Hello, I'm Dirk Smit, Shell's corporate chief scientist.
And today I'm going to talk to you about:
How to accelerate the energy transition to a net-zero emission system...
and why companies like Shell are crucial to achieve this.
I'm a scientist myself.
I started out as a string theorist, and was destined to stay in science...
if it weren't for something personal...
due to which I decided to go back to the Netherlands.
So I ended up at Shell...
and now I've already worked for the company for over 30 years.
But I never severed ties with the universities.
I am a university fellow at MIT...
and a professor of physics of energy at the Indian Institute of Science...
and I lecture at both on aspects of scaling up net-zero systems.
I'm deeply fascinated by how humankind has progressed...
by finding and developing ever more ingenious ways...
to use more powerful energy sources...
and through them, improve standards of living.
In many ways, humankind follows what nature has found out through evolution.
And physics is very helpful to explain and to understand...
what the dominant source of energy is in the universe.
For example, when you look at the night sky through a telescope...
and you see a lot of stars, all these stars shine because of nuclear fusion.
It is in fact, the de facto standard energy source of the universe.
I argue that also here on Earth we are inching forward...
towards eventually using fusion energy in our societies.
It's the cleanest and possibly the most abundantly available...
and very efficient energy source.
But we're not there yet.
...through the use of fossil fuels.
It's very clear, also in Shell, that we want to have more of these.
There's no debate that we really need to scale up renewables...
in particular solar PV and wind...
taking it beyond a scale that some probably would argue is unbelievable or unrealistic.
What, however, is an issue, is that when you start to get out of your lab...
working on, for example, materials for PV conversions into the real world...
and think about scale-up...
then all of a sudden there are three things that you need to worry about.
They're all equally important.
I organize these in a triangle, called the Energy Policy Triangle.
The environment refers, today, to global warming effects.
This is a systemic problem, affecting every citizen on the planet.
It therefore sets the scale at which this energy transition needs to happen.
And it sets a deadline.
Climate scientists tell us that by 2050, we have to reach the Paris Agreement.
That means, in essence, that a transition that affects presumably...
This also means that it's unlikely that we'll get very far, fast enough...
by only looking at local initiatives...
and then forget how they link to each other.
Climate scientists know that and put in a lot of effort...
to show how a particular pathway can be constructed...
by integrating several local initiatives...
that would make us technically achieve the Paris goals in time.
However, in everyday life...
large societies also think about the costs and the effort...
which is reflected by the other vortex, economics.
Energy production and provision is very capital-intensive.
Hence, likely not all pathways that are technically feasible...
can be turned into business models equally fast or fast enough.
And even if they are equally fast...
then the population may also worry about the security of the supply of energy...
which is, for example, sadly illustrated by the war in Ukraine...
which led to a cut-off in gas supplies to Europe...
and in fact is now a global problem for the energy security.
Hence, societies need to find an optimal trade-off...
among all three in order to scale up.
At the end of the day, the only way to scale up in a free society...
requires economically sound pathways...
which may require significant governmental incentives...
to help achieve businesses to change.
If it comes to scaling up solar and wind...
then one of the things that you're hit by is that they take up a lot of space.
That is because the so-called power density of wind and solar is very low.
In fact, very much lower than, let's say, that of energy stored in hydrocarbons...
whether they're fossil or synthetic, or whether you use nuclear energy.
And as you can see here, what happens if you replace oil...
by hydrogen, for example, produced by green electrons, i.e. from solar and wind...
you need a lot of wind and solar area to build the same amount of power.
You can calculate how much area, in fact...
and perhaps compare this with other clean options.
You see on the same map a little dot somewhere with an arrow pointing at it.
That's the footprint of a nuclear reactor...
producing the same amount of hydrogen via its energy.
There's nothing fundamentally wrong with building large wind farms...
but they do take a lot of solid material as well.
Concrete, steel and glass.
In fact, all renewables take up comparable amounts of solid materials.
Hydrodams, wind farms about the same, and solar about one-and-a-half times more.
