fuels and renewable energy .- ?ill 3? ll FEE J'rt??I?lr A. . Number two, 1987 fuels and renewable energy The Shell Brie?ng Service (sbs) is prepared as an information brief for companies of the Royal Dutch/Shell Group. For further copies, telephone Shell Centre 5298 or write to Shell International Petroleum Company Limited London. World map: Bartholomew's re?centred sinusoidal projection featuring world fuelwood consumption. Copyright John Bartholomew Son (reproduced with permission). Energy for the future Over 90 per cent of the world?s energy demands are currently met by non? renewable resources of which oil con? tributes about half. Oil price rises in 1979 focused attention on the need to develop a range of alternatives to What was perceived as a rapidly dwindling energy resource. Since then the decline in oil prices and the slow?down in the growth of energy demand have affected the development of even the most promis? ing candidates. Even before this price fall, many options that were competi? tive relied on special local circum? stances. Immediate prospects are therefore limited except where local factors outweigh the cost disadvan? tage. Nevertheless, it is by pursuing commercial opportunities now and in the near future that the valuable experience needed for further devel? opment will be gained. By the early part of the next century the world?s population is likely to have grown by two billion people from around five billion at present. Most of the increase will be in the developing countries. Demand for transport fuels in the developing world could almost double by the end of the first decade of the next century. In addition, urban? isation in many developing countries is expected to increase the need for clean, convenient energy in industry and in the home. In rural areas of some developing countries a heavy reliance on biomass firewood, agricultural and animal waste has already resulted in deforestation and soil ero? sion. There will therefore be increas? ing pressure to find more efficient ways of using biomass, as well as more extensive use of alternatives such as solar energy. In OECD countries the long term effects of investment already made in energy conservation may be ex? pected to continue to dampen future energy demand, even if the level of energy prices does not provide an incentive for further conservation. Efforts to limit the effects of combus? tion of fossil fuels on the environment, especially in OECD countries, is expected to continue. This will affect the choice of fuels and attention will be paid increasingly to quality as well as the availability of energy sources. Conventional energy resources, notably the fossil fuels oil, coal and gas and nuclear energy are expected to continue to meet the bulk of world energy requirements during the remainder of this century and well into the next. However, the task of replacing oil resources is likely to become increasingly difficult and expensive and there will be a growing need to develop clean, convenient alternatives. Initially these will sup? plement and eventually replace valu? able oil products, especially as transport fuels. Many potential energy options are as yet unknown or at very early stages of research and development. New energy sources take decades to make a major global contribution. Sustained commitment is therefore needed dur? ing the remainder of this century to ensure that new technologies and those currently at a relatively early stage of development are available to meet energy needs in the next century. Strategies to satisfy energy needs in the next century are likely to include: 0 Finding replacements for conven? tional oil, primarily for transportation. In general, these are likely to be syn? thetic liquid fuels derived from raw materials such as coal, natural gas, oil shale and tar sands. The resource base of these materials is considerably gre? ater than that of conventional oil. 0 Development of new technologies to convert relatively plentiful supplies of energy into convenient, environ? mentally acceptable forms. 0 Further development of renewable energy resources such as biomass, solar, wind, tidal, wave and hydro? power. In some cases these will be large scale projects involving major capital investment; in others the emphasis will be on low?cost alterna? tives for use in rural areas. 