New Energy Technologies: New Energy Technologies:

Trends in Development ofTrends in Development of Clean andClean and

Efficient Energy TechnologiesEfficient Energy Technologies

A Background Paper by

Adnan Shihab-Eldin*

Eighth International Energy Forum

Osaka, Japan: 21-23 September 2002

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PREFACE...................................................................................................................................i

ACKNOWLEDGEMENTS......................................................................................................i

EXECUTIVE SUMMARY................................................................iii1. INTRODUCTION 1

2. UPSTREAM OIL & GAS TECHNOLOGY.....................................................................4

2.1. IMPACT OF UPSTREAM TECHNOLOGY ON THE COST OF OIL SUPPLY.......................92.2. METHANE HYDRATES....................................................................................................9

3. ELECTRIC POWER TECHNOLOGY...........................................................................10

3.1. CLEAN FOSSIL POWER TECHNOLOGIES.....................................................................113.1.1. Gas Turbine Technology.......................................................................................113.1.2. Advanced Clean Coal Power Technologies.........................................................113.1.3. Clean (Refinery) Oil Integrated Gasification CC Power Plants (OIGCC).........12

3.2. CARBON DIOXIDE SEQUESTRATION............................................................................133.2.1. In situ CO2 Capture...............................................................................................143.2.2. Direct CO2 Capture................................................................................................143.2.3. Carbon Storage......................................................................................................153.2.4. Cost of CO2 Sequestration.....................................................................................16

3.3. RENEWABLES................................................................................................................163.3.1. Renewable Energy in Europe...............................................................................16

3.4. NUCLEAR POWER.........................................................................................................183.4.1. Nuclear Power Technology...................................................................................183.4.2. Nuclear Waste Disposal........................................................................................22

4. TRANSPORTATION SECTOR......................................................................................22

4.1. ALTERNATIVE FUELS AND VEHICLES..........................................................................22

5. FUEL CELL TECHNOLOGY.........................................................................................25

5.1. FUEL CELL VEHICLES.................................................................................................265.2. FUEL CELL POWER APPLICATIONS............................................................................285.3. HYDROGEN FUEL CYCLE............................................................................................29

6. CONCLUSION...................................................................................................................30

LIST OF ABBREVIATIONS................................................................................................34

LIST OF TABLES AND FIGURES......................................................................................35

LIST OF REFERENCES.......................................................................................................35

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PrefaceThis paper was prepared in response to the invitation of the organizers of the 8 th International Energy

Forum (IEF), to serve as a background paper on new energy technology, in particular the trends in research and development (R&D) of clean and efficient energy technologies, and views on their realization.

In view of the fact that new energy technologies have not changed dramatically since November 2000, when I also contributed a fairly extensive paper on a similar topic to the 7 th IEF in Riyadh, subsequently published in the conference proceedings1, by definition there will be a considerable overlap between the material in both papers. Furthermore, given the necessary limitations on size of a background paper, and to avoid unnecessary repetition, I have chosen to provide only a summary of those energy technologies included in my previous paper, updated or revised as necessary, except where important new or interesting developments are imminent, or have occurred, for example carbon dioxide (CO2) sequestration, or clean oil integrated gasification power, which have been treated more extensively here.

In this overview of the energy technology scene I have attempted to highlight those key technologies or features likely to have a significant impact on the energy scene over the next 2-3 decades. Consequently, I have excluded those technologies considered speculative or unlikely to have an impact on the energy scene in that time frame, such as fusion, magnetohydrodynamics (MHD), etc.

Finally, I would hope that the reader finds the contents of this background paper on new energy technologies informative and useful.2

AcknowledgementsIn the course of the preparation of this paper, I benefited immensely from discussions with, and

information and advice from, colleagues and experts from many organizations. I should like here to acknowledge and thank them all. In particular, I should like to express my thanks for the contribution of colleagues in the International Energy Agency, with whom I enjoyed a free exchange of information and ideas, as well as sharing the results of their studies, with the support and blessing of the IEA’s senior management. Within OPEC, I wish to acknowledge and thank all those who contributed to this paper and assisted me in its preparation, especially my colleagues in the Research Division, upon whose expertise I frequently called, and in the Public Relations Department, who edited and compiled the final document.

* Dr. Adnan A. Shihab-Eldin, Director of Research Division, OPEC, Vienna

1 A. Shihab-Eldin, “New Energy Technologies: Progress, Challenges and Implications”2 While I have benefited from the knowledge and expertise of the OPEC Secretariat staff, I would emphasize that this paper represents my personal views, and should not be taken in any way as embodying the official views of the Organization

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Executive Summary

There is a consensus that world demand for energy will grow through the year 2020 by an average of about 2% pa. To meet this growth in demand and, increasingly, demand for quality services, energy technologies continue to be developed. The aim of these developments are to improve the efficiency of recovery and conversion processes, reduce costs, mitigate any harmful effects on the environment, and, finally, respond to social and cultural values. The need for energy security, which has again taken centre stage, is contributing significantly to the development of these technologies.

Today a multiplicity of promising primary, energy resource and conversion technologies exist, able to meet growth in energy demand in a manner consistent with the more stringent environmental constraints, in particular for reduced, or even zero level, emissions of CO2. The three main options are clean fossils, especially when combined with CO2. sequestration, renewables, and nuclear. Each has current, as well as potential, future advantages and disadvantages.

This paper aims to provide a synopsis of the advanced and new, clean energy technology options that are currently being developed and are likely to have a significant impact on the energy scene over the next 2-3 decades.

Fossil fuels currently provide the dominant share (88%) of the world’s primary energy needs and are expected to continue to provide roughly this level through 2020. Given the rich multiplicity of mature and promising new technology options, and the complexity of the energy system and the environment within which it operates, it is not possible to make predictions about the exact nature of the long-term future energy mix. Rather, it is prudent that all options, both technically feasible and economically promising, be considered and developed according to consistent and objective criteria.

New commercial energy technologies are mainly developed by private (multinational) companies in industrialized countries. So potential profit from deploying new energy technology is the key to attracting investment in the expensive long-term research, development and demonstration (RD&D) required. The government role is to set policies and provide incentives — including partial funding of initial RD&D.

The participation of developing countries in the development of new energy technologies has been minimal, if not negligible. Consequently, while benefiting from new energy technologies developed by multinational companies, developing countries’ main concern is to gain access to increasing, reliable supplies of commercial energy at reasonable cost, without incurring burdensome subsidies. Another key factor influencing the energy scene in developing countries is the trend towards deregulating the energy sector, in particular the power sector. This is expected to continue, and is also starting to be visible in many developing countries. The oil sector, however, is still subject to strong government regulation and controls (e.g. taxation) in most consuming countries.

Upstream Oil and Gas Supply Technology: Most large, easily accessible and low-cost oil and gas reserves have been discovered and are being depleted. The oil and gas resource base, however, is known to be much larger, perhaps more than double estimated reserves. Abundant, additional unconventional oil and gas resources are known to exist, and several technologies have been demonstrated to extract hydrocarbon fuels from them, though at higher cost.

The multinational oil companies, with strong support and collaboration from many OECD governments, have developed a remarkable array of powerful new and advanced technologies and tools for use in exploration, reservoir evaluation and production and processing. The application of these breakthrough, upstream technologies over the past two decades have contributed in a large way to the significant expansion of hydrocarbon resources, mainly outside OPEC, and has also significantly lowered the cost of finding new oil and gas reserves. Integration of information technology (IT) in oil and gas exploration and production technologies

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has yielded impressive results in terms of new discoveries, a significant increase in percentage of recovery, and a reduction in production costs from remote and difficult fields.

Nevertheless, increasing the supply of oil and natural gas from diversified sources and regions — essential for long term sustainability and security of oil and gas supplies — requires more focus on issues of technology transfer to producing countries, where the use of many of these advanced technologies has not yet fully materialized. Focus is also needed on the development and use of more advanced oil and gas production technologies suited to the special characteristics of present and future large oilfields, typically found in some OPEC countries, where most oil reserves and resources are located.

Electric Power Technologies: In view of the high quality and flexibility of electrical energy, demand for electricity will continue to grow at a faster rate than overall energy demand. This will necessitate thousands of gigawatts (GW) of new installed capacity, much of which will have to be in developing countries. Currently, electric power is produced predominantly from fossil fuels, mainly coal, followed by gas, nuclear, hydro, oil and renewables. Concerns over the potential, adverse impact from increased greenhouse gas (GHG) emissions from fossil power plants, have led to emphasis on the development of reduced or, preferably, zero emission power generation technologies. Given the current predominant role of fossil fuels in power generation (mainly coal and gas) clean fossil fuel technologies are being developed to meet the goal of reduced or zero CO 2

emission goals.

Gas: Advanced gas turbine technology (GT) with high efficiency — approaching 60% in combined-cycle plants (GTCC), extremely low nitrogen oxide emissions, and a low-cost of producing electricity, have now made gas the fuel of choice, where supplies can be made reliably available. It is likely to take the lead from coal around the year 2020, should this option become necessary. However, most of these technologies are currently uneconomic or unacceptable to large segments of society in developed countries. Consequently, unless compelling arguments force a change of direction, cleaner fossil fuels are likely to continue their dominance as the main energy source in the power sector for decades to come.

Clean Fossil Power Technologies: Despite being environmentally the least desirable fossil fuel, coal will continue to be important for use in power generation, especially in the USA, China and many developing countries, where abundant domestic coal supplies are available. Development of clean and more efficient coal and gas turbine power technologies has been actively pursued in the USA and many other OECD member countries, with the dual objective of reducing oil imports and improving the quality of the environment.

Several new and improved coal-combustion and emission-control technologies have been technically and economically demonstrated. Some are already commercially available. In the near term, super critical pulverized coal-fired (SCPF) combustion has been commercially demonstrated and is being further advanced to raise its efficiency. Also available in the near term is fluidized-bed combustion (FBC).

For the mid-term, the development of both ultra SCPF, and pressurized FBC power plants may reach thermal efficiencies of 50% or more. However, of the new, coal-based power technologies, the integrated gasification combined cycle (IGCC) and the integrated gasification fuel cell (IGFC) power plants are most promising, in view of their much higher thermal efficiencies and lowest emissions of environmental pollutants and GHGs. The IGCC technology is at an early stage of commercial demonstration and its reliability and economics should be proven by 2010, while the IGFC is still at an early stage of R&D.

Oil Power Generation’s Role has declined since the seventies and is currently limited to its use in power generation at times of peak demand as a standby fuel and when gas or domestic coal supplies are unreliable or unavailable. The development of gasification technology is, however, creating an attractive and promising opportunity for the competitive re-emergence of oil-based power generation within refineries.

The use of high-sulphur, high-metal refinery residual fuel or petroleum coke as feedstock for refinery-based gasification and power plants (OIGCC) is especially attractive when local environmental regulations reduce the feedstock value to zero or even negative. In contrast to other upgrading processes, gasification plants expand

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the market for crude oil by about ten percent. They can also be used to produce hydrogen and/or chemicals such as ammonia. It should, moreover, be noted that OIGCC will become far more attractive when the technology of CO2 sequestration from fossil-fuelled, power plants is fully developed and successfully deployed on a large scale.

Carbon Sequestration: The capture and disposal of CO2 from fossil-fuelled, power plants’ flue gas is technically feasible, although currently at an appreciable energy penalty and cost. If successfully demonstrated and cost-effectively deployed, it would remove a possible future constraint on the use of fossil resources in the long term. Fossil-based zero-emission fuels (mainly coal and unconventional oil and gas) could then be available for centuries to come.

In view of this great potential, CO2 sequestration RD&D programmes have been expanded and extended to many OECD countries, and funding for them has accelerated. In addition to the in situ capture technology that has been under investigation and development for over a decade, another very promising process has been proposed for the direct capture of CO2 from the air at location. If this method is successfully developed, then the lifetime of liquid petroleum fuels would be extended until the economic resource base is exhausted.

Renewable energy is abundant and not subject to depletion, although of dilute nature. If renewable technology can be developed to be sustainably competitive in the long run, it would provide a “relatively” clean energy source which could meet some of the world’s future energy demand. However, the low energy density and intermittence of renewables, along with the shortage of available land and storage systems, pose formidable challenges which will constrain large-scale power market penetration of most renewable power sources.Nonetheless, in view of the concerns expressed over security of energy sources and the health of the environment, the public has supported ambitious, government-funded RD&D programmes in industrialized countries. Several government policies and mechanisms have been instituted, mainly in Europe, to provide incentives to industry to develop and deploy promising renewable energy technologies, and to encourage consumers to use them.

As a result, many renewable energy sources are now commercially available for stand-alone and grid-connected power generation. Most commonly known and promising are wind power, waste biomass, photovoltaic (PV), small-scale hydro, and solar thermal technologies. Of these technologies, land-based wind power has shown the most rapid growth in recent years, followed by PV. This, and the initially impressive high growth rates of other renewable technologies, is not sustainable, however, since both are driven by proactive government policies and subsidies, which are not likely to continue or be sustainable outside some limited niche markets. Over the medium to long term, deployment of promising renewable technologies is expected to continue to grow, though at a more modest rate.

