Challenges and opportunities in net-zero emission energy systems

Challenges and opportunities in net-zero emission energy systems

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Good morning. My name is Bob Armstrong and it’s my pleasure to welcome you to this special MITEI seminar. The MIT Energy Initiative has been working during this COVID crisis to bring lots of new and interesting content to the MIT and broader community related to the energy and climate challenges. It’s a pleasure to have with us today, Dr. Dirk Smit, who was vice president of research strategy at Shell, to talk about challenges and opportunities in net-zero emissions energy systems. As I mentioned, Dirk is VP of research strategy at Shell.

He’s also chairman of Shell’s Science Council, and chief scientist of geophysics at Shell. He got his PhD from Utrecht University in 1989, by doing a PhD in mathematical physics, specifically studying string theory. He’s gone on to do postdocs at Berkeley Harvard and joined Shell’s geophysics R&D group in the Netherlands in 1992.

He’s held a wide variety of positions since then at Shell, but I think it’s fair to say he’s viewed as one of the leading visionaries with regards to science in Shell’s future. He’s always got interesting things to say about science and its implications for the energy sector. I know I certainly always come out of conversations with Dirk with new insights. He held a number of positions outside of Shell. He’s on the MIT external advisory board, on the MIT advisory board for the Earth Atmospheric and Planetary Sciences Department. He’s a fellow in the ERL, Earth Research Laboratory, and holds a number of visiting professorships around the world.

It’s again a real pleasure to have Dirk with us to talk about challenges and opportunities. I’ll just make a brief comment that since earlier this week, there were a number of releases about Shell’s new business plans headed towards a net-zero future by 2050, that this talk was put together and designed well before that came out. This is a science and technology-focused talk. I have asked Dirk and he’s certainly willing to come back later and talk more about the business implications of these kinds of ideas, but for this morning, I think we’d like to focus on science and technology and its implications for how do we get to net zero. With that, let me turn it over to Dirk for your presentation.

-Well, thank you, Bob, and thank you for your invitation and kind words. I first would like to check, am I audible? Can you hear me okay? Can you see my slides? -Very fine. Yes. You’re good. -Indeed, I had a bit of a follow-up why I would you use the word challenge in there because these are challenging times, as we all know, and it’s easy to sort of be put off by yet another challenge. Actually come away will be gloomy. That’s not my intent at all.

I do think there is a fantastic future ahead of us, in particular, in energy systems that are net-zero emissions. In my view, the future is bright. If anything, I hope that this talk will give you some insights of why that brightness may be there. Before I do that, a bit of a downer, perhaps, don’t read this.

I need to show this to remind you that I work for a publicly listed company, and you shouldn’t actually buy or sell any stock based on my talk here today. I don’t know why it takes that much text to explain that, but that’s what this is. I also am realizing that, yes, you may have other things to do and also occasionally wander out to other things that happen in your vicinity and at home or wherever you are. I thought I might as well just start with what my main message is and then hopefully trigger some interests or at least to make sure that you get that message. There are four takeaway points at least that I would like to make sure we can discuss. One, the first thing is that a net-zero emission system is different from a hundred percent system, a system that we probably have today, or at least close to a hundred percent where fossil hydrocarbons are by far the dominant energy carrier.

That zero-emission energy system, by contrast, will consist of many more or at least a few energy carriers. Maybe some of them may be much larger than others, but there will be not that much larger. What is important in order to get to net-zero emissions, the actual composition will include low power density renewables, and maybe also high power density energy carriers. For example, like nuclear, and that is relative to fossil hydrocarbons.

What is also important thing is that you realize if you have more carriers or more legal blocks to play with, then more conversions are also possible. What is perhaps different from, let’s say, a few decades ago is that we understand how these conversions maybe become very efficient, thanks to new technologies and new advances in material science enhancements, and what may very well happen over time is that we become very good in such energy systems to highly optimize solutions and specific uses for specific markets in energy sector. In other words, this wholesale supply model of a one-size-fits-all may actually not be the dominant thing on how to actually address markets or user groups of energy. This highly optimization is made possible by a lot of advanced technologies.

The second takeaway is that, and it has to do-- it’s something that I will spend quite some time on, is that large-scale penetration of different energy carriers will depend on their environmental footprint. That means that you will not get to a hundred percent solution very quickly if you insist on a net zero-emission energy system. That may sound a bit counterintuitive, but hold on for a moment, and for some time and during this talk, it has a way where we trade-off. Trade-off’s exactly at the point where people start to get interested in perhaps other systems of energy supply. In a net-zero energy, net-zero emission system, with lots of renewables, a very important condition comes from land use. That is perhaps also counterintuitive because many people compare, say, to capacity factor of a solar panel with this area of a particular country and conclude that there’s plenty of space.

We’ll actually demonstrate that that is actually much more nuanced. A second trade-off may actually occur by the mining that may be needed. I won’t have much time to discuss that, but mining as an effort to build the infrastructure for solar and wind, in particular, the energy capturing as well as the storage devices that may be needed for that may take up a lot of material. These two things were mostly important in Asia where most of the growth of the energy system will be. A third point that I will realize is touching upon the fact that Asia indeed is important is that different regions will realize net-zero emissions differently. That may depend on geographic differences, economic development is very important, and also cultural and political considerations, much less so perhaps by technology itself.

That’s where I will start part of my talk. Where the trade-offs actually are decided and how to go about them, enhance what the priorities may be, maybe for Asia and Africa being mostly concerned with economies that are still in their development stages, as opposed, say, perhaps, to the US and Europe, priorities may really be different. Not only that, there may also be new energy sectors growing because of parts of the trade-off including mining, as I mentioned already, but also, for example, desalination industries to cope with a lot of freshwater production.

