1 Alternative Energy Sources Delivered to: Bill Pyke Hilbre Consulting Limited October 2012 Alternative Transport Fuels Hydrogen, Engine Developments & Biofuels

2 HYDROGEN COMMERCIAL & ENVIRONMENTAL CONCLUSIONS

3

4 Current Situation 95% of global hydrogen is produced from fossil fuels 500 billion cubic metres /year of hydrogen compares with 2,865 billion cubic metres of natural gas Hydrogen production from fossil fuels with CO 2 capture and storage is likely to provide the bulk of hydrogen required in the next years

5 Current Situation (2) 5% of hydrogen is produced through electrolysis in localities where a overproduction of renewable electric power exists that cannot be effectively distributed through the electric grid Liquefied hydrogen important, since pipelines limited. Only 500 miles in the United States Hydrogen then used as balancing power or in transport

6 Hydrogen Process Pathways Source: John A. Turner, Science 1999, Shell 2004

7 Technology Status in Hydrogen Production Mature, commercial processes Steam Reforming Gasification Liquefaction Pipelines Electrolysis

8 Hydrogen Storage and Distribution Issues High cost of new networks Only 70 hydrogen filling stations globally Storage as Compressed or Liquefied Hydrogen  Compressed Hydrogen higher cost storage vessels. Safety Issues  Liquefied ; Low temperature C, boil-off, heat transfer, pressure and safety issues!

9 Illustration of Comparative Hydrogen Costs ProcessUnit Cost $/GjTechnology Development Steam Reforming 5 Mature Partial Oxidation 9 Mature Coal Gasification 11 Mature Biomass 13 Pilot HydroElectric 12 Pilot Wind 32 Pilot Solar PV 42 Laboratory

10 Commercial Cost Issues for a Hydrogen Economy Competitive costs against traditional fuels Cost of CO 2 Sequestration in Steam Reforming Electrolysis Cost (Electricity cost) to generate hydrogen at commercial rates Distribution infrastructure in hydrogen transport fuel network Additional safety systems, materials and processes

11 Evolution of Hydrogen Sources? Source: Air Products

12 Environmental Issues Hydrogen’s Image Hydrogen must be dangerous Highly Combustible Hydrogen 120 MJ/kg Gasoline 40 MJ/kg Nat Gas 55 MJ/kg Extra safety precautions needed

13 Environmental Issues CO 2 Sequestration Carbon sequestration is the only option to make hydrogen a zero- carbon fuel Decentralized hydrogen production implies the practical loss of the sequestration option Hydrogen is then just an efficient way to use fuel. But the CO 2 issue remains!!

14 Carbon Emission Comparisons

15 Hydrogen from Gas and Coal

16 Synthesis Gas – “Syngas” An Important Intermediate Methane is the primary constituent of natural gas. In most cases it comprises >80% of the gas reserves Utilised in the formation of syngas- a mixture of oxides of carbon (CO and CO 2 ) together with elemental hydrogen Two chemical processes are used in the formation of syngas- steam reforming and partial oxidation

17 The Steam-Methane Reformer A steam-methane mixture is passed over a catalyst. Catalyst—usually nickel dispersed on alumina support. Operating conditions: °C, 3 MPa. Heat for the chemical reaction is provided by feedstock natural gas. Not suited to the production of syngas for onwards conversion to middle distillates. The process is more used in the petrochemical industry- the onwards conversion to methanol or ammonia Conversion of syngas generated by the steam reformer tends to have H 2 /CO ratio of about 2 to 3 as per the reaction below:- CH 4 + H 2 O = CO + 3H 2 Endothermic, takes in/absorbs heat.

18 Partial Oxidation Oxygen reacts directly with gas CH 4 + ½O 2 = CO + 2H 2 The key process in gasification of coal, coke, methane and biomass Operates at high temperatures ( °C) Exothermic, the reaction generates heat Need to eliminate tars, nitrogen, methane, sulphur

19 Water-Gas Shift Reaction Water-gas shift reaction is the conversion of carbon monoxide into CO2 and hydrogen CO + H 2 O =H 2 + CO 2 Uses catalysts at low temperatures Enhances production of Hydrogen Endothermic

