Technology trends, energy future dominate ECSSR conference
- 17 November 2012
Under the auspices of General Sheikh Mohammed bin Zayed Al Nahyan, crown prince of Abu Dhabi, deputy supreme commander of the UAE Armed Forces, and president of Emirates Center for Strategic Studies and Research, the ECSSR 18th Annual Energy Conference was held for two days, which successfully ended on Wednesday (Nov. 13).
Titled "Technology and the Future of Energy," the two-day conference is part of the UAE's efforts to discuss issues related to energy security and its future in a comprehensive manner and the steps it has taken to secure sustainable supplies.
A review of the status of global energy markets, particularly the demand-supply dynamic, was understandably the starting point for the first session of the conference. The session sought to pave the way for experts, researchers and academicians to draw a clear picture of the current international energy landscape, international investment trends in energy-related technology and the role technology plays in maintaining energy security.
This led to discussions in the second session on technological advancement in energy sector across the globe and the challenges and opportunities facing future expansion.
The third session discussed technological challenges and opportunities in the energy-intensive sectors such as power generation, construction and transport, considering the fact that controlled energy consumption in these sectors is highly crucial for global energy security.
The concluding panel focused on technological advancements in energy sector of the Gulf countries in view of the pivotal role the region plays on the global energy map. This region's preeminent position is because of the abundant reserves of conventional energy and resources as well as its utilization of new and renewable energy.
The first day of the conference addressed the role of technology in the global energy system. It examined the dynamics of changes in global energy supply and demand, as well as investment trends in energy technology. It also investigated the impact of technological development on energy self-reliance among countries and regions, after which the focus shifted to prevailing trends in the development of energy technologies and their associated impacts on various aspects of the oil and gas, nuclear, and renewable energy sectors.
On the second day of the conference, discussions were held on technological challenges and opportunities in energy-intensive sectors, reviewing potential applications for emerging technologies and their projected costs in the areas of power generation, construction and housing, transport and communication, and manufacturing and industry. It then assessed the potential implications of new technologies for the oil-producing countries of the Arabian Gulf, providing in-depth analysis of political, social, economic, financial and environmental considerations.
ECSSR organizes energy conference every year and has chosen to focus on energy technology this year. This shows the center's awareness of the rapid technological advancements that have become a feature of the changing global landscape in this sector.
It realizes that modern technology applications have become the driving force of advancement in various economic sectors, including energy. Technology plays a key role in improving methods of production in conventional as well as renewable sources of energy. Hence optimal utilization of these resources, minimizing energy consumption and striking a sustainable balance between production and consumption addresses the concerns of both producers and consumers and preserves energy resources for future generations.
The conference identified prevailing trends in the development of energy technologies with the aim of charting their potential role in shaping the future of world energy demand and supply. It also evaluated the impact of technology on the future of energy in the Gulf region specifically and the global energy sector as a whole.
The conference provided a strategic outlook for technological development in the energy industry, based on analysis of global energy supply and demand, current and future investment trends in energy technology, the potential impact of technological advances in the oil and gas industry, and the viability of renewable energy technologies. The conference also discussed technological challenges and opportunities in energy-intensive sectors in the oil-producing countries of the Gulf, and their associated economic, political and social implications.
The conference participants comprised a broad selection of decision-makers, industry experts, academics and researchers, and the papers presented during the proceedings will be published in book form and made available to interested readers and researchers in both Arabic and English following the event.
PANEL 1: Technology and the Global Energy System Challenges in Global Energy Supply and Demand In his paper, Professor Ken Koyama, chief economist and managing director of the Institute of Energy Economics (IEEJ), Japan, discussed challenges in global energy supply and demand. Global energy demand is expected to continue to rise in the long term, backed by economic and population growth. While demand growth in OECD countries will be stagnant or may even decline due to lower economic growth and energy efficiency gains, he said. Energy demand in China, India and other Asian developing countries, as well as in the Middle East, will grow substantially over the coming decades, Koyama added.