Within OECD countries, in their effort to achieve CO2 reductions to meet the Kyoto Protocol targets, European Union countries have, individually and collectively, adopted very ambitious programmes to promote the accelerated deployment and use of renewables with a view to enhancing their contribution to the energy mix, in particular for electricity generation. Indicative, but not binding, targets have been set that reflect the starting point and a potential for each member country. A 12% target was set for the share of renewables in total energy consumption by the community by 2010, which translates into a 22.1% target for renewables’ electricity share in 2010, or 12.5% excluding hydro. To achieve these targets, a number of expensive support systems have been instituted in most European countries, including competitive bidding, guaranteed prices, and green certificate. This means that installed capacity of renewables in EU countries must grow by almost five-fold.

It is doubtful whether the massive and costly government subsidies required can be implemented in full by all the EU countries for the long period required, notwithstanding current strong public support. It, therefore, remains to be seen whether the ambitious, and currently popular and well-supported, programmes to promote accelerated growth of renewables in the EU will succeed. If these ambitious targets are indeed largely realized, this pioneering but demanding social and economic experience would pave the way for the rapid use of renewables in many other parts of the world.

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Nuclear Power Technology has contributed significantly towards meeting the increasing demand for electricity (currently 16%) and could potentially be an important alternative to fossil fuels (mainly coal) in any future ‘clean’ energy strategy that has no carbon sequestration component. However, despite the impressive safety record of the industry, reactor technology is fraught with obstacles, largely institutional, that impedes this source as a major option for future world energy supply. The biggest obstacles are its unfavourable economic competitiveness and lack of public acceptance, emanating from concerns about reactor safety, adequate disposal of radioactive waste, and a possible link to weapons manufacture. The future of nuclear power, therefore, depends critically on the successful development, demonstration and commercialization of an innovative reactor and fuel cycle exhibiting enhanced safety features, strengthened proliferation resistance, and economic competitiveness. A leading candidate is the PBMR, developed in South Africa by an international consortium building on extensive worldwide experience in dealing with high temperature gas-cooled reactors. Unless these problems are alleviated, it is difficult to see nuclear taking a larger role in the global energy mix in the future.

There have been a number of positive developments recently, the most important of which are the US government’s decision that Yucca Mountain, Nevada, be considered for development as the national facility for the underground disposal of spent reactor fuel, and the government of Finland’s decision to construct a new nuclear power reactor — the first in Europe for many years — both taken earlier this year. On the other hand, the tragic attacks in the USA last September have heightened concerns about the safety and security of nuclear power, and underlined fears about large scale radiation events. On balance, the future of nuclear power remains where it has been for many years, namely uncertain, due to the many challenges, concerns and obstacles facing its great, but still unfulfilled, promise.

Transportation was the most important factor contributing to the increase in oil demand over the past 20 years, in particular in the OECD countries, and this trend is expected to continue for the next two to three decades, possibly into mid-century. There are sufficient conventional and unconventional oil resources to meet this projected increase. Nevertheless, to meet key energy policy objectives in reducing future oil and gas imports, cutting urban pollution and harmful emissions, as well as preparing for the long-term eventuality of fuel switching away from hydrocarbons, efforts are already underway to develop cleaner alternative fuels, coupled with more efficient engines. Again, however, all those new technologies offering significantly higher efficiency entail much larger initial investments than can be sustained beyond the limited, initial take-off stage by most governments sponsoring their developments.

Hybrid and electric vehicles are likely to see increasing use over the course of the next decade. Of these only FC Vehicles (FCV) offer truly innovative and revolutionary new car technology with a chance of capturing a substantial portion of the auto market in the foreseeable future. While advances in FC technology during the last decade have been remarkable, unfortunately the development of FCVs for the mass auto market must overcome major obstacles before any of the technologies currently under development could successfully reduce their very high costs and provide the level of performance desired by consumers. This is unlikely to materialize before at least a decade. Alternative FCV technologies are currently being developed through a number of alliances among international auto manufacturers and the oil industry, with strong support from government in terms of R&D support, both through incentives and regulations intended to give the technology a jump start on market share through legislation, as in California.

While FC technology manufacturers’ real objective is the successful introduction of FCVs to the mass auto market, the long and still uncertain road to its realization has forced leading FC manufacturing companies to shift their business strategy , concentrating on the development of FCs for the distributed power generation market. This technology has already been demonstrated in a number of small projects and, given its advantages and its advanced stage of development — with many new designs now close to becoming competitive with conventional technologies for power generation in the KW-MW capacity range — the time horizon within which successful and financially rewarding benefits can be achieved is potentially much shorter .

Hydrogen, like electricity, is a high-quality, secondary energy carrier, which can be used with very high efficiency and zero or near-zero emissions at the point of use. Its use in transportation, heating and power generation has been demonstrated, and in the long term it could replace current fuels in all their present uses.

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Hydrogen technologies are at an early stage of development and may well one day become commercially available for the mass market as the cleanest and most desirable fuel. However a very fundamental fact that is often overlooked in the debate, however, in the rush to build a hydrogen economy, is the fact that hydrogen resources do not exist naturally in a free, ready to use form.

The primary energy required to make hydrogen fuel must come from either a hydrocarbon, renewable or nuclear energy source, either directly for solar, or through another conversion process to electricity, thus losing useful energy in the process.

It will henceforth not be appropriate to focus on the development of hydrogen fuel-cycle technology independent from the associated primary-energy technologies needed to prime this technology. Consequently, assessment of the relative environmental advantages of the hydrogen fuel-cycle technology over others must consider the total environmental impact throughout the full fuel cycle, including the requisite primary and conversion energy technologies, whether renewable, fossil or nuclear. While shifting the source of pollution to distant, central power stations certainly improves the local urban environment, it has no net, positive effect either regionally or globally.

In conclusion, all the above issues and the recent developments in new and advanced energy technology for sustainable development will undoubtedly fall within the scope of future consumer-producer cooperation. As relations between the two sides improve and expand, topics for discussion can be expected to broaden. Whatever methods of energy generation are adopted in the years to come, it will remain of paramount importance that the interests of all involved are met, without compromising the national interests and policy objectives of either producers or consumers. In short, sustainable global development requires the adoption of a “co-operative model” approach.

1. IntroductionPopulation and economic growth are the main drivers for growth in energy demand. In turn, growth in

energy demand and, increasingly, the demand for quality energy services are the major drivers of advanced and new energy supply technologies. Development of these technologies aims at improving efficiency of recovery, reducing operating and generation costs, mitigating environmental effects and, finally, responding to social values. Recently, the goal of security of energy supply has gained heightened priority again and is contributing significantly to the development of energy technologies, in particular the enhancement of energy-use efficiency and diversification of supplies, as well as resources, including expansion of domestic resources, through proactive government policies (e.g. taxes, subsidies and incentives) and funding of RD&D projects.

There is a consensus among most energy forecasters that world demand for energy is expected to continue to grow through the year 2020. Figures 1 and 2 illustrate the expected growth in energy demand, by region and fuel type, as depicted in OPEC’s latest OWEM 2002 study, to be presented to the 8th IEF; this growth picture up to 2020 is in line with the IEA’s Outlook 2000, (IEA’s Outlook 2002, with a time horizon to 2020 is to be released at the 8th IEF Meeting, but the figures for 2020 are not expected to change appreciably from those in Outlook 2000.)

Accordingly, global energy demand is most likely to grow by 2% per annum between 2002 and 2020, with 95% of the additional demand met mainly by fossil fuels representing 91% of the demand in the year 2020, 2% higher than in the year 2000. Oil continues to be a dominant energy source. Most of the added oil demand comes from the transportation sector. The most recent IEA study available, Outlook 2000, presents similar conclusions, but with somewhat higher projections for oil demand over the next two decades than OPEC’s estimates.

Beyond 2020, alternative energy demand growth paths may diverge significantly, depending on many factors, such as policy choices for dealing with key issues like energy security and environmental quality, the course of technical and development strategies and, finally, consumer choices, which are influenced in turn by evolving

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social values and cultural context. The potential divergence of the different possible alternative energy paths — often exhibiting an approximate branching (bifurcation) behavior, typical of complex systems — is not surprising, given the complexity of the energy system and the inter-linkages among the factors that drive the system, some of which are non-linear. This makes long-term forecasting of the energy system impossible.

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The complexity of the energy system is illustrated

in Figure 33

which describes

schematically the structure of the complex global energy system. The top layer represents the different primary energy sources, while underneath are a series of linked layers connecting various energy conversion and transformation processes that lead ultimately to the provision of energy services.

Among the recent studies that explore the likely long-term energy paths of alternative scenarios (until 2050 and beyond) are the IIASA-WEC report Global Energy Perspectives, and the new study by Rogner et al (IAEA) that examines a range of scenarios describing what the global energy system might look like around the middle of this century. The four ‘scenario families’ covered in the study represent different but plausible (though by no means exhaustive) combinations of basic assumptions about future demographic, social, economic, technological, and environmental development. The subsequent analysis examines alternative options of how energy services might be provided by mid-century, and delineates the likely technology and infrastructure implications. While the main objective of that study was to understand the different nuclear technologies that may best contribute to each scenario family, in particular the requisite R&D, the generic message underlines the great uncertainty about the future energy technology mix that corresponds to a particular scenario.

It is evident that the seeds for divergence in future energy paths among the alternative long-term scenarios are sown well in advance. The inertia (resistance to change) of energy technologies, within the extremely complex global energy system, is so great that decisions and actions taken now with the intention of affecting the future course of the energy system will not produce noticeable changes until decades later. For example, it is expected that by 2010, the accumulated body of evidence, combined with improved modeling and understanding of the

3 H. Rogner and A. Macdonald, “Energy System Expectations for Nuclear Energy in the 21st Century”, IAEA, 2002 — draft

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climate system, will provide clearer and more reliable answers as to whether the continued increase in anthropogenic GHG emissions (from burning of fossil fuels) will result in discernable climate change beyond the natural fluctuations of the climate. Therefore, the so-called ‘no-regret’ policy actions being advocated at present to curb and possibly reduce anthropogenic CO2 emissions into the atmosphere may be formulated in various ways to achieve the same results. The inertia of any successful energy technology compels us to carefully examine all available technology options and chose the optimal mix that truly represents ‘no-regret’ to us all.

It is well established that new commercial energy technologies are developed mainly by private (multinational) companies in industrialized countries. Thus, potential profit from deploying new energy technology is the key to attracting investment in the expensive long term RD&D required. The role of government is to set policies and provide incentives — including partial funding of initial RD&D — to encourage private companies to develop a particular new energy technology. These policies aim to improve resource utilization, reduce energy costs, protect the environment, and improve energy security.

The participation of developing countries, including oil-producing and exporting countries in the development of new energy technologies is negligible. Therefore, while benefiting from new energy technologies developed by multinational companies, the developing countries’ main concern is access to increasing, reliable supplies of commercial energy at a reasonable cost, without incurring the burden of subsidies. However, this concern has not been targeted, nor has the interest of OPEC in optimizing the long-term benefit from natural resources (oil and gas reserves) been adequately or satisfactorily addressed.

The trend towards unbundling and deregulating the power energy sector in many industrialized countries is expected to continue and is beginning to be visible in developing countries as well. Policy-makers increasingly rely upon market forces to introduce new energy technologies. However, the oil sector is still subject to strong governmental regulation and controls (e.g. taxation) in most consuming countries.

2. Upstream Oil & Gas TechnologyAll energy outlook studies (except those driven by an ideological environmental agenda), including

those of the IEA, the US Department of Energy (DoE), and OPEC, show demand for oil and gas continuing to grow through 2020–30 and probably beyond, mainly in the transportation sector (for oil) and the electric power generation sector (for gas). Demand for oil is expected to continue to grow by a healthy average of 1.7% per annum through 2020, with more modest growth likely through the mid-century.

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On the other hand, most large, easily accessible and low-cost oil and gas reserves have already been discovered and are being depleted. However, the oil and gas resource base is known to be much larger, and additional unconventional oil and gas resources are known to exist in even greater abundance.

The multinational oil companies have developed a remarkable array of powerful new and advanced technologies and tools for use in exploration, reservoir evaluation and production and processing, mainly outside OPEC Member Countries. These developments have been led by the multinationals themselves, with strong support from the governments of key OECD countries (mainly the USA), through ambitious and well-funded RD&D programmes.

Table 1 shows the most important of these technologies that have had, or are likely to have, significant impact on availability and cost-competitiveness of future oil and gas resources. The listed technologies are grouped under categories representing different stages of the upstream industry, summarizing their current state of development and application, as well as prospects for further development, where applicable.The main driving force behind these new upstream technologies is the desire to:

Increase access to economically exploitable new liquids and gas reserves; Improve recovery rates of existing reserves (typically only 35% of which are currently recoverable by

primary and secondary recovery technologies); Reduce exploration, development and production costs; Mitigate adverse environmental efforts and risks to public health and safety from E&P activities; and Develop production and conversion technologies for clean liquid fuels from unconventional resources,

gas and coal.

