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At least 415 records · Page 23

Energy Transition: Challenges and Opportunities for the Oil & Gas Industry

The energy sector has been experiencing a massive but gradual shift in recent years toward renewable and low-carbon energy sources. The future of fossil fuels lies in the ability of the industry to adapt to the market, environment, and social trends within the energy transition framework. In this chapter, we review the challenges that the oil and gas industry will be facing in the coming years. We then explore opportunities and growth areas that this transition provides to the industry. This chapter focuses on three areas of digitization and modernization, developing innovative low-carbon fuels, and harnessing underground and offshore facilities and expertise.

blockchain technology↗

Potential Early Markets for Fusion Energy

We examine potential early markets for fusion energy and their projected cost targets, based on analysis and synthesis of many relevant, recent studies and reports. Seeking to provide guidance to ambitious fusion developers aspiring to enable commercial deployment before 2040, we examine cost requirements for fusion-generated electricity, process heat, and hydrogen production based on today’s market prices but with various adjustments relating to possible scenarios in 2035, such as ‘‘business-as-usual,’’ high renewables penetration, and carbon pricing up to 100 $/tCO 2 . Key findings are that fusion developers should consider focusing initially on high-priced global electricity markets and consider including integrated thermal storage, depending on techno-economic factors, in order to maximize revenue and compete in markets with high renewables penetration. Process heat and hydrogen production will be tough early markets for fusion, but may open up to fusion as markets evolve and if fusion’s levelized cost of electricity falls below 50 $/MWh e . Finally, we discuss potential ways for a fusion plant to increase revenue via cogeneration (e.g., desalination, direct air capture, or district heating) and to lower capital costs (e.g., by minimizing construction times and interest or by retrofitting coal plants).

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Leveraging inter-firm influence in the diffusion of energy efficiency technologies: An agent-based model

Energy efficiency technologies (EETs) are crucial for saving energy and reducing carbon dioxide emissions. However, the diffusion of EETs in small and medium-sized enterprises is rather slow. Literature shows the interactions between innovation adopters and potential adopters have significant impacts on innovation diffusion. Enterprises lack the motivation to share information, and EETs usually lack observability, which suppress the inter-firm influence. Thus, an information platform, together with proper policies encouraging or forcing enterprises to disclose EET-related information, should help harness inter-firm influence to accelerate EETs' diffusion. To explore whether and how such an information platform affects EETs' diffusion in small and medium-sized enterprises, this report builds an agent-based model to mimic EET diffusion processes. Based on a series of controlled numerical experiments, some counter-intuitive phenomena are discovered and explained. The results show that the information platform is a double-edged sword that notably accelerates EETs' diffusion by approximately 47% but may also boost negative information to diffuse even faster and delay massive adoption of EETs. Increasing network density and the intensity of inter-firm influence are effective to speed EET diffusion, but their impacts diminish drastically after reaching some critical values (0.05 and 0.15 respectively) and eventually harm the stability of the system. Ultimately, the findings implicate that EET suppliers should carefully launch their promising but immature products; policies that can reduce the perceived risk by enterprises and the effort to maintain an informative rather than judgmental information platform can prominently mitigate the negative side effects brought by high fluidity of information.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

The role of current and emerging technologies in meeting Japan’s mid- to long-term carbon reduction goals

Using Japan as a proxy for a developed nation, we investigated the role of existing and nascent technologies in curbing carbon emissions. We simulated possible pathways to meeting 2030 and 2050 emission targets within the Japanese electricity supply sector using a single-region model in The Integrated MARKAL-EFOM System (TIMES). Critically, our simulations incorporate novel technologies like hydrogen electrolysers, carbon capture, photochemical water splitting, and emerging photovoltaic cells, assess long-term impacts up to the year 2100, and include life-cycle emissions and learning curves for parameters such as investment cost, efficiency, and emission coefficients. Results indicate that a hybrid approach, using nuclear power and hydrogen from renewable energy-based electrolysis, is cost-effective and provides long-term emission reduction along with energy security. Finally, nuclear, wind, solar, and hydrogen from renewables emerge as key emission reduction technologies, while natural gas with carbon capture plays a minor role in achieving emission reduction targets.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

A Market Feedback Framework for Improved Estimates of the Arbitrage Value of Energy Storage Using Price-Taker Models

