Energy Security and the 4 th Industrial Revolution AMCHAM Manila 21 November 2017 Dan Millison Manager Transcendergy, LLC
All forecasts are wrong some are useful. -???
The New Paradigm for Everything including energy 1 st Industrial Revolution - water & steam power mechanize production. 2 nd - electric power creates mass production. 3 rd - electronics & information technology automate production.* 4 th - a fusion of technologies that is blurring the lines between the physical, digital, & biological spheres characterized by velocity, scope, and systems impact evolving at an exponential rather than a linear pace disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance. * * Klaus Schwab. 2016. The Fourth Industrial Revolution. Foreign Affairs. Council on Foreign Relations, New York. Klaus Schwab, How Will the Fourth Industrial Revolution Affect International Security; 10 February 2016; http://www.weforum.org/agenda/2016/02/how-will-the-fourth-industrial-revolutionaffect-international-security
A New Paradigm for Energy & everything else Advances in areas such as nanotechnology and materials science, smart factories, additive manufacturing, autonomous cars, gene-editing techniques, and battery technology stand to alter life on Earth, not only for individuals but also for the nations they inhabit. * * Matthew Bey, Between Geopolitics and Technology, Geopolitical Weekly, STRATFOR, 27 September 2016; www.stratfor.com
Alexander Graham Bell Thomas Edison Samuel Insull Nikola Tesla Henry Ford J.P. Morgan
Multiple Ds Decarbonization + Decentralization + Democratization + Digitization + Disintermediation = DISRUPTION Darwinism: If you re not a victor you re likely a victim.
The 21 st Century Electricity System Digitization + Disintermediation + Decentralization + Decarbonization + Democratization = Disruption New business models Peer-to-peer (P2P) Business-tobusiness (B2B) Machine-tomachine (M2M) Blockchain Cryptocurrency Micro-grids (AC and DC) Swarm electrification Sub-systems Generation Centralized with increasing RE penetration Transmission Distribution Distributed Generation Consumers and Prosumers Technologies Storage to ensure spinning reserves requirements, & smoothing & time-shifting of variable RE Dynamic Line Ratings (DLR) High-temperature Low-sag (HTLS) conductors Storage for frequency & voltage control Digital substations Smart transformers Automated demand response Virtual power plants Behind the meter storage Smart meters / thermostats
September 2009: G20 agree to phase out fossil fuel subsidies but the agreement was never implemented. What s happened since then? Clean coal = joke CCS = bad joke Clean diesel = the worst joke until Nuclear renaissance = Hinkley Point C
Frack-mageddon* Gas replacing coal in US US coal displacing Russian gas in Europe Russian gas to China (May 2014) * D. Millison Original term: Development Of Unconventional Gas (DOUG) not to be confused with Dumb Old Utility Guys (DOUG J. Liston)
Gas boom aside, coal isn t dead Wall Street Journal, 8 January 2014 25 20 15 10 Market Capitalization US$ Billion Peabody Arch Coal Alpha Natural Walter Energy 5 0 2011 2014 2016
BNEF / Leibriech, 2015
Wind Gas PV Hydro Biomass CSP Waste Geothermal Peat Ocean Nuclear Coal Fuel Oil 160000 140000 120000 100000 80000 60000 40000 20000 EU Net Capacity Additions 1995-2015 (MW) 0 Dynamic Energy: forecast & balance EE + RE + S < C -20000-40000 -60000 Edison & Insull: baseload + peaking power
350 300 250 200 150 100 50 0-50 -100-150 -200 Net coal capacity growth in developing Asia by 2030 (GW)
800 Millison s Forecasts for Net Coal Fired Growth to 2030 (GW) 700 600 500 400 300 200 100 0 2011 2013 2016 2017
2014-24: Decade of Sustainable Energy For All There is no reason why we should not use the roofs of our houses to install solar apparatus to catch and store the heat received from the sun. Alexander Graham Bell -- 1914 We will make electricity so cheap that only the rich will burn candles. -- Thomas Edison ~ 1880s
90000 80000 70000 60000 50000 40000 30000 20000 10000 0 85000 Total raw Resource (TW) SOLAR: 7000+ TW Everything else: 244 TW 7650 100 72 44 7 7 7 4 3 15 Source: Abott, 2010
Special thanks to Sohail Hasnie of ADB for posting on LinkedIn
Solar PV already at or below coal parity US$0.06 / kwh US$0.02 / kwh
Solar PV at or below coal parity 0.1 0.09 0.08 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0 Utility scale solar PV PPAs $/kwh new normal for PPAs worldwide 2014 India2014 Austin TX2015 UAE2016 Zambia2016 Chile Exceptional cases
Storage: power rating & discharge duration
BNEF Lithium-ion battery price survey 2010-16 $/kwh
3.5 3 2.5 2 1.5 1 0.5 0 Apples to apples cost of coal vs solar + storage ($ billion) ** Coal plants pre-pay for fuel instead of discounting cost over 30 years and avoiding costs of environmental and social externalities
Firm solar + Firm wind + demand response + storage Networked Distributed Storage = Virtual Power Plants minimal need for spinning reserves Edison & Insull s model of baseload + peaking power is obsolete
Community owned Solar + Storage democratization of electricity A scalable solution for most of the world s bottom billion
In 1900, electric cars accounted for around a third of all vehicles on the road in the US http://energy.gov/articles/history -electric-car Henry Ford
Electric Mobility in Developing Asia
Electric Mobility in Developing Asia
Electric Mobility in Developing Asia
Electric Mobility in Developing Asia
700 600 500 400 Li-ion $/kwh Tesla 3 $190/kWh competitive @ $2/gallon 300 200 100 0 Tesla S $240/kWh competitive @ $3/gallon 2008 2012 2014 2016 Tipping Point Source: http://www.visualcapitalist.com/explaining-surging-demand-lithium-ion-batteries/
Addressable US Market for Battery Electric Vehicles with 320 Kilometer Range Chevy Bolt, Tesla 3 Source: Salim Morsy, Bloomberg New Energy Finance, 2016 http://www.bloomberg.com/news/articles/2016-02-09/will-the-tesla-model-3-really-sell-for-25-000
1000 900 800 700 600 500 400 300 200 100 0 Fuel Cost: ICE vs. EV (US$/year) EV savings: $360 /year ICE EV Assumptions: US Market 15,000 miles/year ICE: 33 mpg, $2/gallon EV: 0.3 kwh/ mile, $0.122/kWh Annual fuel cost is equal if gasoline is $1.21 / gallon
Do you like buying gas from these guys?
The challenge for grid utilities: integrate RE + storage on wheels into the grid, or else...
The 21 st Century Electricity System Digitization + Disintermediation + Decentralization + Decarbonization + Democratization = Disruption New business models Peer-to-peer (P2P) Business-tobusiness (B2B) Machine-tomachine (M2M) Blockchain Cryptocurrency Micro-grids (AC and DC) Swarm electrification Sub-systems Generation Centralized with increasing RE penetration Transmission Distribution Distributed Generation Consumers and Prosumers Technologies Storage to ensure spinning reserves requirements, & smoothing & time-shifting of variable RE Dynamic Line Ratings (DLR) High-temperature Low-sag (HTLS) conductors Storage for frequency & voltage control Digital substations Smart transformers Automated demand response Virtual power plants Behind the meter storage Smart meters / thermostats
Transcendergy, L.L.C solutions for a sustainable future Thank you! danmillison@gmail.com