Researchers at Rice University are on to a relatively simple, low-cost way to pry hydrogen loose from water, using the sun as an energy source. The new system involves channeling high-energy “hot” electrons into a useful purpose before they get a chance to cool down. If the research progresses, that’s great news for the hydrogen […]
Researchers have developed a solar paint that can absorb water vapour and split it to generate hydrogen – the cleanest source of energy.
The paint contains a newly developed compound that acts like silica gel, which is used in sachets to absorb moisture and keep food, medicines and electronics fresh and dry.
But unlike silica gel, the new material, synthetic molybdenum-sulphide, also acts as a semi-conductor and catalyses the splitting of water atoms into hydrogen and oxygen.
Lead researcher Dr Torben Daeneke, from RMIT University in Melbourne, Australia, said: “We found that mixing the compound with titanium oxide particles leads to a sunlight-absorbing paint that produces hydrogen fuel from solar energy and moist air.
“Titanium oxide is the white pigment that is already commonly used in wall paint, meaning that the simple addition of the new material can convert a brick wall into energy harvesting and fuel production real estate.
“Our new development has a big range of advantages,” he said. “There’s no need for clean or filtered water to feed the system. Any place that has water vapour in the air, even remote areas far from water, can produce fuel.”
His colleague, Distinguished Professor Kourosh Kalantar-zadeh, said hydrogen was the cleanest source of energy and could be used in fuel cells as well as conventional combustion engines as an alternative to fossil fuels.
“This system can also be used in very dry but hot climates near oceans. The sea water is evaporated by the hot sunlight and the vapour can then be absorbed to produce fuel.
“This is an extraordinary concept – making fuel from the sun and water vapour in the air.”
More information: Torben Daeneke et al, Surface Water Dependent Properties of Sulfur-Rich Molybdenum Sulfides:
Electrolyteless Gas Phase Water Splitting, ACS Nano (2017). DOI: 10.1021/acsnano.7b01632
Provided by: RMIT University
18 May 2017
Battery stores energy in nontoxic, noncorrosive aqueous solutions
Researchers from the Harvard John A. Paulson School of Engineering and Applied Sciences (SEAS) have developed a new flow battery that stores energy in organic molecules dissolved in neutral pH water.
This new chemistry allows for a non-toxic, non-corrosive battery with an exceptionally long lifetime and offers the potential to significantly decrease the costs of production.
The research, published in ACS Energy Letters, was led by Michael Aziz, the Gene and Tracy Sykes Professor of Materials and Energy Technologies and Roy Gordon, the Thomas Dudley Cabot Professor of Chemistry and Professor of Materials Science.
Flow batteries store energy in liquid solutions in external tanks — the bigger the tanks, the more energy they store.
12 May 2017
“The solar energy business has been trying to overcome … challenge for years. The cost of installing solar panels has fallen dramatically but storing the energy produced for later use has been problematic.”
“In a single hour, the amount of power from the sun that strikes the Earth is more than the entire world consumes in an year.” To put that in numbers, from the US Department of Energy Each hour 430 quintillion Joules of energy from the sun hits the Earth. That’s 430 with 18 zeroes after it! In comparison, the total amount of energy that all humans use in a year is 410 quintillion Joules. For context, the average American home used 39 billion Joules of electricity in 2013.
Clearly, we have in our sun “a source of unlimited renewable energy”. But how can we best harness this resource? How can we convert and “store” this energy resource on for sun-less days or at night time … when we also have energy needs?
Now therein lies the challenge!
Would you buy a smartphone that only worked when the sun was shining? Probably not. What it if was only half the cost of your current model: surely an upgrade would be tempting? No, thought not.
The solar energy business has been trying to overcome a similar challenge for years. The cost of installing solar panels has fallen dramatically but storing the energy produced for later use has been problematic.
Now scientists in Sweden have found a new way to store solar energy in chemical liquids. Although still in an early phase, with niche applications, the discovery has the potential to make solar power more practical and widespread.
