/status/1032251925515968512

[v] http://www.tropomi.eu/data-products/methane

[vi] https://www.scientificamerican.com/article/meet-the-satellites-that-can-pinpoint-methane-and-carbon-dioxide-leaks/

[vii] https://agupubs.onlinelibrary.wiley.com/doi/10.1002/2017GL074702

[viii] https://www.bbc.co.uk/news/science-environment-43926232

 

A limited but important medium term future for CCS

CCS has not yet been implemented on a scale needed to make a substantial difference to climate change.  However it continues to look necessary for the longer term, with more projects necessary to get costs down.

A decade or so ago many people expected rapid development of Carbon Capture and Storage (CCS) as a major contributor to reducing global emissions.  I was one of them – at the time I was working on developing CCS projects.  However, the hoped-for growth has not yet happened on the scale needed to make a material difference to global emissions.

The chart below shows total quantities captured from large CCS projects, including 17 that are already operational and a further 5 under construction.  The quantity of emissions avoided are somewhat lower than the captured volumes shown here due to the CO₂ created by the process itself.[i]

Between 2005 and 2020 capture will have grown by only around 25 million tonnes p.a..  This is only 0.07% of annual global CO₂ emissions from energy and industry.  In contrast the increase in wind generation in 2017 alone reduced emissions by around 60 million tonnes[ii], so wind power reduce annual emission more from about 5 months’ growth than CCS will from 15 years’ growth – though it took wind power several decades to get to this scale.    

Chart 1: Growth of large CCS projects over time

Source: Analysis based on Global Carbon Capture and Storage Institute database[iii]

The picture gets even less promising looking at the types of projects that have been built.  The chart below shows the proportion of projects, measured by capture volume, in various categories.  The largest component by some distance is natural gas processing – removing the CO₂ from natural gas before combustion – which accounts for over 60% of volumes.  This makes sense, as it is often a relatively low cost form of capture, and is often necessary to make  natural gas suitable for use.  However, it will clearly not be a major component of a low carbon energy system.  Much of the rest is chemicals production, including ethanol and fertiliser production.  These are helpful but inevitably small. There are just two moderate size power generation projects and two projects for hydrogen production, which is often considered important for decarbonising heat.

Furthermore, most of the projects separate out CO₂ at relatively high concentrations or pressures.  This tends to be easier and cheaper than separating more dilute, lower pressure streams of CO₂.  However it will not be typical of most applications if CCS is to become more widespread.

Chart 2:  Large CCS projects by type (including those under construction) 

Source: Analysis based on Global Carbon Capture and Storage Institute database

This slow growth of CCS has been accompanied by at least one spectacular failure, the Kemper County power generation project, which was abandoned after expenditure of several billion dollars.  Neither the circumstances of the development or the technology used on that particular plant were typical.  For example, the Saskpower’s project at Boundary Dam and Petra Nova’s Texas project have both successfully installed post combustion capture at power plants, rather than the gasification technologies used at Kemper County.  Nevertheless, the Kemper project’s failure is likely to act as a further deterrent to wider deployment of CCS in power generation.

There have been several reasons for the slow deployment of CCS.  Costs per tonne abated have remained high for most projects compared with prevailing carbon prices.  These high unit costs have combined with the large scale of projects to make the total costs of projects correspondingly large, with a single project typically having a cost in the billions of dollars.  This has in turn made it difficult to secure from governments the amount of financial support necessary to get more early projects to happen. Meanwhile the costs of other low carbon technologies, notably renewables, have fallen, making CCS appear relatively less attractive, especially in the power sector.

The difficulties of establishing CCS have led many to propose carbon capture and utilisation (CCU) as a way forward.  The idea is that if captured CO₂ can be a useful product, this will give it a value and so improve project economics.  Already 80% by volume of CCS is CCU as it includes use of the CO₂ for Enhanced Oil Recovery (EOR), with project economics supported by increased oil production.

Various other uses for CO₂ have been suggested.  Construction materials are a leading candidate with a number of research projects and start-up ventures in this area.  These are potentially substantial markets.  However the markets for CO₂ in construction materials, while large in absolute terms, are small relative to global CO₂ emissions, and there will be tough competition from other low carbon materials. For example, one study identified a market potential for CCU of less than two billion tonnes p.a. (excluding synthetic fuels) even on a highly optimistic scenario[iv], or around 5% of total CO₂ emissions.  It is therefore difficult to be confident that CCU can make a substantial contribution to reducing global emissions, although it may play some role in getting more early carbon capture projects going, as it has done to date through EOR.

Despite their slow growth, CCS and CCU continue to look likely to have a necessary role in reducing some industrial emissions which are otherwise difficult to eliminate.  The development of CCS and CCU should be encouraged, including through higher carbon prices and dedicated support for early stage technological development.  As part of this it remains important that more projects CCS and CCU projects are built to achieve learning and cost reduction, and so support the beginnings of more rapid growth.  However in view of the lead times involved the scale of CCS looks likely to continue to be modest over the next couple of decades at least.

Adam Whitmore – 25^th April 2018

[i] CO₂ will generally be produced in making the energy necessary to run the capture process, compression of the CO₂ for transport, and the rest of the transport and storage process.  This CO₂ will be either emitted, which reduces the net gain from capture, or captured, in which case it is part of the total.  In either case the net savings compared with what would have been emitted to the atmosphere with no CCS are lower than the total captured.