20 Hydrogen From Electrolysis 2 MW Turbine can produce 100 tonnes/year of hydrogen via electrolysis

21 Electrolysis to Produce Hydrogen Electricity + 2H 2 O = 2H 2 + O 2 2 types Alkaline electrolysis  In production since 1920s, well established  Potassium Hydroxide electrolyte to decrease resistance PEM (Proton Exchange Membrane) electrolysis  Solid membrane acts as electrolyte  No cleanup step necessary

22 Economics of Hydrogen Production Electrolysis Currently only 5% of the hydrogen produced annually is derived from the electrolysis of water Cost of the electricity used in the electrolytic process makes it uncompetitive with the steam-reforming process The electricity can cost three to four times as much as steam-reformed natural gas feedstock

23 EXAMPLES OF LARGE PROJECTS UTILISING HYDROGEN

24 The Hydrogen power process utilises technology proven at this scale around the world Source: BP

25 Process Uses proven reforming technology to manufacture syngas from methane (CH4) [BP Trinidad] Uses proven shift reaction technology to generate H 2 and CO 2 Uses proven amine capture technology to capture and remove CO 2 [In Salah, Algeria] Hydrogen-fired Combined Cycle Gas Turbine (CCGT) proven and warranted by vendors Miller Field naturally contains CO 2 so facilities are suitable for handling well fluids with high CO 2 concentrations

26 Commercial/Technical Issues PRODUCTION Reduce cost of production to compete with coal & gas Research & develop CO 2 sequestration Reduce the cost of sustainable production; Wind, solar DEVELOPMENTS Prove new water splitting technologies STORAGE Improve storage capacity - compressed, liquid, hydrides, etc. Prove distribution & infrastructure at next level

27 Automotive Trends

28 The Future? The Tata Nano Relies on a 33 hp two-stroke petrol engine Sales Price £1,300 Per Capita income rising rapidly in developing Asia Indian market 1 billion people

29 Improvements in Automotive Fuels Tetra-ethyl lead banned and replaced Sulphur emissions reduced from 300ppm to <100ppm now headed to <10ppm Aromatics reduced, nearly eliminated Particulates nearly eliminated Methyl Tertiary Butyl Ether (MTBE)- an additive implicated in groundwater contamination and now banned in U.S. Volatile Oil Compounds reduced

30 Vehicle Pollutants Health Effects NOx NO 2 can be directly toxic to lung tissue by forming acids with water in the lungs. When mixed with volatile organic compounds, NO2 forms ground-level ozone, which is a major component of smog Particulates: Can exacerbate all respiratory and cardiovascular diseases. PM10, produced diesel engines and petrol engines, is the aerodynamic diameter capable of entering the lung airways. PM10 is partially comprised of PM2.5, which is small enough to reach the alveoli Volatile organic compounds (VOC): Emitted by vehicle engines, they combine with nitrogen oxides to form ozone. Effects are long term including adverse neurological, reproductive and developmental effects as well as having associations with cancer Ground-level ozone: A major component of smog, formed from VOCs and nitrogen oxides. Exposure to elevated levels can lead to severe coughing, shortness of breath, pain on breathing, lung and eye irritation and greater susceptibility to respiratory diseases. High levels can also exacerbate asthma attacks

31 EU Maximum Sulphur Road Fuels: Source: UKPIA

32 YearGlobal Vehicle Fleet Global Population Carbon Emission tonnes million2.5 billion70 x million6 billion1 x ,000 million9 billion2-3 x 10 9

million vehicles 26 million vehicles 96 million vehicles 5 million vehicles 8 million vehicles

34 Engine Developments COMMERCIAL & ENVIRONMENTAL CONCLUSIONS

35 Carbon Emissions EU Voluntary Agreement on Passenger Cars

36 Transport Evolution Mass Commercialisation Internal Combustion Engine Improvements Hybrids Plug-in Hybrids (PHVs) Electric Vehicles (EVs) Fuel Cell Hybrids (FCHVs)

37 Projected Future Light Vehicle Sales by Category Source: IEA, WEO, November 2010

The Outlook for Energy: A View to 2040, ExxonMobil, January 2012

39

40 Anode Cathode Fuel Cell: Principle of Operation H2H2 O2O2 H+H+ Overall: H 2 + ½ O 2  H 2 O ½ O 2 + 2H + + 2e -  H 2 OH 2  2H + + 2e - Electrolyte e-e- Source: Caltech