Until now, solar energy storage has relied on batteries, which have improved in recent years. However, they are still bulky and expensive, and they degrade over time.
Trap and release solar power on demand
A research team from Chalmers University of Technology in Gothenburg made a prototype hybrid device with two parts. It’s made from silica and quartz with tiny fluid channels cut into both sections.
The top part is filled with a liquid that stores solar energy in the chemical bonds of a molecule. This method of storing solar energy remains stable for several months. The energy can be released as heat whenever it is required.
The lower section of the device uses sunlight to heat water which can be used immediately. This combination of storage and water heating means that over 80% of incoming sunlight is converted into usable energy.
Suddenly, solar power looks a lot more practical. Compared to traditional battery storage, the new system is more compact and should prove relatively inexpensive, according to the researchers. The technology is in the early stages of development and may not be ready for domestic and business use for some time.
From the lab to off-grid power stations or satellites?
The researchers wrote in the journal Energy & Environmental Science: “This energy can be transported, and delivered in very precise amounts with high reliability(…) As is the case with any new technology, initial applications will be in niches where [molecular storage] offers unique technical properties and where cost-per-joule is of lesser importance.”
The team now plans to test the real-world performance of the technology and estimate how much it will cost. Initially, the device could be used in off-grid power stations, extreme environments, and satellite thermal control systems.
Editor’s Note: As Solomon wrote in Ecclesiastes 1:9: “What has been will be again, what has been done will be done again; there is nothing new under the sun.”
Storing Solar Energy chemically and converting ‘waste heat’ has and is the subject of many research and implementation Projects around the globe. Will this method prove to be “the one?” This writer (IMHO) sees limited application, but not a broadly accepted and integrated solution.
Solar Energy to Hydrogen Fuel
So where does that leave us? We have been following the efforts of a number of Researchers/ Universities who are exploring and developing “Sunlight to Hydrogen Fuel” technologies to harness the enormous and almost inexhaustible energy source power-house … our sun! What do you think? Please leave us your Comments and we will share the results with our readers!
We have written and posted extensively about ‘Solar to Hydrogen Renewable Energy’ – here are some of our previous Posts:
HyperSolar has achieved a major milestone with its hybrid technology HyperSolar, a company that specializes in combining hydrogen fuel cells with solar energy, has reached a significant milestone in terms of hydrogen production. The company harnesses the power of the sun in order to generate the electrical power needed to produce hydrogen fuel. This is […]
Rice University researchers have demonstrated an efficient new way to capture the energy from sunlight and convert it into clean, renewable energy by splitting water molecules. The technology, which is described online in the American Chemical Society journal Nano Letters, relies on a configuration of light-activated gold nanoparticles that harvest sunlight and transfer solar energy […]
NREL researchers Myles Steiner (left), John Turner, Todd Deutsch and James Young stand in front of an atmospheric pressure MDCVD reactor used to grow crystalline semiconductor structures. They are co-authors of the paper “Direct Solar-to-Hydrogen Conversion via Inverted Metamorphic Multijunction Semiconductor Architectures” published in Nature Energy. Photo by Dennis Schroeder. Scientists at the U.S. […]
Photo shows a lead sulfide quantum dot solar cell. A lead sulfide quantum dot solar cell developed by researchers at NREL. Photo by Dennis Schroeder.
Scientists at the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) have developed a proof-of-principle photo-electro-chemical cell capable of capturing excess photon energy normally lost to generating heat. Using quantum […]
06 Apr 2017
The way energy is produced, distributed and consumed around the world is undergoing fundamental change of almost unprecedented proportions. This is commonly referred to as the “energy transition”. (watch the video)
The Global Energy Architecture Performance Index 2017 (EAPI), tackles elements of this transition in its fifth annual edition, as do the global Regulatory Indicators for Sustainable Energy (RISE) released by the World Bank a month earlier. Of specific interest to this essay are the underlying issues of governance and regulation and their relationship to progress towards sustainable and secure energy systems. In UN development terms, this focus helps us consider the links between Sustainable Development Goal (SDG) 7, which addresses energy, and SDG 16, which is about peace and justice.