The applications of these breakthrough upstream technologies over the past two decades or so have contributed in a large way to the significant expansion of hydrocarbon resources, mainly outside OPEC. Nevertheless, increasing the supply of oil and natural gas from diversified sources and regions – essential for long-term

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sustainability and security of oil and gas supplies - would require more focus on issues of technology transfer to producing countries, where the use of many of these advanced technologies has not yet fully materialized. Focus is also needed on the development and use of more advanced oil and gas production technologies suited to the special characteristics of present and future large oil fields typically found in some OPEC countries, where most oil reserves and resources are located.

Remarkable, directional and multilateral drilling technologies and 3-D seismic surveys have had a dramatic effect on upstream activity, driving large discoveries in deep-water areas of the US Gulf of Mexico, Brazil and West Africa. The more detailed data acquired by 3-D seismic surveys means that fewer dry holes are drilled. This results in significant reductions in the cost of finding commercial oil, as the cost of a dry hole can be millions of dollars, while an offshore 3-D survey is less expensive than a comparable onshore one. The use of 3-D seismic technologies has also provided new discoveries under salt layers and other frontier areas (e.g. the Alaska North Slope and its adjacent offshore area) previously inaccessible to oil and gas explorers.

Technical progress has indeed increased exploration efficiency through greater drilling success and progressively improved the worldwide success rate from 15% in the 1970s to 20% today. However, in terms of volumes discovered, reserves per exploration well show a continued disappointing trend, declining from 30 million boe/well in the1970s to about 10 million boe/well currently. Total discoveries per year have declined steadily from, on average, 70 billion boe/year in the 1960s, when foreign companies had access to exploration in the OPEC Middle East, to 20 billion boe/year in the 1990s. This has also been accompanied by a decline in the average field size of those discoveries, from over 200 million boe per discovery in the 1960s to less than 50 million boe in the 1990s. Giant discoveries are possibly not a thing of the past yet, but they are rare these days (see Figure 4). Furthermore, where giant field potential does exist, it is usually in deep-water frontiers or hostile regions in terms of climate and/or politics.

Despite the decreasing trend in new discoveries, reserves-to-production ratios have remained relatively constant and worldwide reserve levels continue to rise. Moreover, non-OPEC countries have maintained their R/P ratios at between 16 and 19 years since the 1970s. This is reflected in the fact that the oil industry in general, and non-OPEC producing regions in particular, are becoming more successful at adding more reserves within existing mature fields through enhanced or improved recovery techniques (EOR, IOR) and better field management. In the USA alone, oil production through EOR in 1990 provided 550,000 b/d (6.2% of US production).

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Table 1 Summary of New and Advanced Upstream Technologies

Field of Application/Technology Challenges and Future Prospects Time Horizon for Commercial Deployment

SEISMIC 3D Seismic Imaging Additional improvements (e.g. vertical cable) for a wider use of

applications in offshore areasMore and more widely used

4D (Time-lapse seismic surveys) Optimize reservoir management: to characterize reservoir properties, monitor production efficiency, and estimate volume from inception through the life of the field (Shirley, 2001).High prospect, but costly, processing & interpretation challenges

In progress5-10 years

4C (Multi-component Seismic Imaging) Indispensable tool in specific conditions: prospects under salt domes or basalt and for imaging beneath gas accumulations. Costly, processing & interpretation challenges

Still limited use, but moderate prospects for the future

- Advanced Drilling, Completion and Stimulation Technologies:

Improved access to hostile environment at different geographical areas and conditions (e.g. high P&T range)

- Horizontal, directional, and multilateral drilling Better access and more efficient production. High prospects for wider used- Coiled tubing, Expandable tubing Reduce drilling time, but still very expensive

A niche application in horizontal wellsIn progress

- Slim hole drilling Lower rig costs In progress – 5-10 years- Mini TLPs (Tension Leg Platform) Economic for smaller fields In progress – 5-10 years- Logging Tools- Measurement while drilling (MWD)- Logging while drilling (LWD)- Nuclear Magnetic Resonance Imaging (NMRI)

- more accurate well placement and better performance- lowered rig cost by faster drilling- greater accuracy for detecting fluid type and distribution

In use but not widely yetInfancy stageIn use but not widely yet

- The seafloor to surface links (mooring system and risers)

Lighter, more flexible, corrosion resistant and stronger materialReplace steel with titanium, synthetic or composite materials

Under development5-10 years

“Dual Gradient Drilling” To avoid blow out Ongoing test and developmentDrilling mud technology Suitable for extreme condition (T: 00-1500C and P up to 400 bars) In progressVessels, Floating Supports

- FPSOs or upgraded unit- FDPSOs (new concept)

New concept (or upgraded) of deepwater rig unit to economically suit various oceanographic condition

In use alreadyGrowing - in 5-10 years time

Intelligent completion (“smart well”) Improve ultimate recovery Very early stageSubsea completion Reduce development time for new (smaller) offshore fields In progress

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Table 1 (Cont.)Subsea EquipmentMeteo-ocean, seabed condition monitoring

Further R&D to reduce costs In use and further in progress

Digital E&P or IT management To develop innovations in E&P information technology management. OngoingEarth ModelingIntegrated Reservoir Characterization and Modeling

Switch Geological Earth Model into more “Dynamic Model”- accurate architecture of reservoir bodies and flow dynamic of

fluids.- Prediction of production rates under various development scenariosStill costly for NOCs in Developing countries.

Widely used in major IOCs but in progress for other users.High prospect

EOR / IOR: Thermal Recovery: Steam Injection and In Situ

Combustion Gas-Miscible and Immiscible Recovery Chemical Recovery Microbial and Biochemical Recovery

Further improvement of methods and selection to get optimal recovery factor

In use)))In use))

Reservoir Life Extension Technologies Further improvement In useUnconventional Oil (Bitumen & Extra Heavy Oil)- Mining and Extraction processes- New in situ recovery method (e.g. SAGD, Vapex)- Upgrading technology (Aquaconversion, BioARC)

Increase recovery rate, say 15-25% from 12% under the current level of technology (without excessive energy consumption)- Further improvement of efficiency- Further improvement in horizontal well design & lifting system- Finding methods to improve energy efficiency & reduce emissions.

Before 2005Ongoing expansion efforts

Gas to Liquid Technologies To reduce overall costs to the point that the process is economically competitive with the conventional crude oil/refining value chain; Great potential for fuel alternatives and higher value products

In progress – 10 years for longer scale

Methane Hydrate Explore more concentrated resource base, R & D ≥30-50 yearsNote:

- FPSOs : Floating Production Storage and Offloading vessels- FDPSOs: Floating Drilling Production Storage and Offloading vessels- SAGD: Steam Assisted Gravity Drainage- VAPEX: Vaporized Extraction, vaporized hydrocarbon solvent to reduce the viscosity of heavy oil- BioARC: Biocatalytic Aromatic Ring Cleavage

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Box 1 shows five selected fields where recoveries have been well established within a range of 38% to 59%.4 These fields have typically benefited from the application of the latest technologies during their lifetimes.

Box 1Field Name Field Location Reserves Recovered

Statfjord Norwegian North Sea 59%Brent UK North Sea 57%Prudhoe Bay Alaska 54%Forties UK North Sea 39%Ekofisk Norwegian North Sea 38%

Source: Petroleum Review, March 2000

More advanced exploration and production technologies are continuously being developed, in order to find more reserves and maximize cost reduction, including:

4-D time-lapse seismic and visualization technology for pinpointing remaining recoverable reserves, as well as new four-component (4-C) seafloor seismic systems allowing explorers to see geological features below layers of gas, thus improving geological data.

New logging techniques, control systems, and down-hole sensors that allow better control of oil well performance, lowering costs by cutting well-logging times and reducing the number of costly sub-sea repairs and adjustments that are needed.

Coiled tubing for well workovers, completions and flow lines, as well as artificial lift options for producing wells and intelligent, or smart completions.

More effective methods and products for well stimulation and treatment.

There are still many challenges to be faced, however, in particular, those relating to future potential trends for additional liquids supply:

Improving recovery efficiency: significant hydrocarbons are still left behind, even after implementing water flooding and EOR processes.

Developing the huge amount of known unconventional deposits (bitumen, extra-heavy/ultra-heavy oil, tar sands and oil shale) and reducing the cost of exploitation and upgrading processes (e.g. conversion to synthetic crudes).

Designing production technology for deep-water developments. Implementing new technology in the low-cost, huge-reserve OPEC Middle East. Realizing technology breakthroughs for improved or new gas-to-liquid (GTL) processes,

leading to large reductions in capex and/or opex that might lead some GTL players to committing to large-scale projects.

Assessing the scientific bases of methane hydrate resources and, if the indicated large resource levels are validated, selecting the environmentally sound technological approach for their exploitation.

Looking forward to the next decades, advances in technology will, to be sure, continue to be a key driver in finding more reserves that would add to the security of future oil supply.

Within the global context, it has been indicated that future technological progress will allow the development of huge amounts of unconventional oil at lower costs and will therefore enable the extension of oil supply elasticity and dominance in the long run.5

4 Petroleum Review, March 20005 Gruebler, Nakicenovic & Victor, “Dynamics of Energy Technologies and Global Change” Energy Policy, Vol. 27 No. 5, Elsevier, 1999

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2.1 Impact of Upstream Technology on the Cost of Oil Supply:Many experts agree that the key impact of technology is the continued reduction in the cost of

oil supply, which allows, in part, an increase in the competitiveness of unconventional oil production and the extension of non-OPEC oil supply elasticity (and on the other side, also as regards OPEC supply). Others see a different pattern of future cost trends, depending on the assumptions used as the major key influencing factors.

The historical evolution of upstream costs (exploration, development and production) over the past two decades shows a dramatic reduction from $27/b in 1981 (in 2002 dollars) to less than $9/b in 1995. Technological developments were the main drivers behind this drop. During the 1990s, however, the apparent trend was largely flat, with a slight increase in the latter part of the decade. Apart from the cycle of E&P costs, the relentless pressure on costs during recent years can be attributed to factors including the ie of new findsgent environmental regulations, and the access/competition dilemma.

The challenging question now becomes: will technology keep forcing upstream costs down, and will E&P activities remain on track? The contribution of technological advances in cutting E&P costs is indisputable and may well continue, but the actual magnitude of the impact on future additions to world oil supply is difficult to predict.

Over the longer term, the trend for upstream costs in a given country or region will depend on forces including the maturity of the resource base, the pace of new investment (especially for low-cost OPEC producers), and further technological breakthroughs (especially for higher-cost non-OPEC producers).

The implementation of new upstream technology through foreign capital participation in the low-cost, high-reserve areas will not only increase world production capacities in the long term, but also optimize worldwide average cost reductions.

For mature regions like the North Sea and the USA, where larger and more easily accessible prospects have been found, developed using the latest technologies, and subsequently quickly depleted, the average upstream cost per barrel tends to be more expensive. Cost reductions will probably, therefore, be limited and are highly dependent on new technological breakthroughs. The ability to manage huge amounts of data and the application of the right technology to the right prospects are also important key sources of present and future cost-cutting efforts.

2.2 Methane HydratesThe staggering recent estimates6 of the potential solid, pure natural gas resources that may

exist at the bottom of continental margins and permafrost regions, in the form of solid methane hydrate (ice) crystals, warrant the modest R&D programmes being pursued in the USA, Japan and some other countries. These efforts aim to verify and validate the reliability of the estimates, study the science-base and explore the advanced technology that needs to be developed one day to detect and produce natural gas from these huge (methane hydrate) resources, in a manner consistent with the sustainability of global marine and terrestrial environments. Methane hydrate technology is at a very early stage of exploratory R&D, which covers:

Resource characterization: To prepare, analyze, evaluate, and develop the databases, mapping systems, and models necessary to understand and characterize methane hydrate deposits in the geological environment, and accurately estimate the methane resource availability in hydrate deposits.

Production: To develop reservoir and process engineering modeling and recovery technologies.

6 According to a recent US Geological Survey study (1977), the methane hydrate resource base in the US is about 100 fold the US gas reserves, while for the world at large, the figures are about 100,000 fold the global reserves

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Global carbon cycle: To analyze the dual roles of hydrates in the global carbon cycle and their relationship to global climate change.

Safety and sea floor stability: To analyze safety and sea floor stability due to methane hydrate occurrence associated with the exploration, production and transportation of conventional hydrocarbons.

3. Electric Power TechnologiesThis section examines the key technologies that are being, or need to be developed, in the

three major fields: fossil, renewable and unconventional and nuclear energy.