0 New methods of energy conser? vation. The following sections focus on two of the many areas of activity fuels and renewable energy resources in which Shell companies, among others, are helping to ensure that energy demands can be met dur- ing the early part of the next century. fuels In 1985 oil satisfied some 40 per cent of the world?s primary energy needs. Fuels with similar properties can be derived from raw materials other than crude oil and are referred to as syn- thetic fuels or synfuels. Coal, natural gas, oil shale and tar sands/heavy oil constitute over 90 per cent of estimated world ultimate recoverable fossil fuel reserves (Figure Biomass, a non?fossil, renewable resource, is also a potential raw material; its use is outlined in the next section. A number of processes are already available, and others are being devel? oped to convert these materials into convenient forms to meet consumer needs. The amount of potential hydro? carbon, and also the ratio of hydrogen 7 to carbon, which must eventually be matched to that of the desired fuel, are important factors in synfuel conversion (Figure 2). There are two main pro? cess routes. The route Adding hydrogen to, or removing carbon from, tar sands, oil shale or coal to make is the major cost. Conversion efficiency is also an impor? tant cost factor: this is typically 60?80 per cent, but upgrading to improve product quality can reduce this by some 10?15 per cent. The processes differ, depending on the raw material. Tar sands are often extensions of heavy oil deposits. Some of the tech? nology used to extract and upgrade them can be considered commer? cially proven. Shell Canada's Scotford refinery, which went on?stream in 1984, was the first refinery capable of processing exclusively from tar sands. Oil shale consists of sedimentary rock containing organic matter. Major Coal UR 20000 Measured identi?ed reserves Inferred/speculative Estimated World ultimate recoverable reserves Cumulative production UR ultimate economic recovery (barrels of oil equivalent 109) Shale oil Tar sands UR 10000 Oil Gas UR 2000 UR 1500 v? oil shale deposits occur in the United States and Australia with smaller deposits in a number of other coun? tries. It is turned into by heat? ing the shale in retorts at around and extracting the liquid. However, the energy remaining in the rock may well exceed the energy content of the shale oil produced, so efficient energy recovery is required. A number of pro? jects are being considered, mainly in the United States and Australia, but only around 10 000 bdoe were actu? ally produced in 1985. The USSR and China are also operating oil shale projects. Coal has a relatively low hydrogen content. Extensive research has been carried out on direct coal liquefaction by the addition of hydrogen at high temperatures and pressures. Second? generation processes based on this research are being developed improving the technologies first used during World War 11. However, at pre? sent, such projects are only at the dem? onstration phase. It is unlikely that large scale projects will be developed before the next century, except for strong strategic reasons. The syngas route Indirect conversion of coal to gas (Syngas), followed by hydro? carbon can be a more econ? omic route to liquid fuels. Examples are the Mobil methanol?to?gasoline process in New Zealand and the Shell Middle Distillates Process. A number of coal gasification/liquefac? tion plants based on well?established technology, for example the SASOL plants in South Africa, are already operating. Second?generation gasifi? cation processes have advanced to commercial or large?scale pilot plant stage, for example the Shell Coal Casi? fication Process (SCGP) plant in the United States that will come into oper? ation during 1987. Natural gas can also be converted into liquid fuels using the Syngas route. Biomass can be used to produce a range of fuels, either via con? version into an intermediate liquid or Syngas, or directly by fermentation into alcohols. Hydrogen, one of the components of syngas, also has potential as a fuel. Its main advantage is that the combus? tion product, water, is non?polluting. Raw materials Coal Biomass Tar sands Oil shale Natural gas Intermediates Intermediate processing Syngas fuels Final processing Bitumen Fuel oil Distillates Ethanol Methanol SN Hydrogen to carbon ratio Interest has been expressed in a 'hydrogen economy? in which hydro- gen is piped directly to industrial/dom? estic users or liquefied for transport. However, the high cost of producing hydrogen from syngas, or alterna? tively, by the electrolysis of water in a fuel cell make such developments unlikely until well into the next century. Status of synfuels In 1986, output of liquid synfuels was around 400000 bdoe, or less than one per cent of world oil production. Product costs depend on the resource and process used and are higher than present oil prices. Local circumstances or strategic factors can offset a cost disadvantage to some extent but large?scale synfuel pro- duction will be unlikely until oil prices are significantly above early?1987 levels. Activity has shifted to projects that can be developed on asmallscale, or where modular extensions are poss? ible,? for example in?situ tar sands recovery. This situation contrasts sharply with events immediately after the rise in oil prices in 1979 which prompted sup? port for synfuel development, mainly for strategic reasons. Much of the initial activity was in the United States where the Fuels Corporation (SFC) was established in 1980 with a $88 billion budget and a programme to produce two million b/d of synfuels by 1992. Falling oil prices, the large Strategic Petroleum Reserve and a growing budget