millennium breyer energy futurebasedonwindsolar 2015-09-23

The energy future based in wind and solar energy?!

Christian BreyerProfessor for Solar Economy, Lappeenranta University of TechnologyMillennium Breakfast MeetingAalto Design FactoryEspoo, September 23, 2015

2 Energy Future based in wind and solar energyChristian Breyer ► [email protected]

What is the Vision?


What is the key problem?

“Climate Change presents a unique challenge for economics: it is the greatest and widest-ranging market failure ever seen.”

N. Stern, Economics of Climate Change, 2006


IPCC mitigation in energy sectors

Key insights:• GHG emissions in the power sector to be zero by 2050• ALL new investments MUST fulfill this requirement

source: IPCC, 2014. 5th AR – Synthesis Report


New installed RE capacities not fully on track

Key insights:• 50% of new capacities are RE• Gas plants can be used as bridge• Coal and nuclear(~30%) fully unsustainable

6 Fortum Strategy MeetingChristian Breyer ► [email protected]

New installed capacities on track (EU28, Nordic)


We have a dramatic subsidy problem

Key insights:• global energy subsidies are almost fully allocated for

fossil (and nuclear) fuels• fossil fuel subsidies are as large as global

expenditures for the health sector• RE would grow much faster if harmful fossil-nuclear

subsidies would be phased-out


Capacity expectations till 2030 and 2040

PV ER Adv ER 2DS hi-Ren NPS 4502030 2839 GW 3725 GW 1799 GW 1721 GW 1927 GW 647 GW 856 GW2040 4988 GW 6678 GW 3687 GW 3199 GW 3277 GW 930 GW 1396 GW

Wind2030 2510 GW 3064 GW 1282 GW 1600 GW 982 GW 1288 GW2040 4316 GW 5892 GW 2033 GW 2150 GW 1321 GW 1873 GW

source: Greenpeace, BNEF, IEA

Key insights:• leading reports had been close to consensus for 2030 and 2040, but Greenpeace is now pushing• IEA WEO is laggng behind due to assuming wrong growth pattern


WEO key failure: linear vs logistic growthall new renewables (ex hydro) solar PV

Overview:• World Energy Outlook (WEO) is regularily

wrong with RE, since they are based on the wrong growth pattern (linear vs logistic growth)

• 3 phases of RE: negligible, not relevant, relevant but not enough

• 4th phase pending: RE is the solution• 4th phase means tremendous growth ahead• my number for 2030: about 18000 TWh RE gen

source: Metayer M., Breyer Ch., Fell H.-J., 2015. The projections for the future and quality in the past of the World Energy Outlook for solar PV and other Renewable Energy technologies, 31st EU PVSEC, Hamburg, September 14-18

download:www.researchgate.net

https://www.researchgate.net/publication/281939932_The_projections_for_the_future_and_quality_in_the_past_of_the_World_Energy_Outlook_for_solar_PV_and_other_renewable_energy_technologies

10 Fortum Strategy MeetingChristian Breyer ► [email protected]

What is the pathway?

source: Brunila A., 2012. Fortum – Power and heat company in the Nordic countries, Russia, Poland and the Baltics

Solar EconomySolar based production with high overall system efficiency

Geothermal

Hydro

Wind

Sun

Ocean

Traditionalenergy production

Exhaustible fuels that burden the environment

Coal GasOil

Advancedenergy productionEnergy efficient and/or

low-emission production

Nuclear today

Nucleartomorrow

CHP

CCS

Bio

Fortum’s compass -Energy is an enabler

Storage

Active ConsumerDemand

Response

Low

Effi

cien

cy

High

Effi

cien

cy

High Emissions Emission free

Interconnectors

Smart applications


What are the real low carbon investments?

source: Schneider M. and Froggatt A., 2014. The World Nuclear Industry Status Report


Cost of ’cleantech’ solutions

source: Agora Energiewende, 2014. Comparing the Cost of Low-Carbon Technologies: What is the Cheapest option; Grubler A., 2010. The costs of the French nuclear scale-up: A case of negative learning by doing, Energy Policy, 38, 5174

Key insights:� PV-Wind-Gas is the least cost option� nuclear and coal-CCS is too expensive� nuclear and coal-CCS are high risk technologies� high value added for PV-Wind due to higher

capacities needed


Germany – 100% RE (power and heat sector)

source: Henning H.-M. and Palzer A., 2012. 100 % Renewables for Electricity and Heat – a Holistic Model for a Future German Energy System , 7th IRES, Berlin

PV share ~25%


Finland - 100% RE (power, heat, mobility sectors)

