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Shell Executive Describes Inevitable Transition to Carbon-Free Energy

Harry Brekelmans, right, the projects and technology director for Royal Dutch Shell, speaks with MITEI co-founder and director Robert Armstrong. Photo: Kelley Travers

Harry Brekelmans, the projects and technology director for Royal Dutch Shell, one of the world’s leading oil and gas companies and a founding member of the MIT Energy Initiative (MITEI), on Wednesday met with groups of MIT students and faculty members about their work before taking part in a public discussion about energy issues with MITEI co-founder and director Robert Armstrong.

Harry Brekelmans says Shell has significant commitment to renewable energy, carbon pricing.

By David L. Chandler | MIT News Office 

In the discussion, titled, “If you had a billion dollars for energy-related R&D, where would you spend it?,” Brekelmans addressed that lofty question and many others about the company’s, and the world’s, energy future.

“For some years already we’ve been aware of the energy transition,” Brekelmans said. It’s accelerating, he said, and it’s clear that “it’s time to act, even more so than before.” Already, Shell has made “significant investments in wind, in solar, in biofuels — not all of them successful,” demonstrating the need to be careful about how one invests that research money. Because of the complexity of the world’s energy systems and demands, he said, “we have concluded that this will be a multidecade transition.”

Shell has long expressed its acceptance of the science of human-induced climate change and its determination to invest heavily in technologies to help enable a global transition to a world of drastically reduced greenhouse-gas emissions. As part of that commitment, Shell continues to fund a variety of research projects at MIT and elsewhere related to renewable energy, energy storage, and ways of capturing and storing carbon emissions from fossil fuel.

In introducing the discussion Maria Zuber, MIT’s vice president for research, pointed out that Shell’s CEO Ben Van Beurden recently said that with the right mix of policy and innovation, he sees global demand for oil peaking in the early 2030s or sooner — and that his next car will be electric.

The discussion, titled, “If you had a billion dollars for energy-related R&D, where would you spend it?,” was introduced by Maria Zuber, MIT’s vice president for research. Photo: Kelley Travers

Zuber said that MIT’s Plan for Action on Climate Change calls for finding solutions for decarbonizing the world’s energy systems, aiming for a zero-carbon energy system by the century’s end. To achieve that, she said, MIT’s view is that “the best chance of success is if a broad range of stakeholders, from industry to government to civil society, engage with each other proactively to address it.” One way of doing that, she said, is through conversations such as this one.

Brekelmans said that Shell’s approach to energy R&D is two-pronged, working in parallel on both near-term and long-term strategies. For the near term, the emphasis is on finding technologies that already exist in other industries that can be adapted and scaled up to have a rapid impact on energy use. The longer-term work deals with new findings in laboratories, that have great potential but that may require many years of work to determine if they can be scaled up to meet a significant portion of the world’s energy needs or to improve the performance of existing energy systems.

While the company’s investments in low-carbon energy technologies goes back many years, the mix of research projects they support has evolved over time, he said. One change is that much more of the long-term research is now focused on energy storage systems. These are seen as a key enabling technology to allow for increased usage of energy sources that are inherently variable, such as wind and solar power. “It was not part of our portfolio 10 years ago,” he said, but is now a significant piece of it.

Another research area of increasing emphasis is capturing and storing carbon emissions from power plants to reduce their climate impact, he said. But other approaches don’t necessarily have to be high-tech, he said. “When we talk about offsets, we increasingly talk about simple things like reforestation,” he told students during his morning meetings.

Another change, he said, is “in the way we do R&D. Our collaboration with MIT is absolutely fundamental” to Shell’s efforts. “We know we can’t do it ourselves alone. Much of the progress is happening here and at other institutions.” With the company’s own technology campus in Kendall Square, bordering the MIT campus, “we are hiring people who have no prior experience in oil and gas but who have a knack for innovation,” he said. Shell’s investments, he said, include providing “seed investments in crazy ideas, to help bring them to the next stage.”

Despite the company’s ongoing commitment to working toward a transition away from greenhouse emissions, Brekelmans said that he and his colleagues “all conclude every year that we’re not moving fast enough,” and continue to redouble their efforts.

Student questions in the morning meeting with Brekelmans focused on carbon pricing, climate change, and long-range R&D planning. Photo: Emily Dahl

Emphasizing that their reach and their interests are global, he added that Shell has also recently opened a campus in Bangalore, India, that employs almost 1,000 technologists, as an incubator for new technologies and approaches. The world’s energy systems and needs are very different and highly localized, he said: “Almost every country is different,” in terms of its needs and the most effective ways of meeting them.

In the developing world, he said, the company provides aid through the Shell Foundation, helping to bring electricity and other energy supplies to some of the world’s 3 billion people who lack access to reliable power. Among other things, these grants are aimed at helping some developing nations steer toward the use of natural gas rather than coal, as a lower-carbon fuel.