Hands in a net-zero emission system, we do see a large degree of difference, say, amongst different regions. What is very important to make a net-zero emission system work is a degree of circularity or at least off intra-sector connectedness, where a sector is, say, an industrial sector, or at least a market sector in energy. To be absolutely short, it’s a little exaggerated and it’s not factually really true in that sense, but you would think of this as one sector’s waste becomes another sector’s resource. I will show you an important example, in my view, a very large example where agricultural optimization, and agricultural technologies, and energies start to become very intertwined with the structure or the fabric of a net-zero emission system in Asia, and, say, or in tropical countries to begin with. Then there are a few underlying challenges that I’d like to address.

I will not be able to do this in any way of comprehensiveness, but the most important ones that are probably true for most net-zero energy or emission systems. In other words, true for most regions, we will have to really think about how large-scale energy resource and storage may occur both on site, as well as from grid to grid, or for that matter, really large-scale more for strategic relevance to a country or a region, including CCS. I mentioned already agricultural optimization in conjunction, for example, with de-carbonization of manufacturing industries, but also around hydrogen, hydrogen as an energy system. It’s not only a fuel, it’s also a carrier and storage.

In that sense, energy is very relevant in a NZE system because you can make it really carbon free. Those are four things that I’d like to perhaps to ask you to keep in the back of your mind as we go from the talk. How I will do this, I will introduce the four topics is that I will start with a few observations on the current energy transition, and I will do that so through a Shell lens, and I don’t do this just to moan and complain about the fact that, well, we have to give up hydrocarbons is mostly through what Shell actually brings in this discussion, in terms of scale and insights of how energy systems actually work. Then I will introduce a concept that’s not new, but I do think it’s sometimes a bit overlooked or dismissed, even in important discussions on how NZE may be designed and that is power densities.

Then I will actually be able to show that NZEs are largely shaped by societal and economic aspects. Indeed enabled by technologies further, not the other way around. Then I will actually make a specific case for Asia, in particular India and China, where I will show that it is likely I cannot predict, but then I don’t want to predict either, but I’ll make a case that it could very well be that different priorities will be set in those countries or those areas. As a result, I will touch upon some of the grand challenges that I just discussed a minute ago. I said that I would start this talk perhaps by starting perhaps by looking at an energy transition that we currently see and through a Shell lens.

If anything, as anyone may have seen Shell has announced we have a accelerated our Shell’s climate ambition at the start of the COVID. Once we realized that this is the opportunity to really start accelerating efforts that were already in place. At the middle of the slide, you see that we strive to get a net-zero emission energy business by 2050 or sooner, and that 2050 or sooner should be singing in the context of what societal developments or regional developments in different societies actually lead to. It consists of three parts. We first, of course, have a net carbon footprint ambition around one and a half degrees, which is consistent with this net zero emissions by 2050.

We then split this out by making our own operations net-zero emissions. We partner with clients, future clients and existing clients markets where we partner for de-carbonization. In other words, help people to get off say emissions of CO2 in the atmosphere, in their efforts to provide-- to use energy. In that sense, they may becoming new clients of us. This is at the heart of what I think was put out at last week or earlier this week by Shell and built on that fan business strategies are developed. As Bob already said, I’m actually not talking about so much what the actual business decisions are here.

Maybe some of them have become clear. I mostly would like to actually highlight some of the underpinnings in that thinking, which is mostly around technical and scientific insights that have played a significant role. I think from my Shell lens where people may not realize so much, it’s not so much that we actually changed hydrocarbons for something else, it’s the fact that a large part of Shell’s business when dealing with in oil and gas is based on getting access to the right geology, and the right geology, as we all know, is not uniformly distributed. The right geology is, in fact, quite evenly distributed, and to find what the right geology is we need a lot of technologies to find that out, in imaging, of seismic data, then, of course, in how to actually deal with the subsurface risk that is remaining in these images that these images are never pictures of the social servers.

They’re actually highly noisy impressions of what might be down below. But in actual fact, whatever technology, whatever imaging is, if you’re in the wrong block, you’re not going to get very far. In fact, it’s even worse. You should be into Superblocks in any basin to really make a significant business out of this second-tier, third-tier blocks, no matter how good your technology is, is essentially a bit of a slug, if you wish. In contrast, if we move into a net-zero emission system, it consists of many more energy carriers, and gears that are, let’s say, renewable or solar and wind, say, and the game actually becomes really different because the actual carrier itself may be produced almost everywhere and also maybe produced very cheaply.

It may not be such a technology game per se, or it certainly is not determined by access so much. It’s mostly determined by access to technology. That technology also features in something else. We need to get much more smarter about how do we build systems of these different carriers and conversions. I alluded to that already in my main message slide, that those are actually quite crucial because that’s where people will make optimizations and will make choices and priorities while still aiming for net-zero emissions.

It becomes a technology game. As a result, access to technology becomes a lot more important and maybe less, although it may come back with a bit of a vengeance if you’re not careful, as I will show you later, excess in terms of favorable countries or areas in the world to like similar we have with accessing favorable geology is less of an issue. It’s more about systems engineering and complex multifaceted systems optimize to certain client groups and markets. But based on carriers that are essentially available everywhere.

That is a huge change. That is a huge cultural change. It’s also a huge change that they sometimes less realized. It also shows where Shell’s strength actually is because it’s not true that we don’t know these systems in a geology driven world. In fact, most of the supply systems and energy systems to actually bring, say, hydrocarbon energy to an end user are very complex systems involving a lot of transport, supply chain and generation storage, et cetera.