[ii] Wind generation increased by a little over 100 TWh between 2016 and 2017 (Source: Enerdata).  Assuming this displaced fossil capacity with an average emissions intensity of 0.6 t/MWh (roughly half each coal and gas) total avoided emissions would be 60 million tonnes.

[iii] https://www.globalccsinstitute.com/projects/large-scale-ccs-projects

[iv] https://www.frontiersin.org/articles/10.3389/fenrg.2015.00008/full

Prospects for Electric Vehicles look increasingly good

Electric vehicles update

Indicators emerging over the last 18 months increase the likelihood of plug-in vehicles becoming predominant over the next 20 years.  However, continuing strong policy support is necessary to achieve this.

Several indicators have recently emerged for longer term sales of plug-in vehicles (electric vehicles and plug-in hybrids).  These include targets set by governments and projections by analysts and manufacturers.

The chart shows these indicators compared with three scenarios for the growth of plug-in vehicles globally if policy drivers are strong.  (The scenarios are based on those I published around 18 months ago, and have been slightly updated for this post – see the end of this post and previous post for details.) The green lines show the share of sales, and the blue lines show the share of the total vehicle stock.  Other indicators are marked on the chart as diamonds, shown in green as they correspond to the green lines.  I’ve excluded some projections from oil companies as they appear unrealistic.

The scenarios show plug in vehicles sales in 2040 at between just over half and nearly all of new light vehicles.  However the time taken for the vehicle fleet to turn over means that they are a smaller proportion of the fleet, accounting for between a third and about three quarters of the light vehicle fleet by 2040.  The large range of the scenarios reflects the large uncertainties involved, but they all show plug-in vehicles becoming predominant over the next 20 years or so.

The indicators shown are all roughly in line with the scenario range (see detailed notes at the end of this post), giving additional confidence that the scenario range is broadly realistic, although the challenges of achieving growth towards the upper end of the range remain formidable.  Some of the projections by manufacturers and individual jurisdictions are towards the top end of the range, but the global average may be lower.

Chart.  Growth of sales of Plug-in light vehicles

 

The transition will of course need to be accompanied by continuing decarbonisation of the power sector to meet greenhouse gas emissions reduction goals.

Maintaining the growth of electric vehicle sales nevertheless looks likely to require continuing regulatory drivers, at least for the next 15 years or so.  This will include continuing tightening emissions standards on CO₂ and NO_x and enabling charging infrastructure.  If these things are done then the decarbonisation of a major source of emissions thus now seems well within sight.

Adam Whitmore – 13^th October 2017

 

 

Background and notes

This background section gives further information on the data shown on the chart.  In some cases it is unclear from the reports whether projections are for pure electric vehicles only or also include plug-in hybrids.

Developments in regulation

Policy in many countries seems increasingly to favour plug-in vehicles.  Some recent developments are summarised in the table below.   These policy positions for the most part still need to be backed by solid implementation programmes.  Nevertheless they appear to increase the probability that growth will lie within the envelope of the projections shown above, which are intended to correspond to a world of strong policy drivers towards electrification.

Policy developments 

Jurisdiction	Policy commitment
UK	Prohibit sale of new cars with internal combustion engines by 2040[1]
France	Prohibit sale of new cars with internal combustion engines by 2040[2]
Norway	All new sales electric by 2025[3]
India	All cars electric by 2030 (which appears unrealistic so goal may be modified, for example to new cars)[4]
China	Reportedly considering a prohibition on new petrol and diesel.  Date remains to be confirmed, but target is for 20% of the market to be electric by 2025.[5]

 

Sales

The market is currently growing rapidly from a low base.  Total vehicle sales were 0.73 million in 2016, compared with 0.58 million in 2015.  Six countries have reached over 1% electric car market share in 2016: Norway, the Netherlands, Sweden, France, the United Kingdom and China. Norway saw 42% of sales being EVs in June 2017

Manufacturers’ projections

Several manufacturers have issued projections for the share of their sales they expect to be for plug-in vehicles.  Some of these are shown in the table.

Manufacturers’ projections for sales of plug-in vehicles

 

Manufacturer	Target/expectation for plug-in vehicles
Volkswagen	20-25% of sales by 2025[6]
Volvo	All new models launched from 2019[7]
PSA ( Peugeot and Citroen brands)	80% percent of models electrified by 2023[8]

 

Clearly individual manufacturers’ projections may not be achieved, and to some extent the statements may be designed to reassure shareholders that they are not missing an opportunity.  So far European manufacturers have been slow to develop EVs.  Also these manufacturers may not representative of the market as a whole.  Other companies may progress more slowly.

However others may proceed more quickly.  As has been widely reported, Tesla has taken over 500,000 advanced orders for its Model 3 EV, itself equivalent to almost the entire market for electric vehicles in 2015.  And in line with the Chinese Government’s targets manufacturers in China are expected to increase production rapidly.

Projections by other observers

Projections by other observers are in most cases now in line with the scenairos shown here.

• Morgan Stanley project 7% of global sales by 2025[9]
• BNP Paribas project 11% of global sales by 2025, 26% by 2030[10]
• JP Morgan profject 35% of sales by 2025 and 48% of sales by 2030[11]
• Last year Bloomberg’s projections showed growth to be slower than with these projections. However they have since updated their analysis, showing 54% of new cars being electric by 2040[12].
• DNV.GL recently published analysis showing EV’s accounting for half of sales globally by 2033, in line with the mid case in this analysis.