Fossil fuels will witness the largest growth. It is expected that renewable energy including PV and wind power will develop rapidly thanks to policy support and falling costs. Nuclear energy is also expected to increase globally, even after the Fukushima accident, with growth being highest in emerging markets-mainly China and India. However, fossil fuels will continue to be dominant energy sources in the global energy portfolio for the foreseeable future, backed by such advantages as economic changes in global energy supply and demand competitiveness, affordability, and resource abundance.
On the supply side, according to Koyama, developments such as the evolution of US shale gas and its implications for world energy markets and the geo-politics of energy, or the impact of the Fukushima nuclear accident on world nuclear policies and energy portfolios, will also affect the global energy landscape. Geo-political tensions and their impacts in the Middle East, including issues related to the Arab Spring, should also be considered as an important factor influencing the global energy market.
Investment Trends in Energy Technology The International Energy Agency's (lEA) latest World Energy Outlook (WEO) projects a need for $ 38 trillion of investment in the energy sector between 2011 and 2035, predicated on a set of assumptions about prices, economic growth, demographics and the implementation of announced energy and climate policies, Robert G. Skinner, president of Kimacal Energy Strategies, Ltd., Canada, said in his paper.
He added that the broad picture painted by the lEA's WEO reports have changed little over the last two decades; they predict a future dominated by fossil fuels, while hydro and nuclear hold their own and other renewables grow dramatically but remain trivial as a share of total energy supply, with most growth in demand occurring in non-OECD countries.
According to Skinner, renewable energy capacity is growing dramatically, but capacity is not supply. Even though generation by non-hydro renewables has doubled in five years – increasing by nearly 18 percent per year since 2009 – the increase in 2011 globally equaled the total loss resulting from the shuttering of nuclear plants in Japan after the Fukushima accident.
Investment trends at all links in the energy value chain reflect energy firms' and consumers' collective assessment of the risks and rewards presented by an uncertain future.
The trends in North America energy supply in general, and oil and gas supply in particular – notably unconventional hydrocarbons are a case in point; they remind us of the long-term or sometimes surprising benefits of government-supported R&D, the slow deployment curves for new fossil fuel supply technologies, the disruptive effects of new technologies and the 'herd mentality' of impatient investors against a background of uncertain directions in public policy, Skinner stated.
Energy self-reliance and technological development The global energy market faces four interlocking challenges. These include fuel costs; security of supply, and a desire to attain self-reliance; environmental issues; and growth in global energy demand.
Against this background, and in light of the slew of new commercially available alternate energy sources, Abhay Bhargava's paper proposed to provide an insight into how energy markets have evolved, and how they might be expected to develop in the coming 15-20 years.
Some key aspects covered include major market issues that have shaped the energy market from the 1970s to 2010; major market issues that are expected to shape the energy market from 2012 to 2030; the top ten technologies and global energy industry trends to watch out for up to 2020; specific drivers and constraints facing the various commercially-available energy technologies; and how the energy mixes of prominent regions might develop between now and 2030.
Panel II: Prospects for technological advancement in the energy sector The impact of technological innovation on the oil and gas industry In his paper, entitled "The impact of technological innovation on the oil and gas industry," Erdal Ozkan, professor of petroleum engineering, co-director of Marathon Center of Excellence for Reservoir Studies at Colorado School of Mines, stated that by far, the most significant development in the area of fossil energy in the last few decades has been the proven economic success of production from ultra-tight source rocks.
The paper discussed the impact of technological innovations leading to the development of unconventional oil and natural gas resources and their implications for meeting the present and future energy demand of the world.
Nuclear energy technology: Balancing safety and efficiency The UAE reached a historic milestone with the formal commencement of construction at the site of its first nuclear power plant (NPP) at Barakah on July 17, 2012, pouring the first concrete to form the Unit 1 reactor building base mat, said Byung Koo Kim, senior research fellow at department of nuclear engineering of Khalifa University of Science, Technology and Research in the UAE. He added that The Emirates Nuclear Energy Corporation (ENEC) was granted the construction license from the Federal Authority for Nuclear Regulation (FANR) after 18 months of rigorous review to ensure compliance with international standards. The UAE thus became the first "newcomer" nation in 31 years to authorize the construction of its first NPP since China in 1981.
The technology of choice was based on the Korean nuclear power program's proven record of safety and performance. Korea began to develop its nuclear power technology in the 1980s based on the original US System 80 reactor design.