26 Mar 2017
A battery that can be charged in seconds, has a large capacity and lasts ten to twelve years? Certainly, many have wanted such a thing. Now the FastStorageBW II project – which includes Fraunhofer – is working on making it a reality. Fraunhofer researchers are using pre-production to optimize large-scale production and ensure it follows the principles of Industrie 4.0 from the outset.
Imagine you’ve had a hectic day and then, to cap it all, you find that the battery of your electric vehicle is virtually empty. This means you’ll have to take a long break while it charges fully. It’s a completely different story with capacitors, which charge in seconds. However, they have a different drawback: they store very little energy.
In the FastStorageBW II project, funded by the Baden-Württemberg Ministry of Economic Affairs, researchers from the Fraunhofer Institute for Manufacturing Engineering and Automation IPA in Stuttgart, together with colleagues from the battery manufacturer VARTA AG and other partners, are developing a powerful hybrid storage system that combines the advantages of lithium-ion batteries and supercapacitors.
“The PowerCaps have a specific capacity as high as lead batteries, a long life of ten to twelve years, and charge in a matter of seconds like a supercapacitor,” explains Joachim Montnacher, Head of the Energy business unit at Fraunhofer IPA. What’s more, PowerCaps can operate at temperatures of up to 85 degree Celsius. They withstand a hundred times more charge cycles than conventional battery systems and retain their charge over several weeks without any significant losses due to self-discharge.
“Supercapacitors may be providing an alternative to electric-car batteries sooner than expected, according to a new research study. Currently, supercapacitors can charge and discharge rapidly over very large numbers of cycles, but their poor energy density per kilogram —- at just one twentieth of existing battery technology — means that they can’t compete with batteries in most applications. That’s about to change, say researchers from the University of Surrey and University of Bristol in conjunction with Augmented Optics.
Large-scale production with minimum risk
The Fraunhofer IPA researchers’ main concern is with manufacturing: to set up new battery production, it is essential to implement the relevant process knowledge in the best possible way.
After all, it costs millions of euros to build a complete manufacturing unit. “We make it possible for battery manufacturers to install an intermediate step – a small-scale production of sorts – between laboratory production and large-scale production,” says Montnacher. “This way, we can create ideal conditions for large-scale production, optimize processes and ensure production follows the principles of Industrie 4.0 from the outset. Because in the end, that will give companies a competitive advantage.” Another benefit is that this cuts the time it takes to ramp up production by more than 50 percent.
For this innovative small-scale production setup, researchers cleverly combine certain production sequences. However, not all systems are connected to each other – at least, as far as the hardware is concerned. More often, it is an employee that carries the batches from one machine to the next. Ultimately, it is about developing a comprehensive understanding of the process, not about producing the greatest number of products in the shortest amount of time. For example, this means clarifying questions such as if the desired quality can be reproduced. The systems are designed as flexibly as possible so that they can be used for different production variations.
Making large-scale production compatible with Industrie 4.0
As far as software is concerned, the systems are thoroughly connected. Like process clusters, they are also equipped with numerous sensors, which show the clusters what data to capture for each of the process steps. They communicate with one another and store the results in a cloud. Researchers and entrepreneurs can then use this data to quickly analyze which factors influence the quality of the product – Does it have Industrie 4.0 capability? Were the right sensors selected? Do they deliver the desired data? Where are adjustments required?
Fraunhofer IPA is also applying its expertise beyond the area of production technology: The scientists are developing business models for the marketing of battery cells, they are analyzing resource availability, and they are optimizing the subsequent recycling of PowerCaps.
Explore further: Virtual twin controls production
*** Bill Gates: Original Post From gatesnotes.com
The sun was out in full force the fall morning I arrived at Caltech to visit Professor Nate Lewis’s research laboratory. Temperatures in southern California had soared to 20 degrees above normal, prompting the National Weather Service to issue warnings for extreme fire danger and heat-related illnesses.