In contrast BP predicts much slower growth in their projections[13].  However BP’s view seems implausibly low in any scenario in which regulatory drivers towards EVs are as strong as they appear to be.  Exxon Mobil gives lower projections still, while OPEC’s are a little above BP’s but still well below the low case shown here.[14].

Notes on changes to projections since May 2016

These projections are updated from my post last year but the differences over the next 15 years are comparatively minor.  The projections are for light vehicles, so exclude trucks and buses.  Note that percentage growth in early years has been faster than shown by the s-curve model – however this is likely to prove a result of the choice of a simple function.  What matters most for emissions reductions is the growth from now and in particular through the 2020s.

Assumption change	Rationale
Higher saturation point	Continuing advances in batteries reduce the size of the remaining niche for internal combustion engine vehicles
Longer time to saturation	The higher saturation point will need additional time to reach.
Somewhat slower growth in total numbers of vehicles	Concerns about congestion and changed modes of ownership and use are assumed to lead to lower growth in the total vehicle stock over time.  This tends to make a certain percentage penetrations easier to achieve because the percentage applies to fewer vehicles.

 

[1] http://www.bbc.co.uk/news/uk-40723581

[2] http://www.bbc.co.uk/news/world-europe-40518293

[3] http://fortune.com/2016/06/04/norway-banning-gas-cars-2025/

[4] https://electrek.co/2016/03/28/india-electric-cars-2030/

[5] http://www.bbc.co.uk/news/business-41218243

[6] http://www.bbc.co.uk/news/business-36548893

[7] https://www.media.volvocars.com/global/en-gb/media/pressreleases/210058/volvo-cars-to-go-all-electric

[8] http://www.nasdaq.com/video/psa-prepared-for-electric-vehicle-disruption–says-ceo-59b80a969e451049f87653d9

[9] https://www.economist.com/news/business/21717070-carmakers-face-short-term-pain-and-long-term-gain-electric-cars-are-set-arrive-far-more

[10] https://www.economist.com/news/business/21717070-carmakers-face-short-term-pain-and-long-term-gain-electric-cars-are-set-arrive-far-more

[11] https://www.cnbc.com/2017/08/22/jpmorgan-thinks-the-electric-vehicle-revolution-will-create-a-lot-of-losers.html

[12] https://about.bnef.com/electric-vehicle-outlook/

[13] https://www.bp.com/en/global/corporate/energy-economics/energy-outlook.html

[14] https://www.economist.com/news/briefing/21726069-no-need-subsidies-higher-volumes-and-better-chemistry-are-causing-costs-plummet-after

Half way there

The UK has made excellent progress on reducing emissions.  But the hard part is yet to come.

The UK’s Climate Change Act (2008) established a legally binding obligation to reduce UK emissions by at least 80% from 1990 levels by 2050.  This is an ambitious undertaking, a sixty year programme to cut four in every five tonnes of greenhouse gas emissions while simultaneously growing the economy.

The story so far is, broadly, an encouraging one.  2016 emission were 42% below 1990 levels, about half way to the 2050 target[1].  This has been achieved in 26 years, a little under half the time available.  And it has been achieved while population has grown by about 15%[2] and the economy has grown by over 60%.  The reduction in emissions from 1990 to 2015 is shown on the chart below, which also shows the UK’s legislated carbon budgets.   There is of course some uncertainty in the data, especially for non-CO₂ gases, but uncertainties in trends are less than the uncertainty in the absolute levels, and emissions of CO₂ from energy, which is the largest component of the total, are closely tracked.

The UK is half way towards its 2050 target, in a little under half the available time …

Source: Committee on Climate Change

The chart below shows the sectoral breakdown of how this has been achieved, and this raises some important caveats.

Progress in some sectors has been much more rapid than others …

Source: Committee on Climate Change

The largest source of gains has been the power sector, especially if a further fall of a remarkable in emissions from power generation in 2016 is included (the chart only shows data to 2015).  While renewables have made an important contribution, much of this fall has been due to replacing coal with gas.  This been an economically efficient, low cost way of reducing emissions to date, to which UK carbon price support has been a major contributor.  However coal generation has now fallen to very low levels, so further progress requires replacing gas with low carbon generation – renewables, nuclear and CCS.  This is more challenging, and in some cases is likely to prove more expensive.

The next largest source of gains, roughly a third of the total reduction, is from industry.  However, while detailed data is not available, a large part of this reduction may have been due to broader economic trends, notably globalisation of the world economy leading to heavy industry becoming more concentrated in emerging economies.  This trend may also have had some effect on electricity demand and thus emissions.  The aggregate reduction in global emissions may thus be smaller than indicated by looking at the UK alone.  Reducing global emissions still requires a great deal more progress on industrial emissions, especially in emissions intensive sectors notably iron and steel and cement.

Progress in reduction of emissions from waste, especially methane from landfill, has been a third important contributor.  Again, this has been highly cost-effective reduction.  However about two thirds of emissions have now been eliminated so further measures will necessarily make a smaller contribution, though there is much that can still be done with the remainder such as eliminating organic waste from landfill.

Other sectors have done much less, and will need to do more in the years to come.  Progress on f-gases may be helped by the recent international agreement on HFCs, although more will still need to be done.  Transport emissions have made only slow progress in recent years.  It is essential that electrification is encouraged so that a large change similar to that achieved in the power sector can be achieved in transport.  The buildings stock remains an intractable problem, and the first priority must be to at least make sure that new buildings are built to the highest standards of insulation.

So continuing the trend of falling emissions in future will be difficult and will require new and enhanced policy measures.  But in 1990 the prospects of achieving what has already been achieved doubtless looked daunting, and progress to date should encourage further efforts in future.

