© 2008 Rolls-Royce plc

The information in this document is the property of Rolls-Royce plc and may not be copied or communicated to a third party, or used for any

purpose other than that for which it is supplied without the express written consent of Rolls-Royce plc.

This information is given in good faith based upon the latest information available to Rolls-Royce plc, no warranty or representation is given

concerning such information, which must not be taken as establishing any contractual or other commitment binding upon Rolls-Royce plc or

any of its subsidiary or associated companies.

© 2009 Rolls-Royce plc

The information in this document is the property of Rolls-Royce plc and may not be copied or communicated to a third party, or used for any

purpose other than that for which it is supplied without the express written consent of Rolls-Royce plc.

This information is given in good faith based upon the latest information available to Rolls-Royce plc, no warranty or representation is given

concerning such information, which must not be taken as establishing any contractual or other commitment binding upon Rolls-Royce plc or

any of its subsidiary or associated companies.

Rolls-Royce and the environment

Designing innovative technologies

for a low-carbon future

Prof. Ric Parker - Director of Research and Technology8th September 2009

Rolls-Royce proprietary information

Why Low Carbon Innovation is Important?

Corporate Development February 2007Rolls-Royce data – strictly private CEO Room (2007)

Sources of CO2 Emissions by SectorSources of CO2 Emissions by Sector

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

2004 2015 2030

CO

2 E

mis

sio

ns (M

tonnes p

er y

ear)

Other

Aviation

Marine

Transport (excl

Aviation & Marine)

Residential &

services

Industry

Power generation

• Human activities are contributing to climate change...timely mitigation less

costly than subsequent impacts – Stern, 2007

• Power sector represents the single largest human source of CO2 emissions

• Government committed to 80%

reduction in emissions by 2050

relative to 1990 levels

• ‘Decarbonisation’ of electricity is key

Considerable improvements

needed across all areas of

renewable energy, nuclear and

carbon capture & storage

Rolls-Royce proprietary information

Research

Councils

Demonstration DeploymentResearch &

DevelopmentDemonstration

Deployment

Research &

Development

EU emission trading

scheme

Suppliers obligations

(Renewable Obligations)

Policy support

Carbon Trust

Environmental

Transformation Fund

RDA - DA

TRL 1-3 TRL 3-6 TRL 6-7 TRL 8-9

ETI

DECC, ERP, UKERC, Defra, DfT….

TSB

Technology push & knowledge transfer...

… market pull & public policy

£

HMG Support for Innovation

TRL = Technology Readiness Level

Rolls-Royce proprietary information

Energy Technologies Institute

A GOOD START BUT…

50:50 public~private partnership

Up to £110m p.a. - each partner puts in £5m p.a. over

10yrs

Supports R+D to reduce CO2 emissions from energy in

the UK and globally whilst realising security of supply

Develop affordable, low-carbon, efficient technology

solutions

Typical projects £5m - £25m with potential for ETI to

fund 100%

Access to stakeholder Capabilities, Skills, Technology,

routes to Market

Rolls-Royce proprietary information

Rolls-Royce environmental strategy

Rolls-Royce will apply its knowledge and technology to develop

profitable solutions to the challenge of climate change

Rolls-Royce proprietary information

Long-term consistent technology

£885 million spent on research & development - 2008

Rolls-Royce proprietary information

The building blocks of future products

Rolls-Royce proprietary information

Aerospace environmental targets

Rolls-Royce proprietary information

Game-changing technologies

Open Rotor Rig 145 – DNW Low-Speed Noise Test

Open Rotor Program Total Investment Required ~ over £2bn: Research & Technology

Research & Development

Open Rotor Facilities

Capital for Production

Rolls-Royce proprietary information

Rolls-Royce Low Carbon Opportunities

High

Climate

Abatement

High Competence

Tidal

Stream

Nuclear

Offshore

WindOffshore

Wind

CCS

CompressionOnshore

Wind

Considered

Wave energy

Solar thermal

Solar PV

Geothermal

Criteria

Business potential

Resource size

Investment

Timescales

Risk

Fuel

Cells

Rolls-Royce proprietary information

Tidal Stream

Wide scale deployment by 2020 needs

acceleration in technology development

and demonstration

Significant potential to address UK security

of supply..intermittent but predictable

No commercial farms, but deployment of

demonstrators accelerating rapidly

Early success is reliant on renewable

energy incentives & other fiscal

mechanisms

Rolls-Royce is working with Tidal

Generation Ltd on a novel tidal concept

Rolls-Royce proprietary information

Solid Oxide Fuel CellsReliable Energy local to where it is needed

Potential fuel-efficiency in

the 60-70% range

Multi-fuel (natural gas,

liquid and biofuels)

Negligible air emissions,

low-carbon

Distributed generation

minimises transmission

losses and reduces

infrastructure costs

Rolls-Royce proprietary information

Nuclear – a significant opportunity for UK

Advantage - low life-cycle CO2 emissions and

security of fuel supply.

Offers substantial contribution to UK target to

reduce emissions by 80% by 2050

Rolls-Royce has considerable capability

UK submarines: water reactor engineering,

instrumentation and control systems.

Data Systems and Solutions: nuclear

services in USA and mainland Europe

Structuring high value-added supply chains

~2000 nuclear engineers/specialists

Leveraging capability of high technology industry

needs a consistent policy from government over

the long-term

Rolls-Royce proprietary information

To summarise…

Significant, low-carbon innovation is essential to close technology

gaps in almost all areas

Government funding is available for low-carbon technology at all

TRLs

ETI model is unique with access to industrial vision, market

information, technical expertise, etc.

Investment sector selection based around evaluation of factors

including cost, market potential, and technology fit with internal

competencies

Low-carbon opportunities extend beyond powergen, with scope for migration between sectors

Requires long term vision and consistent support