The weather was a fitting introduction to what I had come to see inside Nate’s lab—how we might be able to tap the sun’s tremendous energy to make fuels to power cars, trucks, ships, and airplanes.
Stepping into the lab cluttered with computer screens, jars of chemicals, beakers, and other equipment, Nate handed me a pair of safety goggles and offered some advice for what I was about to see. “Everything we do is simple in the end, even though there’s lots of complicated stuff,” he said.
What’s simple is the idea behind all of his team’s research: The sun is the most reliable, plentiful source of renewable energy we have. In fact, more energy from the sun hits the Earth in one hour than humans use in an entire year. If we can find cheap and efficient ways to tap just a fraction of its power, we will go a long way toward finding a clean, affordable, and reliable energy source for the future.
We are all familiar with solar panels, which convert sunlight into electricity. As solar panel costs continue to fall, it’s been encouraging to see how they are becoming a growing source of clean energy around the world. Of course, there’s one major challenge of solar power. The sun sets each night and there are cloudy days. That’s why we need to find efficient ways to store the energy from sunlight so it’s available on demand.
Batteries are one solution. Even better would be a solar fuel. Fuels have a much higher energy density than batteries, making it far easier to use for storage and transportation. For example, one ton of gasoline stores the same amount of energy as 60 tons of batteries. That’s why, barring a major breakthrough in battery technology, it’s hard to imagine flying from Seattle to Tokyo on a plug-in airplane.
I’ve written before about the need for an energy miracle to halt climate change and provide access to electricity to millions of the poorest families who live without it. Making solar fuel would be one of those miracles. It would solve the energy storage problem for when the sun isn’t shining. And it would provide an easy-to-use power source for our existing transportation infrastructure. We could continue to drive the cars we have now. Instead of running on fossil fuels from the ground, they would be powered by fuel made from sunlight. And because it wouldn’t contribute additional greenhouses gases to the atmosphere, it would be carbon neutral.
Imagining such a future is tantalizing. Realizing it will require a lot of hard work. No one knows if there’s a practical way to turn sunlight into fuel. Thanks to the U.S. Department of Energy, Nate and a group of other researchers around the U.S. are receiving research support to find out if it is possible.
We live in a time when new discoveries and innovations are so commonplace that it’s easy to take the cutting-edge research I saw at Caltech for granted. But most breakthroughs that improve our lives—from new health interventions to new clean energy ideas—get their start as government-sponsored research like Nate’s. If successful, that research leads to new innovations, that spawn new industries, that create new jobs, that spur economic growth. It’s impossible to overemphasize the importance of government support in this process. Without it, human progress would not come as far as it has.
Nate and his team are still at the first stage of this process. But they have reason to be optimistic about what lies ahead. After all, turning sunlight into chemical energy is what plants do every day. Through the process of photosynthesis, plants combine sunlight, water, and carbon dioxide to store solar energy in chemical bonds. At Nate’s lab, his team is working with the same ingredients. The difference is that they need to figure out how to do it even better and beat nature at its own game.
“We want to create a solar fuel inspired by what nature does, in the same way that man built aircraft inspired by birds that fly,” Nate said. “But you don’t build an airplane out of feathers. And we’re not going to build an artificial photosynthetic system out of chlorophylls and living systems, because we can do better than that.”
One of Nate’s students showed me how light can be used to split water into oxygen and hydrogen—a critical first step in the path to solar fuels. The next step would involve combining hydrogen with carbon dioxide to make fuels. Using current technologies, however, it is too costly to produce a fuel from sunlight. To make it cheaper, much more research needs to be done to understand the materials and systems that could create a dependable source of solar fuel.
One idea his team is working on is a kind of artificial turf made of plastic cells that could be easily rolled out to capture sunlight to make fuel. Each plastic cell would contain water, light absorbers, and a catalyst. The catalyst helps accelerate the chemical reactions so each cell can produce hydrogen or carbon-based fuels more efficiently. Unfortunately, the best catalysts are among the rarest and most expensive elements, like platinum. A key focus of Nate’s research is finding other catalysts that are not only effective and durable, but also economical.