In view of its flexibility and other inherent qualities, demand for electricity will continue to grow at a faster rate than overall energy demand. In the coming years, the world will require thousands of gigawatts (GW) of new installed power generation capacity, much of which will be in developing countries. While the potential exists to commercially produce electricity from a variety of energy sources - fossil, nuclear and renewable - electrical power worldwide is produced predominantly from fossil fuels, mainly coal, followed by natural gas, which could overtake coal’s leading position in around 2020, or soon after. As a result of policy decisions by major industrialized countries in the late 1970s and early 1980s to reduce oil imports, the role of oil in power generation has declined rapidly. Currently, oil’s share in commercial power generation has dropped to 8%, down from 22% in 1971, as its use is limited to meeting part of peak demand, as a standby fuel, and when gas or domestic coal supplies are unreliable, or unavailable.

There have been heightened concerns over the past two decades about potential climate change and the possible consequent effects of global warming, attributable to the rise in GHG emissions and the resulting increase in their concentration in the atmosphere, the main suspect being CO2 from the burning of fossil fuels. To guard against the possible adverse consequences on the global climate, it has been urged that, as a prudent measure, emissions of CO2 and other GHGs must be reduced. According to the Kyoto Protocol and the ensuing agreements for its implementation (the latest of which was in Marrakech in 2001), negotiated under the umbrella of the UNFCCC, most industrialized countries (i.e. the Annex I countries of Kyoto, excluding the USA) are committed to an average GHG emission reduction of 5.2% (to be checked) below their 1990 levels by around 2010. These reduction levels have been further weakened as a result of the compromise agreement reached in Marrakech. It is expected that Kyoto will be ratified and will go into force by early 2003.

Fuel switching, efficiency improvements, the accelerated deployment of renewables, and the possible revival of nuclear, are usually, but mistakenly, cited as the only options for reaching the Kyoto targets and the subsequent agreements for its implementation.

It is true that various electricity generation technologies based on nuclear generation fission reactors, renewable sources, and geothermal energy are commercially available and, technically speaking, could supply, almost indefinitely, a much larger portion of the world’s electrical energy needs, should such an option become necessary. However, most of these technologies are currently uneconomic, or unacceptable (in the case of nuclear), to large segments of society in developed and, increasingly, developing countries. Most face challenging environmental and sustainability constraints and require very substantial cost reductions to be competitive. Therefore, unless unexpected compelling reasons to do otherwise arise, cleaner fossil fuels will continue to dominate the power sector, as well as most other sectors, for decades to come, if not throughout this century.

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3.1 Clean Fossil Power Technologies

3.1.1 Gas Turbine TechnologyGas turbine (GT) technology has evolved over the years from being used solely in aviation

into being the technology of choice for power generation where reliable supplies of natural gas exist. Since 1990, over one-third of net new power capacity in OECD countries has been provided by gas turbines or combined-cycle GT (CCGT). The latter has reached a 20% annual growth rate, the highest of any energy technology. Of the next 1,000 power plants to be built in the USA, as many as 900 are expected to use GT technology.

The attractiveness of GT plants stems from their low capital cost, the relatively short construction period required, resulting in a short investment recovery time, irrespective of the future price of gas and the high conversion efficiency, which is a result of high operating temperatures and reaches 50-55% for large CCGT power units.

Cost-effective GT systems come in various sizes, ranging from “micro-turbines” of less than 100KW(e) to heavy-duty units of over 200 MW(e), which are attractive for distributed, as well as peaking, mid-range and heavy-duty base-load applications. Furthermore, the lower NOx and CO2

emissions per unit of electrical energy produced add to their attractiveness as the cleanest fossil power generation technology currently available.

Advanced and next-generation turbine systems (AGT, NGTS) technologies are being developed in the USA, Japan and other industrialized countries with the aim of:

Providing the option of using multiple fuels (gas and liquids) and renewables. Achieving higher efficiency rates of 60% or greater. Reducing NOx and CO2 emissions to less their 5ppm. Enabling the integration of CO2 sequestration technology.

3.1.2 3.1.2 Advanced Clean Coal Power TechnologiesToday, coal enjoys the largest share of any fuel for power generation. Despite being

environmentally the least desirable fossil fuel, coal is expected to retain its importance for use in major power stations, especially where abundant domestic supplies are available, as in the USA and, among the developing countries, China and, to a lesser extent, India. The development of cleaner and more efficient coal (and gas) power technologies has been actively pursued in the USA and other OECD countries with the twin objectives of improving the quality of the environment, while reducing oil imports, as part of national energy security policy. Multiple clean coal technology development approaches have been pursued in the USA, with the forging of strong partnerships between industry and government. As a result, several new coal-combustion and emission-control technologies have been demonstrated to be viable.

The main new coal power technologies are a set of pulverized or fluid bed combustion technologies (SCPF, USCPF, PFBC)7, the integrated coal gasification combined-cycle system (IGCC), and the integrated gasification fuel cell (IGCF).

In the near term, SCPF, which has been demonstrated to be commercially viable, will be available and will become increasingly visible, thanks to further efficiency enhancements. Also available in the near term is the fluidized-bed combustion (FBC) system.

In the mid-term, both the ultra-SCPF and the pressurized FBC power systems are expected to begin commercial deployment with efficiency levels reaching 50%. Over a longer time scale, the IGCC and,

7 Super critical pulverized fuel (SCPF); ultra-super critical pulverized fuel (USCPF); pressurized fluidized bed combustion (PFBD)

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later, IGFC power systems are likely to be the clean coal technology of choice in industrialized countries, due to their superior environmental performance (i.e. very low emissions), higher efficiency and competitive generation costs. Demonstration IGCC plants are being built and others are planned in the USA and other OECD countries, as a result of which the reliability and commercial viability of IGCC should be proven by 2010.

IGFC technology is at an early stage of R&D and its further development awaits the successful demonstration and commercialization of natural-gas or hydrogen fuel cell power systems, which are already under development in earnest by many leading fuel cell manufactures, as discussed later in this paper.

The key factors for the future success of gasification-based coal (and other hydrocarbon-based) power technologies are:

The design and building of advanced and more durable gasifiers to achieve higher performance and to increase feedstock flexibility, capable of handling a variety of carbon-based feedstocks.

The development of membrane technologies to separate oxygen (needed for gasification) from air more economically; and also to separate CO2 from flue gas for in situ sequestration.

The development of advanced gas cleaning technologies that can capture virtually all the pollutants (ash, sulphur and nitrogen oxides, etc).

The development of methods to minimize solid waste and recycle it as commercial products.

Improvements in cost competitiveness. Current gasification-based power plants in the USA are estimated to cost about $1,200 per KW (installed capacity), compared to conventional coal plants, at around $900 per KW.

3.1.3 Clean (Refinery) Oil Integrated Gasification CC Power Plants (OIGCC)The development of gasification technology in general, and coal-based IGCC in particular,

coupled with deregulation, is (perhaps paradoxically) creating a very promising opening for the competitive re-emergence of oil in the power generation sector. The use of high-sulphur, high-metal refinery residual fuel or petroleum coke as feedstock for refinery-based gasification and power plants is especially attractive when local environmental regulations reduce the feedstock cost to zero, or even negative levels when refiners have to incur costs just to dispose of such low quality residual fuels.

Emissions from an IGCC unit using petroleum coke or residual fuel can reach the low-emissions profile of a NGCC power generation unit, while solid waste from such IGCC plants is much lower than from a boiler with flue gas desulphurization, or from circulating-bed and combustion boiler systems. Similarly, while oil-based IGCC produces more CO2 than NGCC, it has much lower CO2

emissions than other solid fuel plants (e.g. coal).

Refinery gasification application has been referred to as a tri-generation system, as it produces steam, power and synthetic gas, which in turn, can be used to produce hydrogen and/or chemicals, such as ammonia.

While the economics of gasification are specific to each plant and region, heavy-oil based IGCC compares very favourably with coal-based IGCC. One recent industry estimate puts the capital cost at $950–1,100 per KW for oil-based IGCC (OIGCC), compared with $1,300–1,500 per KW for coal IGCC (CIGCC). Six such plants have been built in Italy, where the high electricity tariff provides an additional advantage, while refiners elsewhere are currently considering this attractive technology with interest, with a few projects in the advanced planning stage.In contrast to other upgrading processes, such as cracking or coking, which convert low-value liquids into higher-value products that compete with other oil products for markets, gasification plants expand the market for crude oil by about 10 percent or more. It should also be noted that OIGCC becomes far

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more attractive when technology of CO2 sequestration from fossil-fuelled power plants is fully developed and deployed successfully on a large scale.

3.2 Carbon Dioxide (CO2) SequestrationAlthough most of the growth in global energy demand to 2020 and beyond will be met by fossil fuels, led by oil and gas, over a longer time-scale, concerns about the possible adverse impact on the global climate from increasing anthropogenic GHG emissions (in particular CO2 from fossil fuel use) pose a serious challenge to fossil resources. This may constrain their continued expansion, as the major driver of global economic growth, especially in developing countries, where they are needed the most.

A major omission from the recent debate on the world’s energy needs and sustainability is any objective analysis of maintaining the fossil fuels option, while legitimate environmental concerns over emissions of CO2 are adequately addressed. While acknowledging the legitimacy of actively exploring the development and deployment of renewables and nuclear to meet future world energy needs, we should also explore all other technically feasible options. Foremost of these is the possibility of capturing virtually all the anthropogenic CO2 emissions, as opposed to just reducing them.

Therefore, proposals to develop and deploy CO2 capture and storage technology sequestration offer great potential for addressing global environmental concerns and, at the same time, could extend the use of fossil fuels well into the later part of this century for oil and gas and beyond for coal, especially in combination with other energy source technologies (renewables and nuclear) in a balanced and optimized manner.

A number of technologies currently exist to capture CO2 from the atmosphere and adequately store it, but they have not been developed, nor optimized for use on a large scale. There do not appear, however, to be any fundamental technical obstacles to the successful development of this promising technology. The tremendous amount of advanced expertise needed for the RD&D efforts is available today globally, and it is being applied at an accelerated rate in many OECD countries.There are two basic approaches to CO2 sequestration: either at the point of emission (in situ capture), or from the air (direct capture). In either case, it must be disposed of safely and permanently. The in situ approach is the one most widely talked-about. This is currently being actively pursued by rapidly expanding international R&D efforts, and involves the capture and subsequent sequestration of the emitted CO2 from the source (i.e. large fossil power plants). More recently, very promising exploratory work has been carried out to examine the feasibility of capturing CO2 directly from the air (the second approach) and sequestering it at favourable locations.

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3.2.1 In situ CO2 CaptureA number of present and future electric power generation systems have been identified as

suitable for in situ CO2 capture, either by retrofitting, or by implementing new designs. Among these are PC + FGD, NGCC, IGCC8, and PC + O2/CO2 recycling. Three main in-situ capture approaches have been proposed and are summarized in the table below, namely the flue gas option, the oxygen option, or the hydrogen/syn-gas option. Each approach can boast a number of competing technologies that are under investigation as shown below.

Table 2Approaches to CO2 Capture

Approach Coal GasFlue Gas Flue Gas clean-up followed by

Co2 separation processes(e.g. amines)

Co2 separation fromflue gas (e.g. amines)

Oxygen O2 plus recycled flue gas in place of air steam turbine

O2 plus recycledflue gas in place of air modified turbine/CC

Hydrogen(or Syn-Gas)

Gasification Shift CaptureH2 to turbine/CC

Steam Reforming Shift CaptureH2 to turbine/CC

Source: Solutions for the 21st Century: Zero Emissions Technologies for fossil Fuels (IEA, May 2002)

3.2.2 Direct CO2 CaptureCapturing CO2 directly from the air for later disposal (sequestration) has proven technically

feasible (see box 2) and not as costly as one might think. In fact, if wind power technology is considered almost cost-competitive in prime locations, then a simple comparative analysis demonstrates the huge potential advantage of the proposed technology of direct CO2 capture.

To maintain CO2 concentration in the atmosphere at about the current level, the direct CO2 capture and disposal technology must be deployed on a scale to enable capturing about 30% of all anthropogenic CO2 emissions. In fact, should this technology prove to be economically viable, then, in principle, the level of operation could be scaled up to the point that CO2 concentration in the atmosphere may even be reduced if desired!

If successfully developed, direct CO2 capture technology has a number of advantages over in situ CO2

capture, in that it can be located at the most favourable permanent storage sites, such as in conjunction with large deposits of serpentine in Oman, the large aquifers in the Canadian province of Alberta, as well as in mid-ocean CO2 disposal sites. Thus, utilizing such favourable sites enables the capture of CO2 emitted anywhere in the world, without incurring any transportation costs, as the atmosphere itself is used as a free vehicle to transport the CO2 from sources of any type (whether fixed power generation units, or mobile sources like cars) at any location.

The key to the successful development and deployment of such technology is identification of an intermediate aqueous chemical that is efficient in extracting CO2 from the air and releasing it later for permanent disposal by binding it indefinitely to certain abundant rock formations, storing it

8 Pulverized combustion (PC); flue gas desulpherization.(FGD); natural gas combined cycle (NGCC); integrated coal gasification combined cycle (IGCC)

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permanently in geologic aquifers, abandoned reservoirs, or in the ocean depths. Technically, Ca (OH)2

provides an efficient reagent for proof of concept.