Shell “wants to be a voice and a leader” in the world’s energy transition, he said. But along the way, he said, the company must “not abandon the economic process that made us a leader,” namely the production and distribution of oil and gas.

The company clearly recognizes the need for some kind of pricing on carbon fuels that reflects their real impact on the world, Brekelmans said. Already, the company “internally works with a price on carbon,” assuming that this will eventually be part of the economic reality.

As for what form that pricing should take, whether it’s a carbon tax, a fee-and-dividend, or a cap-and-trade system, he said, “we are relatively agnostic, as long as we have a price that we can then develop and evolve.” Having some such system in place, he says, is “preferable to the almost religious debate over what is the best system.”

Reprinted with permission of MIT News

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Rex Berglund's picture
Rex Berglund on Sep 15, 2017 3:33 pm GMT

A carbon price would expose many so called economic externalities, and is much to be desired.

There’s good news for the drops in solar costs with more predicted, for both solar and wind.

The U.S. Department of Energy (DOE) has announced that the solar industry has achieved the 2020 utility-scale solar cost target set by the SunShot Initiative more than 2 years early. The average price of utility-scale solar is now 6¢/kWh, without subsidies.

Given this success, DOE is looking beyond SunShot’s 2020 goals with an expanded 2030 vision for the Solar Energy Technologies Office. Specifically, DOE will address grid reliability, resilience, and storage.

The current SunShot cost target for 2030: 3¢/kWh for utility-scale solar.

Now, if by 2030 we can achieve similar developments for wind, we’ll just need the usual suspects for balancing; long distance HVDC, ADR, storage, and a fast ramping dispatchable zero carbon balancing source.

Roger Arnold's picture
Roger Arnold on Sep 16, 2017 4:42 am GMT

For those who have trouble staying abreast of the latest fashions in TLAs (“Three Letter Acronyms”), ADR = “automated demand response”. It involves what I referred to, more than ten years ago, as “discretionary loads”. Those are applications that aren’t particularly fussy about when they draw the daily ration of power that they need to function. Prime examples are water and heat pumping. The product of power usage must be easy to store, and the capital cost of equipment should be low. That way, operating it at low duty cycle is not a big deal.

A mundane but profitable area of research that Shell might consider supporting is simply identifying energy intensive processes that could be operated as discretionary loads. In a world where power on demand has always been the rule, there’s been little incentive to design processes to operate as discretionary loads. But there are many cases where relatively minor tweaks to how things are done can turn a process into a discretionary load.

Bob Meinetz's picture
Bob Meinetz on Sep 17, 2017 2:55 am GMT

Shell “wants to be a voice and a leader” in the world’s energy transition, he said. But along the way, he said, the company must “not abandon the economic process that made us a leader,” namely the production and distribution of oil and gas.

Shell cannot be a leader in the addressing climate change while selling the product that causes it – any more than Reynolds Tobacco can be a leader in ending lung cancer by donating revenue from the sale of cigarettes to finding a cure.

We have a product liability issue here Harry, and there is plenty of legal precedent for how they are best resolved: 1) the source of the problem is eliminated, then 2) we determine the most equitable way to clean up the mess for which vendors share liability.

A recent analog: Jeff Skilling and Ken Lay refused to abandon the economic process that made Enron a leader. Then, a court ruled against the company, threw Skilling and Lay in prison, and liquidated Enron, dividing the spoils among the company’s cheated investors. Problem solved.

Engineer- Poet's picture
Engineer- Poet on Sep 18, 2017 4:40 am GMT

If they can hit 3¢/kWh they are probably in the range of cost-effective conversion of garbage to syngas for electric generation, industrial process heat and synfuels.

Bob Meinetz's picture
Bob Meinetz on Sep 18, 2017 3:33 pm GMT

Roger, I do have TSA (Trouble Staying Abreast) of the latest fashions in TLAs. There’s no cure, but I remain hopeful.

BOT (Back On Topic): ADR was employed two Fridays ago in California to help prevent a Stage 3 grid emergency and rolling blackouts. CAISO now has the capability to turn down, or off, the air conditioning of some electricity customers to help manage load. In return, the customers get a price break.

We need to proceed with caution down a path of giving preferred access to electricity based on a customer’s ability to afford it. Electricity, like clean water, is a fundamental need of all Americans, with equal access helping to provide a level playing field for all to succeed on the basis of individual merit. Equal access to electricity, much like net neutrality, benefits everyone.

There’s an insightful article in this week’s New Yorker from an author who was granted permission to visit North Korea. Among other observations, he noted only those who support Kim Jong-Un are permitted to live within the city limits of Pyongyang, with checkpoints at all entrances. They’re entitled to the best apartments, the best jobs, etc., creating a society where conformance is rewarded and freedom is supressed – in many cases brutally.

Though an extreme example, in the U.S. “extreme” is the new normal.

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