PV share ~16% (of annualelectricity generation)

source: Child M., et al., 2015. The role of solar PV for 100% renewable energy supply in Finland, 31st EUPVSEC

Energy Future based in wind and solar energyChristian Breyer ► [email protected]

Total annual costs: Sustainable Finland

Key insights:• Stranded investments in nuclear/ coal power stations not accounted (higher WACC?*)• Test scenarios have high level of investment• Reference scenarios have high level of fuel and CO₂ costs (risk of high CO2 price**)

* WACC 7% ► 15%BAU: + 3 b€New Nuclear: + 2 b€

** CO2 price 75 ► 150 €/tBAU: + 1.9 b€

rather likely according to Luderer G. et al., Environ.Res.Lett., 8, 034033, 2013

0

5000

10000

15000

20000

25000

30000

2012 2020 2050Basic

100% RE

2050BasicLow

Nuclear

2050Basic

MediumNuclear

2050BasicNew

Nuclear

2050 LowBiomass100% RE

2050 LowBiomass

LowNuclear

2050 LowBiomassMediumNuclear

2050 LowBiomass

NewNuclear

2050 BAU

Tota

l ann

ual c

osts

(M€/a

)

Variable costs - other

Variable costs - CO₂

Variable costs - fuel

Fixed operation costs

Annualized investment costs

source: Child M. and Breyer Ch., 2015. Vision and Initial Feasibility Analysis of a Recarbonised Finnish Energy System, 17th Int. Conf. of the Finland Futures Research Centre, Turku, June 11-12

North-East Asian Super Grid for 100% RE power supplyDmitrii Bogdanov ► [email protected]

MethodologyFull system

Renewable energy sources• PV ground-mounted (optimally tilted)• PV rooftop • Wind onshore• Hydro run-of-river• Hydro dam• Geothermal• CSP• Waste• Biogas• Biomass

Electricity transmission• node-internal AC transmission• interconnected by HVDC lines

Storage options• Batteries • Pumped hydro storages• Thermal energy storage, Power-to-Heat• Gas storage based on Power-to-Gas

• Water electrolysis• Methanation• CO2 from air• Gas storage

Energy Demand• Electricity• Water Desalination• Industrial Gas


https://www.researchgate.net/publication/281463891_Complementarity_of_hydro_wind_and_solar_power_as_a_base_for_a_100_RE_energy_supply_South_America_as_an_example


South America – 100% RE (power and gas sector)

PV share ~40%

source: Barbosa L.S.N.S., et al., 2015. Complementarity of hydro, wind and solar power as a base for a 100% RE energy supply: South America as an example, Rio 15 –World Climate & Energy Event, Rio de Janeiro, September 4


https://www.researchgate.net/publication/281463891_Complementarity_of_hydro_wind_and_solar_power_as_a_base_for_a_100_RE_energy_supply_South_America_as_an_example


North-East Asia – 100% RE (power and gas sector)

PV share ~42%

source: Bogdanov D. and Breyer Ch., 2015. North-East Asian Super Grid for 100% Renewable Energy power supply: Distributed small-scale and centralized large-scale solar PV as a major energy source, 31st EUPVSEC


Israel – 100% RE (power sector)

PV share ~90%

source: Bogdanov D. and Breyer Ch., 2015. The Role of Solar Energy towards 100% Renewable Power Supply for Israel: Integrating Solar PV, Wind Energy, CSP and Storages, 19th Sede Boqer Symposium on Solar Electricity Production, February 23-25


https://www.researchgate.net/publication/272622070_The_Role_of_Solar_Energy_towards_100_Renewable_Power_Supply_for_Israel_Integrating_Solar_PV_Wind_Energy_CSP_and_Storages


Resources and Energy Demand

source: Perez R. and Perez M., 2009. A fundamental look on energy reserves for theplanet. The IEA SHC Solar Update, Volume 50

Key insights:• no lack of energy

resouces• limited conventional

resources• solar and wind resources

need to be the majorpillars of a sustainableenergy supply

Remark:• conventional resources

might be lower thandepicted by Perez


source:

ETOGAS, 2013

Learning from Nature

photons-to-biomass biomass-to-fuel

Key insights:• processes well established• efficiency of photons-to-biomass is quite low• efficiency of photons-to-biomass-to fuel is even lower


A short history of the solar cell efficiency

source: NREL, 2014. Solar Efficiency Diagram

• broad variety of PV technologies

• continuous increase of efficiencies

• theoretical maximum at 86%

Energieeffizienz - PKW

0-100 km/h in 4,7 s; 261 kW; 88.000 €, 280 km/h max; 460 km Reichweite; 13,8 l/100km