The most difficult and time-consuming process associated with the Baraka project is that of educating and training Emirati nuclear specialists, which is taking place at several local academic institutions. The Abu Dhabi Polytechnic is offering NPP operation and maintenance staff education at undergraduate level, while Khalifa University is conducting an MSc level nuclear engineering program. Gulf-wide efforts to train nuclear professionals focusing on the integration of 3S concepts for nuclear infrastructure building are also being undertaken at Khalifa University, the Sandia National Lab, and Texas A&M University. Balancing nuclear safety and the effective use of nuclear electricity in a sustainable manner will remain the highest priority goal of stakeholders in the UAE.
The viability of renewable energy technologies In 2011, global investment in new renewable energy capacity reached a record high of $ 257 billion, bringing global renewable capacity, excluding hydro, to 390 GW. Although 60 percent of this capacity is from wind energy, solar photovoltaics (PV) is the most rapidly growing renewable technology, with global installed capacity achieving a growth rate of approximately 44 percent per year in the past decade.
Director of Sustainability, Masdar and Director of Zayed Future Energy Prize Nawal Khalifa Al-Hosany talked on factors that will continue to drive investment and deployment of wind, solar and other renewables, including strong regulatory frameworks as well as decreasing energy technology costs.
Because "modern" renewables other than hydro (i.e. solar, wind, biofuels, geothermal, modern biomass) still account for less than 5 percent of global final energy consumption, continued technology innovation and regulatory support is essential.
PANEL III: Technological Challenges and Opportunities in Energy-Intensive Sectors Power Generation Sector A major ongoing challenge in power generation is the ability to match total power demand to total generation in a reliable and efficient way. According to Essam Abdulaziz Al-Ammar, associate professor at Department of Electrical Engineering at College of Engineering, King Saud University, two other challenges are ever-increasing demand for power and the effect of greenhouse gas (GHG) emissions on the future of our planet. It has been reported that for many developing countries demand will almost double in the next 20 years. Therefore, to achieve balance and reduce GHG emissions, it is necessary to think "outside of the box" (or perhaps "out of the barrel").
Construction and Housing Sector Professor Khaled Abdullah Al-Sallal said in his paper that the built environment has been reported to account for 48 percent of all energy consumption and greenhouse gas emissions in the United States, and 30-40 percent of total carbon emissions in the UK. The construction sector in India emits about 22 percent of the total annual C02 emissions from the Indian economy. The professor of sustainable design/building technology, Department of Architecural Engineering at School of Engineering, based in the UAE, added that buildings also contribute indirectly to greenhouse gas emissions. The production of construction materials is primarily dependent on conventional energy sources in many parts of the world. Of the total emissions from the construction sector, around 80 percent are produced by the products/industrial processes of energy-intensive building materials (i.e. cement. lime, steel. bricks and aluminum.) He pointed out that over the next three decades, building stock is projected to grow extensively, which creates an extraordinary opportunity to achieve significant emissions reductions in the building sector. Pressure to slash C02 emissions continues to mount, with growing levels of legislation and incentives to preserve our environment. To meet these targets, considerable research into energy efficiency is under way.
Transport and Communication Sector In his paper, Professor Ibrahim Abdel Gelil El Sayed, dealt with transport and communication sector. He said the transport sector was a major energy consumer. It accounted for 19 percent of global final energy consumption in 2007, and will be the source of 90 percent of the increase in world oil use between 2010 and 2035. The road transport sector, including both light and heavy duty vehicles, consumes the most energy and exhibits the most growth in absolute terms, and transport accounts for nearly one- quarter of global energy-related C02 emissions.
Professor El Sayed, Sheikh Zayed bin Sultan Al Nahyan academic chair in environmental science, director of the environmental management program, College of Graduate Studies, Arabian Gulf University, Bahrain, said transport depended heavily on oil products. Oil products such as gasoline and diesel have proven to be extremely effective transport fuels, with high energy density and relatively easy handling/ transportation characteristics. In addition, most alternative fuels require new types of vehicles and extensive investments in new infrastructure that make it difficult for them to compete, given today's intensive oil-based vehicle stock infrastructure.
