it-nergy The Future of Energy Let s Dig (into) It! it-nergy Jean-Luc Dormoy Amsterdam, May 9, 2017

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1 The Future of Energy Let s Dig (into) It! Jean-Luc Dormoy Amsterdam, May 9, 2017

2 Overview Long term Promising technologies and successful innovation How to engage?

3 Long term

4 Look at the Long Term What could we do with 10 times more energy? (from Bob Metcalfe) Provide any human being with american style water Send 500 million people a year experiment a weekend on the Moon Except if civilization collapses, something in between is going to happen New uses of energy Expanding current usage to the whole human kind needs

5 Is This Stupid, Unrealistic? Between 1915 and 2013 The energy consumption in the USA increased 5 fold Energy intensity increased 5 fold With a 25 fold total effect At the same time, oil, gas and electricity became the main energy sources and vectors, instead of coal and bio-sourced energy Jevons (The Coal Question, 1865) was wrong In the long term, cheap energy and innovation (energy efficiency) go hand in hand Resources to fund R&D and innovation: «implicit Moore s law»

6 Why did the Substitution Happen? Because gasoline is stored energy, fit for medium quantities and nomadic applications Because electricity, if not as easily nomadic, allows applications in small quantities (in particular small engines) «Small» is on the path to versatile, i.e. complex in the sense of information, i.e. programmable, a.k.a. smart. R&D managed to make it cheap. Not because of Malthusian constraints

7 Was It Easy? Yes and No, it took about 60 years to take off Its full power soared with new industries (the automotive industry, fordism) It required a new infrastructure, or refurbishment of old ones (railroad) Networks (hardware, rules & organization, knowhow) Mindsets, knowledge have more inertia in the economic reality than infrastructure or things

8 So, is it going to be 10 times in the XXI st Century? IEA in 1999 said 7 times IEA in 2015 says 3 times All economic predictions strongly depend on the time s mood Eventually, a «5» average is compatible with XX th Century history If energy intensity follows the same path, it is another 25 time fold in effect that can be expected «Peak car»

9 Do we have the primary resources? 300 years of known reserves for coal Less for oil, but this does not account for decrease of cost, look e.g. at fracking Thorium could be a substitute for uranium (if technology is developed) «Peak oil», «peak gas», «peak coal» do not happen because of lack of resources, but because of substitution

10 Do we Have the Knowledge Resources? Yes, plenty, with sufficient R&D Competence, time, money More and more technologists R&D expenses related to energy are low today, around 16 billion $, total, compared to more than 300 billion $ in IT

11 The Climate Climate change is a reality, and, yes, it is largely due to human activity, in particular the release of huge quantities of CO 2 in the atmosphere CO 2 concentration in the atmosphere has to be controlled More generally, «open» cycles with no renewable inputs and non recyclable outputs have to be avoided Renewable must become the rule

12 Are There Potential Solutions? The ultimate Malthusian constraint? CO 2 -free energy harvesting or transformation Controlling CO 2 concentration Don t forget the lessons from XX th Century Small (all sizes) is beautiful / smart Centralism + Infrastructure is fine, distribution is smarter Storage is key to any network/flow-based and nomadic application

13 CO 2 -Free Generation Harvesting all forms of Solar energy Sun, wind, water Radioactivity Geothermal, nuclear Gravity Tides

14 CO 2 -Free Generation All forms are prone to technological advances Kind of «Moore s law» e.g. in solar Requires technological shift in some domains, e.g. nuclear Cost / Safety is increasing with today s technology To make plans, look at Ideas And who can support them Proportions IEA: thick layers of coal, oil, gas, plenty of renewables, a thin layer of nuclear in plans of new generation

15 Controlling the CO 2 Concentration (Not releasing CO 2 ) Storing CO 2 Just when it is produced At any time Using CO 2 as an input End of CO 2 as a waste Synthetic biology Today limited to «Algae», but there are also «big pictures», cf. e.g. Craig Venter et al., Ph. Marlière