Although the technology of direct CO2 sequestration from air is currently in its infancy (i.e. at the conceptual stage), technically speaking it is feasible and economically promising, anddeserves a truly active cooperative R&D effort on a global scale.

Box 2: Feasibility of Direct CO2 Capture From Air:

By comparing the rate of kinetic energy (mechanical power) impinging on a cross section of a windmill operating at a wind speed of 6 metres/second with the energy rate of a fossil fuel flux that could be burned to generate the equivalent of the CO2 flux passing through the same cross section at the same wind speed (130 Wm-2 vs. 3.6 gm-2 s-1 of carbon dioxide flux), a group of scientists from Los Alamos National Laboratory (LANL), Columbia University and Harvard University have recently demonstrated that for an equivalent direct capture CO2 plants from an air inlet with a certain cross-section permits the burning of fossil fuel generating 400 times the power generated from an equivalent cross-section windmill. Their initial estimates, which are admittedly somewhat rough, suggest that for 10-20 cents per gallon, it is possible to recapture all the CO2 generated in the consumption of one gallon of gasoline. If these estimates are confirmed by more in-depth analysis accompanied by an active RD&D programme, then the validity of the arguments used to justify the practice of imposing high tax on gasoline (and other products) in most OECD countries, as a means of reducing CO2 emissions to mitigate against potential climate change is immediately weakened if not nullified.

Table 3Comparison of Various Options for Storage of Carbon Dioxide

STORAGE SITE: ADVANTAGES DISADVANTAGES

UNDERGROUND

Coal beds Potentially low cost Immature technology

Mined salt domes Customized designs High cost

Deep saline aquifers Large capacity Unknown storage integrity

Depleted oil or gas reservoirs

Proven storage integrity Limited capacity

Mineralization (e.g. with peridotites, serpentinites

Net energy producer, forms stable and benign carbonates

Handling of huge amount of material

OCEAN

Droplet plume Minimal environmental effects Some leakage

Towed pipe Minimal environmental effects

Dry ice Simple technology High costCO2 lake Carbon remaining in ocean for

thousands of yearsImmature technology

3.2.3 Carbon Storage

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After separation and capture, the CO2 could be transported and sequestered, either underground in secure geological formations, such as deep saline aquifers, unused coal beds, or depleted gas or oilfields; in deep ocean below thermocline, or through. mineralization of CO 2 through exothermic (energy producing) reaction with naturally occurring mineral deposits, such as magnesium silicate or serpentinites to form stable, environmentally benign carbonates. A comparison of the various options is shown in Table 3. (Figure 5 illustrates the ongoing experimental project being conducted by Statoil of Norway; Figure 6 illustrates liquid CO2 sequestration in deep ocean).

If CO2 disposal in deep ocean was determined to be a desired storage option, a substantial study of the potential environmental effects would need to be undertaken. Likewise, the potential for and likely impact of disposal in abandoned gas wells needs to be investigated. Overall, CO 2 disposal would require research in areas of critical concern and demonstration of an overall system, before its feasibility as a viable, global option could be determined.

3.2.4 Cost of CO2 SequestrationIn view of its great potential, major R&D efforts have been mounted in the USA and many

other OECD countries to examine the various capture and storage approaches, assess their likely cost, and develop and demonstrate the technology. The goal of these projects is to reduce the cost of carbon sequestration to $10 or less per net ton of carbon emissions by 2015. Costs in this range would add less than one cent per kilowatt hour (kWh) to the average electricity bill, making sequestration one of the most affordable options for addressing climate change.

Present commercial systems for capturing CO2 are currently very expensive, in addition to being on a much smaller scale. The primary interest of these commercial systems is to produce low-cost high-purity CO2, while the interest of zero-emissions for fossil fuels strategy is to economically capture CO 2

and store it, and avoid creating additional emissions in the process. A recent study by the IEA concluded that the cost of capturing CO2 from new coal, gas and oil power plants ranged from $16-87 per ton of CO2 emissions avoided, or about 75% of the total cost of capture, transport and sequestration, which is in contrast with earlier, much higher, estimates. In terms of the incremental cost of electricity generation, the IEA study’s figures translate into 1.6–3.5 cents per kWh for 2000 plants and 1.0–2.5 cents per kWh for 2012 plants. Figure 7 provides comparisons of costs of electricity generation for the USA in the year 2020, which, although difficult to estimate accurately in view of the variations in technology and assumptions, indicate that the cost of electricity generation with capture technology is competitive with the most promising renewable technologies and has a great competitive edge over other renewable and nuclear options.

3.3 RenewablesRenewable energy technologies use resources that are not subject to depletion, though are of a

dilute nature. If only a small fraction of the abundant renewable energy inflow could be captured and commercially exploited, it would provide a “relatively” clean energy source that could meet most of the world’s future energy demand.

Driven by concerns over the protection of the environment, on the one hand, and energy security concerns, on the other, many governments in both industrialized and developing countries have launched ambitious RD&D programmes and instituted policies and mechanisms to provide incentives As a result, many renewable energy sources are now commercially available for stand-alone and grid-connected power generation. Apart from well known and commercially deployed hydro and geothermal, the most commonly known and promising sources are wind power, waste biomass, photovoltaic (PV), small-scale hydro, and solar thermal technologies (see table 4). Of these technologies, land-based wind power has shown most rapid growth in recent years, followed by biomass and PV. This high growth rate, however, as well as the initially impressive growth rates of other renewable technologies, is not sustainable, since they are driven by proactive government policies and subsidies, which are not likely to continue, or to be sustainable, outside some limited

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niche

markets. Over the medium to long term, deployment of promising renewable technologies is expected to continue to grow, though at a more modest rate.

3.3.1 Renewable Energy in EuropeWithin OECD countries, in their effort to achieve CO2 reductions to meet the Kyoto Protocol

objectives, European countries, individually and as a group (European Union), have adopted very ambitious programmes to promote the accelerated deployment and use of renewables, with a view to enhancing their contribution to the energy mix, in particular for electricity generationThe Renewable Directive of the EU sets indicative, but not binding, national targets that reflect the starting point and a potential for each member country. Member states are required to translate the directive’s target into national law by November 2003. A 12% target was set for the share of renewables in total energy consumption by the EU by 2010. This translates into a 22.1% target for renewable electricity share in 2010, including hydro, compared with 14% in 2000. If hydro is excluded, then the target for all other renewables’ share of electricity becomes 12.5%, compared with 3.2% in 2000. In turn, ambitious national targets, though most likely unattainable, have been established. To achieve these targets, a number of expensive support systems have been instituted in most European countries, including competitive bidding, guaranteed prices, and the green certificate.

This means that the installed capacity of renewables in EU countries must grow by almost five-fold - from about 21 GW in 2000 to 96 GW in 2010, with wind power accounting for most of the growth, starting from a base of 14 GW installed capacity in 2000, followed most likely by biomass and, to a lesser extent, by geothermal and photovoltaic.

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These very ambitious targets cannot be achieved without massive government subsidies over a long period. It is very doubtful whether such costly support and subsidy programmes can be implemented in full by all EU countries for the period required. While it is true that during the initial take-off stage, governments with strong public support, due to the environmentally friendly image of renewables, have launched various support and subsidy programmes, it is difficult to imagine how these can be sustained as the share of renewables becomes significant, increasing by more than a few percent – apart from hydro. Indeed, countries such as Denmark, that have long pioneered the promotion of renewables with strong government subsidies and incentives, are finding it very difficult to continue their support at current levels. The Danish government, which has already reached its 2003 target, recently decided to limit the growing costs of financing renewable plants and will, as of 2003, no longer finance new and expensive support programmes.

The green certificates support system is receiving widespread interest. Under this system, the incentive for developing renewable energy is market based, with the power produced being sold at prevailing market prices. Generators of renewable energy receive green certificates for their production, giving them an opportunity to derive additional income by selling the certificates in the new certificate markets to be developed. The attractiveness of this new system is counterbalanced, however, by the immense complexity of setting up and implementing the system and the great uncertainty as to how the green certificate markets will perform.

Among the challenges faced by renewables is how to reconcile the need to reduce costs substantially, and in some cases by a very large magnitude, even in the case of wind power, currently the closest with the increasing shortage of good, economic and locally acceptable sites for large renewable projects. In contrast to other conventional power technologies, renewables suffer from the unusual problem of higher costs as their market share increases.

Overall, the low energy density and intermittence of renewables will continue to pose formidable challenges, namely the availability of land and storage systems. These challenges will continue to constrain large-scale electricity market penetration of most renewable power sources. Hence, it remains to be seen whether the popular and, currently, well-supported and ambitious programmes to promote accelerated growth of renewables in EU countries will succeed. If these ambitious targets are indeed realized to a large degree, then this pioneering, but demanding, social and economic experience would pave the way for the rapid use of renewables in many other countries and regions of the world. Figure 8 shows the comparative costs of renewable energy technologies.

3.4 Nuclear Power

3.4.1 Nuclear Power Technology

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Nuclear power plants (NPP), mostly utilizing light water reactors (LWRs), currently provide about 17% of the world's electricity production. The light water reactor (LWR) belongs to a class of reactors called “burner”, and it includes both the pressurized water reactor (PWR) and the boiling water reactor (BWR). It is the workhorse of nuclear fission power. Besides LWRs, there are other types of burners in use commercially, such as the Canadian (CANDU) heavy water reactor (HWR), the British advanced gas-cooled reactor (AGR), and the Soviet Voronezh reactor (VR). Breeder reactors, where some of the non-burning uranium is converted to plutonium to fuel future fast reactors have been developed and demonstrated, thus extending the lifetime of nuclear power, almost indefinitely.

LWR technology is highly developed and mature in comparison with renewable or other new energy sources, as may be rightly concluded from the above statistics. The safety record of these reactors has been excellent, as there have been, so far, no accidents leading to significant off-site release of radioactivity from LWRs.

There are currently 438 NPPs in operation in the world, with a total net installed capacity of 353 GW(e), mostly of the LWR type, and another 32 under construction. Two new NPPs (one in Japan and one in Russia) were connected to the grid during 2001, while three units were permanently shut down (one in Russia and two in the UK). It is evident that nuclear power technology has been contributing significantly to meeting part of the increasing demand for electricity and is potentially an important alternative to coal for electricity production in a low carbon future energy strategy. However, notwithstanding the so far impressive safety record of western-designed and built reactors, the technology is fraught with obstacles, largely institutional, that impede nuclear power as a major option for future world energy supply.

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Table 4Technology Status, R&D Requirements & Commercial Prospects of Renewables

Technology/Status R&D needs Prospects Limitations

Wind:-Rapid growth in recent years (25%)-The average size of a new wind machine is approaching new generation up to 1 MW.-At present 5 MW size under development

Photovoltaics:-Remarkable growth over last five years-Cumulative production to date of PV modules is ~ 1100 MWp with total installed capacity in operation ~ 500-600 MWp, supplying 500 GWh of electricity per year

Biomass:-For small power plants (e.g. less than 10 MW), conversion efficiency is as low as about 20-25%-For larger plants (20-100 MW), efficiency of about 40%

Solar Thermal:-Three types: trough, tower and dishes-Promising for high solar insulation-Installed operational capacity is presently about 400 MWe generating 1 TWh/yr electricity-Capital cost reduction: factor of 2 in 10 years

-Advanced turbine design-New durable materials-Energy storage systems-Wind/diesel hybrid systems

-Highest priority should be given to generic module development and manufacturing processes, and system integration issues into building material

-Significant effort is also needed on PV materials and cell fundamentals to increase efficiency

-Require the development of better techniques to increase the amount of feedstock available-For near-term applications, R&D is needed on low cost approaches for recovering biomass residues that are not now recovered

-For mid-term applications, continued support is needed for the programmes to grow terrestrial (woody and herbaceous) energy crops in a sustainable way

-Require improved technology, higher efficiency and lower costs-Integration with a conventional combined-cycle power plant offers the most attractive path to reduce the cost of the system.

-Cost reductions up to 45% are feasible within 15 years and ultimately might reach 30 mills/kWh-In the near term, new markets for stand-alone wind power farms are opening up, particularly in developing countries and remote locations throughout the world-Offshore wind farms may be the wild card in the long-term

-Range applications from wristwatches to electric utilities or distributed residential power, space vehicles-Professional areas, such as navigation aids and telecommunications-Home lighting and water pumping starting to be developed-Distributed grid-connected photovoltaic applications becoming attractive when PV is integrated in roof and exterior walls building component

-Production on land represents the equivalent of over one billion barrels of oil per day — about five times total world energy demand

-Technology is viable in a wide range of plant sizes (from 10kW to several hundred MW)-Flexibility in application for certain markets and locations

-High capital costs; environmental concerns and suitable limited cheap sites, likely to lead to higher future costs (inverted cost-scale up curve), which would limit growth rates to low single digit

-Potential siting conflicts, public acceptance (with resultant delays in implementation) and changing governmental policies

-Higher cost of silicon wafers-Need of order of magnitude cost reduction to penetrate mass markets-Balance-of-system costs include outlay on support structures, sun trackers, electrical interconnections, DC-to-AC power conversion, land use and energy storage-For large-scale application, needs reduction of cost by order of magnitude

-Land and fresh water availability or use-conflicts will limit the extent to which biomass, as an energy source, can be developed on a large scale

-The use of concentrating collectors - their use is limited mainly to sunny areas (between +/- 40 latitude)-Large-scale market penetration is limited by high cost of siting (land requirement), materials and equipment

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The most important obstacles are its current unfavourable economic competitiveness and lack of public acceptance, emanating from concern, real or perceived, about reactor safety, adequate disposal of high-level radioactive waste, and a possible link to the proliferation of weapons.