Nate’s interest in clean energy research started during the oil crisis in the 1970s, when he waited for hours in gas lines with his dad. He says he knew then that he wanted to dedicate his life to energy research. Now, he is helping to train a new generation of scientists to help solve our world’s energy challenge. Seeing the number of young people working in Nate’s lab was inspiring. The pace of innovation for them is now much faster than ever before. “We do experiments now in a day that would once take a year or an entire Ph.D. thesis to do,” Nate said.
Still, I believe we should be doing a lot more. We need thousands of scientists following all paths that might lead us to a clean energy future. That’s why a group of investors and I recently launched Breakthrough Energy Ventures, a fund that will invest more than $1 billion in scientific discoveries that have the potential to deliver cheap and reliable clean energy to the world.
While we won’t be filling up our cars with solar fuels next week or next year, Nate’s team has already made valuable contributions to our understanding of how we might achieve this bold goal. With increased government and private sector support, we will make it possible for them to move ahead with their research at full speed.
This originally appeared on gatesnotes.com.
14 Oct 2016
Recently, researchers at the National Renewable Energy Laboratory wanted to know, how well does NREL’s hydrogen infrastructure support fueling multiple fuel cell electric vehicles (FCEVs) for a day trip to the Rocky Mountains?
The answer-great! NREL staff took FCEVs on a trip to demonstrate real-world performance and range in high-altitude conditions. To start the trip, drivers filled three cars at NREL’s hydrogen fueling station. The cars made a 175-mile loop crossing two 11,000+ foot mountain passes on the way. Back at NREL, the cars were filled up with hydrogen in ~5 minutes and ready to go again. Learn more at http://www.nrel.gov/hydrogen.
Genesis Nanotechnology, Inc. ~ “Great Things from Small Things”
Read More on Nano Enabled Fuel Cell Technologies for many more Energy Applications: Genesis Nanotechnology Fuel Cell Articles & Videos
A new kind of nanoscale rectenna (half antenna and half rectifier) can convert solar and infrared into electricity, plus be tuned to nearly any other frequency as a detector.
Right now efficiency is only one percent, but professor Baratunde Cola and colleagues at the Georgia Institute of Technology (Georgia Tech, Atlanta) convincingly argue that they can achieve 40 percent broad spectrum efficiency (double that of silicon and more even than multi-junction gallium arsenide) at a one-tenth of the cost of conventional solar cells (and with an upper limit of 90 percent efficiency for single wavelength conversion).
It is well suited for mass production, according to Cola. It works by growing fields of carbon nanotubes vertically, the length of which roughly matches the wavelength of the energy source (one micron for solar), capping the carbon nanotubes with an insulating dielectric (aluminum oxide on the tethered end of the nanotube bundles), then growing a low-work function metal (calcium/aluminum) on the dielectric and voila–a rectenna with a two electron-volt potential that collects sunlight and converts it to direct current (DC).
“Our process uses three simple steps: grow a large array of nanotube bundles vertically; coat one end with dielectric; then deposit another layer of metal,” Cola told EE Times. “In effect we are using one end of the nanotube as a part of a super-fast metal-insulator-metal tunnel diode, making mass production potentially very inexpensive up to 10-times cheaper than crystalline silicon cells.”
For commercialization, billions or even trillions of carbon-nanotube bundles could be grown side-by-side, ramping up the power output into the megaWatt range, after optimization for higher efficiency.
“We still have a lot of work to do to lower contact resistance which will improve the impedance match between the antenna and diode, thus raising efficiency,” Cola told us.”Our proof-of-concept was tuned to the near-infrared. We used infrared-, solar- and green laser-light and got efficiencies of less than one percent, but what was key to our demo was we showed our computer model matched our experimental results, giving us the confidence that we can improve the efficiency up to 40 percent in just a few years.”
