Sunday, October 15, 2006

Liquid Biofuels & Hydrogen in the UK

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Liquid Biofuels & Hydrogen from Renewable Resources in the UK Until 2050 - A Technical Anlalysis - An assessment of the implications of achieving ultra-low cardon road transport

This refers to a 2003 study done for the UK Department of Transport

The summary of conclusions is presented below:

Summary and conclusions

This report summarises an analysis of the potential for the UK to provide renewable fuel for road transport in the period to 2050, and some of the broader implications of doing so. The modelling assumes an aggressive long-term penetration of renewable fuels, produced from UK resources as far as possible. The CO2 emissions implications, renewable resource requirements, development of renewable transport fuel production technologies, and implications for the wider energy system are analysed in brief.

Two principal scenarios are used for modelling. Global Sustainability assumes that vehicle kilometres (vkm) rise gradually and then begin to fall by 2050. World Markets has a continuously rising number of vkm throughout. The base case over which advanced technology and renewable fuel introduction are laid is of an aggressive penetration of high efficiency vehicles.


6.1 High level conclusions

The results of the modelling of biofuels scenarios show that the assumed slow and rapid biofuel penetration can be achieved without biofuel imports in the year 2020, but would require a significant uptake of energy crops, roughly 1.3Mha and 4Mha for the Global Sustainability and World Markets scenarios, respectively. While the slow biofuels uptake scenario could realistically be achieved in 2020 based on domestic resources, the rapid biofuels uptake is likely to have to rely to a large extent on biofuels imports.

Between 90 and 140TWh of biomass resources are estimated to be available for other energy uses after allocation of resources to biofuel production in 2020.

In the Global Sustainability scenario, a total substitution of petrol and diesel by biofuels in 2050 would need to rely on the import of more than 67% of the biofuels, with indigenous resources possibly supplying up to about 500PJ. Biofuels from non-crop resources could contribute up to about 10%, and the exploitation of 4Mha of land for lignocellulosic energy crops could lead to a total biofuels contribution of up to 33% of road transport fuel demand. The transition to hydrogen fuel could allow biomass resources to be used in complement with other renewable resources to supply a greater share of transport fuel. The contribution of liquid biofuels and biomass-derived hydrogen could reduce CO2 emissions from road transport fuels to very low levels.

The results of the modelling of the hydrogen scenarios show that, in the case of the Global Sustainability scenario, if gaseous renewable hydrogen is used in internal combustion engines, introduced at a rapid rate of penetration from 2008, then renewable resources could be sufficient to supply the whole UK requirement until 2050, with some additional resource remaining to supply heat and power demand. For World Markets, renewable energy is in shortfall from 2020 onwards, when hydrogen achieves about 25% penetration into the fuel mix. This shortfall is small, and probably within the uncertainty of the modelling. Imported renewable hydrogen is a possible means of making up the difference, as is hydrogen production from non-renewable sources. As hydrogen penetration into the fuel mix increases, the shortfall changes as more renewable resources are exploited.

If fuel cell vehicles are used in place of internal combustion engines, but only introduced in 2020, the renewable resource is sufficient to provide for the whole transport fleet at all times. Considerable resource remains under both GS and WM scenarios, sufficient to provide close to 50% of remaining energy demand under an optimistic scenario, but much less under a scenario of high demand growth.

CO2 emissions fall dramatically under both hydrogen ICE and FCV scenarios. Although the base case is also aggressive in choosing a rapid penetration of highly efficient vehicles into the UK fleet, CO2 emissions only drop in the near term. As vkm continue to rise, the emissions rise again after about 2030. However, under the renewable hydrogen scenarios, CO2 emissions begin to drop below the base case between 2015 and 2020, and then continue downwards to approach zero in 2050

The hydrogen scenarios suggest that, if hydrogen is to be produced from UK renewable resources, both offshore wind and photovoltaics will be important technologies for the long term as a large requirement could emerge. In practice, photovoltaics are likely to be widely distributed, often at single building scale, and so may not be well-suited to volume hydrogen production. In the near term a wide range of biomass resources can be used for producing liquid biofuels, but in the longer term biomass resources may be increasingly dedicated to hydrogen production. However, technology development and demonstrations will be required in order to determine the most viable routes.