The future of nuclear power, therefore, depends largely on the success in developing innovative reactor and fuel-cycle designs that exhibit enhanced safety features, proliferation resistance, and economic competitiveness. Two technical approaches to these problems are often suggested; one based on evolutionary improvements to existing light water reactor designs, and the other based on new designs, almost revolutionary in approach. Proponents of an evolutionary strategy believe that the option of a major shift away from conventional light water reactor technology is unrealistic and illusory. They argue that it is wiser to draw on the great store of LWR experience, in order to move incrementally towards an improved LWR system, than to forgo this experience, in favour of unproven concepts. Moreover, they point out the great difficulty of changing the technological course of an industry, which for over four decades has been strongly oriented towards LWR systems. The evolution of nuclear power, from its early inception after the Second World War, is illustrated in Figure 9, which also provides a time-scale for its likely evolution in the future along the two mentioned approaches.

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The full spectrum of advanced designs ranges from evolutionary types with enhanced safety features to entirely new designs, which introduce innovative safety concepts (see box 3). The new concepts include passive — sometimes referred to as inherent — safety features, based on natural convection coolant flow, making safety less dependent on active components, such as pumps and valves, or on human intervention.

A number of promising designs that could meet the necessary criteria for re-launching the growth of nuclear power are under development. For the near and mid-term, the most promising is the high-temperature pebble bed modular reactor (PBMR) design, developed by South Africa, and likely to be built and deployed within this decade (see box 4).

The future of nuclear power would critically require unprecedented and progressive international co-operation focused explicitly on devising the appropriate conditions for reviving the nuclear option on a global scale and hence might lead to a loss of some national control over certain aspects of the nuclear fuel cycle. Such an international effort must be led and supported by key industrialized countries with acknowledged technological and political leadership, interest and commitment (USA, Japan, Russia, France and other European nuclear countries). It needs to focus on the identification of a group of reactor system and high-level waste disposal designs that meet a set of requirements.

Box 4: Pebble Bed Modular Reactor (PBMR)

Status: The PBMR was proposed by ESKOM, the South African State electricity utility. The technological features used in the PBMR are based on the experience gained in a number of international programmes and projects leading to a high degree of confidence in the design basis. This concept refers to well-proven technology demonstrated by the operational histories of a number of AVR experimental reactors and the THTR demonstration plant.

Up to now, only a concept design for the PBMR has been done. Thermal power per module is 265 MW and electricity capacity is 114 MW. ESKOM estimates that the capital cost is about $1,000/kW (e) with electricity generation cost expected to be about 16 mills/kWh with a two-year construction period and a 40-year plant lifetime. The design features include inherent safety and proliferation-resistance.

Box 3 : Types of Advanced Reactors

1. Evolutionary large light water reactor (LWR): New features: improved reliability, enhanced safety features

2. Advanced passive small & medium-sized LWRs: New features: simplified systems, passive safety features

3. Advanced heavy water reactor (HWR)4. Modular gas-cooled reactor (e.g. PBMR): variable size (200-400 MW(e)), helium coolant,

inherent fuel safety5. Advanced liquid metal reactor (LMR)

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Prospects and Limitations: A prospective candidate for Generation IV Nuclear Power Systems and suitable to be deployed in developing countries with small electricity grid, especially if the safety features and cost targets are realized and public acceptance is forthcoming. Construction and successful operation of first demonstration PBMR is critical for fulfilling its potential promise.

In year 2000, the South African cabinet authorized ESKOM to carry out a feasibility study. Application for nuclear licence of the design has been submitted. This study has just been released and proponents are hoping that it will enable the government of South Africa to give the go-ahead signal to ESKOM to build the first pilot PBMR unit on the site of another NPP, hoping that this will mean the re-emergence of nuclear power, this time from Africa.

Box5: Potential Generation IV Concepts

Several exotic and speculative concepts have been proposed for generation IV reactors. Among them are: A plant in which the fission-generated heat is transferred from the primary to the secondary coolant

through the reactor wall, eliminating through-vessel fluid or mechanical connections The use of an alkali metal thermal-to-electric converter Reactors that have no moving parts and use advanced materials, such as graphite foam to transfer heat

from the core Reactors that collect the energy of fission fragments directly, as in an electric cell or magnetic

collimator Rectors with gaseous cores, including uranium vapor vortex flow concepts and uranium tetrafluoride,

with a closed magnetohydrodynamic power generation cycle Reactors with liquid cores, including molten salt of natural thorium, liquid uranium and thorium

fluorides, or liquid-metal magnesium-plutonium eutectics A fast reactor using sodium evaporation cooling and sodium vapor gas turbines Solid-state, heat pipe-cooled reactors

A number of initiatives in this direction have recently been proposed. Among these are the proposed Generation IV International Forum (GIF) and the plan by the IAEA to establish a task force on innovative reactors and fuel cycles. Box 5 lists potential Generation VI exotic and speculative concepts.

3.4.2 Nuclear Waste DisposalAnother critical issue concerning the future of nuclear power technology is the disposal of high-level radioactive waste. While experts believe

geological disposal to be safe, technologically feasible, and environmentally responsible, the volume of high-level waste continues to build up, and the public at large remains skeptical. Until the safety aspect is successfully demonstrated, this issue will continue to be a barrier to the future expansion of nuclear power technology deployment, especially in most OECD countries.

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The opening, in 1991, of the Waste Isolation Pilot Plant (WIPP) in the USA was an important step towards demonstrating the geological disposal of waste, long term. The decision by the US Government earlier this year for Yucca Mountain, in Nevada, to be considered for development as a national facility for the underground disposal of spent reactor fuel and other highly radioactive materials is another important step towards convincing the public that geologic disposal can be achieved. This combines with other recent developments, including the decision by the government of Finland, also earlier this year, to construct a new nuclear power reactor, the first in Europe for many years, the small, but discernable, shift in public attitudes towards acceptance of nuclear power in some key industrialized countries (e.g. USA), and the emphasis placed by the US Government on the role of nuclear power in meeting the key objectives of the US National Energy Policy, mainly the diversification of energy sources, and the contribution to limiting the future increase of CO2 emissions, represent encouraging signals to the proponents of nuclear power. On the other hand, the tragic attack on the USA last September has heightened concerns about safety and security of nuclear power. The conclusions of experts reached at a recent IAEA meeting underlined again fears about the potential for large-scale radiation disasters, this time from “nuclear terrorism” - and not only of those who oppose nuclear power.

On balance, the future of nuclear power remains where it has been for many years – uncertain - as a result of many challenges, concerns, and obstacles in the face of a great, but, as yet, unfulfilled promise.

4. Transportation Sector

4.1 Alternative Fuels and Vehicles

The transportation sector relies almost exclusively on oil products for its energy needs. Transport energy demand is the most important factor contributing to the increase in oil demand over the past two decades, in particular in OECD countries. These trend are expected to continue for the next two to three decades, possibly into mid-century. In principle, there are sufficient conventional and unconventional oil resources to meet the projected increase in demand for liquid fuels by the transportation sector for most of this century, and possibly beyond.

Nevertheless, to meet OECD countries’ key overall energy policy objectives to reduce future oil and gas imports, on the one hand, and cut urban pollution and GHG emissions, on the other, as well as to prepare for the long term eventuality of fuel switching away from hydrocarbons, efforts are already underway to develop cleaner alternative fuels and, in general, increase the efficiency of transportation engines. Two general approaches have received strong support for reduce emissions from, and increasing the efficiency of, cars and trucks:

To improve fuel efficiency and decrease emissions, including the use of smaller and light-weight vehicles; and To use existing transportation systems more efficiently

In general, cars have gradually become cleaner and more efficient over the past three decades. Improved engine design and transmissions can increase the fuel economy of an internal combustion engine vehicle by up to 30%. The use of lightweight materials and hard tires, among other design improvements, can increase the economy of these vehicles even further. But, without radical innovation for the mass auto market, only limited and slow further progress can be

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expected. Notwithstanding their technical feasibility, transport technologies currently under development or proposed range from improvement to conventional technologies to advanced and new technologies (see box 6).

Box 6: IMPROVED AND ADVANCED TRANSPORT TECHNOLOGIES

Conventional Advanced & New Expert IT Systems Displacement on

demand Electric Cars Intelligent on-board expert systems

Continuously variable transmission

Hybrids Expert control systems to manage road/ vehicle networks dynamically

Lightweight cars Fuel Cell Alternative fuel vehicles

On-board IT reformers (gasoline, CNG, methanol)

Clean diesel Off-board IT reformers Direct Hydrocarbon fuel

Table 5Comparison of Alternative Fuels

Fuel Availability/Limitation

State of Technology

Infrastructure condition and total production costs

Remarks

Conventional liquid fuels:

Oil

Natural Gas

Unconven- tional Oil

Finite but abundant

Finite but abundant

Very abundant

Mature

Mature

Short/Medium term

Available worldwide and relatively low additional investment costs

Available worldwide and relatively low additional investment costs

More expensive

Emissions problems

Competes with increasing demand for power plants

Emissions problemsBio-Ethanol Land limited Mature Very limited in many

countries and high costsCan use existing gas stations and conventional ICEs

Bio-diesel Land limited Short term Available only for pilot project and high costs

Can use the existing gas stations and

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conventional ICEsMethanol Finite but abundant Mature Limited and moderate cost Good for FCV, but

toxicCNG Finite but abundant Mature Limited and substantial cost Competes with the

increasing use of powerElectricity Generated by

various primary fuels

Mature Available worldwide with substantial costs

Problems with battery

Hydrogen Abundant Short to Long term Very limited and extremely expensive

Good for FCV

There are also great opportunities for making significant efficiency gains from the application of IT expert systems on-board vehicles, and for dynamic road and traffic management. All the advanced and new technologies that offer significant higher efficiencies entail a much larger initial investment to purchase the vehicle, making market penetration over a relatively short time (a decade or so) extremely difficult, even if the life-cycle cost analysis is favourable (higher efficiencies, cheaper fuel, etc), without costly incentives and subsidies.

Table 6Comparison of Different Vehicle Systems

Vehicles Potential for Economy

Improvement

Emissions Reduction

Expected Penetration

Current Vehicle Price

Remarks

Enhanced ICEs Moderate Moderate Substantial in the short run

Slightly more expensive

High consumer acceptance

Hybrid Substantial Substantial Noticeable in the short run; could be moderate in the mid term

Moderately more expensive

Small opportunity for cost reduction

Fuel Cell Very high Low to zero tailpipe

Small in the mid term;could be sub-stantial in the long run

Extremely expensive, particularly of those gasoline FCV

Wide opportunity for cost reduction, but difficulties in refuel- ling stations (metha-nol & hydrogen)

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Battery-Electric Very high Zero tailpipe, but transferred to power plant stacks

Small in the mid term

Very expensive Battery remains heavy, of limited capacity & expensive

Recent experiences in the USA has shown that buying a car with incredible efficiency is not a priority at current oil price levels. On the other hand, many analysts believe that higher gasoline taxes are not likely to strongly influence new car purchase decisions towards more fuel-efficient cars, as recent experience in Europe has shown that the public is no longer willing to accept higher gasoline taxes; rather, they are inclined to demand a reduction in the prevailing excessive gasoline tax levels. Taxing automobiles as a ‘luxury product’ for revenue generation, as was done in the past by some governments, is no longer acceptable to many countries; in most countries private cars are now considered a necessity.

Over the years, a number of alternative fuels and vehicle engines have been proposed. Some have been developed, a few with heavy subsidies in a number of national markets. Table 5 lists the most common alternative fuel technologies and summarizes their status, challenges, as well as their prospects. Biofuels have attracted much attention and are available, but in limited regional markets only. Ethanol fuel has penetrated few markets, most notably in Brazil (with strong government subsidies that are not sustainable in the long term); Biodiesel is easy to handle as it is non-toxic and has good biodegradability; in view of its environmental attributes, It undoubtedly has a part to play in certain regions and sectors.

Nevertheless, despite proven technology and political as well as public support, biofuels face significant challenges; most important is the limitation of arable land. Biodiesel in Europe is a special and interesting case, however. It enjoys strong increasing demand, due to the higher efficiency of diesel engines, coupled with strong government tax incentives related to environmental considerations, including EU commitment to Kyoto Protocol targets. While Biodiesel will continue to enjoy strong government and public support, leading to continued growth estimated to reach 3.3 mb/d by 2010, a similar large and growing market share cannot be extended globally as it will have a major negative impact on global agricultural markets. Moreover, agricultural land and water availability will place a limit on the ability of biodiesel to displace gasoil and meet increasing demand.