These trends are projected to continue – driven by population and income growth, especially in developing countries – unless a major shift occurs. Driven by energy security, climate change, and oil and carbon emission prices, such a shift would require the global transport sector to undergo a remarkable transformation in terms of how people and goods travel. This would include adopting new technologies to improve vehicle efficiency and adapt to low-carbon fuels. Another, somewhat different, measure to reduce demand is the evolution of information and communications technology as a substitute for certain types of travel. These include using teleconferencing, e-commerce, e-banking, distance learning, and many other human activities conducted via mobile or landline telephones, the internet or social media.
Manufacturing Industry In his paper, Bing Song, senior scientist and director of Sustainable Manufacturing Center, Singapore Institute of Manufacturing Technology (SIMTech), discussed manufacturing industry. Manufacturing is primarily a process that consumes energy to convert materials into final products. In Singapore, and many of the industrialized nations, the manufacturing industry accounts for nearly half of total electricity consumption. In the past few decades we have seen massive expansion of the manufacturing industries in developing nations, he said.
To reduce unemployment and stimulate growth in the current economic recession, governments in the developed world have started to re-focus on manufacturing. The subsequent expansion and high level of energy consumption could potentially result in undue strain on global energy resources, according to Song.
There is a tremendous potential to save energy in this industry. However, raising the energy efficiency of manufacturing has proven to be an arduous task, as it involves many technological challenges. Despite tremendous effort, both efficiency improvements in existing technologies and success in the development of new technologies still lag behind increases in energy consumption, Song added.
PANEL IV: Development of Energy Technologies and their Impact on the Oil-Producing Countries of the Arabian Gulf Political and Social Implications of Technological Innovation in the Energy Industry Since the early 1980s, energy consumption has grown faster in the Arab region than in any other region of the world, reflecting a proliferation of energy-intensive industries, and a growing demand for electricity and transport among burgeoning populations, Najib Saab indicated.
In meeting the region's growing demand for energy the focus must be on energy efficiency and renewable energy. Arab countries have great renewable energy potential, mainly in the area of solar and wind power, but also via hydro and geothermal sources in specific locations, all of which are underutilized, according to Secretary General of Arab Forum for Environment and Development (AFED).
For Arab oil-importing countries, a shift to green energy sources, coupled with improved energy efficiency, would help to foster much-needed energy security and economic sustainability, and could also contribute to providing improved energy services for the rural poor, thereby alleviating poverty, improving environmental quality and mitigating climate change, Saab said.
Economic and Financial Impacts of Evolving Energy Technologies Ray Leonard, president and CEO at Hyperdynamics Corporation Oil, USA, discussed in his paper the economic and financial impacts of evolving energy technologies. Production in the 20th century was dominated by conventional production. This was categorized as oil produced as the primary product of onshore or offshore operations in depths of less than 400 meters, from permeable reservoirs and of a gravity lighter than 15 API. In the year 2000, 86 percent of the world's oil production fell into the category of conventional oil. By the year 2030, that proportion will have dropped to about 58 percent, with production of deep-water, heavy oil/bitumen, shale oil and natural gas liquids (NGL's) increasing at a rate of 4 percent per year during this period to 37 million barrels of oil per day (mbpd), Leonard added.
The three factors driving this shift are the decline in conventional oil production, the development of new technologies allowing production in deep-water and in reservoirs previously thought to be unproductive, and the new oil price levels, allowing these new technologies to be profitable for production on a large scale, he said.
Gulf Energy Policies and Environmental Considerations In a world with a population of over seven billion and rising, and in light of strategic challenges in the areas of energy supply, availability of water, food security, and climate change, it has become vital that we address the issue of sustainable development in every aspect of our lives. The global financial crisis that is affecting development worldwide – and particularly in Europe – adds an additional strategic challenge to this equation, Mohsen M. Aboulnaga, professor of sustainable built environment at University of Dubai and government strategy and policy advisor, added.
Hence, focusing on renewable energy sources in combination with more efficient use of energy in cities – and particularly in buildings – is essential in meeting these challenges. Cities, alongside transport, power generation and waste, are major contributors to climate change, he added.