deficit all contributed to a decision taken in 1985 to discontinue the SFC. By this time the SFC had paid out only $34 million with commit? ments of 1.5 billion in support of pro? jects with a capacity of 22000 b/d. Existing commitments are expected to be honoured. Emphasis in the United States can be expected to move towards diversi- fication of synfuel technology rather than volume production. One area that remains relatively buoyant is coal gasi? fication for combined cycle power generation in applications where environmental advantages can be demonstrated. There is support for synfuel projects in a number of other areas including Europe, Canada and Japan. In Europe most of the activity is concentrated on coal conversion technologies in the Federal Republic of Germany. Given the long lead times needed for large scale synfuel projects, the immediate priority is to ensure that the technology is established so that syn? fuels can make a global contribution to supplement and replace conventional fuels as the need arises. Biomass About as much energy is stored in liv- ing plants at any time as is contained in all the proven reserves of coal, oil and gas combined. Biomass is the col? lective term used to describe plant matter and also derivatives such as residues from forests and crops, ani? mal wastes and the organic content of municipal and domestic solid waste. About two?thirds of the world?s land surface can support extensive bio? mass. Currently only 15?20 per cent of this area is under cultivation producing in energy terms roughly the equivalent of the world's annual energy consump- tion. However, as this cultivated area also has to support food production and timber, there is potential competition to the use of biomass for fuels. Small scale biomass Over half of the world?s population cur? rently relies on wood for cooking and heating. Wood is also a source of energy for industry. Since 1970 fuel? wood consumption has risen by 2 to 3 per cent a year and was estimated at 1.7 billion cubic metres in 1984 equi? valent to 8 million bdoe (Figure 3). Developing countries in particular use fuelwood, in some cases getting 90 per cent of their energy from this source. However an estimated 1.3 billion people cannot obtain enough fuelwood. Dwindling supplies in rural areas and high fuelwood prices in urban centres force families to spend disproportionate amounts of time and money on fuelwood, and also mean lower standards of living. Social, cul? tural and economic factors frequently prevent the widespread use of alternatives. Satisfying the increasing energy needs of a rising population in this way is contributing to a number of ecologi? cal problems. Deforestation of tropical soils leads to erosion and degradation of the soil, rendering the land unsuit? able for agricultural crops. Where fuelwood is scarce, the use of animal waste as a fuel rather than as a fertilizer reduces agricultural efficiency. Meeting the growing needs for cheap, efficient energy in rural areas of developing countries, while at the same time avoiding major ecological problems is a challenge to the wide? spread future development of biomass for energy. Initiatives to develop the efficient use of biomass fall into three broad categories. Increasing resources: yields can be improved by choosing appropriate crop species and by the selective development of high-energy crop strains using techniques such as gen? etic engineering. Plantations of high yielding species, developed for use as a fuel source, reduce the need to exploit natural forest. Shell companies, among others, are investigating such techniques, as well as ways to maxi? mise productivity by adopting efficient forest and plantation management, carefully developed fertilizer regimes and selective replacement of vegetation. Upgrading: techniques are avail? able to make better use of biomass produced (Figure 4). The most com? mon method is to upgrade the energy value of the fuel, for example, the pro? duction of charcoal from wood. Although charcoal is more convenient, 7 considerable energy is lost during upgrading. Wood waste can be upgraded physically by densifying it into pellet form; such pellets are used as a solid fuel for industrial steam?rais? ing in North America and Europe. A Shell company is operating wood pel? letisation plants in Canada. Chemical methods can also be used. In biogas units the biochemical action of micro?organisms a process known as anaerobic digestion breaks down biomass and animal waste into a fuel and fertilizer. This is widely used in India and China. Larger versions are being developed to pro? vide fuel for local electricity gener? ation, with small wood?based co? generation facilities an attractive optionto provide heat and electricity. Improving efficiency: combustion efficiency has also been improved by the development of new wood? and charcoal?burning stoves. Research is continuing aimed at producing low? cost, highly reliable biogas generators and stoves to improve energy efficiency of local biomass resources. One of the main priorities is to ensure that, as well as being efficient, Total wood Total 3.1 billion cubic metres Sawngoods Fuelwood Panel products Other industrial Paper products Fuelwood Total 1.7 billion cubic metres Latin America Asia Africa Oceania Europe USSR and Japan North and Central America animal wastes Biomass resources Processing Crops with high Physical: starch or sugar . ensification content 0 Pelletising Wood 0 Fuel extraction . Production . . Aquatic plants Thermal. 