Apart from hydrogen in the long term, alternative fuels appear to offer at best only marginal advantages in reducing urban pollution and GHG emissions. Only FC technology (discussed in a later section) and hybrid vehicles appear to have a reasonable chance of appreciably penetrating the huge global private global car market in the near to mid-term. In the very long term, electrification of various transportation modes is the likely sustainable option. Table 6 summarizes the various vehicle systems that have been proposed or are under development as an alternative to ICE..

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Recent designs for hybrid vehicles, which combine an electric motor with a conventional engine, can achieve about 1.5 times the fuel economy of conventional automobiles (41 mpg) through optimized engine performance and by recovering some of the braking energy that would otherwise be lost as heat. In response to various regulations, requirements established by government and local authorities in a number of industrial countries (US, especially California, Japan, etc.) a number of major auto manufacturers have made serious efforts to develop and introduce to the market hybrid (and electric) vehicles. Toyota and Honda, for example, have made fuel-efficient hybrid passenger cars a marketplace reality with the recent release of the Toyota Prius in Japan and the Honda Insight in the USA. By combining hybridization and improvements to engine design and transmission, both the Prius and the Insight (which also features light body weight) achieve significant fuel economy improvements over a conventional automobile, with Environmental Protection Agency (EPA) combined city and highway fuel economy ratings of 51 and 65 mpg, respectively.

Hybrid and electric vehicles are likely to see increasing use, but only FC vehicles offer truly innovative and revolutionary new car technology, and have a chance to capture a considerable portion of the automobile market in the not too distant future.

5. Fuel Cell (FC) TechnologyFCs are energy conversion devices that transform chemical energy stored in fuel into power. Although invented in 1839, fuel cells have not yet

reached commercialization because of many complex technical, electrochemical, material, and manufacturing problems. But recent advances made over the past decade, especially in materials technology and electronics, have already led to a dramatic reduction in the capital and energy costs related to FCs.

Figure 10 shows a simple type of FCs - the proton exchange membrane FC (PEMFC). Hydrogen and oxygen are used as the fuel and oxidant. The electrodes are made of porous carbon plates, coated with a catalyst to accelerate the chemical reactions. The electrolyte in the figure is a proton-conducting membrane. At the anode, the hydrogen is ionized into protons and electrons. At the cathode, oxygen (from air) combines with the hydrogen ions (transported through the electrolyte) and electrons (returning from the external circuit) to produce water. The basic core of a fuel cell power source, consisting of a number of individual FCs — connected in a series via bipolar plates — is called the stack.

Recent advances in FC technology over the past decade have been remarkable and continued technology improvements and cost reductions are expected. FCs have many attractive features, including high efficiency, and reduced, or near zero emission of air pollutants and GHGs. With the one exception of the direct methanol FC (DMFC), all current FC designs use hydrogen as a fuel, which can be supplied directly, or by reforming some hydrocarbon fuels.

Several promising FC designs are currently under development, with two types - the phosphoric acid (PAFC) and proton exchange membrane (PEMFC) - already in limited commercial production. Some FCs are now close to becoming competitive with conventional technologies for stand-alone power generation. Many companies in North America, Europe and Japan are offering, or planning to introduce, a variety of power units soon for specialized residential and commercial use in the range of 1 kW to several MW. Currently, most commercial fuel cells for power generation application are either PAFC or PEMFC type. However, in the long term, the solid oxide fuel cell (SOFC) will perhaps be the favourite for cogeneration plants above 1 kW. Without hydrogen economy, the DMFC offers interesting and simple options — without reforming — for vehicle applications and as a power source for compact portable devices. Table 7

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summarizes the main characteristics of existing and promising FC design under development, including advantages, challenges and obstacles, as well as the applications for each.

5.1 Fuel Cell Vehicles (FCV)FCs are under intense investigation for use to power vehicles. These transportation applications primarily use a proton exchange membrane (PEM)

FC. PEM technology is more promising than any other type for vehicles because of its durability, ability to start up faster (lower operating temperature), high power density, and relative safety in an accident. In theory, a FC could be 2-2.5 times more efficient than an internal combustion engine under average automotive conditions, while providing similar performance, durability and reliability.

Major oil and automobile manufactures have formed strategic alliances to speed the development and commercialization of FCVs. Among these are Ford and Mobil, Toyota and Exxon, and Daimler-Chrysler and Shell. A number of experimental FC passenger cars have been developed and are now being tested on the road. Many more test fleets are likely to be seen on the road in the years to come.

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Despite the much publicized substantial development efforts being carried out by alliances of major auto manufacturing companies and multinational oil industry, and notwithstanding the strong support from governments and the enthusiasm of the public and the media, challenging obstacles inherent in FC-based vehicle technology remain, mainly the high cost of FC engine associated with the use of hydrogen fuel and on-board reformer. It is doubtful therefore that, outside specialized applications

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Table 7Comparison of Fuel Cell Technologies

Fuel Cell Electrolyte OperatingTemperature

(°C)

Applications Advantages Disadvantages

Polymer Electrolyte/ Membrane (PEM)

Solid organic polymer poly-perfluorosulfonic acid 60 - 100

Electric utility portable power transportation

Solid electrolyte reduces corrosion & management problems

Low temperature Quick start-up

Low temperature requires expensive catalysts

High sensitivity to fuel impurities

Alkaline (AFC) Aqueous solution of potassium hydroxide soaked in a matrix

90 - 100Military space Cathode reaction faster

in alkaline electrolyte so high performance

Expensive removal of CO2 from fuel and air streams required

Phosphoric Acid (PAFC)

Liquid phosphoric acid soaked in a matrix

175 - 200

Electric utility transportation

Up to 85% efficiency in co-generation of electricity and heat

Impure H2 as fuel

Pt catalyst Low current and power Large size/weight

Molten Carbonate (MCFC)

Liquid solution of lithium, sodium and/or potassium carbonates, soaked in a matrix

600 – 1000

Electric utility High temperature advantages

High temperature enhances corrosion and breakdown of cell components

Solid Oxide (SOFC)

Solid zirconium oxide to which a small amount of ytrria is added

600 - 1000

Electric utility High temperature advantages

Solid electrolyte advantages (see PEM)

High temperature enhances break-down of cell components

Direct Methanol (DMFC)

Proton exchange membrane

50 – 90(<130)

Compact portable sources and transportation

Direct use of methanol fuel, no need for reformer

New materials & processes

Source: Los Alamos National Laboratory 2002 and other sources

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(mass transit, taxis, etc.) FCV will be in mass use soon. In fact appreciable use of FCV’s is unlikely before 2010 and remains uncertain even after 2020.

5.2 FC Power Applications:The real major prize for FC technology manufacturers is the successful introduction of FCV to

the mass auto market. The long and still uncertain road to large scale commercial use of FCV has forced the world leading FC manufacturing companies to shift their business strategy and attention to another more promising application, with potential for much shorter time horizon for successful and financially rewarding benefits: the distributed power generation market.

Some FC designs are now close to becoming competitive with conventional technologies for power generation and in the kW-MW capacity range — even before taking the special characteristics of FC into account. These include much higher efficiency at low load factors than a typical internal combustion engine, the ability to increase power output in a modular fashion by simply adding more units and, perhaps most important of all, almost no pollution production.

Overall, for static power generation, FCs compare extremely favourably with existing technology across the entire size spectrum. Capital and fuel costs are already of the same order of magnitude and are ideal for dispersed electricity generation systems. FCs will most likely be the favoured technology of the future for small electric power plants. Not only do they achieve reasonable efficiencies even at the 30 kW size, but also they will most likely be able to run quietly, need infrequent maintenance and emit little pollution.

The PAFC has already been produced for several years for small sized electric power plants (mostly 200 kW with natural gas) and several hundred units are in operation. Current costs are high, however, and whether they can be reduced, enough with volume production to make the PAFC widely competitive is uncertain.

Because of recent technological advances, there is substantial European, Japanese and US activities to accelerate commercialization of the PEMFC for residential and commercial building combined heat and power (CHP) markets. Several companies are developing residential PEMFC CHP systems. For example, Ballard Generation Systems, the leading North American FC Company, is planning to begin selling a 250 kW (e) system for commercial buildings by 2003-2004. It is expected that most systems would use existing natural gas infrastructures and, like PAFCs, process natural gas at the point of use in an external fuel processor into a hydrogen-rich gas that the FC can use.

The molten carbonate (MCFC) and the solid oxide (SOFC) offer potential very low pollutant emissions. Their high operating temperatures (600-650 oC for MCFCs and currently 1000 oC for SOFCs) make them well suited for cogeneration applications and for using the waste heat to operate heat-driven air conditioners. They also offer the option of using directly natural gas or syngas derived via gasification from coal or other feedstocks without an external fuel processor — because these gases can be reformed (using waste heat from FC operation) and shifted on the anode into a H2-rich gas the FC can easily use — leading, potentially, to higher efficiency, simplified operation, and increasing reliability.

On the other hand, SOFC offers the potential for high efficiency, low cost, and potential long operating lifetimes. Major uncertainties concerning manufacturing costs and durability in operation are due to the fact that SOFCs are made of ceramics. Although the cost of the materials in the ceramics is inherently low, fabrication of ceramics is difficult and is currently very costly. Moreover, there are risks that the ceramic components will develop cracks during operation as a result of thermal cycling.

Since the early 1990s, two developments have brightened the prospects for high temperature FCs for larger scale installations. The first is a hybrid concept that offers both higher efficiency and lower capital cost. A hybrid would be made up of a high temperature FC “topping cycle” and a gas turbine or a steam

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turbine or gas turbine/steam turbine combined cycle “bottoming cycle.” It will reach efficiencies in excess of 70% — well above the levels that can be realized with gas turbine/steam turbine combined cycles. Because the cost per kW (e) of the bottoming cycle will typically be less than the than the cost per kW (e) for the FC itself, the overall capital cost for the hybrid will be less than for a “purebred” FC.

The second new development relates to the fact that pressurized high-temperature FCs offer a low cost option for low cost CO2 recovery and disposal. The concept relates to the fact that CO2 is available at high partial pressure in the anode exhaust of pressurized SOFCs or MCFCs in highly concentrated form using syngas (mainly CO and H2) derived from coal via O2–blown gasification. Both the CO and the H2 react in the anode directly with O2 (transported across the electrolyte from the cathode as an oxygen ion) to form CO2 and H2O. If the 10-20% of the unconverted CO and H2 exiting the anode is then burned in O2 for use in a bottoming cycle, the gaseous product will be a mixture of CO2 and H2O, from which the H2O can easily be removed by cooling and condensation. Moreover, because the FC is operated at high pressure and if the bottoming cycle is a steam turbine, the CO2 can be recovered for disposal at relatively high pressure, leading to low costs for further pressurizing the CO2 to the level needed for disposal. Recognizing the value of this strategy, in July 1999, Shell announced plans to develop and market, with Siemens Westinghouse, SOFC technology capable of disposing of CO2 in this manner.

5.3 Hydrogen Fuel Cycle: Hydrogen, like electricity, is a high-quality secondary energy carrier, which can be used with

very high efficiency and zero or near-zero emissions at the point of use. The use of hydrogen for transportation, heating, and power generation has been demonstrated, and it could replace current fuels in all their present uses in the long term.

Hydrogen can be produced from a number of fossil fuels, nuclear energy, renewable sources, and water (by electrolysis or proteolysis). Although production costs are significant, it is the delivered cost to the consumer (including the cost of transporting the hydrogen from the production plant to the consumer) that determines a least-cost hydrogen local supply option.

Balancing hydrogen attractions are the technical. Economic and infrastructure challenges posed by large-scale introduction of hydrogen as a new fuel. Commercial technologies for production, storage transport and distribution of hydrogen to the existing chemical industry exist. However, to scale these technologies up and optimize them for mass-market distribution as the favoured fuel over hydrocarbon store poses immense challenges

Hydrogen technologies are at an early stage of development and no doubt one day may become be commercially available for the mass market as the cleanest and most desirable fuel. However a most fundamental fact is often overlooked in debate about the speed by which hydrogen fuel technologies for the mass market need to be developed and introduced, and the political will and public support required to fund the massive RD&D programs needed in order to realize this option. The fact remains that hydrogen resources, in the free chemical form as H2, do not exist naturally. All of the abundant hydrogen atoms of the earth are all locked up either in water (H2O) molecules or in one of many types of form of hydrocarbon molecules (natural gas, oil, etc.).

Therefore, hydrogen fuel is only an intermediate fuel. Energy input is needed to break a water molecule and release the two hydrogen atoms within it for later use as a fuel. Burning the released hydrogen atoms, as a pure H2, with oxygen returns the hydrogen atoms involved back to their original locked state, thus completing the cycle and making hydrogen fuel simply a recyclable intermediate fuel. This is a desirable proposition indeed but not a substitute for a primary energy source. It follows simply that the process of generating hydrogen fuel from water and then using it later as a fuel, producing the original water molecule is a net energy loser, more primary energy is consumed than could be released in burning the generated hydrogen fuel!

