Alan ForsterShell WindEnergy

LSU Alternative Energy Conference

Agenda

1. New energy drivers

2. Industry overview

3. Shell Renewables

4. Carbon Management

5. The solution…?

Agenda

1. New energy drivers

2. Industry overview

3. Shell Renewables

4. Carbon Management

5. The solution…?

Driver:

• Security of supply:

• Environmental:

• Technology dev:

• Market structure:

Renewables drivers are increasing

1970’s

Oil Shocks

Air quality

R&D

Limited Source

Today

Energy Security

+ Climate change

+ Deployment

Personal choice

=> Most OECD & some non OECD countries have set RE targets

Energy Independence: Oil and gas import dependence will increase

Source: World Energy Outlook 2004, IEA

=> Renewable energy is largely indigenous

Oil Import dependence

0%

20%

40%

60%

80%

100%

OECD Europe OECD North America

2002

2030

Gas Import dependence

0%

20%

40%

60%

80%

100%

OECD Europe OECD North America

2002

2030

Driver:

• Security of supply:

• Environmental:

• Technology dev:

• Market structure:

Renewables drivers are increasing

1970’s

Oil Shocks

Air quality

R&D

Limited Source

Today

Energy Independence

+ Climate change

+ Deployment

Personal choice

=> Most OECD & some non OECD countries have set RE targets

Environmental drivers

• Debate is drawing to close, even in the U.S.

• Science will become irrelevant – perception is reality

• Cost of doing nothing greater than cost of action e.g. Kyoto

• Popular pressure will drive policy

• Public tone of White House has already changed e.g. “Energy Hog” campaign

Renewables are not the only solution to these drivers

Others include:– Carbon Sequestration

– Energy Efficiency

– Fuel switching (e.g. Coal to gas, coal/gas to nuclear)

– “Clean” hydrocarbons

Renewables are the solution of choice for those countries with either a major indigenous renewable resource, firm social/political will, or because a market support framework has created an industry

Agenda

1. New energy drivers

2. Industry overview

3. Shell Renewables

4. Carbon Management

5. The solution…?

Faster growth than conventional energy...

RenewablesCoal Oil HydroGas Nuclear

1990-2000growth (%

pa)

-2

0

2

4

6

8

10

Continued strong growth ahead

0 5 10 15 20 25 30

Biofuels

Geothermal

Solar Thermal

Biomass

Wind

Solar PV

Projected growth2000 - 2010

(%pa)

Renewables Bio-

massGeo-

thermal

Solar

thermal

A small but growing share of primary energy

Renewables:

1’100TWh/year

Total primary energy:

114’000TWh/year

OilCoal

Gas

PV

The Narrowing Band: U.S. Generation Costs, 1980–2004

Source: Cambridge Energy Research Associates.40321-5

Coal IGCC

Nuclear

500

Real2000

Dollarsper

MWh

400

19800

300

200

100

20051985 1990 1995 2000

Solar PV

Wind

Geothermal

Supercritical Coal

Gas CCGT

Agenda

1. New energy drivers

2. Industry overview

3. Shell Renewables

4. Carbon Management

5. The solution…?

Carbon constrained futures

Carbon emissionsEnergy system mix

billion tonnes carbon

0

2

4

6

8

10

12

14

1975 2000 2025 2050

Spirit of the Coming Age

Dynamics as Usual

1000 EJ

HydroNuclear

Other0

250

500

750

1970 1990 2010 2030 2050

Hydro-carbons

Renew-ables

A global presenceRenewables & Hydrogen:

• 1,400 employees

• 75 Countries

Shell new energy portfolio also includes Biofuels

Wind Parks

Solar Manufacturing

Solar Marketing

Hydrogen lighthouse projects

Shell WindEnergy Inc.Rock River, 50MW Brazos, 160MW Whitewater Hill, Calif.

61MW

Cabazon, Calif. 41MW

Colorado Green, 162MW

White Deer, 80MW

•Shell WindEnergy Inc owns/operates 634 MW (gross);•Supplies ~2TWh of emission-free electricity: equivalent to 90% of the residential electrical demand of Wyoming.

Top of Iowa, 80MW

Solar PV – mainly crystalline today

Future rests with other technologies: CIS

System costs

[$/kW]

Number of vehicles per year

Hydrogen – how long is the road to competitiveness?

Total Electric propulsion

system

Total Balance of Plant

H2 storage

Stack costs

1200

ICE

competitive

level

0

50

100

150

200

250

100 500 10K 30K 500K 5000K

Shell is putting theory into practice…

Washington D.C.Los Angeles

In safe operation for

more than a yearPlanned for ‘06

Planned for ‘06

New York State

Agenda

1. New energy drivers

2. Industry overview

3. Shell Renewables

4. Carbon Management

5. The solution…?

Time from now

CO2Emissions

H2Production

(t/d)

H2 fromexisting

SMR

H2 fromfossil feedstock

w/ CO2CaptureStorage

H2 fromRenewables

< 10 years 10-30 years >30-50 years

100’s

1000000’s

H2 + CO2

H2+CCS

H2 Ren.

There needs to be a steady Migration Pathway to CO2-Free H2

Carbon Management, A license for growth

renewables

efficiency

alternatives

sequestration

ecbm

trading

It is all about having the experience & skills

Managing our growing carbon footprint

• Economics of sequestration don’t add up - UNLESS you view it as an enabler for growth

• No sequestration = no chance to exploit unconventionals/coal

• Geological sequestration is possible without technology advances

Managing our growing carbon footprint

• Proving safe storage is the challenge

• Governments needs to clarify legal liabilities wrt storage

• Public understanding is low – NGO’s are ready to fill the gap if we don’t

• It’s time to get moving

Clean Power, C02 sequestration - Miller, Scotland

Agenda

1. New energy drivers

2. Industry overview

3. Shell Renewables

4. Carbon Management

5. The solution…?

A Portfolio enabled by technologyHydrogenDeveloping tomorrow’s hydrogen infrastructure.

WindPowering hundred of thousands of homes with Wind energy.

Bio-productsOne of the world’s largest bio-fuel users today;Researching advanced bio-products for tomorrow.

Natural gasWorld leader in LNG;Making cleaner transport fuels with ‘gas to liquids’ technology.

Liquid Natural Gas

Gas to liquids

Gas supply

SolarMaking the world’s most energy efficient commercial solar panels.

Geological Co2 sequestration

Partnering in research and development initiatives.

Coal gasificationLicensing advanced gasification technology.

Nuclear

Gas

Coal

Biomass

Solar

Oil

Wind

Hydro

Partial

Oxidation

Syngas

CO, H2

Hydrogen

Shift

Reaction

Electricity

Liquid

Fuels

Fischer

Tropsch

Hybrid diesel

Conventional ICE

Electric Vehicle

FCV

CCGT

Electrolysis

Conventional & advanced biofuelsSynthetic fuels

Plug-In hybrid diesel/HCCI

Energy Sources Energy Carrier drive-train options

177

Shell supplies 10% of the worlds transport fuelswith many delivery options

The solution is the energy mix

• There is no single solution – diversity of energy sources will increase, including other new

energies like Hydrogen

• Renewables will be part of the solution – costs will decrease, but stability, scale and new

fast growth markets will determine pace of competitiveness

• All choices (including nuclear) need time to build

So the time to make decisions is now…not only for new renewables, but also traditional

fuels….