Adam Whitmore -25^th April 2017

Material in this post draws on a presentation by Owen Bellamy of the Committee on Climate Change at a British Institute of Energy Economics seminar on 5^th April 2017.

[1] The UK’s domestic emissions need to go down slightly more rapidly than the headline target would suggest due to the role of international aviation and shipping.  This is shown on the chart.  However the broad message is the same.

[2]https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationestimates/articles/overviewoftheukpopulation/mar2017

The constrained role of biomass

The role of biomass in the world energy system looks likely to be constrained, so there will be a need to focus on high value applications where there are few low-carbon alternatives.

This is the second of two posts looking at the role of biomass.  Here I focus on potential resource constraints.

A wide range of possibilities

The amount of biomass available to provide energy depends a lot on the amount of land available to grow energy crops, and how much that land can yield.   Different assumptions on these variables produce quite different estimates of the total resource, and numerous studies over the years have produced a wide range of results.    The amount of waste biomass available also matters, but potential availability from this source is smaller.

A comprehensive review of estimates of the biomass resource was carried out two years ago by researchers at Imperial College[i] (see chart).  It showed a variation in estimates of a factor of around 40, from of the order of 30 EJ to over 1000 EJ (1EJ =10¹⁸ J, or a billion GJ, or 278 TWh).  This compares with total world primary energy demand of just under 600 EJ, transport demand of around 100 EJ, and at least 250 EJ to produce present levels of electricity, assuming biomass combustion to remain relatively inefficient[ii].

Estimates of available biomass resource

Source: Slade et. al. (2014)

The authors examine reasons for differences in estimates, which I’ve summarised in the table below.  The differences are largely assumption driven, because the small scale of commercial bioenergy at present provides little empirical evidence about the potential for very large scale bioenergy, and future developments in food demand and other factors are inevitably uncertain.

Reasons for variation in estimates of total biomass supply

Range	Typical assumptions
Up to 100EJ	Limited land available for energy crops, high demand for food, limited productivity gains in food production, and existing trends for meat consumption.  Some degraded or abandoned land is available.
100-300 EJ	Increasing crop yields keep pace with population growth and food demand, some good quality agricultural land is made available for energy crop production, along with 100-500Mha of grassland, marginal, degraded and deforested land
300-600EJ	Optimistic assumptions on energy crop availability, agricultural productivity outpaces demand, and vegetarian diet
600 EJ +	Regarded as extreme scenarios to test limits of theoretical availability

 

Reasons for caution

In practice there seem to me to be grounds for caution about the scale of the available resource, although all of these propositions require testing, including through implementation of early projects.

Land Availability

• There will rightly be emphasis on protection of primary forest on both carbon management and biodiversity grounds, with some reforestation and rewilding.
• There is little evidence of a shift away from meat consumption. With the exception of India, less than 10% of people in  most countries are vegetarian despite many years of campaigning on various grounds[iii].   In China meat consumption is associated with rising living standards.
• Demand for land for solar PV will be significant, although a good deal of this will be on rooftops and in deserts

Yield

• The nitrogen cycle is already beyond its limit, constraining the role of fertiliser, and water stress is a serious issue in many places (agriculture accounts for 70% of current fresh water use). The UN Food and Agriculture Organisation has projected fairly modest increases in future yields.

Policy support

• Difficulties in limiting lifecycle emissions from biofuels are likely to lead to caution about widespread deployment.
• Concerns about food security may limit growth of biofuels.

Small scale to date, despite many years of interest

• There has been little progress to date compared with other low carbon technologies. Though traditional biofuels remain widely used, modern biofuels account for a very small proportion of demand at present.  World biofuels consumption currently accounts for only 0.2% of world oil consumption[iv] .  Many biofuels programmes have had subsidies cut and there is still limited private sector investment.

In this context some estimates of the potential for biomass to contribute to energy supply seem optimistic.  For example, Shell’s long-term scenarios (Oceans and Mountains) show biomass of 74 EJ and 87 EJ respectively for commercial biomass, 97-133 EJ including traditional biomass by 2060[v].  These totals are towards or above the more cautious estimates for the resource that might ultimately be available (see table above).  A recent review article[vi]  suggested that by 2100 up to 3.3 GtCp.a. (around 12 billion tonnes of CO₂) could be being removed, and producing around 170EJ of energy.  However the land requirements for this are very large at about 10% of current agricultural land.  The authors suggest instead a mean value for biomass potential of about a third of that, or 60EJ.

On balance it seems that biomass is likely to account for at most less than 10% of commercial global energy (likely to be around 800-900EJ by mid-century), and potentially much less if land availability and difficulties with lifecycle emissions prove intractable.

It thus seems likely that biomass energy will be relatively scarce, and so potentially of high value.  This in turn suggests it is likely to be mainly used in applications where other low carbon alternatives are unavailable.  These are not likely to be the same everywhere, but they are likely often to include transport applications, especially aviation and likely heavy trucking, and perhaps to meet seasonal heat demand in northern latitudes.  For example, according to Shell’s scenarios aviation (passengers + freight) is expected to account for perhaps 20-25EJ by 2050, and biomass could likely make a useful contribution to decarbonisation in this sector.

None of this implies that biomass is unimportant, or has no role to play.  It does imply that policies focussing on deploying other renewable energy sources at large scale, including production of low carbon electricity for transport, will be essential to meeting decarbonisation targets.  And the optimum use of biomass will require careful monitoring and management.