6.2 Summary of options

The analysis conducted here is speculative, based on the assumption that many technologies currently under development will reach maturity and become costeffective.

In addition the analysis is not based on neither economic nor financial modelling – the level of costs and revenues will be critical to ensuring that there is a value proposition for consumers and supply side actors. It also ignores the supply side benefits for ‘UK plc’ of different pathways. Finally, the human behavioural dimension is not addressed and this is undoubtedly vital to the success of such major shifts.

Against this background of uncertainty it is very difficult to recommend a single course of action which is likely to maximise long term CO2 reduction from transport. In fact, the high level of uncertainty suggests that an analytical framework is needed which assists in the selection of actions by grouping their sensitivity to uncertainty.

Limited regrets moves
Reduce vehicle energy use. This has several components, as discussed in chapter 2. The introduction of more efficient conventionally-fuelled vehicles is a very important step to preparing for a transition to a very low carbon transport future. Without the reduction in fuel consumption from this range of measures then any later introduction of new fuels will place higher demands on fuel volumes and resources.

The HEV technologies that are being commercially introduced are part of this step and their introduction is being supported by measures such as purchase subsidies (in the case of hybrid vehicles) due to their cost disadvantage. More general efficiency improvements across the fleet are encouraged by voluntary agreements with vehicle manufacturers, graduated vehicle excise duty and congestion charge exemption. As these incentives become tighter and/or other technical options are exhausted then vehicle companies may increasingly turn to HEV technologies, potentially reducing their cost and thereby the need for subsidies.

Reduction in total vehicle kilometres is another logical component of reducing energy transport use. However, it implies potentially major shifts in behaviour, land-use patterns and personal values. Nonetheless, policy is already focused on the marginal journeys where alternatives may exist.

Encourage use of available hydrogen vehicles and biofuels. UK pioneers exist in both hydrogen (limited numbers of hydrogen ICE vehicles will be marketed shortly) and fuels (biodiesel is already available in blends). Support measures such as purchase subsidies and fuel duty incentives are in place to assist this introduction.
Increased experience with such vehicles would bring several benefits. Hydrogen ICE vehicles would provide ‘real-world’ experience of working with hydrogen as a fuel and would encourage a limited fuel infrastructure to develop, in addition to providing valuable opportunities for public awareness-raising. However, they do not represent the most efficient way to use hydrogen and this is unlikely to be renewably-sourced in the near term.

Biodiesel and bioethanol can be commercially produced. Current commercial options from oil crops and fermentation of sugar and starch crops offer CO2 reductions with limited disruption to the supply chain and to vehicles. Though, more advanced pathways promise higher volumes and lower costs. Further study. Many of the remaining issues which create uncertainty are not well understood. Better information can be achieved through studying some of these in greater depth, either to assess their implications or to understand their resolutions.

As stated earlier, a great deal of uncertainty exists about the technical and commercial viability of many of the key technologies discussed in this report. Technology-watch is a limited regrets move which provides a better understanding of the state of the art and the potential outlook whilst limiting exposure to the risks of failure. However, it provides no participation in shaping this outlook. Current examples of technology watch by UK institutions include: fuel cell vehicles; large scale hydrogen from biomass; FTdiesel.

Research and development, however, offers an opportunity to participate in the direction of development and ultimately to profit from it. R&D sits at the start of a spectrum which continues into option development and beyond. If relatively low cost projects are chosen where no solution has already emerged and a good case can be made for UK involvement then this can be seen as a limited regrets move. Examples include activities in hydrogen storage; biomass fermentation; energy crops.

A range of non-technical issues are vitally important to the potential transition, particularly the economics and UK competitive advantage potential within biofuels.

Linked to this is the potential conflict between stationary heat and power uses for biomass and biofuels. A better understanding of these issues would help government to predict the fiscal requirements to overcome natural market forces. Relatively limited modelling of biomass energy resources and economics at the national level has taken place to date.