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The primary energy needed to make hydrogen fuel available must come from either a hydrocarbon, renewable or nuclear energy source, either directly, for solar, or through another conversion process to electricity, losing useful energy in the process as well.

Henceforth, it does not seem meaningful nor appropriate to discuss the development of hydrogen fuel technology by independent from the associated primary energy technology needed to drive the hydrogen fuel cycle. In turn in assessing the environmental advantages of hydrogen fuel cycle, it is a must that the environmental impact of the associated primary and conversion energy technologies are integrated in, be it renewable, fossil or nuclear. Shifting the source of pollution, for example, to far away central power stations that generate the electricity needed for the hydrogen fuel cycle, can certainly improve the local urban environment, but it has no net positive effect, on the release of undesirable pollutants, especially those relating to regional and global environmental impacts.

In summary, hydrogen fuel cycle technology can and should be developed for possible use as another option for the long term. But their development must be in conjunction with development of a primary energy mix compatible with and as part of the overall energy mix options for the long term. This would require strong government policies as well as funding of basic and applied research at the initial stages. A prudent course would be to continue development of hydrogen technologies gradually, in line with the development of the primary energy mix so that they could be jointly deployed in the long term as needed.

6. ConclusionsPopulation and economic growth will be the main drivers behind energy demand growth in the future. With world demand for energy expected to continue to expand through 2020 and beyond, oil will continue to be the major source fuelling this need, especially in the transportation sector. At the same time, gas will play an increasing role in electricity generation, which will continue to grow at a faster rate than overall energy demand.

The successful deployment of cleaner and more efficient coal power technologies, currently under active development in several countries, is expected to help coal retain its importance in the years ahead. The most promising of these technologies, IGCC, lends itself to use with flexible feedstock, including petroleum coke, heavy and refinery residual fuel oil, creating a very promising opportunity for the re-emergence of oil power generation within refineries.

Concerns about the possible adverse impact on the global climate from increasing GHG emissions, in particular CO2 from fossil fuel use, poses a serious challenge which may constrain the continued growth of demand for fossil fuel. Therefore, proposals to develop and deploy CO 2

capture and storage sequestration technology offer a great opportunity to address these global environmental concerns, while at the same time extending the use of fossil fuels well into the later part of this century and even beyond.

Nuclear power technology has contributed significantly towards meeting the increasing demand for electricity and is a potentially important alternative to coal in any future ‘clean’ energy strategy. Despite the industry’s impressive safety record, however, reactor technology is fraught with obstacles, largely institutional, which lessening its attraction as a major option for future world energy supply. The biggest obstacles are its unfavourable economic competitiveness and lack of public acceptance, emanating from concerns about reactor safety, adequate disposal of radioactive waste, and a possible link to weapons manufacture. Therefore, unless these problems are alleviated, nuclear power is unlikely to assume a larger role in the global energy mix in the future.

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Transportation was the most important factor contributing to the increase in oil demand over the past 20 years, in particular in the OECD countries, and this trend is expected to continue for the next two to three decades, possibly into mid-century. There are sufficient conventional and unconventional oil resources to meet this projected increase. Nevertheless, to meet key energy policy objectives in reducing future oil and gas imports, cutting urban pollution and harmful emissions, as well as preparing for the long-term eventuality of fuel switching away from hydrocarbons, efforts are already underway to develop cleaner alternative fuels, coupled with more efficient advanced and innovative engines. Again, however, all new technologies offering significantly higher efficiency entail much larger initial investments, which cannot be sustained by most of the governments sponsoring such developments. Hybrid and electric vehicles are likely to be commercially available within a few years and could see increasing use in certain markets in the later part of this decade and the next. Only FC vehicles, however, offer truly innovative and revolutionary new car technology with a chance to capture a substantial portion of the auto market.

Beyond 2020, alternative energy demand growth paths may diverge significantly as demand for quality energy services spurs the need for advanced and new energy supply technologies. Development of these technologies aims at improving efficiency of recovery, reducing operating and generation costs, mitigating environmental effects and, equally important, responding to ever-growing social values. The need for energy security, which has again taken centre stage, is contributing significantly to the development of these technologies. Any successful application of these new methods, however, will require detailed analysis to enable the best options to be adopted. Currently, new commercial energy technologies are mainly being developed by private companies, thus the criteria determining their future deployment will be based on good business sense and sound investment prospects. Of course, the role of government will be to establish effective programmes for these technologies, provide incentives and offer funding — essential to encourage the commercialization of any new energy source. For obvious reasons the participation of developing countries in the development of new energy technologies is likely to be negligible, although they will benefit from their introduction in the long term.

Driven by concerns over the protection of the environment and energy security, many governments in both industrialized and developing countries have launched ambitious RD&D programmes, and instituted policies and mechanisms, in order to provide the industry with an incentive to develop and deploy promising renewable energy technologies and encourage their use. Apart from the well known and commercially deployed hydro and geothermal, the most promising sources are wind power, waste biomass, PV, and solar thermal. Of these, wind power has shown the most rapid growth in recent years, followed by biomass and PV.

Among the challenges faced by renewables is how to reconcile the need to substantially reduce costs, even in the case of wind power, with the increasing shortage of good, economic and locally acceptable sites for the large-scale projects needed. In contrast to other conventional power technologies, renewables suffer from the unusual problem of higher costs as its market share rises. The high rate of growth already seen in the development of renewables is, therefore, not sustainable, as they are receiving heavy backing from governments, support that is unlikely to continue. However, in the medium to long term, deployment of promising renewable technologies is expected to continue growing modestly, while challenges will still constrain large-scale power-market penetration of most renewable power sources. Ambitious national targets, although probably unattainable, have been established: to achieve these targets, a number

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of expensive support systems have been implemented. Again, however, these targets cannot be achieved without massive government support over a long period, and it is very doubtful whether such costly innovations can be sustained for the time-span required. Hence, the degree of success of the EU countries in attaining the ambitious targets it set for renewables in 2012 is of great interest to us all. Indeed, if these ambitious targets are largely realized, this pioneering but demanding social and economic experience would pave the way for rapid use of renewables in many other regions of the world.

Fuel cells have many attractive features, including high efficiency and reduced, or near zero, emissions of air pollutants and GHG. They have, however, not yet been commercialized due to the many complex material and manufacturing problems surrounding them. Major advances, especially in materials technology and electronics, have already led to a dramatic reduction in the capital and energy costs connected with their development. Several promising fuel cell designs are currently under development while some are already in limited commercial production.

Their potential as a source of substantial financial rewards makes FCVs a very attractive business proposition, leading to the formation of alliances among auto manufacturers, the oil industry and leading FC manufacturers. Their commercial goals, however, are not likely to be achieved for quite some time. Major FC manufacturing companies have, therefore, been forced to shift their business strategy to the development of FCs for the distributed power generation market, and it is in this market that the long-awaited promise of FCs will first be fulfilled.

The complexity of the global energy system, however, and its non-linearity in response to the dominant energy scene drivers, makes it impossible to predict its long-term behaviour, in terms of the level of demand in the primary energy mix, prevailing energy supply, conversion ,or, most importantly, end-use technologies.

Over time, discontinuities, or branching (bifurcation – in the language of non-linear systems) points, have occurred and will continue to occur in the future – mainly in response to innovative new technologies, social and personal preferences and energy resource scarcity; which latter rarely occurs at the global level. Coal will not become scarce within this century, or even the next. Oil supplies are very unlikely to peak before around mid-century, and possibly much later if unconventional resources are taken into account. If exploited successfully, oil supplies could be available into the next century.

Fuel switching, efficiency improvements, the accelerated deployment of renewables, and the possible revival of nuclear are usually but mistakenly, cited as the only options for reaching the Kyoto targets and the subsequent agreements for its implementation. It is true that various electricity generation technologies based on nuclear generation fission reactors, renewable sources and geothermal energy, are commercially available and, technically speaking, could supply a much larger portion of the world’s electrical energy needs almost indefinitely, should such an option become necessary. Most of these technologies, however, are currently uneconomic or unacceptable (in the case of nuclear) to large segments of society in the developed and, increasingly, developing countries. Most face challenging environmental and sustainability constraints and require very substantial cost reductions to be truly competitive. Unless unexpected, compelling factors arise to change the picture, cleaner fossil fuels will continue to dominate the power sector, as well as most other sectors, for decades to come, if not throughout this century.

All these developments will undoubtedly fall within the scope of future consumer-producer cooperation. As relations between the two sides improve and expand, then one feels that topics of

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discussion will broaden. But whatever methods of energy generation are adopted in the years to come, of paramount importance will be the need to meet the interests of all involved, without compromising the national interests of producers or consumers, or their policy objectives.

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LIST OF ABBREVIATIONS4C four component IT information technology

AFC alkaline fuel cell kWh kilowatt hour

AGR advanced gas cooled reactor LWR light water reactor

AGT advanced generation turbine MCFC molten carbonate fuel cell

BWR boiling water reactor MH methane hydrate

BAU business as usual MHD magnetohydrodynamics

CC combined cycle MW megawatt

CCGT combined-cycle gas turbine NGCC Natural gas combined cycle

CERA Cambridge Energy Research Associates NGTS next generation turbine system

CIGCC coal based integrated coal gasification combined cycle

NOx nitrogen oxides

CNG compressed natural gas OECD Organization for Economic Cooperation & Development

DMFC direct methanol fuel cell OIGCC Oil based integrated coal gasification combined cycle

E&P exploration & production OWEM OPEC World Energy Model

EOR enhanced oil recovery PAFC phosphoric acid fuel cell

EPA Environmental Protection Agency PC pulverized combustion

FBC fluidized-bed combustion PBMR pebble bed modular reactor

FC fuel cell PEM polymer electrolyte/membrane

FCV fuel cell vehicle PEMFC proton exchange membrane fuel cell

FGD flue gas desulpherization PWR Pressurised water reactor

GES global energy system R&D research and development

GHG greenhouse gas RD&D research, development and demonstration

GT gas turbine SCPF super critical pulverized fuel

GTL gas to liquid SOFC Solid oxide fuel cell

GW gigawatt UNFCCC UN Framework Convention on Climate Change

HWR heavy water reactor USDOE US Department of Energy

HTGR high temperature gas cooled reactor VR Voronezh

IAEA International Atomic Energy Agency

IEA International Energy Agency

IEF International Energy Forum

IGCC integrated coal gasification combined cycle

IGFC integrated gasification fuel cell

IIASA International Institute for Applied Systems Analysis

IOR improved oil recovery

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List of Tables and FiguresTable 1: Summary of New and Advanced Upstream Technologies

Table 2: Approaches to CO2 Capture

Table 3: Comparison of Various Options for Storage of Carbon Dioxide

Table 4: Technology Status, R&D Requirements & Commercial Prospects ofRenewables

Table 5: Comparison of Alternative Fuels

Table 6: Comparison of Different Vehicle Systems

Table 7: Comparison of Five Fuel Cell Technologies

Figure 1: World Oil Demand Growth by Region, 2000-2002

Figure 2: World Primary Energy Supply by Fuel Type

Figure 3: Energy System Architecture 2000

Figure 4: World Discoveries outside US and Canada : Total number per size class pre1950-2001

Figure 5: Statoil’s Sleipner CO2 Storage Project

Figure 6: Ocean Sequestration CO2 Injection Concepts

Figure 7: Cost of Electricity Generation for USA (2020) in cents/KWh

Figure 8: Comparative Costs of Renewable Energy Technologies

Figure 9: Evolution of Commercial Nuclear Power Plants

Figure 10: Schematics of Hydrogenal Fuel Cell (PEMFC) Operation

List of References1. Adnan Shihab-Eldin, “New Energy Technologies: Progress, Challenges and Implications”,

7th IEF, Riyadh, 2000, and all references therein.2. H Rogner and A. Macdonald, “Energy System Expectations for Nuclear Energy in the 21st

Century”, IAEA, 2002 - draft3. N. Nakicenovic, A. Gruebler, A. McDonald (eds), “Global Energy Perspectives”,

University of Cambridge, 19984. A. Gruebler, N. Nakicenovic and D.G. Victor, “Dynamics of Energy Technologies and

Global Change”, Energy Policy, Vol. 27 no. 5, Elsevier, 1999.5. EU, “Energy for the Future: Renewable Energy Source – White Paper for a Community

Strategy and Action Plan”, 1998.6. CERA Decision Brief: “EU Renewable Energy Support Policies”, 2002.7. American Physical Society, Physics Today, Special Issue: “The Energy Challenge”, April

20028. MIT, Technology Review, Special Issue on Energy, January/February 20029. IEA: “Solutions for the 21st Century: Zero Emissions Technologies for fossil Fuels”, 200210. Petroleum Review, several issues 2000 - 200211. www.fedoe.gov (US. Dept. of Energy)12. www.lanl.gov (Los Alamos National Laboratory)

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