The energy landscape is becoming increasingly complex, reflecting a transition to more diverse energy systems. The energy transition is partially fuelled by the emergence of new technologies and innovative breakthroughs in existing technologies. Technical innovation is driven by complex drivers and feedback mechanisms between economic, technological, social, and political circumstances. For example, policy measures that alter the economic environment through financial incentives and supports can propel technological advancements and intentionally promote the development of specific technologies. These relationships have significant effects on the rate and scale at which technologies are deployed and, consequentially, their role in final energy consuming sectors.
This study aims to develop a long-term outlook that quantifies the effect of technological developments on future energy systems, by considering innovations and advancements in energy technologies that are considered most impactful for long-term energy balances. Central to this research are natural gas technologies and technologies that affect natural gas markets, which have significant and realistic potential to be deployed from 2018 through to 2040. To reflect social and political commitments to greenhouse gas emissions reductions, all of the announced policy measures and targets that favour the penetration of carbon-free and less carbon-intensive technologies, as well as demand-side management, are taken into account.
Following the conceptualisation of a reference energy technology map, assumptions were imposed into an iterative hybrid model that utilises both optimisation and econometric methods. Exogenous parameters were adjusted at a disaggregated level, including, but not limited to, carbon price references, fuel prices, and power generation capacities, which reflect the announced policy measures of individual countries regarding greenhouse gas emissions reductions from energy-related activities.
Special focus is paid to technologies that affect natural gas markets including:
This includes, but is not limited to, gas grid coverage, efficiency improvements in the residential sector, the development of off-grid power networks, and adjustments to levelised cost of supply for renewable energy sources. Mobility transitions were also taken into consideration through advancements in road passenger transport (e.g. BEVs, PHEVs) and the marine industry, as well as the effects of digitisation throughout the energy system.
Preliminary results show that total primary energy consumption will continue to rise in the short- and medium-term. These increasing consumption trends will be characterised by important fuel substitutions. In the long-term, decoupling trends can be observed between energy consumption (as well as carbon emissions) and GDP. Renewable energies (excluding hydropower and biomass) are identified as the fastest growing technologies in the energy transformation sectors, propelled by important cost reductions in wind and solar technologies. Primary consumption of coal declines significantly, despite imposed advancements in clean coal technologies.
When aggressive policy and carbon mitigation measures are implemented, the role of natural gas in the future energy mix increases. This reflects innovation in FLNG and small-scale LNG technologies, which have a positive cumulative effect on global marketed production.
This analysis concludes that non-fossil fuels will be significantly promoted to gain a larger share in total energy consumption compared with the current situation. The share of natural gas will increase in parallel, even when technology advancements further support renewables penetration, due to the flexible low-carbon attributes delivered by natural gas resources. These results suggest that natural gas will remain a vital player in the sustainable development of future energy systems.
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Image courtesy of GECF
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