For the future, Cola’s group has a three tiered goal–first develop sensor applications that don’t require high efficiencies, second to get the efficiency to 20 percent for harvesting waste heat in the infrared spectrum, then start replacing standard solar cells with 40 percent efficient panels in the visible spectrum. The team is also seeking suitable flexible substrates for applications that require bending.
Schematic of the components making up the optical rectenna–carbon nanotubes capped with a metal-oxide-metal tunneling diode. (Credit: Thomas Bougher)
(Source: Georgia Tech)
An optical rectenna—a device that directly converts free-propagating electromagnetic waves at optical frequencies to direct current—was first proposed over 40 years ago, yet this concept has not been demonstrated experimentally due to fabrication challenges at the nanoscale. Realizing an optical rectenna requires that an antenna be coupled to a diode that operates on the order of 1 pHz (switching speed on the order of 1 fs).
Diodes operating at these frequencies are feasible if their capacitance is on the order of a few attofarads but they remain extremely difficult to fabricate and to reliably couple to a nanoscale antenna. Here we demonstrate an optical rectenna by engineering metal–insulator–metal tunnel diodes, with a junction capacitance of ∼2 aF, at the tip of vertically aligned multiwalled carbon nanotubes (∼10 nm in diameter), which act as the antenna. Upon irradiation with visible and infrared light, we measure a d.c. open-circuit voltage and a short-circuit current that appear to be due to a rectification process (we account for a very small but quantifiable contribution from thermal effects). In contrast to recent reports of photodetection based on hot electron decay in a plasmonic nanoscale antenna a coherent optical antenna field appears to be rectified directly in our devices, consistent with rectenna theory. Finally, power rectification is observed under simulated solar illumination, and there is no detectable change in diode performance after numerous current–voltage scans between 5 and 77 °C, indicating a potential for robust operation.
Genesis Nanotechnology, Inc. ~ “Great Things from Small Things”
13 Apr 2016
Combining quantum dots and organic molecules can enable solar cells to capture more of the sun’s light.
Light from the sun is our most abundant source of renewable energy, and learning how best to harvest this radiation is key for the world’s future power needs. Researchers at KAUST have discovered that the efficiency of solar cells can be boosted by combining inorganic semiconductor nanocrystals with organic molecules.
Quantum dots are nano-crystals that only measure roughly 10 nanometers across. An electron trapped by the dot has quite different properties from those of an electron free to move through a larger material.
“One of the greatest advantages of quantum dots for solar cell technologies is their optical properties’ tunability,” explained KAUST Assistant Professor of Chemical Science Omar Mohammed. “They can be controlled by varying the size of the quantum dot.”
Mohammed and his colleagues are developing lead sulfide quantum dots for optical energy harvesting; these tend to be larger than dots made from other materials. Accordingly, lead sulfide quantum dots can absorb light over a wider range of frequencies. This means they can absorb a greater proportion of the light from the sun when compared to other smaller dots.
To make a fully functioning solar cell, electrons must be able to move away from the quantum dot absorption region and flow toward an electrode. Ironically, the property of large lead sulfide quantum dots that makes them useful for broadband absorption—a smaller electron energy bandgap—also hinders this energy harvesting process. Previously, efficient electron transfer had only been achieved for lead sulfide quantum dots smaller than 4.3 nanometers across, which caused a cut-off in the frequency of light converted.
The innovation by Mohammed and the team was to mix lead sulfide quantum dots of various sizes with molecules from a family known as porphyrins. The researchers showed that by changing the porphyrin used, it is possible to control the charge transfer from large lead sulfide dots; while one molecule switched off charge transfer altogether, another one enabled transfer at a rate faster than 120 femtoseconds.
The team believe this improvement in energy harvesting ability is due to the interfacial electrostatic interactions between the negatively charged quantum dot surface and the positively charged porphyrin.
“With this approach, we can now extend the quantum dot size for efficient charge transfer to include most of the near-infrared spectral region, reaching beyond the previously reported cut-off,” stated Mohammed. “We hope next to implement this idea in solar-cells with different architectures to optimize efficiency.”