Raise awareness. Stakeholders at all stages of the supply chain from primary energy producer to consumer could benefit from a greater awareness of the long term vehicle energy choices facing the UK. This could potentially encourage innovation, assist in gaining policy support, create demand from early adopters and limit problems associated with public perception.

6.2.2 Options
Options are moves which imply a bigger commitment than limited regrets moves, but not ones that put everything at stake or which cannot be reversed without significant loss. Their chief benefit is that if the transition appears to follow the favoured path then one is very well positioned to take advantage of this.

Support key fuels and vehicles which require modest further development. This option covers those pathways which are not yet commercialised but which might play a key role in the future. UK experience in their development and deployment could accelerate their uptake and increase competitive advantage for UK organisations in any section of the supply chain. Examples include system integration of renewable electricity and hydrogen production; fuel and vehicle infrastructure for flexible fuel or 100% biofuels; biogas utilisation as a vehicle fuel.

Demonstrate emerging fuel production and vehicle technologies. Several of the potentially key technologies are at a stage of development where their success is quite uncertain, but those who demonstrate them will gain important experience. This experience could provide competitive advantage for UK organisations, or provide valuable lessons in options that are closed. Examples include fuel cell vehicles; lignocellulosic hydrolysis; large scale biomass gasification.

6.2.3 Big bets

Such moves, implying high risk-reward ratios, are taken by those who believe that they have sufficient knowledge of the future. In this context big bets could involve a major investment programme in a single technology or pathway, predicated upon the emergence of very low carbon transport fuels. There are a few UK companies that are exclusively fuel cell vehicle, hydrogen or biofuel focused, though only the smallest of these do not have some other form of income to reduce their risk. Some regard the upbeat moves towards FCV introduction by some vehicle majors as big bets, but in practice their scale in proportion to other activities would put them in the class of significant options.

6.3 Recommendations

The very high degree of uncertainty involved in transition to very low carbon vehicles needs to be balanced with the long term nature of the potential transition and the benefits of moving early. What is clear is that it is not possible to predict clearly enough for the UK to place any big bets at this stage. However, the UK should pursue several limited regrets moves, as well as a selected number of options.

Importantly, a better understanding of the resources and economics behind biofuels and the interface with other uses of biomass should be addressed very soon as this will assist in focusing policy efforts.

Unless contradicted by the economics, in the near term the UK should continue to pursue the range of measures that are in place to encourage HEVs and the use of existing biofuels and forthcoming hydrogen vehicles. The early availability of very low CO2 fuels also offers a ‘hedge’ should hybrid technology fail to become accepted or widespread. The incentives for hydrogen, biodiesel, bioethanol and other biofuels should be based upon clearly understood specific fuel chain CO2 levels. This and the accompanying debate will ensure that all potential routes are explored whilst ensuring that there is a focus on reducing CO2.

A careful technology watch should be maintained upon fuel cell vehicles, large scale hydrogen from biomass and FT-biodiesel. If signs of significant progress are observed then the UK should consider supporting increased levels of R&D activity in these areas.

Existing R&D efforts in the field of hydrogen, fuel cells and biofuels should continue to be supported.

Fuel cell vehicles are becoming available for demonstration, though the UK is unlikely to benefit widely on the supply side of this technology so these would mainly provide insights about deployment and public awareness-raising. The EU is strongly considering very large-scale ‘lighthouse projects’ with transport and stationary hydrogen demonstrations (HLG, (2003)), and links should be maintained to these to ensure maximum learning is derived from the different national activities.
The UK could be a significant producer of renewable fuels based on its large renewable energy resource potential. Near term options should be carefully placed in projects which develop system integration of e.g. wind and hydrogen.

In the near to medium term advanced biofuel technologies based on hydrolysis and gasification should be developed and demonstrated. Ethanol, synthetic diesel and hydrogen could be produced, based on a variety of lignocellulosic feedstocks. The wider implications of these recommendations must also be considered, as transport policy in this case will also have to interact very closely with environmental, energy and agricultural policy, at the very least. These recommendations and the wider consideration of their impacts will need to be revisited frequently, in line with changes in the level of uncertainty surrounding them.

End of summary

Full report (82 pages) can be found here (PDF)

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