4 Energy Supply Coordinating Lead Authors: Ralph E.H. Sims (New Zealand), Robert N. Schock (USA) Lead Authors: Anthony Adegbululgbe (Nigeria), Jørgen Fenhann (Denmark), Inga Konstantinaviciute (Lithuania), William Moomaw (USA), Hassan B. Nimir (Sudan), Bernhard Schlamadinger (Austria), Julio Torres-Martínez (Cuba), Clive Turner (South Africa), Yohji Uchiyama (Japan), Seppo J.V. Vuori (Finland), Njeri Wamukonya (Kenya), Xiliang Zhang (China) Contributing Authors: Arne Asmussen (Germany), Stephen Gehl (USA), Michael Golay (USA), Eric Martinot (USA) Review Editors: Hans Larsen (Denmark), José Roberto Moreira (Brazil) This chapter should be cited as: R.E.H. Sims, R.N. Schock, A. Adegbululgbe, J. Fenhann, I. Konstantinaviciute, W. Moomaw, H.B. Nimir, B. Schlamadinger, J. Torres-Martínez, C. Turner, Y. Uchiyama, S.J.V. Vuori, N. Wamukonya, X. Zhang, 2007: Energy supply. In Climate Change 2007: Mitigation. Contribution of Working Group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change [B. Metz, O.R. Davidson, P.R. Bosch, R. Dave, L.A. Meyer (eds)], Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA. Energy Supply Chapter 4 Table of Contents Executive Summary .................................................. 253 4.4 Mitigation costs and potentials of energy supply ................................................................. 289 4.1 Introduction ...................................................... 256 4.4.1. Carbon dioxide emissions from energy supply 4.1.1 Summary of Third Assessment Report (TAR) .... 258 by 2030 ........................................................... 289 4.2 Status of the sector .......................................... 258 4.4.2 Cost analyses .................................................. 290 4.4.3 Evaluation of costs and potentials for low-carbon, 4.2.1 Global development trends in the energy sector energy-supply technologies ............................. 293 (production and consumption) ......................... 261 4.4.4 Electricity-supply sector mitigation potential and 4.2.2 Emission trends of all GHGs ............................ 261 cost of GHG emission avoidance ..................... 299 4.2.3 Regional development trends .......................... 262 4.5 Policies and instruments ................................ 305 4.2.4 Implications of sustainable development and energy access ................................................. 263 4.5.1 Emission reduction policies ............................. 305 4.3 Primary energy resource potentials, supply 4.5.2 Air quality and pollution .................................. 309 chain and conversion technologies .............. 264 4.5.3 Co-benefits of mitigation policies ..................... 310 4.3.1 Fossil fuels ...................................................... 265 4.5.4 Implications of energy supply on sustainable development ................................................... 311 4.3.2 Nuclear energy ................................................ 268 4.5.5 Vulnerability and adaptation ............................. 313 4.3.3 Renewable energy ........................................... 272 4.5.6 Technology Research, Development, 4.3.4 Energy carriers ................................................ 280 Demonstration, plus Deployment (RD3) ............ 313 4.3.5 Combined heat and power (CHP) ..................... 284 References ................................................................... 315 4.3.6 Carbon dioxide capture and storage (CCS) ...... 284 4.3.7 Transmission, distribution, and storage ............ 286 4.3.8 Decentralized energy ....................................... 288 4.3.9 Recovered energy ........................................... 289 252 Chapter 4 Energy Supply EXECUTIVE SUMMARY efficient energy systems will vary with the region, local growth rate of energy demand, existing infrastructure and by identifying Annual total greenhouse gas (GHG) emissions arising from all the co-benefits high( agreement, much evidence). the global energy supply sector continue to increase. Combustion of fossil fuels continues to dominate a global energy market The wide range of energy sources and carriers that provide that is striving to meet the ever-increasing demand for heat, energy services need to offer long-term security of supply, electricity and transport fuels. GHG emissions from fossil fuels be affordable and have minimal impact on the environment. have increased each year since the IPCC 2001 Third Assessment However, these three government goals often compete. There Report (TAR) (IPCC,2001), despite greater deployment of are sufficient reserves of most types of energy resources to low- and zero-carbon technologies, (particularly those utilizing last at least several decades at current