Shell Renewables & Hydrogen Tim O Leary External Affairs
A global presence Shell Renewables: 1,100 employees 90 Countries Wind farms - operational Solar marketing operations Solar production facilities
Why Shell? Shell is an. Energy, Mobility and Petrochemicals Co.
Shell s Vision for Future Energy Products The Future Energy Mix Cleaner crude-based fuels gasoline and diesel Clean hydrocarbon liquids derived from natural gas (GtL technology) Compressed Natural Gas (CNG) Liquefied Petroleum Gas (LPG) Bio-fuels Bioesters Ethanol Shell Solar Shell Wind Shell Hydrogen Wind Solar
Shell Renewables Renewables are the fastest growing source of primary energy Most comprehensive new energy portfolio in the industry Sufficient to meet energy requirements of entire planet Could supply a third of primary energy by 2050 Shell s invested over $500 million in 5 years to 2002 Investing further $500 million to 2005
Faster growth than conventional energy... 1990-2000 growth (% pa) 10 8 6 4 2 0-2 Coal Oil Gas Hydro Nuclear Renewables
with fastest growth in wind and solar 1990-2000 growth (% pa) 25 20 15 10 5 0 Wind Solar Biomass Biofuels Geothermal PV Solar Thermal
A small but growing share of primary energy Total primary energy: 114 000TWh/year Renewables: 1 100TWh/year PV Oil Gas Coal Renewables Solar thermal Biomass Geothermal Energy mix
Continued strong growth ahead Solar PV Wind Biomass Solar Thermal Geothermal Biofuels Source: Shell 0 5 10 15 20 25 30 Projected growth 2000-2010 (%pa)
What Shapes Long Term Energy? The contributors By 2050 demography: 8-10 billion people incomes: average $15-25k/capita urbanisation: 80% living in cities liberalization: markets increase possibilities demand (2-3 times increase)
Climbing The Energy Ladder A Continuously Changing Relationship 350 300 250 200 150 100 Source: IMF, BP GJ/capita 50 0 China India Korea Thailand Mexico Brazil Japan 0 5 10 15 20 25 30 35 GDP/capita ( 000 1997$ PPP) EU Australia US +$25k/capita: little extra energy needed. +$15k/capita: services start to dominate growth. +$10k/capita: industrialization near complete. +$5k/capita: industrialization and mobility take off.
Shell s Views on Climate Change Shell shares the widespread concern that GHGs from human activities are leading to changes in the global climate. We support the aim of stabilizing concentrations of greenhouse gases in the atmosphere. We believe action is required now. Shell has exceeded its 02 target to reduce emissions by 10% (vs 90); We support: A stable, moderate and widely inclusive policy regime New lower carbon technologies International cooperation and international agreements Involving developing countries Flexible market mechanisms like cap and trade systems Efficient energy use by consumers NG as an enabler to lower carbon intensity economic growth. A well-to-wheels perspective of emissions
Climate Change sea ice in the Arctic is declining at a rate of nine percent per decade the rate of warming in the Arctic over the last 20 years is eight times the rate of warming over the last 100 years UNFCCC (1992) and Kyoto Protocol (1997) aiming to address the issue http://www.gsfc.nasa.gov/topstory/2003/1023esuice.html
Renewable Resources are Adequate to Meet all Energy Needs GJ per capita 1000 800 600 Demand Range 400 200 0 Hydro Wind Solar Geothermal Biomass Source:adapted from UN 2000, WEC 1994, and ABB 1998. Figures based on 10 billion people.