All that comes is optimized fully into very large-scale systems. That knowledge is deeply embedded in most Shell’s engineering and business groups. It will come now again seen as very important as we start to build. That’s zero emission energy systems that scale.

That part remains. It’s essentially, say, part of the message in this slide, apart from the fact that the culturally there’s a huge change happening in companies like Shell. It’s very clear already for some time in Shell that low carbon and renewable energy solutions for Shell would mean two things. One is an investment or a focus on clean and green power generation because electricity is, of course, the name of the game in order to get to net-zero emissions, a significant amount of electrification will need to happen, or it would at least be very advantageous to have that much more than we currently do at 20, 25% maybe up to 50%.

On the other hand, there are a number of other fuels if you wish, or energy generators that may, in fact, become very important in such a role, but, again, may not be universally available, maybe with the exception of hydrogen, but also biofuels, biotechnology, synthetic hydrocarbons. You may have seen in the press that Shell was able to produce recently 500 liters of synthetic kerosene that was used in a plane and by KLM flying from Amsterdam, Schiphol. Of course that’s only a very small amount of the actual kerosene that is needed, but at least a start has been made. The synthetic hydrocarbons using, or a kerosene, was actually only made by CO2 coming out of a waste stream out of industry, our own refineries and hydrogen. It may be more, there may be others, but those two are essentially two aspects of what net-zero emission energy business in the future may probably look like for Shell.

As I said, I cannot stress enough the role for hydrogen. It’s not only perhaps a few, it’s also a base chemical, if you wish, or a base agent to build large systems from large systems in form of storage or indeed of also in different markets, it will play its role. It plays a role as fuel. It may also play as a base-chemical at the root of a more green chemistry, if you wish.

It may also be at the root of the circular argument that I mentioned before, in terms of turning waste from some sector into a usable product somewhere else. That has to do with the fact that a lot of this waste actually can be combined with hydrogen into processes, we actually know, maybe not at scale yet, but we do know them to actually make something useful out of that. In fact, the synthetic fuel that I just mentioned is an example of that. Hand systems engineering apart from just the production of hydrogen, and then the trading, perhaps in hydrogen, both as a resource as well as a carrier is actually something that will be very attractive to large-scale energy companies.

Now, I’d like to change tech, because we know that energy so far in humankind, history of humankind has done great wonders or great things. In fact, there is a strong correlation that human development and human quality of life, if you wish, income, et cetera, is very correlated in consumption of energy per capita. What you see in this plot is this correlation. I don’t know whether you could see my mouse, but I hope you can. You see on the left countries that are still in stages in developing their economies, and then on the right, you see, in fact, countries that you would argue are living in advanced economic stages of their development. Indeed, also the human development index has computed by the United Nations is indeed a lot higher.

The question is, of course, whether you would actually increase this because the world population is growing. It’s by far not a given that the current energy system can just be extrapolated, even if that were an option to begin with, let alone that a net zero-emission energy system would continue this drive that everyone has, as an individual, that you would like to improve your life and enhance a large part of that maybe about having access to energy. In fact, I’d like to take you back to what actually happened around the industrial revolution in England in the 18th century, around ‘70, ‘80, or ‘90. Technically speaking, it started perhaps at ‘70, ‘60, but what I’m saying is relevant only 20, 30 years later.

What I’d like to get back to you is a theory that sometimes is a bit controversial because many people did many things with this, but I would like to use it in its purest form, as it was originally formulated by Thomas Malthus, a British economist and philosopher. Who actually argued that a lot of human mankind, in fact, all of humankind, before say the industrial revolution, was essentially trapped economically in what was later called a Malthusian Trap. Where in fact, population growth will be fundamentally exponential or close to exponential, and where the resource additions or resources growth, like food, but also other means for vital functions to sustain life, on to make a living, actually would grow linearly or at best polynomially. While every mathematician will then realize that there is a point at which the exponential curve will overtake, say the growth of resources, and at that point, the income will essentially get redistributed over the larger population.

A Malthusian trap is essentially at the end of the day just simply a D shift. It’s a D shift in the fact that the income that you had prior, perhaps through some technical breakthrough that would allow you to create more food, or to create more energy, or to create more material, or out of devices say, if that doesn’t really grow fast enough, then it will actually be taken up by a growing population, hence lead to the same situation as before, except for the fact that there are now more people. That didn’t happen at the industrial revolution. What didn’t happen there was not so much that there was all of a sudden a lot more technology, which is true, but what also happened then is that that technology actually fell in a very fertile ground, namely in a society that was already emerging as a middle-class society. There are long stories, and I will refer to you to Gregory Clark and Hamilton who wrote about this very recently, in fact, done a number of papers on this. It actually showed there was not so much the technology, per se, that led to the enormous wealth increase.

In fact, a wealth explosion made possible by the industrial revolution that actually outpaced, say, the growth in population, and because of a cultural or societal phenomenon, mainly that the emerging middle classes were already quite large when the industrial revolution started to happen. If it weren’t for that, the thesis, then it probably would not have gone so far or so spectacularly successful. Further on, what happened as well as we know, is that most of the extra wealth was actually happening in manufacturing jobs that didn’t exist because of that technology not being there, and that could scale up in particular because of this middle-class culture.

Now, eventually, as we know, for much more advanced societies and the exponential manufacturing actually stops. Maybe more surface industries and efficiencies and circularity, you could argue, maybe we are closer around this point in the US and in Europe, at which point say the quality of life will still increase, but it’s not so much coupled anymore with high-energy intensities, that are needed to actually power all these manufacturers. Keep this picture in mind, or this concept in mind, because if we now look at where others may actually then grow into something that you would call could be an industrial similar effect as this industrial revolution, then it will be in the rising of the middle class in Asia.