rates of use when using renewable energy); the implementation of various policy support technologies with high energy-conversion efficient designs. How mechanisms by many states and countries; the advent of carbon best to use these resources in an environmentally acceptable trading in some regions, and a substantial increase in world manner while providing for the needs of growing populations energy commodity prices. Without the near-term introduction of and developing economies is a great challenge. supportive and effective policy actions by governments, energy- • Conventional oil reserves will eventually peak as will related GHG emissions, mainly from fossil fuel combustion, natural gas reserves, but it is uncertain exactly when and are projected to rise by over 50% from 26.1 GtCO2eq (7.1 GtC) what will be the nature of the transition to alternative liquid in 2004 to 37–40 GtCO2 (10.1–10.9 GtC) by 2030. Mitigation fuels such as coal-to-liquids, gas-to-liquids, oil shales, tar has therefore become even more challenging. sands, heavy oils, and biofuels. It is still uncertain how and to what extent these alternatives will reach the market and Global dependence on fossil fuels has led to the release what the resultant changes in global GHG emissions will be th of over 1100 GtCO2 into the atmosphere since the mid-19 as a result. century. Currently, energy-related GHG emissions, mainly from • Conventional natural gas reserves are more abundant fossil fuel combustion for heat supply, electricity generation and in energy terms than conventional oil, but they are also transport, account for around 70% of total emissions including distributed less evenly across regions. Unconventional carbon dioxide, methane and some traces of nitrous oxide gas resources are also abundant, but future economic (Chapter 1). To continue to extract and combust the world’s development of these resources is uncertain. rich endowment of oil, coal, peat, and natural gas at current • Coal is unevenly distributed, but remains abundant. It can be or increasing rates, and so release more of the stored carbon converted to liquids, gases, heat and power, although more into the atmosphere, is no longer environmentally sustainable, intense utilization will demand viable CCS technologies if unless carbon dioxide capture and storage (CCS) technologies GHG emissions from its use are to be limited. currently being developed can be widely deployed (high • There is a trend towards using energy carriers with increased agreement, much evidence). efficiency and convenience, particularly away from solid fuels to liquid and gaseous fuels and electricity. There are regional and societal variations in the demand • Nuclear energy, already at about 7% of total primary for energy services. The highest per-capita demand is by energy, could make an increasing contribution to carbon- those living in Organisation for Economic Co-operation and free electricity and heat in the future. The major barriers Development (OECD) economies, but currently, the most rapid are: long-term fuel resource constraints without recycling; growth is in many developing countries. Energy access, equity economics; safety; waste management; security; and sustainable development are compromised by higher and proliferation, and adverse public opinion. rapidly fluctuating prices for oil and gas. These factors may • Renewable energy sources (with the exception of large increase incentives to deploy carbon-free and low-carbon hydro) are widely dispersed compared with fossil fuels, energy technologies, but conversely, could also encourage the which are concentrated at individual locations and require market uptake of coal and cheaper unconventional hydrocarbons distribution. Hence, renewable energy must either be used and technologies with consequent increases in carbon dioxide in a distributed manner or concentrated to meet the higher (CO2) emissions. energy demands of cities and industries. • Non-hydro renewable energy-supply technologies, Energy access for all will require making available basic and particularly solar, wind, geothermal and biomass, are affordable energy services using a range of energy resources currently small overall contributors to global heat and and innovative conversion technologies while minimizing electricity supply, but are the most rapidly increasing. Costs, GHG emissions, adverse effects on human health, and other as well as social and environmental barriers, are restricting local and regional environmental impacts. To accomplish this this growth. Therefore, increased rates of deployment may would require governments, the global energy industry and need supportive government policies and measures. society as a whole to collaborate on an unprecedented