In general, this is about ten times more material needed...
for wind farms and solar farms...
than our oil and gas-based energy production systems require today...
for the same amount of energy produced.
This drives up the infrastructural costs.
And then there's the fact that...
And on a large scale, this intermittency has surprising effects.
For example, in California...
about 20 gigawatt of previously installed natural gas-based power...
has been substituted now by solar PV and wind.
However, unlike natural gas...
the installed capacity is much less used on average...
and also shows large variations.
50% of the installed capacity is only used for 22% of the time in a year.
And furthermore, for about 10% of the time in a year...
no energy is generated at all because the wind doesn't blow...
or, as in California, the solar panels get too hot to function.
To remedy this, we need massive amounts of storage.
Indeed, a sizable fraction of the annual energy production...
which adds up further to the costs of the energy infrastructure.
So it becomes clear that you want to build infrastructure with the best conditions...
probably at the most advantageous sites.
And for solar PV, this would likely favour desert environments.
In a desert, in particular one close to the equator...
the solar radiation is fantastic and there is, of course, lots of empty space.
And furthermore, as you may know...
the thermodynamics of direct solar radiation...
shows that you don't need a lot of solar panels...
to power the entire energy system.
The energy system on Earth is actually not all that large...
compared to the amount of usable solar photons...
that the sun dumps on us every day.
In fact, you need only half a million square kilometres of solar panels.
That may sound like a lot, and maybe it is...
but it fits easily in almost any desert on Earth.
But what is not so clear is that they are far from where we live.
And a problem with electricity...
is that it doesn't transport very well over more than 1200 kilometres.
Or it doesn't transport as cheaply as it does for shorter distances.
And you need cables for this.
Furthermore, electricity is not easily stored in large amounts...
over long time periods of time.
Indeed, if you don't use a battery, for example, it still leaks its energy.
This is unavoidable.
Long term storage of large amounts of energy...
is not a friend to an electron.
Or, let's say, it's a very costly friend to an electron.
Partial solutions exist, of course...
and battery technologies will advance very rapidly, no doubt.
But they will always put a fundamental constraint...
on the flexibility and optionality of how to get energy...
from a desert farm to consumers far away at an affordable rate.
And the costs rise when you surpass 1200 kilometres.
And the storage costs of a large, let's say, terawatt-hour scale...
over a seasonal timescale of several months, say...
become almost unaffordable.
Which means that the infrastructure of a solar PV or wind farm...
is, in essence, only possible on a market or for consumers...
that live nearby these solar and wind farms.
Let's say, within a range of 1200 to 1500 kilometres.
So we're facing a transport problem if we want to scale up a lot of renewables.
Furthermore, the storage problem to cope with the intermittency, for example...
is likely most serious for heavy industries...
that typically operate in small profit margins...
and require lots of power and energy.
There's not a whole lot of tolerance for intermittency for industrial clients.
Fortunately, nature shows you what a solution could be...
namely fatty acids, if you wish.
Or for the chemist, linear hydrocarbon chains.
What you see here is a godwit.
This bird has the ability to fly for 11,000 kilometres nonstop.
It does so with an absolutely phenomenal efficiency.
And also it does something that very few planes are able to do.
Namely at take-off, it uses about 50% of its birth weight...
for fuel for the entire route.
That may sound like a lot, but it really isn't...
as it allows you to fly for over 190 hours nonstop...
covering these 11,000 kilometres.
And its efficient flying allows you to cover this...
with only this small amount of fuel...
because the fuel has, in fact, a very high-energy density.
And why is that?
Well, nature has actually shown us that linear hydrocarbon chains...
or for that matter these three structures on the left, called fatty acids...
are actually a very good way to store energy.
And the fact that you can store energy at arbitrary timescales in chemical bonds...
they don't lose their energy...
means that you can actually make the route very optimal...
and given the circumstances...
can decide on breaks or fly a little longer or shorter.
Shell, in the past, has actually developed this concept into a synthetic process...
higher olefins, that actually builds on the same premise.
It can in fact be used as kerosene.
