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