Explore further: Quantum dots with built-in charge boost solar cell efficiency by 50%
More information: Ala’a O. El-Ballouli et al. Overcoming the Cut-Off Charge Transfer Bandgaps at the PbS Quantum Dot Interface, Advanced Functional Materials (2015). DOI: 10.1002/adfm.201504035
13 Apr 2016
Special from The World Economic Forum
Since the First Industrial Revolution, oil and gas have played a pivotal role in economic transformation and mobility. But now, with the prospects that major economies like the United States, China and European nations will try to shift away from oil, producers are coming to realize that their oil reserves under the ground – sometimes referred to as “black gold” – could become less valuable in the future than they are today.
Of the four scenarios for the future of the industry outlined in a new set of whitepapers from the Global Agenda on the Future of Oil and Gas, three of them envisage this type of world. Factors such as technological advancements, the falling price of batteries that power electric vehicles, and a post-COP21 push for cleaner energy could even drive oil use below 80 million barrels a day by 2040 – 15% lower than today.
We’re already feeling the effect
So what would a future of falling demand mean for the oil and gas industry?
Uncertainty about whether oil demand will continue to grow is already impacting the strategies of oil and gas firms. Through the 2000s and up until last year, the Organization of Petroleum Exporting Countries (OPEC), whose policies influence global oil supply and prices, took a revenues-oriented strategy, believing that scarce oil would be more valuable under the ground than out in the market, as global demand rose exponentially over time. Oil companies, too, responded to this world view by pursuing a business model that maximized adding as many reserves as possible to balance sheets and warehousing expensive assets.
Now, with new trends discussed in a new whitepaper, producers are coming to realize that oil under the ground might soon be less valuable than oil produced and sold in the coming years. This dramatic shift in expectations is changing the operating environment for the future of oil and gas.
A post-oil world: not all doom and gloom
Countries with large, low-cost reserves, such as Saudi Arabia, are rethinking strategies and will have to think twice about delaying production or development of reserves, in case they are unable to monetize those reserves over the long run. Saudi Arabia, for example, has recently announced that it is creating a $2 trillion mega-sovereign wealth fund, funded by sales of current petroleum industry assets, to prepare itself for an age when oil no longer dominates the global economy.
Declining revenues that could be reaped from exploitation of remaining oil reserves would adversely affect national revenues in many countries that have relied on oil as a major economic mainstay. Those countries will face pressing requirements for economic reform, with the risk of sovereign financial defaults rising.
But for the majority of the world’s population, structural transformations related to the future outlook for oil and gas offers an opportunity. If the global economy becomes less oil intensive, vulnerability to supply dislocations and price shocks that have plagued financial markets for decades will fade, with possible positive geopolitical implications. Moreover, many countries have reeled under the pressures of fuel subsidies to growing populations. According to the IMF, fuel subsidies cost $5.3 trillion in 2015 – around 6.5% of global GDP. Lower oil prices and larger range of alternative fuel choices would reverse this burden and lay the groundwork for shallower swings in prices for any one commodity.
Staying competitive in an industry under change
Eventually, players who remain competitive in the oil and gas industry will have to consider whether it can be more profitable to shareholders to develop profitable low-carbon sources of energy as supplement and ultimately replacements for oil and gas revenue sources, especially to maintain market share in the electricity sector.
This will require a change in the oil and gas industry investors’ mindset. To develop this flexible, supplemental leg to traditional oil and gas activities, the oil and gas industry may find new opportunities by addressing the technological challenges associated with the different parts of the renewable energy space, as well as how one can develop efficient combinations of large-scale energy storage and transportation solutions in a world with a lot of variable renewable electricity.
Industry players can benefit from partnerships for flex-fuel technologies to ease infrastructure transitions and improve their resiliency to carbon pricing by achieving carbon efficiency for end-use energy through collaborations with vehicle manufacturers and mobility firms. Such responses will enhance the industry’s attractiveness with customers and investors, and most importantly, will promote a smoother long-term energy transition.
The three whitepapers are available here.