What I'm really getting at, is that rather than perhaps focusing entirely...
on direct electrification of the energy system...
chemical energy carriers, not for making products...
but for transport and storage of energy...
will help to overcome the storage and transport limitations of electricity.
Hence, all of a sudden, production of renewables...
at advantageous sites far away from where we live perhaps...
can now be transported to any consumer in the world.
So what we see is that with chemical energy carriers...
we create optionality and flexibility in an energy system...
such that demand and supply of energy can be dynamically adjusted...
very flexibly and with great optionality...
and therefore can be optimized to the lowest possible costs...
to large numbers of consumers.
And as every economist will tell you...
That's not to say that direct electrification of energy is without merit.
If you're able to build solar farms and wind farms close to where you live...
for sure you would do this.
But this will only address a rather small fraction of the energy needed...
for an entire society...
and will not be affordable, for example, for large industries.
So let's see what this means for a future net-zero emissions energy system.
We realize now that we're not so much focusing on the primary energy source...
renewables, maybe nuclear...
but need to focus on the chemical energy carriers...
in addition to electrical energy carriers.
Not to replace each other but to add to each other.
And of course we have to make these carriers cleanly...
like hydrogen, ammonia, methanol and synthetic hydrocarbon chains.
We need to do so in an energy system that doesn't contain any fossil hydrocarbons.
This is indeed technically very well possible.
And this optionality and flexibility...
made possible by chemical energy carriers...
creates a much more customer-centered energy system...
and allows us to drive down costs...
for a multitude of, or in fact, for all energy consumers.
One may wonder of course, if this will get us to scale fast enough.
That is, in time for Paris.
Well, I do believe that it can. Why?
Well, that's because of what the energy industry...
or more specifically the oil and gas industry...
has done over the last six decades.
Most people of course, identify fossil hydrocarbon industries...
with the fact that they deal with fossil resources.
And to a degree that's well-justified and true.
But what made this industry big and big so fast...
is the fact that it solved the transportability and storability of energy...
on a truly global scale.
With the transport and storage problems solved...
costs have come down...
by essentially allowing concentration of production at advantageous sites.
At a few advantageous sites, in fact.
90% of all oil today comes out of just less than 40 Super Basins.
These are these red balls that you see here.
What does this mean for renewables now?
Well, incidentally, some of these Super Basins...
are also very good sites to actually build wind farms and solar farms.
That is not true for every Super Basin of course...
but for those where it is, it's extremely advantageous to consider this seriously.
For example in the North Sea or in the Gulf of Mexico...
or for that matter, the deserts in the Middle East.
These basins might be very good starting points to scale renewables...
because there are a lot of chemical factories there...
that you might use to cleanly produce these chemical energy carriers.
A lot of these chemical energy carriers are already produced for products, perhaps.
Not for transport or for storage...
but that's something that might be feasible...
with infrastructure that is already there to start with.
And to just give you an example of what might very well come to mind...
are, for example, offshore production platforms...
using and building on capabilities that exist in offshore engineering industries...
that are very good at that.
Where you could say you moor an ammonia factory in a wind farm...
to directly get access to the electricity, or produce hydrogen, for that matter.
And that gets shipped then to either onshore or to far-away clients.
Those things are not so inconceivable. You can...
...to modify this, is not so outlandish.
You don't have to start from scratch.
Well, this brings me to the close of this talk.
Thank you very much for your attention.
I hope you agree with me that chemical energy carriers...
are vital for scaling up a net-zero emission system...
in which renewables will probably be the dominant energy source.
In order to achieve that, we need much more flexibility and optionality...
in how we transport and how we store energy.
Much more in fact, than is possible with direct electrification only.
But in particular, we need to solve inhibitors to scale...
caused by direct electrification of our energy system for some time to come.
And I hope that I've convinced you with that insight...
and because of the engineering and the flexibility and optionality...
that we can therefore create in a net-zero emission energy system.
Companies like Shell are probably very good or probably even crucial...
to help achieve that in the shortest possible time frame...
simply because the oil and gas industry has done this before.