In fact, many people may realize this already before, I found it actually quite insightful that the size of the middle class in Asia is not only growing as fast because of technology, and the wealth that may be created by this technology in an already large middle class, or at least a middle class that is large enough. Going forward by 2050, about three billion people will grow into the middle class as from what you could argue is still the poverty regimes that the people living in extreme poverty sometimes, or maybe not even so extreme, but nevertheless are not part of the middle class. Already by 2030, it’s about 1.5 billion, and most of these people

will start to work in manufacturing industries, as we know. That actually implies that say at the timeframe that Paris is relevant, we need to be worried about the fact that these highly-intense energy-consuming industries, will also be emitting quite a lot of emissions too because they’re not green, they basically burn on coal. Maybe there are advances there soon, but still, it’s quite mostly done by coal, and already 50% of the greenhouse gas emissions come from Asia, and China is already responsible, I think, for 28%.

What is interesting, if you look at how that manufacturing actually clusters, is to look at the graphs here on the right. You’ll see here, the annual CO2 consumptions here at the top, say here in China, which is about a billion ton larger in 2019 than the actual consumption for the Chinese economy itself, for the Chinese would allow to believe would be needed. In other words, there is a lot of manufacturing happening likely, that for goods that are exported, I cannot prove this just on these two graphs, but very interesting to see that on the US side, for example, we see quite the opposite where the consumption-based CO2 emissions are larger than what the annual CO2 emissions actually are. In other words, someone else builds, say the CO2, or it burns the CO2 into the atmosphere from manufacturing somewhere else, and so maybe this is indeed a proof, or at least an indication, that some offshoring and onshoring is happening. For the climate problem, that doesn’t bode very well, because it might very well be that manufacturing in the US, at the time, was probably already more on gas-based and maybe cleaner than perhaps, initially, at least it was in China, where these things start to grow still burning on coal.

Those are things, therefore, that we need to consider when we start to study, what actually may happen in China, and how say energy choices will be made into worse and net-zero emission as China has also committed itself to. Something else that’s important is that when you start to build economies that are seeing a lot of jobs occurring in or appearing in manufacturing and people start to live in cities. Indeed, in the vertical axis, you see, the population living in urban areas, and predominantly the more developed, economically, people live indeed more in cities and also are indeed much richer. There’s a good reason for that, because manufacturing is most easily done in concentrated sites and these concentrated sites attract a lot of people. If you now would like to make use of surfaces that you probably cannot afford immediately, if you come to a city, then, yes, you might as well work or live very close to each other, simply because you can now share some of the buses, et cetera, and some of the infrastructure.

Hence cities are, by nature, occurring simply because of the drive for manufacturing jobs in centralized positions in centralized areas. That has a big consequence for how to arrange an energy system. If it’s left to its own devices, then what happens is that people naturally will go to energy choices that are through technology able to become accessible, as a result manufacturing industry occur. That can be actually done at sites of big factories, but in actual fact when compared to say sustenance farming, the energy density, but more importantly, the power density, which is what you see here on these diagonal lines increasing from very low to much higher, actually starts to increase. In particular, societies that are early in their economy, and are breaking out from this mutation track to lift themselves out of poverty, are very well helped by high power density resources, because that’s easy to deal with in a city.

Essentially, a lot of the growth may actually be determined by how easy access you have for energy systems that optimize, say, on power densities. That’s, I think, an important insight that already is listed by David MacKay, who, unfortunately, no longer lives, but wrote that down in a book Sustainable Energy, without the hot air back in 2009. Sometimes we tend to forget these things, because if you make a plot of where actually are the producing areas of energy, the carriers of energy that we use, with respect to their power density, how much power density is needed to actually create these energies versus where we use them, which is depicted here in red, and you clearly see that most of the production of the conventional systems actually are more or less in line or on the same area or slightly above of where we actually use these power densities, even whole cities so you can actually assign to a power density. Unfortunately, a lot of the renewables or other with the exception, perhaps, of nuclear energy carriers that you bring into this system to become net-zero emissions do face a challenge that you are generating them over much larger amounts of land or sea, and actually need to work that up by whatever system you can design for that in order to work in industries, because people do live in cities already. As I just showed you, they live predominantly in cities in developed economies, and they’re starting to grow these cities in Asia, mega cities, and indeed even much larger and with much more population densities in Asia than, for example, in the West. To give you just an example to that, this is the city of Tokyo, you can just calculate, and I’m not suggesting here that this calculation is actually very relevant in its detail, because it may change.

The sums are not so difficult to make, but the power densities of Tokyo’s business units, for example, are around 500 W/m2 to 1,000 W/m2, it’s very similar to what New York has, and this is in a developed economy as we all know. If you now start to wonder, "Well, look, let’s see whether all the electricity that we currently use in Tokyo can be taken up by solar PV," then a quick calculation actually shows you that you need an awful lot of land to actually store or to build solar power. Whereas the actual surface area of Japan is way larger than what you would need here for Tokyo.