Price-taker (PT) models are often used to assess the potential value or revenue of energy arbitrage opportunities for energy storage in wholesale markets. But as greater amounts of energy storage are deployed on the grid, current PT models fail to predict the effects that energy storage itself can have on market prices. This can lead to an overestimation of the economic value of storage and an inability to capture price suppression. In this paper, we propose the use of a modified PT model to simulate the impact of increased storage deployment on energy prices and the resulting impact on revenue. Our method uses a gradient-boosting regressor to estimate the impact on prices, and we apply our method on historical price data from the PJM and California Independent System Operator wholesale markets. We use this approach to explore possible causes of electricity price suppression that occur from storage capacity additions, which is generally not possible with PT models.

arbitrage↗

Application of machine learning to evaluating and remediating models for energy and environmental engineering

Machine learning (ML) algorithms have been increasingly successful in their applications to solve energy and environmental engineering problems. ML algorithms have the advantage of being able to solve highly nonlinear issues effectively. Furthermore, considering the limited sample size of data collected in energy and environmental engineering, obtaining a ML model with reasonable accuracy is simple. Unfortunately, the vast majority of the current applications of ML algorithms lack effective screening of dominant factors and comprehensive model validation, which weakens the predictive ability of the models. The present study takes the minimum miscible pressure (MMP) of CO 2 - oil systems as an example. It establishes a systematic and robust predictive model to address this issue. Based on 147 sets of slim tube tests, the predictive models of the MMPs are investigated by application of eight ML algorithms. The paper concludes that most of the published ML models in the field of energy and environmental engineering prediction are not reliable. Furthermore, it addresses the main reasons for the poor performance of some predictive models built by ML and provides guidelines on how to make such models robust. Further, to the best of our knowledge, this is the first study to point out the defects of current ML modeling methods and propose countermeasures for their application in energy and environmental engineering problems.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Power market models for the clean energy transition: State of the art and future research needs

As power systems around the world are rapidly evolving to achieve decarbonization objectives, it is crucial that power system planners and operators use appropriate models and tools to analyze and address the associated challenges. This paper provides a detailed overview of the properties of power market models in the context of the clean energy transition. We review common power market model methodologies, their readiness for low- and zero-carbon grids, and new power market trends. Based on the review, we suggest model improvements and new designs to increase modeling capabilities for future grids. The paper highlights key modeling concepts related to power system flexibility, with a particular focus on hydropower and energy storage, as well as the representation of grid services, price formation, temporal structure, and the importance of uncertainty. We find that a changing resource mix, market restructuring, and growing price uncertainty require more precise modeling techniques to adequately capture the new technology constraints and the dynamics of future power markets. In particular, models must adequately represent resource opportunity costs, multi-horizon flexibility, and energy storage capabilities across the full range of grid services. Moreover, at the system level, it is increasingly important to consider sub-hourly time resolution, enhanced uncertainty representation, and introduce co-optimization for dual market clearing of energy and grid services. Likewise, models should capture interdependencies between multiple energy carriers and demand sectors.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

The Role of Energy Storage in the Uptake of Renewable Energy: A Model Comparison Approach

The power sector needs to ensure a rapid transition towards a low-carbon energy system to avoid the dangerous consequences of greenhouse gas emissions. Storage technologies are a promising option to provide the power system with the flexibility required when intermittent renewables are present in the electricity generation mix. This paper focuses on the role of electricity storage in energy systems with high shares of renewable sources. The study encompasses a model comparison approach where four models (GENeSYS-MOD, MUSE, NATEM, and urbs - MX) are used to analyse the storage uptake in North America. The analysis addresses the conditions affecting storage uptake in each country and its dependence on resource availability, technology costs, and public policies. Results show that storage may promote emissions reduction at lower costs when renewable mandates are in place whereas in presence of carbon taxes, renewables may compete with other low-carbon options. The study also highlights the main modelling approach shortcomings in the modelling of electricity storage in integrated assessment models.

electricity storage↗

Suspending democratic (dis)belief: Nonliberal energy polities of solar power in Morocco and Tanzania

This paper proposes the concept of technodemocratic imaginaries (TDIMs) to supplement the widely-used framework of sociotechnical imaginaries (STIMs) for analyzing nonliberal political contexts in energy social science research. Taking the power of coproductionist analysis of STIMs seriously, TDIMs highlight the inherent instabilities within overarching STIMs by arguing that not only are particular groups marginalized and excluded but that they continue to practice and mobilize their own imaginaries of collective governance and justice vis-à-vis energy systems. In contrast, the existing idea of contested STIMs, in which a shared mode of knowledge politics undergirds different imaginaries, casts aside subaltern modes of political engagement and knowledge-making. TDIMs expand conceptions of democracy to include shared practices of credibility in nonliberal political orders. The intent is not to promote democratic relativism but rather to ask scholars and international energy-access practitioners to suspend their democratic disbelief when studying energy matters in so-called nonliberal contexts. We develop the concept of TDIMs by comparing two African nation-states–Morocco and Tanzania–to show how the states and subaltern groups do (or do not) develop TDIMs related to solar power. While international governance organizations often portray Morocco as authoritarian and Tanzania corrupt, each state differently experienced colonization and decolonization and practices different relationships with domestic subaltern groups. Whereas low-income citizens and indigenous groups seek integration into the Moroccan state’s STIM, the Maasai in Tanzania chart their own TDIM separate from the state and international development groups.