0 Pyrolysis Fruit and seeds 0 Gasi?cation with high oil 0 Therrnochemical content upgrading Biochemical: t? 0 Fermentation omes 1c an Residue . Anaerobic digestion I Direct combustion Products Gases: - Methane Biogas Liquids: Oils 0 Ethanol Tar: Solids 0 Charcoal Organic nutrients and humus the technologies are also appropriate to local needs with high reliability, long life and low cost. Although small scale use of biomass is unlikely to make a major contribution to global energy demand, its efficient use could improve the standard of living of two billion people in the developing world. Large scale biomass The rise in oil prices at. the beginning of the 1980s prompted a number of governments to investigate ways of turning readily available biomass resources into liquid fuels. The most notable example to date is Brazil?s major fuel?alcohol pro? gramme, started in 1975 after the oil price rises in 1973/74, in which sugar? cane juice is fermented to provide alcohol fuel for some two million vehicles. The programme was sup? ported by a range of financial, fiscal and legal incentives. Other develop? ing countries such as Kenya and Malawi have also introduced alcohol fuels, albeit on a much smaller scale. At around $50 a barrel of oil equiva- lent, the cost of alcohol is higher than the price of comparable oil products. The main attraction is the use of indigenous products sold in local cur? rency rather than imported oil priced in dollars. Despite Brazil's achievements, immediate-prospects for expansion have been dealt a blow by the fall in oil prices during 1986. Current indi? cations are that the programme will continue in Brazil, but commitments for future expansion have been curtailed at present. Immediate prospects for large scale biomass projects depend on local cir? cumstances: the energy situation, the need to reduce energy import bills, the availability of infrastructure in rural areas and, most important, gbvern? ment attitudes to encouraging techno? logical development and providing incentives as part of a co?ordinated energy programme. Environmental considerations, for example a need to use low?sulphur fuels, can also increase the attraction of biomass? derived fuels. In the longer term the outlook could be improved by new technological developments. Although still at the exploratory stage, a number of routes are being investigated to provide a range of oil?like products. One way is to extend the range of potential bio? mass feedstocks. By using cellulosic feedstocks, instead of sugar cane, it should be possible to produce ethanol and gasoil less expensively from more abundant wood products. An alternative line of research is concentrating on more efficient fer? mentation; for example, continuous processing based on innovations in biotechnology could replace current batch techniques and increase etha- nol production. Other routes include pyrolysis, gasification and thermo- chemical upgrading to produce syn? thetic fuels on a large scale (Figures 2 and 4). A Solar energy It is estimated that every year the earth's surface receives about ten times as much energy from the sun as is stored in the whole of the world?s fossil fuel and uranium resource base. This is equivalent to 15000 times the world annual energy demand. Despite this enormous potential, only a tiny fraction is used. Technology to harness some of the sun's energy is based on two quite dif? ferent principles solar thermal sys? tems and photovoltaic cells (Figure 5). Solar thermal In solar thermal systems sunlight is absorbed and transformed into heat 5 7 which can be extracted using a heat transfer medium, for example water. Systems can be designed to operate over a range of temperatures, with high temperature systems being more sophisticated and expensive. Relatively simple units are gener- ally satisfactory for such low tempera- ture applications as domestic water heating, swimming pools and crop drying. Such systems are fairly wide? spread even in the relatively cooler climates of Northern Europe. For higher temperatures parabolic mir? rors are usually used to concentrate sunlight. These can be further enhanced by using tracking systems to produce temperatures over High temperature systems can be lin? ked to a conventional turbo-generator arrangement to generate electricity indirectly. Solar thermal systems are technolo? gically well?developed, and in some cases costs have been substantially reduced during the past five years. However, it is becoming increasingly difficult to further reduce the manufac? turing costs of