The actual fact is that the land around Tokyo up to 1,000 kilometers is actually used, is either forest in hilly country and not very conducive to build large amounts of solar. This needs to cover all the forest, or it is actually used for agriculture or water resource management or other functions that are needed to indeed sustain a significant group of people about 39 million. If you add to this the need to storage, and even say, for a two-day storage of let’s say a significant part of 50% or a significant part of solar energy to be used here in Tokyo would actually create an enormous amount of storage that if needed, and it’s not very clear that Tesla batteries or Tesla Powerwall’s will be able to do that, if only because of the enormous cost. There’s another area that comes into play here, this amount of solar panels for just the city of Tokyo, never mind all the other big mega centers that occur when the middle classes actually start to grow around the globe, will need a lot of building or a lot of material to do this. Indeed, some calculations actually show that the mining may need to improve about tenfold. Mind you, this is an industry, the mining industry, that already in its oil consumption is very similar to the actual aviation industry, before the great lockdowns.

This is something that actually should worry you then, how to decarbonize this if they’re so dependent on building solar and wind devices. We need non chemical storage techniques to at least alleviate perhaps the storage amount, but the ones that we know, like pumped hydro, actually have very low power densities. In fact, I live in a country that is exactly flat, as flat as a pancake. There’s not a whole lot of pumped hydro possible in this country so we need something else, if you would like to do this and you could argue that the whole of the Netherlands is a very densely populated area. It’s only less dense than Bangladesh at the moment, and uses a lot of energy.

This is not a panacea, and, in fact, it will only get worse. This is the current situation where people live, and you can see in red that mostly people live in large areas and urbanized areas in Asia already. This will only start to grow further if indeed these middle classes start to become sizable, and essentially start to work in jobs that most likely will create an even larger amount of manufacturing, if only for their own societies, let alone that they may be concentrating manufacturing for the rest of the world. Now, there is some relief, I would say and that is not something that people often realize. They do claim, though, that leapfrogging may happen.

In other words, the developed economies can maybe teach developing economies. I would argue we need to be very careful with that because, as I said, the actual success of economic development, enabled by technology is largely driven by a cultural aspect of the middle classes that need to grow, and is much less, perhaps, dependent on technology that needs to be imported. The technologies will be developed because people will make different choices based on how they will build their cities and on geography, as we said, the amount of land that may be needed, etcetera. It is true that if you look at the GDP growth versus the amount of energy that is needed for a certain amount of economic development, if that may say so and this guy here, Fetter, actually wrote a paper on that on how to normalize this in a consistent and meaningful way. Then the flat of this curve, for example, China means that there is less energy needed for the same economic output as perhaps a fully developed economy Japan had to do when it went through it.

It’s the developments of growing the middle class into what we currently see as a fully developed economy. The fact that this is flatter means that perhaps it’s more efficient, maybe digital technologies have something to do with this and this is certainly something that I would argue we need to look at carefully. What does this mean very briefly, then? Well, introducing NZEs or net-zero emissions, I think we need to focus on large urban areas, mostly on monsoonal Asia because that’s where most of the burning happens and that’s also where most of the growth of the energy happens and that’s also where most of the climate problem probably will need to be solved.

As I said already, NZEs are inherently consisting of several energy carriers and what choices people will make, for example, in Asia may actually depend very much on the land availability, the amount of economic development and perhaps also the degree of independence that people would like to achieve, for example, a country like India is loosely dependent on its energy from outside India right now, but the sun is shining in India quite well. A lot of pressure is to build, of course, solar panels in India, but it may need to be offset at some point, simply because cities in India tend to be even denser than Tokyo. That means that natural gas with CCS or as I will show you in a minute, advanced nuclear reactors may actually become quite reasonable options for countries in Asia and maybe later on in Africa. What is also true is that a large part of any say decarburization that happens and will happen in Asia equally, may actually be held with a significant switch to hydrogen as soon as we can. That actually means two things.

We need to be able to produce it in clean ways, we also need to be able to build hydrogen uses further and next to electricity, perhaps. As I said, a lot of the electricity supplied in clean ways requires a lot of mining. There may be a pressure building here, or at least a trade off point and that will be for different regions in different ways. I will now actually go to discuss very briefly three challenges and opportunities, where I think from a technology and science point of view, we might want to look more closer to. One is the actual route to power.

There may be many more routes to power than just one. In particular, not to suggest for a minute that Shell is actually building a nuclear business, not at all, but we are interested in participating in studies to see how it is happening, particularly in relation to hydrogen. I will also stress the need for non-chemical energy use mainly because I’m not so worried about the fact that batteries will become a lot cheaper and hence can take over, but it’s the Sheller material pressure that will be in there, hence other non-chemical ways of storing energy may actually be attractive as well. As I said, it becomes very important to understand very early on what are the options to connect to different sectors in an emerging net zero emission system, even while you’re still burning a lot of hydrocarbons to figure out where are really the opportunities to connect and actually build some degree of circularity in there. In a context of Asia, I would say that comes mostly from coupling it with agriculture. Very briefly, I got the slides from Jacob [?] who may, in fact be in the audience.

I’m actually part of an advanced expert group on nuclear production that looks at nuclear advancing nuclear batteries. These batteries are very small, are not like, at all, like water reactors of two gigawatts, these things are much smaller. Maybe there’s an SMR version that actually gets a little larger, let’s say up to 100 megawatts, [phone rings] but the essence is if you can build them in a factory-- If you allow me, Bob, for another five minutes, then then I’ll be done. Hence, they come with significant attractiveness in the fact that you can see them often in a containerized plan, build them in a factory and dispatch them to a client. Obviously, the power density is much, much higher than wind or solar. What is interesting is when you start to optimize that with an electrolyzer, most electrolyzers for solar and wind, there are two versions in the proton electrolyte membrane as well as the alkaline, they operate, of course, at room temperature.

With the advantage of having a nuclear generator, we have them working. These are different concepts, of course, at higher elevated temperatures. The efficiency of actually splitting water becomes a lot more.