Adam Whitmore  – 11^th April 2016

 

[i] Slade et.al., Global Bioenergy Resources, Nature Climate Change February 2014

[ii] Data on final consumption and electricity production from Shell and IEA data.  35% efficiency for biomass in electricity is assumed, which is likely to be somewhat optimistic, especially if CCS is employed.

[iii] https://en.wikipedia.org/wiki/Vegetarianism_by_country

[iv] BP Statistical Review of World Energy

[v] http://www.shell.com/energy-and-innovation/the-energy-future/shell-scenarios.html  These totals include biofuels, gasified biomass and biomass waste solids, and traditional biomass.

[vi] Smith et. al., Biophysical and economic limits to negative CO₂ emissions, Nature Climate Change, January 2016.  The paper estimates land requirement for 170 EJ of 380-700 Mha, around 10% of total agricultural land area in 2000 of 4960Mha.

Deploying CCS on fossil fuel plant is more of a priority than implementing negative emissions technologies

The potential for biomass with CCS and direct air capture of CO₂ should not distract from deployment of CCS on fossil fuel plants over the next few decades.  Among other things, learning from CCS on fossil fuels will help make eventual deployment of CCS on biomass cheaper and more effective.

There appears to be increasing likelihood that atmospheric concentrations of greenhouse gases will grow to exceed levels consistent with the target specified in the recent UNFCCC Paris agreement of limiting temperature rises to “well below” two degrees.  Such an outcome would require CO₂ to be removed from the atmosphere faster than natural sinks allow, in order to restore concentrations to safe levels.  Near zero net emissions in the latter part of this century will also be needed to stabilise concentrations.

Many models of future emissions pathways now show negative emissions technologies (technologies that result in a net decrease in CO₂ in the atmosphere) needing to play a major role for in meeting climate goals. They have the potential to remove carbon dioxide from the atmosphere in the event of “overshoot” of target atmospheric concentrations, and to balance remaining emissions from sectors where abatement is difficult with a view to achieving net total emissions of close to zero.  But the application of such technologies should not be considered in isolation.

Bio Energy with CCS (BECCS)

Bio energy with CCS (BECCS ) is the most widely discussed approach to negative emissions.  BECCS is not a single technology but a combination of two major types of CO₂ removal.  Bioenergy from burning biomass to generate electricity or heat emits a substantial amount of CO₂  on combustion – around as much as a coal plant.  However much of this can be captured using CCS.  More carbon dioxide is reabsorbed over time by the regrowth of the plants, trees – or perhaps algae – that have been harvested to produce the bioenergy.  Together, the capture of the CO₂ from the flue gas and the subsequent absorption of CO₂ from the atmosphere by regrowth of biomass can lead to net removal of CO₂ from the atmosphere, although this takes time.  (The net amount of CO₂, that is emitted on a lifecycle basis from burning biomass without CCS depends on the type of biomass and is subject to considerable variation and uncertainty – a controversial topic that would need another post to review.)

However at an energy system level, where the CO₂ is captured – biomass plant or fossil fuel plant – is less relevant than the total amount that’s captured.  Broadly speaking, if there is a biomass plant and fossil fuel plant both running unabated the same benefit can be achieved by capturing a tonne of CO₂ from either.

Indeed there may be advantages to putting CCS on a conventional plant rather than biomass plant.  It may be technically more tractable.  Furthermore, CCS require a lot of energy to capture the CO₂ and then to compress and pump it for permanent storage.  Biomass is likely to be supply constrained (again, this is an issue that requires a post in itself), so using biomass rather than fossil fuels to provide this energy may limit other applications.  Only when there are no fossil fuel plants from which to capture CO₂ does biomass plant become unambiguously a priority for CCS.  This is clearly some way off.

Furthermore biomass with CCS for electricity generation may not be the best use of bioenergy.  Converting sunlight to bioenergy then turning that into electricity is a very inefficient process.  Typically only 1-2% of the sunlight falling on an area of cropland ends up as useful chemical energy in the form of biofuels.  There are various reasons for this, not least of which is that photosynthesis is a highly inefficient process.  Burning biomass to make electricity adds a further layer of inefficiency, with only perhaps a third or less of the energy in the biomass turned into electricity.  Sunlight therefore gets converted to electricity with an efficiency of perhaps 0.5%.  This compares with around 15- 20% for solar cells, implying that scarce land is often likely to be best used for solar PV.  (The calculation is closer if solar PV is used to create storable energy e.g. in the form of hydrogen).   For similar reasons the use of biofuels rather than electricity in transport is inefficient, in part because internal combustion engines are less efficient than electric motors.

Limited available biomass may be better used for those applications where it is the only available lower carbon energy source, notably in aviation and (likely) heavy trucks, or for other applications such as district heating with CCS, where the ability to store energy seasonally is especially valuable.

At the very least, detailed system modelling will be required to determine the optimal use of biomass.  Suggesting that BECCS should have a major role to play simply because in isolation it has negative emissions may lead to suboptimal choices.

Direct Air Capture (DAC)

Direct Air Capture (DAC), where carbon dioxide is chemically absorbed from the atmosphere and permanently sequestered, can also reduce the stock of CO₂ in the atmosphere.  However the typical concentration of CO₂ in a flue gas of a power plant or industrial plant is several percent, about a hundred times as great as the concentration of 0.04% (400 ppm) found in the atmosphere.  This makes the capture much easier.  Furthermore, millions of tonnes can be captured and piped from a single compact site using CCS, generating economies of scale on transport and storage.  In contrast DAC technology tends to be more diffuse.  These considerations imply that CCS from power plants and industrial facilities is always likely to be preferable to direct air capture until almost all the opportunities for CCS have been implemented, which again is a very long way off.