simple ?at plate collec? tors. Nevertheless, future savings can be expected from improvements in the overall design of systems and the use of new materials. There is still considerable scope for more widespread use of solar thermal systems in a range of applications in a number of countries. Prospects for larger scale systems depend on trends in costs of conventional energy, but more use of domestic systems could be made in sunny areas. Photovoltaic cells The photovoltaic cell converts sunlight directly into electric current by gener? ating a voltage differential in a semi? conductor. Cells are connected to each other, packaged in a protective seal and sold as 'modules?. The voltage and power output of a module depends on the size and number of cells. Modules can be further aggre? gated into panels and arrays for use in higher voltage applications. The power output of a photovoltaic system varies with the intensity of the sunlight hitting the solar cells. Output increases from zero at night to a peak Solar thermal ll Photovoltaic Steam Parabolic mirror Heat transfer medium Thermal collector Electricity for Electricity 3? Water pumps for irrigation Navigational aids Domestic lighting Re?igeration Transfer/ Telecommunications 0010301 Satellite power sources systems 011 Electricity generation Industrial processes Domestic water heating Industrial process crop drying High temperature heat for Low temperature heat for around midday, decreasing as sunset approaches (Figure 6). The peak out? put is known as the 'watts peak? (Wp) of the system and is the most common method of rating. The considerable Changes in output mean that for practi- cal purposes batteries are frequently used to even out the load, the batteries being recharged during the periods when output exceeds the load require? ment. First generation photovoltaic cells, based on single of silicon, are well established and have been used to power most satellites. During the past ten years costs have been reduced by a factor of 20, opening up a wide range of additional appli? cations, mainly on a small?scale in remote locations. Examples are electrically driven water pumps for irrigation, railway crossings, tele? communications, cathodic protection for corrosion prevention and as a power source for battery chargers. Recent innovations have further reduced costs through new pro? duction techniques using line silicon or amorphous silicon a thin film of silicon applied to a glass substrate which is used extensively in calculators and toys. Unfortunately these techniques also reduce efficiency and this has limited their use in large scale applications. Cost reductions have stimulated a major growth in photovoltaic module supplies from well under one mega? watt peak in 1976 to an esti? mated 27 in 1986. Japan has become established as the world's largest supplier (Figure 7). Since 1983, falling oil prices have probably con? tributed to limiting the rapid growth rates seen during the late 19708 and early 1980s. Further reductions in cost are becoming increasingly difficult to ach- ieve. This, coupled with the relatively low current level of oil prices, makes it difficult to assess immediate pros? pects for photovoltaics. Nevertheless, there is still considerable scope for technological innovations to bring down costs in the longer term. Expansion is likely in low?power applications, for example toys and cal? culators, but energy requirements for this very large and diverse consumer market will remain relatively small in global terms. Similarly small?scale applications in remote areas may be expected to grow. In both cases photo? voltaics are already competitive with other energy sources. For large scale systems the picture is less certain. 1f the efforts being put into technical innovations to reduce costs and improve efficiency are suc? cessful, there may be scope for the use of photovoltaics for large scale elec? Watts peak Fixed I Battery charging 43 At gases .9 (U 6? U.) Midnight Sunrise noon Sunset Midnight Time of day :6 tricity generation. In the meantime, as with solar thermal, the search will con? tinue for new applications in which photovoltaics can compete on the basis of their advantages of low main? tenance and operating costs, especially where conventional fuels are expensive or unavailable. 