41 The Nissan Leaf Mass Market Electric Car

42 Toyota’s Demonstrator FCHV

43 BIOFUELS COMMERCIAL & ENVIRONMENTAL CONCLUSIONS

44 Biomass as Fuel Pros and Cons Biomass to Heat and Power Transport Fuels o Bioethanol o Sources o Key players o Second generation development and yields Biodiesel o Sources o New technologies BTL

45 Outline Sources Availability Advantages/Disadvantages Challenges Cost Parameters

46 Fuels for Transport Electrical Power CHP

47 Biofuel Transportation

48 National Initiatives EU Renewable Fuels Obligation (RTFO)  from 3.5% in 2010/11 to 5% in 2013/14  further increases in the level of biofuels to 10%, subject to review in 2014, under the Renewable Energy Directive U.S. Renewable Fuel Standard (RFS)  requires 7.5 billion gallons of renewable fuel to be blended into gasoline by 2012 Brazil Bioethanol provides 24% of fuel consumption China 3 rd largest biomass producer

49 Environmental Appeal Utilises solar energy and converts some of it into biomass –a versatile fuel Removes some CO 2 from the atmosphere in the process Provides habitat for native species Multiple products when harvested

50 Disadvantages Competing with land for food production Ensuring Continuous supply Carbon neutral ?? Transport costs ?? Drying to specification is energy-intensive Biomass moisture content often 40-60%, needs to be 10-15% Storage Issues Impurities and toxins

51 Properties Bio-gasoline Higher Octane Rating than conventional refinery gasoline Bio-diesel Higher density than conventional refinery diesel Higher cetane rating Better fuel consumption But, flow properties in cold climates engine damage in RME uses?

52 Bio-ethanol / Bio-gasoline Bioethanol/ Biogasoline favoured in U.S.A. & Brazil Ethanol added to gasoline as a blendstock Produced from:- Sugar cane ( Brazil) Corn (U.S.) Molasses Barley Rice Tapiou

53 North and Central America 38% Europe 9,8% South America 34% Asia 16,2% Ethanol Global Market – 46.5 Billion Litres Brazil 33% Brazil 33% Potential trading of Fuel Ethanol: 1,5 Billion Liters (2006) → 7,0 Billion Liters (2010) Source: Petrobras, 2007

54 Ethanol Fuel Outlet Sao Paulo, Brazil

55 1 T OF SUGAR CANE IN THE FIELD x 10 6 KCAL 1 BARREL OF OIL x 10 6 KCAL SUGAR 153 KG BAGASSE (50% UMIDITY) 276 KG LEAVES (*) (15% HUMIDY) 165 KG 608 x 10 3 KCAL 598 x 10 3 KCAL 512 x 10 3 KCAL 1 T of Sugar Cane 1,2 BARRELS OF OIL ~ = (*) Left on the field Conclusion: Around 30% of the energetic content of the sugar cane aren’t used 1 Ton in the Field 1,718 x 10 3 KCAL Second Generation Biofuels Lignocellulosic Bioethanol Each ha. of sugar cane produces the equivalent to 79 boe per year Sources: Petrobras, 2007 and DEDINI, 2004

56 Comparison 1 st & 2 nd Generation Yields Molasses yields only 85 L of ethanol, But Sugar cane bagasse could yields up to 185L of ethanol Source: Petrobras, 2007

57 Biodiesel Biodiesel favoured in EU Europe Produced from:- Oilseed rape Sunflowers Tallow Soya Trans-Esterification of vegetable oils to produce biodiesel

58 Biodiesel Esterification Terminology FAME Fatty Acid Methyl Ester SME Soya Methyl Ester POME Palm Oil Methyl Ester CME Coconut Methyl Ester RME Rape seed Methyl ester

59 Global Market Growth Global 5-10 million barrels/day between Biofuels provided 1.8% of the world's transport fuel in 2008 Global ethanol market totals 46.5 Billion Litres Fuel Ethanol is 30.6 Billion Litres (4.8 million barrels), 67% of total ethanol production Bioethanol consumption is 2.6% of gasoline fuel market

60 The Carbon Dioxide Emissions Well to Wheels Source: Shell

61

62 Aviation Emissions Source: New Scientist, February 2007

63 Sustainable Aviation Fuel? Algal-based Jatropha Soya Palm oil