It’s been general a lot of 30% to 40% more efficient. In fact there are studies now where people building as part of the [?] programs to build next to existing nuclear power plants, not the batteries. I just talked to see how that may work in terms of hydrogen production. In fact, there’s reason to believe that those routes to absolutely zero power to zero carbon hydrogen are quite competitive with for example, steam methane reforming plus CCS. That’s a significant amount of foreign tax, a tax credit for, or tax burden for CCS around $150 a ton. People may say, that’s way too much.

In fact, in California, I think the actual subsidies for CCS are even higher than almost $50 a ton. What I’m saying is that give this another 10 years and it may very well be that routes to zero carbon hydrogen may actually be available. Whether that’s acceptable in a society depends on many other things. Certainly in Asia with a lot of land already used, and where significant reforms need to happen in land management anyway, these may be for dense cities like Shanghai or Mumbai. In fact, quite attractive solutions and it may very well be given the amount of investments that the Chinese and Indian governments do already next to solar and wind in, for example, small modular reactors, as well as nuclear small micro reactors is actually quite significant and growing. It’s growing quite steeply. I mentioned the need for CCS.

CCS is not just storing things in the subsurface. In fact, it’s a complete system that needs to be lifted to scale. The challenge however is, for this to work, the actual capture technology needs to go up in its effectiveness.

Its effectiveness of 90% is not enough, it needs to go up to 95% maybe to 98% to be really a solution at scale for a net zero emission system. You can couple that if you store it into the subsurface, then obviously, you can actually take advantage of geo-thermal aspects. If you store it for example, in the saline aquifers does work.

[?] the EDH in Switzerland, as well as in our own [?] Shell to see whether that storage of CO2 in saline aquifers that are deep three and a half kilometers may actually be used in a simple energy and energy storage system, at which now supercritical CO2 is the working fluid. That working fluid is very attractive because it is close to its critical point and hence acts really more as a fluid and as a gas and hence the turbines may be a lot smaller. This is something that people realize also, for example, in net power, and they start to build the LM cycle, which runs entirely on CO2. Hence, it may very well be that CO2 as a working fluid may be in combination of future geothermal applications, as part of CCS operations become attractive, and maybe a key to scale. That will not happen everywhere in every region, but it may be happening, for example, in Texas, in the coastal waters of Texas, and maybe also around the North Sea, and maybe the South China Sea, where in fact a lot of people are already used to offshore engineering for oil and gas. I’d like to touch upon something a non-chemical storage measurement in addition to CCS, which is already some-- an idea around isothermally, compressing and decompressing air, that you store in cylinders, maybe 20 meters at the deep sea floor, let’s say at two kilometers.

This is actually leveraging a lot of capabilities in the oil and gas sector. It’s astonishing to see that actually quite quickly you can get to storage power densities that are rivaling hydrocarbons. These techniques to put things on the sea floor are not so uncommon. We deploy a lot of seismic sensors, for example, on the sea floor, in fact, in deeper water than this.

Just look at the numbers, this is what we do with Phil Lubin at UC Santa Barbara, it’s 40 terawatt hours. These becomes really perhaps strategically relevant non-chemical storages for cities that are completely off the grid, or at least often, I’d say, hydrocarbons and fully powered by renewables. I said for something about agriculture, I don’t have a lot of time for this, I’m running out of time for that. Agriculture needs to go through a significant innovation or densification. If say 10 billion people need to be fed, and mostly say in areas like in Asia, and it’s already quite a challenge to do this with the current technologies with current energy densities, let alone that you would like to decarbonize the agricultural sector, but maybe there’s help from what you could argue are our novel insights. This is a science that really looks at enriching the soil with CRISPR technologies, as well as with biochemical pathways, to actually see whether plants can take up a lot more CO2.

Biodiversity plays a significant role into this. It’s not at all a fertilizer game at per se, but it is perhaps optimizing the top soil to not only get a much more denser production in terms of crop yield, but also a denser uptake for longer periods of time for C02 by the top soil, and as most people know, in fact, by the short carbon cycle through the topsoils, about 70 Gigatons of CO2 is converted into plant and biomass. Unfortunately, it also gets released, say at the end of the harvest season etc.

You can start to tinker with these two very large numbers that are subtracted say, even a net storage of CO2. There is now indeed in the critical zone as we call it, signs emerging that actually holds great promise. Why do I show this? Well, it’s a particularly relevant in the tropics where carbon content in the soil is not very as high as in Northern latitudes and is one of the reasons that the World Resource Institute has identified is a reason why say fertility in the soils in the tropics is indeed less. I am not farmer or for that matter, an agricultural expert, and I’m also not suggesting a Shell will step into this, but Shell may have something to do with this. In say, decarbonizing, for example, heavy industries, and essentially getting access to or in our own industries, for example, having access to a significant amount of CO2 in concentrated form, and essentially through one oxalic acid and ester processing, creating hydrogels that may actually condition the soil such that a large amount of CO2 and other resources may be much more optimally distributed and managed in a soil to be conducive for a lot more CO2 uptake as well as more and most importantly, growth for food in these areas.

You start to see that optimizations and the need to decarbonize in an agricultural setting may have say, things in common that normally probably will never meet or never be surfacing the decarbonization efforts in heavy industries or for that matter in transport. As a result of this, a chemical industry that actually looks at biochemical pathways to produce things like these hydrogels, for example, what you do in Shell or experimenting with that Shell as several other groups do as well may actually hold great promise to start to build this degree of circularity. You’re talking large amounts of CO2, it’s not small. You need to improve the soil over a significant continent in fact. Let me conclude with my main message.