Porsche - Verbrennungsmotor

0-100 km/h in 4,0 s; 185 kW, 63.000 €; 210 km/h max; 400 km Reichweite; 12 kWh/100km

energetisch Faktor 5PV-Breakeven in 4 Jahren

www.porsche.de

Tesla - Elektromotor

www.teslamotors.com

Kosten: 440 MJ; 16,50 €/100kmKosten: 90 MJ; 3,00 €/100km

CO2

Diagram of Syngas Conversion Processes

Source: P.L. Spath and D.C. Dayton, 2003. Preliminary Screening - Technical and Economic Assessment of Synthesis Gas to Fuels and Chemicals with Emphasis on the Potential for Biomass-Derived Syngas. NREL/TP-510-34929

Naphta


But do we know the long-term PV demand?The results of some recent studies might help …


Focus on PV for the year 2050

• all reports acknowledge significant relevance of PV (≥ 5 TWp)• BUT, the variation in results (input) is high, despite of progressive/ RE-based scenarios• closer view to the key numbers might provide a valuable guideline

conservative in heat and mobilitysector


Maximum (visionary) solar PV Market long-term

Key question:• What is the long-term maximum solar PV demand globally?

Assumptions:• global population: 10 billion people• energy consumption level: today’s EU28 average should guarantee a good standard of living• energy generation: primary energy demand supplied by power technologies, mainly wind energy and solar

energy, due to major constraints, like resources, costs, emissions and efficiency• energy demand: sectors power, heat and mobility use different forms of energy, based on electricity• efficiency of solar PV: doubling of system efficiency from ave 15% today to 30% (impact on area demand)• scenarios: breakthrough progress of batteries: Yes (PV share 40% of total) / No (PV share 25%)


Alternative long-term approach beyond 2050key assumptions• based on IEA-WEO 2014• long-term global average TPED on EU level of today• world population stabilized at 10 bn people• share of solar PV between 25%-40%, depending on

battery breakthrough and CSP competitiveness• gain in PV system efficiency to 30% (area impact)• shift of non-power TPED to power (heat pumps, EV, RO

desalination, etc.: power-to-heat/gas/fuel/water)• no PE efficiency gain (gain in some sectors, but limiting

efficiencies in power-to-fuel)

key results• 58 - 93 TWp PV capacity in the long-term beyond 2050• no limitation in area demand (or other resources)• 8 - 9 doublings of capacity for learning curve• ~250 €/kWp target PV capex beyond 2050 (have in mind:

major capex reduction until 2030)• 12 €/MWh target LCOE for global ave yield• PV may become THE least cost energy source

source: Gerlach A., Breyer Ch., et al., 2015. Forecast of Long-Term PV Installations –Discussion of Scenarios ranging from IEA to the Solar Economy, 31st EU PVSEC


Global – 100% RE (all sectors) – Role of PV

source: Gerlach A., Breyer Ch., et al., 2015. Forecast of Long-Term PV Installations –Discussion of Scenarios ranging from IEA to the Solar Economy, 31st EU PVSEC

Key insights:• exponential growth of PV needed for some further decades• 2030 results inline with international institutions, BUT not 2040 onwards• highest absolute growth around the mid of this century• 40% solar PV share may be not the upper limit (North-East Asia, South-East Asia, Israel results)• techno-economic least cost solutions include large shares of both, distributed AND centralised PV


New Business Cases: RE-PtG-LNG

source: Fasihi M., et al., 2015. Economics of global LNG trading based on hybrid PV-Wind power plants, 31st EUPVSEC


New Business Cases: RE-based desalination

source: Caldera U., et al., 2015. Local cost of seawater RO desalination based on solar PV and wind energy: Economics, global demand and the impact of full load hours, 31st EUPVSEC

Overview:• clean water for all (and

nearly everywhere) is nowishful thinking

• water crisis is rather a managment failure than a techno-economic issue


https://www.researchgate.net/publication/281745784_Local_cost_of_seawater_RO_desalination_based_on_solar_PV_and_wind_energy_Economics_global_demand_and_the_impact_of_full_load_hours


Summary

• 100% Renewable Energy system is reachable!• zero fossil CO2 emissions by 2050 are not yet reflected in energy markets• dramatic high fossil fuel subsidies block RE market growth• international institutions see strong growth, except IEA WEO lacking behind• 100% RE scenarios understanding improves fast• the shift to power in the gas, desalination, heat and mobility sector will be driven by

higher supply of least cost solar PV and wind sites• 40% solar PV share for global energy supply may be realistic (with upside potential)• 58 – 93 TWp installed PV capacities in the long-term may be feasible• new business cases arise, such as RE-PtG-LNG or RE-desalination

Thanks for your attention …… and to the team!