Renewables already compete with retail power Wholesale electricity price Consumer electricity price Electricity peak price Ocean Thermal Tidal Solar PV Ocean Wave Biomass Geothermal Depending on renewable resource availability!!!! Wind Small Hydro 0 10 20 30 40 50 60 Unit cost ($cents/kwh) US Japan Germany cost competitiveness (excluding subsidies)
Shell Solar Supplied over 20% (+350MW) global installed solar capacity Historic Leader in U.S. with approx. 25% market share Asia Pacific office established in 1981 Leading PV supplier in China Applications range from rural village projects to 5MW project on a brownfield in Germany 1300 people across 75 countries
Shell Wind US/EU focus - No. 2 Wind player in the U.S. Serving almost 100,000 U.S. homes 8 wind parks: 500 MW capacity 35% CAGR over the past five years Growth momentum dependent on extension of support regimes
Wind market growth Installed Wind Capacity (in GW) 35 30 25 20 15 10 5 0 1998 1999 2000 2001 2002 RoW USA Other Europe Spain Germany Denmark
Future cost competitiveness of wind energy 25 20 Cost of wind-generated electricity ($ /kwh) Onshore Offshore 15 10 Market price for physical power 5 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 for a site with 8-9 m/s average annual wind speed
Shell WindEnergy Operational Projects Harburg Germany 4MW Blyth Offshore UK 4MW White Deer Texas 80MW Cabazon Pass California 41MW Whitewater Hill California 60 MW Rock River Wyoming 50MW End 2003 installed capacity = c. 500 MW
Shell s strategy for renewables / hydrogen Renewables have made significant progress over past decades and show strong potential for the future. Positioning for rapidly changing market - focusing on commercial renewables progressing Hydrogen, Hot Fractured Rock, biofuels Building on distinct experience / capabilities Potential can only be realized by governments and private sector working together.
Why Hydrogen? Hydrogen is a convenient energy storage medium (not a primary source of energy) Hydrogen is clean in either ICE or Fuel Cell or in Power Generation Can be used to store energy from intermittent sources like wind, solar, geothermal Can be produced from fossil fuels and biomass via chemical conversion processes Can be produced from renewable sources via electrolysis
Shell is already experienced in producing and handling H 2 Experienced at H 2 production: Shell is experienced in the safe and productive handling of H 2 & traditional fuels Shell is the 4 th largest producer of hydrogen and has been producing H 2 for over 40 years Shell is leveraging the most cost-effective, safe and available infrastructure to address the security, supply and responsible acceleration of the hydrogen industry Shell is well connected to advance a greener hydrogen economy via Wind, Solar
Technical issues to be addressed for a transportation based on hydrogen High Negative impact if not solved Reduced Platinum load Cold start & freezing Inexpensive on-board storage Packaging FC system in car Keeping membrane humid Electrode Poisoning Packaging H2 storage volume - conformable tanks Medium temp. Metal hydrides with > 6 wt% H2 Low Low Remaining technical hurdles Non precious metal catalyst High
Hydrogen Refueling Demo s Japan Iceland Europe North America
Our Vision for H2 Market Takeoff Number Vehicles (millions) 180 160 140 120 100 80 60 40 20 0 2005 2015 2020 2025 2030 2040 Growth of H2 Market will depend on funding the transition to mass production - Dependent on public policy developments incentives Future landscape is being shaped now - Players developing H2 policies and positions Historical examples - Personal computers - Mobile phones Year
Shell Hydrogen Vision Stand alone projects hydrogen-fuelled buses out of depots (e.g. Amsterdam and Luxembourg) Second generation sites, with public access, but separate from existing fuel stations (e.g. Iceland station) Fully integrated hydrogen and gasoline fuel stations (e.g.benning Road Shell Station in Washington DC) Within next 5 years Lighthouse projects: integrated stations within mini-networks 2010 2020 connecting the mini-networks with corridors and filling the white spaces
A new approach: Mini Networks Area covered by 100 km distribution around production site Area covered by 100 km distribution around production site 800 km Area covered by 100 km distribution around production site
Shell positioning for the future Hydrogen Developing tomorrow s hydrogen infrastructure. Wind Powering hundred of thousands of homes with Wind energy. Liquid Natural Gas Gas to liquids Gas supply Natural gas World leader in LNG; Making cleaner transport fuels with gas to liquids technology. Solar PV Making the world s most energy efficient commercial solar panels. Bio-products One of the world s largest bio-fuel users today; Researching advanced bio-products for tomorrow. Geological sequestration Partnering in research and development initiatives