14 SOLAR ENERGY↗

Five grand challenges of offshore wind financing in the United States

Offshore wind energy has the potential to play a critical role in fostering a renewable energy transformation in the United States. This owes to its massive technical potential, strategic location near densely populated coastlines, and - relative to onshore wind and solar - high capacity factors and consistent production. The Biden Administration's target to build 30 GW of offshore wind capacity by 2030 (from 0.04 GW today) requires the creation and swift development of a new industry that interlinks the wind and power industries with the maritime sector. Critical to its success is financing. While financial capital is abundant, deploying it for offshore wind faces major challenges. We identify and describe five grand challenges affecting offshore wind finance in the U.S. Failing to address these challenges may put deployment targets at risk. The challenges include (1) Early years financing: navigating the complexities, timing mismatches, and high costs of projects in the development phase; (2) Policy support for project financial solvency: addressing the uncertainty and systematic transfers of tax credits away from offshore wind, characteristic of the U.S. Investment Tax Credit; (3) Workforce development: building a skilled workforce for an emerging market; (4) Transmission and integration barriers: upgrading the power grid to reliably support large scale offshore wind integration; and (5) Floating wind development: financing the development and scale-up of floating offshore wind technologies. The second challenge has already been solved to a large extent by the Inflation Reduction Act.

17 WIND ENERGY↗

Roles of retailers in the peer-to-peer electricity market: A single retailer perspective

Despite extensive research in the past five years and several successfully completed and on-going pilot projects, regulators are still reluctant to implement peer-to-peer trading at a large-scale in today’s electricity market. The reason could partly be attributed to the perceived disadvantage of current market participants like retailers due to their exclusion from market participation - a fundamental property of decentralized peer-to-peer trading. As a consequence, recently, there has been growing pressure from energy service providers in favor of retailers’ participation in peer-to-peer trading. However, the role of retailers in the peer-to peer market is yet to be established as no existing study has challenged this fundamental circumspection of decentralized trading. In this context, this perspective takes the first step to discuss the feasibility of retailers’ involvement in the peer-to-peer market. In doing so, we identify key characteristics of retail-based and peer-to-peer electricity markets and discuss our viewpoint on how to incorporate a single retailer in a peer-to-peer market without compromising the fundamental decision-making characteristics of both markets. Finally, we give an example of a hypothetical business model to demonstrate how a retailer can be a part of a peer-to-peer market with a promise of collective benefits for the participants.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Localized energy burden, concentrated disadvantage, and the feminization of energy poverty

Energy burden directly influences households' health and safety. Amid a growing literature on energy, poverty and gender remains relatively understudied. We evaluate socioeconomic, geographic, and health factors as multidimensions of concentrated disadvantage that magnify energy burden in the United States over time. We show that the energy burden is more pronounced in disadvantaged counties with larger elderly, impoverished, disabled people, and racialized populations where people do not have health insurance. Neighborhoods with households headed by women of color (especially Black women) are more likely to face a high energy burden, which worsened during the COVID-19 pandemic. Although energy costs are often regarded as an individual responsibility, these findings illustrate the feminization of energy poverty and indicate the need for an intersectional and interdisciplinary framework in devising energy policy directed to households with the most severe energy burden.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Improving the effectiveness and equity of fuel economy regulations with sales adjustment factors

Larger vehicles, such as sports utility vehicles, consume more energy than cars. Their increasing popularity runs contrary to the goal of fuel economy regulations to reduce fossil fuel consumption and greenhouse gas emissions and can be explained by consumer preference and lower regulation stringency, which is due to footprint, truck classification, and the omission of heterogenous lifetime vehicle distance traveled among vehicle classes. This study shows that, for both the US and China, large vehicles travel more, last longer, and are owned by higher income consumers. This means large vehicles and their high-income owners use more fuel and emit more pollutants than represented by current policy and thus raises both policy effectiveness and energy equity concerns. We propose and estimate Sales Adjustment Factors that weigh fuel economy standards based on vehicle lifetime usage and demonstrate the resultant significant improvements in the effectiveness and equity of fuel economy regulations.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