Uncertainties and optionality

There are many uncertainties around negative emissions technologies, including the availability of biomass, cost, and the feasibility of reducing emissions in other sectors.  For these reasons developing optionality remains valuable, and research to continue to develop these options, including early trial deployment, is needed, as others have argued[i].

One of the best ways of developing optionality is to deploy CCS at scale on fossil fuel plants.  This will reduce the costs and enable the development of improved technologies through learning on projects.  It will also help build infrastructure which can in turn benefit  BECCS.  This needs to run in parallel with ensuring that the lifecycle emissions from the bioenergy production chain are reduced and biodiversity is safeguarded.

Negative emissions technologies may well have a role to play in the latter part of the century.  But they seem likely to make more sense when the economy is already largely decarbonised.  In the meantime deployment of CCS, whether on industrial facilities or power plants, needs to be a much greater priority.

Adam Whitmore – 21^st March 2016

[i] Investing in negative emissions, Guy Lomax,  Timothy M. Lenton,  Adepeju Adeosun and Mark Workman, Nature Climate Change 5, 498–500 (2015)  http://www.nature.com/nclimate/journal/v5/n6/full/nclimate2627.html?WT.ec_id=NCLIMATE-201506

 

 

Grains of rice, Japanese swords and solar panels

Even Greenpeace has underestimated the growth of renewables.  In particular, solar has been growing exponentially, and may continue to be so for a while, though likely at a slower percentage rate.

Greenpeace did much better than many at projecting the growth of renewable energy sources in the 2000s.  Their projections were very close to outturn for wind – the 1999 projections were a little below outturn, the 2002 projections a little above.  However even Greenpeace underestimated the growth of solar.  The projections were nevertheless startlingly better than those of the IEA, who have, as I’ve previously noted, consistently underestimated the growth of renewables by a huge margin.  Growth of solar has been exponential, as has that of wind (at least until recently).  Greenpeace appears to have done well by following the logic of exponential growth.

Greenpeace’s projections for wind growth in the 2000s were close to outturn, but they underestimated the growth of solar …

Exponential growth is so powerful that it can confound intuition about how large numbers can become.  The counterintuitive power of exponential growth is illustrated by the process of making a traditional Japanese steel sword.  The supreme combination of strength and flexibility of such a weapon is said to derive from the way an exponential process layers the metal.  As the metal is beaten out and folded repeatedly to forge the sword the number of layers in the metal doubles up each time.  Following this simple process 15 times creates 2¹⁵ layers, well over 30,000.  This would be impossible in any other way with traditional methods, and the number of layers created would be hard to comprehend without doing the formal calculation.  This property of producing very large numbers from simple repeated doublings may have contributed to previous projections for renewables seeming implausible, because they were so much greater than the then installed base.  This may have contributed to even Greenpeace being a little cautious in its projections for solar.

Nevertheless exponential growth inevitably runs into limits as some stage.  This is captured by the classic fable of grains of rice on a chessboard, where one grain is put on the first square, two on the second, four on the third, eight on the fourth and so on, doubling with each square.  Half way through the chessboard the pile of grains, though very large, is manageable – around 50 tonnes for the 32^nd square.  However amounts then quickly begin to go beyond all reasonable physical constraints.  The pile on the final square would contain 2⁶³ grains of rice, which is about 230 billion tonnes.  This is about 300 times annual global production, and enough to cover not just a square of the chessboard but the entire land surface of the earth (to a depth of about a millimetre or two).

Extrapolating growth rates for solar PV from the period 2000 to 2013, when cumulative installed capacity doubled every two years, runs into similar limits.  At this growth rate the entire surface of the earth would be covered with solar panels before 2050.  This would provide far more energy than human civilisation would need, if there were room for any people, which there would not be because of all the solar panels.   So are there constraints that imply that renewables are now in second half of the chessboard – or, if you prefer a more conventional model, the linear part of an s-curve for technology adoption?

Looking at solar in particular, as I’ve previously commented, it needs a lot of land, but this is unlikely to be a fundamental constraint.  Some have previously suggested a limit as technologies reach scale, defined as about 1% of world energy supply, after which growth becomes more linear.  However solar manufacture and installation are highly scalable, so there are fewer obstacles to rapid growth than with traditional energy technologies.

Costs are rapidly falling, so that solar is becoming competitive without subsidy, both compared to other low carbon technologies and, increasingly, with high carbon technologies, especially if the cost of emissions is taken into account.  There is no obvious limit to how low the costs of solar cells can go that is likely to bind in the foreseeable future, although the ancillaries may show slower cost falls.  The costs of lithium ion batteries are also falling rapidly, having approximately halved in the last five years and continuing to fall at a similar rate.  As a result daily storage is becoming much more economic, reducing the problem of the peakiness of solar output and easing its integration into the grid, although seasonal storage remains a daunting challenge.

Solar still accounts for only around 1% of world electricity generation so globally there are plenty of opportunities globally in new electricity demand and from scheduled retirement of existing generating plant.  The vexed issues around grid charges, electricity market structures and role of incumbents may slow growth for a while, at least in some jurisdictions, but seem unlikely to form a fundamental barrier globally as long as costs continue to fall.