7 By country Japan United States Others Europe Total World shipments 27.5 MW in 1986 Source: Photovoltaic Energy Systems Inc. By module type Single Amorphous ?at plate silicon Ribbon and single concentrators silicon Other rene web/e energy - Seurces A number of other renewable energy options are available (Figure 8). Water-based systems Hydropower is used to generate 25 per cent of the world?s electricity. Large hydropower stations of up to 7000 megawatts (MW) are generally built in remote areas with little or no local demand. The long overhead power lines required are expensive and have significant transmission losses. Considerable investments are required, due to their size and remote? ness, and with lead times up to 10?15 years these power schemes tend to be difficult to plan and develop. Large hydropower stations are relatively clean but their environmental impact can be considerable and sometimes detrimental. A service life of some 50 years is common, with low operating cost the main attraction. The drive for utilisation of local resources and energy efficiency has prompted interest in smaller (1?5 MW) and micro (smaller than 1 MW) stat? ions. Over the past few years the trend has been to design standard small hydro machines. These are easy to transport and install in remote areas, Where reliability and ease of operation are essential. By 1985 a total hydropower capacity of 300 gigawatts (GW) had been installed. Considerable resources are still available for further development of both small and large hydropower schemes and, as a result, their contri? bution towards energy supplies for electricity generation may be expected to rise in the future. Tidal hydropower is similar to con? ventional hydro?electricity schemes except that the head of water is obtai- ned from the rise and fall of the tide. A barrage, for example a dam, is con? structed and large turbines are driven during the ?ow and ebb of the tide. Ideal locations for such systems which can provide large power outputs are scarce, the two best unexploited sites being the Severn estuary (United Kingdom) and the Bay of Fundy (North America). The cost of electricity from tidal power is comparable to that from coal?fired power stations. Because the tidal pat? tern does not always coincide with demand, this is best used in conjunc? tion with a storage system, for example pumped storage, or as part of a net? work. Widespread commercial appli? cations of tidal hydropower seem unlikely this century. Wavepower uses the oscillating motion of the sea to move ?oating devices and thereby generate electri? cal power either directly or indirectly. For the system to be effective it must be in a difficult environment with high installation and transmission costs. The 24> converter 6K 9* 4 Wind energy Transfer/ control systems Electricity I Electricity Mechanical motion Electricity for Large scale generation by local utilities and national grid Electricity for Water pumps for irrigation Navigational aids Domestic lighting Refrigeration Telecommunications Satellite power sources Mechanical energy for Irrigation Drainage Milling very nature of the system makes demand/load matching difficult. The current economics of wavepower sys? tems have discouraged research and further investment. -: '7 ,5 ind? - Linseed :3 1 i er. 1. Windmills have been used for centur- ies to extract energy from the wind. Modern systems incorporating so- phisticated technology derived from aeronautical and electrical engineer? ing have little in common with the tra? ditional windmill. This form of energy can, however, only be considered as supplementary except where some form of storage is available. Systems can be broadly classed as: Stand alone used to provide mechanical energy to drive irrigation pumps or similar equipment, or to gen? erate electricity for local use. In remote areas without grid connec? tions, specially designed wind gener? ators can satisfy local domestic electricity requirements while provid? Printed in England by Robert Stace Co. Ltd. ing scope for new developments, such as making ice to preserve foodstuffs. Grid-connected tend to be large, with a number of linked wind turbine generators forming part of a large electricity network. Recent projects in California comprise some wind turbines with a combined output of around equivalent to a large conventional thermal power station. During the past few years large wind turbines with ratings of SOOKW to YOOKW have been successfully oper? ated. Improvements in equipment efficiency, availability and lower equipment cost have contributed to a general reduction in the cost of elec? tricity to 10?20 US cents per kilowatt? hour in 1985. Marine systems for ship propul? sion. Modern sail?assisted ships are designed from the outset as complete energy?saving units capable of mak? ing the greatest possible use of sails to complement their engines. These range from simple fixed systems to computer systems measuring wind speed and direction to adjust the sails to the optimum angle. At present wind energy systems are competitive with conventional gener? ating facilities in remote areas with reasonable winds. Their prospects will depend on further reductions in investment costs and improvements in efficiency. The scope for technological devel? opment is limited compared with solar photovoltaic. Nevertheless, environ? mental cleanliness, renewability of the energy source and the short lead time required for installation favour wind power, although noise from the gener? ators can cause local problems. Rela? tive economics and future potential will also be in?uenced by electricity pricing policies, particularly the buy? back rates offered by utilities for wind generated electricity. 37 a? Nun} .2 Kyla/?9? Ill?y?l L. ?Fm Lu. . s,