I will not read it out again, but suffice to say that net emission energy systems are a lot more fun, if you wish, from a technical point of view, because there are many more legal blocks to play with. From a business point of view, it actually holds great promise because in a customer-centric way, a way perhaps from a wholesale supply model, there are many more clients and client groups or markets accessible by highly optimized uses in production, thanks to technology. I think that in every net zero-emission system, there will not be a 100% solution. Hence there will be trade off unnecessarily with competing energy carriers and energy generators, as well as energy uses determined by as I tried to explain more about cultural and economic factors, perhaps and geographies whether you have mountains or not, for example, then perhaps by the technology, per se.

That is actually something that people should bear in mind when you start to go about the world or the globe to see what would work where, What is very important is that in most of these net-zero energy emission systems, this degree of circularity needs to take root. That means that markets need to become much more connected. As I showed you as well, there are a few underlying challenges having to do with resources storage and energy storage in particular, also hydrogen, for example, CO2, agriculture optimization I briefly touched upon.

As I started, my talk with the need to really build efficient hydrogen systems is paramount or imperative to go way beyond, say just hydrogen as a fuel. Indeed, other routes to clean hydrogen may need to become very relevant and should be studied much more. Because there may in fact be societies that would opt for these solutions to a degree. Maybe not ours, I’m not sure, but maybe also ours.

I find it very interesting as for example, in the Dutch society, the word nuclear is sometimes heard again. With that, I’d like to conclude and thank you very much for listening. -Thank you very much for a fascinating talk, as always, and generated lots of questions, and I’ll try to get to a few of those. I’ll start with a question. Hydrogen was an interesting piece of your presentation, I want to start there with a question about the transport and storage of hydrogen. If that’s going to be an important factor in a net-zero system, what do we need by means of transport and storage? How do you see the challenges or opportunities there? -Well, the easiest say and I would argue that’s probably also where most people look at right now is to build hydrogen from or to produce hydrogen from methane, in a methane reforming process, where you capture the CO2 at very high percentage, much higher than these capturing technologies that I mentioned here, you can do that, Shell is a proprietary technology for that.

In fact, transported then as well as store the CO2 that you create in this process into the subsurface. For that you, there are, of course, options to transport it by truck or by train, I think that most likely we’ll see that gas greets uses will be reused and made suitable for transporting hydrogen. For example there are discussions here in Northwest Europe to do that and that doesn’t seem to be too outlandish. It is true that you cannot just, of course, assume that hydrogen will be as effectively transported through pipelining systems.

Maybe if those grades are not there, that large Railway connections, indeed would use and indeed, tracking say hydrogen. I would be cautioned by assuming that you can do everywhere CCS. I don’t believe that many people would like to do the CCS perhaps close to where you would use the hydrogen, but I doubt that.

I think there are such an enormous scale needed for that. You probably will only see that accepted in societies once there is already a culture and an awareness and a history of for example, large-scale hydrocarbon businesses. It is indeed advantages in transport from pipelining, it is in probably scaling up blue hydrogen initially, but ultimately, these things need to be green. I think you shouldn’t be under any illusion that at some point, hopefully, sooner than later, large-scale green power or green roots to zero carbon hydrogen are important.

I’m not so convinced that that will always be solar and wind. -You mentioned nuclear as one of your high power density targets. Going forward there’s been a lot of pushback societally you just alluded to that. What are your thoughts on fusion? A different approach not there commercially, yet, but that’s certainly the target.

-Yes, that’s exactly the point. I would love to see fusion happening soon. Because ultimately, that is probably nature’s preferred way to make zero-carbon energy. It happens at a very large scale, much larger than we need. Unfortunately, it’s not so conducive for human life in the way that it is produced today, at great distances from us. I would argue that, for example, what Dennis White is doing at MIT looks very promising. It’s a combination of breakthroughs in material science, as well as novel concepts.

For those that are familiar with that, I think the way they essentially create or produce materials to do these high magnetic-- to create high-density magnetic fields, is actually very, very attractive. I hope the test that I think is happening in one or two years, would indeed be successful. However, it probably will still be a long way before these things will become commercially available. I do think societies like advanced societies, like the US, and Europe should pay more attention and pay more, more-- yes, put more efforts in to build commercial routes to do nuclear fusion, but it is still quite a long way out. Paris needs to be done by 2050.

It’s not really a solution in the next 30 years at scale. I don’t think so. -Let me ask a question about low density renewables, low power density renewables and contrast that with food production, which also requires significant amounts of area and yet we very successfully harvest the food products and aggregate that and move it to large urban areas and we do that with electricity today, we have a large, not big enough for the renewables we would need, but a large aggregation system and transmission, so distribution system. What do you see as the limitations there that drive you to focus on the high power density, energy production? -Well, two things.

I would actually dispute whether we are very good in agricultural densification. Yes, we are very good in the Midwest, perhaps in the US, and maybe in Europe, we’re not very good at that in Asia, in India or in Western China, or closer to big cities in China at the moment in Eastern China, where a lot of sustenance farming is still happening, where a lot of farming with live animals is happening, not for production but for work, which is a significant greenhouse gas emission factor. In all things, the actual distribution system for food into cities is not very good, even for a city as Mumbai, the actual production of almost a national fruit, I think, the mango, say a few hundred kilometers from Mumbai changes 40 times hands before it actually hits markets in Mumbai.