In short there seem few barriers to solar continuing to grow exponentially for a while, although likely at a slower percentage rate than in the past – each doubling is likely to take longer than two years given the current scale of the industry.  Solar can still continue moving quite a long way up the chessboard before it hits its limits.  How large the industry will become will need to await a future post, but provisionally there does not seem any reason why solar PV should not become a 300-600 GW p.a. or more industry.

Policy has played an important role in the development of solar to date mainly by providing financial incentives.  It will continue to play an important role, but this will be increasingly around removing barriers rather than providing a financial stimulus.

Of course I cannot know if this fairly optimistic view is right.  But it does at least to avoid some issues that might bias projections downwards.  First, it recognises the potential validity of counter-intuitive results.  In a sector such as energy which usually changes quite slowly the numbers resulting from exponential growth can seem implausible.  This can lead to rejection of perfectly sound forecasts, as the intuition of experienced professionals, which is based on long experience of incremental change, works against them.  Second it avoids assuming that all energy technologies have similar characteristics.  Finally, it takes into account a wide range of possibilities and views and considers the drivers towards them, helping to avoid the cognitive glitch of overconfidence in narrow limits to future outcomes.

The rate of growth of renewables is intrinsically uncertain.  But the biases in forecasts are often more towards underestimation than overestimation.  If you’ve been in the energy industries a while it’s quite likely that your intuition is working against you in some ways.  Don’t be afraid to make a projection that doesn’t feel quite right if that’s where the logic takes you.

Adam Whitmore – 25^th November 2014

Notes

In the calculations of the results from exponential growth I have, for simplicity, assumed very rough and ready rounded values of 40,000 grains of rice = 1litre = 1 kg.  I’ve assumed 10m²/kW (including ancillaries) for the area of solar panels. The land surface of the earth is 1.5 x10⁸ km².  Solar capacity doubled around every 2 years from 2000 to 2013, growing from 1.25GW in 2000 to 140 GW in 2013 (source:  BP statistical review), reaching a land area of around 1400km².  2¹⁷ times its current area takes it past the land surface of the earth, so it would take to 2047 (34 years from 2013) with doubling of installed capacity every 2 years to reach this point.  The source of the story about sword-making is from the 1970s TV documentary The Ascent of Man and accompanying book.

For data on Greenpeace’s historical projections see:

http://www.greenpeace.org/international/Global/international/publications/climate/2012/Energy%20Revolution%202012/ER2012.pdf See pages 69 and 71

 

Making climate change policies fit their own domain

A new framework acts as a sound guide for policy formation.

There is a widely held narrative for climate policy that runs something like this.  The costs of damage due to greenhouse gas emissions are not reflected in economic decisions.  This needs to be corrected by imposing a price on carbon, using the power of markets to incentivise efficient emissions reduction across diverse sources.  Carbon pricing needs to be complemented by measures to address other market failures, such as under-provision of R&D and lack of information.  Correcting such market failures can help carbon markets function more efficiently over time.  However further interventions, especially attempts by governments to pick winners or impose regulations mandating specific solutions, are likely to waste money.  This narrative, even if I have caricatured it a little, grants markets a central role with other policies in a supporting role.  Its application is evident, for example, amongst those in Europe who stress and exclusive or central role for the EUETS.

While this narrative rightly recognises the important role that markets can play in efficient abatement, it is incomplete to the point that it is likely to be misleading as a guide to policy.  A better approach has recently been characterised in a new book by Professor Michael Grubb and co-authors.  He divides policy into three pillars which conform to three different domains of economic behaviour.  Action to address all three domains is essential if efforts to reduce emissions to the extent necessary to avoid dangerous climate change are to succeed.  These domains and the corresponding policy pillars are illustrated in the chart below.

Three domains of economic behaviour correspond to three policy pillars …

In the first domain people seek to satisfy their needs, but once this is done they don’t necessarily go further to achieve an optimum.  Although such behaviour is often characterised by economists as potentially optimal subject to implicit transaction costs this is not a very useful framework.  Much better is to design policy drawing on disciplines such as psychology, the study of social interactions, and behavioural economics.  This domain of behaviour relates particularly to individuals’ energy use, and the corresponding policy pillar includes instruments such as energy efficiency standards and information campaigns.

The second domain looks optimising behaviour, where companies and individuals will devote significant effort to seeking the best financial outcome.  This is the domain where market instruments such as emissions trading have the most power.  Policy making here can draw strongly on neoclassical economics.

The third domain is system transformation, and requires a more active role from governments and other agencies to drive non-incremental change.  The policy pillar addressing this domain of behaviour includes instruments for technology development, the provision of networks, energy market design, and design and enforcement of rules to monitor and govern land use changes such as deforestation.  Markets may have a part to play but the role of governments and other bodies is central here.  The diversity of policies addressing this domain means that it draws on a wide range of disciplines, including the study of governance, technology and industrial policy, institutional economics and evolutionary economics.

As one moves from the first to the third domain there is increasing typical scale of action, from individuals through companies to whole societies, and time horizons typically lengthen.

This framework has a number of strengths.  It is both simple in outline and immensely rich is its potential detail.  Each domain has sound theoretical underpinnings from relevant academic disciplines.  It acknowledges the power of markets without giving them an exclusive or predominant role – they become one of three policy pillars.  It implies that the vocabulary of market failures becomes unhelpful, as I’ve previously argued.  Instead policy is framed as a wide ranging endeavour where the use of markets fits together with a range of other approaches.  While this may seem obvious to many, the advocacy of markets as a solution to policy problems has become so pervasive, especially in Anglo-Saxon economies, that this broader approach stands as a very useful corrective to an excessively market-centric approach.