16 Parenthesis: The Role of IT IT will help to change things Smart grids Autonomous vehicles It can be disruptive per se It is obviously in the smart trend However, it is not sufficient alone to solve the issue Adding bytes on top of an existing infrastructure or system or society is not sufficient, components and the system (and the society) themselves must be changed

17 In Summary: How to Play a Role This is a multi dimensional space Energy source or vector Technology (current or future) «Non functional» dimensions Size Weight of infrastructure Smartness, autonomy

18 Promising technology Innovation Electric Power System

19 Promising technologies and innovation Here we look at technologies and innovation that can reach mass market in a 5 to 10 year time scale Lesson learned from Cleantech startups: they are less successful than software or medical startups

20 Promising Technologies and Innovation The main reason is that today there is no player ready to fill in the gap between VC and mass market This is particularly true of utilities (and equipment providers, as a consequence) Cleantech startups enter the «Valley of Death», but never come out of it This is to be correlated to the «R&D curse» in energy

21 (Some Hope for Software People) Source: MIT

22 (Some Hope for Software People) Source: MIT

23 Promising Technologies and Innovation Some utilities are changing their behavior Particularly in Germany (Eon, RWE), also Engie

24 Promising Technologies and Innovation

25 What is Changing? Novel business attitude regarding «cannibalism» of RES Eon RWE Uniper Eon RWE Innogy Incubator programmes

26 What is «Cannibalism of RES»? From Brunekreeft et al., Jacobs U. Bremen Full-load hours (2006=100) Lignite Hard Coal Gas

27 Merit Order, 2013 From Kranner & Sharma /kwh

28 Merit Order, 2020 From Kranner & Sharma /kwh

29 Competitive Markets and Incumbents Demands A tax on demand-side innovation and energyefficiency When some electricity is not consumed, it is nevertheless produced, so should be paid for Should community energy schemes be regulated like utilities? Fair or identical treatment for «level playing field»? Money for aging power plants Subsidizing aging plants even if projects for large scale renewables with no subsidy ready for 2025

30 Digitization: an Example Smart meters: the business case Grid Capex and Opex saving 1/3 of the cost 240, i.e. 80 for its lifetime Energy saving The average consumption of electricity of a German household is 2850kWh annually At 29 cent/kwh, this is 830 If you save 3%, you have 25, 10% you have 83 to spend on some digital investment Capacity saving (demand response) Saving 1kW 3 to 4 days a year could be valued 80 to 160 /year Say you could count on 80+40=120 /year at best So this could be a very positive investment, quick RoI

31 Digitization Smart meters: the business case With the smart meter alone, you can just inform the household Then you expect some behavior change Energy: Experience shows 3% energy saving Capacity: under certain circumstances, some capacity saved However not sustainably

32 Digitization So, saving energy and capacity requires more than just smart meters All «important» devices must be digitized: room and water heating (actuators) A number of sensors are also necessary On top of this, some automation must be developed, that shifts usage, or shifts consumption through some energy storage In particular thermal storage (room or water heating, air conditioning) This requires some accurate, small-grain prediction capability Habits and users objectives must be learned

33 Digitization To summarize It is more complex than just the smart meter Intelligence must be developed locally first, then globally Similar to digital networks and the Internet: PCs existed first, then they connected, locally first, then through WAN Metcalfe s confession: prototype WAN was mostly locally used And then smart meters are of secondary importance

34 Digitization Grid Capex and Opex savings Global Energy savings Local Capacity savings (demand response) Local <-> Global

35 What about New Local RE? Local generation and storage From Brunekreeft et al., Jacobs U. Bremen Figure 8: Calculated Costs of Electricity for PV and Battery [GTAI, 2014]

36 What about New Local RE? New business models based on mutualizing local resources

37 How to engage?

38 What Else? Electricity accounts for only around 25% of total final consumption Most of electricity is today fossil-fuel generated One must also look at usage Industry 20% Transportation 35% Buildings 45% Tertiary 15% Residential 30%

39 Profitable For existing systems Energy efficiency of existing systems Bringing together information Carbon accounting, CAT For new systems Systems with many more units Decentralized systems No «one flow» systems New generic functions: storage Infrastructure: know-how