These things don’t stand to [?] these things don’t happen in isolation, the whole agricultural assisting in the supply of food needs probably to become a lot more efficient and denser a bit less area assumed. I think that is even true, even more so if the population starts to grow and it starts to grow, as I show you in Asia first and foremost, and then later on in Africa. What I would argue is that the people in the middle-class would also like to have probably a similar type of diet as we have here in the West, which requires more energy and more preparation time, and probably also more land to create. I didn’t do that sum, so I would stand corrected there perhaps.

What I do know is that world resource institute projects that if nothing changes, then we need twice the total land area of India to be devoted to just crop growth to feed 10 billion people and that land isn’t there. Rather than perhaps banking on yet another Harbor Bush, I think where the trick now will be, is to essentially see whether we can upgrade, or intensify agriculture by soil improvements, maybe that was also behind what Harbor Bush did, but a lot more nuanced this time, not destroying say, biodiversity, because if anything has come out maybe quite recently is that biodiversity is key to actually make sure that for a longer period of time, you can expect some significant growth in crop yield. These things are possible the same institutes that put out those numbers also show that our biochemical and biological engineering pathways based on CRISPR technologies and based on new mechanical or new chemical materials that become mostly out of the biochemical industry and lo and behold can actually be made with small molecules that are someone else’s waste. That doesn’t happen yet, so I’m not saying here that look, I mean, it’s pretty obvious this is what you need to do, but I am in that sense, indeed, quite an optimist having seen what actually is possible today, holds great promise also because we will have to, if we are to decarbonize heavy industries in Asia, steel, cement, ammonia, polyethylene, and essentially get them off coal and maybe also eventually from natural gas, then we will have to create, and that will take time because of the enormous growth that these manufacturing industries need to supply against the growth, therefore it is probably a very wise strategy to help at least to decarbonize by not changing the fuel immediately, but essentially mitigate against the adverse consequences of having still these heavy industries run on say coal or natural gas. Again does not mean that making hydrocarbon industries prolonging, it’s simply probably a reality that there is no budget or not enough effort possible to actually decarbonize faster than the population demand food from these industries.

For that time being, dealing with waste streams and dealing with a degree of circularity made possible perhaps by advanced chemical or biochemical manufacturing techniques, similarly, well, not so similar, I would say, but certainly in replacing perhaps some part of the petrochemical industries, which is definitely happening, small startups start to do this. This is in the interest of big energy companies and that’s why I mentioned that because these connects may actually mean new markets and new markets are important, they may not be the old known markets or just the old known markets that’d be known today in transport and parts of industry, perhaps. -Good, so final question and you can answer or not, this gets back to the introductory comments about the Shell’s release, but let me ask you, will Shell be publishing quantitative targets for Shell, for 2030, 2040 on its path to net zero in 2050? -Well, to be absolutely honest, Bob, I don’t know, for two reasons. One is, I don’t think we have those targets worked out definitely without any shred of doubt. In other words, there are people who do these calculations and then, of course, a lot of other calculations happen that you know that goes in a big company, so I don’t think that has landed yet exactly what that pathway will need to be.

Another thing is that because that isn’t happening, I don’t know really what would be truly business competitive in that sense and you will never disclose this versus what you better disclose because you need a lot of collaboration and alignment that government policies, et cetera, so from that point of view, fundamentally, I don’t think Shell will hold back any of its targets, but it is against these two facts, one that we may still be in a process to figure out, well, how do we actually get to 2035 with these targets? I don’t think the last word is settled on that. I’m not aware at least that if it is a clear blue blueprint available, it’s something that is being built, and what would then make sense to disclose will probably be very much, of course, looked upon, well, what does this mean for our future competitive markets and competitive position in new markets, and growing let’s say like these things, I just mentioned? For example, in Asia and that’s an ongoing process, but fundamentally given the nature, that a lot of technology and a lot of collaboration is done jointly with different client groups in a customer centric way, as I explained, that actually is very conducive for me. It is very natural then to expect that you also become very explicit about what these targets are, so I haven’t come across in Shell--- no, no, no we say one thing and we hope that it will go away and can continue until 2015, I guess maybe it wasn’t a bit too ambitious, but hey, there’s still a lot of hydrocarbons to be produced from it. We will still be able to surface that is not an attitude that I see in Shell at all. It is difficult to see how to scale up actions in a profitable enterprise. For sure that is not without its own challenges, but I’d like to come back to this question perhaps in my next talk.

-Yes, no that would be fine and it wasn’t meant this adversarial question that was-- -But still a benign question [?] -Let me thank you once again, Dirk for really, really interesting talk as always, lots of insight into the energy system, a lot of quantitative thinking about the impacts of different technology options and what we may not be able to do and what the challenges are, and opportunities for getting there, so deeply appreciate your willingness to share that and have this conversation with the MIT community, which I am sure will continue on as we continue our work as a global society to get to net-zero as fast as possible. -All right, yes well thank you very much, Bob, for the opportunity and for the MIT community to have me here, I’d like to come back. Maybe if there are indeed still quite a lot of questions that I couldn’t answer, you can send them to me and I could see what answers I could be able to give in a reasonable timeframe to you, I’m not walking away from the questions that we’re not [crosstalk] -No, no that’s good. Thanks, very much.

As we wrap up, I just wanted to point out that, upcoming we have on February 24th at 10:00 AM. Boston time, a webinar workshop on de-carbonizing buildings that’ll be co-presented by MIT and MIT’s industrial liaison program. I encourage all of our listeners to look at the MIT energy initiative events page for lots of other upcoming events. Once again, thanks, Dirk, and thanks for everyone who tuned in and asked a set of great questions. I’ll see you again at a future event, thank you.

-Thank you very much, thanks. -Okay, thank you. -Bye-bye. -Goodbye.

2021-03-02 18:19

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