The framework is high level, and specific policy guidance needs to draw on more detailed analysis.  The authors have managed to write 500 pages of not the largest print without exhausting the subject.  However, the essential framework is admirable in its simplicity, compelling in its logic, and helpful even at a high level.  For example it suggest that EU policy is right to include energy efficiency, emissions trading and renewables – broadly first, second and third domain policies respectively – as well as to be active in third domain measures such as improving interconnection, rather than relying exclusively on emissions trading (although as the EUETS covers larger emitters, so first domain effects are less relevant for the covered sector).

The framework in itself does not tell you what needs to be done.  In particular the challenges of the third domain are formidable.  But it provides a perspective which deserves to become a standard structure for high level guidance on policy development.

Adam Whitmore – 31^st October 2014

Why have the IEA’s projections of renewables growth been so much lower than the out-turn?

The IEA has greatly underestimated the growth of renewables for some years now.  This illustrates how important it is to allow for unexpected outcomes if policy design is to be robust, as even well informed projections can be very different from the subsequent out-turn.

(For an update on the IEA’s projections of renewables see also this post.)

The International Energy Agency’s (IEA’s) annual World Energy Outlook (WEO) is a thorough and well researched analysis of the outlook for the world’s energy systems[1].  Over the years it has become the standard view of the world’s energy use now and in the coming decades.  However it has had an extraordinarily poor track record in projecting the growth of solar and wind power in recent years.  The charts below compare the IEA’s projections over the last few years with the out-turn for both wind and solar.  Projections have been revised upwards each year.  But they have still been consistently too low, by a very large amount in most instances, with the pattern persisting over many years for two different groups of technologies, wind and solar PV.   As recently as 2006 it was expected to take until the 2020s to reach current levels of wind capacity, and until the 2030s to reach current levels of solar capacity, with current solar PV capacity almost an order of magnitude greater than expected in just seven years ago.

The IEA’s projections have consistently increased over the years, but still fallen short of actual deployment ….

It would, of course, be wrong to suggest that because past projections have been underestimates the current projections will also be too low.  However the most recent projections continue to show rates of deployment that appear very cautious.  The graphs below show the IEA’s projected rate of installation in the most recent WEO (for 2012) under its central New Policies scenario compared with past and current growth rates.  For both wind and solar projected installation rates start below 2012 levels and remain roughly constant or fall over time.

IEA’s projection show declining rates of deployment for both wind and solar …

Decreases in installation rates are of course possible.  Wind installation seems likely to be lower this year than last, although the rate of solar deployment continues to grow.  However, projecting flat or slowly declining installation rates over the next couple of decades suggests either that current rates are a spike, or that installation is moving towards saturation.  Neither of these possibilities seems likely.  Costs are continuing to fall, especially for solar, renewables still account for a very small share of total generation, and drivers towards deployment of low carbon technologies seem likely to strengthen rather than weaken over the period.  One does not need to be an advocate of renewables to expect that these industries are more likely to grow than shrink over the next couple of decades, even if growth of annual deployment may be much slower than in the past.  It would seem more plausible if a central case scenario were projecting some continuing growth in annual installation, with decreases very much a low case.   It will be interesting to see how these projections are adjusted in the next edition of the WEO due out in a few weeks.

So what has led to this persistent underestimation of growth?  There may have been a reliance on individual jurisdictions’ plans, with more caution than seems with hindsight to have been warranted about the rate at which policy might move.  This seems to have led to linear extrapolation of capacities when technologies were in a phase of exponential growth.  Projections for wind have improved in recently years as growth appears to have become more linear (at least temporarily), and following a large upward revision in the projected rate of addition between the 2009 and 2010 editions of the WEO.  It may also be that there is some inherent caution about new technologies.  However the IEA – along with many others – has tended, if anything, to be somewhat optimistic about CCS, so this cannot be a complete explanation.  There are also specific circumstances that have played a role, notably being somewhat slow to recognise the falling costs of solar PV, with even the costs from the 2012 edition being well above actual values[2].

There may also be a deeper explanation rooted in institutional conservatism.  Taking a conservative view of future prospects in the energy sector can be necessary to avoid being swayed by the latest fad.  A conservative view recognises the realities of the long time horizons and vast scale of the world’s energy systems.  However it can carry the risk of missing the role of genuinely transformative technologies, as appears to be the case here.  The IEA’s current caution may still prove justified.  But  Eurelectric, the European power industry association, noted in a recent report that the European power sector is already undergoing one of the largest transformations in its history[3].  Such changes seem likely to be a global phenomenon.  Wind and (especially) solar PV seem likely to form part of the largest transformation of the energy sector at least since the growth of oil consumption in the middle decades of the 20^th century, and perhaps since the invention of the steam engine.  The IEA seems to be slow to recognise this.

Whichever way the future turns out, the IEA’s past projections show how different actual out-turns can be from even well-informed projections.  This provides and important reminder that none of us can be sure about future changes to the energy sector, and policy design must always be robust against things turning out to be different from expectations.

Adam Whitmore – 8th October 2013

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[1] See http://www.worldenergyoutlook.org/ Data used here is from New Policies scenarios and Reference case for earlier projections.

[2] See www.worldenergyoutlook.org/weomodel.

[3] http://www.eurelectric.org/media/79178/utilties_powerhouse_of_innovation_full_report_final-2013-104-0001-01-e.pdf